The recent spate of bombings in the Philippines send a clear signal to the public — GMA wants to prolong her rule. In a layered fashion of political orchestrations her coterie of lapdogs in the palace busies themselves conditioning the minds of people. We should remember bombing did happen before in Makati and in Manila, in malls only to justify and side sweep burning issues, a work of a person who lusting for power and enjoying every bit of the misery that the Filipino people carry.

In order to maintain herself in the helm of power, aside of having this Machiavellian approach, she is now attempting to change the 1987 Constitution, content and form. Content wise, she wants to get rid of all provisions that limit foreign big foreign business to exploit our natural resources. Form wise, she wants a parliamentary government with the end goal running for Prime Minister without term limits at her hometown, Pampanga. Changing content and form serves two purpose, one, changing content will appease big foreign business interests and form, to cloak her self against any political actions, cases that will be filed by the people if she steps down amid the killings, torturing and disappearances under her administration.

Way Out for the Filipino People

There is no way out than to unite. Doing nothing and waiting for the 2010 elections will not help. For all you know elections will not really happen. Such scenario is underway leading to a failed election if indeed they cannot rig the votes through speeded automation of electoral votes via computerization.

 There is a need to escalate and broaden the call for her ouster. She is consciously dangling the electoral scenario to the reactionary progressive opposition whose only aim to dampen their participation in the parliament of the streets. As a united front principle there is a need to continue gathering the broadest range against the narrowest target. The opposition must be united and not play up to GMA’s political maneuver to divide and rule or simply neutralize them.

 A wait and see attitude will not work either.

A basis for her ouster is clearly written in the wall that ordinary people can read.  To mention a few, selling our national sovereignty for a petty sum of money through legislation’s by opening of natural resources for to the exploits of foreign big businesses that has dislocated many of our Filipinos from their homes, brutal militarization campaign called Operation Freedom Watch 1 and 2 ( Oplan Bantay Laya 1 & 2 )which to this date, continues to victimize innocent people, exporting Filipinos, thus destroying families because her government wants their dollars while her administration engage in rampant graft and corruption.

Let us shout to Gloria her time is up, the Filipino people are standing up. Now is the time to unite. For those you had suffered much. You have nothing to loose. We need to dare, we need to struggle and we need to win this!

The recent birth of my niece reminds me that life is something more than just presence, it is the earth rising inside of you, the earth that has been there since the beginning, but taking a different form.

When I started to work more with particular issues of human rights violations I also met different babies, babies and children who had lost their mothers and fathers to a different death. A horrible and preventable death that takes the life not only of its victim, but robs the whole family and the world of their presence, all because they advocated and fought for a better world where their children have genuine freedom, a just peace, and true democracy.

Each day I was with the community, I learned how precious a birth can be, how to appreciate life, and I slowly began to understand what they meant when they whispered me their names and told their stories. There are no deaths that are forgotten, no fathers, no mothers, no sisters and brothers, aunts, uncles, or cousins that are forgotten. They live in the births of new babies each day.

When my own experience of abduction and torture ended and I was reunited with my family it was not a second birth for me, I realized that it is a continuing journey for the search for truth and justice. Repressive governments and military use torture as a form of control, to instill fear in people in debilitating ways, so they stay quiet and lose their light inside. But I realized no amount of pain or suffering or fear can stop that earth in me to keep rising. Instead it gave birth to new births. My experience has convinced me even more of the value of freedom and justice and the importance of fighting for and upholding the principles of human rights and human dignity.

Me being able to write this right now is testimony of how your collective love, support, prayers, and action is helping me and others like me through this experience. I know that your support is also part of a larger movement to create change towards a world free of poverty and oppression. Thank you to friends and family, family and friends of other desaparecidos, progressive people’s organizations, human rights groups, lawyers, civil rights advocates, church people’s organizations, concerned individuals, fellow poets and artists, and all believers in human rights and justice.

There are many more desaparecidos, more abductions, torture and extra-judicial killings going on in the Philippines and around the world. Let the new birth come where there is an end to all of the killings, abductions, and torture. Let the noise come from all directions—they are no longer whispers but shouts for justice.

Love,
Melissa Roxas

——-

RELATED LINKS

Affidavit
http://media.inquirer.net/inquirer/media/mraffidavit.pdf

Supreme Court petition for the Writ of Amparo
http://media.inquirer.net/inquirer/media/Petition-woa.pdf

American Woman Is Freed After Philippines Abduction – 05/25/2009
http://www.nytimes.com/2009/05/26/world/asia/26phils.html

Soldiers ‘Abducted, Tortured’ Fil-Am Activist – 06/02/2009
http://www.bulatlat.com/main/2009/06/02/soldiers-tortured-filipino-american-activist/

US-trained and funded Philippine military implicated in abduction and torture of American citizen: Alliance of Filipino American organizations vows to hold US and Philippine governments accountable and demands end to US taxpayer support for Philippine military – 06/02/2009
http://bayanusa.org/?p=234

Karapatan (Alliance for the Advancement of People’s Rights)
http://karapatan.org

 
What are the modern origins of the Israeli-Palestinian conflict?

[part2]   [part3]   [part4]   [part 5] (Ranjeet Brar speaks at a meeting organized by the Communist Party of Great Britain (Marxist-Leninist). He gave his take on what is happening in Gaza.)

During World War I, Britain made three different promises regarding historic Palestine. Arab leaders were assured that the land would become independent; in the Balfour declaration, Britain indicated its support for a Jewish national home in Palestine; and secretly Britain arranged with its allies to divide up Ottoman territory, with Palestine becoming part of the British empire. Historians have engaged in detailed exegesis of the relevant texts and maps, but the fundamental point is that Britain had no moral right to assign Palestine to anyone. By right Palestine belonged to its inhabitants.

In the late l9th century, anti-Semitism became especially virulent in Russia and re-emerged in France. Some Jews concluded that Jews would only be safe in a Jewish state and thus founded Zionism. Most Jews at the time rejected Zionism, preferring instead to address the problem of anti-Semitism through revolutionary or reformist politics or assimilation. For many orthodox Jews, especially the small Jewish community in Palestine, a Jewish state could only be established by God, not by humans. At first Zionists were willing to consider other sites for their Jewish state, but they eventually focused on Palestine for its biblical connections. The problem, however, was that although a Zionist slogan called Palestine “a land without people for a people without land,” the land was not empty.

Following World War I, Britain arranged for the League of Nations to make Palestine a British “mandate,” that is, a colony to be administered by Britain and prepared for independence. To help justify its rule over Arab land, Britain arranged that one of its duties as the mandatory power would be to promote a Jewish national home.
 
Who were the Jews who came to Palestine?

The early Zionist settlers were idealistic, often socialist, individuals, fleeing oppression. In this respect they were like the early American colonists. But also like the American colonists, many Zionists had racist attitudes toward the indigenous people and little regard for their well-being.
Some Zionists thought in terms of Arab-Jewish cooperation and a bi-national state, but many were determined to set up an exclusively Jewish state (though to avoid antagonizing the Palestinians, they decided to use the term Jewish “national home” rather than “state” until they were able to bring enough Jews to Palestine).

Jewish immigration to Palestine was relatively limited until the 1930s, when Hitler came to power. The U.S. and Europe closed their doors to immigration by desperate Jews, making Palestine one of the few options.
 
Who were the indigenous people of Palestine?

Pro-lsrael propaganda has argued that most Palestinians entered Palestine after 1917, drawn to the economic dynamism of the growing Jewish community, and thus have no rights to Palestine. This argument has been elaborated in Joan Peters’s widely promoted book, From Time lmmemorial. However, the book has been shown to be fraudulent and its claim false. The indigenous population was mostly Muslim, with a Christian and a smaller Jewish minority. As Zionists arrived from Europe, the Muslims and Christians began to adopt a distinctly Palestinian national identity.
 
How did Zionists acquire land in Palestine?

Some was acquired illegally and some was purchased from Arab landlords with funds provided by wealthy Jews in Europe. The legal purchases were often morally questionable as they sometimes involved buying land from absentee landlords and then throwing poor Arab peasants off the land. Land thus purchased became part of the Jewish National Fund, which specified that the land could never be sold or leased to Arabs. Even with these purchases, Jews owned only about 6 percent of the land by 1947.
 
Was Palestinian opposition to Zionism a result of anti-Semitism?

Anti-Semitism in the Arab world was generally far less severe than in Europe. Before the beginning of Zionist immigration, relations among the different religious groups in Palestine were relatively harmonious. There was Palestinian anti-Semitism, but no people will look favorably on another who enter one’s territory with the intention of setting up their own sovereign state. The expulsion of peasants from their land and the frequent Zionist refusal to employ Arabs exacerbated relations.
 
What was the impact of World War Il?

As war approached, Britain shrewdly calculated that they could afford to alienate Jews-who weren’t going to switch to Hitler’s side-but not Arabs, so they restricted Jewish immigration into Palestine. This was precisely when the need for sanctuary for Europe’s Jews was at its height. Many Jews smuggled their way into Palestine as the Western nations kept their borders closed to frantic refugees.

At war’s end, as the enormity of the Holocaust became evident, for the first time Zionism became a majority sentiment among world Jewry. Many U.S. Christians supported Zionism as a way to absolve their guilt for what had happened, without having to allow Jews into the United States. U.S. Zionists, who during the war had subordinated rescue efforts to their goal of establishing a Jewish state, argued that the Holocaust confirmed the need for a Jewish state: Had Israel existed in 1939, millions of Jews might have been saved. Actually, Palestine narrowly avoided being overrun by the Nazis, so Jews would have been far safer in the United States than in a Jewish Palestine.

During the war many Jews in Palestine joined the British army. By war’s end, the Jewish community in Palestine was well armed, well-organized, and determined to fight. The Palestinians were poorly armed, with feudal leaders. The Mufti of Jerusalem had been exiled by the British for supporting an Arab revolt in 1936-39 and had made his way to Berlin during the war where he aided Nazi propaganda. From the Zionist point of view, it was considered a plus to have the extremist Mufti as the Palestinians’ leader. As David Ben Gurion, leader of the Jewish community in Palestine and Israel’s first prime minister, advised in 1938, “rely on the Mufti.”
 
What were the various positions in 1947?

Both the Palestinians and the Zionists wanted the British out so they could establish an independent state. The Zionists, particularly a right-wing faction led by Menachem Begin, launched a terror campaign against Britain. London, impoverished by the war, announced that it was washing its hands of the problem and turning it over to the UN (though Britain had various covert plans for remaining in the region).

The Zionists declared that, having gone through one of the great catastrophes of modern history, the Jewish people were entitled to a state of their own, one into which they could gather Jewish refugees, still languishing in the displaced persons camps of Europe. The Zionist bottom line was a sovereign state with full control over immigration. The Palestinians argued that the calamity that befell European Jews was hardly their fault. If Jews were entitled to a state, why not carve it out of Germany? As it was, Palestine had more Jewish refugees than any other place in the world. Why should they bear the full burden of atoning for Europe’s sins’? They were willing to give full civil rights (though not national rights) to the Jewish minority in an independent Palestine, but they were not willing to give this minority the right to control immigration and bring in more of their co-religionists until they were a majority to take over the whole of Palestine.

A small left-wing minority among the Zionists called for a binational state in Palestine, where both peoples might live together, each with their national rights respected. This view had little support among Jews or Palestinians.
 
What did the UN do and why?

In November 1947, the UN General Assembly voted to partition Palestine into two independent states, a Jewish state and an Arab state, joined by an economic union, with Jerusalem internationalized.
In 1947 the UN had many fewer members than it does today. Most Third World nations were still colonies and thus not members. Nevertheless, the partition resolution passed because the Soviet Union and its allies voted in favor and because many small states were subject to improper pressure. For example, members of the U.S. Congress told the Philippines that it would not get U.S. economic aid unless it voted for partition. Moscow favored partition as a way to reduce British influence in the region; Israel was viewed as potentially less pro-Western than the dominant feudal monarchies.
 
Didn’t Palestinians have a chance for a state of their own in 1947, but they rejected it by going to war with Israel?

In 1947 Jews were only one-third of the population of Palestine and owned only 6 percent of the land. Yet the partition plan granted the Jewish state 55 percent of the total land area. The Arab state was to have an overwhelmingly Arab population, while the Jewish state would have almost as many Arabs as Jews. If it was unjust to force Jews to be a one-third minority in an Arab state, it was no more just to force Arabs to be an almost 50 percent minority in a Jewish state.

The Palestinians rejected partition. The Zionists accepted it, but in private Zionist leaders had more expansive goals. In 1938, during earlier partition proposals, Ben Gurion stated, “when we become a strong power after the establishment of the state, we will abolish partition and spread throughout all of Palestine.”

The Mufti called Palestinians to war against partition, but very few Palestinians responded. The “decisive majority” of Palestinians, confided Ben Gurion, “do not want to fight us.” The majority “accept the partition as a fait accompli,” reported a Zionist Arab affairs expert. The 1936-39 Arab revolt against the British had mass popular support, but the 1947-48 fighting between the Mufti’s followers and Zionist military forces did not.

But even if Palestinians were fully united in going to war against the partition plan, this can provide no moral justification for denying them their basic right of self-determination for over 50 years. This right is not a function of this or that agreement, but a basic right to which every person is entitled. (Israelis don’t lose their right to self-determination because their government violated countless UN cease-fire resolutions.)
 
Didn’t Israel achieve larger borders in 1948 as a result of a defensive war of independence?

Arab armies crossed the border on May 15, 1948, after Israel declared its independence. But this declaration came three and a half months before the date specified in the partition resolution. The U.S. had proposed a three-month truce on the condition that Israel postpone its declaration of independence. The Arab states accepted and Israel rejected, in part because it had worked out a secret deal with Jordan’s King Abdullah, whereby his Arab Legion would invade the Palestinian territory assigned to the Palestinian state and not interfere with the Jewish state. (Since Jordan was closely allied to Britain, the scheme also provided a way for London to maintain its position in the region.) The other Arab states invaded as much to thwart Abdullah’s designs as to defeat Israel.

Most of the fighting took place on territory that was to be part of the Palestinian state or the internationalized Jerusalem. Thus, Israel was primarily fighting not for its survival, but to expand its borders at the expense of the Palestinians. For most of the war, the Israelis actually held both a quantitative and qualitative military edge, apart from the fact that the Arab armies were uncoordinated and operating at cross purposes.

When the armistice agreements were signed in 1949, the Palestinian state had disappeared, its territory taken over by Israel and Jordan, with Egypt in control of the Gaza Strip. Jerusalem, which was to have been internationalized, was divided between Israeli and Jordanian control. Israel now held 78 percent of Palestine. Some 700,000 Palestinians had become refugees.
 
Why did Palestinians become refugees in 1948?

The Israeli government claims that Palestinians chose to leave Palestine voluntarily, instructed to do so via radio broadcasts from Arab leaders who wanted to clear a path for their armies. But radio broadcasts from the area were monitored by the British and American governments and no evidence of general orders to flee has ever been found. On the contrary, there are numerous instances of Arab leaders telling Palestinians to stay put, to keep their claim to the territory. People flee during wartime for a variety of reasons and that was certainly the case here. Some left because war zones are dangerous environments. Some because of Zionist atrocities-most dramatically at Deir Yassin where, in April 1948, 254 defenseless civilians were slaughtered. Some left in panic, aided by Zionist psychological warfare, which warned that Deir Yassin’s fate awaited others. Some were driven out at gunpoint, with killings to speed them on their way, as in the towns of Ramle and Lydda. In short, the Palestinians were subjected to ethnic cleansing similar to that seen in the Balkan wars of the 1990s.

There is no longer any serious doubt that many Palestinians were forcibly expelled. The exact numbers driven out versus those who panicked or sought safety is still contested, but what permits us to say that all were victims of ethnic cleansing is that Israeli officials refused to allow any of them to return. (In Kosovo, any ethnic Albanian refugee, whether he or she was forced out at gunpoint, panicked, or even left to make it easier for NATO to bomb, was entitled to return.) In Israel, Arab villages were bulldozed, citrus groves, lands, and property seized, and their owners and inhabitants prohibited from returning. Not only was the property of “absentee” Palestinians expropriated, but any Palestinians who moved from one place within Israel to another during the war were declared “present absentees” and their property expropriated as well.

Of the 860,000 Arabs who had lived in areas of Palestine that became Israel, only 133,000 remained. Some 470,000 moved into refugee camps on the West Bank (controlled by Jordan) or the Gaza Strip (administered by Egypt). The rest dispersed to Lebanon, Syria, and other countries.
 
Why did Israel expel the Palestinians?

In part to remove a potential fifth column. In part to obtain their property. In part to make room for more Jewish immigrants. But mostly because the notion of a Jewish state with a large non-Jewish minority was extremely awkward for Israeli leaders. Because Israel took over some territory intended for the Palestinian state, there had actually been an Arab majority living within the borders of Israel. Nor was the idea of expelling Palestinians something that just emerged in the 1948 war. In 1937, Ben Gurion had written to his son, “We will expel the Arabs and take their places…with the force at our disposal.”
 
How did the international community react?

In December 1948, the General Assembly passed Resolution 194, which declared that “refugees wishing to return to their homes and live in peace with their neighbors should be permitted to do so” and that “compensation should be paid for the property of those choosing not to return.” This same resolution was overwhelmingly adopted year after year. Israel repeatedly refused to carry out the terms of the resolution.
 
Did the Arab countries take steps to resettle the Palestinian refugees?

Only in Jordan were Palestinians eligible for citizenship. In Lebanon, the government feared that allowing
Palestinians to become citizens would disturb the country’s delicate Christian-Muslim balance; in Egypt, the shortage of arable land led the government to confine the Palestinians to the Gaza Strip. It must be noted, however, that the Palestinians were reluctant to leave the camps if that would mean acquiescing in the loss of homes and property or giving up their right to return.

It is sometimes implied that the lack of assistance to Palestinians from Arab nations justifies Israel’s refusal to acknowledge and address the claims of the refugees. But if you harm someone, you are responsible for redressing that harm, regardless of whether the victim’s relatives are supportive.
 
Hasn’t there been a population exchange, with Jews from Arab lands coming to Israel and replacing the Palestinians?

This argument makes individual Palestinians responsible for the wrong-doing of Arab governments. Jews left Arab countries under various circumstances: some were forced out, some came voluntarily, some were recruited by Zionist officials. In Iraq, Jews feared that they might be harmed, a fear possibly helped along by some covert bombs placed by Zionist agents. But whatever the case, there are no moral grounds for punishing Palestinians (or denying them their due) because of how Jews were treated in the Arab world. If Italy were to abuse American citizens, this would not justify the United States harming or expelling Italian-Americans.
 
How were the Palestinians who remained within Israel treated?

Most Arabs lived in the border areas of Israel and, until 1966, these areas were all declared military security zones, which essentially meant that Palestinians were living under martial law conditions for nearly 20 years. After 1966, Arab citizens of Israel continued to be the victims of harsh discrimination: most of the country’s land is owned by the Jewish National Fund which prohibits its sale or lease to non-Jews; schools for Palestinians in Israel are, in the words of Human Rights Watch, “separate and unequal”; and government spending has been funneled so as to keep Arab villages underdeveloped. Thousands of Israeli Arabs live in villages declared “unrecognized” and hence ineligible for electricity or any other government services.
 
Following 1948, didn’t the Arab states continually try to destroy Israel?

After Israel’s victory in the 1948-49 war, there were several opportunities for peace. There was blame on all sides, but Israeli intransigence was surely a prime factor. In 1951, a UN peace plan was accepted by Egypt, Syria, Lebanon, and Jordan, but rejected by Israel.

When Nasser came to power in Egypt, he made overtures to Israel that were rebuffed. When Nasser negotiated an end to British control of the Suez Canal zone, Israeli intelligence covertly arranged a bombing campaign of western targets in Egypt as a way to discourage British withdrawal. The plot was foiled, Egypt executed some of the plotters, and Israel responded with a major military attack on Gaza. In 1956, Israel joined with Britain and France in invading Egypt, drawing condemnation from the United States and the UN.
 
How were the Occupied Territories occupied?

In June 1967, Israel launched a war in which it seized all of Palestine (the West Bank including East Jerusalem from Jordan and the Gaza Strip from Egypt), along with the Sinai from Egypt and the Golan Heights from Syria. Large numbers of Palestinians, some living in cities, towns, and villages, and some in refugee camps, came under Israeli control. (In 2001, half the Palestinian population of the Occupied Territories lived in refugee camps. The Israeli conquest also sent a new wave of refugees from Palestine to surrounding countries.)

Israel’s supporters argue that although Israel fired the first shots in this war, it was a justified preventive war, given that Arab armies were mobilizing on Israel’s borders with murderous rhetoric. The rhetoric was indeed blood-curdling and many people around the world worried for Israel’s safety. But those who understood the military situation-in Tel Aviv and the Pentagon-knew that even if the Arabs struck first, Israel would prevail in any war. Nasser was looking for a way out and agreed to send his vice-president to Washington for negotiations. Israel attacked when it did in part because it rejected negotiations and the prospect of any face-saving compromise for Nasser. Menachem Begin, an enthusiastic supporter of this (and other) Israeli wars, was quite clear about the necessity of launching an attack. In June 1967, he said, Israel “had a choice.” Egyptian Army concentrations did not prove that Nasser was about to attack. “We must be honest with ourselves. We decided to attack him.”

However, even if it were the case that the 1967 war was wholly defensive on Israel’s part, this cannot justify the continued rule over Palestinians. Sure, punish Egypt and Jordan-don’t give them back Gaza and the West Bank (which they had no right to in the first place, having joined with Israel in carving up the stillborn Palestinian state envisioned in the UN’s 1947 partition plan). But there is no basis for punishing the Palestinian population by forcing them to submit to foreign military occupation.

Israel immediately incorporated occupied East Jerusalem into Israel proper, announcing that Jerusalem was its united and eternal capital. It then began to establish settlements in the Occupied Territories in violation of the Geneva Conventions, which prohibit a conquering power from settling its population on occupied territory. These settlements, placed in strategic locations throughout the West Bank and Gaza, were intended to “create facts” on the ground to make the occupation irreversible.
 
How did the international community respond to the Israeli occupation?

In November 1967, the UN Security Council unanimously passed resolution 242. The resolution emphasized “the inadmissibility of the acquisition of territory by war” and called for the “withdrawal of Israeli armed forces from territory occupied in the recent conflict.” It also called for all countries in the region to end their state of war and to respect the right of each country “to live in peace within secure and recognized boundaries. “

Israel argued that because resolution 242 called for Israeli withdrawal from “territories,” rather than “the territories,” occupied in the recent conflict, it meant that Israel could keep some of them as a way to attain “secure” borders. The official French and Russian texts of the resolution include the definite article, but in any event U.S. officials told Arab delegates that it expected “virtually complete withdrawal” by Israel, and this was the view as well of Britain, France, and the USSR.

Palestinians objected to the resolution because it referred to them only in calling for “a just settlement to the refugee problem” rather than acknowledging their right to self-determination. By the mid-1970s, however, the international consensus-rejected by Israel and the United States-was expanded to include support for a Palestinian state in the West Bank and Gaza, perhaps with insignificant border adjustments.
 
How did the United States respond to the Israeli occupation?

Prior to the 1967 war, France, not the United States, was Israel’s chief weapons supplier. But now U.S. officials determined that Israel would be an extremely valuable ally in the Middle East and Washington became Israel’s principal military and diplomatic backer.

Why, given the U.S. concern for Mideast oil, was Washington supporting Israel? This assumes that the main conflict was Israel vs. the Arabs, rather than Israel and conservative, pro-Western Arab regimes vs. radical Arab nationalism.

Egypt and Syria had been champions of the latter, armed by the USSR, and threatening U.S. interests in the region. (On the eve of the 1967 war, for example, Egypt and Saudi Arabia were militarily backing opposite sides in a civil war in Yemen. Israel had plotted with Jordan against Palestinians in 1948, and in 1970 Israel was prepared to take Jordan’s side in a war against Palestinians and Syria.)

Diplomatically, the U.S. soon backed off the generally accepted interpretation of resolution 242, deciding that given Israel’s military dominance no negotiations were necessary except on Israel’s terms. When Secretary of State Rogers put forward a reasonable peace plan, President Nixon privately sent word to Israel that the U.S. wouldn’t press the proposal. When Anwar Sadat, Nasser’s successor, proposed a peace plan that included cutting his ties with Moscow, Washington decided he hadn’t groveled enough and ignored it. But after Egypt and Syria unsuccessfully went to war with Israel for the limited aim of regaining their lost territory, and Arab oil states called a limited oil embargo, Washington rethought its position. This led in 1979 to the Israeli-Egyptian Camp David Agreement under which Israel returned the Sinai to Egypt in return for peace and diplomatic relations. Egypt then joined Israel as a pillar of U.S. policy in the region and the two became the leading recipients of U.S. aid in the world.
 
What progress was made toward justice for Palestinians during the first two decades of the occupation?

The Palestine Liberation Organization was formed in 1964, but it was controlled by the Arab states until 1969, when Yasser Arafat became its leader. The PLO had many factions, advocating different tactics (some carried out hijackings) and different politics. At first the PLO took the position that Israel had no right to exist and that only Palestinians were entitled to national rights in Palestine. This was the mirror image of the official Israeli view-of both the right-wing Likud party and the Labor party-that there could be no recognition of the PLO under any circumstances, even if it renounced terrorism and recognized Israel, let alone of a Palestinian state anywhere in Palestine.

By 1976, however, the PLO view had come to accept the international consensus favoring a two-state solution. In January 1976 a resolution backed by the PLO, Egypt, Syria, Jordan, and the Soviet Union was introduced in the Security Council incorporating this consensus. Washington vetoed the resolution.
The 1979 Camp David agreement established peace along the Egyptian-Israeli border, but it worsened the situation for Palestinians. With its southern border neutralized, Israel had a freer hand to invade Lebanon in 1982 (where the PLO was based) and to tighten its grip on the Occupied Territories.
 
What was the first Intifada?

Anger and frustration were growing in the Occupied Territories, fueled by Israeli repression, daily humiliations, and the establishment of sharply increasing numbers of Israeli settlements. In December 1987, Palestinians in Gaza launched an uprising, the Intifada, that quickly spread to the West Bank as well. The Intifada was locally organized and enjoyed mass support among the Palestinian population. Guns and knives were banned and the main political demand was for an independent Palestinian state coexisting with Israel.

Israel responded with great brutality, killing hundreds of Palestinians. Labor Party Defense Minister, Yitzhak Rabin, urged Israeli soldiers to break the bones of Palestinian demonstrators. PLO leader Khalil al-Wazir, who from Tunis had advised the rejection of arms, was assassinated (with Rabin’s approval); Israel was especially eager to repress Palestinian leaders who advocated a Palestinian state that would coexist with Israel. By 1989, the initial discipline of the uprising had faded, as a growing number of individual acts of violence by Palestinians took place. Hamas, an organization initially promoted by the Israelis as a counterweight to the PLO, also gained strength; it called for armed attacks to achieve an Islamic state in all of Palestine.
 
What were the Oslo Accords?

Arafat had severely weakened his credibility by his flirtation with Saddam Hussein following the Iraqi invasion of Kuwait. (The Iraqi leader had opportunistically tried to link his withdrawal from Kuwait to an Israeli withdrawal from the Occupied Territories.) Israel saw Arafat’s weakness as an opportunity. Better to deal with Arafat while he was weak, before Hamas gained too much influence. Let Arafat police the unruly Palestinians, while Israel would maintain its settlements and control over resources.
The Oslo agreement consisted of Letters of Mutual Recognition and a Declaration of Principles. In Arafat’s letter he recognized Israel’s right to exist, accepted various UN resolutions, renounced terrorism and armed struggle. Israeli Prime Minister Rabin in his letter agreed to recognize the PLO as the representative of the Palestine people and commence negotiations with it, but there was no Israeli recognition of the Palestinian right to a state.

The Declaration of Principles was signed on the White House lawn on September 13, 1993. In it, Israel agreed to redeploy its troops from the Gaza Strip and from the West Bank city of Jericho. These would be given self-governing status, except for the Israeli settlements in Gaza. A Palestinian Authority (PA) would be established, with a police force that would maintain internal order in areas from which Israeli forces withdrew. Left for future resolution in “permanent status” talks were all the critical and vexatious issues: Jerusalem, refugees, settlements, and borders. These talks were to commence by year three of the agreement.

In September 1995 an interim agreement-commonly called Oslo II-was signed. This divided the Occupied Territories into three zones, Area A, Area B, and Area C. (No mention was made of a fourth area: Israeli-occupied East Jerusalem.) In area A, the PA was given civil and security control but not sovereignty; in area B the PA would have civil control and the Israelis security control; and area C was wholly under Israeli control (these included the settlements, the network of connecting roads, and most of the valuable land and water resources of the West Bank). In March 2000, 17 percent of the West Bank was designated area A-where the vast majority of Palestinians lived-24 percent area B, and 59 percent area C. In the Gaza Strip, with a population of over a million Palestinians, 6,500 Israeli settlers lived in the 20 percent of the territory that made up area C. Palestinians thus were given limited autonomy-not sovereignty-over areas of dense population in the Gaza Strip and small, non-contiguous portions of the West Bank (there were 227 separate and disconnected enclaves), which meant that the PA was responsible chiefly for maintaining order over poor and angry Palestinians.
 
How did Israel respond to the Oslo Accords?

Whatever hopes Oslo may have inspired among the Palestinian population, most Israeli officials had an extremely restricted vision of where it would lead. In a speech in October 1995, Rabin declared that there would not be a return to the pre-1967 borders, Jerusalem would remain united and under exclusive Israeli sovereignty, and most of the settlements would remain under Israeli sovereignty. Rabin said he wanted the “entity” that Palestinians would get to be “less than a state.” Under Rabin, settlements were expanded and he began a massive program of road-building meant to link the settlements and carve up the West Bank. (These by-pass roads, built on confiscated Palestinian land and U.S.-funded, were for Israelis only.)

In 1995 Rabin was assassinated by a right-wing Israeli and he was succeeded as prime minister by Shimon Peres. But Peres, noted his adviser Yossi Beilin, had an even more limited view than Rabin, wanting any future Palestinian state to be located only in Gaza. Yossi Sarid, head of the moderate left Israeli party Meretz, said that Peres’s plan for the West Bank was “little different” from that of Ariel Sharon. Settlements and by-pass roads expanded further.

In May 1996, Likud’s Benjamin Netanyahu who was openly opposed to the Oslo accords was elected prime minister. Netanyahu reneged on most of the already agreed-on Israeli troop withdrawals from occupied territory, continued building settlements and roads, stepped up the policy of sealing off the Palestinian enclaves, and refused to begin the final status talks required by Oslo.

In 1999, Labor’s Ehud Barak won election as prime minister. Barak had been a hardliner, but he had also confessed that if he had been born a Palestinian he probably would have joined a terrorist organization-so his intentions were unclear. His policies, however, in his first year in office were more of the same: settlements grew at a more rapid pace than under Netanyahu, agreed-on troops withdrawals were not carried out, and land confiscations and economic closures continued. His proposed 2001 government budget increased the subsidies supporting settlements in the Occupied Territories.
 
What was the impact of the Oslo accords?

The number of Israeli settlers since Oslo (1993) grew from 110,000 to 195,000 in the West Bank and Gaza; in annexed East Jerusalem, the Jewish population rose from 22,000 to 170,000 - 30 new settlements were established and more than 18,000 new housing units for settlers were constructed. From 1994-2000, Israeli authorities confiscated 35,000 acres of Arab land for roads and settlements. Poverty increased, so that in mid-2000, more than one out of five Palestinians had consumption levels below $2.10 a day. According to CIA figures, at the end of 2000, unemployment stood at 40 percent. Israeli closure policies meant that Palestinians had less freedom of movement-from Gaza to the West Bank, to East Jerusalem, or from one Palestinian enclave to another-than they had before Oslo.
 
What was U.S. policy during this period?

The United States has been the major international backer of Israel for more than three decades. Since 1976 Israel has been the leading annual recipient of U.S. foreign aid and is the largest cumulative recipient since World War II. This doesn’t include all sorts of special financial and military benefits, such as the use of U.S. military assistance for research and development in the United States. Israel’s economy is not self-sufficient and relies on foreign assistance and borrowing. During the Oslo years, Washington gave Israel more than $3 billion per year in aid and $4 billion in FY 2000, the highest of any year except 1979. Of this aid, grant military aid was $1.8 billion a year since Oslo, and more than $3 billion in FY 2000, two-thirds higher than ever before.

Diplomatically, the U.S. retreated from various positions it had held for years. Since 1949, the U.S. had voted with the overwhelming majority of the General Assembly in calling for the right of return of Palestinian refugees. In 1994, the Clinton administration declared that because the refugee question was something to be resolved in the permanent status talks, the U.S. would no longer support the resolution. Likewise, although the U.S. had previously agreed with the rest of the world (and common sense) in considering East Jerusalem occupied territory, it now declared that Jerusalem’s status too was to be decided in the permanent status talks. On three occasions in 1995 and 1997, the Security Council considered draft resolutions critical of Israeli expropriations and settlements in East Jerusalem; Washington vetoed all three.
 
What happened at Camp David?

Permanent status talks between Israel and the Palestinians as called for by the Oslo agreement finally took place in July 2000 at Camp David, in the United States, with U.S. mediators. The standard view is that Barak made an exceedingly generous offer to Arafat, but Arafat rejected it, choosing violence instead.

A U.S. participant in the talks, Robert Malley, has challenged this view. Barak offered-but never in writing and never in detail; in fact, says, Malley, “strictly speaking, there never was an Israeli offer”-to give the Palestinians Israeli land equivalent to 1 percent of the West Bank (unspecified, but to be chosen by Israel) in return for 9 percent of the West Bank, which housed settlements, highways, and military bases effectively dividing the West Bank into separate regions. Thus, there would have been no meaningful independent Palestinian state, but a series of Bantustans, while all the best land and water aquifers would be in Israeli hands. Israel would also “temporarily” hold an additional 10 percent of West Bank land. (Given that Barak had not carried out the previous withdrawals to which Israel had committed, Palestinian skepticism regarding “temporary” Israeli occupation is not surprising.) It’s a myth, Malley wrote, that “Israel’s offer met most if not all of the Palestinians’ legitimate aspirations” and a myth as well that the “Palestinians made no concession of their own.” Some Israeli analysts made a similar assessment. For example, influential commentator Ze’ev Schiff wrote that, to Palestinians, “the prospect of being able to establish a viable state was fading right before their eyes. They were confronted with an intolerable set of options: to agree to the spreading occupation…or to set up wretched Bantustans or to launch an uprising.”
 
What caused the second Intifada?

On September 28, 2000 Ariel Sharon, then a member of Parliament, accompanied by a thousand-strong security force, paid a provocative visit approved by Barak to the Al Aqsa mosque site. The next day Barak sent another large force of police and soldiers to the area and, when the anticipated rock throwing by some Palestinians occurred, the police responded with lethal fire, killing four and wounding hundreds. Thus began the second Intifada.

The underlying cause was the tremendous frustration among the population of the Occupied Territories, who saw things getting worse under Oslo, whose hopes had been shattered, and whose patience after 33 years of occupation had reached the boiling point.
 
Who is Ariel Sharon?

Sharon was the commander of an Israeli force that massacred some 70 civilians in the Jordanian village of Qibya in 1953. He was Defense Minister in 1982, when Israel invaded Lebanon, causing the deaths of 17,000 civilians. In September 1982, Lebanese forces allied to Israel slaughtered hundreds of Palestinian non-combatants in the Sabra and Shitila refugee camps, a crime for which an Israeli commission found Sharon to bear indirect responsibility. As Housing Minister in various Israeli governments, Sharon vigorously promoted settlements in the Occupied Territories. In January 2001, he took office as prime minister.
 
How did Israel respond to this second Intifada?

Israeli security forces responded to Palestinian demonstrations with lethal force even though, as a UN investigation reported, at these demonstrations Israeli Defense Forces, “endured not a single serious casualty.” Some Palestinians proceeded to arm themselves, and the killing escalated, with deaths on both sides, though the victims were disproportionately Palestinians. In November 2001, there was a week-long lull in the fighting. Sharon then ordered the assassination of Hamas leader Mahmoud Abu Hanoud, which, as predicted, led to a rash of terror bombings, which Sharon used to justify further assaults on the PA. By March 2002, Amnesty International reported that more than 1,000 Palestinians had been killed. “Israeli security services have killed Palestinians, including more than 200 children, unlawfully, by shelling and bombing residential areas, random or targeted shooting, especially near checkpoints and borders, by extrajudicial executions and during demonstrations.”

Palestinian suicide bombings have targeted civilians. Amnesty International commented: “These actions are shocking. Yet they can never justify the human rights violations and grave breaches of the Geneva Conventions which, over the past 18 months, have been committed daily, hourly, even every minute, by the Israeli authorities against Palestinians. Israeli forces have consistently carried out killings when no lives were in danger.” Medical personnel have been attacked and ambulances, including those of the Red Cross, “have been consistently shot at.” Wounded people have been denied medical treatment. Israel has carried out targeted assassinations (sometimes the targets were probably connected to terrorism, sometimes not, but all of these extrajudicial executions have been condemned by human rights groups).

The Israeli government criticized Arafat for not cracking down harder on terrorists and then responded by attacking his security forces, who might have allowed him to crack down, and restricting him to his compound in Ramallah.

Israeli opinion became sharply polarized. At the same time that hundreds of military reservists declared their refusal to serve in the West Bank and Gaza, polls show 46 percent of Israelis favor forcibly expelling all Palestinians from the Occupied Territories.
 
What has U.S. policy been?

U. S. military, economic, and diplomatic support has made possible the Israeli repression of the previous year and a half. Much of the weaponry Israel has been using in its attacks on Palestinians was made in the United States (F-16s, attack helicopters, rockets, grenade launchers, Caterpillar bulldozers, airburst shells, M-40 ground launchers) or made in Israel with U.S. Department of Defense research and development funding (the Merkava tank).

On March 26, 2001, the Security Council considered a resolution to establish an international presence in the Occupied Territories as a way to prevent human rights violations. The United States vetoed the resolution. Because Israel did not want the U.S. to get involved diplomatically, Washington did not name a special envoy to the region, General Zinni, until November 2001, more than a year after the Intifada began. Bush met four times with Sharon during the Intifada, never with Arafat. In February 2002, Vice President Cheney declared that Israel could “hang” Arafat.
 
What caused the current crisis?

As the Arab League was meeting to endorse a Saudi peace proposal-recognition of Israel in return for full Israeli withdrawal to the 1967 borders-a Hamas suicide bomber struck. Sharon, no doubt fearing a groundswell of support for the Arab League position, responded with massive force, breaking into Arafat’s compound, confining him to several rooms. Then there were major invasions of all the Palestinian cities in the West Bank. There were many Palestinian casualties, though because Israel has kept reporters out, their extent is not known.

In the early days of Sharon’s offensive, Bush pointedly refused to criticize the Israeli action, reserving his condemnation for Arafat, who, surrounded in a few rooms, was said to not be doing enough to stop terrorism. As demonstrations in the Arab world, especially in pro-U.S. Jordan and Egypt, threatened to destabilize the entire region, Bush finally called on Israel to withdraw from the cities. Sharon, recognizing that the U.S. “demand” was not backed up by any threat of consequences, kept up his onslaught.
 
Is there a way out?

A solution along the lines of the international consensus-Israeli withdrawal from territories occupied in 1967, the establishment of an independent and viable Palestinian state in the West Bank and Gaza with its capital in East Jerusalem-remains feasible. It needs only the backing of the United States and Israel.
The Arabs already have 22 states. Why do they need another one?

Not all Arabs are the same. That other Arabs may already have their right of self-determination does not take away from Palestinians’ basic rights. The fact that many Palestinians live in Jordan and have considerable influence and rights there doesn’t mean that the millions of Palestinians living under Israeli occupation, or who were expelled from their homes and are in refugee camps, aren’t entitled to their rights-any more than the fact that there are a lot of Jews in the U.S., where they have considerable influence and rights, means that Israeli Jews should be packed off across the Atlantic.
 
How can terrorists be given a state?

If people whose independence movements use terrorism are not entitled to a state, then many current-day states would be illegitimate, not the least of them being Israel, whose independence struggle involved frequent terrorism against civilians.
 
Won’t an independent Palestinian state threaten Israeli security?

Conquerors frequently justify their conquests by claiming security needs. This was the reason Israel gave for years as to why it couldn’t return the Sinai to Egypt or pull out of Lebanon. Both of these were done, however, and Israel’s security was enhanced rather than harmed. True, the Oslo Accords, which turned over disconnected swatches of territory to Palestinian administration, may not have improved Israeli security. But as Shimon Peres, one of the architects of the Oslo agreement and Sharon’s current foreign minister acknowledged, Oslo was flawed from the start. “Today we discover that autonomy puts the Palestinians in a worse situation.” The second Intifada could have been avoided, Peres said, if the Palestinians had had a state from the outset. “We cannot keep three and a half million Palestinians under siege without income, oppressed, poor, densely populated, near starvation.”

Israel is the region’s only nuclear power. It is also the strongest military power in the Middle East. Surely it cannot need to occupy neighboring territory in order to achieve security. Nothing would better guarantee the Israeli people peace and security than pulling out of the Occupied Territories.
 
Isn’t the Palestinian demand for the right of return just a ploy to destroy Israel?

Allowing people who have been expelled from their homes the right to return is hardly an extreme demand. Obviously this can’t mean throwing out people who have been living in these homes for many years and would need to be carefully worked out. Both Palestinian officials and the Arab League have indicated that in their view the right of return should be implemented so as not to create a demographic problem for Israel. Of course, one could reasonably argue that an official Jewish state is problematic on basic democratic grounds. (Why should a Jew born in Brooklyn have the right to “return” to Israel while a Palestinian born in Haifa does not?) In any event, neither the Arab League nor Arafat have raised this objection.
 
Don’t Palestinians view their own state as the first step in eliminating Israel entirely?

Hamas and a few other, smaller political groups in Palestine object not just to the occupation but to the very existence of Israel. But the Hamas, et al., position is a distinctly minority sentiment among Palestinians, who are a largely secular community that has endorsed a two-state settlement. To be sure, Hamas has been growing in strength as a result of the inability of the Palestinian Authority to deliver a better life for Palestinians. If there were an independent Palestinian state, one can assume that Hamas would find far fewer volunteers for its suicide squads. It must be acknowledged, though, that the longer the mutual terror continues, the harder it will be to achieve long-term peace.
 
Is a two-state solution just?

There is broad international consensus on a two-state solution along the lines of the Saudi peace proposal. Such a solution is by no means ideal. Palestine is a small territory to be divided into two states; it forms a natural economic unit. An Israeli state that discriminates in favor of Jews and a Palestinian state that will probably be equally discriminatory will depart substantially from a just outcome. What’s needed is a single secular state that allows substantial autonomy to both national communities, something along the lines of the bi-national state proposed before 1948. This outcome, however, does not seem imminent. A two-state solution may be the temporary measure that will provide a modicum of justice and allow Jews and Palestinians to move peacefully forward to a more just future.
 
Stephen R. Shalom teaches political science at William Paterson University and is the author of Imperial Alibis (South End Press). A fully documented version of this article will be posted at www.zmag.org.

Meet Meliton Zamora, a retired University of the Philippines janitor and my hero.

For  forty-five years, he swept floors, cleaned up trash, watered plants and did odd jobs at the University.

I met him when I was active with the UP Repertory Company, a theater group based (then) at the third floor lobby of the Arts & Sciences (AS) building. He would sweep and mop the hallway floors in silence, venturing only a nod and a smile whenever I passed him.

Back then, for me he was just one of those characters whom you got acquainted with and left behind  as soon as you earned your degree and left the university for some  big job in the real world. Someone whose name would probably ring a bell but  whose face you’d have a hard time picturing.  But for many UP students like me who were hard up and had a difficult time paying their tuition fees, Mang Mel was a hero who gave them the opportunity  to finish university and get a big job in the real world.

The year was 1993 and I was on my last semester as a Clothing Technology student. My parents had been down on their luck  and were struggling to pay for my tuition fee. I had been categorized as Bracket 9 in the recently implemented Socialized Tuiton and Financial Assistance Program (STFAP). My father had lost his job and to supplement my allowance, I worked part time as a Guest Relations Officer at Sam’s Diner (back when the term GRO didn’t have shady undertones) and took some odd jobs as a Production Assistant, movie extra and wardrobe mistress.

To be eligible for graduation, I had to enroll in my last three courses  and pay my tuition fee.  Since my parents didn’t have enough money for my matriculation, I applied for a student loan hoping that my one of my Home Economics (HE) professors would take pity on me and sign on as a guarantor for the student loan. But those whom I approached either refused  or were not eligible  as  guarantors.  After two unsuccessful weeks of looking for a guarantor, my prospects looked dim, my future dark.  And so, there I was, a downtrodden twenty year old with a foggy future, crying in the AS lobby. I only had twenty four hours left to look for a guarantor.

Mang Mel, with a mop in hand, approached me and asked me why I was crying. I told him I had no guarantor for my student loan and will probably not be able to enroll this semester. I had no hopes that he would be able to help me. After all, he was just a janitor. He borrowed my loan application papers and said softly, “Puwede ako pumirma. Empleyado ako ng UP.” He borrowed my pen and signed his name. With his simple act of faith, Mang Mel not only saved my day, he also saved my future.

I paid my student loan the summer after that fateful day with Mang Milton and it has been 15  years since then.  I am not filthy rich but I do have a good job in the real world that allows me to support my family and eat three meals a day.  A few weeks  ago, a friend and UP Professor, Daki, told me that Mang Mel recently recorded an album which he sells to supplement  his meager retirement pay, I asked another friend, Blaise, who’s taking his Master’s degree at UP  to  find out how we could contact Mang Mel. My gesture of gratitude for Mang Mel’s altruism has been long overdue. As fate would have it, my friend  saw Mang Mel  coming out of the shrubbery from behind the UP library, carrying firewood.  He got Mang Mel’s address and promised him that we would come over to buy his album.

Together with Blaise and my husband Augie, I went to pay Mang Mel a visit last Sunday. Unfortunately, he was out doing a little sideline gardening for a UP professor in Tandang Sora. We were welcomed into their home by his daughter Kit.  As she pointed out to a laminated photo of Mang Mel on the wall, she proudly told us that her father did retire with recognition from the University. However, she sadly related to us that many of the students whose loans Mang Mel guaranteed neglected to settle their student loans. After forty-five years of service to the University, Mang Mel was only attributed 171 days of work for his retirement pay because all the unpaid student loans were deducted from his full retirement pay of about 675 days.  This seems to me a cruel repayment for his kindness.

This is a cybercall to anyone who did not get to pay their student loans that were guaranteed by  Mang  Mel.  Anytime would be a good time to show Mang Mel your gratitude.

Mang Mel is not asking for a dole out, though I know he will be thankful  for any assistance you can give. So I ask those of you who also benefited from Mang Meliton’s goodness or for those who simply wish to share your blessings, please do visit Mang Mel and buy his CD (P350 only) at No. 16-A, Block 1, Pook Ricarte, U.P. Campus, Diliman, Quezon City (behind UP International House)  or contact his daughter Kit V. Zamora at 0916-4058104.

Picture Charles Ponzi

December 23, 2008

Last week the Good Lord evidently realized that not enough people had been reading Hyman Minsky’s explanation of how financial cycles end in Ponzi schemes – the stage in which banks keep the boom going by lending their customers the money to pay interest and thus avoid default. So He sent Bernie Madoff to dominate the news for a week and give the mass media an opportunity to familiarize newspaper readers and TV watchers with just how Ponzi Schemes work. What Mr. Madoff did was, in a nutshell, what the economy as a whole has been doing under the moniker “wealth creation.”

If the media were able to wait until as late in the financial collapse as last week to provide helpful diagrams about how Ponzi schemes need to keep on growing exponentially, it is simply because bad foreign financial news is not deemed newsworthy in North America. But Europe has been having its own run-throughs, headed by Spain – which by no coincidence is now experiencing the biggest real estate bust outside of the post-Soviet economies.

The best case study occurred two years ago. On May 9, 2006, Spanish police raided 21 homes and offices of Afinsa Fienes Tangibles SA, the world’s largest postage-stamp dealer, and rival firm, Forum Filatélico. They charged eleven men with running a $6.4 billion pyramid scheme that took in some 343,000 investors – 1 percent of Spain’s entire population, making the fraud one of the largest in Spanish history.[1]

An economy either is in trouble or has lost its sense of balance when investors shy away from tangible capital formation in favor of buying postage stamps and similar collectibles. Unlike machinery and technology, stamps do not produce real goods and services. They have long since been printed and sold by the government, and will never be used actually to mail letters. However, stamps have shown themselves to be a great vehicle to attract savers who think that buying them can produce an exponential earnings growth – or more technically, “capital” gains, if we can stretch economic terminology far enough to call a stamp collection “capital.”

If value resulted merely from scarcity, then postage stamps, coins and master paintings all would seem to increase almost automatically over time, just like most land does. But these trophies of wealth do not promote rising production, consumption or living standards. As stamps do not earn money by employing labor to produce goods and services, their price gains are neither profit nor capital gains as classically understood. They are what economists call a windfall.

The Spanish postage-stamp scheme seems to have taken off in 2003, the year in which Spain’s free-market conservative government deregulated public insurance and oversight for non-financial investment funds. Afinsa Group bought two-thirds control of the New Jersey stamp and coin auction house Greg Manning and merged it with the Spanish auctioneer Auctentia to create Escala as the world’s third largest auction house (after Sotheby’s and Christie’s). Escala moved its operations to New York City and listed its stock on the Nasdaq over-the-counter market. Despite the stock market’s lethargic trend, the company’s earnings showed such rapid growth that in just three years its share price soared from under $5 to $35, tripling in 2005 alone.

Afinsa’s purchases accounted for 70 percent of Escala’s profits, thanks largely to the fact that as its Spanish parent’s sole supplier, Escala marked up its stamps by a reported 1,150 percent, out of all proportion to the usual 25 percent. Afinsa thus was carrying stamps for which it paid 58 million euros on its books at €723 million, over ten times their catalog values – which are fictitiously high in any case, being published mainly for the benefit of stamp dealers to give their customers the idea that they are getting a good buy. But as Forum Filatélico’s chairman, Francisco Briones, explained to a reporter from London’s Financial Times: “It was ‘normal’ to charge clients such inflated prices because of the services provided . . . including the custody and conservation of stamps.”

Afinsa paid its stamp investors an annual rate of 6 to 10 percent interest, beating most competing yields as the global financial bubble was pushing interest rates steadily downward. (Spanish government bonds paid only 3.5 percent.) To build up trust, Afinsa gave its clients post-dated checks for the gains that were promised. It also promised to buy back the stamps it sold, at the original price. This gave an appearance of liquidity to the normally illiquid market in stamps, fine arts and other collectibles, where 25 percent commissions to auction houses are normal. These ploys convinced the majority to simply re-invest the money to buy yet more stamps, which the company held in its offices ostensibly for safekeeping and preservation.

Money poured in, giving stock-market investors in Escala much higher returns than the stamp-buying customers nominally were receiving. As one news report remarked, why buy stamps and coins when you can invest in companies dealing in them?[2] But within a week of the arrests, Escala’s stock plunged below $4 a share.

The denouement came shortly after Lloyd’s of London withdrew from a €1.2 billion policy to insure Afinsa’s stamps. One of its experts noticed that if $6 billion really had been invested, it would have bought up all the investment-grade stamps in the world many times over. The fact that stamp prices did not reflect any such extraordinary buying implied that few bona fide stamp transactions occurred at all, and there had been a massive over-billing.

As matters turned out, most of Afinsa’s stamps had no investment value. This explained why there were no receipts for transactions with Escala. The police found €10 million in €500 banknotes (worth about $650 each at the exchange rate of $1.30 per euro) by breaking open a newly plastered wall at the Madrid home of Afinsa’s main stamp supplier, Francisco Guijarro. What they could not find were any receipts for the stamps that he allegedly bought. And despite the remarkably high markups charged for curating the stamp collection, it was rife with phonies, as Lloyd’s had suspected. Concluding that the bills Senor Guijarro had sent to Afinsa were just a cover for a money laundering operation, the prosecutors charged the family members and officers who controlled Afinsa with embezzlement, money laundering, tax evasion, fraudulent bankruptcy, breach of trust and forgery.

The arrests recalled memories of a more famous U.S. fraud involving postage stamps some 86 years earlier, in 1920, by Charles Ponzi – the man who bequeathed his name to history in the form of Ponzi pyramid scheme. He is reported to have arrived in Boston in 1903 with only $2.50. Not speaking much English, he took menial jobs. Fired as a waiter for shortchanging customers, he moved up to Montreal and became an assistant teller in an Italian immigrant bank. It grew rapidly by paying double the normal 3 percent rate of interest on savings accounts, but failed when its real estate loans began to go bad. The bank’s attempt to give the impression of solvency seems to have given Ponzi the idea of paying interest out of new deposit inflows rather than actual earnings.[3] As long as clients felt they were receiving interest regularly, they tended to be calm about the principal balance.

Ponzi was sent to a Canadian prison for forgery, and then was jailed in Atlanta for trying to smuggle Italian immigrants into the United States. After his release he moved back to Boston and got a job selling business catalogs. A Spanish customer sent him a postal reply coupon, which allowed its holder to buy stamps in foreign countries for return mail rather than using domestic currency to buy a stamp.

Prices for these coupons were long out of date, having been set in 1907 by the International Postal Union. World War I drastically shifted exchange rates, enabling buyers to pay a small amount in Britain – or even less in Germany with its depreciated currency – and obtain a return stamp order that was good in the United States.

The markup on these tiny postal orders was large. An American penny could buy foreign stamp orders that could be converted into six cents in U.S. stamps, for a 500 percent profit. The problem was that it would take a truckload of such postal orders to make serious money. A million-dollar investment would involve a hundred million penny coupons – which then would have to be converted into stamps and sold in competition with the U.S. Post Office, presumably at a discount, mainly in immigrant neighborhoods.

Focusing on the principle of arbitrage rather than such laborious implementation, Ponzi explained that he could make a 400 percent gain after expenses. He promised that investors could double their money in 90 days, pretending to take due account of the costs and shipping time from Europe to America. When his Securities Exchange Company paid early investors the high returns he had described, they spread the word to others. Ponzi’s inflow of funds rose from $5,000 in February 1920 to $30,000 in March, and $420,000 by May. By July an estimated $250,000 a day was flowing into his firm, mainly from small investors who let their book credits build up rather than taking out their money. Some people put their life savings into the plan, and even borrowed against their homes.

Ponzi spent most of the money on himself, buying a mansion and bringing his mother over from Italy. The financial reporter Clarence Barron (publisher of Barron’s) noted that if he really had invested the money as he told his investors he had done, Ponzi would have had to purchase 160 million postal reply coupons. Yet the post office reported that few were being bought at home or abroad, and only 27,000 were circulating in the United States.

Federal agents raided Ponzi’s offices in August, but did not find any postal reply coupons, just as Spanish police did not find investment-grade postage stamps in the scheme’s 2006 replay. Ponzi was sentenced to prison yet again, but jumped bail and tried to make some quick money selling Florida real estate. He soon was recaptured, and was deported back to Italy upon his release in 1934.

What Ponzi sold was hope, pandering to peoples’ unrealistic desire to believe that a new way to make easy gains had been discovered, with no visible upper limit as to how long gains can persist in excess of the economy’s own rate of growth. It is a measure of how much harder it is to make returns in today’s world – and hence, how little hope needs to be excited – that whereas Ponzi promised to double his investors’ money every three months, the Spanish stamp scheme paid only a 6 to 10 percent annual return. Neither fraud actually made any trading gains or profits, but simply paid investors out of new money coming in from fresh players. New inflows were treated as earnings. That’s how pyramid schemes work.

It was almost as if the Spanish operators had read one of the biographies of Ponzi that began to appear as observers noticed the common denominators between the global financial bubble of the 1990s and earlier bubbles. These bubbles provide a classic contrast between the real wealth of nations and what the business press these days calls “wealth creation” that simply takes the form of rising asset prices – “capital gains,” most of which are land-price gains.

No doubt stamp collectors would have viewed the bidding up of stamp prices as wealth creation if it actually had occurred. But all it would have achieved was to inflate the price of old stamps, much as the world’s growing ranks of billionaires were bidding up prices for master paintings and modern art, designer furniture and beachfront homes. If all the economy’s savings went into Rembrandts and Picassos, their price obviously would soar, just as putting $6 billion into postage stamps would have established higher plateau levels for stamp prices.

The flow of funds into any category of assets bid up their prices. This is true most of all for land, one of the most universal economic needs and conspicuous- consumption status measures. But does this really “create wealth”? Do market prices reflect use values, living standards and the progress of civilization?

The requisite characteristic for such price gains is indeed scarcity, but not so much that there is not enough for large numbers of buyers to make a market. If psychological utility is the key, “scarcity” has value only as a compulsive acquisitive character – wealth addiction. It means having what other people lack, with connotations of denial. Most money in search of mere scarcity is not going into trophies of the nouveau riches, but into the world’s most abundant yet also most universal scarce resource: land. Nature is not making any more of it, and global warming in fact threatens to take away thousands of miles of prime seashore sites. Yet everyone needs land to live on, making it the object of personal and business saving par excellence. Even in today’s postindustrial economies, land and its subsoil wealth represent the largest components of national balance sheets.

But inasmuch as land cannot be manufactured, savings cannot increase its supply by active investment. This poses a traumatizing problem for economists. National income statistics count any money spent that is not consumed as saving. Following John Maynard Keynes, they define saving as equal to investment. This sows the seeds of confusion with regard to the character and preconditions of economic growth. Can we really call it “wealth creation” when society directs its savings merely into speculation rather than into building up productive powers or living standards?

Classical economists vacillated over treating land as a factor of production or as a legal property right to extract a tollbooth around a given site and levy an access charge much like a user-tax. A factor of production contributes to production and income as more income is invested in it. A rent-yielding property reduces the economy’s flow of income. In the latter case land is part of the institutional property system, not the technologically based production sector of the economy.

What is beyond dispute is that real estate is highly political at the local level. Urban development tends to be shaped by insider dealing and public infrastructure spending to increase local property prices and lobbying to obtain low tax appraisals. It is axiomatic that the more economically powerful a source of wealth becomes, the greater its political power to lobby for special tax advantages. At the national level, real estate uses part of its revenue to back politicians who give it a widening wedge of special income-tax favoritism.

In the financial sphere, every bubble has been led by governments. Bubbles need to be orchestrated by opinion makers, topped by public officials giving a patina of confidence. The “madness of crowds” is a euphemism designed to divert blame away from governments onto the public. In the United States, Alan Greenspan played the role of public bubblemeister similar to that which Walpole had played in England’s South Sea bubble and John Law in France’s Mississippi bubble nearly three centuries ago, in the 1710s.

Today’s balance sheets confuse bubble wealth with real capital formation. “Investment” has become whatever accountants say they are. So have asset and debt values, given today’s leeway for financial fiction. The practice of “marking to market” permits accountants to project hypothetical gains at astronomical rates of interest, or trivializing by discounting, applying purely mathematical functions that have lost all connection to realistic rates of growth. The result is that the financial sector itself has become decoupled from the “real” economy.

The tragedy of our time is that saving today is being diverted in ways that are decoupled from real capital formation, but merely add to the economy’s debt and property overhead. To distinguish wealth from overhead, this book starts with real estate, and then reviews the stock market, advance saving for pensions and health care via a flow of funds into the stock market to create capital gains. My aim is to show how different the actual economy is from what economic textbooks teach. Economic statistics have been hijacked to the cause of special-interest pleading. All but lost from sight is the common weal.

Suppose that Ponzi actually had bought International Postal Orders, and that the Spanish stamp companies actually had invested $6 billion in rare philatelic items and coins, driving up their price to create paper gains for the investors. To whom would they sell, in order to take their gains? (This is the proverbial “greater fool” problem.) More to the point, how positive would have been the broad economic effect of such asset-price inflation?

The recent stock market and real estate bubbles are much like pyramid schemes in the sense that what is bidding up stock and property prices is an exponential inflow of new money from pension plans and mutual funds (for shares) and bank credit (for real estate). Venture capitalists are “cashing out” while corporate managers exercise their stock options.

Suppose that mortgage-packaging companies are honest in their appraisals of current price trends. The real estate bubble is nonetheless speculative and postindustrial. The analogy is found when financial managers endorse government policies that encourage the inflation of price for stocks and bonds, stamps and coins, Rembrandts and modern art by claiming that this creates wealth and hence, by definition, pulls living standards and culture onward and upward.

What is wrong with this picture? For starters, it fails to define value as distinct from price, windfall and capital gains as distinct from earned income. It also neglects the fact that market prices rise and fall, but the debts remain in place. And when debts cannot be paid, savings are wiped out.

On May 9, 2006, the price of Escala shares fell by half as news of the police raids spread. By Friday its stock was down almost 90 percent. On Monday it jumped by 50 percent, from $4.34 at Thursday’s close to $9.45 a share. Hedge funds were making and losing money hand over fist, dwarfing the gains and losses made from stamp trading. A veritable market in crime, punishment and beating the rap was in play.

What does this have to do with true capital formation? Individuals are getting rich while the economy is polarizing between creditors and debtors, property owners and rent-payers. Unproductive investment occurs when it takes the form of windfall “capital” gains, and when it involves going into debt for real estate, stocks or bonds, or “collectibles.” Unproductive credit occurs when commercial banks make loans that merely finance the purchase of property, companies or financial securities already in place.

Two centuries ago, French followers of Count Henry St. Simon outlined an industrial system that was to be based mainly on equity financing (stocks) rather than debt (bonds and bank loans). Their idea was to make industrial banking a kind of mutual fund, so that claims for payment (and hence, the value of savings) would rise and fall to reflect the economy’s earning power. The industrial banking that developed largely in Germany and central Europe differed from the short-term Anglo-American collateral-based trade credit and mortgage lending. But since World War I, global financial practices have been more extractive than productive.

The consequence has been that debts on the economy-wide level have grown more rapidly than the ability to pay. Instead of reducing this debt overhead by earning their way out of debt, economies have sought to inflate their way out of debt. However, the mode of inflation is not the familiar rise in consumer prices, much less wage inflation. Rather, it is asset-price inflation, emanating largely from the United States. Since the gold-exchange standard gave way to the paper dollar standard in 1971, the U.S. economy has become unique in being able to create credit – and foreign debt – without constraint. The result has been an unparalleled growth in debt relative to income, production and wages. This “debt pollution” has been likened to environmental pollution. It is the financial equivalent of global warming.

We have entered an era in which financial markets resemble the stamp-buying funds. Governments have replaced industrial growth with purely financial wealth creation in the form of a real estate and stock market bubble. This has turned the economic universe upside-down relative to what the classical writers expected to result from the technological progress unleashed by the Industrial Revolution and its parallel agricultural, commercial and financial revolutions. Property and credit have become costs instead of a benefit, institutional forms of rent- and interest-extracting overhead rather than helpful inputs.

Notes

[1] “Spanish dealers raided in stamp probe,” “Fears grow for lifetime savings” and “World of collecting comes into focus,” Financial Times, May 10, 2006, and “Stamp groups ‘ran Spain’s biggest scam,’” ibid., May 12, 2006. See also “Stamp-Selling Firms Charged With Fraud By Spain Authorities,” The Wall Street Journal, May 12, 2006.

[2] Escala Trades Up, MSNBC.com, May 16, 2006: Rich Duprey, “Investors buy into the auction house’s claim that it avoided criminal charges”; THE MOTLEY FOOL, MSNBC, May 10, 2006: Rich Duprey, “Escala Is Stamped Out: The company’s stock falls more than 50% after a raid by Spanish authorities,” and “Afinsa denies ‘insolvency’ claim,” BBC, May 11, 2006.

[3] See Wikipedia, “Charles Ponzi,” based mainly on Mitchell Zuckoff, Ponzi’s Scheme: The True Story of a Financial Legend (Random House: New York, 2005).

The US Chapter of Bagong Alyansang Makabayan, or BAYAN USA, an alliance of 12 Filipino organizations across the US, joins the rest of the American people and beyond in celebrating the historical significance of having the first Black president elected into the executive office of the White House.  It is overwhelming and appropriate that many in major cities across the US, people, especially African-Americans, took to the streets last night, many with pots and pans for noisemakers, upon the confirmation that Illinois Senator Barack Obama would become the 44th President of the United States, and had defeated his opponent, Arizona Senator John McCain. It is also appropriate at this time to celebrate the deep potential the new administration has for undoing 8 years of failed and flawed foreign and domestic policies under the Bush administration. BAYAN USA joins the billions around the world in urging the President-elect in heeding the voices of the people in the types of change we need in the USA and around the world, particularly in the Philippines.

On Foreign Policy

A priority in President-elect Obama’s agenda for the people must be repairing the US government’s image to the world, an image gravely tarnished by the policies of the preceding US administrations, especially the last one. This must start with undoing the Global War on Terror launched by the Bush regime. As he has pledged, Obama is intent on phasing-out US troop withdrawal in Iraq in 16 months and ending the war in Iraq. In addition to ending the US war on Iraq, we urge President-elect Obama to do the same thing in countries like the Philippines, where US troops are stationed and conduct dangerous combat exercises in the name of the Global War Against Terror. The Philippines, which the Bush regime tagged the so-called “Second Front” to the war on terror, has been the site of a bloody counter-insurgency campaign under the guise of a war against terrorism.
 
In his final debate with Senator McCain, Obama criticized the government of Colombia for its systemic killings of trade unionists. In selecting foreign trade partners, if Obama truly seeks to have no blood on US taxpayers hands, then he must seriously reconsider US foreign relations with the Philippine government. The new US presidency must heed to call from the United Nations Human Rights Council, Amnesty International, Human Rights Watch, and others in the international human rights monitoring community and condemn the Arroyo government for its perpetration of over 900 extrajudicial killings and 200 enforced disappearances, rivaling the pattern in countries like Colombia.

The new US presidency should also withdraw all monetary and moral support to the Philippine government that are being used to train the Philippine military in its counter-insurgency operations. There is a popular movement in the Philippines to remove the US military presence in Mindanao, rivaling the historic Filipino people’s struggle that eventually led to the dismantling of the largest US military bases overseas- Clark Air Force and Subic Naval bases- in the Philippines back in 1992.

On Domestic Affairs
 
On the domestic front, we are pleased that Obama has pledged during his campaign to “spread the wealth” and to end the “burden on the poor”. There is still a huge disparity inside the United States between rich and poor, between the people and the banks. The most significant way to spread the wealth and end the poor’s burden is by opposing the $700 billion in bailout funds from the US federal reserve pushed by US Congress. These monies will be taken from public funds, wiping out job pensions, healthcare coverage, education, unemployment insurance, and social security, and aggravating the burden on the poor and disenfranchised inside the US. As a former community organizer in the depressed areas of inner-city Chicago, we ask President-Elect Obama to invoke true leadership for the people by urging Washington to prosecute the big banks for their financial crimes instead of bailing them out. There should also be a moratorium on foreclosures and evictions, as many property owners, including Filipinos, are being shut down and forced into displacement.

Obama has also pledged to improve the dysfunctional US immigration system by fixing its bureaucratic nature. One way of doing this is to expose what is the root cause of massive migration of workers from poor countries to the United States. When we understand why people migrate, we can better formulate the solutions for comprehensive immigration reform. Improvements to the broken immigration system starts with ending its repressive nature on undocumented immigrants. This means ending the terrorizing policy of raids and deportations by the Department of Homeland Security’s Immigration and Customs Enforcement (ICE), and finding an efficient and humane path to legalization for the 12 million undocumented people currently living in the shadows in the US. There are 4 million Filipinos in the US today, 1 million of which are undocumented.

On October 2008, Presidential Candidate Obama paid tribute to Filipino-American History Month. Part of his tribute focused on the struggle of aging Filipino WWII Veterans for their full equity. Given the grave undertones of systemic racism that this denial from the US government carries, we urge President-elect Obama, the first African-American president of the US, to lead Washington to embrace justice and undo the historical injustice of denying our Filipino WWII Veterans their full equity and recognition.

The People Are the True Change-Makers, It’s Still in Our Hands
 
Barack Obama’s election victory proves the strength of a people united in action and will. In this time of renewed hope not only in the US but around the world, let us continue to raise our voices, be vigilant, and enact what history has always taught us– the people and the people alone, united in mass movement and holding their leaders accountable, are the true agents of fundamental change. As such, we pledge to strengthen our participation in building a solid and united mass movement that will let no president off the hook and usher in the change we need.  ###