This past September, The Wall Street Journal Asia’s editorial board heralded the Japanese and South Korean enforcement of UN sanctions against Iran as “worth cheering” and a sign that South Korea was “growing up as a democracy.”
But the news today that South Korea has appointed two state-run banks to finance trade with Iran, might make the WSJ editorial board rethink their premature exuberance over the effectiveness of the sanctions regime.
Christian Oliver, Song Jung-a and Anna Fifield write in the Financial Times:
The US had pressured South Korea to cut out trade with Iran following the imposition of sanctions in September. Washington praised Seoul when South Korea announced its own measures.
Soon after the sanctions announcement, however, South Korea quietly reached a financing agreement with the Iranian central bank to buttress trade.
Seoul says that from this month Woori Bank and the Industrial Bank of Korea can finance legitimate trade with Iran in sectors unaffected by sanctions.
South Korea has a $10 billion annual trade relationship with Iran and is clearly eager to retain what commerce they can with the Islamic Republic.
Seoul’s effort to find ways of maintaining its commercial relationships with Iran is yet another example of the challenge of imposing a sanctions regime on Iran, which has a diverse and well established set of trading relationships in the increasingly globalized and interconnected economy.
The FT article says:
But in Washington officials said the South Korean move would increase transparency in dealings with Iran. “This is a measure to ensure that some of the shadier private banks in Iran are not involved [in business transactions],” said a state department spokesman.
The Iranian central bank will deposit proceeds from oil sales in South Korea at Woori and IBK. The funds will be used to ensure payments for South Korean exporters that had been retreating from Iran.
The Great Transformation
By PAUL CRAIG ROBERTS | October 8, 2010
For a number of years I reported on the monthly non-farm payroll jobs data. The data did not support the praises economists were singing to the “New Economy.” The “New Economy” consisted, allegedly, of financial services, innovation, and high-tech services.
This economy was taking the place of the old “dirty fingernail” economy of industry and manufacturing. Education would retrain the workforce, and we would move on to a higher level of prosperity.
Time after time I reported that there was no sign of the “New Economy” jobs, but that the old economy jobs were disappearing. The only net new jobs were in lowly paid domestic services such as waitresses and bartenders, retail clerks, health care and social assistance (mainly ambulatory health care services), and, before the bubble burst, construction.
The facts, issued monthly by the US Bureau of Labor Statistics, had no impact on the ”New Economy” propaganda. Economists continued to wax eloquently about how globalism was a boon for our future.
The millions of unemployed today are blamed on the popped real estate bubble and the sub-prime derivative financial crisis. However, the US economy has been losing jobs for a decade. As manufacturing, information technology, software engineering, research, development, and tradable professional services have been moved offshore, the American middle class has shriveled. The ladders of upward mobility that made American an “opportunity society” have been dismantled.
The wage and salary cost savings obtained by giving Americans’ jobs to Chinese and Indians have enriched corporate CEOs, shareholders, and Wall Street at the expense of the middle class and America’s consumer economy.
The loss of middle class jobs and incomes was covered up for years by the expansion of consumer debt to substitute for the lack of income growth. Americans refinanced their homes and spent the equity, and they maxed out their credit cards.
Consumer debt expansion has run its course, and there is no possibility of continuing to drive the economy with additions to consumer debt.
Economists and policymakers continue to ignore the fact that all employment in tradable goods and services can be moved offshore (or filled by foreigners brought in on H-1b and L-1 visas). The only replacement jobs are in nontradable domestic services, that is, those jobs that require “hands-on” activity, such as ambulatory health services, barbers, cleaning services, waitresses and bartenders–jobs that describe the labor force of a third world country. Even many of these jobs are now filed with foreigners brought in on R-1 type visas from Russia, Ukraine, Thailand, Romania, and elsewhere.
The loss of American jobs and the compression of consumer income by low wages has removed consumer demand as the driving force of the economy. This is the reason expansionary monetary and fiscal policies are having no effect.
The latest jobs report issued today shows that America’s transformation into a third world economy continues. The economy lost 95,000 jobs in September, mainly due to cuts in local education and federal employment. Part of the loss of 159,000 government jobs was offset by 64,000 new private sector jobs.
Where are the new jobs? They are in nontradable lowly paid domestic services: 32,000 were in health care and social services, and 33,900 were in food services and drinking places.
There you have it. That is America’s “New Economy.”
Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
- The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism (blacklistednews.com)
The Brennan Center for Justice and the American Civil Liberties Union released reports this week documenting the growing problem of criminal justice debt and the considerable costs it’s imposing on communities, taxpayers and indigent people convicted of crimes. The following figures come from those reports, titled respectively “Criminal Justice Debt: A Barrier to Reentry” and “In for a Penny: The Rise of America’s New Debtor Prisons.” Click on the figure to go the specific source.
Of the 15 states with the highest prison populations examined in a recent report on “user fees” imposed on people with criminal convictions, number in the South: 7
Number of those 15 states that utilize “poverty penalties” against convicts such as late fees, payment plan fees and interest: 14
Number that charge poor people public defender fees for exercising their constitutional right to counsel: 13
Number that suspend driving privileges for missed debt payments, hurting people’s job opportunities: 8
Number that require individuals to pay off criminal justice fees before reinstating their eligibility to vote: 7
Number that have attempted to measure the impact of criminal justice debt on offenders, their families or communities: 0
Collection fee charged by Alabama for court-related costs: 30 percent
Surcharge Florida allows private debt collectors to tack on to a convicted person’s debt: 40 percent
Amount North Carolina charges for failure to pay a fine or court cost on time: $25
Amount it charges to set up an installment payment plan: $20
Amount it charges for a failure to appear: $200
Amount it charges defendants for crime lab fees: $600
Amount it can assess a person convicted of a DUI for the use of a continuous alcohol monitoring system: up to $1,000
Number of people jailed in North Carolina’s Mecklenburg County in 2009 for failing to pay court-related debt: 246
Amount of money the county made from those jailings: $0
Amount that people released to parole in Texas typically owe in offense-related debt: $500 to $2,000
Amount that defendants in Virginia may be charged per count for certain felonies: $1,235
Percent of felony cases before the New Orleans courts that relate to debt collection issues: over 6
Value of food that Gregory White, a homeless resident of New Orleans, was convicted of stealing: $39
Amount White was assessed in fines and fees for his crime: $339
Number of days White spent in jail because he was unable to pay his debt and couldn’t afford the bus fare to complete community service: 198
Cost of his incarceration for the city: over $3,500
Year in which the Orleans Parish, La. municipal court system settled a lawsuit by agreeing to put a stop to “fines or time” sentencing: 2007
Number of such sentences handed down by that same court in March 2010 alone: at least 32
Estimated percent of people charged with criminal offenses in the U.S. who qualify for indigent defense: 80 to 90 percent
Percentage by which African-American defendants are more likely than white defendants to rely on indigent defense counsel: almost 500
Decade through which many Southern states were still using criminal justice debt collection to effectively re-enslave African-Americans by allowing landowners and companies to “lease” black convicts unable to pay on their own: 1930s
Year in which the U.S. Supreme Court held that imprisoning someone merely because of his inability to pay a fine or restitution was fundamentally unfair: 1983
The residents of Takae, a small village in the hills of northern Okinawa, are no strangers to the American military. Since 1957, they’ve been living next to the world’s largest jungle warfare training center – and many of them are old enough to remember the days when the U.S. Marine Corps hired locals to dress up as Vietcong for its war games.
The 1996 Special Action Committee on Okinawa was supposed to reduce the U.S. presence in the area. Convened to quell public fury over the rape of a 12-year old girl, it pledged to return large swathes of military land to Okinawan residents – including over half of the jungle training center. As the months passed, however, the promise failed to materialize. Even when a Marine helicopter crashed near Takae’s elementary school in 1999, the daily bombing runs and roof-high helicopter sorties continued unabated.
Then, in 2006, the U.S. military made an announcement. Before returning the territory, it first wanted to build six new helipads on the land it was retaining on the outskirts of the village. The residents repeatedly lodged complaints with the prefectural and national governments, but they were ignored. In 2007, construction crews from the Okinawa Defense Bureau arrived to start laying the foundations for the 250-foot helipads. Takae’s villagers were waiting for them. They linked arms to block the gates to the worksite, they surrounded the trucks and appealed to the builders to stop their work. When they refused to listen, the protesters sat in the way of their heavy machinery. But the crews continued to unload bags of cement over their heads. Only when the police arrived did construction stop out of concern for public safety.
Since that day, over 10,000 locals, mainland Japanese, and foreign nationals have participated in a non-stop sit-in outside the planned helipad sites. So far, they’ve managed to thwart any further construction attempts. At small marquee tents, the villagers greet visitors with cups of tea and talk them through their campaign, highlighting their message with hand-written leaflets and water-stained maps.
“We’re just ordinary people wanting to lead ordinary lives,” explains Takae resident, Isa Ikuko. In a quiet voice almost drowned out by the click and whir of late summer insects, she talks of the area’s 180 species of endangered wildlife and her pride in its broccoli-shaped trees, the nearby rivers that supply the island with most of its drinking water, and the recent disclosure that the U.S. military tested Agent Orange here in the 1960s. “But what particularly scares me is the Marine Corps plan to bring in the Ospreys,” says Isa, holding up a U.S. military image of the accident-prone aircraft flying over a river suspiciously similar to one near the village.
Equally frightening are the recent tactics deployed by the Tokyo government. In November 2008, it filed an injunction against 15 of the protesters, accusing them of obstructing traffic in the area. Hoping that the three-hour road trips to the capital’s courthouse would wear down the villagers’ resolve, it also included an 8-year old child on the roster of defendants to intimidate other potential participants. The ploy backfired and the ensuing public outcry forced prosecutors to drop 13 of the cases. Two still remain, though, and with the next hearing scheduled for later in the year, a dangerous precedent is at stake. If the government wins, it will open the door for suits against similar protests – including in nearby Henoko bay where for the past six-and-a-half years, sit-in protesters have successfully prevented construction of an on-sea air base.
As long as the cases meander through the courts, the Okinawa Defense Bureau crews stay away from Takae. But with verdicts due soon, Isa and her fellow protesters are steeling themselves for the showdown sure to come to this little-known corner of northern Okinawa.