Why EU Strategic Autonomy Apart From The U.S. Is Currently Impossible

James W. Carden – Photo: Independent Media Institute

Among the wreckage the riots that have convulsed Paris may leave in their wake include President Emmanuel Macron’s pension reform; Macron’s ability to effectively govern for the next four years; and, quite possibly, the Fifth Republic itself.
As The New York Times reported in March, protesters have been heard chanting, “Paris Rise Up…We decapitated Louis XVI. We will do it again, Macron.”

But another, less noted, casualty of Macron’s high-handed attempt to impose a neoliberal “reform” opposed by large pluralities of French citizens, may well be the idea of European strategic autonomy on matters relating to defense and foreign policy.

Hall Gardner, a professor of international relations at the American University of Paris tells me in his view, “Macron saw himself as the mediator between Russia and the West, but Putin’s invasion of Ukraine and seeming refusal to compromise hurt Macron’s international credibility, while Macron’s apparent inability to foresee the extent of French social protest against his proposed reforms in the French system of retirement reveal him to be a weak leader, who is not in touch with his citizens, so that Putin will attempt to play the Far Right and Far Left, and increasingly the Center, against him, so as to reduce French diplomatic and military support for Ukraine.”

“At the same time,” says Gardner, “the domestic crisis in France is so deep that it will weaken Macron’s efforts to play a constructive role in building an all-European foreign policy vis-a-vis Russia, the U.S. and other states.”

Macron had been pushing the concept of strategic autonomy for years, and during his first campaign for president in 2017 he pledged to “bring an end to the form of neoconservatism that has been imported to France over the past 10 years.”

From the perspective of American restrainers, this should have been welcome news; after all why, eighty years after the end of the Second World War and thirty years after the end of the Cold War is the United States, with $31 trillion in debt, still subsidizing the defense of Europe, which has over 100 million more people and a GDP of roughly $18 trillion?

But then the war in Ukraine came, and with it, a swift and effective effort by the Biden administration—through any means necessary—to impose a strict discipline among its NATO allies.

And so, in the aftermath of Putin’s illegal invasion of Ukraine, strategic autonomy’s future began to look bleak and the riots in Paris have now only served to further drive a stake through its heart.

Some might argue, however, that EU leaders are in fact pursuing a strategy of strategic autonomy as a result of the war in Ukraine. After all, European Commissioner for Internal Market Thierry Breton’s recently announced plans to transform the European Defense Industry Reinforcement Through Common Procurement Act (EDIRPA) into a vehicle through which the EU can meet the new defense requirements for the war in Ukraine. Still more, German Chancellor Olaf Scholz, in his much-heralded “Zeitenwende” (“Turning Point”) speech of last year, pledged €100 million in new defense spending.

But an increase in spending—something the Americans have, after all, been demanding of its European partners for years—is not an alternative strategy. The fact is, the war in Ukraine has consolidated American hegemony in Europe. Firstly, the financial and military contributions to Ukraine by the United States dwarfs the contributions made by EU member states.

And then there is the curious non-reaction by the leaders of the Germany parliamentary coalition, the Social Democrats (SPD) to the destruction of Nord Stream 2. As the German sociologist Wolfgang Streeck, emeritus director of the Max Planck Institute for the Study of Societies recently wondered:
How long the German government can remain as subservient to the United States as it has now promised to be is an open question, considering the risks that come with Germany’s territorial closeness to the Ukrainian battlefield – a risk not shared by the U.S.”

After conversations with German parliamentarians and activists from across the political spectrum over the past week, one comes away with the impression: Quite a good deal longer.

In Germany, the appetite for a freer hand in the formation of their own national security policy exists in pockets (on the part of the Left that still understands the value of Ostpolitik, and the far-right) but is nowhere evident among the political establishment and still less among Scholz’s coalition partners, particularly the bellicose Greens, who now seem to relish their role as a proxy for the U.S. foreign policy establishment.

Yet over the long term, Germany’s economic, energy and national security interests will likely dictate it come to reject (or take a polite pass on) American demands to sign up for the now looming global confrontation between Western democracies and Eurasian authoritarian regimes led by China and Russia.

Over time, Ostpolitik (The “Eastern Policy” of normalized relations with the communist states of Eastern Europe pursued by German Chancellor Willy Brandt in the late 1960s and early 1970s) may have a second life after all, given the German industry’s dependence on cheap natural gas and its ever-increasing trading ties with China: In 2021 two-way trade between Germany and China hit a record $320 billion.

But as things now stand, with Paris distracted by a populist revolt, Washington—with the enthusiastic backing of Warsaw, London, Prague, Riga, Tallinn, Vilnius, and the foreign ministry in Berlin—is exercising a kind of hegemony on the continent not seen since the days when President Reagan, against vast popular protests, placed Pershing II missiles in West Germany in late 1983.

To his great credit, Macron realizes—as did his model, the great Charles de Gaulle—that protracted U.S. hegemony over Europe is both unsustainable and indeed, given Washington’s ever-deepening involvement in the Ukraine war and the new cold war posture it has taken with regard to China, dangerous. But now he is likely helpless to pursue his favored alternative strategy.

In the end, a politically stable France and German buy-in are the two foundational prerequisites for strategic autonomy to succeed. And as of this writing, there is neither.

Author Bio:
This article is distributed by Globetrotter in partnership with the American Committee for U.S.-Russia Accord (ACURA).

James W. Carden is a former adviser on Russia to the Special Representative for Global Intergovernmental Affairs at the State Department. He is a member of the board of ACURA and a writing fellow for Globetrotter.

Source: Globetrotter

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The Long Arm Of Washington Extends Into Africa’s Sahel

Vijay Prashad

On March 16, 2023, U.S. Secretary of State Antony Blinken announced—during his visit to Niger—that the United States government will provide $150 million in aid to the Sahel region of Africa. This money, Blinken said, “will help provide life-saving support to refugees, asylum seekers, and others impacted by conflict and food insecurity in the region.” The next day, UNICEF issued a press release with information from a report the United Nations issued that month stating that 10 million children in the central Sahel countries of Burkina Faso, Mali, and Niger need humanitarian assistance. UNICEF has appealed for $473.8 million to support its efforts to provide these children with basic requirements. According to the Human Development Index for 2021, Niger, despite holding large reserves of uranium, is one of the poorest countries in the world (189th out of 191 countries); profits from the uranium have long drained away to French and other Western multinational corporations. The U.S. aid money will not be going to the United Nations but will be disbursed through its own agencies, such as the U.S. Agency for International Development’s Bureau for Humanitarian Assistance.

Northeast of Niger’s capital Niamey, near the city of Agadez, is Air Base 201, one of the world’s largest drone bases that is home to several armed MQ-9 Reapers. During a press conference with Blinken, Niger Foreign Minister Hassoumi Massoudou affirmed his country’s “military cooperation” with the United States, which includes the U.S. “equipping… our armed forces, for our army and our air force and intelligence.” Neither Blinken nor Massoudou spoke about Air Base 201, from where the United States monitors the Sahel region, trains Niger’s military, and provides air support for U.S. ground operations in the region (all of this made clear during the visit by Chief Master Sergeant of the Air Force JoAnne S. Bass to the base at the end of December 2021). The U.S. will spend $280 million on this base—twice the humanitarian aid promised by Blinken—including $30 million per year to maintain operations at Air Base 201.

Blinken is the first U.S. Secretary of State to visit Niger, a country that his own department accused of “significant human rights issues” like “unlawful or arbitrary killings, including extrajudicial killings by or on behalf of government” and torture. When a reporter asked Blinken during the press conference what the U.S. will do “to bring democracy” to Burkina Faso and Mali, he accused that the United States is monitoring the “democratic backsliding, the military coups, which so far have not led to a renewal of a democratic constitutional process in these countries.” The military governments in Burkina Faso and Mali have ejected the presence of the French military from their territories and have indicated that they would not welcome any more Western military intervention. A senior official in Niger told me that Blinken’s hesitancy to directly speak about Burkina Faso and Mali might have been because of the distress about the faltering democracy in Niger.

Niger President Mohamed Bazoum has faced serious criticisms within the country about corruption and violence. In April 2022, president Bazoum wrote on Twitter that 30 of his senior officials had been arrested for “embezzlement or misappropriation,” and they would be in prison “for a long time.” This was a perfectly clear statement, but it obscured the deeper corruption within Bazoum’s own administration—including the detention of his Communications Minister Mahamadou Zada on corruption charges—which was revealed through an audit of the country’s 2021 spending that highlighted millions of dollars of missing state funds. Furthermore, a third of the money spent by Niger to buy $1 billion in weapons from arms companies between 2011 and 2019 was pilfered by government officials, according to a report by the Organized Crime and Corruption Reporting Project.

In December 2022, during the U.S.-Africa Leaders Summit, President Bazoum joined Benin’s President Patrice Talon to be part of the U.S. project known as the Millennium Challenge Corporation (MCC). The U.S. government pledged $504 million toward facilitating transportation between Benin and Niger, to help increase trade between these two neighbors. The MCC, set up in 2004 in the context of the U.S. war on Iraq, has been expanded into an instrument used by the U.S. government to challenge the Chinese-led Belt and Road Initiative (BRI). Senior officials in Niger, who requested anonymity, and several studies by independent authorities indicate that this MCC money is being used to upgrade African farmlands and that the corporation has been working with U.S.-funded institutions such as the Alliance for a Green Revolution in Africa (funded by the Bill and Melinda Gates and Rockefeller foundations), and turn these agricultural resources over to multinational agribusinesses. The MCC grants, the senior officials said, are used to “launder” Niger’s land to foreign corporate interests and to “subordinate” Niger’s political leadership to U.S. government interests.

At the press conference, Blinken was asked about Russia’s Wagner Group. “Where Wagner has been present,” Blinken said, “bad things have inevitably followed.” Statements have been made recently about the Wagner Group operating in Burkina Faso and Mali by the U.S. State Department’s Vedant Patel after the second coup in the former country in September 2022, and by the RAND Corporation’s Colin P. Clarke in January 2023. Governments in both Burkina Faso and Mali have denied that Wagner is operating from their territory (although the group does operate in Libya), and informed observers such as the Nigerien journalist Seidik Abba (author of Mali-Sahel, notre Afghanistan à nous, 2022) said that countries in the Sahel region are being wary about any foreign intervention. Despite repeating many of Washington’s talking points about Wagner, Niger Foreign Minister Massoudou conceded that focus on it might be exaggerated: “As for the presence of Wagner in Burkina… the information that we have does not allow us to say that Wagner is still in Burkina Faso.”

Before Blinken left for Niger and Ethiopia, U.S. Assistant Secretary of State for African Affairs Molly Phee said that Niger is “one of our most important partners on the continent in terms of security cooperation.” That is the most honest assessment of U.S. interests in Niger—largely about the military bases in Agadez and Niamey.

Author Bio:
This article was produced by Globetrotter.

Vijay Prashad is an Indian historian, editor, and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is an editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest books are Struggle Makes Us Human: Learning from Movements for Socialism and (with Noam Chomsky) The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of U.S. Power

Source: Globetrotter

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How The Cuban Government And Its People Collaborated On The Family Code

Natalia Marques – Photo: commondreams.org

Revolutionary Havana youth describe the process of building legislation in dialogue with the people

On September 25, 2022, Cuba passed one of the world’s most progressive codes on families. All in one go, the small island nation legalized same-sex marriage, defined and upheld the rights of children, the disabled, caregivers, and the elderly, and redefined “family” along ties of affinity rather than blood. This opens the concept of “family” to include nontraditional forms of familial relations, which exist outside the model of the heterosexual nuclear family.

Hailed as “revolutionary” by many in Cuba, the code will help provide protections to people who would have otherwise faced discrimination in society while ensuring that Cubans in same-sex relationships who wish to marry now have the legal right to do so.

According to young Cubans and social movement leaders, whom I spoke to about the Family Code while attending a conference titled “Building Our Future” in Havana in November 2022, the code is a reflection of a dialogue between the Cuban people and their government.

In the time since the code was passed, the Cuban government remains in dialogue with the people. The Ministry of Justice is still holding seminars in provinces throughout Cuba for people seeking answers to questions that have come up during the implementation process. The Family Code has been influencing everything from sports to property relations. Notably, in just the first two months of the law being passed, 112 same-sex marriages were registered.

A Revolutionary Code
“It’s a revolutionary code that will change the thinking and the vision that Cubans have regarding… discriminations that can happen in society,” said Jose Luiz, a third-year international relations student at the Higher Institute of International Relations Raul Roa García. The Family Code legalizes and broadens the definition of a “family” far beyond the traditional definition. The code “will bring new protections to people who have, in one way or another, been discriminated against,” Luiz told me.

Cuba ratified a new constitution in 2019. The constitution was written through “popular consultations” with the Cuban people. Through this process, Cubans participated in community discussions with government officials to both discuss and amend the constitution. Article 68, which called for defining marriage as a union between two people, thus legalizing same-sex marriage, was mentioned in 66 percent of popular consultation meetings. A majority of the Cuban people involved in these processes supported maintaining the definition of marriage as being a union between a man and a woman. This is partly due to historic prejudices against LGBTQ+ people that are prevalent across the Americas, and partly due to Cuba’s growing conservative evangelical movement, which opposes progressive social reforms such as same-sex marriage.

After intense debate regarding Article 68 among the Cuban people, the constitutional commission decided not to include the proposed language in favor of same-sex marriage and instead pushed the decision of addressing the matter through a future “family code” legislation. This legislation became the 2022 Family Code.

‘Popular Consultation’: A Government in Dialogue With Its People
In order to overcome social conservatism to pass one of the most progressive Family Codes in the world, Cuba underwent a meticulous process of popular consultation, from February 1, 2022, to April 30, 2022. The National Assembly of People’s Power stressed the importance of Cubans familiarizing themselves with the code, in order to prevent feelings of uncertainty. Through this process, the Cuban people made more than 400,000 proposals, many of which were included in the finalized code. Minister of Justice Oscar Manuel Silvera Martínez said that the 25th version of the code, presented to and approved by the National Assembly, “was more solid because it was imbued with the wisdom of the people.”

Young people played a central role in the process leading up to the approval of the Family Code. “The Cuban youth… are involved in all tasks that are deployed by the Cuban revolution,” said Luiz. “We also participated in our referendum for our constitution in 2019. We were in popular committees, discussing the constitution and we contributed to that.”

In 2019, Cuba held a referendum on a new constitution. The referendum passed with a majority vote of 86.85 percent, which is about 73.3 percent of the total electorate. The referendum was preceded by a popular consultation process, in which a draft constitution was discussed in 133,000 public meetings nationwide, where the people of Cuba submitted 783,000 proposals for changes. Cuban officials stated that almost 60 percent of the draft constitution was modified based on the proposals submitted by the public during the popular consultation process.

“I remember at my college, we had meetings to explain the [Family Code], and for us as students to give our perspective of the code and propose something for the code,” Neisser Liban Calderón García, also a Cuban international relations student, told me. “But after we did that at college, we had the same thing in our community, with a different perspective because at college we are with our friends, with [other] students; but in the community, we are with people from all ages and from different families.” García, who has a boyfriend, told me that he is glad that he will now have the opportunity to marry in the future.

The results of this popular process speak for themselves: With 74.01 percent of eligible voters participating, the Family Code passed in a landslide victory with 66.87 percent of votes in favor.

“The day that… [the Cuban people] voted for the Family Code in the popular referendum, I also participated directly in the polling station,” said Luiz. “I could see the high participation of the people in the process, and the high acceptance and eagerness for the approval of the code.”

As Luiz mentioned, some young people had the opportunity to participate in an even more direct way. “Through the University Student Federation [FEU], we have meetings with the leadership of the country. For example, my institute had a meeting with the president. And in that meeting, we described the vision we have as revolutionary and communist youths, the vision we have of the change that needs to happen regarding the base and the leaders of the country,” Luiz said. “We have a voice [as youth] in every space that we have, including the president of FEU [who at the time was law student Karla Santana]. She is part of the National Assembly of People’s Power in Cuba. And she shares her perspective with the Cuban government regarding the thinking of the youth and its tradition in the Cuban revolution.”

Gretel Marante Roset, international relations officer for the Federation of Cuban Women, told me that the women of Cuba played a special role in the process of creating the Family Code. “Our commander in chief [Fidel Castro] said that the Federation of Cuban Women is a revolution within another revolution. Women in Cuba are beneficiaries and protagonists of our own development.” Women hold half of all national parliamentary seats in Cuba.

“The Federation of Cuban Women was part of the commission writing the draft of the Family Code to propose the text and interpretation of gender equality,” Marante Roset told me.

“About the Family Code, I think that the document is for the future. It is based on love… recognizing other types of families, joint human rights… I think that this is the future for Cuba,” Marante Roset said.

Author Bio:
This article was produced in partnership by Peoples Dispatch and Globetrotter.

Natalia Marques is a writer at Peoples Dispatch, an organizer, and a graphic designer based in New York City.

Source: Globetrotter

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In Berlin, Mizrahi Activists Face An Identity Conflict Over Judicial Protests

Mati Shoemelof – Portrait: Joseph Sassoon Semah

With Netanyahu’s visit to Germany, Mati Shemoelof struggles to reconcile the Mizrahi Jews’ struggle for a political voice with their role in the rise of the ultra-religious Right.

In January, I received an email from a group of Mizrahi activists in Israel. The Netanyahu government was about to forge ahead with its judicial “reforms” and the email outlined a new Initiative: A Mizrahi-civil collective regarding the public agenda of the new government.

I knew most of the activists from our mutual activism activities in Israel, from social justice and questions of multiculturalism to the growing social gaps in Israel. The invitation to join this new collective prompted a major dilemma for me.
I had started following Israeli news almost obsessively. The new voices of protest and the hundreds of thousands of Israelis protesting every weekend in the big cities had me glued me to the internet.
However, I also felt reassured that I had made the right move by leaving that place, that I had put the correct geographical distance between me and this extreme right-wing government. But could I just sit and do nothing? Even worse, hardly anyone I knew in Germany, a country loaded with Ashkenazi history, could understand my dilemma.

And then Natan Sznaider, an academic and writer who was born in Germany and moved to Israel when he was 20, wrote an article in the German newspaper die Tazabout the struggle in Israel as one between the Mizrahi and the Ashkenazi Jews. Ok, I thought.

So, I read the policy papers of the collective and tried to understand from afar. Now, I want to spread the messages of the Mizrahi Left and challenge the idea that there are two camps here in Berlin fighting each other.
I edit texts and try to contribute as much as I can to help the collective. But the truth is it’s hard for me to contribute much. I am no longer informed like I once was. Then I tell myself that’s just an excuse. So, two weeks ago the collective took to social media and in Hebrew and Arabic put out an open call for worried citizens to join the collective.

We sent our policy paper to politicians and the media and shared it on different channels. We got more than 1853 signatures.
Then we began working with groups of activists in different fields: democracy and protest, education system, culture and media, social justice, housing, public space, transportation and gender and LGTBQ+ rights. And as distant as I am, it is important to me to create a distinct Mizrahi voice in the Israeli media.

Benjamin Netanyahu is using his Mizrahi ministers to undermine the accomplishments of the Mizrahi democratic struggle. For example, he’s cancelled the public housing law that helped lower-income families, which is bound to worsen the ongoing and systematic harm inflicted upon marginalised and mostly Mizrahi populations in Israel.

But there is more to my dilemma, as I learned during my online activism. Some of the opposition discourse on Netanyahu’s rule contains racist elements. People on the Left who do not know Mizrahi history are blaming the Mizrahi people for this judicial reform; they don’t know how the Mizrahi Left contributed to social justice, democracy, and other important issues.

They also use stereotypes and racism when they criticise Mizrahi ministers and forget that our democratic struggle should be clean from racism.

On the Right there is also a scary process, a steady co-option by right-wing pundits and politicians of the discursive fruits of the Mizrahi struggle. Our collective demands for representation, described as “the second Israel” or “periphery and centre,” have turned the discussion over recognition and rights into a confrontation wherein ignorance of Mizrahi history and culture has increased and the profound problems of the present have been silenced.

These right-wing politicians have never participated in the struggles for equality in education, the equitable re-drawing of local council jurisdictions, the expansion of public housing, the prevention of evictions, and the struggle against forced removals of Mizrahi residents of neighbourhoods such as Kfar Shalem, Givat Amal, Abu Kabir, and HaArgazim.

The Mizrahi collective has three main aims: First, we will not be silenced, we will criticise the policies of this government and we will not attempt to silence “the other” within Israeli society.
Second, we will bring our Mizrahi activism to the public to remind Israelis what we gained with former struggles and what we intend to do.
Third, we will use social media to reach out to a younger audience.

This is another moment of important Mizrahi intellectual resistance. We have requested meetings with politicians, we have published a legal paper and sent it to President Herzog with a request for a meeting.
It has also been sent to both the chairman of the Knesset’s Constitution, Law and Justice Committee and the Minister of Justice with a demand to stop judicial proceedings, and to adopt the position paper.

This Mizrahi activism empowered me to stand and argue my special point of view, even here in the weekly protests at the Brandenburg Gate, where most of the protesters are Ashkenazim. Now, I am protesting with them against the coup, while continuing to argue for the long history of Mizrahi struggle, a sharp stance of a Mizrahi Left.

Source: https://plus61j.net.au/jewish-world/in-berlin-mizrahi-activists-face-an-identity-conflict-over-judicial-protests/

Mati Shemoelof is a poet and an author. His writing includes seven poetry books, plays, articles and fiction, which have won significant recognition and prizes. He has written a radio play for German radio WDR. A German edition of his bi-lingual poems was published by AphorismA Verlag.

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Three Banks Have Now Collapsed. A Progressive Economist Explains Why

Gerald Epstein is Professor of Economics and a founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst.

Three banks in the U.S. (Silicon Valley Bank, Signature Bank and Silvergate) have collapsed since early March. The collapses of Silicon Valley Bank and Signature Bank are the two biggest bank failures since 2008. Silicon Valley Bank had deep ties to the high-tech industry while Signature Bank and Silvergate were some of the world’s biggest crypto-friendly banks. So, why are banks collapsing now? Is there a banking crisis underway? Moreover, are government bailouts back? Leading progressive economist Gerald Epstein addresses these and other questions in this exclusive interview for Truthout. Gerald Epstein is professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst, and author of a forthcoming book from the University of California Press titled, Busting the Bankers’ Club: Finance For the Rest of Us.

C.J. Polychroniou: In 2007, the biggest financial crisis since the Great Depression erupted in the U.S. and, within a couple of years, it rippled across the globe with ramifications which, in some instances, have yet to be resolved. Indeed, many analysts have been suggesting all along that the next financial crisis was just waiting to happen because the necessary structural changes to the banking system were never put in place. Now, it seems that the critics were right: On March 10, 2023, Silicon Valley Bank (SVB) collapsed due to a classic bank run and its inability to raise capital. Moreover, a couple of days earlier, California-based Silvergate Bank had also folded and on March 12, the New York-based Signature Bank, which had over $100 billion in assets, became the next casualty. What caused SVB, which was the 16th largest bank in the U.S., to collapse?

Gerald Epstein: There are five main causes of the SVB collapse and the subsequent knock-on problems facing the U.S. and global financial system: the Federal Reserve’s anti-inflation obsession causing it to raise interest rates too high and too fast; the inherent fragility of banking, which for centuries has periodically erupted in crises; inadequate regulation of this fragile system, which often leads to high profits that accrue to banks and their wealthy owners; the corruption and self-dealing that often result from banks’ insufficient supervision; and the lack of public alternatives for financial institutions and services that could perform many of the key functions of banking and finance with less risk and without the private financiers taking their cut. Some of the huge profits financiers make from this system are funneled to buy support from politicians to prevent adequate regulation, and to secure bailouts when the system crashes.

This structure produces failures in various ways and forms. The causes of SVB’s failure are both old school and new dawn — with these two being intertwined and intermingled — creating an old vintage brew poured into new, high-tech bottles. The bank’s investments (assets) were concentrated in a single industry — technology start-ups — that had been booming for several years but then dramatically slowed down, reducing business and income for SVB. To bolster its profits, SVB invested in risky financial assets to enhance short term returns: in this case it invested in long-term U.S. government bonds (and government guaranteed mortgage bonds) that were highly rated (AAA) but had high risks of loss if interest rates went up significantly. In its overzealous attempt to fight inflation, the Fed raised interest rates by more than 4 percentage points within a year, causing the market value of the government’s long-term bonds to plummet. This would not have created problems if SVB had held onto these bonds to term (e.g., 10 years). But, the bank funded these start-ups and bond investments with significant amounts of potentially flighty short-term debt — in this case, large amounts of uninsured deposits lent to the bank by Silicon Valley–oriented venture capital firms (VCs) and their customers (“founders” or “start-ups”). This means that the bank funded its risky investments with flighty debt rather than from its owners’ equity capital. In other words, the bank had high levels of “leverage” (debt relative to assets) based on debts (deposits) that could be demanded back from the bank at a moment’s notice.

Sensing problems with the bank, or just wanting to move their funds to earn higher interest rates, the VC investors began taking their money out of SVB and, as a result, SVB had to sell its government bonds at a loss in order to pay them back their deposits. These losses on the bonds cut into SVB’s capital. When SVB tried to raise more capital in order to cover these losses, this raised eyebrows about the solvency of the firm. VC firms withdrew millions of dollars and told their “start-ups” to take their money and run. When the Federal Deposit Insurance Corporation (FDIC) took control of SVB on March 10, SVB was the 16th-largest bank in the U.S., with over $200 billion in assets, and its collapse was the largest since Washington Mutual in 2008. (For context, the largest U.S. bank is JPMorgan-Chase with $3.2 trillion).

Elizabeth Warren, Bernie Sanders, and many others (law professor Jennifer Taub, Lisa Donner of Americans for Financial Reform and Dennis Kelleher of Better Markets, to name a few) are pointing to the Trump-era partial deregulation of medium-sized banks (less than $250 billion in assets), which contributed to SVB’s failure. SVB’s capital and liquidity requirements were reduced, mandatory stress tests were eliminated, the rules against proprietary trading (the Volcker Rule) were suspended, and the need to prepare plans in case the bank became insolvent (so-called ‘living wills’) was eliminated. These stricter rules would have made it much more likely that the problems with SVB would have been dealt with by the Federal Reserve and FDIC sooner and in a much less disruptive way. Right after Lehman Brothers collapsed in 2008, the Queen of England asked economists at the London School of Economists how they had all missed the warning signs. Many are now asking the same of the Federal Reserve Board and the Federal Reserve Bank of San Francisco that were supposed to be supervising SVB. It turns out that they did know of these problems at least a year ago, but, it seems, only offered toothless warnings.

This lack of serious attention reminds me of the Carmen Segarra saga after the great financial crisis. Segarra was hired to be the New York Federal Reserve monitor/supervisor onsite at Goldman Sachs in 2011. She saw first-hand the lack of risk controls at Goldman and the obsequious behavior of the other New York Fed monitors who seemed more interested in gaining favor with Goldman than protecting the public. Segarra was fired after repeatedly complaining about the lack of serious Fed supervision of Goldman. One wonders if the San Francisco Fed has put on a repeat performance.

Greg Becker, SVB’s CEO, had lobbied Congress for the Trump-era deregulation bill. He also sat on the board of directors of the Federal Reserve Bank of San Francisco up until the day the bank collapsed.

In the cases of SVB and Signature Bank, FDIC insurance will cover all depositors regardless of size, but the Biden administration says this does not amount to a bailout. Does this sound right? I mean, if the U.S. government steps in to shore up deposits in failed banks, doesn’t such a move qualify as a bailout? And who ultimately benefits from a bailout?

This question of whether the FDIC’s after-the-fact decision to cover all of SVB’s and Signature’s deposits — plus, the decision by Federal Reserve to create a special facility to lend money to banks that hold long-term government bonds, dollar for dollar at the original value of the bonds — constitutes a “bailout” is politically and morally fraught, and the discussion of it has, generally, been full of bluster with only a few illuminating contributions.

The term “bailout” is not a technical term; it is a colloquial term. Since at least the 2008 crisis, it has had a largely pejorative connotation, and suggests that someone has been compensated even though they should have known, or did know, better. Worse, perhaps they did something illicit and were still getting compensation from the government. In this meaning, bailout suggests a rescue so that these people will not have to bear the consequences of their acts. This rescue will make it more likely that they will do this irresponsible and costly action again (leading to what economists and insurance companies call “moral hazard”). After 2008, there was a widespread view that “Wall Street got bailed out and Main Street did not.” This really angered people and contributed to the rise of the “Tea Party” and later, to more perverse and dangerous incarnations. No government wants to be accused of doing bank bailouts again, including Joe Biden. Has he, or hasn’t he?

Let’s use an analogy to see if that helps us decide. Say there is a fierce hurricane that hits Miami. Compare three people. One has a house in the middle of town, and it gets destroyed. Say this person could not afford hurricane insurance. If the government comes in and gives this person compensation to help his family get back on their feet, do we think most Americans will call this a bailout? I don’t think so. It is a rescue, or aid. Let’s say another person built a house on the beach. Their house gets swamped. The government gives them compensation, without the condition that they can’t build on the beach again. Will people call this a bailout? Maybe. Then there is a third case. A big property developer who builds a huge apartment complex on the beach, a complex that erodes the beach and makes it easier for high waters to come off the ocean into the complex and the neighbors’ apartments as well. The hurricane wrecks the complex and the neighbors’ apartments, and the building developer gets compensation from the government. Will people call this a bailout? No question. And moral hazard? Definitely. The builder will just do it again with bad implications for him and his neighbors.

Let’s apply this analogy to SVB. The management and owners made bad and irresponsible decisions. The government fired the management and is giving no compensation to the bank’s owners (or other big non-depositor creditors). No bailout here. The FDIC is compensating the startups that had more than $250,000 in the bank, either because they had nowhere else to easily park their payroll and reserves, or because SVB or their VCs forced them to keep their money on deposit at SVB. Are they being bailed out or aided/rescued? I would say that most Americans who understood this situation would say no bailout here. What about the venture capitalists who made multimillion-dollar deposits into SVB, presumably in exchange for benefits from the bank, and some of whom rapidly pulled their money out and told their start-ups to do likewise. The FDIC is making them whole if they did not manage to get all their money out. This smells like a bailout to me.

There are other interesting cases that do not fit into a neat box. Little commented on, the SVB depositor rescue by the FDIC constitutes the first bailout of a major cryptocurrency firm. Circle — the issuer of its crypto-connected “stable-coin,” USD Coin (USDC) — had deposits of more than $3 billion in SVB. These are Circle’s U.S. dollar assets that they use to try to maintain a 1-to-1 dollar peg between their “stable” coin and the U.S. dollar. When SVB went under, USDC dropped off its peg to about 80 cents. U.S. financial regulators such as Securities and Exchange Commission Chair Gary Gensler had warned that these so-called stable coins were unstable and could only be made stable with bail-outs. They found evidence right here. And these regulators should nip this dangerous “financial innovation” in the bud before it causes more problems.

The FDIC will not get the funds to compensate these depositors by raising taxes but by assessing the banks. But small community banks are asking: Why should we bail out these massive VC firms? Shouldn’t the big VC investors, like Peter Thiel, get assessed for these costs?

But even the claim that the executives of SVB are not getting bailed out is questionable. No one doubts that they are largely responsible for the debacle. But it is not true that they are not getting rescued. Senators Elizabeth Warren and Richard Blumenthal have put together a whole rap sheet on possible self-dealing and wealth-grabbing by CEO Gregory Becker and other top management that contributed to SVB’s demise. These include stock sales in the weeks before the collapse and significant bonuses just before the FDIC take over. Warren, Blumenthal, Biden, and others have called for “clawbacks” of ill-gotten gains from bank executives in these situations.

The bottom line, in my view, is that there have been serious bailouts here and more will probably be discovered; but it is not correct to paint all those with large deposits who got rescued as being “bailed out.” There is a structural problem in our current financial system. There needs to be a safe place for businesses to place their reserves and working capital without providing funds to speculative financiers, and without fear that their deposits will be wiped out in a bank failure. That, among other reasons, is why we need publicly provided accounts where households and businesses can hold their money, risk-free.

Given where things stand at the present time, would you say that a banking crisis is under way? Moreover, is there a connection between the SVB collapse and the state of the U.S. economy?

There is a banking crisis underway. I don’t think it will have the strength or reach of the 2008 crisis, but the problems have spread. There is a two-way street between these banking problems and the overall economy. On the one hand, the rapid increase in central bank interest rates to fight inflation is a major precipitating factor driving the financial problems. This interest rate overshooting by the Fed is, as my colleague Bob Pollin and his co-author Hanae Bouazza have shown, due to its wrong-headed commitment to driving inflation down to an arbitrary 2 percent target. These high interest rates and the banking problems partially caused by them will probably restrict useful lending to the economy and may make a recession more likely.

The general consensus so far is that the SVB collapse will have minimal impact on global markets and global financial institutions. Be that as it may, it seems that the U.S. banking system has learned no lessons from the 2007-2008 financial crisis. If this is so, is the problem with private institutions geared toward the pursuit of profit at any cost, or with public policy?

Yes. That is clearly a big part of the problem. A healthy economy needs a set of basic institutions that provide financial services to families and businesses that facilitate their productive and necessary activities. The problem with private, more speculative banks like the big banks that dominate our economy is that they provide lousy and costly services to most families and smaller businesses. And as SVB shows, sometimes these deposit accounts for families and businesses are held alongside large speculative deposits that fund speculative investments that put the whole bank at risk.

At a minimum, we need to restore the levels of financial regulation we had after the Dodd-Frank Act was implemented, but this is not enough. We have to have public provision of basic financial services, such as Federal Reserve Accounts, and/or a postal banking system where anyone can have risk free deposit accounts and, in the latter case, households can get basic banking services. Public banks at the state, municipal or regional level are another example of financial institutions that can provide loans and other financial services insulated from the negative aspects of the profit motive of private banking.

And we need to regulate the regulators, like the Federal Reserve, to prevent them from doing the bidding of the banks. Major structural changes need to be implemented, but I am afraid these issues are beyond the scope of this interview.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over DespairNoam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the LeftInterviews with Progressive Economists (2021).

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Religion, Nationalism, And ‘Western’ Hate: The Covid-19 Crisis Explained In Russian-Speaking And Arab-Islamic Regions

1 Introduction
When the world was hit by the Covid-19 pandemic, reactions from religious leaders were inevitable. Christian and Islamic leaders were no exception to that rule, trying to formulate explanations for cause of the pandemic. Some statements breathed the atmosphere of resignation: the pandemic is affecting the world and therefore believers and the faithful must also resist the pandemic based on their beliefs (Kowalczyk, Roszkowski, Montane et al., 2020). Often religious leaders streamlined their statements with national government policies. In such cases they strove to have the rules of conduct for the faithful to deviate as little as possible from the relevant national approaches to the epidemic (Hart & Koenig, 2020). Yet statements were also made in which religious authorities cite reasons why the world was hit by the pandemic, and in particular the role of God in it (Kowalczyk, Roszkowski, Montane et al., 2020). There are religious authorities who explain the calamities that befall the world in terms of God’s punishment for the sinful behavior of unbelievers (Moravec & Lacková, 2021). In doing so, they would exonerate themselves. Religions have in common the notion of sacredness and sacredness by definition cannot be ‘polluted’ by whatever cause (Chryssides & Geaves, 2011). And with this background in mind,  leaders were also confronted with the question of what to do now that the pandemic was affecting rituals that are sacred within the communities concerned. Based on these considerations, an interesting question is how religious authorities interpret the Covid-19 pandemic. In our expose,  we make a comparison between the reaction of the Russian Orthodox Church and various Islamic fundamentalist organizations on the pandemic. We do this because on initial consideration we found that there seem to be remarkable similarities and differences in the reactions of both.

Thus, this article examines two cases of religious leaders having to formulate answers to questions raised by the pandemic. On the one hand, this concerns the question of how the Russian Orthodox Church reacted to the question of whether believers were still allowed to touch sacred objects such as icons, and on the other hand, the question is how Islamic fundamentalist jihadi movements explain the origin of the pandemic and what they recommend their followers to do to prevent contamination and spread. In short this article aims to answer the following question: ‘How did Russian Orthodox and Islamic fundamentalist officials address the Covid-19 crisis and what motivated them to react as they did?’. The choice to research this particular question is also motivated by the dominant value religion has in Russian-speaking and Islamic societies. Statements of religious leaders have a serious impact on the faithful and the general population of these areas.

This article is structured as follows. The next section outlines the theoretical background on the basis of which the cases are treated. This is followed by a description of both cases, that of the Russian Orthodox Church first, followed by that of Islamic fundamentalist organizations. The article ends with the formulation and a discussion of the conclusions.

2 Theoretical background
The Covid-19 pandemic has made it hard for the authorities to immediately change and adapt countries’ policies to the newly emerging reality of the increasing danger. Governments’ slow reactions and delayed quarantine measures have led to a series of issues in which online and offline misinformation became countries’ strategies to counter the virus (Alimardnai & Elswahi, 2020). This contributes to the global stream of sharing false information to support political goals. The spread of untruthful facts has become one of the key features of contemporary media due to its rapid distribution via user-generated content and propagandist channels (Bakir & McStay, 2017).

Scholarly debates differentiate various definitions of false information depending on its spread and intent to cause harm (Wang et al., 2019; Wardle & Derakhsan, 2017). Misinformation, disinformation, and mal-information are politicized terms of what is commonly referred to in the media as ‘fake news’ (Wang, et al., 2019). Separating different subgroups of deceptive information helps provide a set of clear-cut characteristics of specific ‘fake news’ types that can be helpful for scholars and policymakers alike. However, a foreseeable difficulty with defining these concepts is finding the intent of a fake news story spread and putting it in a category solely based on factors not entirely known to the researcher (Wang et al., 2019). The current article sticks to the following definition of misinformation in relation to mass media and politics — “when false information is shared, but no harm is meant” (Wardle & Derakhsan, 2017). However, the paper also uses misinformation as an umbrella term for all the media stories that have a certain degree of deception because scholars cannot always be certain about the intent of news materials reaching the public. This could be a possible limitation of the studies focusing on the false information spread.

The research topic of misinformation remains very relevant, however, with numerous scholars describing the current period as the “era of fake news” (Wang, et al., 2019). What brings misinformation studies under the spotlight is its abuse by political actors in the public sphere. The main issue with the increasing usage of misinformation by political parties is that while they use it to their advantage, at the same time they create a challenge for the society of undermining democracy (Bakir & McStay, 2017). Namely, wrongly informed citizens get emotionally invested given the provocative nature of misinformation and keep sharing false news while being stuck in digital echo chambers (Bakir & McStay, 2017).

What makes it particularly easy for a misleading news story to gain visibility is its topicality in the specific time period. The ‘basic law of rumor’ is applied here with the amount of circulation varying due to the importance of the subject to the individuals concerned multiplied by the ambiguity of the evidence applied to the topic (Wang, et al., 2019, Allport & Postman, 1947). During the COVID-19 crisis, the two aspects intensified due to the growing individual importance of the news articles regarding the pandemic, and the hoax of evidence and information spread by media outlets. We do not need to undermine the overall vulnerability of individuals and institutions in what homes to misinformation about health (Wang, et al., 2019).

Conspiracy thinking also fuels the spread of false information. The first few months of 2020 have marked a chain of widespread beliefs on Bill Gates, 5G, scientific uncertainties, governments hiding the truth, harms of vaccinations, and the role of China in the virus spread. As the pandemic started approaching more countries, the issues discussed have become significantly more political (Ball & Maxmen, 2020). Especially in the Middle East, where conspiracy theories are immensely influential (Pipes, 1996). In fact, it is important to understand that throughout history, they made their way into providing a key to the political culture of the region (Pipes, 1996). Scholars claim that to understand Middle Eastern culture, one needs to orient himself in the distorting lens of conspiracy theories and to be able to plan around conspiracism, as well as the unique discourse it builds as the region’s most distinctive political feature (Pipes, 1996).

It is interesting to note that, while discussing the theoretical background of fake news more and more website and applications spring up to make the public, in all its diversity, aware of the presence of fake news, how to discover it and how to analyze and deconstruct it. The three authors of this article have also collaborated in an Erasmus+ project financed by the European Union, called CoMMiTTed (see this link), presenting a full program for students and student teachers on fake news in English, Dutch, Spanish and Portuguese. The title of the project is ‘Covid, Migrants and Minorities in Teacher Education: A Fake News Observatory to promote Critical Thinking and Digital Literacy in times of Crisis’ (Pijpers, de Ruiter & Souza da Silva, 2023). The said program leans strongly on the earlier work of Wardle & Derekhshan (2017).

Russian media are also known to manipulate information, especially when it comes to crisis situations (Serrato & Wallis, 2020). Similarly to the Middle Eastern region, conspiracy thinking prevails in the country and gets fueled by the media reports of the “well-trodden” conspiracy theories on coronavirus origin, measures, and social impact (Serrato & Wallis, 2020).  Information on Russian media got continuously manipulated throughout the pandemic.

This article presents, as indicated above, two cases of misinformation coming from two sources that seem to be far away from each other, i.e. the Russian Orthodox Church and Islamic fundamentalist organizations, but it will show that they are quite strongly related to each other, each one defending its unique position vis-à-vis the pandemic, hitting the whole world and causing the whole world to take measures, but not both religious bodies for reasons that will become clear below.
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