Eeyore's news and view

Ukraine risks unrest as ills worsen
By Stefan Wagstyl and Roman Olearchyk
Published: March 2 2009
Olexander Pavlenko, a young computer programmer, is one of tens of thousands of Ukrainians who cannot get their money out of the bank.
He stood in line in Kiev at Nadra Bank and Ukrprombank, two big troubled banks, planning to withdraw more than $10,000 (€7,950, £7,125). But like many others, he was told the cash was not available.
“I stood in line a couple times with other bank clients who were protesting, crying and screaming. But the bank told me: ‘Sorry, we simply don’t have the money now and can’t help you.’”
With about nine banks now under the central bank’s special control, Ukrainians are increasingly worried.
Even those with their money in apparently solid banks, including those controlled by west European banking groups, are concerned because the central bank has banned the early redemption of term deposits, the most popular form of saving in Ukraine.
Altogether, hryvnia bank deposits have dropped 20 per cent since September and those in foreign currency 10 per cent.
Ukraine economy
“This is very serious,” said Olexander Suhonyako, president of the Association of Ukrainian Banks.
The growing discontent among bank clients is matched by other signs of public anger at the impact of the global crisis – and at the seeming inability of the country’s divided leaders to respond effectively.
Recent weeks have seen protests by truck drivers complaining about taxes and the dramatic decline of the hryvnia, which has complicated the repayment of foreign currency vehicle loans.
Meanwhile, the owners of street kiosks in Kiev successfully demonstrated against the city’s plans to take over their stalls.
But with demonstrations drawing only up to 5,000 people, the authorities are confident there is no serious threat to stability.
They say Ukraine is remarkably calm given the country’s economic problems. Gross domestic product growth is forecast to contract 5-10 per cent in 2009, while unemployment is rising and non-payment of wages is becoming more common.
But with political leaders focused on the forthcoming presidential elections due before the end of the year, some observers fear that the protests will become bigger.
Oleksiy Haran, a political science professor at Kiev’s Mohyla University, says:
“If [the economic situation] worsens, if more banks run into trouble, and if more layoffs pile up, then I would expect large crowds to materialise. This will be dangerous for a country that is struggling already to deal with the economic crisis.”
There seems to be no end to the disputes between Viktor Yushchenko, president, and Yulia Tymoshenko, his prime minister.
Much now depends on the implementation of the $16.5bn package assembled by the International Monetary Fund, including money for bank refinancing. After disbursing $4.5bn last autumn, the IMF suspended further loans after a policy disagreement with Kiev.
But Mr Yushchenko and Ms Tymoshenko pledged at the weekend to co-operate with each other and the IMF on implementing reforms.
Meanwhile, the IMF agreed to relax its desired deficit target from less than 1 per cent of GDP to about 3 per cent, in the light of the deepening recession.
Co-operating with the IMF will allow Ukraine not only to secure loans but also support from other international institutions including the World Bank and multinational banks, which have pledged to back their local subsidiaries.
On Monday, Austria’s Raiffeisen International promised to support Aval, its Ukrainian affiliate.
Hryhoriy Nemyria, deputy prime minister, insists Ukraine “is not a basket case”. Ceyla Pazabasioglu, the IMF’s Ukraine mission chief, agrees, saying the country’s difficulties are not “insurmountable”.
But investors are not so sure. Ukraine’s credit default swap rate – a risk measure – stands at around 3,700, compared with about 1,000 for Latvia and 560 for Hungary, two other east European states on IMF support.
Every week seems to bring a new crisis – the next could come this weekend, when Kiev is due to pay a $400m bill to Gazprom, the Russian gas monopoly.
http://www.ft.com/cms/s/0/67fba682-075a-11de-9294-000077b07658.html

411man at the FRC posted this one, it is worth reposting here.
Nation's Food System Nearly Broke
As more farmers face bankruptcy, we all face a food emergency.
February 26, 2009
John Kinsman
The Capital Times, Madison, WI
As our government enacts a stimulus package and President Barack Obama announces bold initiatives to stem home mortgage foreclosures, disaster threatens family farmers and their communities.
The government's response to plummeting commodity prices and tightening credit markets leads to the basic question: Who will produce our food? This is a worldwide crisis. U.S. policy and the demand for deregulation at all levels -- from food production to financial markets -- contribute greatly to the global collapse. The solution must be grounded in food sovereignty so that all farmers and their communities can regain control over their food supply. This response makes sense here in Wisconsin and was the global message from the 500+ farmer leaders at the Via Campesina conference in Mozambique in October.
Many U.S. farmers are going out of business because they receive prices equal to about one half their cost to produce our food. How long could any enterprise receiving half the amount of its input costs stay in business? As an example, dairy farmers in the Northeast and Midwest must be paid between 30 and 35 cents per pound for their milk to pay production costs and provide basic living expenses. Until 1980, farmers received a price equal to 80 percent of parity, meaning that farmers' purchasing power kept up with the rest of the economy. Unfortunately, a 1981 political decision discontinued parity, and today the dairy farmers' share is below 40 percent.
"Free trade" and other regressive agricultural policies have decimated farms. We are now a food deficit nation dependent on food imports, often of questionable quality.
Our food system is nearly broke, which is almost as serious as our country's financial meltdown. With fair farm policies, farmers would get fair prices that would not require higher consumers prices. The Canadian dairy pricing system is the best example that proves fair farmer prices can and often do bring lower consumer prices and a healthier rural economy. In addition, excessive middleman profits are taking advantage of both consumers and producers.
As more farmers face bankruptcy, we all face a food emergency. European farmers speak from thousands of years of experience on the importance of family farms when they warn us, "Any time a country neglects its family farm base and allows it to become financially bankrupt, the entire economy of that country will soon collapse. It may take generations to rebuild the farm economy and that of the country."
Despite the magnitude of this food emergency, the "farm crisis" does not appear in headlines, so politicians are not compelled to provide political or financial assistance to something that would likely fail to bring votes. As farmers, we are now only about 1 percent of the U.S. population, and have little power to expose and prevent our demise. However, our urban and rural friends could be vital voices and advocates.
Bailing out the financial giants will not solve the financial crisis in the country, but the right policies and stimulus dollars could prevent a severe food crisis by saving farmers and workers. Furthermore, farm income dollars remain in and multiply at least two to four times in the local economy.
Family farmers have proposed fair food and farm policies that can be implemented at a fraction of the present multibillion-dollar policies destroying us. As the Treasury Department develops plans to distribute the bailout funds, the National Family Farm Coalition and others urge it to require banks receiving funds to treat their borrowers fairly by providing debt restructuring as an alternate to home or farm foreclosure or bankruptcy.
Concerned citizens can call the White House, 202-456-1111, or your members of Congress, 202-224-3121, to urge them to support policies that enable farmers to earn a fair market price; request an emergency milk price at $17.50 per hundred weight; provide price stability through government grain reserves and effective supply management; support the TRADE Act to be reintroduced in Congress; increase direct and guaranteed loans to family farmers; and ensure that the food we raise can be marketed to local schools and institutions, providing a better food supply at a fair price. We need these immediate changes in our food and farm policy.
http://www.millennium-ark.net/NEWS/09_Food_Water/090302.food.supply.broke.html

U.S. rattled as Mexico drug war bleeds over border
PHOENIX (Reuters) – Hit men dressed in fake police tactical gear burst into a home in Phoenix, rake it with gunfire and execute a man.
Armed kidnappers snatch victims from cars and even a local shopping mall across the Phoenix valley for ransom, turning the sun-baked city into the "kidnap capital" of the United States.
Violence of this kind is common in Mexico where drug cartel abductions and executions are a daily feature of a raging drug war that claimed 6,000 lives south of the border last year.
But U.S. authorities now fear that violent crime is beginning to bleed over the porous Mexico border and take hold here.
"The fight in Mexico is about domination of the smuggling corridors and those corridors don't stop at the border," Arizona Attorney General Terry Goddard said.
Execution style murders, violent home invasions, and a spiraling kidnap rate in Phoenix -- where police reported an average of one abduction a day last year linked to Mexican crime -- are not the only examples along the border.
In southern California, police have investigated cases of Americans abducted by armed groups tied to the Tijuana drug trade. One involved a businesswoman and her teenage daughter snatched in San Diego last year and held to ransom south of the border.
In south Texas, a live hand grenade traced back to a Mexican cartel stash was tossed onto the pool table of a bar frequented by off-duty police officers in January. The pin was left in it and the assailant fled.
COPING WITH SPILLOVER
Mexican traffickers have always been violent, but the death toll has soared since President Felipe Calderon took office in late 2006 and sent tens of thousands of troops to fight the country's powerful cocaine cartels.
Soldiers have fought pitched battles with drug gangs in several Mexican towns and overwhelmed police officers have fled municipal forces the length of the border. In many cases, police officers have been paid off by the drug gangs or even joined them.
In a sign of an increasingly desperate struggle to rein in the violence, Calderon this week ordered 5,000 more troops and federal police to Ciudad Juarez, just across the border from El Paso, Texas.
The cartels have killed 250 people in Ciudad Juarez in the past month, forced the police chief to resign, and shut down the airport with bomb threats.
The struggle by outgunned Mexican authorities to contain the violence was highlighted for Arizona state police last November, when Mexican police officers pinned down in a raging gun battle in Nogales, Sonora, reached out to them with an urgent request for more bullets.
While U.S. authorities stress they have not seen anything like the kind of street battles and horrific beheadings that are now common in Mexico, they are already taking action to curb was has become known as "overspill".
Texas Gov. Rick Perry says he wants 1,000 troops to guard the border. The state's Attorney General Greg Abbott is backing legislation to crack down on money laundering and human, drug and weapons trafficking through the state by the warring Gulf and Sinaloa cartels.
Lawmakers in Arizona heard testimony on border violence last week from police and prosecutors, who are seeking more robust measures to seize smugglers' assets, as well as cracking down harder on gunrunning to Mexico.
PLANNING FOR THE WORST
Washington has stepped up support for Calderon, pledging to give Mexico helicopters, surveillance aircraft, inspection equipment and police training under a $1.4 billion plan to beat the cartels in Mexico and Central America.
Homeland Security Secretary Janet Napolitano -- a former Arizona governor -- told a Congressional hearing last week she was focused on curbing the southbound traffic in guns that are being used to arm the violent cartels.
In a measure of that commitment, a Phoenix gun dealer goes on trial next week on charges he sold hundreds of weapons, including AK-47 assault rifles, to smugglers knowing they would send them to a powerful cartel in Sinaloa state on Mexico's Pacific coast.
As the spiraling drug violence shakes Mexican cities and towns along the U.S. border, U.S. Senate lawmakers announced last week they would hold two hearings to assess the ability of U.S. security forces to deal with the rise in crime on the U.S. side.
Senator Joseph Lieberman, chairman of the homeland security governmental affairs committee, said the panel would assess border security programs already in place and review whether federal, state and local authorities are ready to respond to any serious spillover of the Mexican drugs war.
For the sheriff of Hidalgo County, in south Texas, where the live grenade was thrown into a bar in Pharr, possibly by street gang members armed by a Mexican cartel, that renewed attention to the war on his doorstep can only be welcome.
"It's the first time we've had a hand grenade attack," Guadalupe Trevino told Reuters. "I believe there's more out there that we need to find."
http://news.yahoo.com/s/nm/20090301/ts_nm/us_usa_mexico_drugs

Obama Tied to Millions in Budget Earmarks
By: David Eberhart and David A. Patten Article Font Size President Obama and top members of his administration appear to be sponsoring hundreds of millions of dollars of earmarks in the 2009 budget that Obama is trying to push through Congress, CQPolitics.com reports. In the congressional report that accompanies the budget legislation, Obama is listed as a sponsor of a $7.7 million earmark for “Tribally Controlled Postsecondary Vocational Institutions.” Obama’s co-sponsors on that earmark include Vice President Joe Biden and Secretary of State Hillary Clinton. President Obama pledged to fight the addition of pork-barrel earmarks to legislation during the presidential campaign. Last April, for example, Obama released a statement stating: "We can no longer accept a process that doles out earmarks based on a member of Congress' seniority, rather than the merit of the project." White House Chief of Staff Rahm Emanuel, Biden, Clinton, and three other Cabinet secretaries who served in Congress last year are listed as sponsors or co-sponsors of hundreds of millions of dollars of earmarks attached to the spending bill. The House approved the $410 billion omnibus budget measure Wednesday, sending it on to the Senate. According to CQPolitics.com, Senate staffers say Obama’s name will be removed as a sponsor. It is not clear if Obama will insist that his cabinet officers withdraw their earmark requests, however. Other earmarks traced back to members of the Obama administration: Vice President Joe Biden, who asked for $94.9 million in set-asides before assuming his new office. He is a co-sponsor of those expenditure requests. Interior Secretary Ken Salazar was the lone sponsor on $5.4 million of earmarks in the budget bill. Including the earmarks he supported as a secondary sponsor, he’s linked to $227.4 million of earmarks. Transportation Secretary Ray LaHood asked for $31.2 million in earmarks, including $380,000 to replace vehicles that assist disabled persons in LaHood’s hometown of Peoria, Ill., the Web site says. Emanuel, the former congressman from Illinois, is currently sponsoring $3.9 million in earmarks on an individual basis. Labor Secretary Hilda L. Solis, a former member of Congress representing California, is linked to $38.4 million worth of earmarks, although she was the lone sponsor for only $814,000 of that total. Clinton sponsored just under $109 million in earmarks, although many of those were sponsored in concert with other senators. On Wednesday, Gibbs evaded directly answering a question about whether Obama would prompt his Cabinet secretaries to withdraw their earmark requests. “The president has discussed and worked with Congress to pass some reform of this process that now ensure that people like you that are interested can go into a piece of legislation and see the names of those sponsors,” Gibbs said. http://frc4u.org/phpbb/index.php?topic=352.0;topicseen