Monday, July 16, 2012

Libor Investigation Reveals Widespread Corruption: A Cesspool Of Financial Fraud : From Libor To Lethal Lilly Pads!

Libor Investigation Reveals Widespread Corruption:

A Cesspool Of Financial Fraud


(Ed.; It is not enough to merely round up the CEOs and Managers, insiders and advisers, seize their assets, bank accounts, homes, boats air planes and the like, seize their perks, pensions and golden parachutes; its simply not enough. It is time for all of us to wake up and shake off the shit of the demonization of accountability and regulation as socialist or anti-capitalist because simply put that bit of political garbage is nothing more than that which the Wall Street Bull droppings left on American streets for us to clean up.

Left unregulated we the banks and financial institutions of America and the rest of the world are free to do as they please…and that is what they want…freedom to gamble, plunder and commit any fraud that they consider creative and productive of their bottom lines. They want to be free to engage in any criminal activity they desire at the expense of you and me, you know, the 99% peons and screwed.

They should be prosecuted to an extent of the law we have never witnesses. Found guilty the penalty should be multiplied by the exact number of folks injured…insuring they will never see the outside of prison walls again.

Our choices are becoming Gin Clear; these institutions have become too large and the fear that their leadership is irreplaceable and the institutes too big fail have led to a timidity to confront their corruption and criminality; we can develop the gonads and fortitude to regulate them, make them publicly owned and controlled, or we can nationalize the monsters.

If some of the great banks of the world need to go to the great dumpster of history over this debacle; so be it; if “The Great Ones” in the 1% loose vast fortunes, so be it; maybe then they will learn the hard way that the economic piracy and anarchy that exists today will ultimately destroy Capitalism, not because it is a flawed system, but that Capitalists, the human beings who screech for its protection will have killed their own Golden Goose. )

As Details Of The Investigation Into The Libor Rate Rigging Scandal Are Known, A Picture Of Systemic Corruption Among The Biggest Banks Is Emerging.
Given the broad scope of the Libor case and the number of institutions thought to be involved, the investigations could provide authorities with a "signature moment" to hold big banks accountable for misdeeds during the financial crisis, which hit global markets from late 2007, the newspaper said.


The Federal Reserve Bank of New York learned in April 2008, as the financial crisis was brewing, that at least one bank was reporting false interest rates.

At the time, a Barclays employee told a New York Fed official that “we know that we’re not posting um, an honest” rate, according to documents released by the regulator on Friday. The employee indicated that other big banks made similarly bogus reports, saying that the British institution wanted to “fit in with the rest of the crowd.”

Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity, which persisted through 2009.

While Barclays is the only bank to have admitted wrongdoing at this time, the New York Times reports that "the multiyear investigation has ensnared more than 10 big banks in the United States and abroad."

The Times adds: "Given the scope of the problems and the number of institutions involved, the rate-rigging investigation could provide a signature moment to hold big banks accountable for their activities during the financial crisis."

'It’s hard to imagine a bigger case than Libor,' said one of the government officials involved in the case."

That comment is echoed by Andrew Lo, a professor of finance at the Massachusetts Institute of Technology, who said, "This dwarfs by orders of magnitude any financial scams in the history of markets."

The Independent also reports on the systemic problem, writing that the British Financial Services Authority inquiry into the rate rigging scandal "suggests that there was a culture of rate-rigging in the investment banking division that Mr Diamond ran during the focus of the investigation, from 2005 to 2009, which might have been the cause of Libor-fixing spreading elsewhere.

A source close to the Treasury Select Committee said: 'One of the questions that still needs to be answered is if this was some sort of virus that was spreading through the system from Barclays when people left to go elsewhere, or was it just a dealing room where people were using their old contacts, be it at Barclays or anywhere else?'"

Blogging on Firedoglake, Scarecrow notes that the real victims of the scandal got left in the dark for years. "The thing that has apparently shocked so many people in the last few weeks since the story broke on Barclays’ bid rigging settlement with US and UK regulators is that no one seems to have warned the victims that the entire structure for setting interest rates on consumer loans, mortgages, municipal bonds, insurance swaps and everything else in the economy — literally trillions of dollars in transactions — was rigged. It’s 2012, and they (the victims) just found out, so now there are hundreds of entities lining up to sue the world's largest banksters for one the largest frauds in history."

The Libor, the London Inter Bank Offered Rate, as well as its European counterpart, Euribor and the Japanese counterpart, Tibor, are special rates offered by banks to lend money to each other for a very short time (usually overnight) in a particular currency. These rates affect a wide range of interest rates in the world and other related financial products, especially the one used for short-term financing.

Prior to this scandal, very few people had heard of these special rates or had a good understanding of them, unless they worked in the financial sector. These rates are crucial in pricing derivatives. Derivatives which were initially used to transfer risk from one market player to another are becoming the instruments of speculation par excellence -- one of the most "dangerous" products in the financial markets.

It is not for nothing that Warren Buffet, the most successful investor of the 20th century, once declared, "In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

These products are extremely interest-rate sensitive. That means every single tiny percentage increase or decrease in the interest rate will have a big impact on derivative prices. However, the real impacts of these super sophisticated financial products are not only limited to the balance sheets of the banks; they also hit the pockets of average people. It is estimated that the Libor rate affects trillions of dollars worth of assets in the world. The mortgage rates, the student loans, the credit cards rates, the pension funds of millions of workers are all affected by this blatant manipulation…

The Libor rate affects about $800 trillion dollars of contracts and all sorts if financial instruments globally, according to experts. Investors of all sizes use the rate as a basis for a variety of financial products; homeowners mortgages, consumers’ credit cards and even city governments use derivatives contracts tied to Libor when issuing some bonds.


We've all heard that "derivatives" caused the financial system meltdown, but few understand what they are. Read this and you'll fully understand them, and the concept of "too big to fail."

Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed in a ledger (thereby granting the customers loans).

Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit.

By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.

A young and dynamic Vice President at the local bank recognizes that these customer debts constitute valuable future assets, and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders transform these customer loans into DrinkBonds, AlkiBonds and PukeBonds. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations, she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DrinkBonds, AlkiBonds and PukeBonds drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the various bond securities. They find they are now faced with not only having to write off her bad debt but also with losing over 90% of the presumed value of the bonds. Her wine supplier claims bankruptcy, closing the doors on a family business that had endured for three generations, and her beer supplier is taken over by a competitor, who immediately closes the local plant, lays off 150 workers, and converts their full output to "Bud Light".

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar, no-strings-attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi's bar.

So the drinkers are screwed, Heidi is screwed, her suppliers are screwed, her neighbors are screwed -- but the banks that caused the whole mess (and are now "too big to fail") are bailed out by the ever-more-screwed taxpayers.

Now do you understand how it all works?

The Lily-Pad Strategy…
How the Pentagon Is Quietly Transforming Its Overseas Base Empire and Creating a Dangerous New Way of War

By David Vine

The first thing I saw last month when I walked into the belly of the dark grey C-17 Air Force cargo plane was a void -- something missing. A missing left arm, to be exact, severed at the shoulder, temporarily patched and held together. Thick, pale flesh, flecked with bright red at the edges. It looked like meat sliced open. The face and what remained of the rest of the man were obscured by blankets, an American flag quilt, and a jumble of tubes and tape, wires, drip bags, and medical monitors. That man and two other critically wounded soldiers -- one with two stumps where legs had been, the other missing a leg below the thigh -- were intubated, unconscious, and lying on stretchers hooked to the walls of the plane that had just landed at Ramstein Air Base in Germany. A tattoo on the soldier’s remaining arm read, “DEATH BEFORE DISHONOR.”

I asked a member of the Air Force medical team about the casualties they see like these. Many, as with this flight, were coming from Afghanistan, he told me. “A lot from the Horn of Africa,” he added. “You don’t really hear about that in the media.” “Where in Africa?” I asked. He said he didn’t know exactly, but generally from the Horn, often with critical injuries. “A lot out of Djibouti,” he added, referring to Camp Lemonnier, the main U.S. military base in Africa, but from “elsewhere” in the region, too. Since the “Black Hawk Down” deaths in Somalia almost 20 years ago, we’ve heard little, if anything, about American military casualties in Africa (other than a strange report last week about three special operations commandos killed, along with three women identified by U.S. military sources as “Moroccan prostitutes,” in a mysterious car accident in Mali).

The growing number of patients arriving at Ramstein from Africa pulls back a curtain on a significant transformation in twenty-first-century U.S. military strategy.
These casualties are likely to be the vanguard of growing numbers of wounded troops coming from places far removed from Afghanistan or Iraq. They reflect the increased use of relatively small bases like Camp Lemonnier, which military planners see as a model for future U.S. bases “scattered,” as one academic explains, “across regions in which the United States has previously not maintained a military presence.”

Disappearing are the days when Ramstein was the signature U.S. base, an American-town-sized behemoth filled with thousands or tens of thousands of Americans, PXs, Pizza Huts, and other amenities of home. But don’t for a second think that the Pentagon is packing up, downsizing its global mission, and heading home. In fact, based on developments in recent years, the opposite may be true.
While the collection of Cold War-era giant bases around the world is shrinking, the global infrastructure of bases overseas has exploded in size and scope. Unknown to most Americans, Washington’s garrisoning of the planet is on the rise, thanks to a new generation of bases the military calls “lily pads” (as in a frog jumping across a pond toward its prey).

These are small, secretive, inaccessible facilities with limited numbers of troops, spartan amenities, and prepositioned weaponry and supplies.
Around the world, from Djibouti to the jungles of Honduras, the deserts of Mauritania to Australia’s tiny Cocos Islands, the Pentagon has been pursuing as many lily pads as it can, in as many countries as it can, as fast as it can.

Although statistics are hard to assemble, given the often-secretive nature of such bases, the Pentagon has probably built upwards of 50 lily pads and other small bases since around 2000, while exploring the construction of dozens more.

As Mark Gillem, author of America Town: Building the Outposts of Empire, explains, “avoidance” of local populations, publicity, and potential opposition is the new aim.
“To project its power,” he says, the United States wants “secluded and self-contained outposts strategically located” around the world. According to some of the strategy’s strongest proponents at the American Enterprise Institute, the goal should be “to create a worldwide network of frontier forts,” with the U.S. military “the ‘global cavalry’ of the twenty-first century.” Such lily-pad bases have become a critical part of an evolving Washington military strategy aimed at maintaining U.S. global dominance by doing far more with less in an increasingly competitive, ever more multi-polar world. Central as it’s becoming to the long-term U.S. stance, this global-basing reset policy has, remarkably enough, received almost no public attention, nor significant Congressional oversight. Meanwhile, as the arrival of the first casualties from Africa shows, the U.S. military is getting involved in new areas of the world and new conflicts, with potentially disastrous consequences.

Transforming the Base Empire

You might think that the U.S. military is in the process of shrinking, rather than expanding, its little noticed but enormous collection of bases abroad. After all, it was forced to close the full panoply of 505 bases, mega to micro, that it built in Iraq, and it's now beginning the process of drawing down forces in Afghanistan. In Europe, the Pentagon is continuing to close its massive bases in Germany and will soon remove two combat brigades from that country.

Global troop numbers are set to shrink by around 100,000.
Yet Washington still easily maintains the largest collection of foreign bases in world history: more than 1,000 military installations outside the 50 states and Washington, DC. They include everything from decades-old bases in Germany and Japan to brand-new drone bases in Ethiopia and the Seychelles islands in the Indian Ocean and even resorts for military vacationers in Italy and South Korea. In Afghanistan, the U.S.-led international force still occupies more than 450 bases.

In total, the U.S. military has some form of troop presence in approximately 150 foreign countries, not to mention 11 aircraft carrier task forces -- essentially floating bases -- and a significant, and growing, military presence in space. The United States currently spends an estimated $250 billion annually maintaining bases and troops overseas.
Some bases, like Guantánamo Bay, Cuba, date to the late nineteenth century. Most were built or occupied during or just after World War II on every continent, including Antarctica. Although the U.S. military vacated around 60% of its foreign bases following the Soviet Union’s collapse, the Cold War base infrastructure remained relatively intact, with 60,000 American troops remaining in Germany alone, despite the absence of a superpower adversary.

However, in the early months of 2001, even before the attacks of 9/11, the Bush administration launched a major global realignment of bases and troops that’s continuing today with Obama’s “Asia pivot.”
Bush’s original plan was to close more than one-third of the nation’s overseas bases and shift troops east and south, closer to predicted conflict zones in the Middle East, Asia, Africa, and Latin America. The Pentagon began to focus on creating smaller and more flexible “forward operating bases” and even smaller “cooperative security locations” or “lily pads.” Major troop concentrations were to be restricted to a reduced number of “main operating bases” (MOBs) -- like Ramstein, Guam in the Pacific, and Diego Garcia in the Indian Ocean -- which were to be expanded. Despite the rhetoric of consolidation and closure that went with this plan, in the post-9/11 era the Pentagon has actually been expanding its base infrastructure dramatically, including dozens of major bases in every Persian Gulf country save Iran, and in several Central Asian countries critical to the war in Afghanistan.

Hitting the Base Reset Button

Obama’s recently announced “Asia pivot” signals that East Asia will be at the center of the explosion of lily-pad bases and related developments. Already in Australia, U.S. marines are settling into a shared base in Darwin. Elsewhere, the Pentagon is pursuing plans for a drone and surveillance base in Australia’s Cocos Islands and deployments to Brisbane and Perth. In Thailand, the Pentagon has negotiated rights for new Navy port visits and a “disaster-relief hub” at U-Tapao. In the Philippines, whose government evicted the U.S. from the massive Clark Air Base and Subic Bay Naval Base in the early 1990s, as many as 600 special forces troops have quietly been operating in the country’s south since January 2002. Last month, the two governments reached an agreement on the future U.S. use of Clark and Subic, as well as other repair and supply hubs from the Vietnam War era.

In a sign of changing times, U.S. officials even signed a 2011 defense agreement with former enemy Vietnam and have begun negotiations over the Navy’s increased use of Vietnamese ports. Elsewhere in Asia, the Pentagon has rebuilt a runway on tiny Tinian island near Guam, and it’s considering future bases in Indonesia, Malaysia, and Brunei, while pushing stronger military ties with India.

Every year in the region, the military conducts around 170 military exercises and 250 port visits.
On South Korea’s Jeju island, the Korean military is building a base that will be part of the U.S. missile defense system and to which U.S. forces will have regular access. “We just can’t be in one place to do what we’ve got to do,” Pacific Command commander Admiral Samuel Locklear III has said. For military planners, “what we’ve got to do” is clearly defined as isolating and (in the terminology of the Cold War) “containing” the new power in the region, China. This evidently means “peppering” new bases throughout the region, adding to the more than 200 U.S. bases that have encircled China for decades in Japan, South Korea, Guam, and Hawaii. And Asia is just the beginning.

In Africa, the Pentagon has quietly created “about a dozen air bases” for drones and surveillance since 2007.
In addition to Camp Lemonnier, we know that the military has created or will soon create installations in Burkina Faso, Burundi, the Central African Republic, Ethiopia, Kenya, Mauritania, São Tomé and Príncipe, Senegal, Seychelles, South Sudan, and Uganda. The Pentagon has also investigated building bases in Algeria, Gabon, Ghana, Mali, and Nigeria, among other places. Next year, a brigade-sized force of 3,000 troops, and “likely more,” will arrive for exercises and training missions across the continent. In the nearby Persian Gulf, the Navy is developing an “afloat forward-staging base,” or “mothership,” to serve as a sea-borne “lily pad” for helicopters and patrol craft, and has been involved in a massive build-up of forces in the region. In Latin America, following the military's eviction from Panama in 1999 and Ecuador in 2009, the Pentagon has created or upgraded new bases in Aruba and Curaçao, Chile, Colombia, El Salvador, and Peru.

Elsewhere, the Pentagon has funded the creation of military and police bases capable of hosting U.S. forces in Belize, Guatemala, Honduras, Nicaragua, Panama, Costa Rica, and even Ecuador.
In 2008, the Navy reactivated its Fourth Fleet, inactive since 1950, to patrol the region. The military may want a base in Brazil and unsuccessfully tried to create bases, ostensibly for humanitarian and emergency relief, in Paraguay and Argentina. Finally, in Europe, after arriving in the Balkans during 1990’s interventions, U.S. bases have moved eastward into some of the former Eastern Bloc states of the Soviet empire. The Pentagon is now developing installations capable of supporting rotating, brigade-sized deployments in Romania and Bulgaria, and a missile defense base and aviation facilities in Poland. Previously, the Bush administration maintained two CIA black sites (secret prisons) in Lithuania and another in Poland. Citizens of the Czech Republic rejected a planned radar base for the Pentagon’s still unproven missile defense system, and now Romania will host ground-based missiles.

A New American Way of War

A lily pad on one of the Gulf of Guinea islands of S­ão Tomé and Príncipe, off the oil-rich west coast of Africa, helps explain what’s going on. A U.S. official has described the base as “another Diego Garcia,” referring to the Indian Ocean base that’s helped ensure decades of U.S. domination over Middle Eastern energy supplies. Without the freedom to create new large bases in Africa, the Pentagon is using S­ão Tomé and a growing collection of other lily pads on the continent in an attempt to control another crucial oil-rich region. Far beyond West Africa, the nineteenth century “Great Game” competition for Central Asia has returned with a passion -- and this time gone global. It’s spreading to resource-rich lands in Africa, Asia, and South America, as the United States, China, Russia, and members of the European Union find themselves locked in an increasingly intense competition for economic and geopolitical supremacy. While Beijing, in particular, has pursued this competition in a largely economic fashion, dotting the globe with strategic investments, Washington has focused relentlessly on military might as its global trump card, dotting the planet with new bases and other forms of military power.

“Forget full-scale invasions and large-footprint occupations on the Eurasian mainland,” Nick Turse has written of this new twenty-first century military strategy. “Instead, think: special operations forces... proxy armies... the militarization of spying and intelligence... drone aircraft... cyber-attacks, and joint Pentagon operations with increasingly militarized ‘civilian’ government agencies.” Add to this unparalleled long-range air and naval power; arms sales besting any nation on Earth; humanitarian and disaster relief missions that clearly serve military intelligence, patrol, and “hearts and minds” functions; the rotational deployment of regular U.S. forces globally; port visits and an expanding array of joint military exercises and training missions that give the U.S. military de facto “presence” worldwide and help turn foreign militaries into proxy forces. And lots and lots of lily-pad bases.

Military planners see a future of endless small-scale interventions in which a large, geographically dispersed collection of bases will always be primed for instant operational access. With bases in as many places as possible, military planners want to be able to turn to another conveniently close country if the United States is ever prevented from using a base, as it was by Turkey prior to the invasion of Iraq.

In other words, Pentagon officials dream of nearly limitless flexibility, the ability to react with remarkable rapidity to developments anywhere on Earth, and thus, something approaching total military control over the planet. Beyond their military utility, the lily pads and other forms of power projection are also political and economic tools used to build and maintain alliances and provide privileged U.S. access to overseas markets, resources, and investment opportunities. Washington is planning to use lily-pad bases and other military projects to bind countries in Eastern Europe, Africa, Asia, and Latin America as closely as possible to the U.S. military -- and so to continued U.S. political-economic hegemony. In short, American officials are hoping military might will entrench their influence and keep as many countries as possible within an American orbit at a time when some are asserting their independence ever more forcefully or gravitating toward China and other rising powers.

Those Dangerous Lily Pads

While relying on smaller bases may sound smarter and more cost effective than maintaining huge bases that have often caused anger in places like Okinawa and South Korea, lily pads threaten U.S. and global security in several ways: First, the “lily pad” language can be misleading, since by design or otherwise, such installations are capable of quickly growing into bloated behemoths.

Second, despite the rhetoric about spreading democracy that still lingers in Washington, building more lily pads actually guarantees collaboration with an increasing number of despotic, corrupt, and murderous regimes.

Third, there is a well-documented pattern of damage that military facilities of various sizes inflict on local communities. Although lily pads seem to promise insulation from local opposition, over time even small bases have often led to anger and protest movements.

Finally, a proliferation of lily pads means the creeping militarization of large swaths of the globe. Like real lily pads -- which are actually aquatic weeds -- bases have a way of growing and reproducing uncontrollably.
Indeed, bases tend to beget bases, creating “base races” with other nations, heightening military tensions, and discouraging diplomatic solutions to conflicts. After all, how would the United States respond if China, Russia, or Iran were to build even a single lily-pad base of its own in Mexico or the Caribbean?

For China and Russia in particular, ever more U.S. bases near their borders threaten to set off new cold wars. Most troublingly, the creation of new bases to protect against an alleged future Chinese military threat may prove to be a self-fulfilling prophecy: such bases in Asia are likely to create the threat they are supposedly designed to protect against, making a catastrophic war with China more, not less, likely.
Encouragingly, however, overseas bases have recently begun to generate critical scrutiny across the political spectrum from Republican Senator Kay Bailey Hutchison and Republican presidential candidate Ron Paul to Democratic Senator Jon Tester and New York Times columnist Nicholas Kristof. With everyone looking for ways to trim the deficit, closing overseas bases offers easy savings. Indeed, increasingly influential types are recognizing that the country simply can’t afford more than 1,000 bases abroad.

Great Britain, like empires before it, had to close most of its remaining foreign bases in the midst of an economic crisis in the 1960s and 1970s.
The United States is undoubtedly headed in that direction sooner or later. The only question is whether the country will give up its bases and downsize its global mission by choice, or if it will follow Britain’s path as a fading power forced to give up its bases from a position of weakness. Of course, the consequences of not choosing another path extend beyond economics. If the proliferation of lily pads, special operations forces, and drone wars continues, the United States is likely to be drawn into new conflicts and new wars, generating unknown forms of blowback, and untold death and destruction.

In that case, we’d better prepare for a lot more incoming flights -- from the Horn of Africa to Honduras -- carrying not just amputees but caskets.
David Vine is assistant professor of anthropology at American University, in Washington, DC. He is the author of Island of Shame: The Secret History of the U.S. Military Base on Diego Garcia (Princeton University Press, 2009). He has written for the New York Times, the Washington Post, the Guardian, and Mother Jones, among other places. He is currently completing a book about the more than 1,000 U.S. military bases located outside the United States. To listen to Timothy MacBain's latest Tomcast audio interview in which Vine discusses his experiences with the Pentagon’s empire of bases, click here or download it to your iPod here. Follow TomDispatch on Twitter @TomDispatch and join us on Facebook, and check out the latest TD book, Terminator Planet: The First History of Drone Warfare, 2001-2050.
Copyright 2012 David Vine

Fukushima: A Disaster Manufactured In The Imperial Boardrooms Of Capital
by Chris Williams

They may not live in castles anymore, but the glass-plated skyscrapers that tower over the great cities of the world, in faceless anonymity, still signify the imperious domain of the ruling elite. It is from these places, not the featureless depths of the earth’s roiling crust, which were the decisive cause of the triple nuclear meltdowns at the Fukushima-Daiichi plant on 11th March 2011.

An independent report by the Fukushima Nuclear Accident Independent Investigation Commission (NAIIC), the first independent investigation committee authorized by the Japanese Diet (parliament) in its 66 year history, was released to both houses of the Diet on July 5. The chairman of the report begins with zero equivocation as to the ultimate cause of the nuclear meltdowns, which are still preventing tens of thousands of people from returning to their homes; returns that for many, are likely never to come:

“The earthquake and tsunami of March 11, 2011 were natural disasters of a magnitude that shocked the entire world. Although triggered by these cataclysmic events, the subsequent accident at the Fukushima Daiichi Nuclear Power Plant cannot be regarded as a natural disaster. It was a profoundly manmade disaster – that could and should have been foreseen and prevented. And its effects could have been mitigated by a more effective human response.”

How could such a “profoundly manmade disaster” have come to pass? A multitude of errors, “willful negligence”, and a “reluctance to question authority” led to nuclear power becoming “an unstoppable force, immune to scrutiny by civil society. Its regulation was entrusted to the same government bureaucracy responsible for its promotion.” It sounds all too eerily familiar to anyone who has spent time investigating the US nuclear regulatory body, the Nuclear Regulatory Commission and the collusion between the NRC and US nuclear corporations.

In a line that must indubitably stoke the anger and sorrow of all those made homeless, all those who have lost their livelihoods and all those tens of thousands more who now are left to agonize over radioactive contamination for themselves and their children for decades to come, the report states, “The direct causes of the accident were all foreseeable prior to March 11, 2011.”

In other words, contrary to all the talk about “an unforeseeable event” from governments around the world and nuclear apologists of the left and right, the nuclear meltdowns, with all their untold and long-term consequences for the physical and mental health of the people of the region, were entirely preventable if the corporation which operated the plants, TEPCO, or the government bodies charged with regulating the nuclear industry, NISA and METI, had taken the appropriate safety precautions:

“The operator (TEPCO), the regulatory bodies (NISA and NSC) and the government body promoting the nuclear power industry (METI), all failed to correctly develop the most basic safety requirements—such as assessing the probability of damage, preparing for containing collateral damage from such a disaster, and developing evacuation plans for the public in the case of a serious radiation release.”

The report notes that these organizations had known of the inability of the reactors to withstand such an earthquake and tsunami since 2006. It recommends across the board, substantive reforms to all aspects of nuclear regulation, the operation of the plants, the legal framework within which they operate and the emergency response, evacuation and disaster preparedness plans, all of which were found wanting.

It warns that these must not be cosmetic name changes or simply shifts of personnel but a root and branch reordering of priorities and fundamental reforms as government regulators and the corporation as organizations all failed to protect the public, as is their legal duty:
“There were many opportunities for NISA, NSC and TEPCO to take measures that would have prevented the accident, but they did not do so. They either intentionally postponed putting safety measures in place, or made decisions based on their organization’s self interest— not in the interest of public safety.”

In an echo of the BP Gulf oil spill of 2010, where it was found that BP had no viable emergency response plan, “TEPCO’s manual for emergency response to a severe accident was completely ineffective, and the measures it specified did not function.” In yet another similarity with the BP disaster, where US government regulators were found to be having sex and drug parties with BP officials, the report speaks of “a cozy relationship between the operators, the regulators and academic scholars that can only be described as totally inappropriate.”

However, fundamental reform to the nuclear industry, and TEPCO in particular, is looking less likely without a further outpouring of national protest the like of which Japan has not seen in decades. This is because TEPCO is a giant corporation with a stranglehold on electricity production and much else through various related companies which allow the company.

“Thanks to a virtual monopoly and a murky electricity pricing system, it has become one of the biggest sources of loosely regulated cash for politicians, bureaucrats and businessmen, who have repaid Tepco with unquestioning support and with the type of lax oversight that contributed to the nuclear crisis.”

TEPCO had net income (i.e. profits) of $1.7 billion in 2009 through its corporate affiliates and ownership of 192 electricity plants that produce up to one third of the electricity in Japan. Overall, Japanese people pay twice as much for electricity as do those in the US. TEPCO is, therefore, in the current neoliberal jargon justifying yet more daylight robbery through ongoing bank bailouts, apparently another corporation “too big to fail.”

Amazingly, TEPCO is pushing to restart some of its own reactors despite the widely held belief, now well documented in the government’s independent report, that the corporation was largely to blame. Meanwhile, TEPCO, in its own report on the accident exonerated itself, citing instead the size of the tsunami and government blunders as the causes of the meltdowns.

Conversely, not to mention

much more believably, the authors of the NAIIC report conclude that the accident was manmade:
“The TEPCO Fukushima Nuclear Power Plant accident was the result of collusion between the government, the regulators and TEPCO, and the lack of governance by said parties. They effectively betrayed the nation’s right to be safe from nuclear accidents. Therefore, we conclude that the accident was clearly ‘manmade.’”

Some people, a lot of people, should be going to jail. Betrayal of the people and their right to be free of radioactive contamination, particularly a people that has already suffered the horror of atomic weapons used against its civilian population, is unconscionable. What could have driven these decisions taken by so many people in all these different organizations? Led them to behave in such a criminally irresponsible manner?

Ultimately, we get to the heart of the matter:

“As the nuclear power business became less profitable over the years, TEPCO’s management began to put more emphasis on cost cutting and increasing Japan’s reliance on nuclear power.”

Put another way, the decisions taken were dictated by the prime directive of capitalism: make profit at all costs, grow by any means necessary. Cut whatever corners you need to, bribe and cajole whoever is necessary, denigrate and belittle those who oppose you; there is no higher power to which you will answer other than the God of Profit. This is the iron law of capital accumulation.

The consequences of those decisions, taken in the faraway, plush boardrooms of the nuclear corporations, and the lack of credible government information since the disaster, have now created the fear of the people, the disbanding of families, and the destruction of their livelihoods in Fukushima prefecture:

“They continue to face grave concerns, including the health effects of radiation exposure, displacement, the dissolution of families, disruption of their lives and lifestyles and the contamination of vast areas of the environment. There is no foreseeable end to the decontamination and restoration activities that are essential for rebuilding communities.”

What an utterly appalling way to make electricity. No foreseeable end to decontamination and restoration activities. Even without considering the issue of nuclear waste, the staggering cost of building and operating nuclear plants, or the umbilical cord that indelibly connects the nuclear power industry to the nuclear weapons and defense industry, can anyone honestly say that as a highly technological society, we have no better alternatives to generating electricity than operating nuclear power stations?

The response by the people of Japan has been tremendous and inspiring. Tens of thousands have regularly picketed government and corporate offices to prevent the restart of reactors, 7.5 million people have signed a petition against the restarting of any of the 54 idled reactors which have been kept shuttered due to this massive and unprecedented outpouring of activism, organizing and anger. A new anti-nuclear movement is being born from below.

As of May, the people of Japan celebrated the shut-down of the last of the 54 Japanese reactors, even as there were no power cuts. Our power defeated the nuclear power! People’s joy was short-lived however. Despite the “setback” of the Fukushima nuclear disaster – which should now surely be described at the very least as a disaster-waiting-to-happen, nuclear corporations are not throwing in the towel and admitting that nuclear power has got to go.

Through a carefully orchestrated media campaign of fear-mongering based on the threat of power cuts and government announcements about the dangers a lack of electricity pose to Japan’s fragile economy, they have managed to successfully argue for the restart of reactors in the western industrial region around Osaka. In a rare televised appeal to the Japanese public, the new Prime Minister, Yoshihiko Noda, who is entirely pro-nuclear, made the case for the necessary restarts.

However, in another new piece of evidence that should halt all talk all restarts, the NAIIC report notes that it cannot say whether the earthquake itself – not the tsunami – was partly responsible for the reactor meltdowns. This finding invalidates the “stress tests” that the nuclear plants have undergone to prove that they are safe to operate because those tests were based on the assumption that it was only the tsunami, not the earthquake, which caused the structural problems and loss of power at the plant.

Meanwhile, a separate government panel of experts has declared that, based on what happened with the tsunami from the March 11th earthquake, 34m, or 112 feet high tsunamis are possible along the Pacific coast. Every single one of the 54 Japanese nuclear reactors is situated along the coast!

The tsunami that overwhelmed the Fukushima-Daiichi plant, and swept away entire villages in the area, causing 19,000 deaths, was 14m (45 feet) high, less than half what is predicted as now possible. A 2003 report had put the maximum that had to be planned for at 20m (60 feet) but clearly a 14m wave can overwhelm coastal defenses and inundate nuclear plants such as at Fukushima-Daiichi, which had only anticipated and prepared for a 6m (20 foot) high wave – especially if they have already been compromised by the preceding earthquake. The only rational answer is to permanently shut down all the reactors, break apart and dismantle the nuclear corporations as threats to public health, take further measures to conserve electricity and speed up the program of building the infrastructure necessary for a clean energy economy.

However, there are a few broader conclusions to draw from this report and the litany of similar cases of accidents such as the BP spill where the corporate drive for profit is like an unstoppable tsunami rationalizing all manner of health and safety evasions and cutbacks.

Firstly, this is not about a few bad apples or irresponsible, corrupt people. This is about how capitalism operates. How else does one explain the need for every single area of capital accumulation – from the nuclear industry, to oil and gas, to pharmaceuticals to food production – to have independent regulators preventing the corporations from doing what they are primed to do: make profit at all costs? If the regulators are in the pockets of the corporations that bestride the planet as unaccountable behemoths with their colossal economies, often larger than most individual states, all hell breaks loose.

Second, whatever those deluded environmentalists who are pro-nuclear think, there is no scenario in which a sane person can be pro-nuclear when the nuke plants are operating within a social system that has no ethical, social, ecological or moral concerns and drives the individuals who run the system into immoral actions. The only thing crazier than boiling water by splitting atoms is boiling water by splitting atoms in a social system driven by profit.

Five years ago the great leftist social and ecological thinker and activist Barry Commoner was asked in a New York Times interview whether the environmentalists who have now turned to nuclear power as an answer to global warming had a point. To which he answered:
“No. This is a good example of shortsighted environmentalism. It superficially makes sense to say, ‘Here’s a way of producing energy without carbon dioxide.’ But every activity that increases the amount of radioactivity to which we are exposed is idiotic. There has to be a life-and-death reason to do it. I mean, we haven’t solved the problem of waste yet.
We still have used fuel sitting all over the place. I think the fact that some people who have established a reputation as environmentalists have adopted this is appalling.”

Third, within capitalism, there are certain essential economic activities which need to be thought of as they were before the acceleration of capitalist orthodoxy of deregulation and privatization that occurred with the birth of neoliberalism 30 years ago. Before the drive for privatization that necessitated the evisceration of the organized power of the working class, as the balance of class forces were forcibly tilted toward the corporations and away from us.

Activities where we are not seen as customers for a commodity that we buy from a for-profit corporation, but rather as citizens, with a right to a service from the government that we elect to represent our interests.

Examples of such essential services are the provision of education, access to water, healthcare, a pension, public transportation – the most basic attributes for a productive and healthy life and a functioning society. But this idea must also extend to the provision of electricity. Not just because it is fundamental to the way we live, but, just as importantly, for ecological reasons.

We need to conserve electricity and energy use in general and set up systems to ensure that there is a nationally organized program to do so. However, that will never happen with electricity production when the utilities are privately owned. Private electric utilities make more money the more electricity they sell us. So, having consumers use less would be counter-productive and irrational from a corporate perspective. If they’re regulated and offered incentives to sell us less, they just charge more for each individual unit and pass the costs on. Furthermore, corporations are always going to spend as little as they can get away with on infrastructure, safety and maintenance, as illustrated to a horrific extent by the nuclear catastrophe in Japan.

Electricity should be a service that is publicly provided, not a commodity to be bought. In other words, we need to re-nationalize the electricity grid and see it as an opportunity to build a new energy infrastructure, one that is efficient and has at its heart energy conservation based around alternative sources of energy. Not outdated, dirty, and dangerous 19th and 20th century technologies such as coal, oil, gas or uranium but clean, renewable – and safe – wind, solar and geothermal sources. Energy sources that Japan and United States, have in great abundance.

It’s crystal clear however, that without an organized mass movement from below that unites social and ecological issues together into a single movement for jobs, sustainability and justice, one that tilts the balance of social power back in our favor, as the Japanese people are attempting right now, those changes will not happen. Absent the building of such a movement, we will eventually be left living on an irradiated cinder of a planet where they sell us hazmat suits at inflated prices from the safety of their glittering corporate towers.
In India, there is a titanic struggle going on between people organized under the banner of the People’s Movement Against Nuclear Energy (PMANE) and the Indian government. The Indian state is determined, despite Fukushima, to increase its reliance on nuclear power tenfold, so that it represents 25% of electricity production. This in a country where almost half the population, 400 million people, lack access to electricity and decades old Indian wind turbines produce twice as much electricity as current Indian nuclear plants that have already received billions of dollars in funding. If these wind turbines alone were upgraded, let along building more modern ones or taking advantage of the plentiful solar energy that India basks in, they could supply a much larger segment of electricity and obviate the need for the nuclear plants.

Due to the growth and persistence of the Indian activists struggle, the state is becoming increasingly violent, dispatching thousands of troops to put down protests. The response by PMANE and the anti-nuclear activists to state violence and intimidation as they fight to protect themselves from the calamity of building more nuclear plants deserves to be quoted at some length:

“The day after the Tamil Nadu state by-elections last March… Chief Minister Selvi J. Jayalalithaa suddenly reversed her earlier decision to support the protesters, dispatching at least 6,000 police and paramilitary to the region. For three days, the government prevented essential supplies — including tankers of water and milk — from reaching the PMANE base in Idinthikarai, a coastal village about two kilometers from the Koodankulam reactors. But nearby fishing communities sympathized with the protesters at Idinthikarai and sent in boats of supplies for them. In an unprecedented display of solidarity, traditional local women also took to boats to reach the village. Residents blocked roads en masse, preventing police from arresting the movement’s coordinators.”

This is the kind of heroic solidarity actions and mass movement we need to build in the United States and in every part of the globe.
But finally, if the system really is pathological in its operation, as I would argue it is, then the only solution is to uproot it in its entirety and replace it with something that we can jointly and collectively create; a social and economic system that places people and the planet before profit.

Ultimately, a system where there is no profit, where we cooperate to democratically plan out what we need to produce and how we’re going to produce it with, to use Marx’s words, the “least possible expenditure of energy.” The stepping stones along the path to that fundamental transformation require the building of a mass social and ecological justice movement that fights for real reforms as outlined above, beginning with the abandonment of the destructive and costly insanity of nuclear power and the eradication of fossil fuel derived energy that is destabilizing global climate. But a movement that simultaneously aims for a revolutionary reordering of power.

Power To The People, Not The Corporations!

Chris Williams is a long-time environmental activist and author of Ecology and Socialism: Solutions to Capitalist Ecological Crisis (Haymarket, 2010). He is chair of the science dept at Packer Collegiate Institute and adjunct professor at Pace University in the Dept of Chemistry and Physical Science. He reported from Fukushima in December and January and is currently a Lannan writer-in-residence in Marfa, Texas.
Reuters reports: The Red Cross now views fighting in Syria as an internal armed conflict – a civil war in layman's terms – crossing a threshold experts say can help lay the ground for future prosecutions for war crimes.

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