Archive for March, 2012

NO JOBS FOR AMERICANS

By Paul Craig Roberts

Today (March 9, 2012) the Bureau of Labor Statistics (BLS) announced that 227,000 new non-farm payroll jobs were created by the economy during February. Is the government’s claim true?

No. Statistician John Williams (shadowstats.com) reports that 44,000 of these jobs or 19% consist of an add-on factor derived from the BLS’s estimate that 44,000 more unreported jobs from new business start-ups were created than were lost by unreported business failures. The BLS’s estimate comes from the bureau’s “birth-death model,” which works better during normal times, but delivers erroneous results during troubled times such as the economy has been experiencing during the past four years.

Taking out the 44,000 added-on jobs reduces the February jobs number to 183,000, but does not provide a full correction. In an economy as troubled as the US economy is, most likely the deaths exceeded the births, but we don’t know what the number is. Was it 20,000? 50,000? What number do we deduct from the 183,000? We simply do not know.

Williams reports that seasonal adjustment factors do not work properly during troubled economic times and add their own overstatement to the jobs figure. If anyone could estimate the overestimate of new jobs that results from malfunctioning seasonal adjustments, it is John Williams, but he doesn’t provide an estimate.

Most likely, the new jobs did not exceed 150,000, a figure that would merely keep even with population growth and thus not reduce the rate of unemployment, which, consistent with this deduction, remained constant.

Let’s look now at the kind of jobs that were created. Of the new jobs reported by BLS, 92% are in services. Of this 92%, only 7% could possibly relate to exportable services — architectural, engineering, and computer systems services.

Of the reported new service jobs, 29% are in health care and social services. The categories that account for the health services jobs are ambulatory health care services and hospitals. Waitresses and bartenders account for 20% of the reported new jobs.

Employment services account for 29% of the new reported jobs. Transportation and warehousing accounted for 5% of the reported new jobs, despite a loss of 60,000 jobs in general merchandise and department stores.

In other words, the vast majority of the new jobs are low paying jobs, except for a few truck drivers.

Other conclusions that we can draw are:

The US has nothing to export to reduce its massive trade deficit, which has, sooner or later, disastrous implications for the US dollar. Middle class income jobs are declining, with polarization at the two extremes.

US economic policy continues to focus on the mega-rich at the expense of 99% of the population. US interest rates are kept at, or near to, zero in order to maximize mega-bank earnings, while depriving tens of millions of retired Americans of interest income on their lifetime savings, forcing them to spend their capital in order to live, thus depriving their heavily indebted children of inheritance.

In short, the US is well on its way to becoming a third world country, as I predicted would be the case in 20 years at a Brookings Institution conference in Washington DC early in the 21st century.

America is no longer the land of the free and independent. It is the land of the 1% mega-rich.

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Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. For further information and articles please visit http://www.paulcraigroberts.org/

Copyright Paul Craig Roberts. This article is published with his permission.

 

THE NEW MEDITERRANEAN OIL BONANZA PART ll

By F. William Engdahl

Part II: Rising energy tensions in the Aegean—Greece, Turkey, Cyprus, Syria

The discovery in late 2010 of the huge natural gas bonanza off Israel’s Mediterranean shores triggered other neighboring countries to look more closely at their own waters. The results revealed that the entire eastern Mediterranean is swimming in huge untapped oil and gas reserves. That discovery is having enormous political, geopolitical as well as economic consequences. It well may have potential military consequences too.

Preliminary exploration has confirmed similarly impressive reserves of gas and oil in the waters off Greece, Turkey, Cyprus and potentially, Syria.

Greek ‘energy Sirtaki’

Not surprisingly, amid its disastrous financial crisis the Greek government began serious exploration for oil and gas. Since then the country has been in a curious kind of a dance with the IMF and EU governments, a kind of “energy Sirtaki” over who will control and ultimately benefit from the huge resource discoveries there.

In December 2010, as it seemed the Greek crisis might still be resolved without the by-now huge bailouts or privatizations, Greece’s Energy Ministry formed a special group of experts to research the prospects for oil and gas in Greek waters. Greece’s Energean Oil & Gas began increased investment into drilling in the offshore waters after a successful smaller oil discovery in 2009. Major geological surveys were made. Preliminary estimates now are that total offshore oil in Greek waters exceeds 22 billion barrels in the Ionian Sea off western Greece and some 4 billion barrels in the northern Aegean Sea. [1]

The southern Aegean Sea and Cretan Sea are yet to be explored, so the numbers could be significantly higher. An earlier Greek National Council for Energy Policy report stated that “Greece is one of the least explored countries in Europe regarding hydrocarbon (oil and gas-w.e.) potentials.” [2] According to one Greek analyst, Aristotle Vassilakis, “surveys already done that have measured the amount of natural gas estimate it to reach some nine trillion dollars.” [3]  Even if only a fraction of that is available, it would transform the finances of Greece and the entire region.

Tulane University oil expert David Hynes told an audience in Athens recently that Greece could potentially solve its entire public debt crisis through development of its new-found gas and oil. He conservatively estimates that exploitation of the reserves already discovered could bring the country more than €302 billion over 25 years. The Greek government instead has just been forced to agree to huge government layoffs, wage cuts and pension cuts to get access to a second EU and IMF loan that will only drive the country deeper into an economic decline. [4]

Notably, the IMF and EU governments, among them Germany, demand instead that Greece sell off its valuable ports and public companies, among them of course, Greek state oil companies, to reduce state debt. Under the best of conditions the asset selloffs would bring the country perhaps €50 billion. [5] Plans call for the Greek state-owned natural gas company, DEPA, to privatize 65% of its shares to reduce debt. [6] Buyers would likely come from outside the country, as few Greek companies are in a position in the crisis to take it.

One significant problem, aside from the fact the IMF demands Greece selloff its public oil interests, is the fact that Greece has not declared a deeper exclusive economic zone like most other countries which drill for oil. There was seen little need until now. An Exclusive Economic Zone (EEZ) gives a state special mineral rights in its declared waters under the Third United Nations Convention on the Law of the Sea (UNCLOS), which came into force in November 1994. Under UNCLOS III, a nation can claim an EEZ of 200 nautical miles from its coastline. [7]

Turkey has previously stated it would consider it an act of war if Greece drilled further into the Aegean. [8] Until now that did not seem to have serious economic consequences, as no oil or gas reserves were known. Now it’s an entirely different ballgame.

Evangelos Kouloumbis, former Greek Industry Minister recently stated that Greece could cover “50% its needs with the oil to be found in offshore fields in the Aegean Sea, and the only obstacle to that is the Turkish opposition for an eventual Greek exploitation.” [9]

Hillary dances the Sirtaki too…

In July 2011 Washington joined the Greek energy Sirtaki. Secretary of State Hillary Clinton flew to Athens with energy on her mind. That was clear by the fact she brought with her her Special Envoy for Eurasian Energy, Richard Morningstar. Morningstar was husband Bill Clinton’s Special Advisor to the President on Caspian Basin Energy Diplomacy, and one of the Washington strategic operatives in the geopolitical battles to dismember the Soviet Union and surround a chaos-ridden Russia with hostile pro-NATO former states of the USSR. Morningstar, along with his controversial aide, Matthew Bryza, have been the key Washington architects of Washington’s geopolitically-motivated oil and gas pipeline projects that would isolate Russia and its Gazprom gas resources from the EU. Bryza is an open opponent of Russian Gazprom’s South Stream gas pipeline that would transit the eastern Mediterranean states. [10] Clearly the Obama Administration is not at all neutral about the new Greek oil and gas discoveries. Three days after Hillary left Athens the Greek government proposed creation of a new government agency to run tenders for oil and gas surveys and ultimate drilling bids.

Morningstar is the US specialist in economic warfare against Russian energy diplomacy. He was instrumental in backing the controversial B-T-C oil pipeline from Baku through Tbilisi in Georgia across to the Turkish Mediterranean port of Ceyhan, a costly enterprise designed solely to bypass Russian oil pipeline transit. He has openly proposed that Greece and Turkey drop all historic differences over Cyprus, over numerous other historic issues and agree to jointly pool all their oil and gas reserves in the Aegean Sea. He also has told the Greek government it should forget cooperation with Moscow on the South Stream and Bourgas-Alexandroupolis gas pipeline projects. [11]

According to a report from Greek political analyst Aristotle Vassilakis published in July 2011, Washington’s motive for pushing Greece to join forces with Turkey on oil and gas is to force a formula to divide resulting oil and gas revenues. According to his report, Washington proposes that Greece get 20% of revenues, Turkey another 20% and the US-backed Noble Energy Company of Houston Texas, the company successfully drilling in the Israeli and Greek offshore waters, would get the lion’s share of 60%. [12]

Secretary of State Hillary Clinton’s  husband, Bill, is a Washington lobbyist for Noble Energy. [13]

And some Cyprus complications…

As if these geopolitical complications were not enough, Noble Energy, has also discovered huge volumes of gas off the waters of the Republic of Cyprus. In December 2011 Noble announced a successful well offshore Cyprus in a field estimated to hold at least 7 trillion cubic feet of natural gas. Noble’s CEO, Charles Davidson remarked to the press, “This latest discovery in Cyprus further highlights the quality and significance of this world-class basin.” [14]

Cyprus is a complicated piece of real estate. In the 1970’s as declassified US Government documents recently revealed, then-US Secretary of State Henry Kissinger actively encouraged and facilitated arms to the Turkish  regime of Kissinger’s former Harvard student and then- Prime Minister Bulent Ecevit, to stage a military invasion of Cyprus in 1974, in effect partitioning the island between an ethnically Turkish north and an ethnically Greek Republic of Cyprus in the south, a division which remains.  The Kissinger strategy, backed by the British was believed intended to create a pretext for a permanent US and British military listening post in the eastern Mediterranean during the Cold War. [15]

Today the ethnically Greek south, where Noble has discovered large gas deposits, is a member of the EU. Its President, Demetris Christofias, is the only national leader in the European Union who is a communist. He is also a close friend of Israel, and of Russia. In addition, he is a major critic of American foreign policy, as well as of Turkey. [16]

Now Israel is planning to build an underwater gas pipeline from the Israeli Levantine fields across Cyprus waters onto the Greek mainland where it would be sold on the EU market. The Cyprus and Israel governments have mutually agreed on delimitation of their respective economic zones, leaving Turkey in the cold. Turkey openly threatened Cyprus for signing the agreement with Noble Energy. That led to a Russian statement that it would not tolerate Turkish threats against Cyprus, further complicating Turkish-Russian relations. [17]

Turkish-Israeli relations, once quite friendly, have become increasingly strained in recent years under the Erdogan foreign policies. Ankara has expressed concern about Israel’s recent ties with its historic antagonists, Greece and the Greek side of Cyprus. Turkey’s ally the Turkish Republic of Northern Cyprus, fears it could miss out on its fair share of the gas after Israel and Nicosia signed an agreement to divide the 250 kilometers of sea that separate them. [18]

It becomes evident, especially when we glance at a map of the eastern Mediterranean, that the oil and gas prospective bonanza there is a rapidly unfolding conflict zone of tectonic magnitude involving strategic US, Russian, EU, Israeli and Turkish, Syrian and Lebanese interests.

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F. William Engdahl is a leading researcher, economist and analyst who’s written on issues of energy, politics and economics for over 30 years. He contributes regularly to publications like Japan’s Nihon Keizai Shimbun, Foresight magazine, Grant’s Investor.com, European Banker and Business Banker International. He’s also a frequent speaker at geopolitical, economic and energy related international conferences and is a distinguished Research Associate of the Centre for Research on Globalization where he’s a regular contributor. He is also the author of A Century of War: Anglo-American Oil Politics, Full Spectrum Dominance and the New World Order. He may be reached via his website at www.engdahl.oilgeopolitics.net 

Copyright F. William Engdahl. This article is published with his permission.

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Notes

1. Ioannis Michaletos, Greek Companies Step Up Offshore Oil Exploration—Large Reserves Possible, December 8, 2010, accessed in http://www.balkanalysis.com/greece/2010/12/08/greek-companies-step-up-offshore-oil-exploration-large-reserves-possible/.
2. Ibid.
3. Hellas Frappe, Hillary came to Greece to seal oil exploration deals!, July 21, 2011, accessed in http://hellasfrappe.blogspot.com/2011/07/special-report-hillary-came-to-greece.html.
4. Chris Blake, Drilling for oil in the Aegean nay help ease Greece’s debt crisis, July 7, 2011, accessed in https://www.hellenext.org/reinventing-greece/2011/07/drilling-for-oil-in-the-aegean-may-help-ease-greeces-debt-crisis/
5. Ibid.
6. John Daly, Greece Considering Plugging Aegean Islands into Turkish Energy Grid, 22 November 2011, accessed in http://www.businessinsider.com/greece-considering-plugging-aegean-islands-into-turkish-energy-grid-2011-11.
7. United Nations, United Nations Convention on the Law of the Sea of 10 December 1982: PART VI: CONTINENTAL SHELF, Article76, Definition of the continental shelf, accessed in http://www.un.org/depts/los/convention_agreements/texts/unclos/part6.htm.
8. Chris Blake, op. cit.
9. Ioannis Michaletos, op. cit.
10. Hellas Frappe, op. cit.
11. Ibid.
12. Ibid.
13. Hugh Naylor, Vast gas fields found off Israel’s shores cause trouble at home and abroad, January 24, 2011, accessed in http://www.thenational.ae/news/world/middle-east/vast-gas-fields-found-off-israels-shores-cause-trouble-at-home-and-abroad#full.
14. Noble Energy Press Release, Significant Natural Gas Discovery Offshore Republic of Cyprus, December 28, 2011, accessed in http://www.maritime-executive.com/article/significant-natural-gas-discovery-offshore-republic-of-cyprus.
15. Larisa Alexandrovna and Muriel Kane, New documents link Kissinger to two 1970s coups, June 26, 2007, accessed in http://rawstory.com/news/2007/Intelligence_officers_confirm_Kissinger_role_in_0626.html.
16. Yilan, Cyprus conflict defies ready solution, May 30, 2011, accessed in http://turkeymacedonia.wordpress.com/2011/05/30/cyprus-conflict-defies-ready-solution/.
17. Stephen Blank, Turkey and Cyprus Gas: More Troubles Ahead in 2012, Turkey Analyst, vol. 5 no. 1, 9 January 2011, accessed in http://www.silkroadstudies.org/new/inside/turkey/2012/120109B.html.
18. Hugh Naylor, op. cit.

 

WHY CAN’T AMERICANS HAVE DEMOCRACY?

By Paul Craig Roberts

Syria has a secular government as did Iraq prior to the american invasion. Secular governments are important in Arab lands in which there is division between Sunni and Shi’ite. Secular governments keep the divided population from murdering one another.

When the american invasion, a war crime under the Nuremberg standard set by the US after WWII, overthrew the Saddam Hussein secular government, the Iraqi Sunnis and Shi’ites went to war against one another. The civil war between Iraqis saved the american invasion. Nevertheless, enough Sunnis found time to fight the american occupiers of Iraq that the US was never able to occupy Bagdad, much less Iraq, no matter how violent and indiscriminate the US was in the application of force.

The consequence of the US invasion was not democracy and women’s rights in Iraq, much less the destruction of weapons of mass destruction which did not exist as the weapons inspectors had made perfectly clear beforehand. The consequence was to transfer political power from Sunnis to Shi’ites. The Shi’ite version of Islam is the Iranian version. Thus, Washington’s invasion transferred power in Iraq from a secular government to Shi’ites allied with Iran.

Now Washington intends to repeat its folly in Syria. According to the american secretary of state, Hillary Clinton, Washington is even prepared to ally with al-Qaeda in order to overthrow Assad’s government. Now that Washington itself has al-Qaeda connections, will the government in Washington be arrested under the anti-terrorism laws?

Washington’s hostility toward Assad is hypocritical. On February 26, the Syrian government held a referendum on a new constitution for Syria that set term limits on future presidents and removed the political monopoly that the Ba’ath Party has enjoyed.

The Syrian voter turnout was 57.4%, matching the voter turnout for Obama in 2008. It was a higher voter turnout (despite the armed, western-supported rebellion in Syria) than in the nine US presidential elections from 1972 through 2004. The new Syrian constitution was approved by a vote of 89.4%.

But Washington denounced the democratic referendum and claims that the Syrian government must be overthrown in order to bring democracy to Syria.

Washington’s allies in the region, unelected oil monarchies such as Saudi Arabia and Qatar, have issued statements that they are willing to supply weapons to the Islamist rebels in order to bring democracy — something they do not tolerate at home — to Syria.

For Washington “democracy” is a weapon of mass destruction. When Washington brings “democracy” to a country, it means the country’s destruction, as in Libya and Iraq. It doesn’t mean democracy. Libya is in chaos, a human rights nightmare without an effective government.

Washington installed Nouri al-Maliki as president of Iraq. He lost an election, but remained in power. He has declared his vice president to be a terrorist and ordered his arrest and is using the state police to arrest Sunni politicians. Syria’s Assad is more democratic than Iraq’s Maliki.

For a decade Washington has misrepresented its wars of naked aggression as “bringing democracy and human rights to the Middle East.” While Washington was bringing democracy to the Middle East, Washington was destroying democracy in the US. Washington has resurrected medieval torture dungeons and self-incrimination. Washington has destroyed due process and habeas corpus. At Obama’s request, Congress passed overwhelmingly a law that permits american subjects to be imprisoned indefinitely without a trial or presentation of evidence. Warrantless  searches and spying, illegal and unconstitutional at the turn of the 21st century, are now routine.

Obama has even asserted the right, for which there is no law on the books, to murder any american anywhere if the executive branch decides, without presenting any evidence, that the person is a threat to the US government. Any american anywhere can be murdered on the basis of subjective opinion in the executive branch, which increasingly is the only branch of the US government. The other two “co-equal” branches have shriveled away under the “war on terror.”

Why is Washington so determined to bring democracy to the Middle East (with the exception of Saudi Arabia, Bahrain, Qatar, and the Emirates), Africa, Iran, Afghanistan, Russia, and China, but is hostile to constitutional rights in america?

The rights that americans gained from successful revolution against King George III in the 18th century have all been taken away by Bush/Obama in the 21st century. One might think that this would be a news story, but it isn’t.

Don’t expect the Ministry of Truth to say anything about it.

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Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. For further information and articles please visit http://www.paulcraigroberts.org/

Copyright Paul Craig Roberts. This article is published with his permission.