Signs of the Economic Apocalypse 9-12-05

From Signs of the Times 9-12-05:

The U.S. stock market rose last week in response to the disaster of Hurricane Katrina. Oil prices pulled back as well. The Dow Jones Industrial Average closed on Friday at 10,678.56, up 2.2% from the previous Friday's close of 10,447.37. The NASDAQ closed at 2,175.51, up 1.6% from 2141.07 last week. The yield on the ten-year U.S. Treasury Note was 4.12% at Friday's close, up 9 basis points from 4.03 a week earlier. Oil closed at 64.08 dollars a barrel, down 5.4% from $67.57, which is even lower than it was pre-Katrina (down 3.2% over two weeks from $66.13). The U.S. dollar even gained ground after Katrina, closing at 0.8058 euros, up 1.3% from 0.7954 euros the week before. The euro, then, closed at $1.2410 down from 1.2573 dollars at the previous Friday's close. That puts oil in euros at 51.64 euros a barrel, down 4.1% from the previous week's close of 53.74 euros a barrel. Gold closed at $453.40 an ounce, up 1.3% from last week's close of $447.80. Gold in euros would be 365.35 euros an ounce up 2.6% from 356.16 on the previous Friday. The gold/oil ratio closed at 7.08 barrels of oil per ounce of gold, up sharply (6.7%) from 6.63 a week before.

So why the strength in the dollar and U.S. stocks given the real economic threat posed by Hurricane Katrina? According to Wall Street observers, it was the thought that maybe, given what happened, the Federal Reserve Board might not raise interest rates again. No one mentioned the fact that many corporations (especially Bush-connected ones) stand to make a lot of money on reconstruction and that oil companies have made out like bandits from the sharp rise in gasoline prices.

Firms with Bush ties snag Katrina deals

Sat Sep 10,11:03 AM ET

Companies with ties to the Bush White House and the former head of FEMA are clinching some of the administration's first disaster relief and reconstruction contracts in the aftermath of Hurricane Katrina.

At least two major corporate clients of lobbyist Joe Allbaugh, President George W. Bush's former campaign manager and a former head of the Federal Emergency Management Agency, have already been tapped to start recovery work along the battered Gulf Coast.

One is Shaw Group Inc. and the other is Halliburton Co. subsidiary Kellogg Brown and Root. Vice President Dick Cheney is a former head of Halliburton.

Bechtel National Inc., a unit of San Francisco-based Bechtel Corp., has also been selected by FEMA to provide short-term housing for people displaced by the hurricane. Bush named Bechtel's CEO to his Export Council and put the former CEO of Bechtel Energy in charge of the Overseas Private Investment Corporation.

Experts say it has been common practice in both Republican and Democratic administrations for policy makers to take lobbying jobs once they leave office, and many of the same companies seeking contracts in the wake of Hurricane Katrina have already received billions of dollars for work in Iraq.

Halliburton alone has earned more than $9 billion. Pentagon audits released by Democrats in June showed $1.03 billion in "questioned" costs and $422 million in "unsupported" costs for Halliburton's work in Iraq.

But the web of Bush administration connections is attracting renewed attention from watchdog groups in the post-Katrina reconstruction rush. Congress has already appropriated more than $60 billion in emergency funding as a down payment on recovery efforts projected to cost well over $100 billion.

"The government has got to stop stacking senior positions with people who are repeatedly cashing in on the public trust in order to further private commercial interests," said Danielle Brian, executive director of the Project on Government Oversight.

For the most part, though, the economic news related to Katrina was bad. Increased budget deficits, higher prices, and lower consumer confidence will probably be the main consequences of the disaster. Take a look at the airline industry, for example. In some ways that industry is emblematic: it was already teetering on the brink of multiple bankruptcies before Katrina:

US airline losses could hit $10 billion

Fri Sep 9,10:11 PM ET

U.S. airline losses in 2005 could reach $10 billion, due mainly to soaring fuel prices made worse by Hurricane Katrina, the industry's chief trade group estimated on Friday.

To try and stem the red ink, major carriers plan to ask Congress next week for a one-year holiday from the federal tax on jet fuel to save $600 million, the Air Transport Association said.

"There simply is no rational business plan we can continue to operate under with fuel at the price it is today," Jim May, the association's chief executive, said in an interview with CNBC.

Estimated losses for the year rose from $7 billion to between $9 billion and $10 billion, the association said.

…Mike Boyd, a Colorado-based industry consultant, said fuel and fuel alone is driving substantial industry losses just as traffic returned this spring and summer to levels not seen since before the September 11, 2001, hijacked aircraft attacks.
"If oil prices had stayed where they were in 2004 we would be talking about how profitable the airlines are," Boyd said.

Two carriers, United Airlines and US Airways, are in bankruptcy while Delta Air Lines and Northwest Airlines are weighing Chapter 11 filings. All have cited high fuel prices for their woes. Battered by fuel increases, low fare carrier Independence Air, a unit of FLYi Inc., could also seek court protection.

In addition to these purely economic effects, the United States also faces the prospect of bitter conflict within the elite and between the elite and the public at large. George Bush has been attacked surprisingly hard by the elite media. Scathing editorials and newly sceptical and outraged reporters seem to have the green light to question Bush officials like never before. Bush's overall approval rating has now fallen below 40% -- a level that usually foreshadows downfall and a change of regime. Large segments of the population have lost what little confidence in the government they had. There is a sense of depression and powerlessness among the people. The problem in this case is that the 35% or so of the public that supports Bush still supports him strongly and that the elements of the ruling class that have thrown their lot in with the Bush gang are particularly ruthless and Machiavellian. Political instability like this has never been good news economically.

A certain bellwether of conventional moderate elite opinion, the senior and well-respected columnist David Broder, published the following last week in the Washington Post:

A Price To Be Paid For Folly

By David S. Broder

Sunday, September 11, 2005; B07

In the wake of Hurricane Katrina, credible private experts are forecasting a federal budget deficit of $500 billion for this year, a sharp reminder of the government's fiscal folly.

For all the deserved criticism the Bush administration has received for its tardy and ragged response to the storm's ravages on New Orleans and the Gulf Coast, the long-term costs to the nation of the reckless disregard both the president and Congress have shown toward paying the nation's bills may be even greater.

In time those forced from their homes in Louisiana and Mississippi will be returned, and a degree of order will be restored to their communities. Business will recover. Mardi Gras will again be celebrated in the French Quarter. But our children and grandchildren will pay a continuing price for the refusal of our leaders to face the reality of an out-of-control budget.

The scale of the failure is measured by a set of numbers that Rep. John Spratt of South Carolina, the senior Democrat on the House Budget Committee, carries with him. They chart the annual increases passed by Congress in the national debt limit. In 2002 it was $450 billion; in 2003, $984 billion; in 2004, $800 billion; and this year, the House has passed an increase of another $781 billion, on which the Senate has yet to act. That totals a stunning $3 trillion in additional debt in four years -- a 50 percent increase in the cumulative debt from all of America's previous history.

When you look at that record, the self-congratulatory tone of the Republicans who have been running Washington seems absurdly unjustified. In July, when the White House Office of Management and Budget said the deficit for this year would decline to $333 billion from $412 billion in 2004, President Bush said, "It's a sign that our economy is strong, and it's a sign that our tax relief plan, our pro-growth policies are working."

In August, when the Congressional Budget Office lowered the deficit forecast to $331 billion, Republican Rep. Jim Nussle of Iowa, the chairman of the House Budget Committee, said, "We're clearly on the right track. The strong economy, higher revenues and falling deficit projections are all results of the successful leadership and policies of the Congress and the president."

These judgments were faulty at the time. They made no provision for the continuing costs of the war in Iraq, or for the Republican plan to end the estate tax and make all the previous Bush tax cuts permanent. And, most of all, they did not realistically calculate the costs of the new Medicare prescription drug benefit and the looming obligations to the millions of baby boomers who are nearing retirement age.

Now those pre-Katrina estimates have been rendered even more ridiculous. In the first 10 days since the storm hit, the president asked Congress for emergency appropriations of $62 billion -- and the bills are just starting to come in.

The question is whether this will force the president and congressional Republicans to suspend their obsessive drive to reduce the revenue base of the federal government, or whether they will finally start paying the bills their government is incurring.

It is hard to be optimistic on that score. This president may not literally be incapable of reversing directions, but we have yet to see him do that on any significant matter. Treasury Secretary John Snow reportedly told congressional Republicans in a closed meeting that Katrina strengthens the case for making the Bush tax cuts permanent. Some Republicans in Congress are appalled at the fiscal wreckage, but the leadership on Capitol Hill has yet to assert its constitutional power of the purse or do anything but increase the damage by cutting taxes while simultaneously boosting spending.

The warning signs of impending economic calamity are every bit as evident as the forecasts of ruin for New Orleans when a major hurricane hit.

The runaway budget deficits are compounded by the persistent and growing imbalance in our trade accounts -- jeopardizing the inflow of foreign funds we have used to finance our debt.

At a private dinner the other evening where many of the men and women who have steered economic and fiscal policy during the past two decades were expressing their alarm about this situation, one speaker summarized the feelings of the group:
"I think it's 1925," he said, "and we're headed for 1929."

Phrases like "economic calamity" and "we're headed for 1929" are not the type of alarmist language you would normally ever hear from David Broder. He is telling us that the economic policy insiders in private conversation are telling him that we are headed for complete economic collapse. And the fact that Broder published this makes it more likely to take place. Just last year the elite were united in presenting an optimistic view of the economy to the public. The public may not have bought it, but just the seeming confidence with which that optimism was universally expressed by the official culture helped prop up an adequate level of consumer confidence. Any confidence and optimism is now gone, however. Here is Newsweek:

Eye of the Political Storm

A new NEWSWEEK poll suggests President Bush could become Katrina's next casualty.

By Marcus Mabry

Updated: 1:31 p.m. ET Sept. 10, 2005

Sept. 10, 2005 - Hurricane Katrina claimed her first political casualty Friday. Michael Brown, the head of FEMA, the federal disaster readiness and response agency, was sidelined from the largest disaster relief project in the nation's history. Brown was recalled to Washington by his boss, Homeland Security Secretary Michael Chertoff. But a new NEWSWEEK Poll suggests the post-Katrina political storm may just be rising. And her ultimate casualty could be President George W. Bush.

In Katrina's wake, the president's popularity and job-approval ratings have dropped across the board. Only 38 percent of Americans approve of the way Bush is doing his job overall, a record-low for this president in the NEWSWEEK poll. (Fifty-five percent of Americans disapprove of his overall job performance.) And only 28 percent of Americans say they are "satisfied with the way things are going" in the country, down from 36 percent in August and 46 percent in December, after the president's re-election. This is another record low and two points below the satisfaction level recorded immediately after the Abu Ghraib prison abuse scandal came to light. Fully two-thirds of Americans are not satisfied with the direction of the country.

But Katrina's most costly impact could be a loss of faith in government generally, and the president, in particular. A majority of Americans (57 percent) say "government's slow response to what happened in New Orleans" has made them lose confidence in government's ability to deal with another major natural disaster. Forty-seven percent say it has made them lose confidence in the government's ability to prevent another terrorist attack like 9/11, but 50 percent say is has not. (Note: our question asked about "government" in general, so we cannot say whether respondents meant state, local, federal or a combo of any of the three.)

More critical to President Bush - and the GOP's future as the nation's majority party: most Americans, 52 percent, say they do not trust the president "to make the right decisions during a domestic crisis" (45 percent do). The numbers are exactly the same when the subject is trust of the president to make the right decisions during an international crisis.

Why the gloom? Forty percent of Americans say the federal government's response to the crisis in New Orleans was poor. Thirty-two percent say it was fair; 21 percent say it was good and five percent believe it was excellent. Americans don't think much of the local and state governments' responses either: 35 percent say state and local officials did a poor job and 34 percent say they did a fair job; 20 percent say they did a good job and five percent say an excellent job after the storm hit.

The Katrina effect is evident in how Americans rate the president personally. In every category, the view of the president is at all-time lows for the NEWSWEEK poll. Only 49 percent of Americans now believe the president has strong leadership qualities. The same percentage of registered voters feel that way, 49 percent - down from 63 percent the week before Bush's reelection. Only 42 percent of Americans believe the president cares about people like them; 44 percent of registered voters feel that way - down from 50 percent the week before the election. And only 49 percent of Americans and the same percentage of registered voters believe Bush is intelligent and well-informed - down from 59 percent before the election.

Similarly, public approval of the president's policies on issues from the economy (35 percent) to the war in Iraq (36 percent) to terrorism and homeland security (46 percent) have suffered. Demonstrating the widespread havoc that Katrina has wrought on the president's political fortunes - even far from issues of disaster response - for the first time in the four years since 9/11, more Americans disapprove of Bush's handling of terrorism and homeland security than approve of it.

Reflecting the tarnished view of the administration, only 38 percent of registered voters say they would vote for a Republican for Congress if the Congressional elections were held today, while 50 say they would vote for a Democrat.

The president and the GOP's greatest hope may be, ironically, how deeply divided the nation remains, even after national tragedy. The president's Republican base, in particular, remains extremely loyal. For instance, 53 percent of Democrats say the federal government did a poor job in getting help to people in New Orleans after Katrina. But just 19 percent of Republicans feel that way. In fact, almost half of Republicans (48 percent) either believes the federal government did a good job (37 percent) or an excellent job (11 percent) helping those stuck in New Orleans.

…The deep partisan divide, evident in whom Americans blame for the slow relief effort, could act to brake any further fall in the president's support levels, particularly if Bush's base feels the Democrats or the media are piling on the president.

A more troubling finding of the NEWSWEEK Poll is that as divided as we are by party, Americans are even more divided by race. For instance, 66 percent of those polled say a "major reason" for government's slow response to the crisis in New Orleans was poor communication between federal, state and local officials. Fifty-seven percent say a major reason was that the destruction was more than expected and overwhelmed officials. Fifty-five percent believe that the incompetence of federal officials was to blame and 57 percent believe state and local officials' incompetence led to the slow response.

But whites and non-whites disagree sharply on the role of race and class in the tragedy. Fully 65 percent of non-whites believe that government was slow to rescue those trapped in New Orleans because they were black, while 64 percent of whites say race was not a cause at all of the government's slow response.

Overall, 22 percent of those polled say a "major reason" government action was slow was that New Orleans was "not a priority because the people affected were mostly African-American." But 47 percent of non-whites believe race was a "major reason;" only 13 percent of whites do. Meanwhile, 20 percent of whites and 53 percent of non-whites believe a "major reason" the response was slow was that most of those trapped were poor. (Overall, 29 percent of Americans believe the poverty of those affected was a major reason for the slow response.)

In general, 35 percent say that the heads of federal agencies such as FEMA and the Department of Homeland Security are most to blame for not getting help quickly enough to the people in New Orleans; just 17 percent say President Bush himself is to blame.

The question now is whether any of this will matter come the Congressional mid-term elections more than a year from now. The White House is hoping it won't.

So Bush's survival strategy is clear: rally the fascist, fundamentalist and white supremacist popular base (why else would they send Barbara Bush out there but as a wink and a nod to the racist base, just as Laura Bush and Condolleeza Rice were presenting a different face?) to provide enough of a safe haven to conduct smear campaigns against critics, then implement creeping martial law. Amazingly, a new disaster might help Bush more than hurt him. As Jeff Wells noted, Bush governs from disaster to disaster and each new disaster blots out memory of previous ones. How many people talk about Enron any more? Even ongoing ones can get shoved aside. How many conversations have people had about the Iraq War in the last week? And, with each disaster, the rights of the people get weakened or eliminated and the control of an unaccountable power over the public grows stronger.

What has been most depressing in the last two weeks for people in the United States is the sick feeling you get watching the footage of whole cities laid waste, of federal troops taking a U.S. city by force and people relocated to camps to serve as cheap, indentured labor and to lose any property they may have had or, with martial law declared, any civil rights they may have had, and that this may be a foretaste of things to come - that these people will stop at nothing to maintain control.

The term "ethnic cleansing" has even been used to describe plans within the borders of the United States. Here's Xymphora:

If most of the victims weren't black, it simply wouldn't be possible to do what Bush is now doing to New Orleans. I've written about the ethnic cleansing of New Orleans, and some people laugh. Here is a report from the Wall Street Journal on the plans of the white elites of New Orleans for the rebuilding (my emphasis in bold; we all know what he means by 'poor people'):

The power elite of New Orleans - whether they are still in the city or have moved temporarily to enclaves such as Destin, Fla., and Vail, Colo. - insist the remade city won't simply restore the old order. New Orleans before the flood was burdened by a teeming underclass, substandard schools and a high crime rate. The city has few corporate headquarters.

The new city must be something very different, Mr. Reiss says, with better services and fewer poor people. 'Those who want to see this city rebuilt want to see it done in a completely different way: demographically, geographically and politically,' he says. 'I'm not just speaking for myself here. The way we've been living is not going to happen again, or we're out.'

The plan is to use the ethnic cleansing to return the city to Republican party control. Remember these rebuilding plans when you keep hearing how 'uninhabitable' the city will be. Apparently, it will only be uninhabitable for blacks. With all the money that is going to be pouring into the pockets of local bigwigs to realize their grandiose white plans, it should be possible for the government to fund the return of all displaced residents. As Glen Ford states:

"Displacement based on race is a form of genocide, as recognized under the Geneva Conventions. Destruction of a people's culture, by official action or depraved inaction, is an offense against humanity, under international law. New Orleans – the whole city, and its people – is an indispensable component of African American culture and history. It is clear that the displaced people of New Orleans are being outsourced – to
everywhere, and nowhere. They are not nowhere people. They are citizens of the United States, which is obligated to right the wrongs of the Bush regime, and its unnatural disaster. Charity is fine. Rights are better. The people of New Orleans have the Right to Return – on Uncle Sam's tab."

It would be a real shame if, on top of all the corruption, negligence, stupidity and malfeasance, the Bush regime also got away with destroying the culture of New Orleans in order to ethnically cleanse it into a Dixieland theme park that votes Republican. The Right of Return is not only for Palestinians!

Commenting on the same article, Kurt Nimmo wrote:

Christopher Cooper's War Street Journal article (Old-line families plot the future) is worth excerpting at length because it so shamelessly reveals how the rich elite "business" sociopaths of New Orleans think and operate:

…A few blocks from Mr. O'Dwyer, in an exclusive gated community known as Audubon Place, is the home of James Reiss, descendent of an old-line Uptown family. He fled Hurricane Katrina just before the storm and returned soon afterward by private helicopter. Mr. Reiss became wealthy as a supplier of electronic systems to shipbuilders, and he serves in Mayor Nagin's administration as chairman of the city's Regional Transit Authority. When New Orleans descended into a spiral of looting and anarchy, Mr. Reiss helicoptered in an Israeli security company to guard his Audubon Place house and those of his neighbors.

Obviously, if you're going to hire ruthless killers to protect your property from people driven insane by hunger and thirst, you may as well hire the best - and for killing people, the Israelis are right up at the top of the list, having spent the last fifty years or so killing desperately poor Palestinians.

…In short, rich sociopaths such as Mr. Reiss are fed up with poor people, even though they profitably exploit them as janitors and food servers and cashiers at Wal-Marts. Reiss believes there should be a manageable number of poor minimum wage workers in the new New Orleans - just enough to clean the toilets and sweep the floors at the new casinos and luxury hotels he envisions. Incidentally, Bush has set the tone by suspending the minimum pay scale requirements for federal contractors in New Orleans under the Davis-Bacon Act. It appears Reiss and the "business elite" would like to set up isolated Bantustans of impoverished workers and have them shipped in to serve tourists and middle class fun seekers. Sort of reminds you of South Africa under apartheid.

Is it possible the "business elite" in New Orleans deliberately sabotaged the levees, thus flooding poor areas of the city and ethnically cleansing thousands of poor people, most of them African-American? It wouldn't be the first time.

In 1927, the so-called Great Mississippi Flood was used to ethnically cleanse African-Americans. "As the flood approached New Orleans, Louisiana 30 tons of dynamite were set off on the levee at Caernarvon, Louisiana," explains Wikipedia. "This prevented New Orleans from experiencing serious damage but destroyed much of the marsh below the city and flooded all of St. Bernard Parish… During the disaster 700,000 people were displaced, including 330,000 African-Americans who were moved to 154 relief camps. Over 13,000 refugees near Greenville, Mississippi were gathered from area farms and evacuated to the crest of an unbroken levee, and stranded there for days without food or clean water, while boats arrived to evacuate white women and children. Many African-Americans were detained and forced to labor at gunpoint during flood relief efforts… The aftermath of the flood was one factor in the Great Migration of African-Americans to northern cities." (Emphasis added.)

It is becoming clear that dominant elements in the ruling class are out to make the United States a military dictatorship. The techniques developed in Iraq are now being used on citizens of the United States!

New Orleans: the specter of military dictatorship

Statement of the World Socialist Web Site Editorial Board

10 September 2005

The appalling incompetence and negligence that characterized the government's response at the outset of the human tragedy unleashed by Hurricane Katrina have now given way to ruthlessly efficient methods of military occupation and repression in the ravaged city of New Orleans.

For four critical days, Washington proved incapable of mounting any credible effort to rescue the tens of thousands of largely poor and working class New Orleaneans who were left to their fate in the city's flooded streets, many of them losing their lives not to the surging waters, but to the lack of food, water or medicine.

Now the city has been inundated with troops, federal agents and cops of all descriptions, turning it into one of the most heavily armed camps on the face of the globe. Combat-equipped soldiers and police wearing helmets and flak jackets are going door to door in the city to enforce a mandatory evacuation at the point of a gun.

City authorities claimed Friday that they have yet to order forced removal of residents and would do so only with "minimum force." In many cases, demands by armed troops have proven sufficient to drive people from their homes. "When you get 15 M16s pointed at you and they line you up against the wall, it's kind of scary," one New Orleans resident told the Washington Post, explaining why she was leaving.

In other cases, however, the official assertions are belied by televised images of cops and troops kicking in the doors of homes and dragging people away in plastic cuffs. The New Orleans Police Department acknowledged Friday that it had arrested 200 people that day.

With an estimated 10,000 residents still in the city, far worse is yet to come. Many justifiably fear that if they leave they will have no homes to come back to. "They are trying to get this neighborhood for the rich people," one man told the New Orleans Times-Picayune Thursday.

The first 11 days of the disaster have revealed two political truths about present-day America. First, for all the talk about beefing up "homeland security" against an alleged terrorist threat, the US government has developed no serious civil defense plans to protect the American people from mass disasters, either natural or man-made.

Second, in the wake of September 11, 2001, Washington has exploited the terrorist attacks to concentrate ever-growing power in its military-police apparatus, while elaborating extensive preparations for martial law nationwide.

…Confronted with the inability of FEMA and other civilian agencies to organize a relief effort, the government had no option but a military one. Once it decided to use it, there were definite consequences.

While there was no adequate planning for disaster relief, the military and the Homeland Security Department had well developed and rehearsed blueprints for imposing martial law and the suppression of civil unrest. These have been the key focus of planning at both the Pentagon and the Homeland Security Department in the four years since the September 11 attacks.

Once these plans were taken off the shelf and the military was called in, its own protocols and doctrines drove the intervention, with deadly consequences.

First, the city was effectively sealed off, with residents seeking to flee the disaster turned back at gunpoint and those trying to bring in relief supplies turned back. The Red Cross, which has played the leading role in countless previous disasters, was never allowed to enter the city. This took place as a horrified world watched people dying in the hungry crowds that waited outside the New Orleans Convention Center and amid the squalor of the Superdome.

The order for the military to go in came only after the Pentagon was assured that it could intervene with overwhelming force. Senior commanders spoke in terms of a "combat operation" and "storming" the convention center, where people were waiting to be evacuated.

Now the city is bristling with automatic weapons and is patrolled by troops in armored vehicles fresh from Iraq. The obvious question is what is this massive armed force doing in New Orleans, a city that is largely submerged under water and nearly deserted? This level of military occupation is on its face absurd, but it has been executed according to existing plans for martial law that are the product of protracted secret deliberations.

The central focus of this military operation has been the establishment of law and order, the protection of private property and, to those ends, the forced evacuation of the remaining residents of the city.

The most chilling revelation coming out of New Orleans is that for America's ruling elite and its state apparatus, the lives of ordinary Americans count for nothing. This has found its most grotesque expression in the failure of the authorities for a full 10 days to make any effort to recover the bodies of the storm's victims, which lie rotting in the streets.

The storm's survivors complained bitterly about the media's referring to them as "refugees," understandably bridling over a term that suggests that the largely poor and black masses of newly homeless are foreigners in their own land. Yet, the reality is that many of them have been treated more as criminals than victims.

Those loaded onto trucks in the mandatory evacuation are not told where they are going. As the Salt Lake Tribune reported, one planeload of evacuees was informed that they were being shipped off to Utah only after their plane had taken off from New Orleans International Airport. There also were multiple reports that those being dispersed across the country are in many cases subjected to restrictions on their movements and behavior that come close to penal confinement.

Both the lack of preparation in terms of civil defense or humanitarian relief and the turn towards martial law have deep roots in the social structure and political system of the United States.

For more than a quarter century, both Democratic and Republican administrations have pursued a policy designed to transfer wealth from the vast majority of working people to the financial elite. They have systematically slashed every program aimed at ameliorating conditions of poverty in order to award ever fatter tax cuts to those at the top of the economic pyramid. In the process, the ruling elite has created conditions of profound social inequality and instability that have erupted to the surface with the disaster in New Orleans.

The deepening of social inequality has been accompanied by an unprecedented attack on basic democratic rights - conducted under the pretext of a "war on terrorism" and "homeland security" - and an increasing reliance on military force, both at home and abroad.

The events in New Orleans provide a sobering warning of the immense dangers posed by these developments. The assumption of extraordinary and unconstitutional powers by the president, the development of a secret shadow government, revealed in the aftermath of September 11, the passage of the Patriot Act, the establishment of the Homeland Security Department, and the creation of a US Northern Command, the first such military command to prepare and conduct nationwide operations on US soil, have together established the framework for a police-military dictatorship. In New Orleans, such a regime is being given a dry run.

What all this tells us is that the driving force now is not economics or politics; it is pure military power. It tells us that they have been developing techniques to deal with the consequences of an economic collapse or true political opposition, and they will have no reluctance to use these techniques in the most ruthless manner on anyone.

These people do not care about "markets" or "economic growth." They care only about their own power. Economic growth has served its purpose and now only destroys their environment and crowds their planet with undesirables.