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Spring 2011

Maine Action Committee Newsletter, April 2011

Maine Peace Action Committee

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This Newsletter is brought to you for free and open access by DigitalCommons@UMaine. It has been accepted for inclusion in General University of Maine Publications by an authorized administrator of DigitalCommons@UMaine. For more information, please contact [email protected]. Maine Peace Action Committee STATEMENT OF PURPOSE he Maine Peace Action Committee If we direct our energy and other resources imperialism and proposing alternatives to these (MPAC) was founded in 1974 with a into weapons systems, there is little left for policies. Tspecial focus on ending the war in creative solutions to problems such as the world We find we can act effectively if we focus on a Indochina. MPAC has been concerned with our food and fuel shortages which threaten our limited number of specific issues and campaigns. society’s violent and militaristic nature, which is survival. We need projects which can: manifested in a lack of humane and progressive We have seen human needs are neglected by values and a tendency towards solving problems 1. unite people within our group an existing government, and when that govern- via destructive means. 2. provide opportunities for action resulting in ment represses groups attempting to meet those measurable achievement Our general orientation takes the double focus needs, violent upheaval has resulted. Our govern- of analyzing and opposing militarism, or the ment’s military economic support for such repres- 3. link our efforts with national campaigns; and efforts to use nuclear weapons and other military sive regimes has embroiled us in armed conflicts 4. demonstrate the dynamics of militarism and means to solve human problems, and imperialism, which have escalated to full scale war and could imperialism. or the efforts by powerful nations to use economic mean inevitable global destruction. For our activities to be successful, we need to and military means to impose their will upon less We support efforts to deal with each of these educate ourselves about issues, analyze the powerful peoples. contributing factors, investigate alternative solu- problems since we see them as resulting and Our nation’s pursuit of these policies under- tions, decide strategy for implementing alterna- contributing to an economic and political system mines its ability to deal with the needs of its own tives, and share our understanding with the over which most of us have little control. citizens and places us in greater danger of war. community to enlist their support. Our tax dollars are used to develop first strike We in MPAC believe that while none of these MPAC believes that people united and work- capable weapons and to support repressive efforts by itself can bring about a completely just ing together can redefine our values and change regimes abroad. Consequently, there are fewer society, together we can work toward more our approach to problems so that we shall be able dollars available for needed human services both comprehensive solutions. We feel that we can to live in a free and creative society; indeed, such here and abroad. best contribute by challenging militarism and efforts are imperative if we are to survive.

Table of Contents Vol. 36, No. 2 • Spring 2011

Statement of Purpose ...... 1 Community Interconnection ...... Daniel White ...... 2 Peacebuilding Challenges ...... Doug Allen ...... 3 Tribal Conflict in Libya ...... Joshua Trombly ...... 7 The Ethical, Political and Economic Consequences of Derivatives Trading or How The Bankers Are Ruining The World ...... Alexander Achmatowicz ...... 8 How social spending pays us back ...... Anna Sweeney ...... 10 H.O.P.E. Festival (poster) ...... 11 Page 2 MPAC Newsletter

COMMUNITY INTERCONNECTION ll life is interconnected. Think about it. billions who live in poverty, the constant fighting school and usually if we can repeat it back to the Think about how all living things depend of wars for control of markets, and the destruc- teacher we get an A. It is up to us to ask questions Aupon one another. An ecosystem is made tion of the natural environment. about what our purpose really is in life and what up of parts that give and take. We breathe in Interestingly, the documentary The makes us most happy. Talk about these things oxygen from trees and breathe out carbon dioxide Corporation makes the claim that if corporations with other people. These types of conversations for the trees. This is the constant exchange of are viewed as people (which incidentally they are the most meaningful to me. I believe that the energy inherent in life. The rule applies to now are under law) then they possess the charac- best life is one that is based on a foundation of communities as well. Why do humans form ter traits of a confirmed psychopath: callous morality. More than one wise tradition in the communities? Because we need one another. Our unconcern for the feelings of others, incapacity to world says that the way to find the highest happi- ancestors realized that living in groups was vital maintain enduring relationships, reckless disre- ness for yourself is to truly wish others to be well. for survival. People support one another in gard for the safety of others, deceitfulness: I have found that trying to relate to others as groups. Living in groups allows us to satisfy friends has made me feel more at ease and has needs such as eating, shelter, belonging, and led me to great new friendships. I think that understanding ourselves. We are not separate friendship is infinitely more important than from the community. We are the community. consumption. I would rather have friends What benefits the community benefits us, and than any amount of money in the world. what hurts the community hurts us. The fact that it feels good being positive I believe that the reason why people cause and friendly to the world is not a surprise. suffering is because of their ignorance of the Remember, there is a flow of energy between interrelatedness of life. The corporate-rich in everything. What we give is what we receive. charge of most of the wealth and resources on It makes complete sense that what is good for Earth use an ideology that says humans are by the community is good for us. It also feels nature competitive, individualistic, and profit good to realize connection to the community. most from consumption and acquisition of The community is not an abstraction sepa- material wealth and power. They argue that rate from us; it is not us vs. society. Rather, since there are limited material resources on community is the real condition of intercon- the planet, we must live according to a competi- repeated lying and conning of others for profit, nected individuals. That’s why community must tive system of economics in order to ensure that incapacity to experience guilt, and failure to be ‘realized’; realization is becoming aware of all the material and social resources are used to conform to social norms with respect to lawful what already is, and the truth of our condition is the most efficient and optimal degree. This and behaviors. Should anyone want these we are interconnected individuals living in other limited reasoning defends the fact that psychopaths in charge of our society? community. there is a massive imbalance of wealth between Learning to see ourselves as connected to each I believe that negative feelings come from feel- the rich and poor. Furthermore, the rich are in a other and the earth will be the end of war, ing disconnected, separate, and misunderstood by position to further their power by influencing poverty, and environmental abuse. In our system others, and these are symptoms that come from government policy i.e. corporate deregulation, we have been raised to believe certain things not living as a community. I think our socio- lower taxes for the rich, and wars to protect about ourselves and the world we live in. The economic system feeds off of these feelings. I resource and trade markets. underlying values of this system do not think the system stems from this illusion of sepa- The view that humans are inherently selfishly adequately represent what it means to be human. rateness. When we feel disconnected, it is competitive and the best life is one of material To me the best things about being human are painful. These feelings are fuel for a consumerist wealth and consumption is simply not true. friendship, cooperation, good-willed competition society. The truth is that we don’t really need to Humans can indeed be competitive, and being so (playing games), creation, and self-determina- consume a lot or acquire very much. What I can have useful productive results. However, tion. Corporations don’t like these values because think we need is connection to each other, to the cooperation can have the same productive impli- they impinge upon their profits. Friendship isn’t community and earth. We can’t do this alone. By cations, and many contend that a socially cooper- worth anything to a corporation, and neither is nature it is a group process. I think that as more ative and inclusive attitude towards life is more the opportunity for us to freely choose who we people realize connection to the community the conducive to a higher wellbeing than a selfishly are, who we want to be, and what we wish to more powerful will be the effort to end injustices. competitive attitude. The problem with the create. One of the best ways to realize yourself as competitive view is that it destroys the reality of Imagine if everyone were friends. It is not connected to the community is to join a peace the self’s essential relationship to the community impossible. We can think about what we really activist or community building group. and environment. Because of the disconnection, value and make it a reality. Why not? This is a I think it is our duty to improve our commu- harm to the community is justified or shrugged search. We are not taught to search and experi- nity. Since we are truly connected to everyone, off. The devastating evidence of this is seen in the ment. We are taught to accept what we learn in we should truly care for those who suffer. As a part of the community you are related to the issue. We all have a voice and we all have will. If we decide to work towards resolutions we are that much closer to improving the situation. Some believe that we feel even more connected to the community when we give back to it and that it is a human need to feel that we have given. What we receive by such giving is a much greater sense of our own self-development, self-fulfillment and connection to the community. Remember the flow of give and take. — Daniel White Spring 2011 Page 3

PEACEBUILDING CHALLENGES he philosophy and practice of Mahatma one’s family, one’s neighbors, all the way to global violence and war, as in the reporting of killings, Gandhi, as critically selected and relations between nation states. bombings, selectively defined terrorism, and Tcreatively reinterpreted, reformulated, “Peace” is generally defined in oppositional violent crimes. However, Gandhi submits that and reapplied, can challenge us to rethink our terms to “war,” and, in this sense, , this is a false view of human history in the sense approach to peacebuilding. This article provides NGO (Non-governmental organizations), and of how most people live their lives and why we dramatic challenges to our usual ways of thinking other peacebuilding efforts involve the process have been able to evolve and survive. about war and war making, peace and peacebuild- opposed to war making. They involve either In most of our lives, relatively nonviolent ing, violence and . In short, Gandhi building the peace after war or, in broader terms, peaceful relations are the norm, with occasional can serve as a catalyst challenging us to rethink working in preventative ways to avoid war. violent interruptions. We experience cooperative our usual ordinary views, as well as the dominant However, Martin Luther King, Jr., drawing on relations, love, compassion, caring, responding to views of those with economic, political, and mili- Gandhi, repeatedly reminds us that what most the suffering and needs of others, etc. This is what tary power, in ways that open up new, more call “peace” is really a “negative peace,” a state in expresses what is morally and truly human and adequate approaches to our most pressing crises. which there is no overt conflict. And, according distinguishes us from less developed, brute, What are our usual ways of thinking about to King and Gandhi, this is not a real peace at all. violent force. In this sense, Gandhi challenges us peacebuilding? Most people with power, as well as Real peace, a “positive peace,” always means that by submitting that we already have peacebuilding ordinary citizens, easily identify themselves as there are relations of justice. There is no peace capacities and resources. What we need to do, being for peace and peacebuilding and as against without justice. Such insight will be essential for war and war making, even if they usually qualify analyzing our peacebuilding challenges. See PEACEBUILDING on Page 4 this by acknowledging that war and war making In this regard, we may differentiate three are sometimes, regrettably, necessary, almost senses of “peace” that involve different views of always justified as means for establishing the goal the dominant status quo and hence very different of peace. approaches to what needs to be “built.” First, By way of a dramatic challenging contrast, my there is the dominant perspective that the usual approach, using Gandhi’s insights and analysis, status quo situation is one of peace, with violent contends that most who claim to favor peace interruptions of war and the need to restore the actually favor war or at least are comfortable peace. In this sense, we commonly provide a list of perpetuating and benefiting from war. In more the number of wars in different centuries or in the general terms, since war is a specific form of world today in such places as Iraq and violence, most who claim to favor nonviolence . Many say that Sri Lanka had a long actually favor violence or at least contribute to, civil war that was ended in 2009. We talk about are complicit with, and benefit from a state of violent upheavals in Africa, the Middle East, contemporary violence. If that is the case, how Pakistan, and other parts of the world, with the do we embrace nonviolent, antiwar, constructive potential for developing into war, and the need for alternatives for winning the peace? peacebuilding to remove such threats. “Peace” and “Peacebuilding” Second, there is a very different perspective in which the dominant status quo itself expresses a Positive terms like “peace,” as well as other violent state of war. In this sense, even when feel-good terms like “love,” are usually thrown there is no overt conflict or disruption, the status out and employed in vague, uncritical, self-serv- quo of class exploitation, poverty, gender oppres- ing ways. They are often little more than some sion, and other relational forms of domination slogan on a greeting card with a happy face, or, reveal the deepest obstacles and major challenges more seriously, are employed to disguise, obfus- for peacebuilding. Here we can formulate a chal- cate, or justify one’s real unpeaceful and unloving lenging perspective in which the 21st-century priorities and relations with regard to one’s self, status quo is not peaceful, but must be radically transformed through nonviolent peacebuilding. Third, there is a very different sense, frequently expressed by a challenging Gandhi and different from the above two senses, in which our normal ways of relating are often not violent or expressive of states of war making. This is very different from the first status quo perspective in which peace is simply the absence of overt war. Gandhi claims that history books emphasize the history of powerful conquerors, tyrants, and others who impose their will through violence and war. The media focuses on acts of Page 4 MPAC Newsletter

own self-realization), without which swaraj (true self-rule, self-determinism, and freedom) is impossible. We are socialized into a modern world through language acquisition, family upbringing, educa- tional training, religious and cultural institutions, and relations of rewards and punishments in which all of these dimensions of violence interact and mutually reinforce each other. We finally develop a view of our selves and our world as normal, natural, rational, modern, and civilized; a view that is inherently and essentially violent. We come to regard violence and war as just the way things are and as a result of violent, aggressive, competitive, egotistical, greedy, or even evil “human nature.” Without understanding this multidimensionality of violence, we cannot grasp the underlying root causes and determining causal factors that give rise to and perpetuate the multidimensionality of war making. PEACEBUILDING ical, violent conflicts. Any relevant, nonviolent, Second, in accepting or just living in such a (continued from Page 3) peacebuilding perspective must deal with such overt violence and war, but this is only a small world, we must become aware of the structural which is no easy task, is to awaken, mobilize, and part of overall violence and war in each of our violence of the status quo. This is business as put into practice those higher, more human, more lives and in the contemporary world. usual or simply the way things are. The fact that developed forces necessary for effective peace- the dominant system seems to be functioning effi- First, we must deepen and broaden our peace- building. ciently, even without examples of overt physical building perspective by How does this relate to a perspective challeng- becoming aware of the multi- ing us to formulate a more relevant and signifi- dimensional violence of the cant approach to peacebuilding? In formulating modern world. In addition to the strengths of such an alternative perspective, overt physical violence, I’ll focus on two key notions that are essential for Gandhi often points to inner understanding how a nonviolent peacebuilding psychological violence, approach can broaden and deepen our under- linguistic violence, economic standing of violence and war: the multidimen- violence, social violence, sionality of violence and the structural violence political violence, cultural of the status quo. violence, religious violence, and educational violence. The numerous mani- festations of such multidimensional violence are often not overt but are hidden, concealed, and camouflaged in their expressions of violence or disruption, does not mean that it is violence. Such violence is often based on nonviolent peaceful relations. Billions of expressed in states of multidimen- human beings suffer and die, without acts of sional war and war making: economic active noncooperation, protest, and resistance, war, psychological war, cultural war, because they feel fearful, hopeless, and powerless, religious war, and so forth. blame themselves, or accept some religious, For example, a nonviolent peace- cultural, or political ideological justification for building approach must emphasize their suffering. But this “peaceful” acceptance, economic violence, which we can without noncooperation and resistance, of the Broadening and Deepening the usually equate with exploitation. In understand- dominant status quo should not disguise the fact Approach to Violence ing violence in the world, we must emphasize that this is a very violent situation. unequal, asymmetrical relations of domination in For Gandhi, the normal dominant economic Most of us, who claim to be against violence which some people own and control the land, the and political systems are structurally and relation- and war and for nonviolence and peace, use these technology, the wealth and capital, and they use ally violent and really express an ongoing state of terms in a very narrow sense. We restrict such economic power to exploit and oppress the war. For example, recent political moves by gover- “violence” and “war” to overt physical forces and impoverished and disadvantaged masses. As nors and legislatures in Maine and in many other conflicts. “Violence” refers to killing, assaults, Gandhi repeatedly shows, modern economics is states represent radical violent measures taken on rape, torture, domestic physical abuse, bullying, inherently violent and is at odds with the true behalf of the status quo wealthiest and most and terrorist attacks. “War” involves military goals of swadeshi (economic self-sufficiency and powerful corporations and individuals. Even attacks, shooting, bombing, and threatening with sustainability, especially by focusing on the when there is not massive resistance to such military force. In this sense, conflict resolution, economic well being of those around us), sarvo- political and economic measures, they express a including peacebuilding, involves the challenge daya (the well being of all), and swadharma of how to transform or prevent these overt, phys- (acting in an ethical manner consistent with our See PEACEBUILDING on Page 5 Spring 2011 Page 5

PEACEBUILDING mass slaughter of innocent civilians, and other only on short-term violence and terror to over- (continued from Page 4) transparent examples of violent evil “others” come violence and terror, we shall not get to the threatening us and our interests. Any peacebuild- root causes and basic determinants that give rise violent state of war directed against the working ing approach must, of course, address such terror- to and perpetuate violence and terrorism in our class, unions, the poor, immigrants, Muslims, ism. world. We’ll continue to be entrapped in repro- racial minorities, the disabled, and, in general, the ducing vicious cycles of violence that will guaran- most exploited and oppressed and least powerful However, using our Gandhi-inspired approach, tee that the 21st century will be largely defined as and most disadvantaged and needy individuals our peacebuilding perspective must also begin to a time of violence, war, and terrorism. and groups. talk about multidimensional terrorism and the structural terrorism of the status quo. In addition In our peacebuilding perspective, our under- standing of the multidimensional violence, as integrated with the structural violence of the status quo, is necessary for analyzing our modern violent world, for getting to the root causes and basic relational determinants, and for resisting such pervasive violence and war making. Responding to Gandhi’s challenges, such a deep- ened and broadened approach to violence is necessary for proposing nonviolent alternatives grounded in satya (truth), (nonviolence, love), (putting into practice truth force, love force, soul force), constructive work (based on or social and ethical obligations), self- less service and action to meet the needs of others, and real freedom, democracy, equality, and real self-realization, progress, happiness, and meaningful human existence. Such an expanded consciousness of a more complex, nuanced, overt and hidden, holistic, relational approach to violence and war radically changes how we under- stand and respond to our contemporary crises and the challenges of peacebuilding; for transforming violent structures and relations into ones of truth, nonviolence, love, compassion, and self-rule. Terrorism Consider how a peacebuilding perspective, influenced by Gandhi’s broadened and deepened to the usual individual and group terrorism, there approach to violence and war, might begin to The Modern Violent and Alternative are corporate and other economic terrorism, mili- address the dramatic contemporary illustration of Nonviolent Perspectives tary terrorism, state terrorism, psychological “terrorism” that so dominates our discourse, terrorism, cultural terrorism, and religious terror- This very different kind of nonviolent peace- media, political and military priorities in the ism. Not hundreds or thousands, but hundreds of building perspective can be contrasted with a United States, especially since 9/11, and in other millions of human beings live lives of daily fear, modern, Western perspective that now dominates parts of the world. In the dominant discourse, insecurity, and terror. They suffer unnecessarily globalized political, economic, and military think- “terrorism” is usually restricted to the violent from humanly caused and imposed conditions of ing. In Hind Swaraj and other writings, Gandhi intentions and actions of suicide bombers, the exploitation, oppression, and injustice. Millions of maintains that modern professions, such as law them die from preventable deaths because of and medicine, modern views of science and tech- ARE WE intentional polices and actions that deny them nology and nature, and modern views of “devel- decent health care and needed medicine, decent opment” and “progress” are inherently violent. In housing, opportunities for education, adequate most general terms, “Modern Civilization,” in its nutrition, access to water and other essential orientation or way of being in the world and in its SAFE YET? many perspectival defining characteristics, is resources, and a living wage. multidimensionally and structurally violent. In its Such “normal” policies and actions, sometimes normal functioning, it represents a state of war overtly violent but usually legal and structural carried out against other human beings, against expressions of the dominant status quo, meet all nature, and against our own ethical and spiritual of the criteria in a critical definition of terrorism: selves. They are intentional, are always violent (either overtly, covertly, or involving the threat of The perspective of modern Western thinkers, violence), and instill fear and insecurity in the as illustrated by the still influential philosophical civilian population, in order to achieve certain approach of Thomas Hobbes, often uses some of objectives (such as profit maximization, accumu- the same state of war and war making language of lation of wealth and power, access to and control Gandhi’s perspective. As is well known, for of natural resources and cheap labor, egoistic Hobbes, human beings exist in a violent, insecure, maximization of consumption, political power, terrifying “State of Nature” that is really a “State religious ends, and so forth). of War.” In such a state of war, in which there is no long-term peace and security, brute violent From our peacebuilding perspective, if we do forces dominate, life is short, and there is no not address multidimensional and status quo chance for developing culture or civilization. That structural violence and terrorism, instead focusing See PEACEBUILDING on Page 6 Page 6 MPAC Newsletter

nonviolence, and war and war making where we normally see peace. However, an alternative peacebuilding perspective provides us with a radically different view of human nature, of our human condition and situation in the world, of what humans are capable of developing, and of what is needed in terms of theory and practice for building real peace. From such a nonviolent perspective, to empower any sovereign, nation state, corpora- tion, institution, group, or individual with so much concentrated and centralized violent force and means of coercion is an economic, political, and military recipe for disaster for the 21st century. It will not contribute to long-term peace- building and real security free from fear, terror, exploitation, oppression, and injustice. Regardless of modern ideological justifications for the need and benefits of violence, war, and war making–in terms of their means for achieving ends of free- dom, , democracy, development, and civilization–such dominant use of violence will at best produce an illusory sense of peace and security that really rests upon and maintains an ongoing state of violence, war, and insecurity. Concluding Observation In my own work–sympathetically rereading and reflecting critically on Gandhi’s life and his writings, evaluating his strengths and weaknesses, and struggling with Gandhi’s confusions, ambigu- ities, inconsistencies, and contradictions–I’ve attempted to expand, modify, and reformulate Gandhi’s profound insights regarding violence in ways that are significant and relevant today. This means attempting to integrate Gandhi’s profound, insights with non-Gandhian comple- A Gandhi-informed peacebuilding perspective PEACEBUILDING mentary perspectives in ways that allow us to looks at human beings and the world in radically (continued from Page 5) formulate and apply new creative approaches to different ways from this Hobbesian and related violence and war making, nonviolence and is why we come together, through a mutually modern Western orientations. Such a nonviolent peacebuilding. I have not presented such a devel- beneficial Social Contract, to give up much of our perspective does not need to be convinced of the oped peacebuilding analysis and application in absolute rights and liberties in the State of human capacity for violence in the world that this article. Nature, in order to empower a Sovereign who will continually threatens any real sense of real peace provide us with peace and security. Since there is and real security, forces us to live in an ongoing Instead, the preliminary, but absolutely neces- no reason to trust others to live up to the Social state of violence and war, and places the future of sary, aim of this article has been to challenge us to Contract, we must provide the Sovereign with humankind and the sustainability and survival of rethink our normal dominant approaches to sufficient forces of violence and coercion to carry the planet in doubt. In fact, such a perspective violence, war, and war making and to rethink out its role of protecting us from foreign and uncovers multidimensional violence and the what alternative approaches to nonviolence, domestic violent threats to our peace and secu- structural violence of the status quo in ways that peace, and peacebuilding might mean. Without rity. reveal so much violence where we normally see such a transformed awareness, our resistance to violence and war and our alternative constructive actions toward realizing nonviolence and peace will remain limited and usually unsuccessful. —Doug Allen Spring 2011 Page 7

TRIBAL CONFLICT IN LIBYA he revolt in Libya is all over the news One cannot understand the current Libyan brutal dictator, Saddam Hussein. However, Iraq these days. In fact, it is hardly possible to crisis without understanding Libya's tribes. very quickly descended into chaos and civil war. Tturn on the television without being Though Libya has become more modern during This happened despite a powerful military pres- assaulted with images of gallant rebels waging Gaddafi's reign, and tribal populations have ence in Iraq on the part of the United States, and battle against the forces of the evil Colonel mixed in large cities, tribal identity and culture is despite Iraq's conflicts boiling down to a relatively Gaddafi. As the United States and our European still a strong force. Tribes in Libya fall into three simple Shia vs. Sunni war. In Libya, with dozens main categories: The western, the central, and allies descend swiftly into yet another Muslim of tribes and hundreds of sub-tribes, such a the eastern tribes. Gaddafi himself hails from the country, the American media has once again conflict could very well go on into the next Gaddafa tribe, which is the most powerful tribe in managed to convince most of us that the dictator century. central Libya. The first cities to fall to the rebel- we are overthrowing is as evil as they come, that lion lie mainly in the eastern section of Libya, It is possible, though, that the American he targets civilians, that his entire country is where the tribes have always opposed Gaddafi. media is, for once, telling the truth. Gaddafi may against him, that we will be greeted as liberators. Benghazi, one of the greatest strongholds of the well be a mentally unstable dictator who murders As we have all been through this before, it may be rebellion, is home to the Zuwayya tribe, the his own civilians. It may also be true, as the rebel prudent to be a bit more curious than we were in largest and most powerful in the east. During the leaders have said, that today's Libya is modern the lead up to the invasion of Iraq. By helping to reign of King Idris I, whom Gaddafi deposed in enough to avoid decades of tribal conflicts. overthrow Gaddafi, are we liberating Libya? 1969, the eastern tribes were given special privi- According to them, tribes have been mixed in the leges over the tribes of west and center. Under The popular image of Gaddafi is one of an large cities of modern Libya, and tribal animosity Gaddafi, these same eastern tribes have been insane dictator, barely clinging to power. Why has weakened. They paint a picture of a modern, oppressed. From this, it would seem that what we middle class Libyan population which will rid then are so many still willing to fight for him? are seeing in Libya is not so much a democratic itself of the brutal Gaddafi or die trying. There have been whispered hints in the revolution, but rather a tribal civil war. Gaddafi From the American perspective, it is hard to American media and loud propaganda from the himself has claimed as much. According to Libyan rebels claiming that Gaddafi has been Gaddafi, without him Libya will fall into chaos determine who is telling the truth. The only thing hiring foreign mercenaries to fill the ranks of his and be embroiled in tribal conflict for decades. that we can be sure of is that we had better be a army, though whether there is any truth to these lot more careful this time around; We literally Is he wrong? Even if one takes into account cannot afford another Iraq. Hopefully, with the claims is hard to determine. One thing is for sure: that traditional Gaddafi supporters have begun to support of the United Nations and the Arab Though propaganda would have us believe that oppose him, which would suggest that the current League, Libya will be able to rebound from this Gaddafi is alone, and that by attacking him we situation is more than a tribal conflict, what guar- conflict as a single united country. If not, we may are fighting on the side of the Libyan people, antee do we have that a Libya without Gaddafi Libyan story is far more complicated and far more will be better off? After we toppled the Bath party be getting in way over our heads. real. in Iraq, many Iraqis cheered the downfall of the —Joshua Trombly Page 8 MPAC Newsletter

THE ETHICAL, POLITICAL AND ECONOMIC CONSEQUENCES OF DERIVATIVES TRADING OR HOW THE BANKERS ARE RUINING THE WORLD hen most people think of investing they the banks if the risk of sub-prime mortgages seem less risky by credit ratings agencies, which think of stocks or bonds. Stocks are like defaulting can be passed to a third party and more- universally claimed that these risky financial Wbuying a tiny share of a company and over if the short term risk of defaults can be instruments (mortgage backed securities, collater- receiving in return some of the company’s profit reduced. The banks did this by bundling home alized debt obligations) had virtually no risk. The on a regular basis. Of course, stocks can be bought mortgages together (perhaps ten thousand or ratings industry enjoys a semi-governmental func- for speculative reasons as well. People buy stocks more) and selling them onto Wall Street in the tion because their ratings carry legal weight and in the hope that their price will rise as the form of a derivative. Investors were buying a share municipal funds etc. cannot be invested in company is more successful and more people want of the income generated from bundles of mort- ventures determined by the credit rating agencies to buy stock in that company. Bonds are more like gages and with it accepting the risk of homeown- to be risky. Ridiculously, the credit rating agencies lending money to a company or a government and ers defaulting. Big companies bought into these are in general paid by the investment banks whose come with legal obligations to pay back the bond- mortgage backed securities and collateralize debt products they are legally tasked with rating. holder with interest or in a lump sum. Offering obligation (bundles of mortgage backed securi- Ostensibly to alleviate risk, but in fact with the stocks and bonds plays a vital economic role by ties), as did individuals and a variety of funds, opposite result, banks offered another kind of raising money for new ventures. Worldwide stock everything from retirement funds to municipal and derivative called a credit default swap on the and bond markets together account for approxi- state governments around the world. derivatives based on bundles of home mortgages. mately 100 trillion dollars. These days, another The sub-prime mortgage market was at its core The buyer of a credit default swap makes payments important investment opportunity exists, deriva- a giant pyramid scheme. When the US housing to the seller, and in return receives a payoff if the tives. The world market in over-the- underlying financial instrument defaults, in this counter, meaning essentially unregu- case, a mortgage backed security. A credit default lated, derivatives has surpassed 615 swap is similar to insurance, but differs in one very trillion dollars. This has major ethi- important way. Credit default swaps are scrupu- cal, political and economic conse- lously not called insurance, because insurance is quences of which public literacy is regulated. If a bank offered “insurance” on 1 tril- almost entirely non-existent. A lion dollars of mortgage backed securities, mean- derivative is a contract that can be ing it would have to pay investors in the event of purchased and whose value is based massive defaults, it would be required to have on some underlying asset. For exam- some percentage of that amount in a rainy day ple, a “futures” derivative is an fund. With a credit default swap, no parallel agreement to buy some product into requirement was made. Credit default swaps allow the future at a predetermined price, banks to charge infinite amounts of money by say rice for 60 dollars. If the price of taking on infinite amounts of risk without having rice is expected to go up to 97 the money to pay if things go wrong. It was basi- dollars, buying rice futures is a good cally printing money, and all of the banks and speculative investment. In the past, insurance companies like American International such commodity-based futures could Group (AIG) made outlandish profits offering be a safety net for rice producers and these credit default swaps. While it meant that the buyers, who could expect to sell or purchase a market was doing well, as it was in part because of banks were now taking on an amount of liability certain amount of oil at a predetermined price the wide availability of sub-prime loans, everyone that could literally destroy them overnight, the regardless of whether the market for rice went up was making money. Even if a sub-prime borrower short term (not that short term) profit was well or down. The trade in derivatives in its modern defaulted, the home could be sold at a profit if the worth the risk, particularly to CEOs being paid incarnation introduces extreme volatility into the housing market kept going up. The quantity of $50 to $100 million for their “stellar” performance. market by supplanting the price provided by easily available mortgages, coupled by the increase Another big factor in the banks’ decision to accept supply and demand with an artificial price based in home prices that this partly created, meant that this risk was an understanding that governments on the amount of money being poured into specu- people also bought homes for speculative reasons, around the world would come to their assistance lative bets on the underlying asset’s future value. further inflating the market. It became economic in the event of catastrophe. The banks could This is particularity explosive when combined doctrine that US housing prices would literally reasonably expect this special treatment because with other kinds of derivatives, such as swaps, that never go down, a contingency the banks would of their centrality in the global economy and influ- amount to unregulated insurance, insurance with- later claim they could not reasonably be expected ence within governments the world over. out the money to back it up. A terrifying reality of to foresee, despite that fact that many of them today’s global economic is that a substantial While some companies were offering credit would switch their position to bet on the collapse, default swaps to make money on the fee, other majority of the 615 trillion dollars tied up in deriv- a point to which we shall return. Under normal atives trading is based on thin air. banks were actively betting against the entire circumstances, no bank would ever lend to the mortgage market. This is how the smart banks, The trade in derivatives based on home mort- risky people that the banks were in fact actively particularly Goldman Sachs, profited from the gages was the primary reason behind the recent seeking. An FBI report from 2007 reveals that fully financial collapse. Goldman Sachs and friends collapse in the home mortgage market and with it 80% of sub-prime mortgages were bank-initiated, took out billions in credit default swaps backed by the global economy. Investment banks wanted to meaning that the banks sought out poor desperate AIG (the largest insurer), so when the entire make money by offering mortgages to people they people to give mortgages to, not the other way enterprise of mortgage backed securities and certi- knew could not pay them back, but who would pay around. (See Huntington Post, William K. Black, fied debt obligations (that these same banks had a higher than normal interest rate on their mort- The Two Documents Everyone Should Read to been profiting from and had been instrumental in gage because they were risky. These are people Better Understand the Crisi,. Febuary 25, 2009. creating) collapsed they would still make money. who would never have received a home mortgage Online at http://www.huffingtonpost.com/william- The strain of payment on these credit default in the past, called “sub-prime” borrowers. The k-black/the-two-documents-everyon_b_ sub-prime market is only financially attractive to 169813.html.) The whole process was made to See BANKERS on Page 9 Spring 2011 Page 9

BANKERS 1930s and the Great (continued from Page 8) Depression which limited the ability of speculators to enter swaps pushed AIG into bankruptcy, but thankfully the market. After a decades- for the other banks, the government bailed out long campaign for deregulation AIG, so these banks still made money when AIG won by the banks in 1991, a used the public monies from the bailout to payout significant number of market on the credit default swaps. Critically, the amount players began to look at deriva- of credit default swaps that were used for specula- tives based on commodities tion grew to dwarf the amount that was actually from a purely speculative used for insurance, with 5 trillion dollars worth of perspective. Between 2000 and bonds issued in the world prior to the collapse and 2008, the number of food an astounding 60 trillion in credit default swaps commodities derivative on those bonds (a credit default swap can be taken contracts increase by 500% and out on a bond, just as easily as it can on a securi- more specifically, between 2006 tized debt obligation or other derivative). (See and 2008 it is estimated that Alex Blumberg. “How Credit Default Swaps speculators dominated long Spread Financial Rot” NPR’s This American Life, positions, those positions based October 30, 2008. on profiting from an increase in http://www.npr.org/templates/story/story. price, in food commodities. For php?storyId=96333239.) To illustrate how much example, speculators held 65 money 60 trillion dollars represents, it is interest- per cent of long maize ing to reflect that the entire gross domestic prod- contracts, 68 per cent of uct (the market value of all goods and services housing market, which continued to grow in no soybeans and 80 per cent of wheat. However, like produced in a country) of the US in 2007 was only small part because of the wide availability of home in housing, bets placed on the very necessities of around 14 trillion dollars. mortgages offered in order to create the mortgage- people’s lives result in catastrophe. Nowhere can backed securities. Commodity index funds are An individual cannot take out a fire insurance this more clearly be demonstrated than in the wild remarkably similar. Their profitability rests on agreement on his neighbor’s home, because that surge in staple food prices between 2007-2008, increasing commodity prices (all commodities), would give him an incentive to “help” his neigh- when millions of people went hungry, not because something which is guaranteed in the short term bor’s chances of having a house fire. On the other there was a lack or food, but rather because they in part because of the increasing number of hand, a company can take a life insurance policy could not afford it. Globally, poor people spend a commodity index funds being offered. This is out on one of their competitors, clients or even very high percentage of their income on food, particularly the case because of the great wash of the investment opportunities they created for sale somewhere between 50% and 90% and have very monies that fled the home derivatives market through the purchase of a credit default swap. little leftover to protect themselves against seeking other opportunities. Put simply, specula- One of the more recent scandals involving changes in price. tive traders invest in futures contracts to profit Goldman Sachs revolves around the bank In 2007 and 2008, the price of food and energy when the price of the underlying commodities constructing 1 billion dollars in mortgage backed skyrocketed. The IMF’s food price index increased either increase, or increase beyond the futures securities which it sold to investors under the by more than 80% and oil prices soared to almost contract’s price. When a sufficient number of big pretense of being a good investment, but which $150 dollars per barrel. According to the World economic players are involved in this game, they testimony and the investments themselves suggest Health Organization the number of chronically change the commodity price by simply holding it had designed to fail. Goldman Sachs insured the malnourished people rose by 115 million from onto large numbers of commodity futures. In 1 billion dollar mortgage bundle such that it prof- 2006 to 2008. This was not just the result of long many commodities, the spot-price (day to day ited from both selling the original mortgage- term trends effecting supply and demand, but price) has become the price of the futures deriva- backed security and its inevitable failure. When rather, speculation was the root cause of “wild” tives the closest to expiration. The reality of other the details of this particular arrangement became price changes both then in 2008 and again today events effecting the food price make this even public, Goldman Sachs received a slap on the as prices soar beyond 2008 levels. If poor harvests, more egregious as the speculative weight of hand, but nothing substantial was done to prevent environmental change, bio-fuels, Asia’s changing investors on the market makes even small fluctu- them or other backs from acting similarly into the diet and systemic instabilities in the world food ations in price into large fluctuations. Again, there future. trade created by neo-liberalism are the primer for are other reasons for food prices to rise, based on The deregulation of the kinds of derivatives disaster, the explosive is an artificial concoction or supply and demand, but these do not account for that led to the collapse of the global economy was the derivatives trade which makes it easy for the recent “wild” fluctuations generated by short- accomplished by the same actors who deregulated investors to profit on fluctuations in the price of term speculative predation. the market in commodity-based derivatives. commodities without physically hording any of At a time when public employees are being Again, these are things like futures or options on the underlying assets. demonized across the nation, it is crucial that we rice, wheat, uranium, oil, etc. A futures contract is Most of the trade in derivatives based on food remember who are the real villains responsible for an agreement to buy some commodity at a future commodities is done through commodity index ruining not only our own economy, but the global date at a prearranged price. An options contract funds. These are investment opportunities created economy. With the exception of Bernie Madoff, differs from a futures contract because it allows, by banks. In essence, they are similar to the mort- who was largely punished for ripping off other rich but does not require, the purchase of some gage-backed securities banks that were construct- people, no one, no one who was responsible for commodity at a future date at a preset price. ing to allow Wall Street to invest in home mort- creating the current economic slump has gone to These kinds of trades have caused wild fluctua- gages. Investors in commodity index funds don’t jail. Even more importantly, these same people are tions in many different kinds of commodities, but buy a single commodity for good supply and responsible for the deaths of millions of people of particularly concern are those commodities demand reasons, but rather buy into indexes of 25 globally through their manipulation of commodi- most linked to the day-to-day survival of people or more commodities, just like investors didn’t buy ties prices, a crime which may not have the same worldwide, namely food and energy commodities. a derivative contract on a single mortgage, about ring to it as murder, but whose magnitude defies In the past, the trading of food commodity which they could know the details, but rather imagination. based derivatives was mostly the domain of play- bought into thousands about which they under- —Alexander Achmatowicz ers who had an interest in the underlying physical stood nothing. The profitability of mortgage- commodities, because of laws dating back to the backed securities was based on growth in the US Page 10 MPAC Newsletter

HOW SOCIAL SPENDING PAYS US BACK HOW ARE WE SPENDING OUR What is welfare and who gets it? When does social spending make sense? TAX DOLLARS ANYWAY? Achieving big things requires us to pool Infrastructure is the foundation on which Military (non-veteran) – 59% resources through our tax system. Individual prosperity is built. Schools, courts, roads, bridges, charitable giving cannot build a road or defend a transportation systems, police, fire departments, Health and Human Services – 6% nation. The reason societies are formed is so that healthcare, childcare, and family leave time from Education – 5% we can share the benefits and the responsibilities work are essential for increased productivity, Veterans Affairs – 4% of security and “provide for the common welfare” innovation, and quality of life. Investment in (just as it says in the Constitution). The wealthi- these areas provide far more economic stimulus, Housing – 3% est individuals, who have been the recipients of on a dollar-for-dollar basis than those big tax cuts the Bush tax cuts for the last 10 years, have a for the wealthy. That’s because a huge portion of particular responsibility, as they are in a position those big tax cuts for the wealthiest people go to WHERE YOUR INCOME TAX in which they are easily able to meet and exceed MONEY IS REALLY GOING all their financial needs. THIS YEAR! A 25% cut in military spending will give us at least Schools or $175 billion a year for our Tanks? communities.

Health Care We could have or Bombs? these choices:

Build or renovate Schools: savings or overseas investments that don’t help 20,000 schools our national economy or create needed jobs. It’s been shown that that the earlier we invest Health Insurance for 40 in building human capital, which is made up of Care: million people things like job skills, general knowledge and expe- rience, physical health, social skills, etc., the Green 5 million earth- bigger the rewards. Which means that the money The U.S. spends as much on military as the Jobs: friendly jobs we spend on pre-school gives us the highest rate rest of the world combined. We have passed the of return on our investment, and that our current point of ensuring security and now military Veterans’ A 3.5-fold increase approach of trying to give hasty skills training to contractors are simply becoming incredibly rich Services: in the VA budget people later in life when they’re in crisis is less off the backs of the taxpayers. effective and a lower total value. But, investing Incredibly the top 1% of people have as much 4-year scholarships early means that you have to wait longer to see wealth as the bottom 90% of people. The Bush College: for 8.5 million the effects of your investment. This change in tax cuts that were extended by Congress gave students strategy requires a mind set change too. We need 50% of cuts to the top 5% of households and we to look at education, not as a drain on the econ- Affordable mortgages now have the biggest wealth disparity since just Housing: omy but as a necessary investment toward a more for a million families before the Great Depression. We can’t afford to prosperous society. It’s just an investment in continue these giveaways to people who need it people instead of things. If we want innovation the least! and industry we need to have a population that Contrary to popular opinion, poor people are can contribute to them at every level. Big increases in military spending + Big tax not the major recipients of welfare. If you use toll- cuts for the wealthy = Huge deficits. And, of free roads, public schools, tax deductions, The necessary change in values and pri- course, the wealthy and powerful recipients of national parks, police departments, and fire orities these military contracts and tax cuts push for cuts departments, you’re a welfare recipient. In fact Exactly one year before his assassination, in spending on things like healthcare, entitle- the biggest welfare recipients in this country are Martin Luther King, Jr. made the following ments and education because cuts in these areas corporations. By the beginning of the Second profound statement that is truer today than ever: will not affect them directly. They can afford World War, corporations were paying 50% of the “We must rapidly begin the shift from a ‘thing- private health insurance, private schools, and federal government’s expenses. By the 1950s, this oriented’ society to a ‘person-oriented’ society. stock portfolios for retirement. declined to 25% and by 2003 to just 7%. And the When machines and computers, profit motives mythology that all these tax cuts lead to jobs and Spending decisions and property rights, are considered more impor- investment hasn’t seemed to pan out. Instead tant than people, the giant triplets of racism, “Every gun that is made, every warship launched, executive salaries and bonuses have ballooned, extreme materialism, and militarism are inca- every rocket fired, signifies in the final sense a theft benefits packages for the middle-class jobs and pable of being conquered…. America, the rich- from those who hunger and are not fed, those who are minimum-wage jobs that still exist have shrunk or est, most powerful nation in the world, can well cold and are not clothed.” disappeared, and jobs and industries are being lead the way in this revolution of values….” – President Dwight Eisenhower shipped overseas. — Anna Sweeney Spring 2011 Page 11 Contributors pinions expressed in this Newsletter are those of individual members of MPAC and other university Joshua Trobley O and community activists. They do not necessarily Dan White express the views of other MPAC members or of the Eric Collins Maine Peace Action Committee group as a whole. We know that other readers may not Anna Sweeney agree with all that is stated in this issue, and we encour- Alexander M.K. Achmatowicz age your response. Doug Allen NEWSLETTER Shannon Brenner The Maine Peace Action Committee has its general Nick Waterman meeting every Tuesday at 7:00 PM in the Virtue Room of Lily McLaughlin The Maples Building on the University of Maine Ilze Petersons campus. Meeting times and dates may change. MPAC Volume 36, Number 2 often has subcommittees working on topics of special interest to current members. MPAC also organizes film Spring 2011 Funded in part by University of Maine series, speakers, teach-ins, workshops, concerts, reading Student Government groups, demonstrations, and other peace and justice actions. For more information on MPAC, call 581-3860. Publication services by Tammy P. Olson If you are interested in and activism, and Eric T. Olson please join us. http://www.umaine.edu/mpac/

e trust that you have enjoyed reading past issues of the MPAC Newsletter. If you have not renewed Wyour subscription or have not made a contiibution to MPAC during the past year, please return the following form to us. (Please make checks payable to Maine Peace Action Committee.):  Yes, I’d like to continue to receive the MPAC Newsletter! Here’s $5.00 for my annual subscription. Here’s an extra contribution to help pay for the Newsletter. I’m short on cash now, but please keep me on your mailing list. Name: ______Mailing address: ______Town/State/Zip: ______Please return to: Maine Peace Action Committee, Memorial Union, University of Maine, Orono, ME 04469

MAINE PEACE ACTION COMMITTEE PRSRT STD Memorial Union U.S. POSTAGE PAID D. Geisler University of Maine ORONO, ME 04473 Orono, ME 04469 (Change Service Requested) PERMIT NO. 34 ENDLESS WAR OR HUMAN NEEDS? Taxpayers in Maine will pay $2.5 billion for Iraq and Afghanistan war spending since 2001.

Could your tax dollars be better spent? http://national priorities.org/Trade-Offs.html