The Voice of the White House
Washington, D.C. May 27, 2016:”Acording to F.B.I statistics nearly 800,000 people are reported missing each year. Out of the 800,000 people reported missing, approximately 75% percent of missing person cases are resolved within 24 hours. Most of these are runaways and victims of parental kidnapping. 650,000 are accounted for, leaving a balance of 150,000 per annum unaccounted for. This figure varies from year to year but remains in the 125,000 to 150,000 figure year after year. Many of those who have vanished have had no social, economic or legal problems to compel them to vanish. Where the vanished have gone and why they have disappeared is not known. Questions without an answer.”
The Müller Washington Journals 1948-1951
At the beginning of December, 1948, a German national arrived in Washington, D.C. to take up an important position with the newly-formed CIA. He was a specialist on almost every aspect of Soviet intelligence and had actively fought them, both in his native Bavaria where he was head of the political police in Munich and later in Berlin as head of Amt IV of the State Security Office, also known as the Gestapo.
His name was Heinrich Müller.
Even as a young man, Heini Müller had kept daily journals of his activities, journals that covered his military service as a pilot in the Imperial German air arm and an apprentice policeman in Munich. He continued these journals throughout the war and while employed by the top CIA leadership in Washington, continued his daily notations.
This work is a translation of his complete journals from December of 1948 through September of 1951.
When Heinrich Müller was hired by the CIA¹s station chief in Bern, Switzerland, James Kronthal in 1948, he had misgivings about working for his former enemies but pragmatism and the lure of large amounts of money won him over to what he considered to be merely an extension of his life-work against the agents of the Comintern. What he discovered after living and working in official Washington for four years was that the nation¹s capital was, in truth, what he once humorously claimed sounded like a cross between a zoo and a lunatic asylum. His journals, in addition to personal letters, various reports and other personal material, give a very clear, but not particularly flattering, view of the inmates of both the zoo and the asylum.
Müller moved, albeit very carefully, in the rarefied atmosphere of senior policy personnel, military leaders, heads of various intelligence agencies and the White House itself. He was a very observant, quick-witted person who took copious notes of what he saw. This was not a departure from his earlier habits because Heinrich Müller had always kept a journal, even when he was a lowly Bavarian police officer, and his comments about personalities and events in the Third Reich are just as pungent and entertaining as the ones he made while in America.
The reason for publishing this phase of his eventful life is that so many agencies in the United States and their supporters do not want to believe that a man of Müller¹s position could ever have been employed by their country in general or their agency in specific.
Tuesday, 17 January 1950
Had a pleasant conversation with Hoover this morning about my “great success” with Philby. I have listened to my scripted recording and will have it sent over to him by courier as soon as he has the time to receive him.
Expect to hear from Philby soon enough and I very strongly want to get together with Hoover to see what is progressing with our observation of the British. Also, I have more information to feed to Senator M. (McCarthy, ed.) but let us see what he does with the State Department material. I have been going out almost every night with Bunny and things are progressing very well. Never push these things. She is very intelligent and very determined so one must proceed with placid, yet hopeful, calm. The aunt likes me but I am not interested.
I have been asked if I would like to breed Maxl. He has many famous dog ancestors and a friend of Bunny has a bitch. When she comes into heat (the bitch, not the friend!) I will think about it. I know Maxl would certainly like that. Right now, he is sitting on his basket, next to me in my room, watching me intently. I always wonder just how much dogs really know about what we are thinking? If they do, no doubt he will be frantic with anticipation. A dog’s sex life is so simple. The males smell something delicious, jump up on the ladies, work away for a few minutes and then hop off…at least when they can. And no regrets at all. The bitch has the litter and the male goes his way, waiting for another delightful odor.
Am getting in another shipment of Upmann’s Corona Majors tomorrow. I certainly don’t drink like I did in the last years of the war…I can’t…stomach won’t take it anymore…but still love to smoke. One of my associates remarked that after fifty, all one talks about are the bowel habits, loss of hearing and other things. Probably true, but I wouldn’t know about that. I shall be fifty in April. That is a dismal prospect so perhaps I ought to seriously consider getting married again. Of course, I am officially dead so who would care? Sophie is no doubt happy in her widowhood and we were not a congenial couple towards the end. I remember the last weeks of the war and her insane stubbornness in returning to Berlin. I think she felt she would catch me with little Anna but who knows? Women take an enormous amount of patience, skill and cunning and then they suddenly develop headaches at the wrong time or pout endlessly because you forgot to buy them something.
I have had a chat with Heini about Irmgard. She wants to marry him very badly. Of course, he is quite handsome but especially, he is an American citizen! I think she would marry Maxl if that would get her the green passport. Of course, I doubt if Maxl would be interested. She doesn’t smell quite the same.
I told Heini if he wished to marry I., he had my full blessings. He replied that he did not want to marry her and that she was beginning to be a clinging nuisance. This might present a problem unless I can turn her loose on the brother who is equally as good looking but quite remote from here. Heini says, with much laughter that he is in complete agreement with this program and will begin at once to “soften him up” to the project. I pointed out that the opposite is often more effective and we did enjoy a good laugh. I. came in just then and I had to tell her that we were talking about the Negro in the blackout in New York during the war who had to keep smiling so people could see him! One has to think quickly where women are concerned.
Saturday, 21 January 1950
Excellent news today! Hiss was convicted by the jury and will be sentenced next Wednesday. I hope they put him away for the rest of his life but he will probably be free on appeal for some time. If it wouldn’t make so much trouble, I would turn Arno loose on him but one cannot do that. Of course, he is guilty but the Justice Department cannot use some of its evidence against him because it would reveal how much we know about the Soviet’s activities and point out a few more rodents who will have to be crept up on and whacked with a heavy club. Well, I expect to see mourning bands being worn by the CIA idiots this week.
I was just sent a clipping from a university paper concerning remarks made by Hoover which are interesting…and certainly at variance with what he has told me in the very recent past. According to this article, which appeared on the first of the month, Hoover states that he is strongly opposed to a national police force designed to fight communists! I suppose this is another public relations effort on Hoover’s part because he has specifically stated in my presence that this is exactly what we need. I believe, if I know the man at all, that he is opposed to there being another such agency set up when his own is in place. It makes him look like a civil libertarian, which he is certainly not.
I read a paper not too long ago that discussed Hoover’s role in the Palmer anti-radical raids held after the end of the 1914 war. Wilson was incapacitated with a stroke and the Attorney General, (A. Mitchell, ed.) Palmer, conducted a number of raids against known radicals…that included socialists, communists and God knows how many other groups of political protesters. Instead of surgical removal of the most dangerous, they rounded up and physically deported a very large number of people who were outspoken opponents of the political system. Hoover was in charge of much of this and I must say it was like reading an account of what went on in Germany during the times of the Council Republics. Of course in Germany, we merely shot anyone involved in counter-government activity and here they shoved them onto cattle boats and shipped most of them back to Russia, Poland or wherever.
As most of them were Jews and as I know Hoover hates Jews, I am not surprised that he is so genuinely friendly to me. He assumes that I must be another Jew-hater and keeps asking me about what sort of methods I used on these “miserable people” as he calls them.
When they tried poor Ilse Koch, someone invented the story of lampshades made from tattooed human skin. I suspect that Hoover feels that this was a true story and wonders if he could get a few for his house. The lampshades and the soap made from dead Jews are some of the more grotesque stories made up to enrich the Sunday newspapers.
I once tried to explain to Hoover that our prison camp system was not designed to murder millions of Jews but was intended, mostly, for political prisoners.
Recent books by drooling lunatics about vast gas chambers and millions reduced to soap fat or ashes have no relationship with the truth whatsoever, but there are those who still believe the world is flat or that Father Christmas is coming with gifts for them. Father Christmas should, if he exists, stuff the mouths of the mythmakers with enough coal to heat the boilers of the Capitol building for three years.
Soon, the lunatics will come out with stories about Hitler throwing fat babies into bonfires.
People like Hoover, and Washington…and New York…are filled with them…seem to have no problem with the disappearance of thousands of Jews in Europe and at the New Year’s party, a serving general officer said that the bad thing about Hitler was that he lost the war, but the good thing was that he killed off all the Jews first.
Such wonderful sentiments! Of course he was a General Staff officer here in Washington and never fired a shot in anger. I doubt if a combat general would make such a statement but then I am not entirely certain there either.
I had much to do with the Zionists at one time and felt that they had the right idea in establishing a Jewish state on the old estate as it were. I even assisted their aims in sending our Jews down there. It served two purposes. Hitler wanted all the Jews out of Germany and the Zionists wanted them in Palestine to build a new state. Never worked out. The Arabs hate the Jews and they have the oil. I had to fight the British and the Bormann people over this and gave it up finally.
I have been greatly disappointed to note that instead of building a peaceful state, the sufferers are determined to make others suffer and are now doing to the once-peaceful Arabs what everyone else in Europe has done to them over the last hundred years.
Stalin, like myself, saw a wonderful opportunity of getting rid of his unwanted Jews (and Josef does hate Jews down underneath the pipe-smoking facade) by sending them down to Palestine in boats full. He reasons that the Russian Jews down there will assist the terrorists in taking control of the new state and then Comrade Josef can pose as the protector of the new state, move in and get not only a warm-water port (for which all Russians have lusted since the Ark) but access to all the oil. He was in Persia until Truman forced him out. Why was Stalin there with his troops? To protect the people against the evil West? No, to get the oil fields. And why would Josef support the Jews in Israel? Because he loves them? No, because he wants a foothold there.
Truman knows all about this and won’t allow it.
When he was told that Israel was planning to invade one of the oil-producing countries, he made it very clear that he would oppose this with military force if need be.
No invasion, but the President now has terrible enemies who will continue to work against him. These people will not be thwarted and will have their way. They are already in positions of great power in Russia and now they will try to regain the ground they lost here when Roosevelt died. They see Truman as their enemy, but he is not. He merely will not allow himself to be forced into anything, and unlike Roosevelt, Truman has surrounded himself with other Midwest types and has not filled the White House with Harvard Jews.
They think this means T. is an anti-Semite but he is not. He is a practical, very sincere American whose roots are in the land and not in Harvard or Yale.
Roosevelt did terrible damage to the middle class during his unlamented reign and I doubt if Truman can put things right but at least he will try. And by trying, he will bring down the wrath of all those pinheaded pseudo-intellectuals who loathe businessmen and want to socialize all business with themselves as head of the bureaus that run them. The fact that such imbeciles are heavily Jewish in composition is immaterial to me but not to many others and I can foresee some troubles ahead.
McCarthy has said that almost all of the spies and traitors here are Jews and that he wishes to make a crusade against them! No, this is not the way to go, Joseph, not at all.
The Church is restraining him from making such utterances because the public would not tolerate such things. They do not like Negroes for sure but would resist any attempt to drive them out of the country. Many would secretly wish for this to happen but few would act on their wishes and would be criticized by the others for their brutality.
Many Americans, from what I have heard, also are very angry about the flood of communists who Roosevelt put into office to harass them but would never openly support any kind of anti-Semitic pogroms. This is middle-class morality and one ignores it at their peril.
Secret Text in Senate Bill Would Give FBI Warrantless Access to Email Records
May 26 2016,
by Jenna McLaughlin
A provision snuck into the still-secret text of the Senate’s annual intelligence authorization would give the FBI the ability to demand individuals’ email data and possibly web-surfing history from their service providers without a warrant and in complete secrecy.
If passed, the change would expand the reach of the FBI’s already highly controversial national security letters. The FBI is currently allowed to get certain types of information with NSLs — most commonly, information about the name, address, and call data associated with a phone number or details about a bank account.
Since a 2008 Justice Department legal opinion, the FBI has not been allowed to use NSLs to demand “electronic communication transactional records,” such as email subject lines and other metadata, or URLs visited.
The spy bill passed the Senate Intelligence Committee on Tuesday, with the provision in it. The lone no vote came from Sen. Ron Wyden, D-Ore., who wrote in a statement that one of the bill’s provisions “would allow any FBI field office to demand email records without a court order, a major expansion of federal surveillance powers.”
Wyden did not disclose exactly what the provision would allow, but his spokesperson suggested it might go beyond email records to things like web-surfing histories and other information about online behavior. “Senator Wyden is concerned it could be read that way,” Keith Chu said.
It’s unclear how or when the provision was added, although Sens. Richard Burr, R-N.C., — the committee’s chairman — and Tom Cotton, R-Ark., have both offered bills in the past that would address what the FBI calls a gap and privacy advocates consider a serious threat to civil liberties.
“At this point, it should go without saying that the information the FBI wants to include in the statue is extremely revealing — URLs, for example, may reveal the content of a website that users have visited, their location, and so on,” Andrew Crocker, staff attorney for the Electronic Frontier Foundation, wrote in an email to The Intercept.
“And it’s particularly sneaky because this bill is debated behind closed doors,” Robyn Greene, policy counsel at the Open Technology Institute, said in an interview.
In February, FBI Director James Comey testified during a Senate Intelligence Committee hearing on worldwide threats that the FBI’s inability to get email records with NSLs was a “typo” — and that fixing it was one of the FBI’s top legislative priorities.
Greene warned at the time: “Unless we push back against Comey now, before you know it, the long slow push for an [electronic communication transactional records] fix may just be unstoppable.”
The FBI used to think that it was, in fact, allowed to get email records with NSLs, and did so routinely until the Justice Department under George W. Bush told the bureau that it had interpreted its powers overly broadly.
Ever since, the FBI has tried to get that power and has been rejected, including during negotiations over the USA Freedom Act.
The FBI’s power to issue NSLs is actually derived from the Electronic Communications Privacy Act — a 1986 law that Congress is currently working to update to incorporate more protections for electronic communications — not fewer. The House unanimously passed the Email Privacy Act in late April, while the Senate is due to vote on its version this week.
Sen. John Cornyn, R-Texas, is expected to offer an amendment that would mirror the provision in the intelligence bill.
Privacy advocates warn that adding it to the broadly supported reform effort would backfire.
“If [the provision] is added to ECPA, it’ll kill the bill,” Gabe Rottman, deputy director of the Center for Democracy and Technology’s freedom, security, and technology project, wrote in an email to The Intercept. “If it passes independently, it’ll create a gaping loophole. Either way, it’s a big problem and a massive expansion of government surveillance authority.”
NSLs have a particularly controversial history. In 2008, Justice Department Inspector General Glenn Fine blasted the FBI for using NSLs supported by weak evidence and documentation to collect information on Americans, some of which “implicated the target’s First Amendment rights.”“NSLs have a sordid history. They’ve been abused in a number of ways, including … targeting of journalists and … use to collect an essentially unbounded amount of information,” Crocker wrote.
One thing that makes them particularly easy to abuse is that recipients of NSLs are subject to a gag order that forbids them from revealing the letters’ existence to anyone, much less the public.
Push to expand FBI surveillance authority threatens U.S. email privacy bill
May 26, 2016
by Dustin Volz
WASHINGTON- An effort in the U.S. Senate to expand the Federal Bureau of Investigation’s authority to use a secretive surveillance order has delayed a vote on a popular email privacy bill, casting further doubt on whether the legislation will become law this year.
The Senate Judiciary Committee on Thursday postponed consideration of a measure that would require government authorities to obtain a search warrant before asking technology companies, such as Microsoft and Alphabet Inc’s Google , to hand over old emails. A version of the Senate bill unanimously passed the House last month.
Currently, federal agencies do not need a warrant to access emails or other digital communications more than 180 days old due to a provision in a 1986 law that considers them abandoned by the owner.
But Republican party senators offered amendments Thursday that privacy advocates argued contravened the purpose of the underlying bill and would likely sink its chances of becoming law.
Those amendments include one by Senator John Cornyn, the second ranking Republican in the Senate, that would broaden the FBI’s authority to deploy an administrative subpoena known as a National Security Letter to include electronic communications transaction records such as the timestamps of emails and their senders and recipients.
Senators Patrick Leahy and Mike Lee, the Democratic and Republican authors of the email privacy bill, agreed to postpone the vote to give time to lawmakers to review the amendments and other provisions of the bill that have prompted disagreement.
NSLs do not require a warrant and are almost always accompanied by a gag order preventing the service provider from sharing the request with a targeted user.
The letters have existed since the 1970s, though the scope and frequency of their use expanded greatly after the Sept. 11, 2001 attacks on the United States.
In 2015 requests for customer records via NSLs increased nearly 50 percent to 48,642 requests, up from 33,024 in 2014, according to a U.S. government transparency report.
The Obama administration has for years lobbied for a change to how NSLs can be used, after a 2008 legal memo from the Justice Department said the law limits them largely to phone billing records. FBI Director James Comey has said the change needed essentially corrects a typo.The Senate Intelligence Committee this week passed a bill to fund the U.S. intelligence community that contains a similar provision that would allow NSLs to be used to gather email records.
Senator Ron Wyden, an Oregon Democrat, voted against the proposal and said it “takes a hatchet to important protections for Americans’ liberty.”
(Reporting by Dustin Volz; Editing by Alan Crosby)
Stop the nonsense: homeopathy has no place in medicine
On Thursday, more than 500 doctors will meet in Bremen for the 165th Annual Congress of Homeopathic Doctors. It’s scandalous that medical professionals still adhere to such superstitions, says DW’s Fabian Schmidt.
May 25, 2016
Homeopathy is nothing but an obscure mistaken belief. It explains alleged successes in healing patients with a mystic and magic “memory of water,” with ominous “energy” and “vibrations.” This hocus-pocus is no more scientific than Santeria incantations by Haitian voodoo priests.
Homeopathy has been clearly proven to be pharmaceutically useless in proper medical trials. Therefore, its only place is in the cabinet of horrors of historical medical and anthropological research institutions.
Medicine must not be arbitrary
Since Virchow researched cells and his contemporary Robert Koch discovered the importance of bacteria a lot has happened: Our medical research today is focusing on the level of molecules. With the decoding of the human genome, medicine has become better and more powerful than ever before.
At no point in history have humans better understood how all the various processes in the body influence each other. Never before have we known more about the functions of all those enzymes, hormones and proteins. Today, even the use of custom made molecules for individual treatment is a common practice against some cancers. It’s called personalized medicine.
Scientific knowledge today is precise, thorough and verifyable. That’s why the medical profession must not allow medicine to be devalued by unscientific and ideologically tainted belief-systems from the Napoleonic era. There must be no place for such arbitrariness in this noble scientific discipline.
Doctors need to take a stand
For the sake of their own reputation, but even more for the protection of patients and customers, the medical professional organizations, universities and the research-based pharmaceutical companies must take a clear stand: homeopathy must be outlawed. It has no place in medical practices, pharmacies or serious research laboratories.
The curricula of medical faculties also need to be free of these esoteric teachings. Leave the globuli – the homeopathic tablets – to those who can really use them: to historians, who are researching the errors of ancient medicine, to anthropologists who are looking into creepy supersticious rites or to the incorrigible shamans and druids. At least, those self-appointed healers do not have a medical license.
The best would be to store homeopathy in the last corner on some dusty shelf, somewhere hidden far away behind the pathological collections with jars with diseased body parts and organs of Berlin’s famous 19th century doctor Rudolf Virchow. After all, his terrifying exhibits were part of real scientific medical research. They represent the foundation of our modern medicine.
The Desperate Plight of Petro-States
With a Busted Business Model, Oil Economies Head for the Unknown
by Michael T. Klare
Pity the poor petro-states. Once so wealthy from oil sales that they could finance wars, mega-projects, and domestic social peace simultaneously, some of them are now beset by internal strife or are on the brink of collapse as oil prices remain at ruinously low levels. Unlike other countries, which largely finance their governments through taxation, petro-states rely on their oil and natural gas revenues. Russia, for example, obtains about 50% of government income that way; Nigeria, 60%; and Saudi Arabia, a whopping 90%. When oil was selling at $100 per barrel or above, as was the case until 2014, these countries could finance lavish government projects and social welfare operations, ensuring widespread popular support. Now, with oil below $50 and likely to persist at that level, they find themselves curbing public spending and fending off rising domestic discontent or even incipient revolt.
At the peak of their glory, the petro-states played an outsized role in world affairs. The members of OPEC, the Organization of the Petroleum Exporting Countries, earned an estimated $821 billion from oil exports in 2013 alone. Flush with cash, they were able to exert influence over other countries through a wide variety of aid and patronage operations. Venezuela, for example, sought to counter U.S. influence in Latin America via its Bolivarian Alliance for the Peoples of Our America (ALBA), a cooperative network of mostly leftist governments. Saudi Arabia spread its influence throughout the Islamic world in part by financing the efforts of its ultra-conservative Wahhabi clergy to establish madrassas (religious academies) throughout the Islamic world. Russia, under Vladimir Putin, used its prodigious oil wealth to rebuild and refurbish its military, which had largely disintegrated following the collapse of the Soviet Union. Lesser members of the petro-state club like Angola, Azerbaijan, and Kazakhstan became accustomed to regular fawning visits from the presidents and prime ministers of major oil-importing countries.
That, of course, was then, and this is now. While these countries still matter, what worries these presidents and prime ministers now is the growing likelihood of civil violence or even state collapse. Take, for example, Venezuela, long an ardent foe of U.S. policy in Latin America, but today the potential site of a future bloody civil war between supporters and opponents of the current government. Similar kinds of internal strife and civil disorder are likely in oil-producing states like Algeria and Nigeria, where the potential for the further growth of terrorist violence amid chaos is always high.
Some petro-states like Venezuela and Iraq already appear to be edging up to the brink of collapse. Others like Russia and Saudi Arabia will be forced to reorient their economies if they hope to avoid such future outcomes. Whatever their degree of risk, all of them are already experiencing economic hardship, leaving their leaders under growing pressure to somehow alter course in the bleakest of circumstances — or face the consequences.
A Busted Business Model
Petro-states are different from other countries because the fates of their governing institutions are so deeply woven into the boom-and-bust cycles of the international petroleum economy. The challenges they face are only compounded by the unnaturally close ties between their political leaderships and senior officials of their state-owned or state-controlled oil and natural gas industries. Historically, their rulers have placed close allies or even family members in key industry positions, ensuring continuing government control and in many cases personal enrichment as well. In Russia, for example, the management of Gazprom, the state-controlled natural gas company, and Rosneft, the state-owned oil company, is almost indistinguishable from the senior leadership in the Kremlin, with both groups answering to President Putin. A similar pattern holds for Venezuela, where the government keeps the state-owned company, Petróleos de Venezuela, S.A. (PdVSA), on a tight leash, and in Saudi Arabia, where the royal family oversees the operations of the state-owned Saudi Aramco.
In 2016, one thing is finally clear, however: the business model for these corporatized states is busted. The most basic assumption behind their operation — that global oil demand will continue to outpace world petroleum supplies and ensure high prices into the foreseeable future — no longer holds. Instead, in what for any petro-state is a nightmarish, upside-down version of that model, supply, not demand, is forging ahead, leaving the market flooded with fossil fuels.
Most analysts, including those at the International Monetary Fund (IMF), now believe that increases in energy efficiency, the spread of affordable alternative energy sources (especially wind and solar), slowing worldwide economic growth, and concern over climate change will continue to put a damper on fossil fuel demand in the years ahead. Meanwhile, the oil industry — now equipped with fracking technology and other advanced extractive techniques — will continue to boost supplies. It’s a formula for keeping prices low. In fact, a growing number of analysts are convinced that world oil demand will in the not-so-distant future reach a peak and begin a long-term decline, ensuring that large reserves of petroleum will be left in the ground. For the petro-states, all of this means persistent pain unless they can find a new business model that is somehow predicated on a permanent low-oil-price environment.
These states vary in both their willingness and ability to respond to this new reality effectively. Some are too deeply committed to their existing business model (and its associated leadership system) to consider significant changes; others, increasingly aware of the need to do something, find almost insuperable structural roadblocks in the way; and a third group, recognizing the desperate need for change, is attempting a total economic overhaul of its oil economies. In recent weeks, examples of all three types – Venezuela for the first, Nigeria the second, and Saudi Arabia the third — have surfaced in the news.
Venezuela: A Nation on the Brink
Venezuela claims the world’s largest proven reserves of petroleum, an estimated 298 billion barrels of oil. In past decades, the exploitation of this vast fossil fuel patrimony has ensured incredible wealth for foreign companies and Venezuelan elites alike. After assuming the presidency in 1999, however, Hugo Chávez sought to channel the bulk of this wealth to Venezuela’s poor and working classes by forcing foreign firms to partner with the state-owned oil firm PdVSA and redirecting that company’s profits to government spending programs. Billions of dollars were funneled into state-directed “missions” to the poor, lifting millions of Venezuelans out of poverty. In 2002, when the company’s long-serving managers rebelled against these moves, Chávez simply replaced them with his own party loyalists and the diversion of funds continued.
In the wake of the ousting of that original management team, the country’s oil production began to decline. With prices running at or above $100 per barrel, this initially seemed to make little difference as money continued to pour into government coffers and those missions to the poor kept right on going. What Chavez didn’t do, however, was create the national equivalent of a rainy-day fund. Little of the oil money was channeled into a sovereign wealth fund for more problematic moments, nor was any invested in other kinds of industries that might in time have generated streams of non-fossil-fuel income for the government.
As a result, when prices began to drop in the fall of 2014, Chavez’s presidential successor, Nicolás Maduro, faced a triple calamity: diminished revenues for social services, scant savings to draw upon, and no alternative sources of income. Not surprisingly, as a new impoverishment spread, many former Chavistas lost faith in the regime and, in last December’s parliamentary elections, voted for emboldened opposition candidates.
Today, Venezuela is a nation living under an officially declared “state of emergency,” politically riven, experiencing food riots and other violence, and possibly on the brink of collapse. According to the IMF, the economy contracted by 5.7% in 2015 and is expected to diminish by another 8% this year — more, that is, than any other country on the planet. Inflation is out of control, unemployment and crime are soaring, and what little money Venezuela had in its rainy-day account has largely been spent. Only China has been willing to lend it money to pay off its debts. If Beijing chooses to hold back when the next payments come due this fall, the country could face default. Opposition leaders in the National Assembly seek to oust Maduro and move ahead with various reforms, but the government is using its control of the courts to block such efforts, and the nation remains in a state of paralysis.
Nigeria: Continuing Disorder
Nigeria possesses the largest oil and natural gas reserves in sub-Saharan Africa. The exploitation of those reserves has long proved immensely profitable for foreign companies like Royal Dutch Shell and Chevron and also for well-connected Nigerian elites. Very little of this wealth, however, has trickled down to those living in the Niger Delta region in the south of the country where most of the oil and gas is produced. Opposition to the central government in Abuja, the capital, to which the oil income flows, has long been strong in the Delta, leading to periodic outbursts of violence. Successive federal administrations have promised a more equitable allocation of oil revenues, but a promise this has remained.
From 2006 to 2009, Nigeria was wracked by an insurgency spearheaded by the Movement for the Emancipation of the Niger Delta, a militant group seeking to redirect oil revenues to the country’s impoverished southern states. In 2009, when President Umaru Musa Yar’Adua offered the militants an amnesty and monthly cash payments, the insurgency died down. His successor, Goodluck Jonathan, a southerner, promised to respect the amnesty and channel more funds to the region.
For a while, high oil prices enabled Jonathan to make good on some of his promises, even as entrenched elites in Abuja continued to pocket a substantial percentage of the country’s petroleum income. When prices began to plummet, however, he was confronted with mounting challenges. Pervasive corruption turned people against the government, feeding recruits into Boko Haram, the terror movement then growing in the country’s northern reaches; money intended for soldiers in the Nigerian army disappeared into the pockets of military elites, subverting efforts to fight the insurgents. In national elections held a year ago, Muhammadu Buhari, a former general who vowed to crack down on corruption, rescue the economy, and defeat Boko Haram, took the presidency from Jonathan.
Since assuming office, Buhari has demonstrated a grasp of Nigeria’s structural weaknesses, especially its overwhelming dependency on oil monies, along with a determination to overcome them. As promised, he has launched a serious crackdown on the sort of corruption that is a commonplace feature of petro-states, firing officials accused of blatant thievery. At the same time, he has stepped up military pressure on Boko Haram, for the first time putting a crimp in that group’s brutal activities. Crucially, he has announced plans to diversify the economy, placing more emphasis on agriculture and non-fossil-fuel-related industries, which might, if pursued seriously, help diminish Nigeria’s increasingly disastrous reliance on oil.
In the cold light of day, however, the country still needs those oil revenues for the lion’s share of its income, which means that in the current low-price environment it has ever less money to fight Boko Haram, pay for social services, or pursue alternative investment schemes. In addition, Buhari has been accused of disproportionately targeting southerners in his fight against corruption, sparking not just fresh discontent in the Delta region but the rise of a new militant group — the Niger Delta Avengers — that poses a threat to oil production. On May 4th, the Avengers attacked an offshore oil platform operated by Chevron and the Nigerian National Petroleum Corporation, forcing the companies to shut down production of about 90,000 barrels per day. Add that to other insurgent attacks on the country’s oil infrastructure and the Nigerian government is expected to lose $1 billion in May alone. If repairs are not completed on time, it may lose an equal amount in June. It remains a nation on edge, in danger of devastating impoverishment, and with few genuine alternatives available.
Saudi Arabia: Seeking a New Vision
With the world’s second largest reserves of oil, Saudi Arabia is also the planet’s leading producer, pumping out a staggering 10.2 million barrels daily. Originally, those massive energy reserves were owned by a consortium of American companies operating under the umbrella of the Arabian-American Oil Company (Aramco). In the 1970s, however, Aramco was nationalized and is now owned by the Saudi state — which is to say, the Saudi monarchy. Today, it is the world’s most valuable company, worth by some estimates as much as $10 trillion (10 times more than Apple), and so a source of almost unimaginable wealth for the Saudi royal family.
For decades, the country’s leadership pursued a consistent political-economic business plan: sell as much oil as possible and use the proceeds to enrich the numerous princes and princesses of the realm; provide lavish social benefits to the rest of the population, thereby averting popular unrest of the “Arab Spring” variety; finance the ultra-conservative Wahhabi clergy so as to ensure its loyalty to the regime; finance like-minded states in the region; and put aside money for those rainy-day periods of low oil prices.
Saudi leaders have recently come to recognize that this plan is no longer sustainable. In 2016, the Saudi budget has, for the first time in recent memory, moved into deficit territory and the monarchy has had to cut back on both its usual subsidies to and social programs for its people. Unlike the Venezuelans or the Nigerians, the Saudi royals socked away enough money in the country’s sovereign wealth fund to cover deficit spending for at least a couple of years. It is now, however, burning through those funds at a prodigious rate, in part to finance a brutal and futile war in Yemen. At some point, it will have to sharply curtail government spending. Given the youthfulness of the Saudi population — 70% of its citizens are under 30 — and its long dependence on government handouts, such moves could, in the view of many analysts, lead to widespread civil unrest.
Historically, Saudi leaders have been slow to initiate change. But recently, the royal family has defied expectations, taking radical steps to prepare the country for a transition to what’s being termed a post-petroleum economy. On April 25th, the powerful Deputy Crown Prince, Mohammed bin Salman, unveiled “Saudi Vision 2030,” a somewhat hazy blueprint for the kingdom’s economic diversification and modernization. Prince Mohammed also indicated that the country will soon begin to offer public shares in Saudi Aramco, with the intention of raising massive funds to invest in and create non-oil-related Saudi industries and revenue streams. On May 7th, the monarchy also abruptly dismissed its long-serving oil minister, Ali al-Naimi, and replaced him with the head of Saudi Aramco, Khalid al-Falih, a figure deemed more subservient to Prince Mohammed. Falih’s job title was also changed to minister of energy, industry, and mineral resources, which was (so the experts speculated) a signal from the monarchy of its determination to move beyond exclusive reliance on oil as a source of income.
This is all so unprecedented that there is no way of predicting whether the Saudi royals are actually capable of bringing anything like Saudi Vision 2030 to fruition, no less moving away in a serious fashion from its reliance on oil. Many obstacles remain, including the possibility that jealous royals will push Prince Mohammed (and his vision) aside when his father, King Salman, now 80, passes from the scene. (There are regular rumors that some members of the royal family resent the meteoric rise of the 31-year-old prince.) Nevertheless, his dramatic statements about the need to diversify the kingdom’s economy do show that even Saudi Arabia — the petro-state par excellence — now recognizes that some kind of new identity is now a necessity.
The Stakes for Us All
You may not live in a petro-state, but that doesn’t mean you don’t have a stake in the evolution of this unique political life form. From at least the “oil shock” of 1973, when the Arab OPEC members announced an “oil boycott” against the U.S. for its involvement in the Yom Kippur War, such countries have played an outsized role on the world stage, distorting international relations, and — in the Greater Middle East — involving themselves (and their financial resources) in one conflict after another from the Iran-Iraq War of 1980-1988 to the wars in Yemen and Syria today.
Their fervent support for and financing of favored causes — whether it be Wahhabism and associated jihadist groups (Saudi Arabia), anti-Westernism (Russia), or the survival of the Assad regime in Syria (Iran) — has provoked widespread disorder and misery. It will hardly be a tragedy if a lack of funds forces such states to pull back from efforts of this sort. But given the centrality of fossil fuels to our world for the last century or more, the chaos that could ensue in the oil heartlands of the planet from low oil prices and high supply is likely to create unpredictable new nightmares of its own.
And the greatest nightmares of all lurk not in any of this but in the inability of these states and those they supply to liberate themselves from reliance on fossil fuels fast enough. Looking into the future, the demise of petro-states as we’ve known them could have a profound impact on the struggle to avert catastrophic climate change. Although these states are not primarily responsible for the actual combustion of fossil fuels — that’s something we in the oil-importing countries must take responsibility for — their pivotal role in fueling the global petroleum economy has made them largely resistant to international efforts to curb emissions of carbon dioxide. As they try to repair their busted business model or collapse under the weight of its failures, we can only hope that the path they follow will entail significantly less dependence on oil exports as well as a determination to speed up the conclusion of the fossil fuel era and so diminish its legacy of climate disaster.
France set to grind to a halt as strikes spark fuel shortages and air and rail blockages
May 14, 2016
by Henry Samuel
The Telegraph UK
Paris-France was facing transport meltdown on Tuesday as a tense standoff between unions and the government over labour reform saw oil refineries blocked and a fifth of its fuel pumps run dry.
Just three weeks before the Euro 2016 football tournament and days before the British half-term holidays, when thousands of motorists cross into France, at least seven out of eight of the country’s refineries were cut off, fuel shortages looked set to worsen and a string of rail and air strikes are looming.
Hostilities commenced before dawn on Tuesday when police launched a raid to “liberate” an oil refinery near the southern port of Marseille held by strike picketers. Officers fired tear gas and water cannon to oust protesters blocking the Exxon Mobil refinery and terminal at the Fos-Sur-Mer site.
They met stiff resistance as picketers hit back by lobbing paving slabs and setting crates and tyres on fire, lightly injuring seven officers.
However, unionists said they had successfully managed to block the country’s other refineries, along with several fuel depots.
One in every five of the country’s 12,500 petrol stations were either completely dry or out of one type of fuel, a week after oil workers first went on strike, according to Alain Vidalies, the transport minister.
Emergency stocks are sufficient to keep the country’s fuel stations in operation for up to two months, according to some experts, if the government chose to tap into those supplies. But François Hollande, the French president, and his prime minister warned they wouldn’t let a “minority” of unions take the country “hostage”.
Despite government assurances everything was under control, news of fuel shortages sparked panic buying, prompting long lines and fuel rationing in parts of France. Some motorists even crossed into Belgium to fill up.
Observers said the standoff was a key test of strength for the hardline CGT union, whose historic ability to mount mass demonstrations that grind the country to the halt and result in government U-turns appears to be on the wane.
It has called for strikes “everywhere, all round France” against the government’s labour reform, which has prompted frequent street protests over the past two months.
The CGT, along with others, has called a rolling strike at SNCF, the national railway, from May 31, and an open-ended one on the Paris underground and suburban commuter train networks from June 2 – a week before the Euro 2016 opens amid warnings that “workers” come before football.
Meanwhile, civil aviation unionists on Tuesday called a strike from June 3 to 5.
The CGT said the labour reform will unpick France’s protective and labyrinthine labour regulations, allowing firms to lay off staff more easily for economic reasons and by providing further exemptions from national rules on pay and working conditions.
Philippe Martinez, the union’s boss, warned that the government was playing with fire by breaking up picket lines.
“”We’ll see this through to the finish, to withdrawal of the labour law,” he warned. “This is a government which has turned its back on its promises and we are now seeing the consequences.”
The Socialist government has already pushed the law through parliament without a vote due to a Leftist backbench revolt, and is adamant it will be enacted as its last major reform before next year’s presidential elections.
Critics argue the watered-down law does not go far enough.
While France is showing modest signs of recovery, with growth expected to hit 1.5 per cent this year, the International Monetary Fund on Tuesday warned that its economy will not recover sufficiently to cut 10 per cent unemployment and debt without further reforms, notably by tightening rules for receiving generous unemployment benefits – a move likely to draw more howls of disapproval from unions.
If labour unrest grows it risks deterring faltering foreign investment, analysts warned.
Even home-grown oil and gas giant Total threatened on Tuesday to “seriously reconsider” its investment plans in France due to the strikes, with its chief executive Patrick Pouyanné reportedly saying they constituted a “breakdown in the pact between workers and the company”.
While the government has insisted it will stand firm, Christian Jacob of the opposition centre-Right party, The Republicans, remained sceptical. “That’s what they say until they cave in.”
“We know all about that,” added the former ally of ex-president Jacques Chirac, famous for making several U-turns in the face of mass protests.
Violent clashes break out in France over labor reforms
Riot police have used tear gas to disperse protesters in the French capital during demonstrations against labor reforms. The prime minister has said he’s open to ‘improvements’ to the bill but won’t scrap it altogether.
May 26, 2016
Thousands of protesters clashed with police in central Paris and other French cities on Thursday, as union activists around the country stepped up industrial action over a raft of labor reforms.
Between 18,000 and 100,000 people joined the march in the French capital before it took a violent turn in the afternoon. Masked individuals reportedly smashed the windows of high street shops and banks as police fired tear gas on the crowd. Sixteen people were arrested. There were similar scenes in the western city of Nantes, while in southwestern Bordeaux around 100 people stormed a police station.
Protesters demand the government abandon a controversial labor reform bill that makes it easier for employers to hire and fire workers, and relaxes rules around the 35-hour work week.
The government forced the bill through parliament earlier this month. It says the legislation will create jobs and tackle unemployment, which hovers at around 10 percent. Union representatives have said they see the reform as a tool to erode workers’ rights.
Wave of industrial action
Union anger over the changes has led to strikes across France that have affected oil refineries, fuel depots, ports, train services and some flights. The wave of industrial action has had a particularly disruptive impact on fuel supply, resulting in days of shortages at gas stations.
In the port city of Le Havre on Thursday, dock workers set off smoke bombs and fireworks in front of the city hall. Dock workers also went on strike in the southern port city of Marseille, preventing ships from offloading oil and gas.
More protests ahead
Another round of protests is planned for June 14, four days after the 2016 European Championships soccer tournament kicks off in France.
Members of the CGT union, one of the seven unions that called for the nationwide strike, warned the tournament could face major disruptions if the government refuses to scrap the bill.
Francis Duseux, the head of France’s oil industry lobby, said the government had been forced to dip into four days’ worth of its strategic fuel reserves for the first time in six years to compensate for the resulting supply problems. He said only two of the country’s eight refineries were working normally.
French Prime Minister Manuel Valls said abandoning the reforms was not an option, but he did open the door to possible “improvements and modifications” to the legislation.
“I am always open when some aspect should be improved, but on the main lines of the text, particularly Article 2, there is no question of touching it,” said Valls on broadcaster BFM-TV. “We cannot cede to a desire to make the government fold by blocking the economy.”
Under Article 2, companies can opt out of national labor protection obligations if they adopt in-house deals on pay and conditions with the consent of employees. CGT union members have rejected the offer, and say they will continue striking until the bill is dropped.
Hollande says won’t let protesters choke economy as police clear fuel picket
May 27, 2016
by Bate Felix
Paris-French riot police removed picketers and barricades blocking access to a large fuel distribution depot as President Francois Hollande warned anti-reform protesters on Friday he would not let them strangle the economy.
The police operation to free up a fuel depot near the Donges oil refinery in western France followed similar swoops at other depots this week to ease petrol shortages caused by picketers fighting planned labor law reforms.
Although concerns were mounting about potential disruption to the Euro 2016 soccer tournament which begins in two weeks time, evidence elsewhere in the energy sector indicated a slightly less tight supply compared with the previous day. Some 741 of oil major Total’s 2,200 filling stations were out of fuel compared with 784 a day earlier.
In the Seine Maritime region north of Paris, local government prefect Nicole Klein said the number of petrol stations without fuel had fallen significantly and lifted rationing orders.
Nevertheless at the Fos-Lavera oil port in southern France, the country’s biggest, about 38 oil tankers were queued up waiting to unload, up from 12 the previous day, a port authority spokeswoman said.
Separately, the hardline CGT union said its members at the CIM oil terminal at the port of Le Havre, which handles 40 percent of French crude oil imports, had voted to extend their strike until Monday.
Speaking in Japan after a summit with other world leaders, Hollande said France’s economy was starting to pick up and should not be derailed by opponents of a reform designed to make hiring and firing easier to boost employment
I will stay the course because this is a good reform and we must go all the way to adoption,” the Socialist leader said. “This is not the time to put the French economy in difficulty.”
Hollande’s appeal was directed above all at the CGT union, which is leading street protests, public transport strikes and fuel supply pickets that also risk disrupting the European soccer tournament France is hosting next month.
Some evidence to back up Hollande’s remarks on the economy emerged on Friday in consumer confidence data collected in May.
The official consumer confidence index surged past even the highest estimate to reach the highest level since October 2007, before the global financial crisis broke.
Hundreds of thousands of people have taken to the streets over the past three months for protests marred by violence on the fringes in which hundreds of police have been hurt and more than 1,300 people arrested.
Hollande, who faces an election a year from now plagued by dismal popularity ratings and high unemployment, says the labor reform is vital to tackle joblessness, which has dipped for two months in a row but remains close to a rate of 10 percent.
The reform, which the CGT wants withdrawn, would make it easier for companies to lay off staff in difficult economic times. It would also allow firms to opt out of national labor protection rules if they strike in-house deals on pay and conditions with the consent of a majority of their staff.
French protesters attacked a police station and smashed bank windows on Thursday at rallies against the reform, while the CGT members sought to choke off fuel supplies.
Seventy-seven people were arrested during nationwide street demonstrations on Thursday in which more than 150,000 marched, according to the Interior Ministry.
(Reporting by Brian Love and Simon Carraud in Paris and Thomas Wilson in Japan; Editing by Andrew Callus and Janet Lawrence)
Airport screening made 70,000 miss American Airlines flights this year
May 26, 2016
May 26 (Reuters) – American Airlines Group Inc has had more than 70,000 customers and 40,000 checked bags miss flights this year because of delays in airport screening, according to an executive’s testimony before a U.S. Congressional subcommittee Thursday.
A shortage of staff and a surge in air travelers have created a nightmare scenario for the U.S. Transportation Security Administration (TSA), with airport wait times in places like Chicago stretching beyond two hours. American, the world’s largest airline, wants TSA to create a senior internal role focused on advocating for travelers, according to prepared remarks by American’s Senior Vice President for Customer Experience Kerry Philipovitch.
(Reporting By Jeffrey Dastin in New York; Editing by Chizu Nomiyama)
US reports first case of bacteria resistant to antibiotic of last resort
‘It is the end of the road for antibiotics unless we act urgently,’ says Centers for Disease Control and Prevention after superbug infects Pennsylvania woman
May 25, 2016
For the first time, a US patient has been infected with bacteria resistant to an antibiotic used as a last resort, scientists said Thursday.
The patient, a 49-year-old woman in Pennsylvania, has recovered but health officials fear that if the resistance spreads to other bacteria, the country may soon see supergerms impervious to all known antibiotics.
“It is the end of the road for antibiotics unless we act urgently,” Dr Tom Frieden, director of the Centers for Disease Control and Prevention (CDC), said in Washington.
Other countries have already seen multidrug-resistant superbugs that no antibiotic can fight. So far, the US has not. But this sets the stage for that development, CDC officials said.
The woman had gone to a military clinic in Pennsylvania in April and was treated for a urinary tract infection. Initial tests found she was infected with E coli bacteria, a common variety of germ seen in the gut that often makes its way to the bladder.
But the tests showed this E coli was resistant to antibiotics commonly used first for such infections. She was successfully treated with another kind of antibiotic.
But while she has recovered, further testing completed in the last week confirmed the E coli was carrying a gene for resistance against the drug colistin.
Colistin is an old antibiotic. By the 1970s, doctors had mostly stopped using it because of its harsh side effects. But it was brought back as other antibiotics began losing their effectiveness.
It is used against hard-to-treat bacteria that resist one of the last lines of defence, antibiotics called carbapenems. If those germs pick up the colistin-resistance gene, doctors may be out of treatment options, health officials say.
“This is another piece of a really nasty puzzle that we didn’t want to see here,” said Dr Beth Bell, who oversees CDC’s emerging infectious diseases programs.
The CDC is working with Pennsylvania health officials to interview the woman and her family to try to figure out how she might have picked up the strain. The woman had not travelled outside the country recently, officials said.
The colistin-resistant gene has been seen in animals and people in China, Europe and Canada. Federal officials said on Thursday that colistin-resistant E coli has also been found in a pig in the US, but there was nothing to link the finding to the Pennsylvania case.
Researchers at Walter Reed national military medical center, who did the confirmatory tests, reported on the Pennsylvania case on Thursday in a journal of the American Society of Microbiology
Dozens injured at fight at Calais ‘Jungle’ migrant camp
A massive brawl in France’s “Jungle” migrant camp has left at least 40 people with injuries. One person was seriously hurt after a fight broke out between migrants from Afghanistan and Sudan.
May 27, 2016
Prosecutors have opened an investigation into a large fight at a refugee camp in northern France, authorities said on Friday.
The brawl broke out at the Calais “Jungle” camp on Thursday involving 200 to 300 refugees from Afghanistan and Sudan.
A total of 40 people were injured, including 33 migrants, two police officers and five aid workers.
Three people sustained serious injuries, including one person who was stabbed, said local official Fabienne Buccio. One of those seriously injured was a young, female aid worker from La Vie Active, which runs the Jules-Ferry aid center.
The fight broke out as food was being distributed at the heart of the camp, but the exact cause has yet to be determined.
Over 200 police officers were sent to the camp along with 70 firefighters and 11 ambulances.
Between 4,000 and 5,000 people live at the northern camp in makeshift dwellings in hopes of crossing the English Channel to Great Britain.
The Interior Ministry has encouraged migrants to seek asylum in France and relocate to other areas of France with better accommodations. However, the number of people in the camp has grown in recent weeks.
In February, French authorities used tear gas to disperse migrants while police dismantled part of the camp in an attempt to clear out some of the migrants.
US economy slows to weakest pace in a year
The US Commerce Department has revised up first-quarter GDP growth for the world’s largest economy. But despite the improvement on the first estimate last month, output slowed in the January-March period.
May 27, 2016
The US economy grew at an annual rate of 0.8 percent in the first quarter, better than the 0.5 percent stated by the Commerce Department in its first estimate a month ago.
Despite the upward revision, the figure marked the second weak quarter in a row, following a modest 1.4-percent gain in the final three months of last year.
As the new year progressed, the economy was held back by turbulence in financial markets and was consequently hurt by a strong dollar and sluggish global demand, which eroded exports.
Better times ahead?
In addition, low oil prices weighed on the economy, undercutting profits of oilfield companies like Schlumberger and Halliburton, forcing them to slash spending on equipment.
There was no change in consumer spending, accounting for more than two-thirds of US economic activity. Consumption increased by 1.9 percent, the report said.
What the upward revision did reflect, though, was a smaller drag from trade than previously reported as well as a rebound in after-tax corporate earnings.
After two sluggish quarters, there are signs the economy has been gaining momentum again with retail sales, exports, industrial production, home building and home sales all surging in April.