Allison Kilkenny: Unreported

Israel: Boycott, Divest, Sanction

Posted in politics by allisonkilkenny on January 8, 2009

Naomi Klein

002-0725213133-israel-palestineIt’s time. Long past time. The best strategy to end the increasingly bloody occupation is for Israel to become the target of the kind of global movement that put an end to apartheid in South Africa. 

In July 2005 a huge coalition of Palestinian groups laid out plans to do just that. They called on “people of conscience all over the world to impose broad boycotts and implement divestment initiatives against Israel similar to those applied to South Africa in the apartheid era.” The campaign Boycott, Divestment and Sanctions—BDS for short—was born. 

Every day that Israel pounds Gaza brings more converts to the BDS cause, and talk of cease-fires is doing little to slow the momentum. Support is even emerging among Israeli Jews. In the midst of the assault roughly 500 Israelis, dozens of them well-known artists and scholars, sent a letter to foreign ambassadors stationed in Israel. It calls for “the adoption of immediate restrictive measures and sanctions” and draws a clear parallel with the antiapartheid struggle. “The boycott on South Africa was effective, but Israel is handled with kid gloves.… This international backing must stop.” 

Yet even in the face of these clear calls, many of us still can’t go there. The reasons are complex, emotional and understandable. And they simply aren’t good enough. Economic sanctions are the most effective tools in the nonviolent arsenal. Surrendering them verges on active complicity. Here are the top four objections to the BDS strategy, followed by counterarguments. 

1. Punitive measures will alienate rather than persuade Israelis. The world has tried what used to be called “constructive engagement.” It has failed utterly. Since 2006 Israel has been steadily escalating its criminality: expanding settlements, launching an outrageous war against Lebanon and imposing collective punishment on Gaza through the brutal blockade. Despite this escalation, Israel has not faced punitive measures—quite the opposite. The weapons and $3 billion in annual aid that the US sends to Israel is only the beginning. Throughout this key period, Israel has enjoyed a dramatic improvement in its diplomatic, cultural and trade relations with a variety of other allies. For instance, in 2007 Israel became the first non–Latin American country to sign a free-trade deal with Mercosur. In the first nine months of 2008, Israeli exports to Canada went up 45 percent. A new trade deal with the European Union is set to double Israel’s exports of processed food. And on December 8, European ministers “upgraded” the EU-Israel Association Agreement, a reward long sought by Jerusalem. 

It is in this context that Israeli leaders started their latest war: confident they would face no meaningful costs. It is remarkable that over seven days of wartime trading, the Tel Aviv Stock Exchange’s flagship index actually went up 10.7 percent. When carrots don’t work, sticks are needed. 

2. Israel is not South Africa. Of course it isn’t. The relevance of the South African model is that it proves that BDS tactics can be effective when weaker measures (protests, petitions, back-room lobbying) have failed. And there are indeed deeply distressing echoes of South African apartheid in the occupied territories: the color-coded IDs and travel permits, the bulldozed homes and forced displacement, the settler-only roads. Ronnie Kasrils, a prominent South African politician, said that the architecture of segregation that he saw in the West Bank and Gaza was “infinitely worse than apartheid.”That was in 2007, before Israel began its full-scale war against the open-air prison that is Gaza. 

3. Why single out Israel when the United States, Britain and other Western countries do the same things in Iraq and Afghanistan? Boycott is not a dogma; it is a tactic. The reason the BDS strategy should be tried against Israel is practical: in a country so small and trade-dependent, it could actually work. 

4. Boycotts sever communication; we need more dialogue, not less. This one I’ll answer with a personal story. For eight years, my books have been published in Israel by a commercial house called Babel. But when I published The Shock Doctrine, I wanted to respect the boycott. On the advice of BDS activists, including the wonderful writer John Berger, I contacted a small publisher called Andalus. Andalus is an activist press, deeply involved in the anti-occupation movement and the only Israeli publisher devoted exclusively to translating Arabic writing into Hebrew. We drafted a contract that guarantees that all proceeds go to Andalus’s work, and none to me. In other words, I am boycotting the Israeli economy but not Israelis. 

Coming up with our modest publishing plan required dozens of phone calls, e-mails and instant messages, stretching from Tel Aviv to Ramallah to Paris to Toronto to Gaza City. My point is this: as soon as you start implementing a boycott strategy, dialogue increases dramatically. And why wouldn’t it? Building a movement requires endless communicating, as many in the antiapartheid struggle well recall. The argument that supporting boycotts will cut us off from one another is particularly specious given the array of cheap information technologies at our fingertips. We are drowning in ways to rant at one another across national boundaries. No boycott can stop us. 

Just about now, many a proud Zionist is gearing up for major point-scoring: don’t I know that many of those very high-tech toys come from Israeli research parks, world leaders in infotech? True enough, but not all of them. Several days into Israel’s Gaza assault, Richard Ramsey, the managing director of a British telecom specializing in voice-over-internet services, sent an email to the Israeli tech firm MobileMax. “As a result of the Israeli government action in the last few days we will no longer be in a position to consider doing business with yourself or any other Israeli company.” 

Ramsey says that his decision wasn’t political; he just didn’t want to lose customers. “We can’t afford to lose any of our clients,” he explains, “so it was purely commercially defensive.” 

It was this kind of cold business calculation that led many companies to pull out of South Africa two decades ago. And it’s precisely the kind of calculation that is our most realistic hope of bringing justice, so long denied, to Palestine. 

This column was first published in The Nation 

Further Information:
The only international news network covering every aspect of the war on Gaza is Al Jazeera English. The station isn’t available in North America but you can watch it live in high-quality through www.livestation.com (player download is required).

The Summers Conundrum

Posted in Barack Obama by allisonkilkenny on November 13, 2008

 dr-lawrence-h-summers-82Alternet.org via The Nation

Mark Ames explains why Barack Obama’s possible appointment of Lawrence Summers will be bad news, and deliver inevitable disappointment earlier than expected.

—————–

We all know in the backs of our minds that Barack Obama’s incredible victory will eventually be followed by disappointment. But does it have to come so soon, and hit so hard? The answer will be yes, if Lawrence Summers is named treasury secretary in the president-elect’s cabinet, as many observers believe will be the case. Summers was one of the key architects of our financial crisis — hiring him to fix the economy makes as much sense as appointing Paul Wolfowitz to oversee the Iraq withdrawal. And when you look at the trail of economic destruction Summers left behind in other crisis-stricken countries who sought his advice in the past, then “terror” might be a more appropriate word than “disappointment.”

The conventional wisdom is that Summers is the “centrist” choice — Fareed Zakaria (“I think Summers is an extraordinarily brilliant guy”) and David Gergen (“Larry Summers would be superb at this job”), two titans of centrism, both weighed in Sunday on the Stephanopoulos show in favor of Summers. And yet so far the debate over Summers has been largely confined to two outrageous moments in his career: his 1991 World Bank memo calling Africa “UNDER-polluted,” and his more recent declarations, while serving as president of Harvard, about women’s genetic inferiority in math and science. By themselves, these two incidents might be dismissed as merely provocative in a maverick-moron sort of way, as many of Summers’ supporters argue; but in the context of Summers’s track record, in which he oversaw the destruction of entire economies and covered up cronyism and corruption, his Africa memo and sexist declarations aren’t exceptions but rather part of a disturbing pattern.

From the start, Summers has been on the wrong side of Obama’s supporters. In 1982, while still a graduate student at Harvard, Summers was brought to Washington by his dissertation advisor Martin Feldstein, the supply-side economist, to serve on Ronald Reagan’s Council of Economic Advisors. Those first years in the Reagan administration were crucial in the right-wing war against New Deal regulation of the banking system and financial markets — a war that Reagan’s team won, and that we’re all paying for today. Although Summers eventually identified himself with the Democratic Party — albeit the right wing of that party — nevertheless, as the New York Times‘s Peter T. Kilborn wrote in 1988:

 

He worked for 10 months as a top analyst in President Reagan’s Council of Economic Advisers when his mentor, Martin S. Feldstein, was running it, and his colleagues don’t recall him venting anti-Reagan heresies then ….

 

“One of the ironies of this business is that Summers’s economics are quite close to Feldstein’s,” said William A. Niskanen, who was a member of the Feldstein council.

It’s ironic if you expected Summers to be a liberal Democrat — but par for the course in the context of Summers’s real record. Some fifteen years after Summers’s stint in the Reaganomics war room, he reappears as one of the key villains fighting to suppress the regulatory efforts of a top official, Brooksley Born, who was trying to call attention to the dangers of the unregulated derivatives, such as credit swap defaults, which today are considered the key to the current economic crisis.

But let’s return to the Summers timeline. After his stint in the Reaganomics brain trust, he returned to Harvard to serve as one of the university’s youngest professors. In 1988, he was Michael Dukakis’s chief economic advisor, but when that campaign failed to bring Summers to power, he turned to America’s great rival, the former Soviet Union, to try out his economic experiments. In 1990, Lithuania, a restive Soviet republic seeking independence, hired Summers to advise on that country’s economic transformation. Poor Lithuania had no idea what it got itself into. This was Summers’s first opportunity to tackle a country in economic crisis and put his wunderkind theories into practice. The results were literally suicidal: in 1990, when Summers first arrived, Lithuania’s suicide rate was 26.1 per 100,000 and falling. Just five years after Summers got his hands on Lithuania’s economy, life became so unbearable under the economic transition that the suicide rate nearly doubled to 45.6 per 100,000, worse than any other ex-Soviet republic in transition. In fact, it was the highest suicide rate in the world, suggesting something particularly harsh and brutal about the economic transition in that country as opposed to the others, where suffering and pain were common. Things got so bad that in 1992, after just two years of Summers-nomics, the traumatized Lithuanians voted the communist party back into power, the first East European nation to do so — even though just a year earlier Lithuanians actually died on the streets fighting communism.

Fresh off his success in Lithuania, Summers moved to the World Bank, where he was named the chief economist in 1991, the year he issued his famous let’s-pollute-Africa memo. It was also the year that Summers, and his Harvard protg Andrei Schleifer (who worked with Summers on the Lithuania economic transformation), began their catastrophic “rescue” of Russia’s crisis-ridden economy. It’s a complicated story involving corruption, cronyism and economic devastation. But by the end of the 1990s, Russia’s GDP had collapsed by more than 60 percent, its population was suffering the worst death-to-birth ratio of any industrialized nation in the twentieth century, and the financial markets that Summers and Schleifer helped create had collapsed in what was then the world’s biggest debt default ever. The result was the rise of Vladmir Putin and a national aversion to free markets and anything associated with Western liberalism.

But that’s not all. Summers, through Schleifer, was also tainted with some of that country’s corruption, which resulted in a US Justice Department lawsuit against Schleifer and others. While Schleifer was being paid by US taxpayers to advise the Russians on capital markets in the 1990s, his wife, Nancy Zimmerman, bought and traded Russian equities for a Boston hedge fund she ran — they even used Schleifer’s US taxpayer-funded offices to run Zimmerman’s Moscow-based hedge fund operations.

How close were Larry Summers and Andrei Schleifer? According to former Boston Globe economics correspondent David Warsh, Summers and Schleifer “were among each other’s best friends,” and Summers taught Schleifer “as an undergraduate, sent him on to MIT for his PhD, took him along on an advisory mission to Lithuania in 1990, and in 1991, shepherded his return to Harvard as full professor, where he was regarded, after Martin Feldstein and Summers, as the leader of the next generation.”

In 2000, the Justice Department sought $102 million in damages from Schleifer, one of Schleifer’s Harvard associates and Harvard University in a conflict-of-interest suit resulting from Schleifer’s role as the lead US adviser to Russia’s economic reforms — questioning the way Schleifer and his wife profited from his position. Schleifer’s Harvard team in Moscow was funded by USAID in a no-bid contract, and supported by Summers as soon as he moved into the Treasury Department in 1993. So Schleifer benefited from his relationship with Summers twice: first, by getting a choice contract as the US government’s man in Moscow in the 1990s when Summers was in power in the US government, one that benefited his wife’s hedge fund (earlier this year, Portfolio suggested that the Schleifers’ hedge fundsmade them billionaires ). Then after Schleifer returned to Harvard to face the lawsuit, Summers, now president of Harvard, presided over a controversial settlement that all but let his protg off the hook. Thanks to pressure by Summers, Schleifer kept his chair at Harvard, where he continues to teach today.

Summers’s other favorite man in Russia was Anatoly Chubais — who consistently ranks at the top of Russia’s “ most hated man” polls. Chubais was executor of the Russian government’s privatization program, in which state companies worth tens of billions of dollars were handed over to insiders for a fraction of their worth in blatantly rigged auctions. Summers praised Chubais as a “demigod” and called Chubais and his free-market cohorts “the dream team.” In September 1998, after Russia’s capital markets collapsed, along with billions in US-taxpayer-backed loans, Chubais boasted to a Russian newspaper, “We swindled them.” By “them,” he meant the Western and American aid institutions that funded his reforms.

In light of all of the corruption, cronyism and devastation that have marked his career, Summers’ statements about an under-polluted Africa or intellectually-inferior women no longer seem like provocative eccentricities but part and parcel of the Summers shtick. And now there’s talk that President-elect Obama may hand the keys to national treasury to Summers — meaning that he’ll be in charge of overseeing a trillion-dollar taxpayer bailout of the entire financial industry, a process already rife with conflicts of interest, cronyism and corruption — as detailed by Naomi Klein.

The bailout, as currently implemented, threatens to devastate America’s economy much as Russia’s and Lithuania’s were devastated before. The idea that this is exactly the right time and place to put Larry Summers in charge of our economy’s future is so frightening that it makes the Sarah Palin vice presidential choice seem almost quaint by comparison. Let’s hope the rumors are wrong.

Mark Ames is a contributor to eXiledonline.com. He is the author ofGoing Postal: Rage, Murder, and Rebellion: From Reagan’s Workplaces to Clinton¿s Columbine and Beyond.

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