Poverty is a Weapon of Mass Destruction - Part II

Poverty isn't something you choose. No one chooses to live on less than it takes to survive. No one chooses to remain in poverty and watch their loved ones suffer. Poverty is done to you.

It has always been that way.
Curious who does it and what the cost will be?  

For a recent example from the financial crash of '07/'08, the world's poor began to die at the hand of our financial behemoths. The death toll is still rising.

Lehman Brothers and other firms took the world to the brink of economic collapse. Richard Fuld, head of Lehman Brothers admitted to congress that he'd taken $300 million in pay... while leading the firm to a $600 billion (600 BILLION $) bankruptcy that helped precipitate the disaster. The biggest failure in history.

Goldman-Sachs, which bears a portion of responsibility through GSAMP, paid record staff bonuses during the collapse and after. For creating, selling, spinning off, and then short-selling bad mortgage instruments as they defaulted. The $182 Billion bailout of AIG was followed by millions for AIG staff bonuses which are a scandal all on their own.

The global downturn/recession hit the poor the hardest, as always. It is tough enough on the poor in America, but developing-country families lost around 20% of their income, dropping millions of households below the extreme poverty level. The poorest began to die quickly and continue to do so now more than three years later.

A UNESCO study highlights wider human development impacts of the '08 financial crisis specifically, including the prospect of an increase of between 200,000 and 400,000 in infant mortality. Child malnutrition, already a rising trend, will be one of the main drivers of higher child death rates. "Millions of children face the prospect of long-term irreversible cognitive damage as a result of the financial crisis," says Montjourides. A few thousand folks did it all.

"Now a child born in sub-Saharan Africa faces an under-five mortality rate that is 24 times higher than in the industrialized nations." When you live on $2 a day and spend half on food, an increase in the price of food is deadly.

Long before this summer's political debt ceiling fiasco and subsequent financial turmoil worldwide, the International Monetary Fund said the world's 22 poorest countries might need an additional $25bn aid this year to cope with the financial crisis. If the crisis is worse than the IMF expects, though, that could hit $140bn. To keep folks from dying by the tens, perhaps hundreds of thousands.

The crisis is now officially worse, and the poor continue to die as a direct result of US and EU economic policy.

So, a few hundred Wall Street decision makers and a few hundred elected representatives have put their nation and the world at risk, to the point where people are dying by the thousands; that pretty much makes them culpable, doesn't it? Manslaughter, perhaps. Like the drunk who didn't set out to smash the school bus, but was selfishly indifferent enough to once again try driving while intoxicated.

There's plenty of blame to go around. There were foolish, perhaps irresponsible, even arrogantly incompetent folks involved over the last decade. Wall Street, Congress, the White House, and the intravenously attached lobbyists ... The worst of it; they don't any longer represent the rest of us Americans.

And it extends internationally to similar activities in the EU and beyond, of course. Greek and Icelandic insolvency, French protests over benefits, Japanese debt downgraded, India's financial corruption scandals. Weak fiscal governance is a world problem with the developed nations carrying the largest responsibility.

These folks, the key players in the collapse, don't deserve their bonuses or their offices. They deserve to stand in a village center among the surviving members of the families of the now tens of thousands who've died and the eventual hundreds of thousands who will likely die because of their actions, and there give an account. They will, of course, ... stand and give an account, I mean. We all will.

In recent days, as our US lawmakers managed to compound the matter, deepening and extending the impact on the poor, we find ourselves being the world's great curse.

Want a better world? Yea, me too.

The United States Senate issuing the Levin–Coburn Report found “that the '07/'08 crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”[1]

Following a quick review, it appears that the Levin-Coburn report lays primary blame for the financial collapse at the feet of reckless Wall Street executives, federal regulators “who cast a blind eye,” and out-of-control credit rating agencies who downplayed the serious risks of “crap” mortgage backed securities and collateralized debt obligations in order to maintain record breaking fees collected from the very entities requesting the ratings. Megabanks like Washington Mutual and Countrywide also aggressively shifted their sales from lower risk fixed rate loans to subprime adjustable loans, flooding the market seeking greater profit margins. Senator Levin pointed out that “rampant conflicts of interest are the threads that run through every chapter of this sordid story.”

This report was issued by congress earlier this year, just a few months before their own handling of the US debt issue hit the international economies yet again.

UNICEF Reports
International Monetary Fund report
United Nations reports
UN Standing Committee on Nutrition
and an interesting study from Stanford University on a Sovereign (National) Fiscal Responsibility Index

In 2007, a whopping 91% of AAA-rated mortgage securities were downgraded to junk status, meaning they were now the riskiest kind of security. From 'best investment' to 'worst investment' in one step. Truth was, they were junk all along but were fraudulently misrepresented by the players.

"Looking back, if any single event can be identified as the immediate trigger of the 2007 financial crisis, it would be the mass downgrades," said Levin. "Those downgrades hit the market like a hammer, making it clear that [they] had been a colossal mistake."  No, not a mistake; they were fraud.

What makes it worse, said Levin, is that credit raters and the banks knew that what they were giving to investors was junk.  Note it was not a mistake; it wasn't accidental.  The securities were knowingly sold as AAA by folks who knew they were junk; it was deliberate fraud.

20110804 Update: The US and international debt squabble has tanked the global market place.

20110822 Update: The price of maize (corn) in the Horn of Africa has doubled over the last year, the World Bank has said. Families on the edge can no longer feed their children.

The world economy remains vulnerable and fragile despite almost 5 years of post-crash efforts. As is usually the case, the poor suffer most.

When we think of the poor, we think in broad strokes.
The voices of the poor are often unheard, and the
individuals themselves, forgotten.

It only took about a decade of Wall Street sponsored Federal deregulation to produce the Great Recession. "If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand."

--Milton Friedman, American economist and Nobel Prize recipient

Accountability? Citizens and the world deserve the backing of law. Wall Street should be held accountable like anyone else who wields a deadly weapon.

The Dogs of War

Cry ‘Havoc,’ and let slip the dogs of war;  
That this foul deed shall smell above the earth with carrion men, groaning for burial.  

~Marc Anthony shortly after Caesar was assassinated (from Shakespeare's 'Julius Caesar')

The military order Havoc! was a signal given to English military forces to direct the soldiery (in Shakespeare's words 'the dogs of war') to pillage and chaos.

The prelude to war is worth understanding.  We commonly ascribe a single event, an assassination, an attack as the starting of hostilities, but there's usually much more.

The assassination of Archduke Ferdinand, for example, marks the start of World War I, but it was not the cause.  The conflict emerged from colonial expansion, competition for wealth, power and prestige, and the economic and military rivalry among the European powers.  All these contributed to a hostile climate and the final spillover.

As the 20th century began, the world was being swallowed by empires. Rulers scrambled
 for the greatest expanse, the largest domain.  Europe's citizens, without thought for the
 people just like themselves in other regions, cheered their conquering monarchs.

Under Kaiser Wilhelm II, Germany moved from the status quo to an aggressive stance. Kaiser Wilhelm decided against renewing a treaty with Russia, opting for an Austrian alliance. France and Russia signed an alliance in 1894 united by fear and resentment of Berlin. In 1898, Germany began to build up its navy, alarming the world's most powerful maritime nation, Britain. Recognising the threat to her security, Britain abandoned the policy of holding aloof from entanglements with continental powers. Within ten years, Britain had concluded agreements with her two major colonial rivals, France and Russia. Europe was divided into two armed camps: the Entente Powers and the Central Powers, and their populations began to see war not merely as inevitable but even welcome.

In the summer of 1914 the Germans were prepared to run the risk of a large-scale war. The crumbling Austro-Hungarian Empire decided, after the assassination on 28 June, to take action against Serbia, which was suspected of being behind the murder. The German government issued the so-called 'blank cheque' on 5-6 July, offering unconditional support to the Austrians, despite the risk of war with Russia. Germany, painted into a diplomatic corner by Wilhelm's bellicosity, saw this as a way of breaking up the Entente, for France and Britain might refuse to support Russia.

A month after the war began, Germany drew up far-reaching war aims. French power would be broken, Belgium reduced to vassal status, and a colonial empire carved out in Africa and elsewhere.  Other countries had plans for empire of their own.

Kaiser Wilhelm II, 1902

Ruler of Germany and

Prussia

King Ferdinand I, 1914

Romania

Nicholas II, 1896

Emperor of Russia, Grand

Duke of Finland, King of

Poland

King George V, 1911
Great Britain

WWI was a family contest.  

During the First World War, monarchs of countries from both sides were closely related by descent from either Queen Victoria, King Christian IX or both.

• King George V of Great Britain, Kaiser Wilhelm II of Germany and Empress Alexandra Feodorovna of Russia, empress consort of Tsar Nicholas II, were all first cousins. 
• Other relatives who fought against Germany were Romania, whose queen-consort, Marie, wife of King Ferdinand I, was a cousin of the Kaiser and Greece, whose queen-consort, Sophia, wife of King Constantine I, was the Kaiser's own sister. 
• King George V was a first cousin of both Tsar Nicholas II of Russia and King Constantine I of Greece. 
• Other first cousins of George V, whose countries were neutral during the war, were King Christian X of Denmark, Queen Victoria Eugenie of Spain (queen-consort of King Alfonso XIII) and King Haakon VII of Norway (who was George's brother-in-law by marriage to George's sister).

The human cost of the war is beyond comprehension.  From the first gunshot fired in anger in 1914 to the 11th hour of the 11th day on the 11th month in 1918, the Great War took its toll.  Of the 65 million men who fought in World War 1:

• 8 million were killed in battle.
• 2 million died of illness and disease.
• 21.2 million were wounded.
• 7.8 million were taken prisoner or went missing in action.
• and 6.8 million civilians were killed.

In every nation that took part in the combat, there were few families who hadn't lost a relative in the war; a brother, a son, a father, a nephew, or an uncle. Some towns and villages lost every male of fighting age. If that community lay near a combat zone, many others were killed as well.

The war was not limited to Europe; it involved multi-ethnic empires such as Great Britain, France, Germany, Russia, Austro-Hungary and Turkey. The diverse ethnic groups in these multi-ethnic empires were conscripted for military service.  [A] (B)  Losses from the colonies:

 Losses from British colonies

Britain recruited Indian, Chinese, native South African, Egyptian and other overseas labour to provide logistical support in the combat theatres.^[C] British casualties in East Africa include the deaths of 44,911 recruited labourers.^[D] [E]

 Ghana (the Gold Coast): 16,200  Kenya (British East Africa): 32,000  Malawi (Nyasaland): 3,000  Nigeria (part of British West Africa): 85,000  Sierra Leone (part of British West Africa): 1,000  Uganda (the Uganda protectorate): 1,500  Zambia (Northern Rhodesia): 2,000  Zimbabwe (Southern Rhodesia): 5,716 ^[F]

 Losses from the Republic of the Congo (The Belgian Congo) - Part of the Kingdom of Belgium; 155,000  

 Losses from French colonies

In 1857, France began recruiting men from her West

African colonies to use in military campaigns. During

World War I, and even more so for World War II,

there was a significant expansion of this pool of men

through conscription, as France became aware that their

so-called tirailleurs sénégalais (soldiers from all over

 French West Africa, and not just Senegal), would be

 an important resource in their struggle against Germany.

 Algeria (French Algeria): 26,000  Vietnam (French Indochina): 12,000  Mali (French West Africa): 60,000  Morocco (the French protectorate of Morocco): 8,000  Senegal (French West Africa): 36,000  Guinea (French West Africa): 14,500  Madagascar: 2,500 military  Benin (French West Africa): 27,000  Burkina Faso (French West Africa): 17,000  Republic of the Congo (French Equatorial Africa): 32,000  Ivory Coast (French West Africa): 12,000  Tunisia (French Tunisia): 2,000  Chad (French Equatorial Africa): 1,500  Central African Republic (French Oubangui-Chari): 1,000  Niger (French West Africa): 1,000  Gabon (French Equatorial Africa): 10,500

Askaris in German East Africa

 Losses from German colonies

 Tanzania (German East Africa): 50,000  Namibia (German South-West Africa): 1,000  Cameroon (Kamerun): 5,000 military and 50,000 others  Togo (German Togoland): 2,000  Rwanda (German East Africa): 15,000

After the war, the winners levied harsh reparations and divided the contested lands among them.  Twenty years later, we did it again.  In WWII, 50-60 million died, a third of whom were civilians.

The world was shattered.  People's tolerance for war and destruction was on the wane, and tactics of aggression began to change.  Recognizing that the era of 'conquer and occupy' was ending, power players from the ruling families and their industry counterparts on the global stage turned to exploitation of labor and resources in developing countries to satisfy their aspirations for conquest. 

The era of Economic Conquest begins.  Trade practices were effectively enslavement.  Resources were acquired and exported without benefit to the host nation.  Financial practices were predatory, designed to extract the target country's productivity in the form of interest payments. Refinements and regulations in the financial industry have not abated that extraction of wealth in any measurable fashion.  The developing nations are without defense.

The human cost from today's almost exclusively economic war far exceeds that of the two world wars combined.  The following difficulties persist as the direct and indirect results of political and economic policies in the developed world:

• Almost half the world — over three billion people — live on less than $5 a day per person.
• At least 80% of humanity lives on less than $10 a day.  1
• More than 80 percent of the world’s population lives in countries where income differentials are widening.  2
• According to UNICEF, 22,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death.”  3
• Around 27 percent of all children in developing countries are found to be underweight or stunted. The two regions that account for the bulk of the deficit are South Asia and sub-Saharan Africa.
  
  Water problems affect half of humanity:

• Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation. 
• Almost two in three people lacking access to clean water survive on less than $2 a day, with one in three living on less than $1 a day. 
• Access to piped water into the household averages about 85% for the wealthiest 20% of the population, compared with 25% for the poorest 20%. 
• 1.8 billion people who have access to a water source within 1 kilometre, but not in their house or yard, each consume around 20 litres per day. In the United Kingdom the average person uses more than 50 litres of water a day flushing toilets (where average daily water usage is about 150 liters a day. The highest average water use in the world is in the US, at 600 liters day.) 
• Some 1.8 million child deaths each year as a result of diarrhea. 
• The loss of 443 million school days each year from water-related illness. 
• Millions of women spending several hours a day collecting water. 
• A mere 12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World.(ref) 
• Costs with health spending, productivity losses and labour diversions … are greatest in some of the poorest countries. Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceeds total aid flows and debt relief to the region. 10

Firewood:  In developing countries some 2.5 billion people are forced to rely on biomass - firewood, charcoal and animal dung - to meet their energy needs for cooking. In sub-Saharan Africa, over 80 percent of the population depends on traditional biomass for cooking, as do over half of the populations of India and China.  14

Suffocation from the indoor use of solid fuels [by poorer segments of society] is a major killer. It claims the lives of 1.5 million people each year, more than half of them below the age of five: that is 4000 deaths a day. To put this number in context, it exceeds total deaths from malaria and rivals the number of deaths from tuberculosis.  15

Wealth and Debt: In 2005, the world's wealthiest fifth did 76.6% of private consumption. The poorest fifth just 1.5%.16  

For every $1 in aid a developing country receives, over $25 is spent on debt repayment.2

The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money. 25 

An analysis of long-term trends shows the distance between the richest and poorest countries was about:

1. • 3 to 1 in 1820
   • 11 to 1 in 1913
   • 35 to 1 in 1950
   • 44 to 1 in 1973
   • 72 to 1 in 1992Source27

We are what we do.  Consider the global priorities in spending in 1998

Global Priority	$U.S. Billions
Cosmetics in the United States	8
Ice cream in Europe	11
Perfumes in Europe and the United States	12
Pet foods in Europe and the United States	17
Business entertainment in Japan	35
Cigarettes in Europe	50
Alcoholic drinks in Europe	105
Narcotics drugs in the world	400
Military spending in the world	780

And compare that to what was estimated as additional costs to achieve universal access to basic services in all developing countries:

Global Priority	$U.S. Billions
Basic education for all	6
Water and sanitation for all	9
Reproductive health for all women	12
Basic health and nutrition	13

Source31

The wealth of developing nations is extracted by the international community; aid and assistance projects do not make up the difference.  

Nigeria should be the best place in the world to raise a child, but it's typical of the developing world; most citizens live in abject poverty in an unsafe environment.  Their exported resources alone are worth more each year than the entire productivity of most countries in the world, but the resulting wealth is consumed by multinational corporations and corrupt power players.  The majority of the nation's citizens are disenfranchised, left without a voice or opportunity for change.

We've been at war (economic war) for more than sixty years with extraordinary advances by the financial industry in the last twenty.  And the rich are winning, but only the rich.

Individuals may or may not be willing to face the question -- how much does your lifestyle illustrate the crime?