Banking on the Bomb

The Nuclear Weapons Industry & Its Financial Backers

by JOHN STANTON

“Most financial institutions don’t consider the social and environmental consequences of their investments. Unless members speak up and take action, they’re unlikely to take ethical considerations into account. Our research shows that teachers’ pension funds in the United States, Canada and Britain invest heavily in companies involved in the nuclear weapons industry. Yet polls show that teachers — the guardians of our future, in many ways — are overwhelmingly opposed to nuclear weapons. Through their daily work, teachers promote understanding, tolerance and cooperation. Nuclear weapons are the very antithesis of these virtues. Teachers should refuse to have their retirement savings invested in this horrible industry.”
– Daniela Varano International Campaign to Abolish Nuclear Weapons.

“TIAA-CREF declines to comment.” 
The most open and forthright firm on this matter has been TIAA-CREF. Though they will be in the firing line they have tried to make decent investments.
The International Campaign to Abolish Nuclear Weapons released an eye-popping report on 5 March 2012 titled Don’t Bank on the Bomb. In that report are listings of banks, financial institutions and funds that, in some form, fund the research, design, development, production, deployment and maintenance of nuclear weapons.
Nobel Laureate Bishop Desmond Tutu penned the introduction to the report. He indicated that battling against the entrenched interests (government/military and banks/financial firms) that sustain nuclear weapons and fund their modernization will be a long and arduous struggle. But he points to the model of boycott and disinvestment used to pressure the apartheid government of South Africa as both inspiring and successful.

“Banks and other financial institutions should be called upon to do the right thing and assist, rather than impede, efforts to eliminate the threat of radioactive incineration by divesting from the immoral nuclear arms industry. In the long struggle to end racial segregation in South Africa, our freedom was won with the help of concerned individuals around the world who pressured their leaders and corporate actors to stop funding the racist regime. To those who invested in our country, we said: you are doing us no favor; you are buttressing one of the most vicious systems. Divestment was vital in the campaign to end apartheid in South Africa. Today, the same tactic can – and must – be employed to challenge man’s most evil creation: the nuclear bomb. No one should be profiting from this terrible industry of death, which threatens us all.”

Teach Your Children Well
Don’t Bank on the Bomb offers a treasure trove of data on the financial institutions that invest either directly or tangentially in the nuclear weapons industry. Some financial entities referenced are surprising. One of those is TIAA-CREF which the report describes as “TIAA-CREF: Teachers Insurance and Annuity Association,  College  Retirement Equities Fund is a financial services organization that is the leading retirement provider for people who work in the academic, research, medical and cultural fields. It has US$453 billion in combined assets under management, reported revenue of US$32.22 billion in 2010 and employs 7,200 people. It has major offices in Denver, Charlotte and Dallas as well as 70 local offices throughout the United States. It invests in: Alliant Tech Systems, Babcock & Wilcox, BAE Systems, Boeing, General Dynamics, Finmeccanica, GenCorp, Honeywell International, Jacobs Engineering, Lockheed Martin, and Northrop Grumman.”
TIAA-CREF manages the funds for thousands of K-12, college and graduate school educators in public and private/parochial-religious educational institutions across the United States. Arguably ironic, and certainly contradictory,  is that religious affiliated schools, whose leadership preaches peace and cultural unity at home and abroad, find that their retirement funds depend, in part, on the financial performance of the nuclear weapons industry and military strategists in Washington, DC, Moscow, Beijing, Tel Aviv, London, Delhi and Islamabad.
Landmines and Nukes
The International Campaign to Ban Landmines (ICBL) recently celebrated its 13th Anniversary in March 2012. Next to Bishop Tutu’s South Africa boycott and disinvestment model stands the ICBL’s tireless effort to ban the use of landmines around the world. The grassroots organization was awarded the Nobel Peace Prize for its work which culminated in the signing of the Mine Ban Treaty in “Ottawa, Canada, on 3 December 1997. It entered into force less than two years later, more quickly than any treaty of its kind in history.”
Unfortunately, the flaw in ICBL’s model is that the United States of America and 36 other countries refuse to become parties to the treaty. The USA has splendid company that includes Russia, China, Israel, India and Pakistan. Coincidently, these are the same countries that hold the world’s largest arsenals of nuclear weapons (the UK has signed the Ban Mine Treaty). If these countries are not willing to forsake the use of landmines, then the prospects for eliminating nuclear weapons seems dismal.
At the moment, President Obama has requested $11.5 billion for the FY2013 budget for the National Nuclear Security Administration. Only $2.5 billion of that amount is directed to nonproliferation with the remainder to be funneled to national security purposes.
Religion’s Role
For FY2012, according to the Arms Control Association, the situation was this: “The United States military maintains a modern arsenal of 1,790 deployed strategic nuclear warheads, according to the September 2011 accounting under the New START treaty. These warheads are deployed on Intercontinental Ballistic Missiles (ICBMs), Submarine-Launched Ballistic Missiles (SLBMs), and Strategic Bombers. The Departments of Defense and Energy currently spend approximately $31 billion per year to maintain and upgrade these systems. For Fiscal Year (FY) 2012, the Obama administration is requesting $7.6 billion in funding for weapons activities in the Department of Energy’s National Nuclear Security Administration (NNSA), which oversees the U.S. nuclear stockpile and production complex, a 10 percent increase over the FY 2011 appropriation of $6.9 billion.
In the next four years NNSA plans to spend $9.6 billion on maintaining, securing, and modernizing the nuclear stockpile, and $34 billion on all of its weapons activities programs.  The U.S. military is in the process of modernizing all of its existing strategic delivery systems and refurbishing the warheads they carry to last for the next 20-30 years or more. These systems are in many cases being completely rebuilt with essentially all new parts.”
And that’s big business.
Perhaps some flavor of religion as a stimulant to mobilize a campaign against nuclear weapons development and their haunting presence is necessary. Bishop Tutu is correct, of course. And so is the Ayatollah Khamenei, “…the Islamic Republic, logically, religiously and theoretically, considers the possession of nuclear weapons a grave sin and believes the proliferation of such weapons is senseless, destructive and dangerous.”
John Stanton is a Virginia based writer specializing in national security matters. Reach him at cioran123@yahoo.com

Obama Chooses Wall Street Over Main Street

http://www.truthdig.com/report/item/20081125_obama_chooses_wall_street_over_main_street/

AP photo / Charles Dharapak

They have his ear: Lawrence Summers, left, is just one veteran of Clinton-era deregulation who has found his way into Barack Obama’s inner circle.

By Robert Scheer

Maybe Ralph Nader was right in predicting that the same Wall Street hustlers would have a lock on our government no matter which major party won the election. I hate to admit it, since it wasn’t that long ago that I heatedly challenged Nader in a debate on this very point.

But how else is one to respond to Barack Obama’s picking the very folks who helped get us into this financial mess to now lead us out of it? Watching the president-elect’s Monday introduction of his economic team, my brother-in-law Pete said, “You can see the feathers coming out of their mouths” as the foxes were once again put in charge of the henhouse. He didn’t have time to expound on his point, having to get ready to go sort mail in his job at the post office. But he showed me a statement from Citigroup showing that the interest rate on Pete the Postal Worker’s credit card was 28.9 percent, an amount that all major religions would justly condemn as usurious.

Moments earlier, Obama had put his seal of approval on the Citigroup bailout, which his new economic team, led by protégés of Citigroup Executive Committee Chairman Robert Rubin, enthusiastically endorsed. A bailout that brings to $45 billion the taxpayer money thrown at Citigroup and the guarantee of $306 billion for the bank’s “toxic securities” that would have been illegal if not for changes in the law that Citigroup secured with the decisive help of Rubin and Lawrence Summers, the man who replaced him as Treasury secretary in the Clinton administration.

As Summers stayed on to ensure passage of deregulatory laws that enabled enormous banking greed, Rubin was rewarded with a $15 million-a-year executive position at Citigroup, a job that only got more lucrative as the bank went from one disaster, beginning with its involvement with Enron in which Rubin played an active role, to its huge role in the mortgage debacle. It is widely acknowledged that Citigroup fell victim to a merger mania, which Rubin and Summers made legal during their tenure at Treasury.

Yet despite that dismal record of dismantling sound regulation, Summers has been picked by Obama to be the top White House economic adviser and another Rubin disciple, Timothy Geithner, is the new Treasury secretary. Geithner, thanks in part to the strong recommendation of Rubin, had been appointed chairman of the New York Federal Reserve Bank after working for Rubin and Summers during the Clinton years. Once at the New York Fed, he was the main government official charged with regulating Citigroup, a task at which he obviously failed. Yet over the weekend, it was Geithner who hammered out the Citigroup bailout deal with Treasury Secretary Henry Paulson and a very actively involved Rubin.

As The Washington Post reported, Paulson had indicated last week that no further bailouts were planned before the new administration took office until “Rubin, an old colleague from Goldman Sachs, told Paulson in phone calls that the government had to act.” Rubin conceded in an interview with the Post that he had played a key role in the politics of the bailout.

This outrageous conflict of interest in which Rubin gets to exploit his ties to both the outgoing and incoming administrations was best described by Washington Post writer Steven Pearlstein: “The ultimate irony, of course, is that just as Rubin and Co. at Citi were being bailed out by the Bush administration, President-elect Barack Obama was getting set to announce a new economic team drawn almost entirely from Rubin acolytes.”

As opposed to the far tougher deal negotiated on the bailout of AIG, the arrangement with Citigroup leaves the executives, including Rubin, who brought Citigroup to the brink of ruin, still in charge. Nor is there any guarantee of the value of the mortgage bundles that taxpayers will be guaranteeing. That is because, as candidate Obama clearly stated in his major economics address back in March, the deregulation pushed though during the Clinton years ended transparency in banking.

Why then has he appointed the very people responsible for this disaster to now make it all better? Why not ask him? Heck, yes, it is time for the many of us who responded to his e-mails during the campaign to now challenge our e-mail buddy as to why he suddenly acts as if the interests of Wall Street and Main Street are one and the same.

Robert Scheer is editor in chief of Truthdig and the author of a new book, “The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.”

Why Conservatives Led the Fight Against the Bailout Deal

By Joshua Holland, AlterNet
http://www.alternet.org/story/100857/

On Monday, the Bush administration's massive Wall Street bailout went down to a narrow defeat in the House. After the 228-205 vote, markets crashed, and the usual partisan finger-pointing followed. According to the Washington Post, Speaker Nancy Pelosi "maintained that Democrats 'delivered on our side of the bargain' by getting 60 percent of House Democrats to support a bill that was built around the Bush administration's proposal, whereas 67 percent of House Republicans voted against it."

At first glance, it may appear that the 133 House Republicans who broke with their party's leadership did so out of principle -- that they bravely stood up against a massive cash transfer to those most responsible for precipitating the financial crisis in the first place. They appeared to be gambling a lot in taking that principled position, despite the fact that the bailout had drawn fire from across the political spectrum. The conventional wisdom, after all, has gelled around the idea that only an unprecedented cash infusion into the ailing banking system will stave off a potential Next Great Depression. The message many rebellious conservatives sent was that it takes courage to roll the dice with the world's economy six weeks before an election, even if the public was deeply skeptical of the measure (the reality is that almost none of the lawmakers who face tight races this fall voted for the bailout, fearing a backlash from voters; Congress is not known for courage or principle on the eve of an election).

And there's no question that the bill they and 95 of their Democratic colleagues killed was an extremely bad one, even if some token nods to "Main Street" had been added to help it go down lawmakers' throats more smoothly. Democrats abandoned a key provision -- one vehemently opposed by lenders -- to allow bankruptcy judges to modify mortgages that are in the process of foreclosure, and they accepted only token limits on executive compensation for companies that would be rescued under the plan (PDF). Worst of all was a vaguely worded provision that might have allowed the Treasury to buy up bad paper at the price at which it was originally booked, rather than at those securities' largely unknowable but deeply diminished current value. That would have essentially given a small investor class an opportunity to recover its losses at the expense of the American taxpayer (and future taxpayers, as the bailout would be financed through debt).

But a deeper look reveals another picture of the legislative fight that has occupied Washington since George W. Bush first proposed the bailout. Unlike most House Democrats, who voted against the bill in an attempt to send the plan back to the drawing board to get a deal that might better protect taxpayers and homeowners, House conservatives torpedoed the measure in order to advance their own alternative "bailout," one that's an ideologically motivated back door to bailing out Wall Street without doing anything for Main Street.

The plan is notably light on detail, even for campaign season, when politicians are loath to discuss the fine points of any proposal. But based on what can be gleaned from media reports, the heart of the "alternative" scheme is for the government to sell insurance for securities based on bad loans, rather than buy up the paper directly. Supposedly, the premiums would be high enough to assure that Joe and Jane taxpayer don't get fleeced.

On its face, that idea seems both fiscally sound and decidedly conservative, in the traditional sense of the word.

But remember what the immediate problem we face is all about. The financial industry is weighed down by an enormous "shit pile" of bad paper -- mortgage-backed securities, complex derivatives and insurance-like instruments that were supposed to make all these "creative" investment vehicles somewhat sound. That shit pile, impossible to value accurately, is threatening the whole economy, as lenders hunker down and hold onto their cash reserves in an attempt to ride out the storm of foreclosures, and that's making it tough for businesses and consumers to get credit they need to expand their operations or buy new gizmos.

That's not a situation that lends itself to a government-backed insurance policy. If the premiums aren't deeply subsidized by the American public, they'll be out of reach of troubled banks by definition -- after all, if they had enough cash to cover their bad debts, which will ultimately be the job of the insurer (that's you, me and the people we know), then they wouldn't find themselves on the brink of collapse to begin with. That means the government would still end up effectively buying up the banks' worthless paper piece by piece as the underlying assets on which that paper is written go belly-up. Think of it as the government selling fire insurance for houses that are already ablaze.

So the point was not to spare the taxpayer the expense of Wall Street's shit pile. By offering an alternative plan, House conservatives abandoned a negotiating process that was, at heart, about trying to modify the disastrous Bush-Paulson plan so that it didn't just bail out the financial sector's movers and shakers without getting some concessions for working America.

The other two tenets of the alternative plan are worse still.

In keeping with the tradition of a party that has one policy solution to all economic ills -- cutting taxes on the wealthy -- the conservatives who bucked their leaders also suggested cutting capital gains taxes, even if only on a temporary basis. It's a triumph of ideology over common sense. We've seen stock markets tanking, as investors flee like rats from a sinking ship, seeking safer ground in commodities, which have gone through the roof (oil prices have been moderated somewhat by expectations of a long slowdown that would cut demand). A tax holiday on capital gains would only encourage those investors with steely nerves (and gains) who are staying in the market to join the herd, getting out while it's tax-free to do so. That can only send the already sky-high prices for food, energy and everything else even higher into the stratosphere. Ordinary working people would end up paying on both sides of the deal -- getting soaked for Wall Street's Reckless Lending Insurance and then paying through the nose to put food on the table.

Adding insult to injury is the third leg of the "alternative" bailout plan: more deregulation of the financial sector.

That's nothing short of breathtaking in its audacity. It was a lax regulatory environment that brought us to the verge of collapse in the first place. Exotic security-backed loans -- loans that didn't conform to the standards in place for banks that held deposits, including subprime loans, mortgages given to people who misstated their income and loans with heavy prepayment penalties and huge balloon payments -- are, as one would expect, faring far worse than the kinds of traditional loans that are regulated by the Federal Housing Authority or backed by Fannie Mae. Regulations passed by Congress only three months ago, as the depth of the meltdown had become clear, made "coercing a real estate appraiser to misstate a home's value" and "making a loan without regard to borrowers' ability to repay the loan from income and assets other than the home's value" a no-no; if similar commonsense regulations had been in place over the past decade, the run-up of the real estate market wouldn't have been as frenzied, and we wouldn't see the skyrocketing number of foreclosures we're witnessing today.

Again, none of this is to suggest that Americans should shed a tear for the demise of the compromise deal struck between Treasury Secretary Paulson and the Bush administration -- it was a bad deal that deserved to go down in flames. But it's also becoming increasingly evident that some sort of intervention is necessary to prevent the crisis from spreading through the entire global economy. Rather than pugnaciously cling to a failed ideology by heaping lucre on the wealthiest in the hope that it trickles down to the rest of us, Congress should be going back to the drawing board and coming up with a bailout plan rooted in a modicum of economic justice.

The House conservatives who have proven to be such a fly in the ointment are trying to go the other way -- cooking up a plan that will only deepen Main Street's pain in the name of saving it from Wall Street's predations.

Joshua Holland is an AlterNet staff writer.

© 2008 Independent Media Institute. All rights reserved.

Bailout Protest, NYC!

Updated: These photos were taken by Jeremy Scahill who attended the protests against Bush's bailout in New York City. I especially like the sign that says "Jump! You Fuckers".

Click for larger version.

Click for larger version.

Protesters confront corporate execs staring out the windows at the streets:

Click for larger version.

"Greed Kills" ... "Paulson, Rescue My Two Kids From Their College Loans" ... "Bush & Co., Bailout the Real People, Not Your Rich Pals":

Click for larger version.

"4.0 GPA, $90,000 in Debt, No Job ... Where's My Bailout?":

Click for larger version.