In a recent op-ed in The Wall Street Journal, “Israel and the Plight of Mideast Christians,” Ambassador Michael Oren presents Israel as a tolerant, dove-like, and peaceful democracy. This is belied by the facts.
I am one of those Palestinian Christians living inside Israel to whom Oren refers. At no time in my life have I ever felt the “respect and appreciation” of the Jewish state, which Oren so glowingly references.
Israel’s Christian minority is marginalized in much the same manner as its Muslim one or, at best, quietly tolerated. We suffer the same discrimination when we try to find a job, when we go to hospitals, when we apply for bank loans, and when we get on the bus — in the same way as Palestinian Muslims.
Israel’s fundamental basis is as a racist state built for Jews only, and the majority of the Jewish population doesn’t really care what religion we are if we’re not Jewish. In my daily dealings with the State, all I have felt is rudeness and overt contempt.
Oren’s statement that “The extinction of the Middle East’s Christian communities is an injustice of historic magnitude” is outright shocking to anyone familiar with even the basic history of how Israel was founded.
I would like to remind Oren and others that this founding expelled thousands of Palestinian Christians from their homes in 1948 and displaced them, either forcing them to flee across the border or making them internal refugees. The ethnic cleansing of Palestinians that comprised the founding of Israel is, too, an injustice of historic magnitude. A man living in a glass house — or a house stolen from Palestinians — should think very carefully before tossing stones.
My cousin’s husband, Maher, is from Iqrith, a village a few miles from mine in the Galilee. His family, and all of Iqrith’s inhabitants, were expelled from their village in 1948 and Iqrith was razed to the ground by Israeli forces on Christmas eve, 1950, in a special “Christmas gift” to its people. The timing of this destruction leaves one to wonder at the intended message.
Maher was born years after his family took shelter in Rama, a village nearby in the Galilee. Today, he struggles with finding a place to build a house to live in with his wife and children. Israeli policies that severely restrict the building zones in Arab towns and villages result in land shortages impeding the population’s natural expansion. Limiting land to residents of the same town or village means that internal Palestinian refugees face severe housing discrimination.
The return of people like Maher has been made impossible by Israel, which refuses to negotiate on the right of refugees to return to their homeland. If Oren is so concerned for Palestinian Christians, would he kindly give the green light for the return of Christian refugees from Iqrith, Birim, Tarshiha, Suhmata, Haifa, Jaffa, and tens of other Palestinian towns and villages that they were expelled from in 1948?
The answer, I assure you, is no. Many of these refugees are living in refugee camps in nearby countries, where Israel and Oren are happy to leave them.
The terrorists referred to in Oren’s statement that “Israel, in spite of its need to safeguard its borders from terrorists, allows holiday access to Jerusalem’s churches to Christians from both the West Bank and Gaza,” are in fact Palestinian Christians living on the land that Israel has occupied — in flagrant opposition to all human rights charters — and from which it is refusing to withdraw its soldiers and illegal settlers.
To applaud Israel for giving people permits to travel across what by law is their own country is the height of hubris.
His claim that “In Jerusalem, the number of Arabs — among them Christians — has tripled since the city’s reunification by Israel in 1967″ fails to mention Israel’s relentless policies of cracking down on Jerusalem: building unending settlements; building a separation wall that slices right through the city, severing its families, neighborhoods and businesses and hitting hard at its Arab economy; seizing Arab lands and expelling families that have lived on them for generations; and revoking the citizenship of any Palestinian resident who travels abroad for too long.
Imagine the outcry if an American citizen traveled abroad for two years and upon return discovered that his citizenship was revoked and that he had lost his American ID and passport.
Israeli officials don’t care whether the Palestinians they discriminate against are Christian or Muslim. It is true that inter-religious strife is on the rise in a region long tormented by poor living conditions, for which the West bears significant responsibility having aided the region’s many dictators.
Oren’s faux tolerance and crocodile tears over the plight of Christians fool no one. Were he serious, I would urge him to have a close look at Israel’s policies of occupation and racial discrimination.
Fida Jiryis is a Palestinian writer from the Arab village of Fassuta in the Galilee. She is the author of the forthcoming book, My Return to Galilee, which chronicles her return from the Diaspora to Israel.
- A Palestinian Christian response to Michael Oren (alethonews.wordpress.com)
The Media Office of the Waed Society for Detainees and Ex-Detainees reported that Palestinian detainees in Israeli prisons and detention camps intend to declare, in April, one of the largest open-ended hunger strikes.
The society said that the detainees will declare the exact day that would mark the beginning of their strike shortly before starting it as they anticipate that Israeli soldiers will be conducting counter measures and attacks in order to foil the strike.
Some of the anticipated, and previously experienced measures, include transferring dozens of detainees from one facility to another, and placing others in solitary confinement.
Head of the media office of the Waed Society, Abdullah Qandeel, stated that the detainees confirmed to the Society that the strike will be decisive and has several main goals topped by demanding an end to the illegal solitary confinement policies, medical negligence, and all Administrative Detention orders, the Maan News Agency reported.
Qandeel added that this strike requires extensive solidarity from the Palestinian people in order to expose the Israeli violations and support the detainees in their open-ended “battle”.
He further stated that media coverage of the strike, and highlighting the plight of the detainees in Israeli prisons, detention and interrogation facilities, is very essential, especially in the Arab world and Europe.
- Free Hanaa Shalabi, End Administrative Detention (alethonews.wordpress.com)
- Israel issues third consecutive detention order against prisoner of conscience Ahmad Qatamesh (alethonews.wordpress.com)
- B’Tselem reports sharp increase in the numbers of Palestinians being held in administrative detention (alethonews.wordpress.com)
- Minister of Detainees Calls for Boycott of Military Courts (alethonews.wordpress.com)
- Hana Shalabi to continue hunger strike despite sentence reduction (alethonews.wordpress.com)
- Valiance in the Face of Cruelty (alethonews.wordpress.com)
- Hana al-Shalabi on hunger strike against renewed administrative detention (alethonews.wordpress.com)
Mark Yudof, President of the University of California, helped the ADL, one of whose primary activities is to advocate for Israel, raise $700,000 at its 2010 fundraising dinner at the Beverly Hilton. Yudof called the ADL “a light of the Diaspora.” (L-R) UC President Mark Yudof; ADL Regional Director Amanda Susskind; Jurisprudence Award .honoree Arthur N. Greenberg and his wife, Audrey; Humanitarian Award honorees Ardyth and Samuel Freshman; and ADL Regional Board Chair Nicole Mutchnik
A group of 150 scholars at twenty California institutions of higher learning, are concerned about the latest statements and actions of UC President Mark Yudof. The group, known as California Scholars for Academic Freedom (CS4AF), believes that under the guise of promoting “civility and tolerance,” Yudof has in fact delivered a blow to the right to dissent and protest.
Our concerns are twofold: an apparent bias regarding the right of free speech and dissent on UC campuses, and a stated reliance on advice from two organizations that lack credible experience in dealing with academic freedom.
In a March 8 letter addressed to the UC community, President Yudof presented a one-sided argument about the problem of intolerance by focusing exclusively on protests against speakers who represent the Israeli government or whose presentations endorse the manner in which Israel maintains its occupation of the West Bank and Gaza.
In his letter, President Yudof treats characterizes the disruption of speeches at a UC Davis event titled “Israeli Soldiers Speak Out” as “hate-driven… attacks.” In so characterizing the event, he appears to have relied on a letter from the AMCHAI Intiative and made no further effort to determine the facts of the case.
At this February 27 event, which featured two members of the Israeli Defense Forces, there were two protests: an organized, peaceful protest by Students for Justice in Palestine (SJP), and a sustained outburst by a university employee not associated with the group. The SJP protest was organized with the support of members of Jewish Voices for Peace and MECHA. According to UC Davis faculty who were present, this protest “did not disrupt the event, nor did any members of this diverse coalition interrupt the speakers.” Rather, the protesters carried out “a silent walkout” followed by “a small, peaceful discussion outside the building where they discussed the realities of life under occupation.” Yudof’s letter nevertheless characterizes all the protests as “verbal attacks.” It then compares them to hate crimes such as drawing swastikas on the doors of Jewish students, hanging nooses to intimidate African American Students, and spray-painting profanities across the entrance to the LGBT Resource Center at UC Davis.
We find this comparison appalling. Israel is a nation-state, not an ethnic or religious group, and protests against the policies of a government are entirely distinct from hate crimes. We believe that this criminalization of protest does a disservice to the entire UC community.
To persuade us that he seeks to foster toleration for everyone, the President might have condemned the documented instances of harassment and intimidation practiced by Stand With Us, including attacking bystanders with pepper spray and brandishing stun guns at UC Berkeley on February 25. He might also have condemned the monitoring of UC faculty by organizations such as Campus Watch. In one incident, a “monitor” fabricated a quote in order to depict UCLA professor Susan Slyomovics, the descendant of Auschwitz survivors, as a Holocaust denier – a podcast of the event refutes his claims. No member of the UC administration has ever responded to such outrages with calls for tolerance and respectful coexistence.
An equally disturbing element of Yudof’s letter is his announcement that his office is “working with the Museum of Tolerance and the Anti-Defamation League to improve campus climate for all students and to take full advantage of our marvelous diversity.” The choice of these—and only these–particular entities amounts to taking sides in the Israeli-Palestinian conflict and related issues. By leaving out groups working on behalf of Palestinian human rights or human rights in general, but collaborating only with organizations whose mandates are devoted to supporting Israeli governmental interests and squelching criticism of Israeli policies in all public domains, including university campuses, President Yudof is in effect advocating for one party rather than promoting tolerance across the board.
Moreover, the selection of these two organizations is problematic regardless of whether other organizations are also to be involved. The Anti-Defamation League has led numerous campaigns to defame and harass academics and others who criticize Israeli policies. The League has been sued and lost several cases involving spying and harassment. For example, in 2011, it was ordered to pay $10 million in damages to William and Dorothy Quigley for libelously characterizing them as anti-Semites. The Museum of Tolerance, whose mandate focuses on public education about the Holocaust, has been implicated in the destruction of a Palestinian cemetery in Jerusalem in order to construct a park featuring a monument to Zionism. Neither of these organizations is qualified to offer advice on academic freedom or freedom of speech at public universities, and it is our position that neither of them should be relied upon by the UC or involved in efforts to pursue the worthy goal of promoting tolerance.
The president of the University of California, the second largest university system in the United States, should speak for all his students, faculty and staff, not only for those whose political affiliations he may happen to support. According to the Jewish Journal, the President recently “met with all of the UC Hillel directors in his office in Oakland to discuss our observations regarding how Israel is faring on campus, how the Jewish community perceives the university’s actions and inactions, and, most important, how Jewish students are feeling about the situation.” As far as we know, he has made no comparable initiative to determine how Palestine is faring on campus, how the human rights community perceives the university’s actions and inactions, and, most important, how Palestinian or other concerned students, of any race, creed, or color are feeling about the situation.
It should not be necessary to explain that one can protest the actions of a government without committing a hate crime, and that reliance on partisan organizations is unlikely to “improve campus climate.” We applaud and endorse any initiative “to foster a climate of tolerance, civility and open-mindedness,” but we do not believe that criminalizing dissent can ever serve that purpose
Photo from 2010 Jewish Journal article Milken family recognizes Jewish educators, YULA rides, ADL honors
- Pro-Israel University of California president denies Jewish students face “hostility” as Zionist complaints allege (alethonews.wordpress.com)
- Release of UC Davis Pepper Spray Investigation Findings Delayed (delong.typepad.com)
Noam Schalit, father of former imprisoned soldier Gilad, told Israel’s Channel 10 that if he were Palestinian, he would kidnap Israeli soldiers in his fight for freedom.
Gilad Schalit was held captive by Hamas in Gaza for five years. Israel and Hamas agreed to a prisoner exchange deal in 2011 that saw Gilad released in exchange for 1,027 Palestinian detainees.
Noam also said Israel should engage in talks with Hamas, provided the Palestinian group agrees to accept Israel as a Jewish state, denying indigenous Palestinians their equal rights.
“I am in favor of speaking to anyone who wants to talk to us,” he said.
“If they change their ways and are willing to recognize Israel as a Jewish state, yes, I would shake his hand,” he added.
Israel has maintained a siege on the Gaza Strip since 2006, while expanding illegal settlements in the occupied West Bank.
An Israeli assault on Gaza last weekend killed 26 Palestinians, including several children.
Nowhere in NATOland is public opposition to “humanitarian wars” more muted than in France. Only a few prominent voices were raised against last year’s assault on Libya. Today, the few who attempt to arouse opposition to Western military intervention in Syria are the targets of a strangely obscure and yet effective campaign of slander designed to stigmatize and silence them.
The campaign operates like this. A rather small number of obscure journalists writing on obscure websites calling themselves “anarchist” and “anti-fascist” specialize in denouncing individuals who oppose war or criticize the European Union as fascists and anti-Semites. Their targets are usually intellectuals who are normally considered to be on the left. The technique is to identify opposition to war as “supporting dictators” and serious criticism of the EU as “rightist nationalism”. It is strongly implied that reluctance to go to war to overthrow the dictator du jour is tantamount to refusing to act to prevent Hitler from exterminating the Jews.
The other technique is plain old guilt by association. The targeted leftist has been seen somewhere in the company of someone identified as on the far right, therefore…
This primitive slander goes unnoticed by the overwhelming majority of the population. However, these obscure slanders are then used to put pressure on leftist groups to silence the heretic. Amazingly, this works.
Recently, such pressure has persuaded several supposedly progressive organizations to cancel speakers who were targeted by this campaign. The leftist Belgian writer and activist Michel Collon was abruptly barred from a scheduled presentation of his latest book on media lies about the war in Libya at the Bourse du Travail, a labor union center in Paris. Other outspoken opponents of imperialist wars have had their speaking engagement abruptly cancelled, or encountered groups of “anti-fascist” militants intent on preventing them from speaking. In recent days, the writer Jacob Cohen was physically attacked as an “anti-Semite” by the Jewish Defense League, which boasted of this action on a video. A fortnight ago, the University Paris VIII (formerly Vincennes) cancelled a long-scheduled international conference entitled “Israel: a state of apartheid?” on grounds that it could constitute a “threat to public order”.
The silencing of anti-war opinion is not unrelated to the existence in France of official censorship of “racist” speech and “Holocaust denial”. In the past thirty years, the Holocaust, or Shoah, has virtually become the state religion in France, especially in the schools, where pupils are repeatedly reminded of French guilt in allowing deportation of Jewish children during the World War II Nazi occupation of France (many more Jewish children were hidden and sheltered than were deported, fortunately). An atmosphere has been created in which there is no presumption of innocence when it comes to accusations of anti-Semitism. Thus there is understandable haste to avoid such accusations by ostracizing anyone who is suspected of this gravest of sins (on a par only with pedophilia).
Last month, Jean Bricmont received a series of questions for an interview from a young journalist who had already attacked him under a pen name in the context of the “antifascist” campaign against anti-war advocates. Just this week her slanders and threats of disruption caused a Paris church center to cancel a program on intervention in Syria. This young woman is suspected by at least one of her targets of being a US agent, and a law suit against her has been filed. However, Jean Bricmont, who as a matter of principle accepts debate with all adversaries, answered her questions in detail. Unsurprisingly, she chose not to publish them.
Letter to A French Journalist
By Jean Bricmont
You have asked me about my “support for dictators” (especially Assad). You suggest that this amounts to interference in the internal affairs of other countries, and pose questions about my “links with the far right” as well as with what you call “conspiracist” websites and the rationalist and progressive “support” that I allegedly thereby provide them.
Here is my answer:
You raise two important questions: my “support for dictators” and my “links with the far right.” These questions are important, not because they are pertinent (they are not), but because they are at the heart of the strategy of demonization of the modest forms of resistance to war and imperialism that exist in France . It is thanks to such false identifications that my friend Michel Collon (who runs the website http://www.michelcollon.info/) was banned from speaking on NATO propaganda about the Libyan war at the Bourse du Travail in Paris, after a campaign led by self-styled anarchists.
First of all, since you mention rationalism, let us think of the greatest 20th century rationalist philosopher, Bertrand Russell. What happened to him during the First World War, to which he was opposed? He was, of course, denounced for supporting the Kaiser. The trick consisting in denouncing the opponents of a given war as supporters of the other side is as old as war propaganda itself. Thus, in recent decades, I have allegedly “supported” Milosevic, Saddam Hussein, the Taliban, Gaddafi, Assad… and maybe tomorrow Ahmadinejad.
Actually, I do not support any regime. I support a policy of non-intervention, that is to say, I not only reject the “humanitarian” wars, but also the purchase of elections, the color revolutions, the coups organized by the West, the unilateral sanctions, etc.(see http://www.counterpunch.org/2012/02/20/the-case-for-a-non-interventionist-foreign-policy/). I propose that the West endorse the policy of the Non-Aligned Movement, which, in 2003, shortly before the invasion of Iraq, wanted to “strengthen international cooperation to solve international problems of a humanitarian character in full compliance with the Charter of the United Nations” and reiterated “the rejection by the Non-Aligned Movement of the so-called right of humanitarian intervention that has no basis either in Charter of the United Nations or in international law.” This is the constant position of the majority of mankind, of China, Russia, India, Latin America, the African Union. Whatever you think of it, this position is not on the far right.
As I have written a whole book on this subject (Humanitarian Imperialism, Monthly Review Press, 2006), I will not explain in detail my reasons, but I will simply note that, if the Westerners are so capable of solving the problems of Syria, why do they not solve first those of Iraq, Afghanistan or Somalia? I will also note that there is a basic moral principle when one is interfering in the internal affairs of other countries – suffer yourself the consequences of that intervention. Westerners of course think they are doing good everywhere, but the millions of victims caused by their wars in Indochina, Southern Africa, Central America and the Middle East probably see things differently.
Concerning my relationship with the far right, there are two distinct questions: what do we mean by “relationship” and what does “far right” mean? I’d love to protest alongside the entire left against interventionist policies. But the left in the West has been almost completely persuaded by the arguments in favor of humanitarian intervention and, in fact, often criticizes Western governments for not intervening as rapidly or as often as they should. So, on the rare occasions when I protest publicly, I can do so only with those who agree to protest, who are not all on the far right, far from it (unless, of course, one defines opposition to humanitarian wars as being on the far right), but who are not on the left in the usual sense, since the bulk of the left support the policy of intervention. At best, a part of the left takes refuge in the “neither-nor” position: neither NATO nor the country being attacked at the time. Personally, I consider that our duty is to fight first against the militarism and the imperialism of our own countries, not to criticize those who defend themselves against their onslaught, and that our situation, as citizens of the attacking countries, is anything but neutral, contrary to what the rhetoric of the “neither-nor” position suggests.
Moreover, I feel that I have the right to meet and talk with whomever I want: I sometimes talk with people whom you would describe as being on the far right (although, in most cases, I would disagree with this characterization), but more often with people on the far left, and even more often with people who are neither one nor the other. I am interested in Syrians who oppose the policy of intervention, since they can provide me with information about their country that goes against the dominant discourse, while of course I know, through the media, the discourse of the pro-intervention Syrians.
As for websites, I write wherever I can – again, if the mainstream left want to listen or even to debate with me on the policy of intervention, I am quite willing to do so. But this is not the case. I note that the “conspiracist” websites, as you call them, are far more open, because they accept me even though they know in general that I disagree with their analyses, particularly on September 11. Moreover, the people I know who publish on these sites are not on the far right, and simply being skeptical about the official story of September 11 is not, in itself, a far-right position.
The world is far too complicated to keep a “pure” attitude, where one only meets and talks with people from “our side”. Let us not forget that in France it was the Chamber elected at the time of the Popular Front which voted to grant full powers to Pétain in 1940 (after the exclusion of the Communist deputies, and with the assistance of the Senators). And the opposition to the collaboration brought together the Stalinists (at the time, all the Communists revered Stalin) and the Gaullists, many of whom were, before the war, definitely on the right. The same thing happened during the Algerian and Vietnam wars, since the opposition to these wars included, among others, Communists, Trotskyites, Maoists, Christian leftists, pacifists. By the way, were Stalin, the Algerian NLF and Ho Chi Minh democrats? Was it wrong to “support” them, that is, to fight Nazism or colonialism alongside them? And in the anti-Communist campaigns of the 80s, did not the human-rights left make common cause with a variety of nationalists or anti-Semites (Solzhenitsyn, for example)? And today, do not supporters of intervention in Libya and Syria make common cause with Qatar, Saudi Arabia and a number of Salafist movements?
I also have a problem with the definition of “far right”. I know what you mean by that, but, for me, what matters are ideas, not labels. Feeling free to attack countries that do not threaten you (which is the essence of the proclaimed right of intervention) for me is a far right idea. Punishing people because of their opinions (as do the laws punishing “Holocaust denial”), for me is a far right idea. Depriving countries of their sovereignty and therefore of the very foundation of democracy, as is increasingly done by the “construction of Europe”, for me is a far right idea. Saying “Israel is sharply criticized because it is a great democracy,” as if there were no other reason to criticize Israel, to quote the person for whom most of the left will vote in the second round of the French presidential elections (François Hollande), for me is a far right idea. Simplistically opposing the West to the rest of the world, particularly Russia and China (as much of the left does today in the name of democracy and human rights), for me is a far right idea.
If you want to find a place where I would unhesitatingly agree with the “left”, travel and go to Latin America. There, you will find a left that is anti-imperialist, popular, pro-sovereignty and democratic. Leaders like Chavez, Ortega or Kirchner are elected and reelected with scores unthinkable here, including for the “democratic left”, and they face a media opposition far more dangerous than “Holocaust revisionists” (their opposition actually does support military coups), but they never consider banning them.
Unfortunately, in Europe and especially in France, the Left has capitulated on many fronts: peace, international law, sovereignty, freedom of expression, the condition of workers, and the social control of the economy. The left has replaced politics with moralizing: it decides, in the entire world, who is democratic and who is not, what is the far right and whom one can meet. They spend their time swelling out their chest, “denouncing” dictators and their accomplices, politically incorrect phrases, or anti-Semites, but they have no concrete proposals to offer that would meet the concerns of the people they claim to represent.
These multiple betrayals of progressive causes do indeed open a boulevard to a part of the far right, but the fault lies with those who have accomplished and accepted these changes, not with those trying modestly to resist the world order.
This letter has appeared in French (http://www.legrandsoir.info/lettre-a-une-journaliste.html) and in Spanish (http://www.rebelion.org/noticia.php?id=145117).
- The Case for a Non-Interventionist Foreign Policy (alethonews.wordpress.com)
- An Exchange on “Humanitarian” Intervention with Rocky Anderson (alethonews.wordpress.com)
- Why Hate Gilad Atzmon Pt. 2: “He’s WRONG!” (Or Is He?) (alethonews.wordpress.com)
- Judge dismisses claims of “anti-Semitic climate” at UC Berkeley (alethonews.wordpress.com)
India and South Korea have increased oil imports from Iran despite the United States’ plea for the two countries to reduce their dependence on the Iranian crude, says the International Energy Agency (IEA).
According to an IEA report, released on Wednesday, both Seoul and New Delhi sharply raised their oil purchases from Iran in January.
The rise in the purchase of the Iranian crude comes despite Washington’s appeals for a reduction of oil imports from Iran by around 15 percent in volume.
The White House is now concerned that it may have to impose sanctions on New Delhi for its refusal to cut back on crude purchases from Tehran.
Earlier on Tuesday, Turkey’s Minister of Energy and Natural Resources Taner Yildiz announced that Turkey is continuing to purchase crude oil from the Islamic Republic.
Oil prices have remained high following Iran’s decision to cut oil sales to some European countries in response to the EU’s sanctions on the country.
On January 23, EU foreign ministers approved sanctions against Iran, including a ban on Iranian oil imports, a freeze on the assets of the Central Bank of Iran within the bloc’s states and a ban on selling diamonds, gold, and other precious metals to Tehran.
The US, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear energy program.
Iran has repeatedly refuted the Western allegations regarding its nuclear energy program, arguing that as a signatory to the nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it is entitled to develop and acquire nuclear technology for peaceful purposes.
- Iran oil ban to hit 10 main crude importers hardest (alethonews.wordpress.com)
- Japan not ready for Iran oil sanctions (alethonews.wordpress.com)
- Democratic Senator Carl Levin urges naval blockade of Iranian oil (alethonews.wordpress.com)
- US sanctions on Iran punishing small states: Sri Lanka (alethonews.wordpress.com)
An Inside Glimpse Into the Nefarious Operations of Goldman Sachs
Goldman Sachs employee Greg Smith’s very public resignation, replete with a pointed letter published in the New York Times yesterday, has landed upon the investment bank like a bomb. Slamming a “toxic and destructive environment” within Goldman Sachs, Smith says the firm’s internal culture has devolved to the point where the entire staff not only tolerates, but expects workers at all levels, from senior partners to associates, to pursue nothing but ever-more sophisticated means of “ripping their clients off.”
Apologists for the financial sector —including the editors of the major business newspapers and television networks— predictably have shot back with a flurry columns and reports, mostly designed to discredit the former vice president by making fun of Smith and his concerns. If you strip away the ad hominem layers to these responses though, the core problems raised by Smith remain, and the reaction of the business press seems all the more absurd, for Goldman’s pesky turncoat isn’t saying anything that’s news to the public: Goldman Sachs is characterized by a toxic culture of greed? Stop the presses!
There is much more to be said about Goldman Sachs’ derivatives operation, however, and Smith’s provocative resignation provides an opportunity because he was working in the belly of it.
At the center of Smith’s critique are derivatives, the arcane financial instruments that transformed the world’s splintered national economies and regional banking systems into a single, if complicated, global system. Evangelists of derivatives claim they have made new heights of economic growth, trade, and prosperity possible. Critics have pointed out since the beginning of the derivatives boom in the 1980s how perfectly suited they are to fraud and systemic catastrophe via the greed of the few and the powerful.
Derivatives, many close observers have reminded us, were at the center the Enron meltdown, the demise of Long Term Capital Management, the Asian Financial Crisis, and most recently the Great Recession and its various flares, from the housing bubble that exploded from junked collateralized debt obligations, to the current Greek debt imbroglio and the credit default swaps haunting the background. In each case, and many less-known fiascos, derivatives traders in Wall Street’s leading banks played key roles either as the major villains, or enabling partners in vast crimes of information, leverage, and risk. Time and again we find derivatives at the center of scandalous greed. Now we have a high-profile banker denouncing not just some bad apples in his firm, but the firm’s entire culture.
There’s a deeper and more disturbing truth still further below the surface though. To get there it’s instructive to know a little more about Goldman’s derivatives operation, and the wider industry of which Goldman is a small part.
Who are the clients on the receiving end of Goldman’s “toxic and destructive” tendencies? Many times the victims have been other corporations, industrial firms with less sophisticated and perhaps naive financial officers. Quite often though the victims of Goldman’s derivatives operation have been cities, counties, and local government agencies. A key client category for derivatives has been large local governments and agencies that issue hefty sums of long-term debt.
Goldman, and the handful of other global banks that dominate the derivatives industry, sold local governments on the idea that a particular set of derivative products could provide wondrous solutions to hedge against the risks inherent in issuing long term debt. The banks claimed that interest rate swaps could shield counties, cities, and agencies from possible spikes in floating interest rates attached to their bonds. Thus many governments agreed to complex, multi-decade deals involving the swapping of payments on fictive amounts of money associated with real debt. In no time at all interest rate swaps became the single largest category of derivatives, dwarfing all others.
Today interest rate swaps make up 82% of the total market in derivatives, measured by total notional amounts. This is partly the result of governments all over the world entering into interest rate swaps, agreeing to tie cash flows to trillions of notional dollars. What’s key is that none of this has required duplicity or reckless greed on the part of bankers at Goldman Sachs or other firms. Let’s be clear; this is a structural transformation of capitalism on a global scale, and it has sucked up all corporate and government entities into the new logic of hedging and efficiency. That a few powerful financial corporations have placed themselves in strategic positions to benefit from this structural shift should come as no surprise.
In California’s Bay Area, multiple governments have come to find themselves on the paying end of Goldman’s derivatives department where apparently traders referred to clients as “muppets.” The most obvious example is the city of Oakland where a chronic budget crisis has led to the shuttering of schools and cuts to elder services, housing, and public safety. Oakland signed an interest rate swap with Goldman in 1997. The terms of the deal, revised once in 2003, were typical of interest rate swaps except that Oakland’s financial officers, based on this author’s research and impressions, seem to have agreed to a somewhat higher fixed rate obligation than most other cities that signed swap deals for similar amounts of debt with comparable ratings. Oakland partly did this, I am guessing, to receive upfront payments of roughly $5 and $10 million from Goldman Sachs, cash that the city wished to have on hand immediately. The bank seemed eager to do this because the original terms, and renegotiated terms in 2003, were much to its favor. It would earn the $15 million back, and then some over the twenty-four year life of the swap.
Across the Bay, Goldman Sachs signed an interest rate swap agreement with the San Francisco International Airport in 2007 to hedge $143 million in debt. Today this agreement has a negative value to the Airpot of about $22 million, even though its terms were much better than those Oakland agreed to. The Airport, like Oakland, must now pay millions each year to Goldman Sachs until the agreement expires, or until the floating LIBOR interest rate rises enough to offset the net balance of payments. Goldman sold derivatives up and down California and across the United States to cities, counties, and agencies, promising them a means of reducing debt payments over the long haul.
Business press pundits who are now slamming Smith say it’s absurd to expect that Goldman Sachs was doing anything less than trying to make money off these deals, and that counter-parties to the firm’s dealings knew well what they were signing up for. This mischaracterizes the entire problem, however, and threatens to steer the conversation into a narrow, and politically irrelevant one about whether Goldman Sachs is or isn’t a den of fraud.
When governments signed up for interest rate swap deals with Goldman Sachs they certainly did know that the bank would be making money off the agreement, first in the form of up-front fees, and then off of savings produced by the pairing of comparative advantages in debt markets that interest rate swaps are designed to achieve. If you don’t understand that last point, don’t worry. What it means simply is that Goldman Sachs sold interest rate swap products to governments by promising to both protect a government against interest rate volatility, and to also likely reduce the overall long-term cost of borrowing money. It was supposed to be a win-win game.
The truly impressive thing about the whole derivatives market is that it is supposed to ratchet up the efficiency of the entire global economy, making dollars go much further, protecting all parties from volatility, transcending previous market barriers and smoothing flows of cash… at least in theory. The theory seemed to be working in the 1990s and through most of the 2000s. Goldman didn’t have to convince anyone of this for the results were plain to see.
That it hasn’t panned out in practice, that the whole derivatives-based economy nearly collapsed in 2008 and continues to falter, isn’t so much the result of Goldman’s toxic culture of greed as it is the outcome of a much more troubling feature of our economic system. While I agree with Smith’s observation —which is important because it’s based on insider knowledge— that Goldman Sachs is an especially predatory corporation, I see a larger pattern of power relations embodied in the new economy, structured as it is by derivatives, that isn’t based on any specific firm’s internal culture or corruption, or the supposed naivety and stupidity of financial officers in government and less profitable sectors of the economy.
Consider the fact that Goldman Sachs isn’t even the biggest fish in the pond, nor is it profiting the most from the blizzard of derivative products that structure the capitalist economy today. Of the five financial corporations that “dominate in derivatives,” as the U.S. Office of the Comptroller of the Currency puts it, Goldman Sachs ranks fourth, behind by Bank of America, Citibank, and far behind the absolute king of derivatives, JP Morgan Chase.
In February JP Morgan Chase let slip that it cleared $1.4 billion in revenue on trading interest rate swaps in 2011, making these instruments one of the bank’s biggest sources of profit. According to some reports, JP Morgan Chase made billions more in 2008 and 2009 when the financial crisis and federal response combined to make floating-to-fixed interest rate swaps into extremely profitable assets for the banks on the floating side of the deal. Similar things can be said for Mogan Stanley, HSBC, Wells Fargo, Bank of America, Bank of New York, and the dozens of smaller interest rate swap peddlers currently profiting from direct transfers of public dollars.
Are all these banks poisoned by toxic cultures of greed? Surely there are similarities in the internal cultures of large banks, and greed and a little sociopathic ability to profit from another’s loss is a professional asset in these sorts of organizations. In contemporary corporate culture the euphemism for this is “competition.”
Toxic culture and greed, or “competitiveness” if you prefer, in the investment banks isn’t a sufficient answer to why derivatives have become the foundation of today’s global economy, however. The criminal activities of some bankers, driven by these more pervasive cultures, can’t explain the economic crisis and the vast injustices that are being perpetrated still in the name of “economic recovery.” The interest rate swap crisis stinging local governments and enriching the banks is a case in point.
The windfall of revenue accruing to JP Morgan, Goldman Sachs, and their peers from interest rate swap derivatives is due to nothing other than political decisions that have been made at the federal level to allow these deals to run their course, even while benchmark interest rates, influenced by the Federal Reserve’s rate setting, and determined by many of these same banks (the London Interbank Offered Rate, LIBOR) linger close to zero. These political decisions have determined that virtually all interest rate swaps between local and state governments and the largest banks have turned into perverse contracts whereby cities, counties, school districts, water agencies, airports, transit authorities, and hospitals pay millions yearly to the few elite banks that run the global financial system, for nothing meaningful in return. These perfectly legal cash flows measuring globally in the hundreds of billions, from the public to the banks, dwarf anything that is the result of fraud.
Back when the economy was in a “normal” stasis of growth, the early and mid-2000s, interest rate swaps and other derivatives promised security against risk, and a new vista for capitalism and public finance. Tellingly, when the crisis struck, swaps were allowed to become a one way flow of funds from the public to the banks. This shadow bailout for the banks has done considerable damage to already cash-strapped local governments suffering from declines in tax revenues and federal aid.
Whether Goldman Sachs is or isn’t an organization gripped by a toxic culture isn’t all that important when one considers the destructive impact that derivatives have had, and continue to have upon society. Capitalism as it functions today is completely dependent upon derivatives. Interest rate swaps are the single largest type of derivative, measured by notional amount, because they achieve an integration of different national, regional, and sectoral financial markets into one global financial system. It’s in the genetics of the project of financial globalization, fueled by derivatives, that the real problem lies, not in the internal culture of Goldman Sachs, or the illegal behaviors of some bankers across many firms. The real crime lies in perfectly legal and legitimated activities whereby a few powerful corporations design a system that puts the welfare of the world’s vast majority at grave risk. It’s the system that’s toxic. Goldman Sachs merely operates well within the toxicity.
Nevertheless, Greg Smith’s effort to pull back the curtain on one of the most nefarious and powerful corporations in history is most welcomed, especially for the deeper conversations it can stoke about the origins of the current crisis.
Darwin Bond-Graham is a sociologist and author who lives and works in Oakland, CA. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press.
Seven year-old, Baraka Al Mughrabi, died, on Wednesday midday, after succumbing to wounds he sustained during an Israeli air raid targeting Gaza City on Monday. His death brings the death toll due to Israeli military escalations targeting the coastal enclave since last Friday to 26.
The latest round of escalation started after the Israeli army assassinated, on Friday, the leader of the armed Popular Resistance Committees in Gaza and his assistant. Palestinian sources announced today that among those 26 killed were five elderly men, two women and five children. 80 people in total were injured some lie in critical conditions.
Meanwhile on Tuesday night and Wednesday morning Israeli jet fighters violated the Egyptian mediated truce and conducted air raids targeting a number of locations in Gaza city. One of the targeted buildings was a wood factory. The factory was totally destroyed, no injuries reported.
Cairo announced on Tuesday that a ceasefire deal was reached between Israel and Palestinian groups in Gaza ending five days of escalation in the coastal enclave. According to Cairo Israel will stop attacks and extra judicial assassinations while Palestinian resistance will halt home-made shell fire from Gaza.
Meanwhile Israeli army officials dubbed the Egyptian mediated truce “fragile” adding that Palestinian groups may violate the truce deal. Yesterday Palestinian groups announced that they will resume firing home-made Qassam shells into Israeli towns near Gaza if Israel does not keep its end of the deal.
- No pretense of an excuse for continued Israeli attacks on Gaza (alethonews.wordpress.com)
- Israeli attacks kill 12 Palestinians, wound 21 (alethonews.wordpress.com)
- Gaza truce declared as Israel hails new missile defense (alethonews.wordpress.com)
- 5 killed, 46 injured in fourth day of Gaza airstrikes (alethonews.wordpress.com)
- Israeli Forces Open Fire at Gaza Funeral, Injure Five (alethonews.wordpress.com)
In ancient Greece and Rome the front line soldiers were drawn from the wealthiest class of citizens. That was partly because each soldier had to provide his own equipment and armor was expensive, but it was also due to the belief that men who had the most to lose would fight best. It also guaranteed that wars would be no more frequent than necessary, would be short in duration, and would be decisive in nature. America’s Founding Fathers clearly had similar ideas, envisioning only a small national army and much larger state militias where the local property owners would come out on weekends and drill with their weapons on the village green, developing the skills necessary to defend their homes.
I was thinking about the duties entailed in citizenship as I watched television coverage of the spectacle of the annual conference of the American Israel Public Affairs Committee (AIPAC). I wondered about the six thousand plus attendees at the conference and their hubristic sense of entitlement minus any sense of responsibility for what they advocate. The entire conference was dedicated to going to war with Iran, a war that is manifestly not in America’s interest. But there they were, welcoming more than half of Congress and a majority of Supreme Court Justices as well as the President of the United States, as they called for war on behalf of a foreign country.
I asked myself how many of those at AIPAC would pay any price at all for going to war with Iran? How many of them have children in the military? With a little searching I could only find ten members out of the 535 members of Congress having recently had sons or daughters in the military and I would imagine the numbers among other AIPAC attendees would be even lower. I would bet the percentage is miniscule. And how many of those at AIPAC will be contributing their wealth to support another absolutely senseless foreign war? None, most likely as America has become addicted to going to war on a credit card. Instead, the AIPAC attendees have learned that it is possible to start wars by using much smaller sums of money to buy influence and votes on Capitol Hill and compliant editorial writers in the media, meaning that AIPAC’s $65 million budget can easily translate into a war that costs the American taxpayer several trillion dollars, as occurred with Iraq.
AIPAC understands that there is no need to sacrifice one’s children or spend anything more than necessary when there are other people’s children out there who are ready, willing and able to die for your cause and for the foreign land that you hold most dear. It is a coward’s way to go to war without pain, without grief, and without cost to you personally, where fighting and dying by others is little more than an abstraction. It is one more powerful reason why groups like AIPAC, instead of being celebrated, should be placed under Justice Department supervision and strictly monitored as collaborative and subversive agents of foreign powers, which is precisely what they are. And when they step out of line by stealing secrets or suborning politicians it should mean hard time in prison. No one deserves to die in someone else’s fight, particularly in a bad cause, and no one should be able to start a war and escape the consequences.
Philip Giraldi is the executive director of the Council for the National Interest.
- Two Choices for Obama: War or More War (alethonews.wordpress.com)
- Should the US Go to War for Israel? (alethonews.wordpress.com)
- AIPAC to sic Obama on Iran (alethonews.wordpress.com)
- Progressive Democratic hero Elizabeth Warren enlists to serve AIPAC’s pro-war agenda (alethonews.wordpress.com)
- Netanyahu Calls the Shots (alethonews.wordpress.com)
The International diamond-regulatory system, the Kimberley Process Certification Scheme, set up to end the trade in blood diamonds is under pressure to ban diamonds from Israel because human rights activists state they are funding the Israeli military, which stands accused of war crimes and possible crimes against humanity by the UN Human Rights Council.
A statement issued by a coalition of human rights groups including Jews for “Boycotting Israel Goods,” the Alternative Information Centre – a Bethlehem-based Israeli/Palestinian group – and a number of Palestine solidarity groups from Ireland and Britain calls on the new KPSC chair, US Ambassador, Gillian Milovanovic and members of the KPSC to ban the export of diamonds crafted in the Zionist entity.
The groups expressed “great concern about the recent escalation of military attacks by Israeli forces against the defenseless, besieged residents of the Gaza strip which have killed at least 23 Palestinians, including two children.”
“Scores of people have been injured, while thousands more have been terrorized and traumatized. With this horrific backdrop, we believe the time for action is now. The jewellery industry is facilitating Israeli war crimes by allowing the trade in diamonds from Israel which generates around $1 billion per annum in funding for the Israeli military . The international community must act in a meaningful manner to end Israeli violations of international law; banning the export of Israeli diamonds would be a very important step in that direction,” the Kimberley’s statement read.
The statement calls on jewelers “not to sell diamonds from Israel which should be regarded as blood diamonds and to end the false and grossly misleading practice of claiming that diamonds which fund gross human rights violations by government forces are ‘conflict free’.”
It also called for support for this initiative from other organizations: “We ask human rights groups worldwide to pressure the diamond industry to isolate diamonds processed in Israel and not to allow the legitimate diamond market to be used as an economic shield to fund Israeli apartheid, occupation and war crimes,” the statement concluded.
- American arms used to kill Palestinians; US complicit in Israeli crimes: Report (alethonews.wordpress.com)
- No pretense of an excuse for continued Israeli attacks on Gaza (alethonews.wordpress.com)
- | Israel Terror Bombs Gaza! (truthaholics.wordpress.com)