China Rising- Episode 3 (video)

Episode 3 - The Fire Inside 

A four-part series that gives a rare insight into the country on the move, with history in tow.

Source:Al Jazeera

"The Retirement Gamble" Facing Us All (Video)

Watch The Retirement Gamble on PBS. See more from FRONTLINE.

April 23, 2013, 10:09 am ET · by Martin Smith

If you’ve been watching any commercial television lately, you are well aware that the financial services industry is very busy running expensive ads imploring us to worry about our retirement futures. Open a new account today, they say.

They are not wrong that we should be doing something: America is facing a retirement crisis. One in three Americans has no retirement savings at all. One in two reports that they can’t save enough. On top of that, we are living longer, and health care costs, as we all know, are increasing.

But, as I found when investigating the retirement planning and mutual funds industries in The Retirement Gamble, which airs tonight on FRONTLINE, those advertisements are imploring us to start saving for one simple reason. Retirement is big business — and very profitable. It doesn’t take a genius to figure out that the more we save into the industry’s financial products, the more money they make in fees and commissions trading our hard-earned cash. And as long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back.

Big banks, brokerages, insurance companies and other financial service providers operate under something called a suitability standard — which says they don’t have to give you the best advice, just advice that isn’t too egregiously terrible.

Let’s say you sit down with an adviser at your brokerage or bank and ask for some advice on how you should allocate your retirement savings, or which funds you might want to choose for your IRA.

You’ll get lots of advice, but chances are it won’t be worth much. Eighty five percent of all financial advisers and financial planners are really just brokers or salesman. Their incentive is to sell you a product that makes them a higher commission, not necessarily a product that maximizes your chances of saving more. Only 15 percent of advisers are “fiduciaries” — advisers who by law must operate with your best interests in mind.

Last year, the Obama administration proposed a rule to mandate that all financial advisers, financial planners and other assorted financial wizards would have to adopt a fiduciary standard when it came to employee retirement accounts such as your 401(k) or IRA account. The financial services industry, which today manages something upwards of $10 trillion of our retirement nest eggs, thought this was a bad idea and pushed back hard. Scores of their protest letters poured into the U.S. Labor Department, the branch of our government responsible for regulating employee retirement accounts.

“As long as they don’t run away with our money or invest it in a Ponzi scheme, they have little in the way of accountability to us when something goes wrong. And even then it can be hard to fight back.”

Congress, too, was hit with a furious lobbying campaign. This would be way too expensive, the industry said; if we have to provide such a standard of service, we will either have to pack up and find another business line, or have to pass the increased costs on to our customers. The Obama administration pulled their proposal last fall.

How would a new fiduciary rule change things? Chances are you would be sold less expensive products, not only in your IRA accounts but inside your company 401(k) as well. It’s all about fees. While reporting on retirement plans for FRONTLINE, nothing has been more surprising to me than the corrosive effect of fees on our retirement savings.

It’s this simple: Fund fees can erode as much as half or more of your prospective gains.
For the sake of dramatizing the point, John Bogle, founder of Vanguard, the world’s largest mutual fund company and pioneer of low-cost index funds, gave me a startling example while we were filming. Assume you are invested in a mutual fund, he says, with a gross return of 7 percent, but that the mutual fund charges you an annual fee of 2 percent.

Over a 50-year investing lifetime, that little 2 percent fee will erode 63 percent of what you would have had. As Bogle puts it, “the tyranny of compounding costs” is overwhelming.

In short, fees matter. So what can you do? You aren’t going to find a fund that invests your money for free, but experts say you can come close by buying index funds. Their fees can be a tenth of what the average mutual funds charges. And over time, in bull and bear markets, on average, index funds perform better than their more expensive actively managed fund cousins. This is no secret to anyone who is paying attention.

So why aren’t our trusted financial advisers and those ads telling us to buy index funds? Why do some 401(k) plans not even offer them on their menus?

It’s because even though an index fund might be a better option for you and me, a broker operating under a suitability standard has no incentive to sell it to us. He or she will make higher commissions from options that have higher fees.

Sadly, a recent AARP study reported that 70 percent of mutual fund savers were not even aware that they were paying any fees at all.

Is there hope for change? The Labor Department says they plan to reintroduce a new fiduciary rule this summer that will force the financial services industry to think of us first when it comes to retirement. We’ll see how that goes.

In the meantime, The Retirement Gamble airs tonight (check your local listings here). What I uncovered while making this documentary made me rethink my financial future. It just might do the same for you.

America’s greatest threat: Unsafe work conditions

The Texas fertilizer plant explosion reveals that lax regulations are far more dangerous than any form of terrorism 

 By David Sirota

If I told you that government officials possessed ironclad proof that an imminent threat to this nation had the capacity to create a 9/11′s worth of injuries and deaths every year at an annual economic cost of a quarter trillion dollars, ask yourself: Would you say we should do something about it?

I’m guessing you would. Out of a basic sense of patriotism, you would probably at minimum support some new security regulations and investments in enforcing those regulations, even if that meant paying slightly higher taxes. After all, you profess to love America, and that’s the least we should do in the face of such a threat to our country, right?
 
Now ask yourself: Would your response to the original query change if you discovered that the threat at hand was not from a terrorist, but from unsafe workplaces — and that because of that unaddressed problem, these casualties and costs have already become a fact of life in America? Come on, admit it — your response probably would change. Yes, many who would reflexively support more regulations and enforcement in the face of a foreign terrorist threat would suddenly scoff at more regulations and enforcement in the face of unsafe workplaces. Why the double standard?

That’s the troubling question raised by the reaction — or, really, lack thereof — to last month’s catastrophic explosion in West, Texas.

Occurring in the heart of a nation whose government data documents 4,500 workplace deaths every year at a cost of $250 billion, the deadly blast originated at a fertilizer plant that had not been inspected by the chronically underfunded Occupational Safety and Health Administration since 1985.

The location of the plant is particularly significant. As the New York Times reports, Texas promotes an “antipathy toward regulations” as “the only state that does not require companies to contribute to workers’ compensation coverage” and a place where many counties “cite the lack of local fire codes as a reason for companies to move there.”

As a result, Texas is not the nation’s most populous state but nonetheless sports “the nation’s highest number of workplace fatalities.” When it comes to industrial disasters, the Times notes that Texas has only about a quarter more “high risk” sites than the state (Illinois) with the second most number of such facilities. However, it has, according to the Times, “more than three times the number of accidents, four times the number of injuries and deaths, and 300 times the property damage costs” as that state.

If all this data was about a terrorist threat, the reaction would be swift — negligent federal agencies would be roundly criticized and the specific state’s lax attitude toward security would be lambasted. Yet, after the fertilizer plant explosion, there has been no proactive reaction at all, other than Texas Republican Gov. Rick Perry boasting about his state’s “comfort with the amount of oversight” that already exists.

So, again, why the discrepancy? Simply put, because this is what now passes for acceptable in a deregulated economy whose laws are written by corporate interests.

Those interests are hostile to safety regulation and enforcement because they don’t want to spend even a tiny bit more on making worksites secure for employees. So they, and the politicians whose campaigns they fund, have made an epithet out of the word “regulation” in order to guarantee that almost nobody asks whether we have to tolerate 4,500 dead American workers each year.

We don’t have to tolerate that level of workplace carnage, of course. There are many obvious and constructive things we could do, starting with adding resources to regulatory agencies and beefing up workplace enforcement. But if even a blast as big as the one in West, Texas, cannot make us realize that simple fact, then nothing will.

Source: Salon.com

 

Infographic: Africa's natural resource wealth - Interactive - Al Jazeera English

Infographic: Africa's natural resource wealth - Interactive - Al Jazeera English

China Rising Episode 1 & 2 (Video)

A four-part series that gives a rare insight into the country on the move, with history in tow.

After centuries of western dominance, the world’s centre of economic and political weight is shifting eastward.

In just 30 years, China has risen from long-standing poverty to being the second largest economy in the world – faster than any other country in history.

From angry farmers to weary migrant workers, powerful politicians and everyone in between, what China says and does, has become of undeniable importance to the entire world.

 Episode 1 - The Dramatic Rise 

 

Source: Al Jazeera

Although no other country in history has risen so quickly from poverty to prosperity as China has, for many in the world's most populous nation, those advances have come at a price.
The economic reforms that made the People's Republic's rise possible have also led to a harshly divided China. Divisions whose impacts could easily spread from disenfranchised indviduals to threaten the economic growth contemporary Chinese society has come to be based upon.

In the opening episode of this four-part series, we tell the stories behind these divisions, from the rising urban middle class to impoverished rural areas and the precarious existence of hundreds of millions of migrant workers on the fringes of some of the world's fastest growing cities.

Episode 2 - Power and the People  

 

From the ruling Communist Party to filmmakers and bloggers, more and more people in China are looking to get their voices heard.

As blogs look to exploit their political potential and grassroots protests and mass incidents continue to increase in numbers, we analyse  how the country run and how do the people get their say. 

In this episode of China Rising , we look at how the people of one of the world's most powerful, yet closed states, manage to reach the masses.

We interview authors who struggle with censorship and self-censorship, and examine the country's thriving film industry, which seeks to top Hollywood.

President Barack Obama Weekly Address May 11, 2013 (Video/Transcript)

Remarks of President Barack Obama Weekly Address The White House May 11, 2013

Hi, everybody.  Our top priority as a nation is reigniting the true engine of our economic growth – a rising, thriving middle class.  And few things define what it is to be middle class in America more than owning your own cornerstone of the American Dream: a home.

Today, seven years after the real estate bubble burst, triggering the worst economic crisis since the Great Depression and costing millions of responsible Americans their jobs and their homes, our housing market is healing.  Sales are up.  Foreclosures are down.  Construction is expanding.  And thanks to rising home prices over the past year, 1.7 million more families have been able to come up for air, because they’re no longer underwater on their mortgages.
From the day I took office, I’ve made it a priority to help responsible homeowners and prevent the kind of recklessness that helped cause this crisis in the first place.

My housing plan has already helped more than two million people refinance their mortgages, and they’re saving an average of $3000 per year.

My new consumer watchdog agency is moving forward on protections like a simpler, shorter mortgage form that will help to keep hard-working families from getting ripped off.
But we’ve got more work to do.  We’ve got more responsible homeowners to help – folks who have never missed a mortgage payment, but aren’t allowed to refinance; working families who have done everything right, but still owe more on their homes than they’re worth.

Last week, I nominated a man named Mel Watt to take on these challenges as the head of the Federal Housing Finance Agency.  Mel’s represented the people of North Carolina in Congress for 20 years, and in that time, he helped lead efforts to put in place rules of the road that protect consumers from dishonest mortgage lenders, and give responsible Americans the chance to own their own home.  He’s the right person for the job, and that’s why Congress should do its job, and confirm him without delay.

And they shouldn’t stop there.  As I said before, more than two million Americans have already refinanced at today’s low rates, but we can do a lot better than that.  I’ve called on Congress to give every responsible homeowner the chance to refinance, and with it, the opportunity to save $3,000 a year.  That’s like a $3,000 tax cut.  And if you’re one of the millions of Americans who could take advantage of that, you should ask your representative in Congress why they won’t act on it.

Our economy and our housing market are poised for progress – but we could do so much more if we work together.  More good jobs.  Greater security for middle-class families.  A sense that your hard work is rewarded.  That’s what I’m fighting for – and that’s what I’m going to keep fighting for as long as I hold this office.

Thank you.  And have a great weekend.

President Obama Speaks on Innovation and Manufacturing (Video/Transcript)

Remarks by the President at Applied Materials, Inc. - Austin, TX

THE PRESIDENT:  Hello, Austin!  How you doing?  (Applause.) Well, it is wonderful to see all of you here today.  First of all, give Nicole an outstanding round of applause for the great job that she did.  (Applause.) 

It is wonderful to be here at Applied Materials.  I want to thank Mike and everybody who helped out hosting us and a wonderful tour of the facility.  It was incredible.  Rick was showing me some of your “clean rooms” where you are building the equipment that makes the chips that is basically powering everything that you guys are taking pictures with right now.  (Laughter.)  Smartphones, computers, iPads, laptops.  And it is just remarkable to see.  Every time I walk through these kinds of facilities I'm thinking, this is just magic.  I don't know how they do it.

Somebody was explaining to me that -- I guess one of the wafers was being cleaned, and he said, this would be the equivalent -- it was Alex who told me this -- Alex is around here somewhere -- the equivalent of if you were mowing the South Lawn but every blade of grass was exactly cut at the same height within a single human hair.  That's how precise things are.  That sounds pretty precise to me.  And if that's, by the way, the precision that you operate on, if that’s how you define a clean room, then Sasha and Malia are going to have to step up their game at home.  (Laughter.)  Because it is not that clean.  (Laughter.) 

I want to thank your Mayor, Lee Leffingwell, who’s doing a great job.  (Applause.)  Lee is doing outstanding work every day and helping to bring the Austin community together.  Congressman Lloyd Doggett is here.  (Applause.)  They’ve been great hosts.  We actually have a special guest -- the Mayor of San Antonio in the house -- my friend, Julian Castro is here.  (Applause.) 

Now, I’ve spent the day in Austin talking with folks about what we can do to reignite the true engine of America’s economic growth -- a thriving, rising middle class and a dynamic, cutting-edge economy.  That’s our priority.  That should be Washington’s top priority.  (Applause.)  And I see three things that we need to focus on to do it. 

Number one, we've got to make America a magnet for good jobs.  Number two, we've got to help people earn the skills they need to do those jobs.  Number three, we've got to make sure people’s hard work is rewarded so that they can make a decent living doing those jobs. 

And if you watch the news, sometimes you may think that there’s just doom and gloom out there.  But the truth is there’s incredible stuff going on all across America and right here in Austin that I think can be good models for the rest of America to follow. 

This morning I visited Manor New Tech High School, where students are learning high-tech skills that companies like Applied are looking for right now.  They are getting excited, working with math and science and technology and engineering.  And it's a hands-on high school where subjects are integrated, and kids are building things and conducting experiments at very early ages.  And it's sparking their imagination in ways that may lead them to start up the next Applied, or come here and work at Applied. 

And then I joined a few local families for lunch to talk about how we can make sure that hard work pays off with wages you can live on and raise a family, with health care that you can count on, and the chance to put away some money for retirement.  And we also had good barbeque -- (laughter) -- which is necessary for economic growth.  (Laughter.)  Some good barbeque once in a while.  And then I came to Applied Materials to talk about what we can do to make America a magnet for new jobs in manufacturing.

After shedding jobs for a decade, our manufacturers have added now about 500,000 new manufacturing jobs over the past three years.  (Applause.)  That’s good news.  Caterpillar is bringing jobs back from Japan, and Ford is bringing jobs back from Mexico.  And after placing plants in other countries like China, Intel is opening its most advanced plant right here at home.  This year, Apple started making Macs in America again.  (Applause.) 

So there are some good trend lines there, but we've got to do everything we can to strengthen that trend.  We've got to do everything we can to help the kind of high-tech manufacturing that you're doing right here at Applied.  And we want to make sure it takes root here in Austin and all across the country.  And that means, first of all, creating more centers of high-tech manufacturing.

Last year, we launched our first manufacturing innovation institute in Youngstown, Ohio, to develop new technologies and equip workers with the skills required to master 3-D printing techniques.  And in my State of the Union address, I called on Congress to set up 15 more of these manufacturing hubs all across America, and I said that my administration was going to go ahead and move forward with three new hubs on our own, even without congressional action. 

Well, today, we're launching a competition for those hubs.  We are looking for businesses and universities that are willing to partner together to help their region -- help turn their region into global centers of high-tech jobs.  Because we want the next revolution in manufacturing to be “Made in America.”  (Applause.)  We’re going to do that.   

The truth is, over the past couple decades, too many communities have been hit hard when plants closed down and jobs dried up.  The economy obviously is changing all the time.  Nobody knows that better than folks here at Applied.  I was talking to somebody who’s -- after showing me the wafer and some chips, and then they showed me a smartphone, they pointed to the smartphone and they said, 40 years ago, there’d be about $3 billion just trying to get this much computing power in this little thing, except it would fill up a whole room. 

And so the economy is dynamic.  Technology is constantly changing.  That means we’ve got to adapt as well.  And even as we’re working to reverse the trend of communities that have been hard hit with old manufacturing leaving, we’ve got to propose partnerships with local leaders in manufacturing communities to help attract new investment in the infrastructure and the research that will attract new jobs and new businesses, so that communities that have been knocked down can get back up and get back on their feet. 

And we should help our workers get the training they need to compete for the industries of tomorrow.  No job in America should go unfilled just because we don’t have anybody with the right skills.  (Applause.)  And that’s a priority.  Now, some of your colleagues that I met, some of them have advanced degrees.  Some of them came to apply basically right out of high school.  But all of you, whether it was, in some cases, through a university education, in some cases the military, in some cases just on-the-job training -- all of you have specialized skills that are exactly what we need to continue to grow our economy.  But we’ve got a whole bunch of folks out there who don’t have those skills, either because the education system failed them or because their skills have been rendered obsolete.

And that’s why I want to rethink how our high school kids are prepared.  I want to make sure that we’re training two million Americans at our community colleges for skills that will lead directly to a job.  (Applause.)  And that’s also why we’ve got to make sure that college is affordable and people aren’t burdened by a mountain of debt so that they can continue to upgrade their skills as well.

Now, if we want to manufacture the best products, we’ve also got to invest in and cultivate the best ideas.  Innovation, ingenuity -- that’s the constant of the American economy.  That’s one of the constants of our character.  It’s what keeps America on the cutting-edge. 

And just before I came here, I visited the Capital Factory, which, as some of you know, is a place that helps start-ups take off.  And everywhere you turn, somebody has got a new idea.  They’re all thinking big.  They’re taking risks.  It’s exciting.

There was a young woman who is in a wheelchair and physically disabled but is just incredibly inspired to make sure that she’s not in any way confined by that situation.  And she’s basically designed and is now manufacturing a car that people in wheelchairs can just drive their wheelchair right into the car and start driving.

And then you had a young man who had a 3-D camera -- it was about this big -- and basically from filming either a static image or in the round, can basically download that immediately and create a 3-D image, and then use that for 3-D manufacturing  -- 3-D printing and manufacturing.  And what currently costs about $80,000 costs about $3,000 -- the technology that he’s developed.  So they're doing amazing stuff.

And one of the things we’re doing to fuel more inventiveness like this, to fuel more private sector innovation and discovery, is to make the vast amounts of America’s data open and easy to access for the first time in history.  So talented entrepreneurs are doing some pretty amazing things with data that's already being collected by government.

So over at the Capital Factory, I met with folks behind the start-up called StormPulse, which uses government data on weather to help businesses anticipate disruptions in service.  And then you’ve got a Virginia company called OPower that’s used government data on trends in energy use to save its customers $200 million on their energy bills.  There’s an app called iTriage, founded by a pair of ER doctors that uses data from the Department of Health and Human Services to help users understand medical symptoms and find local doctors and health care providers. 

And today I’m announcing that we’re making even more government data available, and we’re making it easier for people to find and to use.  And that’s going to help launch more start-ups.  It’s going to help launch more businesses.  Some of them undoubtedly will be using this data powered by chips that essentially started right here at Applied Materials.  (Applause.)

It’s going to help more entrepreneurs come up with products and services that we haven’t even imagined yet.         

This kind of innovation and ingenuity has the potential to transform the way we do almost everything.  One-third of jobs in Austin are now supported by the tech sector.  And we should do all we can to encourage this kind of innovation economy all across America, in ways that produce new jobs and new opportunities for the middle class.

And we’re poised for a time of progress -- if we’re willing to seize it.  Not even five years after the worst economic crisis in our lifetimes, our jobs market, our housing market are steadily healing.  Our deficits are falling at the fastest rate in decades.  The American auto industry has made a comeback.  It’s thriving.  American energy is booming.  But we’ve got to keep moving forward, and we’ve got to make sure that Washington is not administering self-inflicted wounds when we’re making progress.

So Mike and I were talking about the fact that if we can reform our tax system to eliminate some of these loopholes potentially we could lower some rates.  That would make our businesses more competitive.

Basic research, you’ll hear people talk about how government is not going to do anything for us.  Well, we all understand that the private sector powers and drives our economy.  On the other hand, most of the private sector right now has a lot of trouble financing basic research.  And that basic research is the foundation for everything that's done at this company, and everything that's done for most of your customers.  And we can't afford to fall behind when it comes to basic research.  So there’s some key things that we can do that shouldn't be ideological.  They're not Democratic ideas or Republican ideas or independent ideas.  They're just good ideas that allow the government to help create the foundation, the platform, the environment in which companies like Applied Materials can thrive. And that's what we've got to constantly champion.

And when you're talking to your members of Congress or you're talking to elected officials, you've got to remind them we don't want government to do everything for us, but it's got a role to play on infrastructure, basic research -- making sure that we've got a tax system that's fair, making sure that we've got some basic stability in our budget so people aren't always guessing what's going to happen around the corner.

Think about how this company was built.  Back in 1967, when Applied Materials was just getting off the ground, there were five employees.  They worked out of this small industrial unit in California.  And I suppose they had a “clean room” in there, but I don't know what it looked like.  (Laughter.)  But what they lacked in size, they made up with ingenuity and imagination and risk-taking.  And over the years, as you grew to become a leader in high-tech manufacturing, that ingenuity never faltered.  Whether you’ve been with this company for decades -- as I know some of you have -- or just for a year, you’re all focused on the future.  Every day you're pushing the limits of technology a little bit further.

And you're not alone, because somewhere over at the Capital Factory, there’s an entrepreneur mapping out a new product on a whiteboard that may be the next big thing.  Somewhere over at Manor New Tech High School, there’s a kid scribbling down an idea for a new invention that one day may turn into an entirely new industry.  That’s America.

And when you look out across this room, what you also notice is there's talent drawn from every segment of our society.  We don't care what you look like, where you come from, what your last name is.  We just want to make sure we're all working together to create a better future for our kids. 

That's America. We innovate.  We adapt.  We move forward.  That's what Austin is all about.  That's what's going on in this city.  (Applause.)  And that's what I want to keep on promoting as your President of the United States of America. 

Thank you, everybody.  God bless you.  God bless America.

Al-Nakba Episode 1 (Palestinian 'catastrophe' of 1948) (video)

A series on the Palestinian 'catastrophe' of 1948 that led to dispossession and a conflict that endures to this day.

Source: Al Jazeera

“The Nakba did not begin in 1948. Its origins lie over two centuries ago….”

So begins this four-part series on the ‘nakba’, meaning the ‘catastrophe’, about the history of the Palestinian exodus that led to the first Arab-Israeli War in 1948 and the establishment of the state of Israel.

This sweeping history starts back in 1799 with Napoleon’s attempted advance into Palestine to check British expansion and his appeal to the Jews of the world to reclaim their land in league with France.

The narrative moves through the 19th century and into the 20th century with the British Mandate in Palestine and comes right up to date in the 21st century and the ongoing ‘nakba’ on the ground.

Arab, Israeli and Western intellectuals, historians and eye-witnesses provide the central narrative which is accompanied by archive material and documents, many only recently released for the first time.

 Episode 1 - Al- Nakba  

For the Palestinians, 1948 marks the 'Nakba' or the 'catastrophe', when hundreds of thousands were forced out of their homes.

But for Israelis, the same year marks the creation of their own state.

The tragedy in Palestine is not just a local one; it is a tragedy for the world, because it is an injustice that is a menace to the world's peace.
Arnold Toynbee, British historian

This series attempts to present an understanding of the events of the past that are still shaping the present.

This story starts in 1799, outside the walls of Acre in Ottoman-controlled Palestine, when an army under Napoleon Bonaparte besieged the city. It was all part of a campaign to defeat the Ottomans and establish a French presence in the region.

In search of allies, Napoleon issued a letter offering Palestine as a homeland to the Jews under French protection.  He called on the Jews to ‘rise up’ against what he called their oppressors.
Napoleon’s appeal was widely publicised. But he was ultimately defeated. In Acre today, the only memory of him is a statue atop a hill overlooking the city.

Yet Napoleon’s project for a Jewish homeland in the region under a colonial protectorate did not die, 40  years later, the plan was revived but by the British. 

Dow Jones Industrial Average hit 15000 and who is getting richer?

The Dow Jones Industrial Average hit 15056.20 for the first time and unemployment rate continued at 7.50 percent. Although the unemployment rate dropped lower again, it continues to be still higher than it should be after such a sharp increase of the Dow Jones.

Moreover, real wage growth continues to be stagnant.

So there is no reason to celebrate. In contrary, we should wonder, who is benefits from this high record of the Dow Jones and who is getting richer?

Special series The Secret of the Seven Sisters - Episode 3 & 4 (Video)

Episode 3 - The Dancing Bear

 

Source:Al Jazeera
 In the Caucasus, the US and Russia are vying for control of the region. The great oil game is in full swing. Whoever controls the Caucasus and its roads, controls the transport of oil from the Caspian Sea.

Tbilisi, Erevan and Baku - the three capitals of the Caucasus. The oil from Baku in Azerbaijan is a strategic priority for all the major companies.

From the fortunes of the Nobel family to the Russian revolution, to World War II, oil from the Caucasus and the Caspian has played a central role. Lenin fixated on conquering the Azeri capital Baku for its oil, as did Stalin and Hitler.

On his birthday in 1941, Adolf Hitler received a chocolate and cream birthday cake, representing a map. He chose the slice with Baku on it.

On June 22nd 1941, the armies of the Third Reich invaded Russia. The crucial battle of Stalingrad was the key to the road to the Caucasus and Baku’s oil, and would decide the outcome of the war.

Stalin told his troops: "Fighting for one’s oil is fighting for one’s freedom."

After World War II, President Nikita Krushchev would build the Soviet empire and its Red Army with revenues from the USSR’s new-found oil reserves.

Decades later, oil would bring that empire to its knees, when Saudi Arabia and the US would conspire to open up the oil taps, flood the markets, and bring the price of oil down to $13 per barrel. Russian oligarchs would take up the oil mantle, only to be put in their place by their president, Vladimir Putin, who knows that oil is power.

The US and Putin‘s Russia would prop up despots, and exploit regional conflicts to maintain a grip on the oil fields of the Caucusus and the Caspian.

But they would not have counted on the rise of a new, strong and hungry China, with an almost limitless appetite for oil and energy. Today, the US, Russia and China contest the control of the former USSR’s fossil fuel reserves, and the supply routes. A three-handed match, with the world as spectators, between three ferocious beasts – The American eagle, the Russian bear, and the Chinese dragon.

Episode 4 - A Time for Lies

 

Peak oil – the point in time at which the highest rate of oil extraction has been reached, and after which world production will start decline. Many geologists and the International Energy Agency say the world's crude oil output reached its peak in 2006.

But while there may be less oil coming out of the ground, the demand for it is definitely on the rise.

The final episode of this series explores what happens when oil becomes more and more inaccessible, while at the same time, new powers like China and India try to fulfill their growing energy needs.

And countries like Iran, while suffering international sanctions, have welcomed these new oil buyers, who put business ahead of lectures on human rights and nuclear ambitions.
At the same time, oil-producing countries have had enough with the Seven Sisters controlling their oil assets. Nationalisation of oil reserves around the world has ushered in a new generation of oil companies all vying for a slice of the oil pie.

These are the new Seven Sisters.

Saudi Arabia's Saudi Aramco, the largest and most sophisticated oil company in the world; Russia's Gazprom, a company that Russia's President Vladimir Putin wrested away from the oligarchs; The China National Petroleum Corporation (CNPC), which, along with its subsidiary, Petrochina, is the world's secnd largest company in terms of market value; The National Iranian Oil Company, which has a monopoly on exploration, extraction, transportation and exportation of crude oil in Iran – OPEC's second largest oil producer after Saudi Arabia; Venezuela's PDVSA, a company the late president Hugo Chavez dismantled and rebuilt into his country's economic engine and part of his diplomatic arsenal; Brazil's Petrobras, a leader in deep water oil production, that pumps out 2 million barrels of crude oil a day; and Malaysia's Petronas - Asia's most profitable company in 2012.

Mainly state-owned, the new Seven Sisters control a third of the world's oil and gas production, and more than a third of the world's reserves. The old Seven Sisters, by comparison, produce a tenth of the world's oil, and control only three percent of the reserves.
The balance has shifted.

President Barack Obama Weekly Address May 4, 2013 (Video/Transcript)

Remarks of President Barack Obama Weekly Address Mexico City, Mexico May 4, 2013

Hi, everybody.  Today, I’m speaking to you from the road – a trip to Mexico and Costa Rica.

I’m here because Latin America represents an incredible opportunity for the United States, especially when it comes to my top priority as President: creating good, middle-class jobs.
On Friday, we learned that our businesses created another 176,000 jobs last month.  That’s 2.2 million new jobs over the past year, and 6.8 million new jobs over the past 38 months.
But as I've said before, I won’t be satisfied until everyone who wants a job can find one. So I’m going to keep doing everything I can and going everywhere I need to go to help our businesses create jobs.

Now, one of the best ways to grow our economy is to sell more goods and services Made in America to the rest of the world.  That includes our neighbors to the south.

Right now, over 40 percent of our exports go to the Americas.  And those exports are growing faster than our trade with the rest of the world.  That’s why I visited Latin America this week – to work with leaders to deepen our economic ties and expand trade between our nations.
In Mexico, I also talked about immigration reform, because that’s an important issue that affects both our countries.

The truth is, right now, our border with Mexico is more secure than it’s been in years.  We’ve put more boots on that border than at any time in our history, and illegal crossings are down by nearly 80 percent from their peak in 2000.  But we’ve got more to do – not just to secure the border but to fix an immigration system that is badly broken.

In recent weeks, we’ve seen a commonsense immigration reform bill introduced in the Senate.  This bill is a compromise, which means that nobody got everything they wanted – including me.  But it’s largely consistent with the principles I’ve laid out from the beginning.

It would continue to strengthen security at our borders and hold employers more accountable if they knowingly hire undocumented workers.

It would provide a pathway to earned citizenship for the 11 million individuals who are already in this country illegally.

And it would modernize our legal immigration system so that we’re able to reunite families and attract the highly-skilled entrepreneurs and engineers who will help create good paying jobs and grow our economy.

These are all commonsense steps that the majority of Americans support.  So there’s no reason that immigration reform can’t become a reality this year.

In the meantime, I’ll keep working with our neighbors on our common security and our common prosperity.  Millions of Americans earn a living right now because of the trade between our nations.  And after this week, I’m as confident as ever that we can build on our shared heritage and values to open more markets for American businesses and create more jobs for American workers.

Thanks and have a great weekend.

G.W. Bush spins Iraq Decision to go to War (Video/Transcript)

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Transcript:
I live in western Massachusetts, just outside the city of north Hampton. Among the charms, north Hampton, Massachusetts, has an elegant public library, called the Forbes library. Not just a centerpiece of downtown, it turns out it has national significance.
Forbes library isn't named for a U.S. President. There’s never been a president Forbes, it's actually named after some rich guy judge that donated the library, but it contains the Presidential library and museum of former President Calvin Coolidge. That's tucked away somewhere inside the place I used to check out DVDs when I couldn't afford rental fees at block buster.

The papers memorabilia is tucked away inside that building. It’s a public library in north Hampton. Calvin Coolidge is the last U.S. president not to have a free standing named after him presidential library. Since Coolidge, all other American presidents we've had, even Nixon, they have an edifice built somewhere in their honor. The tourist brochure from the national archives about all the presidential libraries includes this kind of creepy map that seems like the disembodied heads loom over regions of the country. Look at poor Arizona.

They have nothing to do with Nixon, but he looms over the state like a death's head. this map showed all the different places you could go in the country as a member of the public to explore the modern presidents and the things they have preserve and this is what's happening there today, when people from here on out go to the George W. Bush Presidential library to play the decision points game. This is what happens. Watch.

 George W. Bush made many tough decisions as president. Now you'll get a flavor for what that's like. Take a look at the list of scenarios in front of you. First, you will select which one you want to tackle. The majority of the theater chose the threat of Saddam Hussein. President Bush had to make a choice, one, seek another U.N. resolution, two, lead an international coalition to remove Saddam, three, accept Saddam Hussein will remain in power. You are about to get expert advice. You’ll have to weigh conflicting points of view. Okay, we're ready to start. Work fast, the clock is ticking.

With a literal drum beat, actual drum beat to war coming out of the speakers in the theater, you get advice from members of the intelligent community, while and this is what's happening there today, when people from here on out go to the George W. Bush presidential library to play the decision points game. This is what happens. Watch.
With a literal drum beat, actual drum beat to war coming out of the speakers in the theater, you get advice from members of the intelligent community, while you're getting those briefings, and you get interrupted by ominous breaking news developments.
If we act to depose him, other countries could use our actions to wage unjustified wars in the future.

Chemical warheads.

This is the first really solid evidence.

After you deal with all the breaking news interruptions about new weapons that weren't disclosed before being discovered and get advice from your fake actor experts, it's finally time to make this decision. They do set up three options to choose from, right? You can seek a new U.N. resolution that makes sense. You can invade, of course, they don't say invade, they say, lead an international coalition, which means invade. If you want to not invade, what's the label for not invading? That choice is labeled take no action. That’s the neutral presentation of options here. You can lead, or you can do nothing. If you choose to do nothing, well, president bush's former white house chief of staff then appears on screen and obviously expresses his disappointment in you.

Times up. It’s time to make a decision. You were asked how to address the threat of Saddam Hussein. You had three options. The people in the theater today decided to take no action and accept that Saddam Hussein will remain in power.

Accept, way to go, wusses. He doesn't stop there, though, with his disapproving, almost disbelieving lack, he then has president bush to come on screen and say the correct answer is you should have invaded. when I first read descriptions of this, I thought they'd meant you'd get historical footage of George W. Bush from his presidency, documenting the history how the bush presidency handled the issue at the time, but as you can see, this is president bush now, this is contemporary George w. Bush taped recently still making the case today that invading Iraq is the right answer.

My first choice was to use diplomacy rather than putting American troops into harm's way.

First choice, diplomacy. he goes on to explain the U.N. resolutions passed. then he launches right into this explanation for why invading Iraq was the right thing to do, because smoking gun was going to be a mushroom cloud, because Saddam's weapons of mass destruction, Saddam being linked to terrorist groups. Seriously.

The stakes were too high to trust the dictator's word against the weight of evidence and the consensus of the world. Saddam posed too big a risk to ignore he had used weapons of mass destruction in the past, showed every sign of continuing to pursue such weapons, and supported international terrorist organizations. The world was made safer by his removal. With his departure, 25 million Iraqis have the chance to live in freedom and build a free society. The new democracy in Iraq can be a valuable ally in the heart of the Middle East and a beacon of hope to reformers around the world.

Imagine at the bill Clinton presidential library, an interactive exhibit designed to prove that he did not have actual relations with that woman. Imagine an interactive meet tricky dick hologram at the Nixon library, showing ways he really isn't a crook. You know, the weight of evidence did not show that we had to invade Iraq. There was no consensus of the world that we had to invade Iraq. When we invaded Iraq, look at this, every country in the map that is shaded blue here, every country here on this map shaded in blue was against us invading Iraq.

Does it seem like there was a world consensus we should invade Iraq? The head of the U.N. at the time said he considered that invasion to be illegal. The consensus of the world was George w. Bush had to lead an international coalition to invade Iraq?

Are you serious? These little kids, who as of today are going to our nation's newest presidential library to learn the unvarnished history about this presidency, are being told Saddam Hussein showed every sign of continuing to pursue weapons of mass destruction. The case to invade Iraq was not mistaken. The case to invade Iraq was cooked up. It was a hoax perpetrated on the American people, and they are still cooking it up right now, ten years to the day after the mission accomplished speech, as if the last ten years has never happened. This is what kids are being taught that part of our nation's history. I kind of think this is a national scandal.

President Barack Obama Weekly Address April 27, 2013 (Video/Transcript)

Remarks of President Barack Obama

Weekly Address

The White House

April 27, 2013

Hi, everybody.  Our top priority as a nation must be growing the economy, creating good jobs, and rebuilding opportunity for the middle class.

But two months ago, Congress allowed a series of automatic budget cuts to fall across the federal government that would do the opposite.  In Washington-speak, these cuts were called the “sequester.”  It was a bad idea then.  And as the country saw this week, it’s a bad idea now.

Because of these reckless cuts, there are parents whose kids just got kicked out of Head Start programs scrambling for a solution.  There are seniors who depend on programs like Meals on Wheels to live independently looking for help.  There are military communities – families that have already sacrificed enough – coping under new strains.  All because of these cuts.

This week, the sequester hurt travelers, who were stuck for hours in airports and on planes, and rightly frustrated by it.  And, maybe because they fly home each weekend, the Members of Congress who insisted these cuts take hold finally realized that they actually apply to them too.

Republicans claimed victory when the sequester first took effect, and now they’ve decided it was a bad idea all along.  Well, first, they should look at their own budget.  If the cuts they propose were applied across the board, the FAA would suffer cuts three times deeper.

So Congress passed a temporary fix.  A Band-Aid.  But these cuts are scheduled to keep falling across other parts of the government that provide vital services for the American people.  And we can’t just keep putting Band-Aids on every cut.  It’s not a responsible way to govern.  There is only one way to truly fix the sequester: by replacing it before it causes further damage.

A couple weeks ago, I put forward a budget that replaces the next several years of these dumb cuts with smarter cuts; reforms our tax code to close wasteful special interest loopholes; and invests in things like education, research, and manufacturing that will create new jobs right now.

So I hope Members of Congress will find the same sense of urgency and bipartisan cooperation to help the families still in the crosshairs of these cuts.  They may not feel the pain felt by kids kicked off Head Start, or the 750,000 Americans projected to lose their jobs because of these cuts, or the long-term unemployed who will be further hurt by them.  But that pain is real.
The American people worked too hard, for too long, rebuilding from one economic crisis just to see your elected officials keep causing more.  Our economy is growing.  Our deficits are shrinking.  We’re creating jobs on a consistent basis.  But we need to do more to help middle-class families get ahead, and give more folks a chance to earn their way into the middle class.  And we can, if we work together.  That’s what you expect.  That’s what I’m going to work every single day to help deliver. 

Thank you.

Australia & Gun Control's Aftermath (video)

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Indecision Political Humor,The Daily Show on Facebook

John Oliver learns it's pointless for America to study the Australian gun control experience because the situations are just too similar. 

Does only the United States has real people?

Is the United States the only real country?

 

Remarks by President Obama at Dedication of the George W. Bush Presidential Library

Bush Presidential Center

Dallas, Texas

PRESIDENT OBAMA:  Thank you so much.  (Applause.)  Thank you.  Please be seated.  To President Bush and Mrs. Bush; to President Clinton and now-former Secretary Clinton; to President George H.W. Bush and Mrs. Bush; to President and Mrs. Carter; to current and former world leaders and all the distinguished guests here today -- Michelle and I are honored to be with you to mark this historic occasion.

This is a Texas-sized party.  And that’s worthy of what we’re here to do today:  honor the life and legacy of the 43rd President of the United States, George W. Bush.

When all the living former Presidents are together, it’s also a special day for our democracy.  We’ve been called “the world’s most exclusive club” -- and we do have a pretty nice clubhouse.  But the truth is, our club is more like a support group.  The last time we all got together was just before I took office.  And I needed that.  Because as each of these leaders will tell you, no matter how much you may think you’re ready to assume the office of the presidency, it’s impossible to truly understand the nature of the job until it’s yours, until you’re sitting at that desk.

And that’s why every President gains a greater appreciation for all those who served before him; for the leaders from both parties who have taken on the momentous challenges and felt the enormous weight of a nation on their shoulders.  And for me, that appreciation very much extends to President Bush.

The first thing I found in that desk the day I took office was a letter from George, and one that demonstrated his compassion and generosity.  For he knew that I would come to learn what he had learned -- that being President, above all, is a humbling job.  There are moments where you make mistakes.  There are times where you wish you could turn back the clock.  And what I know is true about President Bush, and I hope my successor will say about me, is that we love this country and we do our best.

Now, in the past, President Bush has said it’s impossible to pass judgment on his presidency while he’s still alive.  So maybe this is a little bit premature.  But even now, there are certain things that we know for certain.

We know about the son who was raised by two strong, loving parents in Midland, famously inheriting, as he says, “my daddy’s eyes and my mother’s mouth.”  (Laughter.)  The young boy who once came home after a trip to a museum and proudly presented his horrified mother with a small dinosaur tailbone he had smuggled home in his pocket.  (Laughter.)  I’ll bet that went over great with Barbara.

We know about the young man who met the love of his life at a dinner party, ditching his plans to go to bed early and instead talking with the brilliant and charming Laura Welch late into the night.

We know about the father who raised two remarkable, caring, beautiful daughters, even after they tried to discourage him from running for President, saying, “Dad, you’re not as cool as you think you are.”  (Laughter.)  Mr. President, I can relate.  (Laughter.)  And now we see President Bush the grandfather, just beginning to spoil his brand-new granddaughter.

So we know President Bush the man.  And what President Clinton said is absolutely true -- to know the man is to like the man, because he’s comfortable in his own skin.  He knows who he is.  He doesn’t put on any pretenses.  He takes his job seriously, but he doesn’t take himself too seriously.  He is a good man.

But we also know something about George Bush the leader.  As we walk through this library, obviously we’re reminded of the incredible strength and resolve that came through that bullhorn as he stood amid the rubble and the ruins of Ground Zero, promising to deliver justice to those who had sought to destroy our way of life.

We remember the compassion that he showed by leading the global fight against HIV/AIDS and malaria, helping to save millions of lives and reminding people in some of the poorest corners of the globe that America cares and that we’re here to help.

We remember his commitment to reaching across the aisle to unlikely allies like Ted Kennedy, because he believed that we had to reform our schools in ways that help every child learn, not just some; that we have to repair a broken immigration system; and that this progress is only possible when we do it together.

Seven years ago, President Bush restarted an important conversation by speaking with the American people about our history as a nation of laws and a nation of immigrants.  And even though comprehensive immigration reform has taken a little longer than any of us expected, I am hopeful that this year, with the help of Speaker Boehner and some of the senators and members of Congress who are here today, that we bring it home -- for our families, and our economy, and our security, and for this incredible country that we love.  And if we do that, it will be in large part thanks to the hard work of President George W. Bush.  (Applause.)

And finally, a President bears no greater decision and no more solemn burden than serving as Commander-in-Chief of the greatest military that the world has ever known.  As President Bush himself has said, “America must and will keep its word to the men and women who have given us so much."  So even as we Americans may at times disagree on matters of foreign policy, we share a profound respect and reverence for the men and women of our military and their families.  And we are united in our determination to comfort the families of the fallen and to care for those who wear the uniform of the United States.  (Applause.)

On the flight back from Russia, after negotiating with Nikita Khrushchev at the height of the Cold War, President Kennedy's secretary found a small slip of paper on which the President had written a favorite saying:  "I know there is a God.  And I see a storm coming.  If he has a place for me, I believe I am ready."

No one can be completely ready for this office.  But America needs leaders who are willing to face the storm head on, even as they pray for God's strength and wisdom so that they can do what they believe is right.  And that’s what the leaders with whom I share this stage have all done.  That’s what President George W. Bush chose to do.  That’s why I'm honored to be part of today's celebration.

Mr. President, for your service, for your courage, for your sense of humor, and, most of all, for your love of country, thank you very much.  From all the citizens of the United States of America, God bless you.  And God bless these United States.  (Applause.)

Human infections with the emerging avian influenza A H7N9 virus from wet market poultry: clinical analysis and characterisation of viral genome

Source: The Lancet, Early Online Publication, 25 April 2013

Audio Link

Summary

Background

Human infection with avian influenza A H7N9 virus emerged in eastern China in February, 2013, and has been associated with exposure to poultry. We report the clinical and microbiological features of patients infected with influenza A H7N9 virus and compare genomic features of the human virus with those of the virus in market poultry in Zhejiang, China.

Methods

Between March 7 and April 8, 2013, we included hospital inpatients if they had new-onset respiratory symptoms, unexplained radiographic infiltrate, and laboratory-confirmed H7N9 virus infection. We recorded histories and results of haematological, biochemical, radiological, and microbiological investigations. We took throat and sputum samples, used RT-PCR to detect M, H7, and N9 genes, and cultured samples in Madin-Darby canine kidney cells. We tested for co-infections and monitored serum concentrations of six cytokines and chemokines. We collected cloacal swabs from 86 birds from epidemiologically linked wet markets and inoculated embryonated chicken eggs with the samples. We identified and subtyped isolates by RT-PCR sequencing. RNA extraction, complementary DNA synthesis, and PCR sequencing were done for one human and one chicken isolate. We characterised and phylogenetically analysed the eight gene segments of the viruses in the patient's and the chicken's isolates, and constructed phylogenetic trees of H, N, PB2, and NS genes.

Findings

We identified four patients (mean age 56 years), all of whom had contact with poultry 3—8 days before disease onset. They presented with fever and rapidly progressive pneumonia that did not respond to antibiotics. Patients were leucopenic and lymphopenic, and had impaired liver or renal function, substantially increased serum cytokine or chemokine concentrations, and disseminated intravascular coagulation with disease progression. Two patients died. Sputum specimens were more likely to test positive for the H7N9 virus than were samples from throat swabs. The viral isolate from the patient was closely similar to that from an epidemiologically linked market chicken. All viral gene segments were of avian origin. The H7 of the isolated viruses was closest to that of the H7N3 virus from domestic ducks in Zhejiang, whereas the N9 was closest to that of the wild bird H7N9 virus in South Korea. We noted Gln226Leu and Gly186Val substitutions in human virus H7 (associated with increased affinity for α-2,6-linked sialic acid receptors) and the PB2 Asp701Asn mutation (associated with mammalian adaptation). Ser31Asn mutation, which is associated with adamantane resistance, was noted in viral M2.

Interpretation

Cross species poultry-to-person transmission of this new reassortant H7N9 virus is associated with severe pneumonia and multiorgan dysfunction in human beings. Monitoring of the viral evolution and further study of disease pathogenesis will improve disease management, epidemic control, and pandemic preparedness.

Funding

Larry Chi-Kin Yung, National Key Program for Infectious Diseases of China.

America's War Games

How the Obama administration is redefining the US military's strategic priorities with far-reaching consequences.

Source: Al Jazeera

 

The United States' military expenditures today account for about 40 percent of the world total. In 2012, the US spent some $682bn on its military - an amount more than what was spent by the next 13 countries combined.

Now that the war in Iraq is over and the withdrawal of US troops from Afghanistan will be complete in 2014, the stage might therefore appear to be set for a decrease in US defence spending. Even in Washington DC, many have argued that the defence budget can be cut substantially and the resulting "peace dividend" could be diverted to more pressing domestic concerns, such as dealing with the nation's continuing economic problems.

You can't do anything about it [because] there's too much political support.

Chuck Spinney, a defence analyst

However, a battle to ward off cuts to the Pentagon's budget has begun and the way things are going, it seems likely that the US will have the smallest drawdown or reduction of the military budget after a period of conflict since World War II - in comparative terms, smaller than after Vietnam, Korea and the end of the Cold War. 

The Pentagon's joint chiefs of staff have appeared before Congress warning of dire results from the impacts of sequestration, a requirement to reduce defence spending by $500bn over 10 years that grew out of a 2011 budget deal between President Obama and Congress. In March, sequestration led to a $41bn cut in 2013 defence spending.

Pentagon officials, defence companies, politicians and conservative commentators argue that defence cuts will be devastating for the military and the economy. Others point out that after sequestration, the Pentagon's base defence budget, which does not include additional funds for the war in Afghanistan - will remain above the Cold War average, and close to the highest level since World War II.

Chuck Spinney, who worked as an analyst in the US secretary of defence's office for 26 years, believes it is difficult for the United States to reap the benefits of a peace dividend because of the workings of the military-industrial complex that President Dwight Eisenhower warned about in his final 1961 address.

"It's what in Washington we call an iron triangle," Spinney says, " you have an alliance between the private sector, the defence contractors, the executive branch, in this case the Pentagon, and the legislative branch."

Everyone benefits from expensive procurement projects - the Pentagon gets weapons, defence companies get to make profits, and politicians get re-elected by funding armaments that generate jobs for constituents and campaign contributions from defence companies.

The result, according to Spinney, is a defence budget "that is packed to the gills with weapons we don't need, with weapons that are underestimated in their future costs".

The Pentagon and defence contractors low-ball costs and exaggerate performance in the early stages of a project to "turn on the money spigot". Then the companies engage in "political engineering," they spread the contracts and employment for a weapon around to as many Congressional districts as possible. They do that, Spinney says, so that once cost-overruns and performance problems become apparent, "you can't do anything about it [because] there's too much political support".

The F-35 Joint Strike Fighter is a textbook case of a Pentagon procurement project that reveals why it is difficult to cut the defence budget. Three versions of the F-35 are being built for the Air Force, Navy and Marines by Lockheed Martin, the largest defence contractor in the US. The F-35 is the most expensive military weapons programme in US history, bigger than the Manhattan Project that produced nuclear weapons.

The F-35 was sold as a programme that would cost $226bn for about 2,900 aircrafts. It is now seven years behind schedule, and the price has increased almost 100 percent to $400bn for only 2,400 fighters. At least another $1 trillion will be required for operations and maintenance of the F-35 over its lifetime.

Pierre Sprey, an aircraft engineer and analyst who was one of Defense Secretary Robert McNamara's 'whizz kids' in the 1960s, believes that the project should be cancelled or "there will be so little money left over for anything that's needed, it'll be unbelievable. They'll be cutting people, pilots, training, everything just to pay for this thing."

 

There will be so little money left over for anything that's needed, it'll be unbelievable.

Pierre Sprey, an aircraft engineer and analyst

Sprey played a key role in the design and procurement of the F-16 fighter and the A-10 ground support plane, two mainstays of the current US Air Force fleet.

Mike Rein, the F-35 spokesman for Lockheed, says that the company saw the period from 2012 and into 2013 as "a step of great progress for the programme and [something which is] certainly going in the right direction". He points to the tests of the F-35 that were completed in 2012. Sprey argues that "they're re-testing stuff they already failed. So this isn't progress. This is like every day that you're flying, you're finding new problems. And you're slipping the schedule worse and worse."

The F-35 was supposed to be operational by 2012, but critics say it is unlikely to be deployed before 2017 at the earliest.

Despite a litany of engineering and performance problems, Congress continues to support the programme. Lockheed has spread jobs and contracts to 47 states and Puerto Rico, according to its website.

The company also seems to have an international political engineering strategy - eight countries besides the US are involved in the aircraft's development program - including Britain, Italy, Canada, Australia and Turkey. Meanwhile, Israel, Singapore and Japan have plans to buy the fighter.

According to Spinney, that "makes it even more difficult to cut the programme because now you're creating an international incident of some kind. That's no accident. It was done deliberately."

Pork barrel deal-making that goes on in Congress over weapons projects also makes it hard to secure a peace dividend.

According to William Hartung of the Center for International Policy, "there will be a sort of log rolling process where you know, ‘I'll support your weapons system if you support my weapons system.' And so once that horse trading goes on, then it's much harder to cut anything."

Two years ago, the US army announced that it could save close to $2.8bn by pausing production of the Abrams M1 tank. Ray Odierno, the army chief of staff, said the M1 fleet was in good shape and no more tanks were needed. The Pentagon does not see much use for the M1 in confronting 21st century threats like terrorism and piracy. However, Congress did not go along. Over the last two years, it has provided $355bn to keep the M1 production line rolling at the Joint Systems Manufacturing Center in Lima, Ohio.

General Dynamics, which operates the tank plant, spent $22m on lobbying Congress over the past two years, and about $2m on campaign contributions. According to the David Berger, the mayor of Lima, General Dynamics also put together a study claiming that it would be more cost-effective to keep the tank plant open now than to reopen the plant in the future if it was needed.

The company would not send us the cost study, and declined our request for an interview.
Hartung says that Pentagon contractors have "for years used the jobs argument to revive weapons systems that have been cancelled. To push for things that even the Pentagon itself has not wanted." For months, a study has been circulating in Washington, underwritten by the Aerospace Industries Association, a major defence industry trade group. It claims that a million jobs would be lost as a result of sequestration cuts to defence spending.

Hartung, who has analysed the study, says it exaggerates the potential job loss number by a factor of three, and that many of those jobs will be replaced. He points out that spending on education, health care, and infrastructure "can create 1.5 to 2 times as many jobs. So the economy would be much better off spending on things other than the Pentagon."

Several recent reports examining ways to cut Pentagon spending call for changes in the US nuclear weapons posture. They claim that it would produce hundreds of billions of dollars of savings in coming decades, and the Obama administration is reportedly considering nuclear weapons cuts. But they will be difficult to achieve.

The economy would be much better off spending on things other than the Pentagon.

William Hartung, the Center for International Policy

"People are still mired in Cold War thinking and they feel like the more nuclear weapons we have the better," Hartung says. "And in addition to that the nuclear weapons industry has some of the biggest strongest companies in the military industrial complex."

Lockheed Martin builds submarines, launches ballistic missiles, and runs the nuclear weapons laboratories; General Dynamics builds nuclear subs; and Northrop Grumman, Boeing and Lockheed Martin are all hoping to build the next nuclear bomber.

Chuck Hagel, the new US secretary of defence, was a member of a US Nuclear Policy Commission sponsored by the anti-nuclear arms group Global Zero. Headed by a former vice chairman of the US joint chiefs of staff, the commission called for shrinking the number of US nuclear warheads from 5,000 to 900. Commission members also thought there was little risk in eliminating ballistic missiles from the US nuclear delivery triad of submarines, bombers and missiles.

At his confirmation hearing, Hagel was attacked by senators whose states have a stake in the nuclear weapons business, and subsequently criticised by the staff of conservative think tanks like the Heritage Foundation. Steve Bucci, the head of the Center for Foreign Policy Studies at Heritage, believes that any change in America's nuclear posture would be "a very foolish thing to do".

Along with two other think tanks, Heritage has launched a campaign called Defending Defence to ward off cuts to the US defence budget. A major reason is the potential threat they see from China, which Bucci says "cannot be underestimated. They are trying to make themselves a world power, not just a regional power."

In his view, the US needs to keep defence spending high, in case the Chinese become "more aggressive and hostile".

Concerns about China were reflected in the Obama administration's announcement last year that it is re-positioning US military resources to the Asia-Pacific region after the wars in Iraq and Afghanistan. It is estimated that China spends about one-fifth to one-quarter as much on its military as the US. Spinney and others see warnings about China and the administration's so-called Asia-Pacific "pivot" as a way to bolster defence spending in the face of pressure for cuts.

"We need a threat," Spinney says, "Al-Qaeda has sort of run out of strength and we have to have a new threat to justify continued spending." Spinney believes that there is little chance of a peace dividend after the wars in Iraq and Afghanistan. "We are going to pivot to Asia and increase the defence budget," he says.

There are signs he could be right.

This month, President Obama released a 2014 federal budget proposal that called for $526.6bn in funding for the department of defense. It was widely expected that the defence total would be at least $50bn less.

The White House and the Pentagon chose to ignore the statutory requirement for a $50bn reduction mandated by sequestration. They apparently hope that sequestration can be overturned, and defence budget cuts already agreed to, reversed. Instead of laying the groundwork for a peace dividend by putting the Pentagon on a glide path to smaller budgets, the administration's proposal projects increases in America's base defence budget over the next five years.