Me the President of Bolivia detained illegally in Europe ! - An Open Letter to the International Community

On July 2 occurred one of the most unusual events in the history of international law: the prohibition on the presidential plane of the multinational State of Bolivia to fly the French, Spanish, Italian and Portuguese territories, and my confinement at the airport of Vienna ( Austria) for fourteen hours. 

Several weeks later, the attack committed against the lives of members of an official delegation by the so-called democratic and law-abiding states, continues to raise indignation, however condemnations abound, worldwide, by citizens, social organizations, international organizations and governments.

What has happened? I was in Moscow , moments before I began my meeting with Mr Vladimir Putin, an assistant alerted me to technical difficulties : impossible to go to Portugal as originally planned. However, when I concluded my interview with the Russian President, it was already clear that the problem was not technical ...

From La Paz, our Foreign Minister, David Choquehuanca managed to organize a stopover in Las Palmas deGran Canaria , Spain, and to get the confirmation for a new flight plan . Everything seems in order ... But while we're in the air, the group captain Celiar Arispe, in charge of the Presidential Air Group and who was piloting the plane that day, came to see me, " Paris withdrew the permission to fly ! We cannot enter the French airspace.“ The surprise was equalled only by his concern: we were about to fly over France.

We could have, of course tried to return to Russia , but that would be at the risk of running out of kerosene. Colonel Arispe had contacted the control tower at the airport in Vienna to seek permission to make an emergency landing. The Austrian authorities should here be thanked for having granted the permission.

Sitting in a small office-room at the airport, which was arranged for me, I was discussing with my vice president , Alvaro Garcia Linera , and Choquehuanca to decide upon the sequence of events and above all, trying to understand the reasons for the French decision , when the pilot informed me that Italy also refused our entry into its airspace.

Then only, I received a visit from the Spanish ambassador in Austria, Alberto Carnero. He announced before me that a new flight plan had just been approved to carry me to Spain .

Only all that he will need, beforehand, he said, is the permission to inspect the presidential plane. This is even a prerequisite to our departure for Las Palmas de Gran Canaria.

When I asked about the reasons for this requirement, Mr. Carnero evokes the name of Edward Snowden, an employee of a U.S. company to which Washington outsources some of its espionage activities. I replied that I knew about him only through the press. I also reminded the Spanish diplomat that my country respects international conventions : on no account I was trying to extradite anyone to Bolivia .

Mr. Carnero was in constant touch with the Spanish Under-Secretary for Foreign Affairs, Mr. Rafael Mendívil Peydro , who obviously asked him to insist. "You are not going to inspect this plane, I had to hammer . If you do not believe what I tell you, that would mean, you are treating the President of the Sovereign State of Bolivia as liar. The diplomat went out to take instructions from his superior, then came back. He then asked me to invite him to "take a cup of coffee " in the plane. "So you take me for a delinquent ? I asked him. If you really want to get into the plane, you will do it by force. And I cannot resist a military or a police operation : I do not have the means. "

Having been definitely scared , Ambassador rejects the option of force, yet he did clarify to me that in these circumstances he cannot allow our flight plan : "At 9:00 am, we will tell you whether you can or cannot leave. In the meantime, we will discuss with our friends" he explained to me. "Friends"? "But who are these " friends " of Spain which you are referring to ? France and Italy, perhaps?" He refused to answer me and went out ...

I took this opportunity to discuss with Argentine President Cristina Fernández, an excellent lawyer who guides me on the legal issues , as well as with the presidents of Venezuela and Ecuador, Rafael Correa and Nicolás Maduro. Both were very worried about us. Correa also called me several times during the day for our news. This solidarity gave me strength, " Evo, they have no right to inspect your plane ! , " He repeatedly said to me. I was not unaware of the fact that a presidential plane has the same status as an embassy.

But these advices and the arrival of the ambassadors of the Bolivarian Alternative for the Peoples of Our America (ALBA ) (1) increased tenfold my determination to show myself firm . No, we will not offer to Spain or any other country – the United States much less than the any other - the satisfaction to inspect our aircraft. We will defend our dignity, sovereignty and the honour of our country, our great motherland . We will never accept this blackmail.

The Spanish ambassador returned. Concerned, worried and nervous, he told me that I had finally all the permissions and could go. Finally, we took off ...

The ban on the flight, decreed simultaneously by four countries and coordinated by the Central Intelligence Agency (CIA) against a sovereign country on the sole pretext that we were carrying Mr. Snowden with us, brings to light the political weight of the main imperial power: the United States.

Until July 2 (date of our detention), everybody understood that the States are equipped with security agencies to protect their territory and population. But Washington has exceeded the limits of the conceivable. Violating all the principles of good faith and international conventions, he transformed a part of the European continent into its colonized territory. An insult to human rights, one of the achievements of the French Revolution.

The colonial spirit which led to the submission of so many countries demonstrates once again that the empire recognizes no limits - neither legal nor moral or territorial. It is now clear to the world that, for such power , any law can be broken , all sovereignty can be violated , all human rights can be ignored.

The power of the United States, is of course its armed forces involved in various wars of invasion and supported by a military-industrial complex, which is out of the ordinary. Stages of their interventions are well known: after the military conquest , the imposition of free trade, a singular conception of democracy, and finally the submission of the people to the voracity of multinationals. The indelible marks of imperialism - be it military or economic – are defacing Iraq , Afghanistan , Libya and Syria. Some of the countries which were invaded on suspicion of possessing weapons of mass destruction or harboring terrorist organizations. Countries where thousands of people were killed, yet the ICC could not institute any legal actions.

But American power also comes from underground devices of spreading fear, blackmailing and intimidation. Some of the recipes gleefully used by Washington to maintain its status: the "exemplary punishment" in the purest colonial style which led to the suppression of Abya Yala Indians ( 2). It now falls on the people who have decided to be free and the political leaders who have chosen to govern for the poor. The memory of this policy of exemplary punishment is still strong in Latin America: one thinks of the coup against Hugo Chavez in Venezuela in 2002 , against Honduran President Manuel Zelaya in 2009, against Correa in 2010, against Paraguayan President Fernando Lugo in 2012 and , of course, against our government in 2008 , led by the U.S. ambassador to Bolivia , Philip Goldberg ( 3). The "example" is set, so that the indigenous people, workers, peasants , social movements do not dare raise their heads against the ruling classes . The "example" is set to bend those who resist and to terrorize others. But an "example" now leads the poor of the continent and around the world to redouble their efforts of unity to strengthen their struggles.

The attack we suffered reveals the two faces of the same oppression, against which the people have decided to revolt: imperialism and its political and ideological twin, colonialism. Sequestration of a presidential plane and its crew - that one was entitled to consider unthinkable in the twenty-first century - illustrates the survival of a form of racism in some European governments. For them, the Indians and the democratic and revolutionary process in which they are incurred are obstacles on the path of civilization. This racism, now, takes refuge in the arrogance and the most ridiculous "technical" explanations to disguise a political decision born in a Washington office. Here are governments which have lost the ability to recognize themselves as colonized , and which are trying to protect the reputation of their master ...

The empire and the colonies go hand in hand. Having opted for the obedience to the orders given to them, some European countries have confirmed their status as subject countries. The colonial nature of the relationship between the United States and Europe has increased since the attacks of 11 September 2001 and was unveiled to all in 2004, when we learned of the existence of illegal U.S. military flights supposedly carrying prisoners of war to Guantánamo or to European prisons. We now know that these alleged "terrorists" were subjected to torture, a reality on which even the organizations of human rights often keep mum.

The "war against terrorism" has reduced the old Europe to the rank of colony; an unfriendly, even hostile act, which can be analyzed as a form of state terrorism, in so far as it leaves the private lives of millions citizens to the whims of the empire.

But this snub to the international law represented by our sequestration, constitutes perhaps a breaking point. Europe gave birth to the noblest ideas of liberty, equality, fraternity . It has widely contributed to the scientific progress and the emergence of democracy. It is only a pale copy of itself: a neo-obscurantism threatens the peoples of a continent which, a few centuries back, lit up the world with his revolutionary ideas and raised hope.

Our sequestration could provide for all the peoples and governments of Latin America, the Caribbean, Europe , Asia , Africa and North America, the opportunity to form a united bloc condemning the shameful attitude of the States involved in the violation of international law. It is also an ideal opportunity to strengthen the social movements to build another world, of fraternity and complementarity. It is to the people to build that world.

We are confident that the people of the world, particularly those in Europe , are feeling the same aggression  we were victims of. And we interpret their indignation as an indirect way to introduce the excuses always refused to us by some of the responsible governments (4).

Evo Morales
President of the Multinational State of Bolivia.

Translation from the French by Trinanjan Chakraborty

(1) of which Antigua and Barbuda , Bolivia, Cuba , Ecuador, Nicaragua, Dominican Republic, Saint Vincent and the Grenadines and Venezuela are members. ( All notes by the Monde Diplomatique. )
(2) Name given to the Americas by the Kuna ethnic of Panama and Colombia before the arrival of Christopher Columbus. In 1992, the name was chosen by the Native American nations to designate the continent.
(3) On these various events , see the page " Honduras " on the site of the MD and read Maurice Lemoine, " État d’exception en Équateur " La valise diplomatique , October 1, 2010, and Gustavo Zaracho " Le Paraguay repris en main par l’oligarchie, " La valise diplomatique, July 19, 2012 , Hernando Calvo Ospina ," Petit précis de déstabilisation en Bolivie " , Le Monde diplomatique , June 2010.
(4) Since then, Lisbon , Madrid, Paris and Rome have formally apologized to La Paz .

Post-war nostrums

We will have to seriously revisit John Maynard Keynes’ insights if we want to get out of this recessionary nightmare, writes Robert Skidelsky

Expect plans for higher borrowing, tax cuts, and more spending in Monday’s pre-Budget statement. With the UK sliding into depression, it is not surprising that the old Keynesian tool kit is being ransacked. But Keynesian economics is not just about fixing damaged economies. You don’t need very sophisticated economics to spend your way out of a depression. In one form or other ~ usually by war or war preparations ~ governments have been doing it throughout history.

It does require very sophisticated economics to prove that depressions cannot happen. This was the economics Keynes set out to challenge in his great book, The General Theory Of Employment, Interest And Money, written during the Great Depression of the 1930s. His own ideas, he wrote, were “extremely simple, and should be obvious”. Economies were inherently unstable; governments had a vital role to play in stabilising them.

These heresies were too simple and obvious for the economics profession. After a long and rather successful trial run, Keynesian economics was obliterated by the free-market revolution which swept the Anglo-American world under former UK Prime Minister Margaret Thatcher and former US President Ronald Reagan. In a notable comeback, updated versions of the theory Keynes had challenged “proved” that unregulated or lightly regulated market economics were very stable, and that government intervention only made things worse. In apparent disregard for mathematical demonstrations to the contrary, crises and crashes, booms and busts continued to occur, and politicians continued to try to mitigate their consequences, common sense being stronger than logic. This is roughly the situation we are in now. Economic theory points to non-intervention: politics points to intervention. Keynes’s attempt to marry the two in the notion of “practical statecraft” failed.

Keynes’s “simple and obvious” ideas can be summed up in two propositions. The first is that large parts of the future are unknowable. “The outstanding fact,” he wrote, “is the extreme precariousness of our estimates of the basis of knowledge on which our estimates of prospective yield (of securities) have to be made.” The “unknowability” of the future imparted an inherent instability to financial and investment markets, leading to periodic outbreaks of “herd behaviour”, when “new fears and hopes will without warning take charge of human affairs”. He called the economics of his day a “polite technique which tries to deal with the present by abstracting from the fact that we know very little about the future”.

How was this “abstraction” achieved? By assuming, Keynes wrote, that uncertainty could be “reduced” to calculable probability, and therefore to the same status as certainty itself. This underlies today’s “efficient market hypothesis” which treats uncertainty as measurable risk; its acceptance explains the explosion of the derivatives market since the 1980s, which has brought the financial system crashing down.

Keynes’s second proposition is that depressions can last a long time, longer than it is politically safe to tolerate. He did not doubt that markets worked “in the long run”. “But this long run,” he wrote in his best-known remark, “is a misleading guide to current affairs. In the long run we are all dead.”

Keynes offered a number of reasons why economies did not simply “bounce back” after a great shock (the Dow Jones index did not recover its 1929 prices till 1952). However, his clinching argument in his 1930s debates with free market economists such as Friedrich Hayek was political. It was much too risky to allow economies to slide into deep depression. The example of Hitler was vivid in the minds of all democratic politicians. In 1928, at the height of Weimar Germany’s prosperity, the Nazis got 2 per cent of the vote. By 1930 they were up to 18 per cent. In 1933 Hitler was in power.

During that time, German unemployment had risen from two million to six million. Hayek and the free market economists never had an answer to this argument. So what should the British government do now? In 1931 Keynes favoured the devaluation of sterling, but this is now irrelevant: the pound is not fixed to gold as it was in his day, and is sinking quite naturally. The suggestion most favoured by editorial columns is to cut interest rates and go on cutting them. Keynes was certainly not against this, but “cheap money” to counter depression is not specifically Keynesian, and he doubted the efficacy of monetary policy on its own.

The Bank of England might flood the market with money, but this would not necessarily produce lower interest rates ~ and therefore greater lending ~ if the tendency to hoard money was going up at the same time. “The possession of actual money,” Keynes wrote, “lulls our disquietude; and the premium which we require to make us part with money is the measure of the degree of our disquietude.” As the adage has it: you can bring a horse to water but you can’t make it drink.

This leaves fiscal policy as the unique instrument in the Keynesian tool kit. It is idle to speculate whether Keynes would have favoured tax cuts or public spending increases. His remedies were always tailored to their impact on the state of confidence. His essential point was that, in a depression, a government stimulus was needed to offset the decline in private spending. This would mean running a temporary budget deficit. If pessimistic analysts are right in predicting a shrinking of GDP next year in the order of 3 to 4 per cent, the increase in the current deficit might have to be very large, even larger than the 2 per cent Lib Dem leader Vince Cable is proposing.

With output and inflation falling, Keynes would not have worried now about the “dangers of inflation”. He would have expected the budget deficit to shrink automatically as the economy recovered, and would have imposed new taxes as and when they were needed. “The boom, not the slump,” he wrote, “is the right time for austerity at the Treasury.”

The final question is this. Will we be content simply to take Keynes out of his cupboard from time to time, dust him down, and put him in charge of rescue operations, before putting him back firmly in his cupboard? Or will we now try to run our affairs paying proper attention to his insights into financial instability so as to prevent these alternations of mania and panic from periodically seizing control of our lives?

The Independent

The present crisis and the way forward

Prabhat Patnaik
The Hindu, Nvember 14

The need of the hour is the injection of demand through direct fiscal action by governments across the world.

The current world economic crisis is perceived almost exclusively as a sequel to the collapse of the housing bubble in the United States. This certainly has been its immediate provocation, but an important structural factor underlying it must not be overlooked: the stimulus for booms in contemporary capitalism has come increasingly from such bubbles. The U.S. whose size and strength make it, in the current regime of trade liberalisation, the main determinant of the pace of expansion of the world economy, has increasingly come to rely on such bubbles to initiate and sustain booms.

John Maynard Keynes, writing during the Great Depression, had suggested an alternative stimulus, namely, a comprehensive “socialisation” of investment, whereby the state acting on behalf of society always ensured a level of investment in the economy, and hence a level of aggregate demand, that was adequate for full employment. This entailed not only a jettisoning of the free market system in favour of state intervention, but also restraints on the free global mobility of finance, since meaningful state intervention could not be undertaken if the nation-state faced internationally-mobile capital. “Let finance be primarily national,” he had said.

The Keynesian stimulus was adopted in the post-war period, during what has been called the “Golden Age of Capitalism.” But the process of globalisation, involving above all the globalisation of finance, which began during the period of Keynesian demand management itself, put an end to that stimulus, and removed a host of regulatory measures that characterised the Keynesian regime. Boosts to aggregate demand now come increasingly from the stimulation of private expenditure, associated with the creation of bubbles in asset prices, rather than from an adjustment of public expenditure within the context of reasonably stable asset prices. Not surprisingly, the frequency of financial crises, associated with the bursting of these bubbles, has increased greatly after 1973. The current crisis underscores the need for a new stimulus. Till now, governments have only injected liquidity into the system for stemming the crisis. They initially planned to do so by purchasing “toxic” securities, but eventually had to inject liquidity against equity, through part-nationalisation of financial institutions.

But such injection is not enough. Credit does not start flowing simply because banks can access more liquidity; there has to be adequate demand for credit for viable projects by solvent borrowers. This is absent. Since the injection of liquidity does not improve the solvency of firms saddled with “toxic” securities, the risk associated with lending to them remains prohibitively high. Besides, the anticipation of a recession makes borrowers chary of borrowing and lenders chary of lending.

This anticipation derives from several factors. The bursting of one bubble is not necessarily succeeded by the immediate formation of another. Moreover, the very scale of the current financial crisis gives rise to an anticipation of a prolonged recession. Finally, since the recession has already started, the prospects of crisis-prevention now through the usual monetary instruments (including liquidity injection) appear distinctly dim. The mutually reinforcing tendencies, of increased liquidity preference on the part of private individuals and institutions, and of the real economy sliding downwards, have already started, and will continue, unless governments now act to inject demand into the economy directly.

The third world countries will not escape the effects of this crisis. Many of them whose financial systems are still not sufficiently “opened up” will escape the direct impact of the world financial crisis, but they certainly will have to face the impact of the recession of the real economy. Their export earnings, both merchandise and invisibles, will be hit, causing unemployment and output contraction on the one hand, and foreign exchange crisis, exchange rate depreciation and accentuated inflation on the other. (The latter will be aggravated by the outflow of speculative capital that had come in earlier to the “newly emerging markets” under the aegis of Foreign Institutional Investors).

Two areas are of special concern here. One is the inevitable decline in the terms of trade for primary commodities that will occur in a recession, which will push cash-crop growing peasants into even greater distress. The other is the loss of food security over much of the third world that will inevitably occur.

The loss of food security will occur for several reasons: first, the loss of foreign exchange earnings owing to the decline in exports and in the terms of trade will cause a decline in foodgrain availability in food-importing countries. Secondly, even if food availability is somehow maintained, the decline in the incomes of exporting peasants, small producers and the unemployed will mean inadequate purchasing power in their hands to buy necessary food. And thirdly, if the terms of trade of non-food primary commodities decline relative to food, as has been happening, then both the above problems will be greatly aggravated.

There is a tragic irony here. The booms fed by asset price bubbles not only did not benefit the large mass of peasants, petty producers, agricultural labourers, craftsmen, and industrial workers in the third world, but were actually accompanied by an absolute deterioration in their living standards. This happened not despite the boom but because of it. With the interlinking of global financial markets, asset price booms in the U.S. tended to produce stock market booms, and more generally financial sector booms, even in third world countries, where banks and other financial institutions withdrew from productive sector lending to speculative lending, from rural lending to urban lending, and from agriculture and small-scale sector lending to consumer credit to the affluent, and loans against securities. This damaged the productive base of the peasant and small-scale sector. Secondly, the changed role of the state in the new dispensation where it was more concerned with supporting the financial sector boom than with sustaining peasant and petty production, entailed a withdrawal of state support from the latter sector: input subsidies, the price support system, essential public investment, and state spending on rural infrastructure and on social sectors were all drastically curtailed, to the detriment of the entire small producer economy.

Between 1980-85 and 2000-05 the per capita cereal output in the world declined absolutely by 8 per cent, which also meant an absolute decline in per capita world cereal consumption. But since, taking both direct and indirect consumption into account, the advanced countries witnessed an increase, the decline was particularly sharp in the third world. Even China and India which experienced remarkably high GDP growth rates, did not escape this trend.

Paradoxically, this decline was not accompanied by any rise in relative cereal prices. In fact between these two years the terms of trade of cereals vis-À-vis manufacturing in the world economy declined by nearly 40 per cent, which suggests that the squeeze on the purchasing power of the masses in the third world was even greater. The other side of the speculative boom therefore was a drastic squeeze on the living standards of the masses, especially in the third world (which is why describing the U.S. as the “locomotive” of the world economy is so inapposite: this locomotive while pulling some coaches, pushed back some others). But even though the third world masses suffered from the effects of the speculative boom, they would also suffer additionally from the effects of its collapse.

The need of the hour is the injection of demand through direct fiscal action by governments across the world. For activating governments for this, two conditions have to be satisfied. The first is control over cross-border financial flows, for otherwise governments will continue to remain prisoners to the caprices of globally-mobile speculative finance capital. The second is the setting up of an international financial facility, operated on principles different from the Bretton Woods Institutions, which not only makes concessional finance available to developing economies, but also enables them to substitute long-term loans for their current short-term borrowing.

The general objective of larger government spending must be the reversal of the squeeze on the living standards of the people everywhere. In India, China and other third world countries, however, in addition to welfare state measures, larger government expenditure has to be oriented towards a substantial increase in agricultural, especially foodgrains, output.

In short, the new paradigm must entail inter alia a foodgrain-led growth strategy (on the basis of peasant, not corporate, agriculture), sustained through larger government spending, which simultaneously rids the world of both depression and financial and food crises. The trade and financial arrangements of the world economy have to be oriented towards achieving this end.

(Based on a presentation by Professor Patnaik at the United Nations General Assembly on October 30 as a member of the Interactive Panel of the UNGA on the Global Financial Crisis.)

How Roosevelt checked the Supreme Court during the Great Depression

T. R. Andhyarujina
The Hindu, November 14

His court packing bill encountered opposition. Though he lost the battle, he won the war to change the attitude of the Supreme Court judges.

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The U.S. Supreme Court invalidated 10 vital New Deal laws
In 1937, Roosevelt announced a Bill to change the Court’s composition
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The present world economic crisis originating from the United States and measures to tackle it there brings back memories of the Great Depression of the 1930s and the New Deal legislation of President Roosevelt to overcome it. One of the gripping chapters of that saga is how the U.S. Supreme Court initially thwarted important parts of the New Deal legislation of President Roosevelt by declaring them unconstitutional and how the President attempted to overcome the judicial obstruction to the New Deal laws by packing the Court with judges of his choice.

When President Roosevelt of the Democratic Party came to office in 1932 for his first term, 7 out of the 9 judges of the U.S. Supreme Court had been appointed by earlier Republican Presidents. From 1935 onwards a majority of conservative judges of ages over 70 of the Supreme Court invalidated 10 vital New Deal laws that were enacted by the Congress to overcome social and economic insecurity arising from the Great Depression, notably the National Industrial Recovery Act, the Railroad Retirement Act and the Agricultural Adjustment Act. The Court held these laws violated the freedom of contract of individuals and due process of law. President Roosevelt strongly criticised these decisions as an overreach of judicial authority frustrating the social and economic forces needed to combat the Great Depression.

Critics of the Court singled out four of the judges, Justices Van Devanter, McReynold, Sutherland and Butler as the “Four Horsemen of Reaction.” Together with the swing vote of Justice Owen Roberts they created a majority of 5 judges to 4 to invalidate important New Deal laws.

Roosevelt made these decisions of the Supreme Court thwarting the New Deal laws his re-election manifesto and promised to overcome the judicial veto when re-elected. On November 3, 1936 Roosevelt was re-elected with an electorate landslide and on February 5, 1937, he announced his Judiciary Reorganizing Bill 1937 to change the Court’s composition of the adverse majority to his programmes. This came to be known as the notorious Court Packing Plan of Roosevelt.

The essence of this proposed legislation was to replace every sitting judge of the Supreme Court over the age of 70 and six months with a new judge. Roosevelt would then have the chance to appoint six more judges, presumably having his philosophy of being favourable to the New Deal legislation and thereby increasing the size of the Court to 15 judges.

Roosevelt promoted this law in one of his “Fireside Chats” on the national radio to the nation on March 9, 1927. It remains today as the most outspoken and withering criticism of a nation’s Supreme Court of judicial overreaching into domains of the executive and legislature. His words are worth recalling.

Roosevelt said, “In the last four years the Court has been acting not as a judicial body, but as a policy-making body. When Congress has sought to stabilise national agriculture, to improve the conditions of labour, to safeguard business against unfair competition, to protect our national resources, and in many other ways, to serve our clearly national needs, the majority of the court has been assuming the power to pass on the wisdom of these acts of Congress — and to approve or disapprove the public policy written in these laws.”

He went on to say “The Court has improperly set itself up as a third house of the Congress — a super-legislature, reading into the Constitution words and implications which are not there, and which were never intended to be there. We have, therefore, reached the point as a nation where we must take action to save the Constitution from the Court and the Court from itself. We must find a way to take an appeal from the Supreme Court to the Constitution itself. We want a Supreme Court, which will do justice under the Constitution and not over it. In our courts we want a government of laws and not of men.”

Roosevelt’s court packing bill rightly encountered strong opposition in the nation as subverting the independence of the highest court and it failed to pass into law. Although Roosevelt lost the battle he won the war to change the attitude of the judges of the Supreme Court. Within a few days of Roosevelt’s Fireside chat, on March 29, 1937, Justice Owen Roberts, who held the decisive swing vote position, changed his previously held view of opposition on an important New Deal regulation relating to minimum wages thus enabling the court by 5 to 4 to hold it valid. This was the famous “Switch in time that saved the Nine” in judicial history of the U.S.

There followed important changes in the Court’s view on the National Labour Act and Social Security tax which the Court now held to be valid and constitutional. Shortly, thereafter, the leader of the four Horsemen Justice Van Devanter resigned realising as one observer said that “the jig was up.” Six months later Justice Sutherland also resigned. The complexion of the Supreme Court totally changed without Roosevelt’s court packing plan. Roosevelt went on to appoint five new justices in his second term in usual course. With these changes Supreme Court’ s attitude to economic reform laws changed for all times to an understanding deference in policy matters of government.

This interlude in the history of the U.S. Supreme Court has lessons for all democracies governed by the rule of law. First is that even the highest judiciary at times tends to overstep its limits and intrude into policies of government with disastrous results for the nation. Secondly, methods to pack the court by government to obtain favourable verdicts can never be the means to correct the court verdicts even if they are egregiously wrong.

(The writer is a senior advocate and former Solicitor-General of India.)

Corrections and Clarifications

An article "How Roosevelt checked the Supreme Court during the Great Depression" (Op-Ed, November 14, 2008) said, in the sixth paragraph, that Roosevelt promoted this law in one of his "Fireside Chats" on the national radio to the nation on March 9, 1927. It should have been "Tuesday, March 9, 1937". President Roosevelt's 35 minute 28 second-long speech was called the "Fireside Chat on Reorganization of the Judiciary".

When tax-and-spend becomes borrow-and-spend

Peter Bradshaw

I.O.U.S.A — a thoroughly admirable picture by documentary film-maker Patrick Creadon — takes the driest subject in the world — America’s national debt — and makes you deeply ashamed of not having been worried about it before now.

Its thesis is that America’s crack-cocaine-style debt addiction is a more serious problem than either terrorism or global warming. The budget deficit of the U.S. has risen to an eye-watering $9tn; its trade deficit is $738.6bn; its political leaders are casual about waste, and its feckless, want-it-now citizens buy stuff on credit and have abandoned the habit of saving, drummed into them by their provident parents and grandparents.

Creadon and his camera team follow General David Walker, the former U.S. comptroller as he travels across the country, attempting to tell America what it very much does not want to hear. America is spending much, much more than it earns. The result, as Mr. Micawber might have put it, is misery. Or future misery, anyhow.

It is all very well for Keynes to say that in the long run we are all dead — but our children will be alive. Mightn’t they have to pick up the bills?

Dishonest and pusillanimous politicians of both parties are terrified of unpopular tax hikes, says Creadon. So they borrow the money. During the second World War, America issued war bonds, and U.S. citizens were told that buying them was a stern patriotic duty.

Nowadays, debt is quite different. Debt is sexy; it can be repackaged and reconfigured in a hundred financial instruments that generate income. The political right, supposedly the stern guardians of financial rectitude, are as spendthrift as anyone else. Tax-and-spend has become borrow-and-spend. And naturally, only unsophisticated hayseeds who don’t understand the financial world would worry about the political consequences.

But wait — who is lending America money? Not Americans, but foreigners: largely the Chinese, who in any case enjoy a massive trade imbalance. China now has such hefty loans that these amount to what Creadon calls a “nuclear” financial weapon.

— © Guardian Newspapers Limited, 2008

Tech Companies, Long Insulated, Now Feel Slump

ASHLEE VANCE
NYT, November 15, 2008

The technology industry, which resisted the economy’s growing weakness over the last year as customers kept buying laptops and iPhones, has finally succumbed to the slowdown.

In the span of just a few weeks, orders for both business and consumer tech products have collapsed, and technology companies have begun laying off workers. The plunge is so severe that some executives are comparing it with the dot-com bust in 2000, when hundreds of companies disappeared and Silicon Valley lost nearly a fifth of its jobs.

October “was like turning a switch,” said Robert Barbera, chief economist at the Investment Technology Group, a research and trading firm. “Everything pretty much shut down.”

After industry leaders like Intel and Nokia warned of slowing sales this week, investors aggressively sold technology stocks. On Friday, the Nasdaq composite index, which is full of technology names, fell 5 percent. Advanced Micro Devices and eBay both dropped more than 10 percent.

Tech companies directly account for about 4 percent of the nation’s employment. And globally, companies and governments spend about $1.75 trillion on technology a year, according to Forrester Research. But the industry’s importance to the world economy is larger than its size might suggest. Technology has fueled many of the productivity gains of the last two decades. And about half of the capital spending by corporations goes toward technology products, according to Moody’s Economy.com.

As struggling businesses cut back on spending of all kinds, a slowdown in tech proved inevitable.

During the dot-com crash, technology companies were victims of Internet hype that they helped create. Once the enthusiasm faded, so did the boom-era sales on software and infrastructure equipment.

However, consumer enthusiasm for products like video games, wireless phones and high-definition televisions helped the industry recover.

This time around, the tech sector finds itself at the mercy of a double-barreled slump in both corporate and consumer spending caused by the housing decline and the economic crisis on Wall Street. Technology companies are also feeling the effect of frozen credit markets as business and government customers struggle to finance computer and software purchases that can run to millions of dollars.

“We have never seen anything like this in history,” said William T. Coleman III, a Silicon Valley veteran who founded the software maker BEA Systems and is now chief executive at a start-up called Cassatt.

Best Buy, the leading electronics retailer, declared this week that “rapid, seismic changes in consumer behavior” had fostered the worst conditions in its 42-year history, and its main rival, Circuit City Stores, filed for bankruptcy protection. Nokia, the world’s largest maker of cellphones, predicted Friday that global sales of handsets would fall in 2009, which would be only the second decline ever.

Technology giants like Intel, which makes chips for personal computers and servers, and Cisco Systems, which makes network equipment, warned that revenue was plummeting at rates last seen in 2001.

Dozens of start-ups, like the messaging service Twitter and the electric carmaker Tesla Motors, have been cutting staff members as they prepare for a slow economy.

And on Friday, Sun Microsystems, a leading maker of computers used by financial services companies, announced that it would lay off as many as 6,000 employees, or 18 percent of its work force.

The turnaround has been as sudden as it is severe. Until late September, a number of large technology companies maintained an optimistic stance, despite the obvious distress in the global economy.

Cisco was the first large technology company to reveal its sales data from October, noting a 9 percent fall in sales compared with the same month last year. On Nov. 5, Cisco, which is based in San Jose, cautioned that because of a “completely different environment,” revenue in its current quarter could plummet as much as 10 percent — a major reversal from the 7 percent growth that Wall Street had been expecting.

Intel, the world’s largest chip maker, followed this week, warning that sales in the fourth quarter could fall as much as 19 percent compared with the same period last year.

Even Google, an advertising juggernaut that many analysts said they believed would weather a downturn better than other companies, is now feeling the impact.

About eight weeks ago, the company’s chief executive, Eric E. Schmidt, told reporters, “My guess is that the drama is in New York and not here.” A month later, Google surprised Wall Street when it reported strong financial results for the quarter that ended Sept. 30, sending its shares up 10 percent.

But Google’s stock has dropped 16 percent since, as the same analysts who were upbeat about its results have since cut their revenue and profit forecasts. This week, its shares dipped below $300 for the first time in three years, well below their $742 peak. And the company, known for its torrid hiring and free-spending on employee perks, has begun the most serious belt-tightening in its 10-year history.

“We don’t know as managers how long the crisis goes,” Mr. Schmidt said last week.

For all the gloom, the tech industry is still far healthier than Wall Street. Unlike the banks, many technology companies are flush with cash. Cisco has close to $27 billion; Google, $14 billion; and Apple, $24 billion. It is likely that some of these funds will go toward acquiring struggling competitors. “The guys that aren’t as strong will be good pickings,” Mr. Coleman said.

Powered by technology, Silicon Valley has stood out as a bright spot for jobs in the United States, with employment growing at about 2 percent a year while national employment slowed. Through 2007, the region continued to add 20,000 jobs, although that positive trend has started to change.

“With this now having become a worldwide event, it’s clear that the job losses will come,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.

Given the unpredictability of the current economy, the industry’s past experience will only go so far, said Chris Cornell, an economist with Economy.com. “It would be a tragic mistake for C.E.O.’s who did a great job fighting the last recession to think the same tactics will work this time,” he said.

Miguel Helft contributed reporting.

SOMETHING OF A MIRACLE - Obama has to redefine the US to itself, and to the world

Westminster gleanings
Anabel Loyd
The Telegraph, 17 November

The tension of Election Day in Washington, when 92 per cent of the district of Columbia voted for Barack Obama but still dared not expect victory, vanished in a collective sigh of relief when he was declared president-elect at 11pm. The euphoria began on the next breath and with unseasonably warm, damp weather rotting the residual grimacing Halloween pumpkins, Washington has a spring in its step, heedless of continuing market falls or the soldiers in fatigues and desert boots pouring in and out of the Pentagon. The opposition has gone to ground; the Grand Old Party is engaged in post mortems; the president has invited his successor and his family to the White House; African Americans have seen a second coming and it belongs to them. We forget that 40 years ago, an eyeblink in history, within the memory of most of the current population here, they could not vote. The shame and the residual cruelty of hundreds of years of slavery are still very close at hand.

Expectations are so high. The world has watched Obama win and believes that if an African American can become president of the United States of America, anything is possible. Whatever happens, Obama has transformed the US. On Wednesday morning, two African American women on the subway, one bouncing with sleepless joy, decked out in Obama tee shirt, cap, backpack and badges, agreed that his mixed-race status was important, his ability to straddle and perhaps now finally remove the barriers between two worlds. Others have suggested that his non-slave ancestry gave him a confidence and impetus that no descendant of slavery, still carrying the wounds five generations on, could have achieved. For non-Americans, it took the television shots of Jesse Jackson weeping as he watched the new president-elect to remind us of that heritage.

The less-charitable have suggested that his emotion was for himself and for a presidential bid that never was, but whatever passing regrets, that crowd in Chicago was living the moment. They were rewarded by a speech of remarkable statesmanship and gravitas, even in celebration, from a man of stature, power and serenity, already confident of his ability to lead. The typhoon of hope anticipating this election, now heralding the inauguration of the new president, is worth the laying aside of contemporary British scepticism — the urge to undermine pedestals, especially those stood on by American icons, to blow in the wind of change with the rest of the world.

What now? In an instant this week, things have appeared to get better, but staggering responsibility rests on a man with unique global status and power, but apparently little experience. He is a man who has four short years before he has to fight again the same battles, when, whatever the successes, the clarity of a message of change will be obfuscated by the inevitable compromises and failures of office, the slowing of campaign urgency in the face of government bureaucracy.

An Obama activist — expert on public policy and federalism, former member of the Clinton administration, and senior Fulbright scholar to India — dismissed my concerns over the style-versus-substance issues we are familiar with in the UK, with an explication of the machine led by and supporting the president-elect. Most of his path to the White House has been well out of the standard political limelight, but rooted in principles of community organizing learnt during years of local politics in Chicago. It is his understanding of the need for inclusiveness and community-building that has been the scaffolding for a decentralized campaign spearheaded by cutting-edge IT programmes and providers to bring the message into people’s homes. This has resonated with first-time voters to bring them into a vast community of hope, empowered by its involvement in the process of the election and the sense of its own ability to make change, demonstrated by the long patient lines of voters on November 4. This was democracy. Its result has revived America’s reputation as the land of opportunity.

Every campaign-helper received an email of thanks from the president-elect by Wednesday morning. During the campaign, they have been made to feel constantly in touch with their candidate. Countless blogs, groups, messages-boards, have kept people in the loop, part of something new, exciting, where they were essential for success. The secret of Obama’s stratospheric funding too has been in the desire to be part of this new community. People have gone on giving whatever they can manage. It is probable that the giving will begin again when it is needed, and that fears of the vast sums required to run a re-election campaign starting, on recent history, in not much more than a couple of years may be unwarranted as the community finds new resources. The sums of money spent on a campaign are beyond the imagination of poorer parts of the world. By 2012, we will know if they are well spent. Obama spoke on the night of November 4 of the time needed to make changes — if he can continue to communicate clearly the slow processes of government and be seen to be moving forward, he will hold his community together.

Once upon a time, Tony Blair preached community in the UK. He failed first by reverting to domineering leadership as he gathered all the strings of government in his hands and played puppet-master to his colleagues and, by inference, to the country. Ultimately, he failed on the back of his divisive support for President Bush in the wars that have shattered international reputations and remain at the bottom of the poisoned chalice inherited by Obama. In Washington, everyone wants peace, but the domestic and world economic situation has risen like oil to the surface, and even the current ecstasy is tinged with the sobriety of job losses and failing companies as markets continue to fall. There is little sense of the usual relaxation or the hidden infighting over appointments of the period of transition between presidential administrations. Clear decisions are already being made on roles, previously agreed in case of victory, and the president-elect is up and running and deeply involved in building new economic plans.

Concerns exist that his decision-making process may be too collegial and therefore too slow. Obama is on a knife-edge between the need to change processes of policy-making and implementation from the top-down, centralized approach initiated in the Clinton years to lay a path for the worst efforts of George W. Bush, and the importance of a fast forward decisiveness on both domestic and foreign issues. For now, he is on the case, and may achieve a balance that holds fast to consensus as the watchword whilst understanding the need for the aggression and, to quote the Washington Post, “sharp-edged approach to politics” of his new chief of staff, Rahm Emanuel. A veteran of the Clinton administration, Emanuel adds a level of continuity, experience and rigorousness of policy to the new team with what is likely to be an essential core of steel. Meanwhile, the transition website continues to build the sense of the importance of popular and individual involvement in the processes of the next administration with its opening message, “It’s your America, share your ideas.”

There are suggestions that Franklin D. Roosevelt is Obama’s role model, but, however appalling the Great Depression, Roosevelt in 1932 had far fewer balls to juggle at once, only later making the international decisions that brought the US into World War II. The new president and his secretary of state have instantly to involve themselves in the wars of their predecessors, to start the long processes of withdrawal and extrication, and attempt to play peace-maker without playing god. Opposition, quiet for now, will rear its head at the first signs of weakness or failure, and the whole world will be watching. At the same time, the president has to deal with the global economic, energy and environment issues so disastrously handled by the Bush administration. At home, campaign promises made ahead of vital and immediate measures towards economic salvage mean tax changes and, vital to the poor, health as well as education policy reforms. The new president has to redefine the US to itself and to the world. He has to maintain the hope as the wheels of government and international relations grind slow. We may have seen something of a miracle this month. They are saying in Washington, too, that the quality of the new administration will be remarkable as people hungry for change rush to accept badly paid jobs to be part of Obama’s new world. Another miracle perhaps.

So, can he do it? Well, time will tell. But, for the moment, I’ll go with the hope. Yes, he can.

BEYOND THE MILESTONE - Unless Obama’s victory heralds changes, it will remain a symbol

Postscript
Githa Hariharan
The Telegraph, November 16

There has been a flood of reaction to Barack Obama’s triumph in the presidential elections, and it will probably be a good while before this unruly flood abates. But soon after the news was confirmed, there was a recurring reaction that neatly combined disbelief, amazement and sheer gratitude in a single and simple sentence. “I never thought I would see this day.” This spontaneous reaction was heard over and over again in America. The statement, so heartfelt that it almost sounds raw-skinned, could be understood as saying one of three things. It could be an indication of the relief so many feel at the passing of the eight torturous years of a particularly vicious government. It’s a relief that allows for some hope that “unilateral” decisions will make way for some “multilateral” attempts at decision-making. In other words, there may be hope that the American government will learn to speak to more people and hear more people — both in America and elsewhere.

The reaction could be amazement that a more “international” person — a man of a more heterogeneous background in terms of race, nationality and life experience — is actually going to the White House. In which case, it may be possible to hope that at least some of the insular and jingoistic baggage of the past can be left behind. Perhaps more than lip service will be paid to the fact that contemporary America is, more than ever, a nation of immigrants. And if this can happen, there may even be an acknowledgement that the “American way of life” — something so often anxiously defended by conservatives as if it is an old museum piece that must be preserved in cotton wool — is actually a dynamic, debatable idea.

But most of all, the reaction is gratitude for witnessing a milestone in African-American history. At this point, anyway, very few people would dilute this gratitude by carping about whether Obama is “black enough”. Nor can this reaction be mistrusted as either “merely emotional” or as “overemphasizing race”. It’s impossible to forget that this election victory has happened in a country where white did mean master and black did mean slave. There’s no getting away from this history, or its legacy. In fact, there is no need to go all the way back to the years of slavery. Just the last 50-odd years would do to get a sense of the distance travelled, and the pain suffered en route. It hasn’t been that long since racial discrimination and racial stereotypes were not only real, they were also legal.

Not all that long ago, in 1955, in Montgomery, Alabama, a member of the National Association for the Advancement of Colored People, Rosa Parks, was arrested for refusing to give up her bus seat to a white passenger. The subsequent bus boycott organized by the black community in Montgomery lasted for more than a year till the buses were desegregated. Parks, an icon of the civil rights movement, died three years too early to witness the milestone of 2008 — she died at the age of 92 in 2005.

A year before Parks’s gesture to affirm black rights, the 1954 landmark case, Brown versus Board of Education of Topeka, Kansas, resulted in a unanimous judgment from the supreme court. The court ruled that segregation in public schools was unconstitutional, overturning the 1896 Plessy versus Ferguson judgment that sanctioned “separate but equal” segregation of the races. The 1954 ruling stated that “separate educational facilities are inherently unequal”. It paved the way for large-scale desegregation — a process fraught with difficulty, and a process, many would argue, that is yet to be fully achieved in 2008.

Again, it was only four decades back, 44 years to be precise, that Lyndon B. Johnson signed the most sweeping civil rights legislation to prohibit discrimination of all kinds based on race, colour, religion or national origin. Asserting that civil rights laws alone are not enough to remedy discrimination, President Johnson issued Executive Order 11246, which enforced affirmative action for the first time. It required government contractors to “take affirmative action” toward prospective minority employees in all aspects of hiring and employment.

But while laws and executive orders are important, neither can bridge that wide and frustrating gap between sanctioned equality and flesh-and-blood inequality. In 1964, the same year President Johnson signed the Civil Rights Act, the bodies of three civil rights workers — two white, one black — were found in an earthen dam, six weeks into a federal investigation. The civil rights workers were men in their early twenties, working to register black voters in Mississippi. When they went to investigate the burning of a black church, they were arrested by the police on speeding charges, and incarcerated for several hours. Then they were released after dark into the hands of the Ku Klux Klan, who murdered them. The sad tailpiece of this already tragic story is that it was only as recently as 2005 — on the 41st anniversary of the Mississippi civil rights murders of 1964 — that the ringleader, Edgar Ray Killen, was convicted of manslaughter.

It is true that the 2008 electoral verdict in America is not as much about race as it is about a rejection of the Bush years, and what they have done to both America and other parts of the world. But in embracing the idea of change, the American electorate has come upon a powerful milestone for equality.

Despite greed, warmongering and the seduction of empire, America and Americans have travelled a long and difficult road towards this milestone. Now that a black man will soon move into the White House, will the ground realities really change? Will the mainstream political voices address the racial and economic disadvantage eating into the lives of the common Americans more directly? Will they find alternative strategies to the military bullying abroad? Will there be real attempts to shift attitudes and dispel stereotypes — not only about African-Americans, but also Arabs, Muslims, foreigners?

For now, there is a terrible temptation to romanticize Obama as the new and wondrous knight of utopia. There is an equally strong temptation to air the mothballed liberal voices in America, let them have their say, or sing and celebrate for a happy, if brief, intermission. The intermission is brief because a milestone is only a signpost. Its rhetoric may be moving; it may be cathartic. But it has to lead to something, and something substantial enough to make the milestone meaningful. Otherwise, it is only a fragile symbol in a museum. In his address at the Democratic National Convention, in San Francisco in 1984, Jesse Jackson referred to “the call of conscience, redemption, expansion, healing and unity”. “Leadership,” he said, “must heed the call of conscience, redemption, expansion, healing and unity, for they are the key to achieving our mission.” If the possibilities the milestone of 2008 suggest are not to be squandered, the call of conscience may demand that at least some of the policies and practices of the Bush years will have to be put in reverse gear as soon as possible.

LALGARH NEWS

Maoists threaten Lalgarh war
The Telegraph CORRESPONDENT

Midnapore, Nov. 12: Maoists today threatened an armed resistance in West Midnapore’s Lalgarh where tribals have been protesting police raids and detentions following a blast that missed the chief minister by minutes.

CPI (Maoist) state secretary Kanchan said: “We are with the people of Lalgarh. Our guerrilla squad is with them to build an armed resistance. I appeal to the Lalgarh people to follow the Nandigram path by setting up road blocks and snapping electricity and telephone connections to teach the CPM and police a lesson.”

Villagers armed with bows and arrows tonight placed at least 30 trees at various points on the road that branches off NH 6 and leads to Jhargram town. They also blocked the road connecting Jhargram with Jamboni. “They are trying to cut off the town,” a police officer said.

The road to Jhargram from Midnapore town had not been touched till late tonight.

In East Midnapore’s Nandigram, villagers led by the Trinamul Congress and all- egedly aided by Maoists had created a similar island of unrest, cut-off from the administration.

In Jhargram, the villagers wrote on the road: “The police have to explain why innocent villagers were arrested on suspicion of being Maoists.”

Tribal youths continued to obstruct the state highway connecting Midnapore town with Bandwan in Purulia.

“The Maoists have been instigating the villagers. We have got some vital information after questioning three persons picked up from Binpur and Jamboni on November 6,” said West Midnapore police chief R.K. Singh. He declined comment when asked why the intelligence branch had failed to tip off the administration about Maoist activities.

Armed policemen had pounced on schoolchildren returning from a soiree and tried to link them with the rebels while probing the blast at Salboni that hit a car in Union minister Ram Vilas Paswan’s convoy on November 2. Women were allegedly beaten up during the raids that followed.

District magistrate N.S. Nigam said the allegations of police misconduct would be probed. “I appeal to the agitating villagers to return home and let us redress their grievances through talks,” he said.

Detentions by ‘mistake’ that made Lalgarh dig up roads
PRONAB MONDAL

Lalgarh (West Midnapore), Nov. 11: Headmaster Asim Ganguly woke up on November 4 morning to hear two of his Class VIII students had been arrested in connection with the Maoist blast two days earlier. He couldn’t believe his ears.

“They are normal, innocent boys who wouldn’t dream of doing anything subversive,” the head of Vivekananda Vidyapith in Kanthapahari, Lalgarh, said today. “The police action was absurd, cruel and high-handed.”

The arrest of the two 14-year-olds and a friend — and police raids that led to women being beaten up — were the main reason Lalgarh’s villagers have dug up roads, Nandigram style, to keep the administration at bay.

Buddhadeb Patra and Goutam Patra were picked up with Aben Murmu — a 15-year-old Class VIII student from Ramakrishna High School — on November 3 night on suspicion of links with the Maoists who had tried to bomb the chief minister’s car the day before.

All three were freed on bail four days later but Ganguly hasn’t yet recovered from the shock. “Why didn’t the police get in touch with me first? I’ve taught these boys and watched over them for so many years now — wouldn’t I know what sort they were?”

Perhaps to give their action a semblance of credibility, the police had initially bloated the ages of the boys by four years each to 18, 18 and 19. However, the man they dragged out of bed at 3 the next morning in Barapelia village was 62.

Retired teacher Khamananda Mahato, who used to teach at Ganguly’s school, said: “Some 200 armed policemen surrounded my house, their faces covered with black cloth. They ordered me to accompany them.”

Mahato’s wife was ill and he requested them to wait till morning, but they would not agree. At Lalgarh police station, he was asked to identify a man he had never seen, and was held till 4pm. Mahato today said he was still “traumatised”.

“Mastermoshai was a very popular teacher. It’s absurd to link him to any anti-national activity,” Ganguly, 40, said of his former colleague.

District police chief Rajesh Kumar Singh admitted the arrests and the detention were “mistakes”. He said: “We had no evidence and so did not oppose the boys’ bail plea. We also dropped their names from the chargesheet.”

Mahato, Singh added, “lives in an area that is a Maoist corridor; so we thought he might know some of the suspects. Later we realised that he didn’t.”

The boys said they were returning from a baul performance at Kanthapahari, 4km from their home in Banshber, around 11pm when armed policemen pounced on them.

“They threw me by the collar inside a van, flat on the floor, my face shoved between their boots. Not a single question was asked, not who we were, or where we were from,” Aben said.

Within minutes, Goutam and Buddhadeb too were flung inside the van and, like Aben, lay prone on the floor.

“I was so frightened, I started crying,” Goutam said. “A policeman prodded me with his boot and shouted he would kick me to death unless I stopped. I tried to smother my sobs and then the van started moving.”

At Salboni police station, when the boys were repeatedly asked to name their dadas (Maoist seniors), one of them, clueless about what they were being asked, replied he didn’t have a dada (elder brother).

“The police slapped us and beat us but they got nothing out of us because we didn’t know anything,” Buddhadeb said.

After some time, they were pushed into the lock-up. “One night here, and you’ll be talking tomorrow,” a policeman said.

The boys were charged with waging war against the country, causing hurt with dangerous weapons and attempt to murder.

“How could the police think my son would do any such thing?” wept Pratima Patra, Goutam’s mother, at her mud hut. “I went to Lalgarh and fell at officers’ feet but they wouldn’t listen.”

The boys were released only when village after village erupted in protest. The agitators today dug up a road in Salboni and continued blocking the Midnapore-Bandwan highway despite a promise yesterday to repair it.

In Lalgarh, CPM leaders run for guns

Indian Express

Kolkata, November 14 : When it comes to political leaders moving with a gun-toting entourage, there is little difference these days between Western Uttar Pradesh and the Maoist-affected areas of West Midnapore.
During its trip to Lalgarh, several encounters of The Indian Express with the zonal leaders of the CPM proved that panic has struck the party hard ever since the tribal agitation began on November 5.

Those blessed with clout are granted security personnel from the state’s armed forces. The officials in the district administration confided that over 100 grassroots leaders now move with private protectors. The threat perception is said to be “real” from Maoists, who have strong pockets of influence in the region.

On way to Lalgarh, at Bottola Chalk near the local CPM party office, The Indian Express met Anuj Pande, the party’s zonal committee secretary. Moving around with gun-totting securitymen provided by the government, Pande still looks a scared man.

World Leaders Vow Joint Push to Aid Economy

MARK LANDLER
NYT, November 16, 2008

WASHINGTON — Facing the gravest economic crisis in decades, the leaders of 20 countries agreed Saturday to work together to revive their economies, but they put off thornier decisions about how to overhaul financial regulations until next year, providing a serious early challenge for the Obama administration.

Though the countries’ stimulus packages were cast as ambitious steps, they mainly reflected measures that the countries were already undertaking to respond to the crisis. What remains to be seen is whether, working with a new White House, the leaders will cast aside their political and economic differences to embrace more radical changes, including far-reaching but fiercely debated proposals to overhaul regulation.

The group planned its next meeting for April 30, 101 days after President-elect Barack Obama is sworn into office.

Mr. Obama, who sent emissaries but did not attend at the meeting, will find common ground with the leaders in his support of a further stimulus program in the United States — something President Bush opposes. The group called for more fiscal measures to cushion the blow of a downturn that is hitting rich and poor countries.

Two senior advisers for Mr. Obama, Madeleine K. Albright and James A. Leach, met privately with leaders on the sidelines. And Mr. Obama addressed the meeting only obliquely on Saturday in his first radio address as president-elect, in which he expressed appreciation that Mr. Bush “has initiated this process, because our global economic crisis requires a coordinated global response.”

Meeting here, in the capital of the country where the crisis began, the extraordinary gathering of leaders from the Group of 20, representing wealthy countries and major emerging economies, began what participants said would be a broad reform of the institutions that have governed global markets since World War II.

In a five-page communiqué that mixed general principles with specific steps, the G-20 pledged a new effort to bolster supervision of banks and credit-rating agencies, scrutinize executive pay and tighten controls on complex derivatives, which deepened the recent market turmoil.

“Our nations agree that we must make the financial markets more transparent and accountable,” President Bush said. He warned that “a meeting is not going to solve the world’s problems,” and described the talks as the beginning of a process that would carry over to the next administration.

With dueling press briefings and statements through the weekend, it was clear that bridging ideological gaps among nations afflicted with different versions of the economic contagion would provide the new president and other world leaders with a daunting challenge.

There is also a more basic philosophical divide across the Atlantic: Europeans in general favor more state control over markets, even to the point of granting regulators cross-border authority, while the United States stresses the primacy of national regulators. President Nicolas Sarkozy of France, who called on Mr. Bush to organize the meeting, alluded to those differences, saying the negotiations, even on general principles, had been challenging.

Mr. Sarkozy said: “I am a friend of the United States of America, but if you ask, was it easy? No, it wasn’t easy.” He added that he did not fly to Washington “simply for the pleasure of traveling.”

He said the Americans had made concessions even by agreeing to discuss issues like regulatory coordination and executive pay. The communiqué, however, suggested there were concessions on both sides.

Prodded by Mr. Bush, who earlier in the week gave an impassioned defense of capitalism, the leaders reaffirmed their commitment to free markets and trade. But they also clearly laid blame for the crisis at the doorstep of the United States, saying “some advanced countries” had taken inadequate steps to prevent a buildup of dangerous risks.

The meeting set out a road map for overhauling regulations in a wide range of areas, and assigned the work to groups of experts. At the next meeting, which Mr. Sarkozy proposed to hold in London, the leaders will debate specific proposals developed by those groups.

Among those measures is a European proposal to set up so-called colleges of supervisors, which would meet regularly to share information about global banks with operations in many countries.

Another idea is to expand the membership of the Financial Stability Forum, an influential group of finance ministers and central bankers from industrialized countries, to include emerging markets like Brazil and China.

Still, for all the talk of action and history-making change, some experts said the outcome was disappointing.

“This is plain-vanilla stuff they could have agreed on without holding a meeting,” said Simon Johnson, an economist at the Massachusetts Institute of Technology and a former chief economist of the International Monetary Fund. “What’s new, except that this is the G-20 instead of the G-7?”

Despite broad support for economic stimulus, the leaders were not able to agree on a coordinated global effort. The Bush administration, which does not favor a further stimulus, resisted that idea. And the proposal for colleges of supervisors fell short of an international regulatory agency favored by the French. The Bush administration opposes any regulatory agency with cross-border authority.

The statement did not single out hedge funds as needing regulation, which Germany has long advocated. German diplomats said they were satisfied that the issue would be addressed later. “There shall be no blind spots,” said the German chancellor, Angela Merkel.

Despite playing up the role of the International Monetary Fund as a vehicle for helping developing countries in crisis, the leaders did not call for an expansion in the fund’s lending resources.

Collectively, the leaders here represented countries that account for 85 percent of the world’s economy. But the guest list was more remarkable for what it said about the shifting landscape of power. With the United States and Europe struggling economically and consumed by efforts to stabilize their banks, China, Japan and Saudi Arabia emerged as the likeliest candidates to help distressed countries.

In one of the few concrete commitments, the Japanese prime minister, Taro Aso, pledged to increase lending to the I.M.F. by up to $100 billion, and he encouraged other cash-rich countries to do the same. On Saturday, the fund added Pakistan to its list of countries receiving emergency funds. Pakistan said it had agreed to a loan of $7.6 billion to prevent a default by its government.

Some leaders were simply eager to be heard. “Emerging market countries were not the cause of this crisis, but they are amongst its most affected victims,” the prime minister of India, Manmohan Singh, said.

The leaders convened in the colonnaded great hall of the National Building Museum, a 19th-century building that served as headquarters for the United States Pension Fund after the Civil War. It was also the place Senator Hillary Rodham Clinton used to end her presidential campaign last June.

Mr. Bush, accompanied by his Treasury secretary, Henry M. Paulson Jr., sat between Brazil’s president, Luiz Inácio Lula da Silva, who chairs the Group of 20, and Prime Minister Aso.

Afterward, Mr. Bush acknowledged that expanding the group from the customary seven or eight industrialized powers to 20 nations raised the risk that nothing substantive would get done.

But Mr. Bush said the meeting had been surprisingly substantive, and he seemed enthusiastic about one of the more arcane proposals: a clearinghouse for the $33 trillion market in credit default swaps.

These derivatives, which act as a form of insurance against the failure of an underlying asset, have been blamed for exacerbating the recent market upheaval. A clearinghouse would back trades in credit default swaps and absorb losses if a dealer in these securities failed.

Mr. Bush said he felt compelled to act because “if you don’t take decisive measures, then it’s conceivable that our country could go into a depression greater than the Great Depressions.”

When Mr. Sarkozy first proposed the meeting, some predicted it would be dominated by finger-pointing. Now, some critics said the communiqué did not go far enough in assigning blame for the crisis.

“Anyone looking for the G-20 to issue a mea culpa on the global financial crisis will be sadly disappointed,” said Kenneth S. Rogoff, a professor of economics at Harvard. The leaders “curiously downplay the huge culpability of the political leadership in the U.S. and Europe.”

With Mr. Bush’s imminent departure, however, there seemed to be little appetite to pile on the United States.

With Congress likely to consider a stimulus package in the coming weeks or in January, Mr. Johnson of M.I.T. said Mr. Obama might be able to go to the next summit meeting with strong evidence of American action.

“The U.S., despite having broken all the china, may end up playing a decisive role in fixing this situation,” he said.

Steven Lee Myers, David D. Kirkpatrick and Sheryl Gay Stolberg contributed reporting.