Does the US Face G20 Mutiny? Financing the Empire

By MICHAEL HUDSON

I am travelling in Europe for three weeks to discuss the global financial crisis with government officials, politicians and labor leaders. What is most remarkable is how differently the financial problem is perceived over here. It’s like being in another economic universe, not just another continent.

The U.S. media are silent about the most important topic policy makers are discussing here (and I suspect in Asia too): how to protect their countries from three inter-related dynamics:

(1) the surplus dollars pouring into the rest of the world for yet further financial speculation and corporate takeovers;

(2) the fact that central banks are obliged to recycle these dollar inflows to buy U.S. Treasury bonds to finance the federal U.S. budget deficit; and most important (but most suppressed in the U.S. media,

(3) the military character of the U.S. payments deficit and the domestic federal budget deficit.

Strange as it may seem – and irrational as it would be in a more logical system of world diplomacy – the “dollar glut” is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire – effective “taxation without representation.” Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as “equilibrium,” as if it is part of economic nature and “free markets” rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. The mass media chime in, pretending that recycling the dollar glut to finance U.S. military spending is “showing their faith in U.S. economic strength” by sending “their” dollars here to “invest.” It is as if a choice is involved, not financial and diplomatic compulsion to choose merely between “Yes” (from China, reluctantly), “Yes, please” (from Japan and the European Union) and “Yes, thank you” (Britain, Georgia and Australia).

It is not “foreign faith in the U.S. economy” that leads foreigners to “put their money here.” That’s a silly cartoon of a more sinister dynamic. The “foreigners” in question are not consumers buying U.S. exports, nor are they private-sector “investors” buying U.S. stocks and bonds. The largest and most important foreign entities putting “their money” here are central banks, and it is not “their money” at all. They are sending back the dollars that foreign exporters and other recipients turn over to their central banks for domestic currency.

When the U.S. payments deficit pumps dollars into foreign economies, these banks are being given little option except to buy U.S. Treasury bills and bonds – which the Treasury spends on financing an enormous, hostile military build-up to encircle the major dollar-recyclers – China, Japan and Arab OPEC oil producers. Yet these governments are forced to recycle dollar inflows in a way that funds U.S. military policies in which they have no say in formulating, and which threaten them more and more belligerently. That is why China and Russia took the lead in forming the Shanghai Cooperation Organization (SCO) a few years ago.

Here in Europe there is a clear awareness that the U.S. payments deficit is much larger than just the trade deficit. One need merely look at Table 5 of the U.S. balance-of-payments data compiled by the Bureau of Economic Analysis (BEA) and published by the Dept. of Commerce in its Survey of Current Business to see that the deficit does not stem merely from consumers buying more imports than the United States exports as the financial sector de-industrializes its economy. U.S. imports are now plunging as the economy shrinks and consumers are now finding themselves obliged to pay down the debts they have taken on.

Congress has told foreign investors in the largest dollar holder, China, not to buy anything except perhaps used-car dealerships and maybe more packaged mortgages and Fannie Mae stock – the equivalent of Japanese investors being steered into spending $1 billion for Rockefeller Center, on which they subsequently took a 100 per cent loss, and Saudi investment in Citigroup. That’s the kind of “international equilibrium” that U.S. officials love to see. “CNOOK go home” is the motto when it comes to serious attempts by foreign governments and their sovereign wealth funds (central bank departments trying to figure out what to do with their dollar glut) to make direct investments in American industry.

So we are left with the extent to which the U.S. payments deficit stems from military spending. The problem is not only the war in Iraq, now being extended to Afghanistan and Pakistan. It is the expensive build-up of U.S. military bases in Asian, European, post-Soviet and Third World countries. The Obama administration has promised to make the actual amount of this military spending more transparent. That presumably means publishing a revised set of balance of payments figures as well as domestic federal budget statistics.

The military overhead is much like a debt overhead, extracting revenue from the economy. In this case it is to pay the military-industrial complex, not merely Wall Street banks and other financial institutions. The domestic federal budget deficit does not stem only from “priming the pump” to give away enormous sums to create a new financial oligarchy. It contains an enormous and rapidly growing military component.

So Europeans and Asians see U.S. companies pumping more and more dollars into their economies. Not just to buy their exports in excess of providing them with goods and services in return; not just to buy their companies and “commanding heights” of privatized public enterprises without giving them reciprocal rights to buy important U.S. companies (remember the U.S. turn-down of China’s attempt to buy into the U.S. oil distribution business); not just to buy foreign stocks, bonds and real estate. The U.S. media somehow neglect to mention that the U.S. government is spending hundreds of billions of dollars abroad – not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the “color revolutions” that have been funded – and are still being funded – all around the former Soviet Union.

Pallets of shrink-wrapped $100 bills adding up to tens of millions of the dollars at a time have become familiar “visuals” on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as “wonderful faith in the U.S. economic recovery” and presumably the “monetary magic” being worked by Wall Street’s Tim Geithner at Treasury and Helicopter Ben Bernanke at the Federal Reserve.

Here’s the problem: The Coca Cola company recently tried to buy China’s largest fruit-juice producer and distributor. China already holds nearly $2 trillion in U.S. securities – way more than it needs or can use, inasmuch as the United States government refuses to let it buy meaningful U.S. companies. If the U.S. buyout would have been permitted to go through, this would have confronted China with a dilemma: Choice #1 would be to let the sale go through and accept payment in dollars, reinvesting them in what the U.S. Treasury tells it to do – U.S. Treasury bonds yielding about 1 per cent. China would take a capital loss on these when U.S. interest rates rise or when the dollar declines as the United States alone is pursuing expansionary Keynesian policies in an attempt to enable the U.S. economy to carry its debt overhead.

Choice #2 is not to recycle the dollar inflows. This would lead the renminbi to rise against the dollar, thereby eroding China’s export competitiveness in world markets. So China chose a third way, which brought U.S. protests. It turned the sale of its tangible company for merely “paper” U.S. dollars – which went with the “choice” to fund further U.S. military encirclement of the Shanghai Cooperative Agreement. The only people who seem not to be drawing this connection are the American mass media, and hence public. I can assure you from personal experience, it is being drawn here in Europe. (Here’s a good diplomatic question to discuss: Which will be the first European country besides Russia to join the S.C.O.?)

Academic textbooks have nothing to say about how “equilibrium” in foreign capital movements – speculative as well as for direct investment – is infinite as far as the U.S. economy is concerned. The U.S. economy can create dollars freely, now that they no longer are convertible into gold or even into purchases of U.S. companies, inasmuch as America remains the world’s most protected economy. It alone is permitted to protect its agriculture by import quotas, having “grandfathered” these into world trade rules half a century ago. Congress refuses to let “sovereign wealth” funds invest in important U.S. sectors.

So we are confronted with the fact that the U.S. Treasury prefers foreign central banks to keep on funding its domestic budget deficit, which means financing the cost of America’s war in the Near East and encirclement of foreign countries with rings of military bases. The more “capital outflows” U.S. investors spend to buy up foreign economies –the most profitable sectors, where the new U.S. owners can extract the highest monopoly rents – the more funds end up in foreign central banks to support America’s global military build-up. No textbook on political theory or international relations has suggested axioms to explain how nations act in a way so adverse to their own political, military and economic interests. Yet this is just what has been happening for the past generation.

So the ultimate question turns out to be what countries can do to counter this financial attack. A Basque labor union asked me whether I thought that controlling speculative capital movements would ensure that the financial system would act in the public interest. Or is outright nationalization necessary to better develop the real economy?

It is not simply a problem of “regulation” or “control of speculative capital movements.” The question is how nations can act as real nations, in their own interest rather than being roped into serving whatever the American government decides is in America’s interest.

Any country trying to do what the United States has done for the past 150 years is accused of being “socialist” – and this from the most anti-socialist economy in the world, except when it calls bailouts for its banks “socialism for the rich,” a.k.a. financial oligarchy. This rhetorical inflation almost leaves no alternative but outright nationalization of credit as a basic public utility.

Of course, the word “nationalization” has become a synonym for bailing out the largest and most reckless banks from their bad loans, and bailing out hedge funds and non-bank counterparties for losses on “casino capitalism,” gambling on derivatives that AIG and other insurers or players on the losing side of these gambles are unable to pay. Bailout in this form is not nationalization in the traditional sense of the term – bringing credit creation and other basic financial functions back into the public domain. It is the opposite. It prints new government bonds to turn over – along with self-regulatory power – to the financial sector, blocking the citizenry from taking back these functions.

Framing the issue as a choice between democracy and oligarchy turns the question into one of who will control the government doing the regulation and “nationalizing.” If it is done by a government whose central bank and major congressional committees dealing with finance are run by Wall Street, this will not help steer credit into productive uses. It will merely continue the Greenspan-Paulson-Geithner era of more and larger free lunches for their financial constituencies.

The financial oligarchy’s idea of “regulation” is to make sure that deregulators are installed in the key positions and given only a minimal skeleton staff and little funding. Despite Alan Greenspan’s announcement that he has come to see the light and realizes that self-regulation doesn’t work, the Treasury is still run by a Wall Street official and the Fed is run by a lobbyist for Wall Street. To lobbyists the real concern isn’t ideology as such – it’s naked self-interest for their clients. They may seek out well-meaning fools, especially prestigious figures from academia. But these are only front men, headed as they are by the followers of Milton Friedman at the University of Chicago. Such individuals are put in place as “gate-keepers” of the major academic journals to keep out ideas that do not well serve the financial lobbyists.

This pretence for excluding government from meaningful regulation is that finance is so technical that only someone from the financial “industry” is capable of regulating it. To add insult to injury, the additional counter-intuitive claim is made that a hallmark of democracy is to make the central bank “independent” of elected government. In reality, of course, that is just the opposite of democracy. Finance is the crux of the economic system. If it is not regulated democratically in the public interest, then it is “free” to be captured by special interests. So this becomes the oligarchic definition of “market freedom.”

The danger is that governments will let the financial sector determine how “regulation” will be applied. Special interests seek to make money from the economy, and the financial sector does this in an extractive way. That is its marketing plan. Finance today is acting in a way that de-industrializes economies, not builds them up. The “plan” is austerity for labor, industry and all sectors outside of finance, as in the IMF programs imposed on hapless Third World debtor countries. The experience of Iceland, Latvia and other “financialized” economies should be examined as object lessons, if only because they top the World Bank’s ranking of countries in terms of the “ease of doing business.”

The only meaningful regulation can come from outside the financial sector. Otherwise, countries will suffer what the Japanese call “descent from heaven”: regulators are selected from the ranks of bankers and their “useful idiots.” Upon retiring from government they return to the financial sector to receive lucrative jobs, “speaking engagements” and kindred paybacks. Knowing this, they regulate in favor of financial special interests, not that of the public at large.

The problem of speculative capital movements goes beyond drawing up a set of specific regulations. It concerns the scope of national government power. The International Monetary Fund’s Articles of Agreement prevent countries from restoring the “dual exchange rate” systems that many retained down through the 1950s and even into the ‘60s. It was widespread practice for countries to have one exchange rate for goods and services (sometimes various exchange rates for different import and export categories) and another for “capital movements.” Under American pressure, the IMF enforced the pretence that there is an “equilibrium” rate that just happens to be the same for goods and services as it is for capital movements. Governments that did not buy into this ideology were excluded from membership in the IMF and World Bank – or were overthrown.

The implication today is that the only way a nation can block capital movements is to withdraw from the IMF, the World Bank and the World Trade Organization (WTO). For the first time since the 1950s this looks like a real possibility, thanks to worldwide awareness of how the U.S. economy is glutting the global economy with surplus “paper” dollars – and U.S. intransigence at stopping its free ride. From the U.S. vantage point, this is nothing less than an attempt to curtail its international military program.

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be at: mh@michael-hudson.com

By MICHAEL HUDSON

I am travelling in Europe for three weeks to discuss the global financial crisis with government officials, politicians and labor leaders. What is most remarkable is how differently the financial problem is perceived over here. It’s like being in another economic universe, not just another continent.

The U.S. media are silent about the most important topic policy makers are discussing here (and I suspect in Asia too): how to protect their countries from three inter-related dynamics:

(1) the surplus dollars pouring into the rest of the world for yet further financial speculation and corporate takeovers;

(2) the fact that central banks are obliged to recycle these dollar inflows to buy U.S. Treasury bonds to finance the federal U.S. budget deficit; and most important (but most suppressed in the U.S. media,

(3) the military character of the U.S. payments deficit and the domestic federal budget deficit.

Strange as it may seem – and irrational as it would be in a more logical system of world diplomacy – the “dollar glut” is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire – effective “taxation without representation.” Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as “equilibrium,” as if it is part of economic nature and “free markets” rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. The mass media chime in, pretending that recycling the dollar glut to finance U.S. military spending is “showing their faith in U.S. economic strength” by sending “their” dollars here to “invest.” It is as if a choice is involved, not financial and diplomatic compulsion to choose merely between “Yes” (from China, reluctantly), “Yes, please” (from Japan and the European Union) and “Yes, thank you” (Britain, Georgia and Australia).

It is not “foreign faith in the U.S. economy” that leads foreigners to “put their money here.” That’s a silly cartoon of a more sinister dynamic. The “foreigners” in question are not consumers buying U.S. exports, nor are they private-sector “investors” buying U.S. stocks and bonds. The largest and most important foreign entities putting “their money” here are central banks, and it is not “their money” at all. They are sending back the dollars that foreign exporters and other recipients turn over to their central banks for domestic currency.

When the U.S. payments deficit pumps dollars into foreign economies, these banks are being given little option except to buy U.S. Treasury bills and bonds – which the Treasury spends on financing an enormous, hostile military build-up to encircle the major dollar-recyclers – China, Japan and Arab OPEC oil producers. Yet these governments are forced to recycle dollar inflows in a way that funds U.S. military policies in which they have no say in formulating, and which threaten them more and more belligerently. That is why China and Russia took the lead in forming the Shanghai Cooperation Organization (SCO) a few years ago.

Here in Europe there is a clear awareness that the U.S. payments deficit is much larger than just the trade deficit. One need merely look at Table 5 of the U.S. balance-of-payments data compiled by the Bureau of Economic Analysis (BEA) and published by the Dept. of Commerce in its Survey of Current Business to see that the deficit does not stem merely from consumers buying more imports than the United States exports as the financial sector de-industrializes its economy. U.S. imports are now plunging as the economy shrinks and consumers are now finding themselves obliged to pay down the debts they have taken on.

Congress has told foreign investors in the largest dollar holder, China, not to buy anything except perhaps used-car dealerships and maybe more packaged mortgages and Fannie Mae stock – the equivalent of Japanese investors being steered into spending $1 billion for Rockefeller Center, on which they subsequently took a 100 per cent loss, and Saudi investment in Citigroup. That’s the kind of “international equilibrium” that U.S. officials love to see. “CNOOK go home” is the motto when it comes to serious attempts by foreign governments and their sovereign wealth funds (central bank departments trying to figure out what to do with their dollar glut) to make direct investments in American industry.

So we are left with the extent to which the U.S. payments deficit stems from military spending. The problem is not only the war in Iraq, now being extended to Afghanistan and Pakistan. It is the expensive build-up of U.S. military bases in Asian, European, post-Soviet and Third World countries. The Obama administration has promised to make the actual amount of this military spending more transparent. That presumably means publishing a revised set of balance of payments figures as well as domestic federal budget statistics.

The military overhead is much like a debt overhead, extracting revenue from the economy. In this case it is to pay the military-industrial complex, not merely Wall Street banks and other financial institutions. The domestic federal budget deficit does not stem only from “priming the pump” to give away enormous sums to create a new financial oligarchy. It contains an enormous and rapidly growing military component.

So Europeans and Asians see U.S. companies pumping more and more dollars into their economies. Not just to buy their exports in excess of providing them with goods and services in return; not just to buy their companies and “commanding heights” of privatized public enterprises without giving them reciprocal rights to buy important U.S. companies (remember the U.S. turn-down of China’s attempt to buy into the U.S. oil distribution business); not just to buy foreign stocks, bonds and real estate. The U.S. media somehow neglect to mention that the U.S. government is spending hundreds of billions of dollars abroad – not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the “color revolutions” that have been funded – and are still being funded – all around the former Soviet Union.

Pallets of shrink-wrapped $100 bills adding up to tens of millions of the dollars at a time have become familiar “visuals” on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as “wonderful faith in the U.S. economic recovery” and presumably the “monetary magic” being worked by Wall Street’s Tim Geithner at Treasury and Helicopter Ben Bernanke at the Federal Reserve.

Here’s the problem: The Coca Cola company recently tried to buy China’s largest fruit-juice producer and distributor. China already holds nearly $2 trillion in U.S. securities – way more than it needs or can use, inasmuch as the United States government refuses to let it buy meaningful U.S. companies. If the U.S. buyout would have been permitted to go through, this would have confronted China with a dilemma: Choice #1 would be to let the sale go through and accept payment in dollars, reinvesting them in what the U.S. Treasury tells it to do – U.S. Treasury bonds yielding about 1 per cent. China would take a capital loss on these when U.S. interest rates rise or when the dollar declines as the United States alone is pursuing expansionary Keynesian policies in an attempt to enable the U.S. economy to carry its debt overhead.

Choice #2 is not to recycle the dollar inflows. This would lead the renminbi to rise against the dollar, thereby eroding China’s export competitiveness in world markets. So China chose a third way, which brought U.S. protests. It turned the sale of its tangible company for merely “paper” U.S. dollars – which went with the “choice” to fund further U.S. military encirclement of the Shanghai Cooperative Agreement. The only people who seem not to be drawing this connection are the American mass media, and hence public. I can assure you from personal experience, it is being drawn here in Europe. (Here’s a good diplomatic question to discuss: Which will be the first European country besides Russia to join the S.C.O.?)

Academic textbooks have nothing to say about how “equilibrium” in foreign capital movements – speculative as well as for direct investment – is infinite as far as the U.S. economy is concerned. The U.S. economy can create dollars freely, now that they no longer are convertible into gold or even into purchases of U.S. companies, inasmuch as America remains the world’s most protected economy. It alone is permitted to protect its agriculture by import quotas, having “grandfathered” these into world trade rules half a century ago. Congress refuses to let “sovereign wealth” funds invest in important U.S. sectors.

So we are confronted with the fact that the U.S. Treasury prefers foreign central banks to keep on funding its domestic budget deficit, which means financing the cost of America’s war in the Near East and encirclement of foreign countries with rings of military bases. The more “capital outflows” U.S. investors spend to buy up foreign economies –the most profitable sectors, where the new U.S. owners can extract the highest monopoly rents – the more funds end up in foreign central banks to support America’s global military build-up. No textbook on political theory or international relations has suggested axioms to explain how nations act in a way so adverse to their own political, military and economic interests. Yet this is just what has been happening for the past generation.

So the ultimate question turns out to be what countries can do to counter this financial attack. A Basque labor union asked me whether I thought that controlling speculative capital movements would ensure that the financial system would act in the public interest. Or is outright nationalization necessary to better develop the real economy?

It is not simply a problem of “regulation” or “control of speculative capital movements.” The question is how nations can act as real nations, in their own interest rather than being roped into serving whatever the American government decides is in America’s interest.

Any country trying to do what the United States has done for the past 150 years is accused of being “socialist” – and this from the most anti-socialist economy in the world, except when it calls bailouts for its banks “socialism for the rich,” a.k.a. financial oligarchy. This rhetorical inflation almost leaves no alternative but outright nationalization of credit as a basic public utility.

Of course, the word “nationalization” has become a synonym for bailing out the largest and most reckless banks from their bad loans, and bailing out hedge funds and non-bank counterparties for losses on “casino capitalism,” gambling on derivatives that AIG and other insurers or players on the losing side of these gambles are unable to pay. Bailout in this form is not nationalization in the traditional sense of the term – bringing credit creation and other basic financial functions back into the public domain. It is the opposite. It prints new government bonds to turn over – along with self-regulatory power – to the financial sector, blocking the citizenry from taking back these functions.

Framing the issue as a choice between democracy and oligarchy turns the question into one of who will control the government doing the regulation and “nationalizing.” If it is done by a government whose central bank and major congressional committees dealing with finance are run by Wall Street, this will not help steer credit into productive uses. It will merely continue the Greenspan-Paulson-Geithner era of more and larger free lunches for their financial constituencies.

The financial oligarchy’s idea of “regulation” is to make sure that deregulators are installed in the key positions and given only a minimal skeleton staff and little funding. Despite Alan Greenspan’s announcement that he has come to see the light and realizes that self-regulation doesn’t work, the Treasury is still run by a Wall Street official and the Fed is run by a lobbyist for Wall Street. To lobbyists the real concern isn’t ideology as such – it’s naked self-interest for their clients. They may seek out well-meaning fools, especially prestigious figures from academia. But these are only front men, headed as they are by the followers of Milton Friedman at the University of Chicago. Such individuals are put in place as “gate-keepers” of the major academic journals to keep out ideas that do not well serve the financial lobbyists.

This pretence for excluding government from meaningful regulation is that finance is so technical that only someone from the financial “industry” is capable of regulating it. To add insult to injury, the additional counter-intuitive claim is made that a hallmark of democracy is to make the central bank “independent” of elected government. In reality, of course, that is just the opposite of democracy. Finance is the crux of the economic system. If it is not regulated democratically in the public interest, then it is “free” to be captured by special interests. So this becomes the oligarchic definition of “market freedom.”

The danger is that governments will let the financial sector determine how “regulation” will be applied. Special interests seek to make money from the economy, and the financial sector does this in an extractive way. That is its marketing plan. Finance today is acting in a way that de-industrializes economies, not builds them up. The “plan” is austerity for labor, industry and all sectors outside of finance, as in the IMF programs imposed on hapless Third World debtor countries. The experience of Iceland, Latvia and other “financialized” economies should be examined as object lessons, if only because they top the World Bank’s ranking of countries in terms of the “ease of doing business.”

The only meaningful regulation can come from outside the financial sector. Otherwise, countries will suffer what the Japanese call “descent from heaven”: regulators are selected from the ranks of bankers and their “useful idiots.” Upon retiring from government they return to the financial sector to receive lucrative jobs, “speaking engagements” and kindred paybacks. Knowing this, they regulate in favor of financial special interests, not that of the public at large.

The problem of speculative capital movements goes beyond drawing up a set of specific regulations. It concerns the scope of national government power. The International Monetary Fund’s Articles of Agreement prevent countries from restoring the “dual exchange rate” systems that many retained down through the 1950s and even into the ‘60s. It was widespread practice for countries to have one exchange rate for goods and services (sometimes various exchange rates for different import and export categories) and another for “capital movements.” Under American pressure, the IMF enforced the pretence that there is an “equilibrium” rate that just happens to be the same for goods and services as it is for capital movements. Governments that did not buy into this ideology were excluded from membership in the IMF and World Bank – or were overthrown.

The implication today is that the only way a nation can block capital movements is to withdraw from the IMF, the World Bank and the World Trade Organization (WTO). For the first time since the 1950s this looks like a real possibility, thanks to worldwide awareness of how the U.S. economy is glutting the global economy with surplus “paper” dollars – and U.S. intransigence at stopping its free ride. From the U.S. vantage point, this is nothing less than an attempt to curtail its international military program.

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be at: mh@michael-hudson.com

Does the US Face G20 Mutiny? Financing the Empire

The Recovery Plan From Hell: What Wall Street Wants

By MICHAEL HUDSON

Tuesday’s announcement of the Obama-Geithner recovery plan is basically an extension of the Bush-Paulson plan – yet more giveaways to financial insiders, with a view to concentrating the U.S. banking system into a cartel of just a few large banks. This is not altogether bad news for the still relatively healthy part of the banking system (healthy in the sense of still avoiding negative equity). Smaller, less troubled banks will be bought out by the large “troubled” ones, to the personal financial benefit of their stockholders. This cannot solve today’s financial problem: the fact that the debt overhead far exceeds the economy’s ability to pay. In fact, it will spread the distortions that the large banks have introduced, until the entire system presumably looks like Citibank, Bank of America, JP Morgan Chase and Wells Fargo.

But this clearly is only Stage One of a two-stage plan that has not yet been announced, although the Wall Street Journal’s op-ed page has provided enough hints trickling out for the past three months to tip the hand of Wall Street’s “dream recovery plan.”

It is not exactly what most people are hoping for. In fact, it threatens to be a nightmare scenario for the economy at large. Watch for the magic phrase: “equity kicker,” first heard in the S&L mortgage crisis of the 1980s.

The first question to ask about the Recovery Program is, “recovery for whom?” The answer is, for the people who design the Recovery Program and their constituency, the bank lobby. The second question is, what is it they want to recover? The answer is, another Bubble economy, having seen the Greenspan Bubble make them so rich with his particular kind of “wealth creation”: wealth in the form of indebtedness of the “real” economy at large to the banking system, and unprecedented capital gains to be made by riding the wave of asset-price inflation.

For the financial elites, the problem is that it is not possible to inflate another bubble from today’s debt levels, widespread negative equity, and still-high level of real estate, stock and bond prices. No amount of new credit or capital for the banking system will induce banks to provide credit to real estate that already is over-mortgaged, or to individuals and corporations already over-indebted. All professional observers have forecast property prices to keep on plunging for at least the next year, which is as far as the eye can see in unstable conditions such as we are experiencing today.

While the Obama administration’s financial planners wring their hands in public and say “We feel your pain” to debtors at large, they also recognize that the past ten years have been a golden age for the banking system and Wall Street. The wealthiest 1 per cent of the population has raised its share of the returns to wealth – dividends, interest, rent and capital gains – from 37 per cent of the total ten years ago to 57 per cent five years ago, and an estimated 70 per cent today. Over two-thirds of the returns to wealth now go to the wealthiest 1 per cent of the population. This is the highest on record. We are approaching Russian kleptocratic levels.

Yet the financial Hard Right of the political spectrum – the lobbyists now in control of the Treasury, the Federal Reserve and the Justice Departments for starters – repeats the new Big Lie: that it is the poor who have brought the system down, “exploiting” the rich by trying to ape their betters and live beyond their means. Subprime families have taken out subprime loans, the lying poor have signed documents to obtain “liars’ loans,” as Alt-A, no-documentation loans are called in the financial junk-paper trade.

I learned the reality a few years ago in London, talking to a commercial bank strategist there. “We’ve had an intellectual breakthrough,” he said. “It’s changed our credit philosophy.”

“What is it?” I asked, imagining that he was about to come out with yet a new junk mathematics formula?

“The poor are honest,” he said, accompanying his words with his jaw dropping open as if to say, “Who could have guessed?”

The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today’s neoliberal Chicago School language, the poor behave “uneconomically.” That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.

As I said above, it was a golden age. The financial and real estate bubble is the world that America’s financial power elite would love to recover. The problem for them is how to start a new bubble and make yet another fortune. The alternative would be to keep what they have taken and run – not so bad, but a scenario that perhaps they can improve on.

Discussions about emergency bailouts have focused on putting in place enough new lending capacity by the banking system to start inflating prices on credit once again. But a new bubble can’t be started from today’s asset-price levels. This week’s $2 trillion or so in new bailout money for the banks (“capital,” and specifically finance capital, not to be confused with industrial capital) will only be lent out once prices fall by another 30 to 50 percent. So this can represent only Stage 1.

The question for Stage 2 is, how can the $10 to $20 trillion capital-gain run-up of the Greenspan years been repeated in an economy that is “all loaned up”?

One thing Wall Street knows is that to make money, you not only need asset prices to rise, they have to go down again – and up again, and down again. Without going down, after all, how can they rise up? The more frenetic the price fibulation, the easier it is for computerized buy-and-sell programs to make money on options and derivatives. What is being planned today looks like a similar up-and-down movement in real estate.

The first trick is to preserve the wealth of the creditor class – Wall Street, the banks and the other financial vehicles that enrich the wealthiest 1 per cent and indeed, the richest 10 per cent of the population. Stage One involves buying out their bad loans at a price that saves them from taking a loss. This is done by shifting the loss onto the “taxpayers” – labor, onto whose shoulders the tax burden has been shifted steadily, step by step since 1980, with the Greenspan Commission imposing an onerous Social Security tax on the middle class and using the proceeds to slash taxes on the higher brackets. Next comes an “aggregator” bank (sounds like “alligator,” from the swamps of toxic waste) to buy the bad debts and put them in a public agency. The government calls this the “bad” bank. But it does good for Wall Street – by buying loans that have gone bad – or perhaps nearer the truth, loans that never were good in the first place.

The harder part is to revive opportunities for creditors to make a new killing. (And it’s the economy that’s being killed.) Here’s how I imagine the plan might work.

Suppose a recent buyer has purchased a home for $500,000, with a $500,000 adjustable-rate mortgage scheduled to reset at 8 per cent. Suppose too that the current market price has fallen to $250,000 – a loss of 50 per cent by the end of 2009. After all, there needs to be enough time for prices to decline. Otherwise, there would be no economy to “rescue.” Mr. Geithner and Summers need to “feel your pain” to come out with the package that I’m describing. The government will swap “cash for trash,” printing new Treasury bonds (interest to be paid by “the taxpayer) in exchange for the $500,000 mortgage that is going bad, heading toward only a $250,000 market price.

The “Bad” bank that the Obama plan decided was not quite ready to be created this week will take the form of a public/private partnership (PPP), of the sort that Tony Blair made so notorious in Britain. It will be financed with private funds – in fact, with the funds now being given to re-capitalize America’s banks (headed by the Wall St. banks that have done so poorly). Banks will use the money they receive from the Treasury for selling their junk mortgages at par – along with other bailout funding – to buy shares in a new $5 trillion institution. Something like Fanny Mae or Freddie Mac will be created and its bonds guaranteed (that’s the “public” part – “socializing” the risk). The PPP institution will start with, say, $3 trillion in funds, and will have the power to buy and renegotiate the mortgages that have passed into the hands of the government and other holders. This “Middle Class Homeowner Recovery Trust” will use its private funding for the “socially responsible” purpose of “saving the taxpayer” and homeowners by renegotiating the mortgage down from its original $500,000 to the new $250,000 price.

Here’s the patter talk you can expect, with the usual Orwellian euphemisms. The “rescue the homeowners” PPP, a veritable Savior Bank, will go to a family strapped by its home mortgage debt and feeling more and more desperate as the price of its major asset plummets deep into Negative Equity territory. An offer will be made: “We’ve got a deal to save you. We’ll renegotiate your mortgage down to $250,000, the current market price, and we’ll also lower your interest rate to just 5.50 per cent. This will cut your monthly debt charges by nearly two thirds. You will escape from negative equity, and you can afford to stay in your home.”

The family probably will say, “Great.”

But they will have to make a concession. That’s where the new public/private partnership makes its killing. Its Savior Bank, funded with private money that is to take the “risk” (and also the rewards) will say to the family that agrees to renegotiate its mortgage: “Now that the government has taken a loss while we’ve let you stay in your home, we need to recover the money that’s been lost. So when the time comes for you to sell, or to renegotiate your mortgage, our Savior Bank will receive the capital gain up to the original amount written off. If we’ve made you whole, we want to be made whole too.”

In other words, if the homeowner sells the property for $400,000, the Savior Bank will get $150,000 of the capital gain. If the property sells for $500,000, the bank will get $250,000. And if it sells for more, thanks to some new clone of Alan Greenspan acting as bubblemeister, the capital gain will be split in some way. If the split is 50/50, then if the home sells for $600,000, the owner at that time will split the $100,000 further capital gain with the Savior Bank. The Savior Bank will thus make much more through its share of capital gains than it extracts in interest!

This plan will be even better for Wall Street than the Greenspan bubble was! Last time around, it was the middle class that got the gains. To be sure, it really was the bank that got the gains, because mortgage interest charges absorbed the entire rental value. But at least homeowners had a chance at the free ride, if they didn’t squander their money in refinancing their mortgages. And many did use their homes “like a piggy bank” to support their living standards.

But this time around, Wall Street is not obliged to make its money by making middle class homeowners rich. Debt-strapped homeowners are willing to settle merely for a plan that leaves them in their homes! It can get for itself the capital gains that have been the driving force of U.S. “wealth creation,” Alan Greenspan bubble-style.

The irony is that the only kind of policies that are politically correct these days are those that make the situation worse: yet more government money in the hope that banks will create yet more credit/debt to raise house prices and make them even more unaffordable; to inflate a new bubble; to give what really should be called the “bad banks” – the Big Four or Five where the junk mortgages, junk CDOs and junk derivatives resulting from junk mathematics are concentrated – yet more money to buy out smaller banks that have not yet been infected with reckless financial opportunism.

And by the same token, lobbyists for these bad banks are screaming at the top of their voices that all solutions to the problem are politically incorrect: debt writedowns to bring the debt burden within the ability to pay. That is what the market is supposed to do – by bankruptcy in an anarchic collapse, if not by reasoned government policy. The bad banks, after demanding “free markets” all these years, have stopped the free market when it comes anywhere near them and their bonuses. For them, markets are free of regulation against predatory lending; free of taxing the wealthy so as to shift the burden onto labor; free for the financial sector to wrap itself around the “real” economy like a parasitic vine around a tree and extract the entire surplus in the form of financial engineering.

This is a travesty of freedom. But worst of all is the “freedom” of today’s economic discussion from the wisdom of classical political economy and from the experience of economic history regarding how societies have coped with the debt overhead through the ages.

An alternative policy to save the economy from being “rescued” by Wall Street

There is an alternative to ward all this off. A debt writedown, followed by a land tax so that the “free lunch” (what John Stuart Mill called the “unearned increment” of rising land prices, a gain that landlords made “in their sleep”) would serve as the tax base rather than labor and industry being burdened with an income tax.

One move would be to prevent banks from lending against the land’s value. They could lend against buildings, but not land. This would cut the maximum permissible loan to 50 to 60 per cent of the total property price – unless the government did what classical economists advocated and tax the land’s market price (its rental value) as the tax base, shifting the tax back off of labor. This would achieve the kind of free markets that Adam Smith, John Stuart Mill and Alfred Marshall described, and which the Progressive Era aimed to achieve with America’s first income tax in 1913.

A land tax would prevent housing prices from rising again. This would save homeowners from taking on so much debt in order to obtain housing. And it would save the economy from seeing “wealth creation” take the form of the “unearned increment” being capitalized into higher bank loans with their associated carrying charges (interest and amortization). The key to real estate bubbles is to inflate site valuations.

By MICHAEL HUDSON

Tuesday’s announcement of the Obama-Geithner recovery plan is basically an extension of the Bush-Paulson plan – yet more giveaways to financial insiders, with a view to concentrating the U.S. banking system into a cartel of just a few large banks. This is not altogether bad news for the still relatively healthy part of the banking system (healthy in the sense of still avoiding negative equity). Smaller, less troubled banks will be bought out by the large “troubled” ones, to the personal financial benefit of their stockholders. This cannot solve today’s financial problem: the fact that the debt overhead far exceeds the economy’s ability to pay. In fact, it will spread the distortions that the large banks have introduced, until the entire system presumably looks like Citibank, Bank of America, JP Morgan Chase and Wells Fargo.

But this clearly is only Stage One of a two-stage plan that has not yet been announced, although the Wall Street Journal’s op-ed page has provided enough hints trickling out for the past three months to tip the hand of Wall Street’s “dream recovery plan.”

It is not exactly what most people are hoping for. In fact, it threatens to be a nightmare scenario for the economy at large. Watch for the magic phrase: “equity kicker,” first heard in the S&L mortgage crisis of the 1980s.

The first question to ask about the Recovery Program is, “recovery for whom?” The answer is, for the people who design the Recovery Program and their constituency, the bank lobby. The second question is, what is it they want to recover? The answer is, another Bubble economy, having seen the Greenspan Bubble make them so rich with his particular kind of “wealth creation”: wealth in the form of indebtedness of the “real” economy at large to the banking system, and unprecedented capital gains to be made by riding the wave of asset-price inflation.

For the financial elites, the problem is that it is not possible to inflate another bubble from today’s debt levels, widespread negative equity, and still-high level of real estate, stock and bond prices. No amount of new credit or capital for the banking system will induce banks to provide credit to real estate that already is over-mortgaged, or to individuals and corporations already over-indebted. All professional observers have forecast property prices to keep on plunging for at least the next year, which is as far as the eye can see in unstable conditions such as we are experiencing today.

While the Obama administration’s financial planners wring their hands in public and say “We feel your pain” to debtors at large, they also recognize that the past ten years have been a golden age for the banking system and Wall Street. The wealthiest 1 per cent of the population has raised its share of the returns to wealth – dividends, interest, rent and capital gains – from 37 per cent of the total ten years ago to 57 per cent five years ago, and an estimated 70 per cent today. Over two-thirds of the returns to wealth now go to the wealthiest 1 per cent of the population. This is the highest on record. We are approaching Russian kleptocratic levels.

Yet the financial Hard Right of the political spectrum – the lobbyists now in control of the Treasury, the Federal Reserve and the Justice Departments for starters – repeats the new Big Lie: that it is the poor who have brought the system down, “exploiting” the rich by trying to ape their betters and live beyond their means. Subprime families have taken out subprime loans, the lying poor have signed documents to obtain “liars’ loans,” as Alt-A, no-documentation loans are called in the financial junk-paper trade.

I learned the reality a few years ago in London, talking to a commercial bank strategist there. “We’ve had an intellectual breakthrough,” he said. “It’s changed our credit philosophy.”

“What is it?” I asked, imagining that he was about to come out with yet a new junk mathematics formula?

“The poor are honest,” he said, accompanying his words with his jaw dropping open as if to say, “Who could have guessed?”

The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today’s neoliberal Chicago School language, the poor behave “uneconomically.” That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.

As I said above, it was a golden age. The financial and real estate bubble is the world that America’s financial power elite would love to recover. The problem for them is how to start a new bubble and make yet another fortune. The alternative would be to keep what they have taken and run – not so bad, but a scenario that perhaps they can improve on.

Discussions about emergency bailouts have focused on putting in place enough new lending capacity by the banking system to start inflating prices on credit once again. But a new bubble can’t be started from today’s asset-price levels. This week’s $2 trillion or so in new bailout money for the banks (“capital,” and specifically finance capital, not to be confused with industrial capital) will only be lent out once prices fall by another 30 to 50 percent. So this can represent only Stage 1.

The question for Stage 2 is, how can the $10 to $20 trillion capital-gain run-up of the Greenspan years been repeated in an economy that is “all loaned up”?

One thing Wall Street knows is that to make money, you not only need asset prices to rise, they have to go down again – and up again, and down again. Without going down, after all, how can they rise up? The more frenetic the price fibulation, the easier it is for computerized buy-and-sell programs to make money on options and derivatives. What is being planned today looks like a similar up-and-down movement in real estate.

The first trick is to preserve the wealth of the creditor class – Wall Street, the banks and the other financial vehicles that enrich the wealthiest 1 per cent and indeed, the richest 10 per cent of the population. Stage One involves buying out their bad loans at a price that saves them from taking a loss. This is done by shifting the loss onto the “taxpayers” – labor, onto whose shoulders the tax burden has been shifted steadily, step by step since 1980, with the Greenspan Commission imposing an onerous Social Security tax on the middle class and using the proceeds to slash taxes on the higher brackets. Next comes an “aggregator” bank (sounds like “alligator,” from the swamps of toxic waste) to buy the bad debts and put them in a public agency. The government calls this the “bad” bank. But it does good for Wall Street – by buying loans that have gone bad – or perhaps nearer the truth, loans that never were good in the first place.

The harder part is to revive opportunities for creditors to make a new killing. (And it’s the economy that’s being killed.) Here’s how I imagine the plan might work.

Suppose a recent buyer has purchased a home for $500,000, with a $500,000 adjustable-rate mortgage scheduled to reset at 8 per cent. Suppose too that the current market price has fallen to $250,000 – a loss of 50 per cent by the end of 2009. After all, there needs to be enough time for prices to decline. Otherwise, there would be no economy to “rescue.” Mr. Geithner and Summers need to “feel your pain” to come out with the package that I’m describing. The government will swap “cash for trash,” printing new Treasury bonds (interest to be paid by “the taxpayer) in exchange for the $500,000 mortgage that is going bad, heading toward only a $250,000 market price.

The “Bad” bank that the Obama plan decided was not quite ready to be created this week will take the form of a public/private partnership (PPP), of the sort that Tony Blair made so notorious in Britain. It will be financed with private funds – in fact, with the funds now being given to re-capitalize America’s banks (headed by the Wall St. banks that have done so poorly). Banks will use the money they receive from the Treasury for selling their junk mortgages at par – along with other bailout funding – to buy shares in a new $5 trillion institution. Something like Fanny Mae or Freddie Mac will be created and its bonds guaranteed (that’s the “public” part – “socializing” the risk). The PPP institution will start with, say, $3 trillion in funds, and will have the power to buy and renegotiate the mortgages that have passed into the hands of the government and other holders. This “Middle Class Homeowner Recovery Trust” will use its private funding for the “socially responsible” purpose of “saving the taxpayer” and homeowners by renegotiating the mortgage down from its original $500,000 to the new $250,000 price.

Here’s the patter talk you can expect, with the usual Orwellian euphemisms. The “rescue the homeowners” PPP, a veritable Savior Bank, will go to a family strapped by its home mortgage debt and feeling more and more desperate as the price of its major asset plummets deep into Negative Equity territory. An offer will be made: “We’ve got a deal to save you. We’ll renegotiate your mortgage down to $250,000, the current market price, and we’ll also lower your interest rate to just 5.50 per cent. This will cut your monthly debt charges by nearly two thirds. You will escape from negative equity, and you can afford to stay in your home.”

The family probably will say, “Great.”

But they will have to make a concession. That’s where the new public/private partnership makes its killing. Its Savior Bank, funded with private money that is to take the “risk” (and also the rewards) will say to the family that agrees to renegotiate its mortgage: “Now that the government has taken a loss while we’ve let you stay in your home, we need to recover the money that’s been lost. So when the time comes for you to sell, or to renegotiate your mortgage, our Savior Bank will receive the capital gain up to the original amount written off. If we’ve made you whole, we want to be made whole too.”

In other words, if the homeowner sells the property for $400,000, the Savior Bank will get $150,000 of the capital gain. If the property sells for $500,000, the bank will get $250,000. And if it sells for more, thanks to some new clone of Alan Greenspan acting as bubblemeister, the capital gain will be split in some way. If the split is 50/50, then if the home sells for $600,000, the owner at that time will split the $100,000 further capital gain with the Savior Bank. The Savior Bank will thus make much more through its share of capital gains than it extracts in interest!

This plan will be even better for Wall Street than the Greenspan bubble was! Last time around, it was the middle class that got the gains. To be sure, it really was the bank that got the gains, because mortgage interest charges absorbed the entire rental value. But at least homeowners had a chance at the free ride, if they didn’t squander their money in refinancing their mortgages. And many did use their homes “like a piggy bank” to support their living standards.

But this time around, Wall Street is not obliged to make its money by making middle class homeowners rich. Debt-strapped homeowners are willing to settle merely for a plan that leaves them in their homes! It can get for itself the capital gains that have been the driving force of U.S. “wealth creation,” Alan Greenspan bubble-style.

The irony is that the only kind of policies that are politically correct these days are those that make the situation worse: yet more government money in the hope that banks will create yet more credit/debt to raise house prices and make them even more unaffordable; to inflate a new bubble; to give what really should be called the “bad banks” – the Big Four or Five where the junk mortgages, junk CDOs and junk derivatives resulting from junk mathematics are concentrated – yet more money to buy out smaller banks that have not yet been infected with reckless financial opportunism.

And by the same token, lobbyists for these bad banks are screaming at the top of their voices that all solutions to the problem are politically incorrect: debt writedowns to bring the debt burden within the ability to pay. That is what the market is supposed to do – by bankruptcy in an anarchic collapse, if not by reasoned government policy. The bad banks, after demanding “free markets” all these years, have stopped the free market when it comes anywhere near them and their bonuses. For them, markets are free of regulation against predatory lending; free of taxing the wealthy so as to shift the burden onto labor; free for the financial sector to wrap itself around the “real” economy like a parasitic vine around a tree and extract the entire surplus in the form of financial engineering.

This is a travesty of freedom. But worst of all is the “freedom” of today’s economic discussion from the wisdom of classical political economy and from the experience of economic history regarding how societies have coped with the debt overhead through the ages.

An alternative policy to save the economy from being “rescued” by Wall Street

There is an alternative to ward all this off. A debt writedown, followed by a land tax so that the “free lunch” (what John Stuart Mill called the “unearned increment” of rising land prices, a gain that landlords made “in their sleep”) would serve as the tax base rather than labor and industry being burdened with an income tax.

One move would be to prevent banks from lending against the land’s value. They could lend against buildings, but not land. This would cut the maximum permissible loan to 50 to 60 per cent of the total property price – unless the government did what classical economists advocated and tax the land’s market price (its rental value) as the tax base, shifting the tax back off of labor. This would achieve the kind of free markets that Adam Smith, John Stuart Mill and Alfred Marshall described, and which the Progressive Era aimed to achieve with America’s first income tax in 1913.

A land tax would prevent housing prices from rising again. This would save homeowners from taking on so much debt in order to obtain housing. And it would save the economy from seeing “wealth creation” take the form of the “unearned increment” being capitalized into higher bank loans with their associated carrying charges (interest and amortization). The key to real estate bubbles is to inflate site valuations.

The Recovery Plan From Hell: What Wall Street Wants

Casino Capitalism

This phrase was originally used to describe gambling on the stockmarket but takes on a new and very literal meaning with some of these 'credit default swaps' as described on Moon of Alabama.

Some of these CDS dont have an underlying asset and thus have no connection with the real economy, anymore than gambling at a casino has any connection with real work and value creation (except that it can lead the the ruin of jobs, careers, families and lives - or in the case of CDS, the ruin of the financial sector and the real economy along with it.)

'Credit default swaps' or 'derivatives' are simply a bet or a gamble. And you can bet on anything you like, eg, I'll pay you a dollar now, and if it rains 5mm or more between 4 and 5pm tomorrow, you pay me $100. If you say ok or negotiate a new agreed price, we have a contract.

They can have a useful insurance or hedging purpose, eg a premium paid in case my house gets burned down by a bushfire. But you dont have to own the asset hedged or insured. So what if 20 people who dont own my house also make a bet? There will be a very big payout in total if there is a fire. And they'll have an interest in fire, wont they? Perhaps go for a country drive, carelessly dispose of a cigarette or two, or have a barbecue during a total fire ban?

b:

We are now several month into this and some people still do not 'get it'. I'll try to give a slow but simple answer.

AIG signed insurances against bond defaults in form of Credit Default Swaps in a notional value of more than $450 billion. Some insured bonds defaulted and AIG paid out for these insurances. As it did not have the money to do so, the Bush and Obama administrations decided that the taxpayer should pay.

Up to November $150 billion were given to AIG and on Monday another $30 billion. But AIG still has $300 billion of CDS exposure and will likely make more high losses on that.

When Lehman Brothers went bankrupt -a 'credit event' - people who had insured their holdings of Lehman bonds asked their insurers to pay for their losses. Such a credit event was also triggered when Fannie and Freddie were taken into receivership.

AIG which had written insurances for the debt of those entities faced a big payout and the taxpayer had to cough up the money.

What is the moral justification for this [the taxpayer funded bailout when AIG couldnt pay]?

It was morally okay because the people and institutions insured by AIG were justified to expected the payout as their 'assets', i.e. Lehman bonds had really lost value. They had hedged a real risk like you do when you pay for fire insurance on your house. Insured you are right to expect a payout when your house burns down.

But their is another group of people and institution who got money from the taxpayer through AIG.

This second group never ever owned a Lehman or Freddie or Fannie bond. But they also had bought insurance from AIG against the default of these bonds. These people never invested in 'assets'. They payed a small monthly fee to AIG for a lottery slip and when Lehman failed they had a huge win. They went to AIG, pointed to the 'credit event' and demanded the payout. AIG obliged and the taxpayer gave the money.

Some may ask:

"While it is easy to understand the moral case for bailing out real bondholders that insured against default, what is the moral case for paying out to people who made pure bets? These people never owned a fire insured house at all. Why do they get taxpayer money when my house burns down?"

"If they had be given back the money they payed for the lottery slips, i.e. the small monthly insurance premium, that would probably be understandable, but why do the taxpayers pay out the lottery win when the private lottery organizer is bankrupt?"

Simple answer to those simple questions: Because the administration says so.

There are big numbers behind this.

Of a total of $600 billion real [Lehman Bros] bonds owned by lots of people only $150 billion were credit insured. When Lehman bonds defaulted, owners of $450 billion of its debt lost all their money.

Owners of $150 billion of that debt did not lose any money. They were payed out the insurance they had contracted and the insurers (backed by the taxpayers) carried the loss.

The total economic loss was $600 billion, $450 billion by bond owners and $150 billion by insurances. $600 million left the monetary system - poof.

But on top of that there were written insurances with a notional value of $250-$350 billion that insured people who never had the insured asset but were only playing the lottery. These people demanded money from the insurer and indeed they were payed.

This part of the 'event' did not have a real economic loss. No money left the system.

Instead money was payed from the insurer toward the insurance holder, the buyers of CDS'. As the insurer was backed by the taxpayer every one and his/her children now pays for the enormous lottery win for a few people, who had risked very little. This is money that is moving from the bottom of the society to the top in unprecedented amounts.

What is the moral justification for this?

There is none.

Who are those people who are getting huge payouts from the taxpayer for risking little?

AIG still has $300 billion in CDS exposure. If the Lehman quote of 1/3 real insurance and 2/3 lottery bets is the same with those CDS, which is likely, than a few rich people are waiting for a $200 billion free payout from the taxpayer.

Geithner does not want you or anyone else to know who profits from this scheme without having risked any real money. His rich friends do not want you to know that they are racking in billions of dollars in lottery wins that cost them little money and that the taxpayers are paying out because the private lottery operator went bust. They will pay off Geithner when his job is done and he finally gets kicked out.

People in the known and within the business are not likely to explain this... This is money moving from many persons at the bottom to very few at the top.

Geithner and his masters fear that if the public knew or understood that, they would probably only get the costs of the lottery slip disbursed - if at all.

They want the big one. AIG has still $300 billion at risk that you and your kids will have to pay for.

They want it. And they are getting it. And there is nothing you can do about that.

In comments b spells it out even more brutally:

The whole thing is not about what's cheaper but how do [the rich elite] make the most money out of it.

The Lehman bust made, as explained in my post above, some folks about 200-300bn in cash without having invested much more than a million or two. Did anyone of those people thought of how to make the bust "cheaper" for them - sure they did. If they could have gotten $200bn for a $1 investment they would have taken it.

I am devastate that otherwise intelligent people like you do not get this yet.

IT WAS A SCAM. Lehman was made to go bust because some people made A WHOLE LOT OF MONEY from the Lehman bust - not millions - hundreds of billons!

They "insured" themselves against the bust, then arranged it and the taxpayers paid the "insured" sum. What is so hard to understand with that?

From the taxpayer view there was never ANY need to pay anything at all. Those really insured against losses of assets they owned might have a moral case - might!!!

Those "insured" and never owned the "insured" asset never had a justifiable case to get anything from their bet.

The later make up for two thirds of what the taxpayer is paying out.

Why are the taxpayers, we and our children, paying for these?

---
"Saving Lehman" was never an option. The setup was clear for anyone who could read the market.

The question was and is how to save the taxpayer from taking the losses others take as profits.

If this is true, and I do feel some scepticism that it is as baldly manipulated as all that, then this is simply epic financial and political corruption.

b's solution is to Declare all Credit Default Swaps Null and Void. In comments to this post b is able to point out that a number of informed commentators are also calling for a similar solution to the derivatives nightmare which threatens to bring down the global financial system.

This phrase was originally used to describe gambling on the stockmarket but takes on a new and very literal meaning with some of these 'credit default swaps' as described on Moon of Alabama.

Some of these CDS dont have an underlying asset and thus have no connection with the real economy, anymore than gambling at a casino has any connection with real work and value creation (except that it can lead the the ruin of jobs, careers, families and lives - or in the case of CDS, the ruin of the financial sector and the real economy along with it.)

'Credit default swaps' or 'derivatives' are simply a bet or a gamble. And you can bet on anything you like, eg, I'll pay you a dollar now, and if it rains 5mm or more between 4 and 5pm tomorrow, you pay me $100. If you say ok or negotiate a new agreed price, we have a contract.

They can have a useful insurance or hedging purpose, eg a premium paid in case my house gets burned down by a bushfire. But you dont have to own the asset hedged or insured. So what if 20 people who dont own my house also make a bet? There will be a very big payout in total if there is a fire. And they'll have an interest in fire, wont they? Perhaps go for a country drive, carelessly dispose of a cigarette or two, or have a barbecue during a total fire ban?

b:

We are now several month into this and some people still do not 'get it'. I'll try to give a slow but simple answer.

AIG signed insurances against bond defaults in form of Credit Default Swaps in a notional value of more than $450 billion. Some insured bonds defaulted and AIG paid out for these insurances. As it did not have the money to do so, the Bush and Obama administrations decided that the taxpayer should pay.

Up to November $150 billion were given to AIG and on Monday another $30 billion. But AIG still has $300 billion of CDS exposure and will likely make more high losses on that.

When Lehman Brothers went bankrupt -a 'credit event' - people who had insured their holdings of Lehman bonds asked their insurers to pay for their losses. Such a credit event was also triggered when Fannie and Freddie were taken into receivership.

AIG which had written insurances for the debt of those entities faced a big payout and the taxpayer had to cough up the money.

What is the moral justification for this [the taxpayer funded bailout when AIG couldnt pay]?

It was morally okay because the people and institutions insured by AIG were justified to expected the payout as their 'assets', i.e. Lehman bonds had really lost value. They had hedged a real risk like you do when you pay for fire insurance on your house. Insured you are right to expect a payout when your house burns down.

But their is another group of people and institution who got money from the taxpayer through AIG.

This second group never ever owned a Lehman or Freddie or Fannie bond. But they also had bought insurance from AIG against the default of these bonds. These people never invested in 'assets'. They payed a small monthly fee to AIG for a lottery slip and when Lehman failed they had a huge win. They went to AIG, pointed to the 'credit event' and demanded the payout. AIG obliged and the taxpayer gave the money.

Some may ask:

"While it is easy to understand the moral case for bailing out real bondholders that insured against default, what is the moral case for paying out to people who made pure bets? These people never owned a fire insured house at all. Why do they get taxpayer money when my house burns down?"

"If they had be given back the money they payed for the lottery slips, i.e. the small monthly insurance premium, that would probably be understandable, but why do the taxpayers pay out the lottery win when the private lottery organizer is bankrupt?"

Simple answer to those simple questions: Because the administration says so.

There are big numbers behind this.

Of a total of $600 billion real [Lehman Bros] bonds owned by lots of people only $150 billion were credit insured. When Lehman bonds defaulted, owners of $450 billion of its debt lost all their money.

Owners of $150 billion of that debt did not lose any money. They were payed out the insurance they had contracted and the insurers (backed by the taxpayers) carried the loss.

The total economic loss was $600 billion, $450 billion by bond owners and $150 billion by insurances. $600 million left the monetary system - poof.

But on top of that there were written insurances with a notional value of $250-$350 billion that insured people who never had the insured asset but were only playing the lottery. These people demanded money from the insurer and indeed they were payed.

This part of the 'event' did not have a real economic loss. No money left the system.

Instead money was payed from the insurer toward the insurance holder, the buyers of CDS'. As the insurer was backed by the taxpayer every one and his/her children now pays for the enormous lottery win for a few people, who had risked very little. This is money that is moving from the bottom of the society to the top in unprecedented amounts.

What is the moral justification for this?

There is none.

Who are those people who are getting huge payouts from the taxpayer for risking little?

AIG still has $300 billion in CDS exposure. If the Lehman quote of 1/3 real insurance and 2/3 lottery bets is the same with those CDS, which is likely, than a few rich people are waiting for a $200 billion free payout from the taxpayer.

Geithner does not want you or anyone else to know who profits from this scheme without having risked any real money. His rich friends do not want you to know that they are racking in billions of dollars in lottery wins that cost them little money and that the taxpayers are paying out because the private lottery operator went bust. They will pay off Geithner when his job is done and he finally gets kicked out.

People in the known and within the business are not likely to explain this... This is money moving from many persons at the bottom to very few at the top.

Geithner and his masters fear that if the public knew or understood that, they would probably only get the costs of the lottery slip disbursed - if at all.

They want the big one. AIG has still $300 billion at risk that you and your kids will have to pay for.

They want it. And they are getting it. And there is nothing you can do about that.

In comments b spells it out even more brutally:

The whole thing is not about what's cheaper but how do [the rich elite] make the most money out of it.

The Lehman bust made, as explained in my post above, some folks about 200-300bn in cash without having invested much more than a million or two. Did anyone of those people thought of how to make the bust "cheaper" for them - sure they did. If they could have gotten $200bn for a $1 investment they would have taken it.

I am devastate that otherwise intelligent people like you do not get this yet.

IT WAS A SCAM. Lehman was made to go bust because some people made A WHOLE LOT OF MONEY from the Lehman bust - not millions - hundreds of billons!

They "insured" themselves against the bust, then arranged it and the taxpayers paid the "insured" sum. What is so hard to understand with that?

From the taxpayer view there was never ANY need to pay anything at all. Those really insured against losses of assets they owned might have a moral case - might!!!

Those "insured" and never owned the "insured" asset never had a justifiable case to get anything from their bet.

The later make up for two thirds of what the taxpayer is paying out.

Why are the taxpayers, we and our children, paying for these?

---
"Saving Lehman" was never an option. The setup was clear for anyone who could read the market.

The question was and is how to save the taxpayer from taking the losses others take as profits.

If this is true, and I do feel some scepticism that it is as baldly manipulated as all that, then this is simply epic financial and political corruption.

b's solution is to Declare all Credit Default Swaps Null and Void. In comments to this post b is able to point out that a number of informed commentators are also calling for a similar solution to the derivatives nightmare which threatens to bring down the global financial system.

Casino Capitalism

The Anti-Empire Report March 4th, 2009

The Anti-Empire Report

March 4th, 2009
by William Blum
www.killinghope.org

Being serious about torture. Or not.

In Cambodia they're once again endeavoring to hold trials to bring some former senior Khmer Rouge officials to justice for their 1975-79 war crimes and crimes against humanity. The current defendant in a United Nations-organized trial, Kaing Guek Eav, who was the head of a Khmer Rouge torture center, has confessed to atrocities, but insists he was acting under orders.1 As we all know, this is the defense that the Nuremberg Tribunal rejected for the Nazi defendants. Everyone knows that, right? No one places any weight on such a defense any longer, right? We make jokes about Nazis declaring: "I was only following orders!" ("Ich habe nur den Befehlen gehorcht!") Except that both the Bush and Obama administrations have spoken in favor of it. Here's the new head of the CIA, Leon Panetta: "What I have expressed as a concern, as has the president, is that those who operated under the rules that were provided by the Attorney General in the interpretation of the law [concerning torture] and followed those rules ought not to be penalized. And ... I would not support, obviously, an investigation or a prosecution of those individuals. I think they did their job."2 Operating under the rules ... doing their job ... are of course the same as following orders.

The UN Convention Against Torture (first adopted in 1984), which has been ratified by the United States, says quite clearly, "An order from a superior officer or a public authority may not be invoked as a justification of torture." The Torture Convention enacts a prohibition against torture that is a cornerstone of international law and a principle on a par with the prohibition against slavery and genocide.

Of course, those giving the orders are no less guilty. On the very day of Obama's inauguration, the United Nation's special torture rapporteur invoked the Convention in calling on the United States to pursue former president George W. Bush and defense secretary Donald Rumsfeld for torture and bad treatment of Guantanamo prisoners.3

On several occasions, President Obama has indicated his reluctance to pursue war crimes charges against Bush officials, by expressing a view such as: “I don't believe that anybody is above the law. On the other hand I also have a belief that we need to look forward as opposed to looking backwards.” This is the same excuse Cambodian Prime Minister Hun Sen has given for not punishing Khmer Rouge leaders. In December 1998 he asserted: "We should dig a hole and bury the past and look ahead to the 21st century with a clean slate."4 Hun Sen has been in power all the years since then, and no Khmer Rouge leader has been convicted for their role in the historic mass murder.

And by not investigating Bush officials, Obama is indeed saying that they're above the law. Like the Khmer Rouge officials have been. Michael Ratner, a professor at Columbia Law School and president of the Center for Constitutional Rights, said prosecuting Bush officials is necessary to set future anti-torture policy. "The only way to prevent this from happening again is to make sure that those who were responsible for the torture program pay the price for it. I don't see how we regain our moral stature by allowing those who were intimately involved in the torture programs to simply walk off the stage and lead lives where they are not held accountable."5

One reason for the non-prosecution may be that serious trials of the many Bush officials who contributed to the torture policies might reveal the various forms of Democratic Party non-opposition and collaboration.

It should also be noted that the United States supported Pol Pot (who died in April 1998) and the Khmer Rouge for several years after they were ousted from power by the Vietnamese in 1979. This support began under Jimmy Carter and his National Security Adviser, Zbigniew Brzezinski, and continued under Ronald Reagan.6 A lingering bitterness by American cold warriors toward Vietnam, the small nation which monumental US power had not been able to defeat, and its perceived closeness to the Soviet Union, appears to be the only explanation for this policy. Humiliation runs deep when you're a superpower.

Neither should it be forgotten in this complex cautionary tale that the Khmer Rouge in all likelihood would never have come to power, nor even made a serious attempt to do so, if not for the massive American "carpet bombing" of Cambodia in 1969-70 and the US-supported overthrow of Prince Sihanouk in 1970 and his replacement by a man closely tied to the United States.7 Thank you Richard Nixon and Henry Kissinger. Well done, lads.

By the way, if you're not already turned off by many of Obama's appointments, listen to how James Jones opened his talk at the Munich Conference on Security Policy on February 8: "Thank you for that wonderful tribute to Henry Kissinger yesterday. Congratulations. As the most recent National Security Advisor of the United States, I take my daily orders from Dr. Kissinger."8

Lastly, Spain's High Court recently announced it would launch a war crimes investigation into an Israeli ex-defense minister and six other top security officials for their role in a 2002 attack that killed a Hamas commander and 14 civilians in Gaza.9 Spain has for some time been the world's leading practitioner of "universal jurisdiction" for human-rights violations, such as their indictment of Chilean dictator Augusto Pinochet a decade ago. The Israeli case involved the dropping of a bomb on the home of the Hamas leader; most of those killed were children. The United States does this very same thing every other day in Afghanistan or Pakistan. Given the refusal of American presidents to invoke even their "national jurisdiction" over American officials-cum-war criminals, we can only hope that someone reminds the Spanish authorities of a few names, names like Bush, Cheney, Rumsfeld, Powell, Rice, Feith, Perle, Yoo, and a few others with a piece missing, a piece that's shaped like a conscience. There isn't even a need to rely on international law alone, for there's an American law against war crimes, passed by a Republican-dominated Congress in 1996.10

The noted Israeli columnist, Uri Avnery, writing about the Israeli case, tried to capture the spirit of Israeli society that produces such war criminals and war crimes. He observed: "This system indoctrinates its pupils with a violent tribal cult, totally ethnocentric, which sees in the whole of world history nothing but an endless story of Jewish victimhood. This is a religion of a Chosen People, indifferent to others, a religion without compassion for anyone who is not Jewish, which glorifies the God-decreed genocide described in the Biblical book of Joshua."11

It would take very little substitution to apply this statement to the United States — like "American" for "Jewish" and "American exceptionalism" for "a Chosen People".

Hell hath no fury like an imperialist scorned.

Hugo Chávez's greatest sin is that he has shown disrespect for the American Empire. Or as they would say in America's inner cities — He's dissed the Man. Such behavior of course cannot go unpunished lest it give other national leaders the wrong idea. Over the years, the United States has gotten along just fine with brutal dictators, mass murderers, torturers, and leaders who did nothing to relieve the poverty of their population — Augusto Pinochet, Pol Pot, the Greek Junta, Ferdinand Marcos, Suharto, Duvalier, Mobutu, the Brazil Junta, Somoza, Saddam Hussein, South African apartheid leaders, Portuguese fascists, etc., etc., terrible guys all, all seriously supported by Washington at one time or another; for none made it a regular habit, if ever, to diss the Man.

The latest evidence, we are told, that Hugo Chávez is a dictator and a threat to life as we know it is that he pushed for and got a constitutional amendment to remove term limits from the presidency. The American media and the opposition in Venezuela often make it sound as if Chávez is going to be guaranteed office for life, whereas he of course will have to be elected each time. Neither are we reminded that it's not unusual for a nation to not have a term limit for its highest office. France, Germany, and the United Kingdom, if not all of Europe and much of the rest of the world, do not have such a limit. The United States did not have a term limit on the office of the president during the nation's first 162 years, until the ratification of the 22nd Amendment in 1951. Were all American presidents prior to that time dictators?

In 2005, when Colombian President Alvaro Uribe succeeded in getting term limits lifted, the US mainstream media took scant notice. President Bush subsequently honored Uribe with the American Presidential Medal of Freedom. But in the period leading up to the February 15 referendum in Venezuela, the American media were competing with each other over who could paint Chávez and the Venezuelan constitutional process in the most critical and ominous terms. Typical was an op-ed in the Washington Post the day before the vote, which was headlined: "Closing in on Hugo Chávez". Its opening sentence read: "The beginning of the end is setting in for Hugo Chávez."12

For several years now, the campaign to malign Chávez has at times included issues of Israel and anti-Semitism. An isolated vandalism of a Caracas synagogue on January 30th of this year fed into this campaign. Synagogues are of course vandalized occasionally in the United States and many European countries, but no one ascribes this to a government policy driven by anti-semitism. With Chávez they do. In the American media, the lead up to the Venezuelan vote was never far removed from the alleged "Jewish" issue.

"Despite the government’s efforts to put the [synagogue] controversy to rest," the New York Times wrote a few days before the referendum vote, "a sense of dread still lingers among Venezuela’s 12,000 to 14,000 Jews."13

A day earlier, a Washington Post editorial was entitled: "Mr. Chávez vs. the Jews - With George W. Bush gone, Venezuela's strongman has found new enemies."14 Shortly before, a Post headline had informed us: "Jews in S. America Increasingly Uneasy - Government and Media Seen Fostering Anti-Semitism in Venezuela, Elsewhere"15

So commonplace has the Chávez-Jewish association become that a leading US progressive organization, Council on Hemispheric Affairs (COHA) in Washington, DC, recently distributed an article that reads more like the handiwork of a conservative group than a progressive one. I was prompted to write to them as follows:

Dear People,

I'm very sorry to say that I found your Venezuelan commentary by Larry Birns and David Rosenblum Felson to be remarkably lacking. The authors seem unable, or unwilling, to distinguish between being against Israeli policies from anti-semitism. It's kind of late in the day for them to not have comprehended the difference. They are forced to fall back on a State Department statement to make their case. Is that not enough said?

They condemn Chávez likening Israel’s occupation of Gaza to the Holocaust. But what if it's an apt comparison? They don't delve into this question at all.

They also condemn the use of the word "Zionism", saying that "in 9 times out of 10 involving the use of this word in fact smacks of anti-Semitism." Really? Can they give a precise explanation of how one distinguishes between an anti-Semitic use of the word and a non-anti-semitic use of it? That would be interesting.

The authors write that Venezuela's "anti-Israeli initiative ... revealingly transcends the intensity of almost every Arabic nation or normal adversary of Israel." Really. Since when are the totally gutless, dictator Arab nations the standard bearer for progressives? The ideal we should emulate. Egypt, Saudi Arabia, and Jordan are almost never seriously and harshly critical of Israeli policies toward the Palestinians. Therefore, Venezuela shouldn't be?

The authors state: "In a Christmas Eve address to the nation, Chávez charged that, 'Some minorities, descendants of the same ones who crucified Christ ... took all the world’s wealth for themselves'. Here, Chávez was not talking so much about Robin Hood, but rather unquestionably dipping into the lore of anti-Semitism." Well, here's the full quote: "The world has enough for all, but it turns out that some minorities, descendants of the same ones who crucified Christ, descendants of the same ones who threw Bolivar out of here and also crucified him in their own way at Santa Marta there in Colombia ..." Hmm, were the Jews so active in South America?

The ellipsis after the word "Christ" indicates that the authors consciously and purposely omitted the words that would have given the lie to their premise. Truly astonishing.

After Chávez won the term-limits referendum with about 55% of the vote, a State Department spokesperson stated: "For the most part this was a process that was fully consistent with democratic process." Various individuals and websites on the left have responded to this as an encouraging sign that the Obama administration is embarking on a new Venezuelan policy. At the risk of sounding like a knee-reflex cynic, I think this attitude is at best premature, at worst rather naive. It's easy for a State Department a level-or-so above the Bushies, i.e., semi-civilized, to make such a statement. A little more difficult would be accepting as normal and unthreatening Venezuela having good relations with countries like Cuba, Iran and Russia and not blocking Venezuela from the UN Security Council. Even more significant would be the United States ending its funding of groups in Venezuela determined to subvert and/or overthrow Chávez.
You've got to be carefully taught

I've been playing around with a new book for awhile. I don't know if I'll find the time to actually complete it, but if I do it'll be called something like "Myths of U.S. foreign policy: How Americans keep getting fooled into support". The leading myth of all, the one which entraps more Americans than any other, is the belief that the United States, in its foreign policy, means well. American leaders may make mistakes, they may blunder, they may lie, they may even on the odd occasion cause more harm than good, but they do mean well. Their intentions are honorable, if not divinely inspired. Of that most Americans are certain. And as long as a person clings to that belief, it's rather unlikely that s/he will become seriously doubtful and critical of the official stories.

It takes a lot of repetition while an American is growing up to inculcate this message into their young consciousness, and lots more repetition later on. Think of some of the lines from the song about racism from the Broadway classic show, "South Pacific" — "You've got to be taught" ...

You've got to be taught
from year to year.
It's got to be drummed
in your dear little ear.
You've got to be taught
before it's too late.
Before you are 6 or 7 or 8.
To hate all the people
your relatives hate.
You've got to be carefully taught.

The education of an American true-believer is ongoing, continuous. All forms of media, all the time. Here is Michael Mullen, chairman of the Joint Chiefs of Staff, the highest military officer in the United States, writing in the Washington Post recently:

"We in the U.S. military are likewise held to a high standard. Like the early Romans, we are expected to do the right thing, and when we don't, to make it right again. We have learned, after seven years of war, that trust is the coin of the realm — that building it takes time, losing it takes mere seconds, and maintaining it may be our most important and most difficult objective. That's why images of prisoner maltreatment at Abu Ghraib still serve as recruiting tools for al-Qaeda. And it's why each civilian casualty for which we are even remotely responsible sets back our efforts to gain the confidence of the Afghan people months, if not years. It doesn't matter how hard we try to avoid hurting the innocent, and we do try very hard. It doesn't matter how proportional the force we deploy, how precisely we strike. It doesn't even matter if the enemy hides behind civilians. What matters are the death and destruction that result and the expectation that we could have avoided it. In the end, all that matters is that, despite our best efforts, sometimes we take the very lives we are trying to protect. ... Lose the people's trust, and we lose the war. ... I see this sort of trust being fostered by our troops all over the world. They are building schools, roads, wells, hospitals and power stations. They work every day to build the sort of infrastructure that enables local governments to stand on their own. But mostly, even when they are going after the enemy, they are building friendships. They are building trust. And they are doing it in superb fashion."16

How many young servicemembers have heard such a talk from Mullen or other officers? How many of them have not been impressed, even choked up? How many Americans reading or hearing such stirring words have not had a lifetime of reinforcement reinforced once again? How many could even imagine that Admiral Mullen is spouting a bunch of crap? The great majority of Americans will swallow it. When Mullen declares: "What matters are the death and destruction that result and the expectation that we could have avoided it", he's implying that there was no way to avoid it. But of course it could have been easily avoided by not dropping bombs on the Afghan people.

You tell the true-believers that the truth is virtually the exact opposite of what Mullen has said and they look at you like you just got off the Number 36 bus from Mars. Bill Clinton bombed Yugoslavia for 78 days and nights in a row. His military and political policies destroyed one of the most progressive countries in Europe. And he called it "humanitarian intervention". It's still regarded by almost all Americans, including many, if not most, "progressives", as just that.

Now why is that? Are all these people just ignorant? I think a better answer is that they have certain preconceptions; consciously or unconsciously, they have certain basic beliefs about the United States and its foreign policy, most prominent amongst which is the belief that the US means well. And if you don't deal with this basic belief you'll be talking to a stone wall.
Notes

1. Associated Press, August 1, 2007 ↩
2. Press conference, February 25, 2009, transcript by Federal News Service ↩
3. Agence France Presse (AFP), January 20, 2009 ↩
4. New York Times, December 29, 1998 ↩
5. Associated Press, November 17, 2008 ↩
6. See William Blum, "Rogue State", chapter 10 ("Supporting Pol Pot") ↩
7. See William Blum, "Killing Hope", chapter 20 ("Cambodia, 1955-1973") ↩
8. http://www.realclearpolitics.com/articles/2009/02/jones_munich_conference.html ↩
9. Reuters news agency, January 30, 2009 ↩
10. The War Crimes Act (18 U.S.C. 2441) ↩
11. Haaretz, leading Israeli newspaper, January 30, 2009 ↩
12. Washington Post, February 14, 2009, column by Edward Schumacher-Matos ↩
13. New York Times, February 13, 2009 ↩
14. Washington Post, February 12, 2009 ↩
15. Washington Post, February 8, 2009 ↩
16. Washington Post, February 15, 2009, p. B7 ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

www.killinghope.org

The Anti-Empire Report

March 4th, 2009
by William Blum
www.killinghope.org

Being serious about torture. Or not.

In Cambodia they're once again endeavoring to hold trials to bring some former senior Khmer Rouge officials to justice for their 1975-79 war crimes and crimes against humanity. The current defendant in a United Nations-organized trial, Kaing Guek Eav, who was the head of a Khmer Rouge torture center, has confessed to atrocities, but insists he was acting under orders.1 As we all know, this is the defense that the Nuremberg Tribunal rejected for the Nazi defendants. Everyone knows that, right? No one places any weight on such a defense any longer, right? We make jokes about Nazis declaring: "I was only following orders!" ("Ich habe nur den Befehlen gehorcht!") Except that both the Bush and Obama administrations have spoken in favor of it. Here's the new head of the CIA, Leon Panetta: "What I have expressed as a concern, as has the president, is that those who operated under the rules that were provided by the Attorney General in the interpretation of the law [concerning torture] and followed those rules ought not to be penalized. And ... I would not support, obviously, an investigation or a prosecution of those individuals. I think they did their job."2 Operating under the rules ... doing their job ... are of course the same as following orders.

The UN Convention Against Torture (first adopted in 1984), which has been ratified by the United States, says quite clearly, "An order from a superior officer or a public authority may not be invoked as a justification of torture." The Torture Convention enacts a prohibition against torture that is a cornerstone of international law and a principle on a par with the prohibition against slavery and genocide.

Of course, those giving the orders are no less guilty. On the very day of Obama's inauguration, the United Nation's special torture rapporteur invoked the Convention in calling on the United States to pursue former president George W. Bush and defense secretary Donald Rumsfeld for torture and bad treatment of Guantanamo prisoners.3

On several occasions, President Obama has indicated his reluctance to pursue war crimes charges against Bush officials, by expressing a view such as: “I don't believe that anybody is above the law. On the other hand I also have a belief that we need to look forward as opposed to looking backwards.” This is the same excuse Cambodian Prime Minister Hun Sen has given for not punishing Khmer Rouge leaders. In December 1998 he asserted: "We should dig a hole and bury the past and look ahead to the 21st century with a clean slate."4 Hun Sen has been in power all the years since then, and no Khmer Rouge leader has been convicted for their role in the historic mass murder.

And by not investigating Bush officials, Obama is indeed saying that they're above the law. Like the Khmer Rouge officials have been. Michael Ratner, a professor at Columbia Law School and president of the Center for Constitutional Rights, said prosecuting Bush officials is necessary to set future anti-torture policy. "The only way to prevent this from happening again is to make sure that those who were responsible for the torture program pay the price for it. I don't see how we regain our moral stature by allowing those who were intimately involved in the torture programs to simply walk off the stage and lead lives where they are not held accountable."5

One reason for the non-prosecution may be that serious trials of the many Bush officials who contributed to the torture policies might reveal the various forms of Democratic Party non-opposition and collaboration.

It should also be noted that the United States supported Pol Pot (who died in April 1998) and the Khmer Rouge for several years after they were ousted from power by the Vietnamese in 1979. This support began under Jimmy Carter and his National Security Adviser, Zbigniew Brzezinski, and continued under Ronald Reagan.6 A lingering bitterness by American cold warriors toward Vietnam, the small nation which monumental US power had not been able to defeat, and its perceived closeness to the Soviet Union, appears to be the only explanation for this policy. Humiliation runs deep when you're a superpower.

Neither should it be forgotten in this complex cautionary tale that the Khmer Rouge in all likelihood would never have come to power, nor even made a serious attempt to do so, if not for the massive American "carpet bombing" of Cambodia in 1969-70 and the US-supported overthrow of Prince Sihanouk in 1970 and his replacement by a man closely tied to the United States.7 Thank you Richard Nixon and Henry Kissinger. Well done, lads.

By the way, if you're not already turned off by many of Obama's appointments, listen to how James Jones opened his talk at the Munich Conference on Security Policy on February 8: "Thank you for that wonderful tribute to Henry Kissinger yesterday. Congratulations. As the most recent National Security Advisor of the United States, I take my daily orders from Dr. Kissinger."8

Lastly, Spain's High Court recently announced it would launch a war crimes investigation into an Israeli ex-defense minister and six other top security officials for their role in a 2002 attack that killed a Hamas commander and 14 civilians in Gaza.9 Spain has for some time been the world's leading practitioner of "universal jurisdiction" for human-rights violations, such as their indictment of Chilean dictator Augusto Pinochet a decade ago. The Israeli case involved the dropping of a bomb on the home of the Hamas leader; most of those killed were children. The United States does this very same thing every other day in Afghanistan or Pakistan. Given the refusal of American presidents to invoke even their "national jurisdiction" over American officials-cum-war criminals, we can only hope that someone reminds the Spanish authorities of a few names, names like Bush, Cheney, Rumsfeld, Powell, Rice, Feith, Perle, Yoo, and a few others with a piece missing, a piece that's shaped like a conscience. There isn't even a need to rely on international law alone, for there's an American law against war crimes, passed by a Republican-dominated Congress in 1996.10

The noted Israeli columnist, Uri Avnery, writing about the Israeli case, tried to capture the spirit of Israeli society that produces such war criminals and war crimes. He observed: "This system indoctrinates its pupils with a violent tribal cult, totally ethnocentric, which sees in the whole of world history nothing but an endless story of Jewish victimhood. This is a religion of a Chosen People, indifferent to others, a religion without compassion for anyone who is not Jewish, which glorifies the God-decreed genocide described in the Biblical book of Joshua."11

It would take very little substitution to apply this statement to the United States — like "American" for "Jewish" and "American exceptionalism" for "a Chosen People".

Hell hath no fury like an imperialist scorned.

Hugo Chávez's greatest sin is that he has shown disrespect for the American Empire. Or as they would say in America's inner cities — He's dissed the Man. Such behavior of course cannot go unpunished lest it give other national leaders the wrong idea. Over the years, the United States has gotten along just fine with brutal dictators, mass murderers, torturers, and leaders who did nothing to relieve the poverty of their population — Augusto Pinochet, Pol Pot, the Greek Junta, Ferdinand Marcos, Suharto, Duvalier, Mobutu, the Brazil Junta, Somoza, Saddam Hussein, South African apartheid leaders, Portuguese fascists, etc., etc., terrible guys all, all seriously supported by Washington at one time or another; for none made it a regular habit, if ever, to diss the Man.

The latest evidence, we are told, that Hugo Chávez is a dictator and a threat to life as we know it is that he pushed for and got a constitutional amendment to remove term limits from the presidency. The American media and the opposition in Venezuela often make it sound as if Chávez is going to be guaranteed office for life, whereas he of course will have to be elected each time. Neither are we reminded that it's not unusual for a nation to not have a term limit for its highest office. France, Germany, and the United Kingdom, if not all of Europe and much of the rest of the world, do not have such a limit. The United States did not have a term limit on the office of the president during the nation's first 162 years, until the ratification of the 22nd Amendment in 1951. Were all American presidents prior to that time dictators?

In 2005, when Colombian President Alvaro Uribe succeeded in getting term limits lifted, the US mainstream media took scant notice. President Bush subsequently honored Uribe with the American Presidential Medal of Freedom. But in the period leading up to the February 15 referendum in Venezuela, the American media were competing with each other over who could paint Chávez and the Venezuelan constitutional process in the most critical and ominous terms. Typical was an op-ed in the Washington Post the day before the vote, which was headlined: "Closing in on Hugo Chávez". Its opening sentence read: "The beginning of the end is setting in for Hugo Chávez."12

For several years now, the campaign to malign Chávez has at times included issues of Israel and anti-Semitism. An isolated vandalism of a Caracas synagogue on January 30th of this year fed into this campaign. Synagogues are of course vandalized occasionally in the United States and many European countries, but no one ascribes this to a government policy driven by anti-semitism. With Chávez they do. In the American media, the lead up to the Venezuelan vote was never far removed from the alleged "Jewish" issue.

"Despite the government’s efforts to put the [synagogue] controversy to rest," the New York Times wrote a few days before the referendum vote, "a sense of dread still lingers among Venezuela’s 12,000 to 14,000 Jews."13

A day earlier, a Washington Post editorial was entitled: "Mr. Chávez vs. the Jews - With George W. Bush gone, Venezuela's strongman has found new enemies."14 Shortly before, a Post headline had informed us: "Jews in S. America Increasingly Uneasy - Government and Media Seen Fostering Anti-Semitism in Venezuela, Elsewhere"15

So commonplace has the Chávez-Jewish association become that a leading US progressive organization, Council on Hemispheric Affairs (COHA) in Washington, DC, recently distributed an article that reads more like the handiwork of a conservative group than a progressive one. I was prompted to write to them as follows:

Dear People,

I'm very sorry to say that I found your Venezuelan commentary by Larry Birns and David Rosenblum Felson to be remarkably lacking. The authors seem unable, or unwilling, to distinguish between being against Israeli policies from anti-semitism. It's kind of late in the day for them to not have comprehended the difference. They are forced to fall back on a State Department statement to make their case. Is that not enough said?

They condemn Chávez likening Israel’s occupation of Gaza to the Holocaust. But what if it's an apt comparison? They don't delve into this question at all.

They also condemn the use of the word "Zionism", saying that "in 9 times out of 10 involving the use of this word in fact smacks of anti-Semitism." Really? Can they give a precise explanation of how one distinguishes between an anti-Semitic use of the word and a non-anti-semitic use of it? That would be interesting.

The authors write that Venezuela's "anti-Israeli initiative ... revealingly transcends the intensity of almost every Arabic nation or normal adversary of Israel." Really. Since when are the totally gutless, dictator Arab nations the standard bearer for progressives? The ideal we should emulate. Egypt, Saudi Arabia, and Jordan are almost never seriously and harshly critical of Israeli policies toward the Palestinians. Therefore, Venezuela shouldn't be?

The authors state: "In a Christmas Eve address to the nation, Chávez charged that, 'Some minorities, descendants of the same ones who crucified Christ ... took all the world’s wealth for themselves'. Here, Chávez was not talking so much about Robin Hood, but rather unquestionably dipping into the lore of anti-Semitism." Well, here's the full quote: "The world has enough for all, but it turns out that some minorities, descendants of the same ones who crucified Christ, descendants of the same ones who threw Bolivar out of here and also crucified him in their own way at Santa Marta there in Colombia ..." Hmm, were the Jews so active in South America?

The ellipsis after the word "Christ" indicates that the authors consciously and purposely omitted the words that would have given the lie to their premise. Truly astonishing.

After Chávez won the term-limits referendum with about 55% of the vote, a State Department spokesperson stated: "For the most part this was a process that was fully consistent with democratic process." Various individuals and websites on the left have responded to this as an encouraging sign that the Obama administration is embarking on a new Venezuelan policy. At the risk of sounding like a knee-reflex cynic, I think this attitude is at best premature, at worst rather naive. It's easy for a State Department a level-or-so above the Bushies, i.e., semi-civilized, to make such a statement. A little more difficult would be accepting as normal and unthreatening Venezuela having good relations with countries like Cuba, Iran and Russia and not blocking Venezuela from the UN Security Council. Even more significant would be the United States ending its funding of groups in Venezuela determined to subvert and/or overthrow Chávez.
You've got to be carefully taught

I've been playing around with a new book for awhile. I don't know if I'll find the time to actually complete it, but if I do it'll be called something like "Myths of U.S. foreign policy: How Americans keep getting fooled into support". The leading myth of all, the one which entraps more Americans than any other, is the belief that the United States, in its foreign policy, means well. American leaders may make mistakes, they may blunder, they may lie, they may even on the odd occasion cause more harm than good, but they do mean well. Their intentions are honorable, if not divinely inspired. Of that most Americans are certain. And as long as a person clings to that belief, it's rather unlikely that s/he will become seriously doubtful and critical of the official stories.

It takes a lot of repetition while an American is growing up to inculcate this message into their young consciousness, and lots more repetition later on. Think of some of the lines from the song about racism from the Broadway classic show, "South Pacific" — "You've got to be taught" ...

You've got to be taught
from year to year.
It's got to be drummed
in your dear little ear.
You've got to be taught
before it's too late.
Before you are 6 or 7 or 8.
To hate all the people
your relatives hate.
You've got to be carefully taught.

The education of an American true-believer is ongoing, continuous. All forms of media, all the time. Here is Michael Mullen, chairman of the Joint Chiefs of Staff, the highest military officer in the United States, writing in the Washington Post recently:

"We in the U.S. military are likewise held to a high standard. Like the early Romans, we are expected to do the right thing, and when we don't, to make it right again. We have learned, after seven years of war, that trust is the coin of the realm — that building it takes time, losing it takes mere seconds, and maintaining it may be our most important and most difficult objective. That's why images of prisoner maltreatment at Abu Ghraib still serve as recruiting tools for al-Qaeda. And it's why each civilian casualty for which we are even remotely responsible sets back our efforts to gain the confidence of the Afghan people months, if not years. It doesn't matter how hard we try to avoid hurting the innocent, and we do try very hard. It doesn't matter how proportional the force we deploy, how precisely we strike. It doesn't even matter if the enemy hides behind civilians. What matters are the death and destruction that result and the expectation that we could have avoided it. In the end, all that matters is that, despite our best efforts, sometimes we take the very lives we are trying to protect. ... Lose the people's trust, and we lose the war. ... I see this sort of trust being fostered by our troops all over the world. They are building schools, roads, wells, hospitals and power stations. They work every day to build the sort of infrastructure that enables local governments to stand on their own. But mostly, even when they are going after the enemy, they are building friendships. They are building trust. And they are doing it in superb fashion."16

How many young servicemembers have heard such a talk from Mullen or other officers? How many of them have not been impressed, even choked up? How many Americans reading or hearing such stirring words have not had a lifetime of reinforcement reinforced once again? How many could even imagine that Admiral Mullen is spouting a bunch of crap? The great majority of Americans will swallow it. When Mullen declares: "What matters are the death and destruction that result and the expectation that we could have avoided it", he's implying that there was no way to avoid it. But of course it could have been easily avoided by not dropping bombs on the Afghan people.

You tell the true-believers that the truth is virtually the exact opposite of what Mullen has said and they look at you like you just got off the Number 36 bus from Mars. Bill Clinton bombed Yugoslavia for 78 days and nights in a row. His military and political policies destroyed one of the most progressive countries in Europe. And he called it "humanitarian intervention". It's still regarded by almost all Americans, including many, if not most, "progressives", as just that.

Now why is that? Are all these people just ignorant? I think a better answer is that they have certain preconceptions; consciously or unconsciously, they have certain basic beliefs about the United States and its foreign policy, most prominent amongst which is the belief that the US means well. And if you don't deal with this basic belief you'll be talking to a stone wall.
Notes

1. Associated Press, August 1, 2007 ↩
2. Press conference, February 25, 2009, transcript by Federal News Service ↩
3. Agence France Presse (AFP), January 20, 2009 ↩
4. New York Times, December 29, 1998 ↩
5. Associated Press, November 17, 2008 ↩
6. See William Blum, "Rogue State", chapter 10 ("Supporting Pol Pot") ↩
7. See William Blum, "Killing Hope", chapter 20 ("Cambodia, 1955-1973") ↩
8. http://www.realclearpolitics.com/articles/2009/02/jones_munich_conference.html ↩
9. Reuters news agency, January 30, 2009 ↩
10. The War Crimes Act (18 U.S.C. 2441) ↩
11. Haaretz, leading Israeli newspaper, January 30, 2009 ↩
12. Washington Post, February 14, 2009, column by Edward Schumacher-Matos ↩
13. New York Times, February 13, 2009 ↩
14. Washington Post, February 12, 2009 ↩
15. Washington Post, February 8, 2009 ↩
16. Washington Post, February 15, 2009, p. B7 ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

www.killinghope.org

The Anti-Empire Report March 4th, 2009

Anti Empire Report Feb 2009 by William Blum

The Anti-Empire Report

February 3rd, 2009
by William Blum
www.killinghope.org

Change (in rhetoric) we can believe in.

I've said all along that whatever good changes might occur in regard to non-foreign policy issues, such as what's already taken place concerning the environment and abortion, the Obama administration will not produce any significantly worthwhile change in US foreign policy; little done in this area will reduce the level of misery that the American Empire regularly brings down upon humanity. And to the extent that Barack Obama is willing to clearly reveal what he believes about anything controversial, he appears to believe in the empire.

The Obamania bubble should already have begun to lose some air with the multiple US bombings of Pakistan within the first few days following the inauguration. The Pentagon briefed the White House of its plans, and the White House had no objection. So bombs away — Barack Obama's first war crime. The dozens of victims were, of course, all bad people, including all the women and children. As with all these bombings, we'll never know the names of all the victims — It's doubtful that even Pakistan knows — or what crimes they had committed to deserve the death penalty. Some poor Pakistani probably earned a nice fee for telling the authorities that so-and-so bad guy lived in that house over there; too bad for all the others who happened to live with the bad guy, assuming of course that the bad guy himself actually lived in that house over there.

The new White House press secretary, Robert Gibbs, declined to answer questions about the first airstrikes, saying "I'm not going to get into these matters."1 Where have we heard that before?

After many of these bombings in recent years, a spokesperson for the United States or NATO has solemnly declared: “We regret the loss of life.” These are the same words used by the Irish Republican Army (IRA) on a number of occasions, but their actions were typically called “terrorist”.

I wish I could be an Obamaniac. I envy their enthusiasm. Here, in the form of an open letter to President Obama, are some of the "changes we can believe in" in foreign policy that would have to occur to win over the non-believers like me.
Iran

Just leave them alone. There is no "Iranian problem". They are a threat to no one. Iran hasn't invaded any other country in centuries. No, President Ahmadinejad did not threaten Israel with any violence. Stop patrolling the waters surrounding Iran with American warships. Stop halting Iranian ships to check for arms shipments to Hamas. (That's generally regarded as an act of war.) Stop using Iranian dissident groups to carry out terrorist attacks inside Iran. Stop kidnaping Iranian diplomats. Stop the continual spying and recruiting within Iran. And yet, with all that, you can still bring yourself to say: "If countries like Iran are willing to unclench their fist, they will find an extended hand from us."2

Iran has as much right to arm Hamas as the US has to arm Israel. And there is no international law that says that the United States, the UK, Russia, China, Israel, France, Pakistan, and India are entitled to nuclear weapons, but Iran is not. Iran has every reason to feel threatened. Will you continue to provide nuclear technology to India, which has not signed the nuclear Non-Proliferation Treaty, while threatening Iran, an NPT signatory, with sanctions and warfare?

Russia

Stop surrounding the country with new NATO members. Stop looking to instigate new "color" revolutions in former Soviet republics and satellites. Stop arming and supporting Georgia in its attempts to block the independence of South Ossetia and Abkhasia, the breakaway regions on the border of Russia. And stop the placement of anti-missile systems in Russia's neighbors, the Czech Republic and Poland, on the absurd grounds that it's to ward off an Iranian missile attack. It was Czechoslovakia and Poland that the Germans also used to defend their imperialist ambitions — The two countries were being invaded on the grounds that Germans there were being maltreated. The world was told.

"The U.S. government made a big mistake from the breakup of the Soviet Union," said former Soviet leader Mikhail Gorbachev last year. "At that time the Russian people were really euphoric about America and the U.S. was really number one in the minds of many Russians." But, he added, the United States moved aggressively to expand NATO and appeared gleeful at Russia's weakness.3

Cuba

Making it easier to travel there and send remittances is very nice (if, as expected, you do that), but these things are dwarfed by the need to end the US embargo. In 1999, Cuba filed a suit against the United States for $181.1 billion in compensation for economic losses and loss of life during the almost forty years of this aggression. The suit held Washington responsible for the death of 3,478 Cubans and the wounding and disabling of 2,099 others. We can now add ten more years to all three figures. The negative, often crippling, effects of the embargo extend into every aspect of Cuban life.

In addition to closing Guantanamo prison, the adjacent US military base established in 1903 by American military force should be closed and the land returned to Cuba.

The Cuban Five, held prisoner in the United States for over 10 years, guilty only of trying to prevent American-based terrorism against Cuba, should be released. Actually there were 10 Cubans arrested; five knew that they could expect no justice in an American court and pled guilty to get shorter sentences.4

Iraq

Freeing the Iraqi people to death ... Nothing short of a complete withdrawal of all US forces, military and contracted, and the closure of all US military bases and detention and torture centers, can promise a genuine end to US involvement and the beginning of meaningful Iraqi sovereignty. To begin immediately. Anything less is just politics and imperialism as usual. In six years of war, the Iraqi people have lost everything of value in their lives. As the Washington Post reported in 2007: "It is a common refrain among war-weary Iraqis that things were better before the U.S.-led invasion in 2003."5 The good news is that the Iraqi people have 5,000 years experience in crafting a society to live in. They should be given the opportunity.

Saudi Arabia

Demand before the world that this government enter the 21st century (or at least the 20th), or the United States has to stop pretending that it gives a damn about human rights, women, homosexuals, religious liberty, and civil liberties. The Bush family had long-standing financial ties to members of the Saudi ruling class. What will be your explanation if you maintain the status quo?

Haiti

Reinstate the exiled Jean Bertrand Aristide to the presidency, which he lost when the United States overthrew him in 2004. To seek forgiveness for our sins, give the people of Haiti lots and lots of money and assistance.

Colombia

Stop giving major military support to a government that for years has been intimately tied to death squads, torture, and drug trafficking; in no other country in the world have so many progressive candidates for public office, unionists, and human-rights activists been murdered. Are you concerned that this is the closest ally the United States has in all of Latin America?

Venezuela

Hugo Chavez may talk too much but he's no threat except to the capitalist system of Venezuela and, by inspiration, elsewhere in Latin America. He has every good historical reason to bad-mouth American foreign policy, including Washington's role in the coup that overthrew him in 2002. If you can't understand why Chavez is not in love with what the United States does all over the world, I can give you a long reading list.

Put an end to support for Chavez's opposition by the Agency for International Development, the National Endowment for Democracy, and other US government agencies. US diplomats should not be meeting with Venezuelans plotting coups against Chavez, nor should they be interfering in elections.

Send Luis Posada from Florida to Venezuela, which has asked for his extradition for his masterminding the bombing of a Cuban airline in 1976, taking 73 lives. Extradite the man, or try him in the US, or stop talking about the war on terrorism.

And please try not to repeat the nonsense about Venezuela being a dictatorship. It's a freer society than the United States. It has, for example, a genuine opposition daily media, non-existent in the United States. If you doubt that, try naming a single American daily newspaper or TV network that was unequivocally against the US invasions of Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam. Or even against two of them? How about one? Is there a single one that supports Hamas and/or Hezbollah? A few weeks ago, the New York Times published a story concerning a possible Israeli attack upon Iran, and stated: "Several details of the covert effort have been omitted from this account, at the request of senior United States intelligence and administration officials, to avoid harming continuing operations."6

Alas, Mr. President, among other disparaging remarks, you've already accused Chavez of being "a force that has interrupted progress in the region."7 This is a statement so contrary to the facts, even to plain common sense, so hypocritical given Washington's history in Latin America, that I despair of you ever freeing yourself from the ideological shackles that have bound every American president of the past century. It may as well be inscribed in their oath of office — that a president must be antagonistic toward any country that has expressly rejected Washington as the world's savior. You made this remark in an interview with Univision, Venezuela's leading, implacable media critic of the Chavez government. What regional progress could you be referring to, the police state of Colombia?

Bolivia

Stop American diplomats, Peace Corps volunteers, Fulbright scholars, and the U.S. Drug Enforcement Administration, from spying and fomenting subversion inside Bolivia. As the first black president of the United States, you could try to cultivate empathy toward, and from, the first indigenous president of Bolivia. Congratulate Bolivian president Evo Morales on winning a decisive victory on a recent referendum to approve a new constitution which enshrines the rights of the indigenous people and, for the first time, institutes separation of church and state.

Afghanistan

Perhaps the most miserable people on the planet, with no hope in sight as long as the world's powers continue to bomb, invade, overthrow, occupy, and slaughter in their land. The US Army is planning on throwing 30,000 more young American bodies into the killing fields and is currently building eight new major bases in southern Afghanistan. Is that not insane? If it makes sense to you I suggest that you start the practice of the president accompanying the military people when they inform American parents that their child has died in a place called Afghanistan.

If you pull out from this nightmare, you could also stop bombing Pakistan. Leave even if it results in the awful Taliban returning to power. They at least offer security to the country's wretched, and indications are that the current Taliban are not all fundamentalists.

But first, close Bagram prison and other detention camps, which are worse than Guantanamo.

And stop pretending that the United States gives a damn about the Afghan people and not oil and gas pipelines which can bypass Russia and Iran. The US has been endeavoring to fill the power vacuum in Central Asia created by the Soviet Union’s dissolution in order to assert Washington's domination over a region containing the second largest proven reserves of petroleum and natural gas in the world. Is Afghanistan going to be your Iraq?

Israel

The most difficult task for you, but the one that would earn for you the most points. To declare that Israel is no longer the 51st state of the union would bring down upon your head the wrath of the most powerful lobby in the world and its many wealthy followers, as well as the Christian-fundamentalist Right and much of the media. But if you really want to see peace between Israel and Palestine you must cut off all military aid to Israel, in any form: hardware, software, personnel, money. And stop telling Hamas it has to recognize Israel and renounce violence until you tell Israel that it has to recognize Hamas and renounce violence.

North Korea

Bush called the country part of "the axis of evil", and Kim Jong Il a "pygmy" and "a spoiled child at a dinner table."8 But you might try to understand where Kim Jong Il is coming from. He sees that UN agencies went into Iraq and disarmed it, and then the United States invaded. The logical conclusion is not to disarm, but to go nuclear.

Central America

Stop interfering in the elections of Nicaragua, El Salvador and Guatemala, year after year. The Cold War has ended. And though you can't undo the horror perpetrated by the United States in the region in the 1980s, you can at least be kind to the immigrants in the US who came here trying to escape the long-term consequences of that terrible decade.

Vietnam

In your inauguration speech you spoke proudly of those "who have carried us up the long, rugged path towards prosperity and freedom ... For us, they fought and died, in places like ... Khe Sanh." So it is your studied and sincere opinion that the 58,000 American sevicemembers who died in Vietnam, while helping to kill over a million Vietnamese, gave their life for our prosperity and freedom? Would you care to defend that proposition without resort to any platitudes?

You might also consider this: In all the years since the Vietnam War ended, the three million Vietnamese suffering from diseases and deformities caused by US sprayings of the deadly chemical "Agent Orange" have received from the United States no medical attention, no environmental remediation, no compensation, and no official apology.

Kosovo

Stop supporting the most gangster government in the world, which has specialized in kidnaping, removing human body parts for sale, heavy trafficking in drugs, trafficking in women, various acts of terrorism, and ethnic cleansing of Serbs. This government would not be in power if the Bush administration had not seen them as America's natural allies. Do you share that view? UN Resolution 1244, adopted in 1999, reaffirmed the sovereignty and territorial integrity of the former Federal Republic of Yugoslavia to which Serbia is now the recognized successor state, and established that Kosovo was to remain part of Serbia. Why do we have a huge and permanent military base in that tiny self-declared country?

NATO

From protecting Europe against a [mythical] Soviet invasion to becoming an occupation army in Afghanistan. Put an end to this historical anachronism, what Russian leader Vladimir called "the stinking corpse of the cold war."9. You can accomplish this simply by leaving the organization. Without the United States and its never-ending military actions and officially-designated enemies, the organization would not even have the pretense of a purpose, which is all it has left. Members have had to be bullied, threatened and bribed to send armed forces to Afghanistan.
School of the Americas

Latin American countries almost never engage in war with each other, or any other countries. So for what kind of warfare are its military officers being trained by the United States? To suppress their own people. Close this school (the name has now been changed to protect the guilty) at Ft. Benning, Georgia that the United States has used to prepare two generations of Latin American military officers for careers in overthrowing progressive governments, death squads, torture, holding down dissent, and other charming activities. The British are fond of saying that the Empire was won on the playing fields of Eton. Americans can say that the road to Abu Ghraib, Guantanamo, and Bagram began in the classrooms of the School of the Americas.

Torture

Your executive orders concerning this matter of utmost importance are great to see, but they still leave something to be desired. They state that the new standards ostensibly putting an end to torture apply to any "armed conflict". But what if your administration chooses to view future counterterrorism and other operations as not part of an "armed conflict"? And no mention is made of "rendition" — kidnaping a man off the street, throwing him in a car, throwing a hood over his head, stripping off his clothes, placing him in a diaper, shackling him from every angle, and flying him to a foreign torture dungeon. Why can't you just say that this and all other American use of proxy torturers is banned? Forever.

It's not enough to say that you're against torture or that the United States "does not torture" or "will not torture". George W. Bush said the same on a regular basis. To show that you're not George W. Bush you need to investigate those responsible for the use of torture, even if this means prosecuting a small army of Bush administration war criminals.

You aren't off to a good start by appointing former CIA official John O. Brennan as your top adviser on counterterrorism. Brennan has called "rendition" a "vital tool" and praised the CIA's interrogation techniques for providing "lifesaving" intelligence.10 Whatever were you thinking, Barack?

Abdelbaset Ali Mohmed al Megrahi

Free this Libyan man from his prison in Scotland, where he is serving a life sentence after being framed by the United States for the bombing of PanAm flight 103 in December 1988, which took the lives of 270 people over Scotland. Iran actually financed a Palestinian group to carry out the bombing — as revenge for the US shooting down an Iranian passenger plane in July, killing 290 — not Libya, which the US accused for political reasons.11 Nations do not behave any more cynical than that. Megrahi lies in prison now dying of cancer, but still the US and the UK will not free him. It would be too embarrassing to admit to 20 years of shameless lying.

Mr. President, there's a lot more to be undone in our foreign policy if you wish to be taken seriously as a moral leader like Martin Luther King, Jr.: banning the use of depleted uranium, cluster bombs, and other dreadful weapons; joining the International Criminal Court instead of trying to sabotage it; making a number of other long-overdue apologies in addition to the one mentioned re Vietnam; and much more. You've got your work cut out for you if you really want to bring some happiness to this sad old world, make America credible and beloved again, stop creating armies of anti-American terrorists, and win over people like me.

And do you realize that you can eliminate all state and federal budget deficits in the United States, provide free health care and free university education to every American, pay for an unending array of worthwhile social and cultural programs, all just by ending our wars in Iraq and Afghanistan, not starting any new ones, and closing down the Pentagon's 700+ military bases? Think of it as the peace dividend Americans were promised when the Cold War would end some day, but never received. How about you delivering it, Mr. President? It's not too late.

But you are committed to the empire; and the empire is committed to war. Too bad.

Notes

1. Washington Post, January 24, 2009 ↩
2. Interview with al Arabiya TV, January 27, 2009 ↩
3. Gorbachev speaking in Florida, South Florida Sun-Sentinel, April 17, 2008 ↩
4. http://www.killinghope.org/bblum6/polpris.htm ↩
5. Washington Post, May 5, 2007, p.1 ↩
6. New York Times, January 11, 2009 ↩
7. Washington Post, January 19, 2009↩
8. Newsweek, May 27, 2002 ↩
9. Press Trust of India (news agency), December 21, 2007 ↩
10. Washington Post, November 26, 2008 ↩
11. http://www.killinghope.org/bblum6/panam.htm ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

The Anti-Empire Report

February 3rd, 2009
by William Blum
www.killinghope.org

Change (in rhetoric) we can believe in.

I've said all along that whatever good changes might occur in regard to non-foreign policy issues, such as what's already taken place concerning the environment and abortion, the Obama administration will not produce any significantly worthwhile change in US foreign policy; little done in this area will reduce the level of misery that the American Empire regularly brings down upon humanity. And to the extent that Barack Obama is willing to clearly reveal what he believes about anything controversial, he appears to believe in the empire.

The Obamania bubble should already have begun to lose some air with the multiple US bombings of Pakistan within the first few days following the inauguration. The Pentagon briefed the White House of its plans, and the White House had no objection. So bombs away — Barack Obama's first war crime. The dozens of victims were, of course, all bad people, including all the women and children. As with all these bombings, we'll never know the names of all the victims — It's doubtful that even Pakistan knows — or what crimes they had committed to deserve the death penalty. Some poor Pakistani probably earned a nice fee for telling the authorities that so-and-so bad guy lived in that house over there; too bad for all the others who happened to live with the bad guy, assuming of course that the bad guy himself actually lived in that house over there.

The new White House press secretary, Robert Gibbs, declined to answer questions about the first airstrikes, saying "I'm not going to get into these matters."1 Where have we heard that before?

After many of these bombings in recent years, a spokesperson for the United States or NATO has solemnly declared: “We regret the loss of life.” These are the same words used by the Irish Republican Army (IRA) on a number of occasions, but their actions were typically called “terrorist”.

I wish I could be an Obamaniac. I envy their enthusiasm. Here, in the form of an open letter to President Obama, are some of the "changes we can believe in" in foreign policy that would have to occur to win over the non-believers like me.
Iran

Just leave them alone. There is no "Iranian problem". They are a threat to no one. Iran hasn't invaded any other country in centuries. No, President Ahmadinejad did not threaten Israel with any violence. Stop patrolling the waters surrounding Iran with American warships. Stop halting Iranian ships to check for arms shipments to Hamas. (That's generally regarded as an act of war.) Stop using Iranian dissident groups to carry out terrorist attacks inside Iran. Stop kidnaping Iranian diplomats. Stop the continual spying and recruiting within Iran. And yet, with all that, you can still bring yourself to say: "If countries like Iran are willing to unclench their fist, they will find an extended hand from us."2

Iran has as much right to arm Hamas as the US has to arm Israel. And there is no international law that says that the United States, the UK, Russia, China, Israel, France, Pakistan, and India are entitled to nuclear weapons, but Iran is not. Iran has every reason to feel threatened. Will you continue to provide nuclear technology to India, which has not signed the nuclear Non-Proliferation Treaty, while threatening Iran, an NPT signatory, with sanctions and warfare?

Russia

Stop surrounding the country with new NATO members. Stop looking to instigate new "color" revolutions in former Soviet republics and satellites. Stop arming and supporting Georgia in its attempts to block the independence of South Ossetia and Abkhasia, the breakaway regions on the border of Russia. And stop the placement of anti-missile systems in Russia's neighbors, the Czech Republic and Poland, on the absurd grounds that it's to ward off an Iranian missile attack. It was Czechoslovakia and Poland that the Germans also used to defend their imperialist ambitions — The two countries were being invaded on the grounds that Germans there were being maltreated. The world was told.

"The U.S. government made a big mistake from the breakup of the Soviet Union," said former Soviet leader Mikhail Gorbachev last year. "At that time the Russian people were really euphoric about America and the U.S. was really number one in the minds of many Russians." But, he added, the United States moved aggressively to expand NATO and appeared gleeful at Russia's weakness.3

Cuba

Making it easier to travel there and send remittances is very nice (if, as expected, you do that), but these things are dwarfed by the need to end the US embargo. In 1999, Cuba filed a suit against the United States for $181.1 billion in compensation for economic losses and loss of life during the almost forty years of this aggression. The suit held Washington responsible for the death of 3,478 Cubans and the wounding and disabling of 2,099 others. We can now add ten more years to all three figures. The negative, often crippling, effects of the embargo extend into every aspect of Cuban life.

In addition to closing Guantanamo prison, the adjacent US military base established in 1903 by American military force should be closed and the land returned to Cuba.

The Cuban Five, held prisoner in the United States for over 10 years, guilty only of trying to prevent American-based terrorism against Cuba, should be released. Actually there were 10 Cubans arrested; five knew that they could expect no justice in an American court and pled guilty to get shorter sentences.4

Iraq

Freeing the Iraqi people to death ... Nothing short of a complete withdrawal of all US forces, military and contracted, and the closure of all US military bases and detention and torture centers, can promise a genuine end to US involvement and the beginning of meaningful Iraqi sovereignty. To begin immediately. Anything less is just politics and imperialism as usual. In six years of war, the Iraqi people have lost everything of value in their lives. As the Washington Post reported in 2007: "It is a common refrain among war-weary Iraqis that things were better before the U.S.-led invasion in 2003."5 The good news is that the Iraqi people have 5,000 years experience in crafting a society to live in. They should be given the opportunity.

Saudi Arabia

Demand before the world that this government enter the 21st century (or at least the 20th), or the United States has to stop pretending that it gives a damn about human rights, women, homosexuals, religious liberty, and civil liberties. The Bush family had long-standing financial ties to members of the Saudi ruling class. What will be your explanation if you maintain the status quo?

Haiti

Reinstate the exiled Jean Bertrand Aristide to the presidency, which he lost when the United States overthrew him in 2004. To seek forgiveness for our sins, give the people of Haiti lots and lots of money and assistance.

Colombia

Stop giving major military support to a government that for years has been intimately tied to death squads, torture, and drug trafficking; in no other country in the world have so many progressive candidates for public office, unionists, and human-rights activists been murdered. Are you concerned that this is the closest ally the United States has in all of Latin America?

Venezuela

Hugo Chavez may talk too much but he's no threat except to the capitalist system of Venezuela and, by inspiration, elsewhere in Latin America. He has every good historical reason to bad-mouth American foreign policy, including Washington's role in the coup that overthrew him in 2002. If you can't understand why Chavez is not in love with what the United States does all over the world, I can give you a long reading list.

Put an end to support for Chavez's opposition by the Agency for International Development, the National Endowment for Democracy, and other US government agencies. US diplomats should not be meeting with Venezuelans plotting coups against Chavez, nor should they be interfering in elections.

Send Luis Posada from Florida to Venezuela, which has asked for his extradition for his masterminding the bombing of a Cuban airline in 1976, taking 73 lives. Extradite the man, or try him in the US, or stop talking about the war on terrorism.

And please try not to repeat the nonsense about Venezuela being a dictatorship. It's a freer society than the United States. It has, for example, a genuine opposition daily media, non-existent in the United States. If you doubt that, try naming a single American daily newspaper or TV network that was unequivocally against the US invasions of Iraq, Afghanistan, Yugoslavia, Panama, Grenada, and Vietnam. Or even against two of them? How about one? Is there a single one that supports Hamas and/or Hezbollah? A few weeks ago, the New York Times published a story concerning a possible Israeli attack upon Iran, and stated: "Several details of the covert effort have been omitted from this account, at the request of senior United States intelligence and administration officials, to avoid harming continuing operations."6

Alas, Mr. President, among other disparaging remarks, you've already accused Chavez of being "a force that has interrupted progress in the region."7 This is a statement so contrary to the facts, even to plain common sense, so hypocritical given Washington's history in Latin America, that I despair of you ever freeing yourself from the ideological shackles that have bound every American president of the past century. It may as well be inscribed in their oath of office — that a president must be antagonistic toward any country that has expressly rejected Washington as the world's savior. You made this remark in an interview with Univision, Venezuela's leading, implacable media critic of the Chavez government. What regional progress could you be referring to, the police state of Colombia?

Bolivia

Stop American diplomats, Peace Corps volunteers, Fulbright scholars, and the U.S. Drug Enforcement Administration, from spying and fomenting subversion inside Bolivia. As the first black president of the United States, you could try to cultivate empathy toward, and from, the first indigenous president of Bolivia. Congratulate Bolivian president Evo Morales on winning a decisive victory on a recent referendum to approve a new constitution which enshrines the rights of the indigenous people and, for the first time, institutes separation of church and state.

Afghanistan

Perhaps the most miserable people on the planet, with no hope in sight as long as the world's powers continue to bomb, invade, overthrow, occupy, and slaughter in their land. The US Army is planning on throwing 30,000 more young American bodies into the killing fields and is currently building eight new major bases in southern Afghanistan. Is that not insane? If it makes sense to you I suggest that you start the practice of the president accompanying the military people when they inform American parents that their child has died in a place called Afghanistan.

If you pull out from this nightmare, you could also stop bombing Pakistan. Leave even if it results in the awful Taliban returning to power. They at least offer security to the country's wretched, and indications are that the current Taliban are not all fundamentalists.

But first, close Bagram prison and other detention camps, which are worse than Guantanamo.

And stop pretending that the United States gives a damn about the Afghan people and not oil and gas pipelines which can bypass Russia and Iran. The US has been endeavoring to fill the power vacuum in Central Asia created by the Soviet Union’s dissolution in order to assert Washington's domination over a region containing the second largest proven reserves of petroleum and natural gas in the world. Is Afghanistan going to be your Iraq?

Israel

The most difficult task for you, but the one that would earn for you the most points. To declare that Israel is no longer the 51st state of the union would bring down upon your head the wrath of the most powerful lobby in the world and its many wealthy followers, as well as the Christian-fundamentalist Right and much of the media. But if you really want to see peace between Israel and Palestine you must cut off all military aid to Israel, in any form: hardware, software, personnel, money. And stop telling Hamas it has to recognize Israel and renounce violence until you tell Israel that it has to recognize Hamas and renounce violence.

North Korea

Bush called the country part of "the axis of evil", and Kim Jong Il a "pygmy" and "a spoiled child at a dinner table."8 But you might try to understand where Kim Jong Il is coming from. He sees that UN agencies went into Iraq and disarmed it, and then the United States invaded. The logical conclusion is not to disarm, but to go nuclear.

Central America

Stop interfering in the elections of Nicaragua, El Salvador and Guatemala, year after year. The Cold War has ended. And though you can't undo the horror perpetrated by the United States in the region in the 1980s, you can at least be kind to the immigrants in the US who came here trying to escape the long-term consequences of that terrible decade.

Vietnam

In your inauguration speech you spoke proudly of those "who have carried us up the long, rugged path towards prosperity and freedom ... For us, they fought and died, in places like ... Khe Sanh." So it is your studied and sincere opinion that the 58,000 American sevicemembers who died in Vietnam, while helping to kill over a million Vietnamese, gave their life for our prosperity and freedom? Would you care to defend that proposition without resort to any platitudes?

You might also consider this: In all the years since the Vietnam War ended, the three million Vietnamese suffering from diseases and deformities caused by US sprayings of the deadly chemical "Agent Orange" have received from the United States no medical attention, no environmental remediation, no compensation, and no official apology.

Kosovo

Stop supporting the most gangster government in the world, which has specialized in kidnaping, removing human body parts for sale, heavy trafficking in drugs, trafficking in women, various acts of terrorism, and ethnic cleansing of Serbs. This government would not be in power if the Bush administration had not seen them as America's natural allies. Do you share that view? UN Resolution 1244, adopted in 1999, reaffirmed the sovereignty and territorial integrity of the former Federal Republic of Yugoslavia to which Serbia is now the recognized successor state, and established that Kosovo was to remain part of Serbia. Why do we have a huge and permanent military base in that tiny self-declared country?

NATO

From protecting Europe against a [mythical] Soviet invasion to becoming an occupation army in Afghanistan. Put an end to this historical anachronism, what Russian leader Vladimir called "the stinking corpse of the cold war."9. You can accomplish this simply by leaving the organization. Without the United States and its never-ending military actions and officially-designated enemies, the organization would not even have the pretense of a purpose, which is all it has left. Members have had to be bullied, threatened and bribed to send armed forces to Afghanistan.
School of the Americas

Latin American countries almost never engage in war with each other, or any other countries. So for what kind of warfare are its military officers being trained by the United States? To suppress their own people. Close this school (the name has now been changed to protect the guilty) at Ft. Benning, Georgia that the United States has used to prepare two generations of Latin American military officers for careers in overthrowing progressive governments, death squads, torture, holding down dissent, and other charming activities. The British are fond of saying that the Empire was won on the playing fields of Eton. Americans can say that the road to Abu Ghraib, Guantanamo, and Bagram began in the classrooms of the School of the Americas.

Torture

Your executive orders concerning this matter of utmost importance are great to see, but they still leave something to be desired. They state that the new standards ostensibly putting an end to torture apply to any "armed conflict". But what if your administration chooses to view future counterterrorism and other operations as not part of an "armed conflict"? And no mention is made of "rendition" — kidnaping a man off the street, throwing him in a car, throwing a hood over his head, stripping off his clothes, placing him in a diaper, shackling him from every angle, and flying him to a foreign torture dungeon. Why can't you just say that this and all other American use of proxy torturers is banned? Forever.

It's not enough to say that you're against torture or that the United States "does not torture" or "will not torture". George W. Bush said the same on a regular basis. To show that you're not George W. Bush you need to investigate those responsible for the use of torture, even if this means prosecuting a small army of Bush administration war criminals.

You aren't off to a good start by appointing former CIA official John O. Brennan as your top adviser on counterterrorism. Brennan has called "rendition" a "vital tool" and praised the CIA's interrogation techniques for providing "lifesaving" intelligence.10 Whatever were you thinking, Barack?

Abdelbaset Ali Mohmed al Megrahi

Free this Libyan man from his prison in Scotland, where he is serving a life sentence after being framed by the United States for the bombing of PanAm flight 103 in December 1988, which took the lives of 270 people over Scotland. Iran actually financed a Palestinian group to carry out the bombing — as revenge for the US shooting down an Iranian passenger plane in July, killing 290 — not Libya, which the US accused for political reasons.11 Nations do not behave any more cynical than that. Megrahi lies in prison now dying of cancer, but still the US and the UK will not free him. It would be too embarrassing to admit to 20 years of shameless lying.

Mr. President, there's a lot more to be undone in our foreign policy if you wish to be taken seriously as a moral leader like Martin Luther King, Jr.: banning the use of depleted uranium, cluster bombs, and other dreadful weapons; joining the International Criminal Court instead of trying to sabotage it; making a number of other long-overdue apologies in addition to the one mentioned re Vietnam; and much more. You've got your work cut out for you if you really want to bring some happiness to this sad old world, make America credible and beloved again, stop creating armies of anti-American terrorists, and win over people like me.

And do you realize that you can eliminate all state and federal budget deficits in the United States, provide free health care and free university education to every American, pay for an unending array of worthwhile social and cultural programs, all just by ending our wars in Iraq and Afghanistan, not starting any new ones, and closing down the Pentagon's 700+ military bases? Think of it as the peace dividend Americans were promised when the Cold War would end some day, but never received. How about you delivering it, Mr. President? It's not too late.

But you are committed to the empire; and the empire is committed to war. Too bad.

Notes

1. Washington Post, January 24, 2009 ↩
2. Interview with al Arabiya TV, January 27, 2009 ↩
3. Gorbachev speaking in Florida, South Florida Sun-Sentinel, April 17, 2008 ↩
4. http://www.killinghope.org/bblum6/polpris.htm ↩
5. Washington Post, May 5, 2007, p.1 ↩
6. New York Times, January 11, 2009 ↩
7. Washington Post, January 19, 2009↩
8. Newsweek, May 27, 2002 ↩
9. Press Trust of India (news agency), December 21, 2007 ↩
10. Washington Post, November 26, 2008 ↩
11. http://www.killinghope.org/bblum6/panam.htm ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

Anti Empire Report Feb 2009 by William Blum

The Anti-Empire Report January 3rd, 2009 by William Blum

The Anti-Empire Report

January 3rd, 2009

www.killinghope.org
America's other glorious war

The Pentagon pushes hard for a large increase in troops for Afghanistan. Barack Obama has been calling for the same since well before the November election. Listen to the drumbeats telling us that the security of the United States and the Free World necessitates increased action in this place called Afghanistan. As urgent as Iraq 2003, it is. Why? What is there about this backward, reactionary, woman-hating, failed state that warrants hundreds of deaths of American and NATO soldiers? That justifies tens of thousands of Afghan deaths since the first US bombing attacks in October 2001?

In early December, reports the Washington Post, "standing at Kandahar Air Field in Afghanistan, Defense Secretary Robert M. Gates said the United States is making a 'sustained commitment' to that country, one that will last 'some protracted period of time'." The story goes on to discuss $300 million in construction projects at this one base to house additional American forces, erecting guard stations and towers and perimeter fencing around the barracks area, putting in vehicle inspection areas, administration offices, cold-storage warehouse, a new power plant, electrical and water distribution systems, communications lines, housing for 1,500 personnel who sustain the systems, maintenance shops, warehouses1 ... America's wealth bleeds out endlessly.

Back in April Maj. Gen. David Rodriguez, commander of the US Army's 82nd Airborne Division, when asked how long it would take to create "lasting stability" in Afghanistan, replied: "In some way, shape or form ... I think it's a generation."2 "Stability", it should be noted, is a code word used regularly by the United States since at least the 1950s to mean that the regime in power is willing and able to behave the way Washington would like it to behave. It is remarkable, and scary, to read the US military writing about how it goes around the world bringing "stability" to (often ungrateful) people. This past October the Army published a manual called "Stability Operations".3 It discusses numerous American interventions all over the world since the 1890s, one example after another of bringing "stability" to benighted peoples. One can picture the young American service members reading it, or having it fed to them in lectures, full of pride to be a member of such an altruistic fighting force.

For those members of the US military in Afghanistan the most enlightening lesson they could receive is that their government's plans for that land of sadness have little or nothing to do with the welfare of the Afghan people. In the late 1970s through much of the 1980s, the country had a government that was relatively progressive, with full rights for women; even a Pentagon report of the time testified to the actuality of women's rights in the country.4 And what happened to that government? The United States was instrumental in overthrowing it. It was replaced by the Taliban.

Since the dissolution of the Soviet Union, US oil companies have been vying with Russia, Iran and other energy interests for the massive, untapped oil and natural gas reserves in the former Soviet republics of Central Asia. The building and protection of oil and gas pipelines in Afghanistan, to continue farther to Pakistan, India, and elsewhere, has been a key objective of US policy since before the 2001 American invasion and occupation of the country, although the subsequent turmoil there has presented serious obstacles to such plans. A planned Turkmenistan-Afghanistan-Pakistan-India pipeline has strong support from Washington because, amongst other reasons, the US is eager to block a competing pipeline that would bring gas to Pakistan and India from Iran.5 But security for such projects remains daunting, and that's where the US and NATO forces come in to play.

In the late 1990s, the American oil company, Unocal, met with Taliban officials in Texas to discuss the pipelines.6 Zalmay Khalilzad, later chosen to be the US ambassador to Afghanistan, worked for Unocal7; Hamid Karzai, later chosen by Washington to be the Afghan president, also reportedly worked for Unocal, although the company denies this. Unocal's talks with the Taliban, conducted with the full knowledge of the Clinton administration, and undeterred by the extreme repression of Taliban society, continued as late as 2000 or 2001.

As for NATO, it has no reason to be fighting in Afghanistan. Indeed, NATO has no legitimate reason for existence at all. Their biggest fear is that "failure" in Afghanistan would make this thought more present in the world's mind. If NATO hadn’t begun to intervene outside of Europe it would have highlighted its uselessness and lack of mission. “Out of area or out of business” it was said.

In June, the Canadian Center for Policy Alternatives published a report saying Taliban and insurgent activity against the US-NATO presence in Kandahar province puts the feasibility of the pipeline project in doubt. The report says southern regions in Afghanistan, including Kandahar, would have to be cleared of insurgent activity and land mines in two years to meet construction and investment schedules.

"Nobody is going to start putting pipe in the ground unless they are satisfied that there is some reasonable insurance that the workers for the pipeline are going to be safe," said Howard Brown, the Canadian representative for the Asian Development Bank, the major funding agency for the pipeline.8

If Americans were asked what they think their country is doing in Afghanistan, their answers would likely be one variation or another of "fighting terrorism", with some kind of connection to 9-11. But what does that mean? Of the tens of thousands of Afghans killed by American/NATO bombs over the course of seven years, how many can it be said had any kind of linkage to any kind of anti-American terrorist act, other than in Afghanistan itself during this period? Not one, as far as we know. The so-called "terrorist training camps" in Afghanistan were set up largely by the Taliban to provide fighters for their civil conflict with the Northern Alliance (minimally less religious fanatics and misogynists than the Taliban, but represented in the present Afghan government). As everyone knows, none of the alleged 9-11 hijackers was an Afghan; 15 of the 19 were from Saudi Arabia; and most of the planning for the attacks appears to have been carried out in Germany and the United States. So, of course, bomb Afghanistan. And keep bombing Afghanistan. And bomb Pakistan. Especially wedding parties (at least six so far).
Israel and Palestine, again, forever

Nothing changes. Including what I have to say on the matter. To prove my point, I'm repeating part of what I wrote in this report in July 2006 ...

There are times when I think this tired old world has gone on a few years too long. What's happening in the Middle East is so depressing. Most discussions of the everlasting Israel-Palestine conflict are variations on the child's eternal defense for misbehavior – "He started it!" Within two minutes of discussing/arguing the latest manifestation of the conflict the participants are back to 1967, then 1948, then biblical times. Instead of getting entangled in who started the current mess, I'd prefer to express what I see as two essential underlying facts of life which remain from one conflict to the next:

1. Israel's existence is not at stake and hasn't been so for decades, if it ever was, regardless of the many de rigueur militant statements by Middle East leaders over the years. If Israel would learn to deal with its neighbors in a non-expansionist, non-military, humane, and respectful manner, engage in full prisoner exchanges, and sincerely strive for a viable two-state (if not one-state) solution, even those who are opposed to the idea of a state based on a particular religion could accept the state of Israel, and the question of its right to exist would scarcely arise in people's minds. But as it is, Israel still uses the issue as a justification for its behavior, as Jews all over the world use the Holocaust and conflating anti-Zionism with anti-Semitism.
2. In a conflict between a thousand-pound gorilla and a mouse, it's the gorilla who has to make concessions in order for the two sides to progress to the next level. What can the Palestinians offer in the way of concession? Israel would reply to that question: "No violent attacks of any kind." But that would leave the status quo ante bellum – a life of unmitigated misery for the occupied, captive Palestinian people, confined to the world's largest open air concentration camp.

It is a wanton act of collective punishment that is depriving the Palestinians of food, electricity, water, money, access to the outside world ... and sleep. Israel has been sending jets flying over Gaza at night triggering sonic booms, traumatizing children. "I want nobody to sleep at night in Gaza," declared Israeli Prime Minister Ehud Olmer9, words suitable for Israel's tombstone.

Israel has created its worst enemies – they helped create Hamas as a counterweight to Fatah in Palestine, and their occupation of Lebanon created Hezbollah. The current terrible bombings can be expected to keep the process going. Since its very beginning, Israel has been almost continually engaged in fighting wars and taking other people's lands. Did not any better way ever occur to the idealistic Zionist pioneers?
The question that may never go away: Who really is Barack Obama?

In his autobiography, "Dreams From My Fathers", Barack Obama writes of taking a job at some point after graduating from Columbia University in 1983. He describes his employer as "a consulting house to multinational corporations" in New York City, and his functions as a "research assistant" and "financial writer".

The odd part of Obama's story is that he doesn't mention the name of his employer. However, a New York Times story of 2007 identifies the company as Business International Corporation.10 Equally odd is that the Times did not remind its readers that the newspaper itself had disclosed in 1977 that Business International had provided cover for four CIA employees in various countries between 1955 and 1960.11

The British journal, Lobster Magazine – which, despite its incongruous name, is a venerable international publication on intelligence matters – has reported that Business International was active in the 1980s promoting the candidacy of Washington-favored candidates in Australia and Fiji.12 In 1987, the CIA overthrew the Fiji government after but one month in office because of its policy of maintaining the island as a nuclear-free zone, meaning that American nuclear-powered or nuclear-weapons-carrying ships could not make port calls.13 After the Fiji coup, the candidate supported by Business International, who was much more amenable to Washington's nuclear desires, was reinstated to power – R.S.K. Mara was Prime Minister or President of Fiji from 1970 to 2000, except for the one-month break in 1987.

In his book, not only doesn't Obama mention his employer's name; he fails to say when he worked there, or why he left the job. There may well be no significance to these omissions, but inasmuch as Business International has a long association with the world of intelligence, covert actions, and attempts to penetrate the radical left – including Students for a Democratic Society (SDS)14 – it's valid to wonder if the inscrutable Mr. Obama is concealing something about his own association with this world.
On socialist Cuba's 50th anniversary, January 1, 2009: Notes on the beginning of its unforgivable revolution.

The existence of a revolutionary socialist government with growing ties to the Soviet Union only 90 miles away, insisted the United States government, was a situation which no self-respecting superpower should tolerate, and in 1961 it undertook an invasion of Cuba.

But less than 50 miles from the Soviet Union sat Pakistan, a close ally of the United States, a member since 1955 of the South-East Asia Treaty Organization (SEATO), the US-created anti-communist alliance. On the very border of the Soviet Union was Iran, an even closer ally of the United States, with its relentless electronic listening posts, aerial surveillance, and infiltration into Russian territory by American agents. And alongside Iran, also bordering the Soviet Union, was Turkey, a member of the Russians' mortal enemy, NATO, since 1951.

In 1962 during the "Cuban Missile Crisis", Washington, seemingly in a state of near-panic, informed the world that the Russians were installing "offensive" missiles in Cuba. The US promptly instituted a "quarantine" of the island – a powerful show of naval and marine forces in the Caribbean would stop and search all vessels heading towards Cuba; any found to contain military cargo would be forced to turn back.

The United States, however, had missiles and bomber bases already in place in Turkey and other missiles in Western Europe pointed toward the Soviet Union. Russian leader Nikita Khrushchev later wrote:

"The Americans had surrounded our country with military bases and threatened us with nuclear weapons, and now they would learn just what it feels like to have enemy missiles pointing at you; we'd be doing nothing more than giving them a little of their own medicine. ... After all, the United States had no moral or legal quarrel with us. We hadn't given the Cubans anything more than the Americans were giving to their allies. We had the same rights and opportunities as the Americans. Our conduct in the international arena was governed by the same rules and limits as the Americans."15

Lest anyone misunderstand, as Khrushchev apparently did, the rules under which Washington was operating, Time magazine was quick to explain. "On the part of the Communists," the magazine declared, "this equating [referring to Khrushchev's offer to mutually remove missiles and bombers from Cuba and Turkey] had obvious tactical motives. On the part of neutralists and pacifists [who welcomed Khrushchev's offer] it betrayed intellectual and moral confusion." The confusion lay, it seems, in not seeing clearly who were the good guys and who were the bad guys, for "The purpose of the U.S. bases [in Turkey] was not to blackmail Russia but to strengthen the defense system of NATO, which had been created as a safeguard against Russian aggression. As a member of NATO, Turkey welcomed the bases as a contribution to her own defense." Cuba, which had been invaded only the year before, could have, it seems, no such concern. Time continued its sermon, which undoubtedly spoke for most Americans:

"Beyond these differences between the two cases, there is an enormous moral difference between U.S. and Russian objectives ... To equate U.S. and Russian bases is in effect to equate U.S. and Russian purposes ... The U.S. bases, such as those in Turkey, have helped keep the peace since World War II, while the Russian bases in Cuba threatened to upset the peace. The Russian bases were intended to further conquest and domination, while U.S. bases were erected to preserve freedom. The difference should have been obvious to all."16

Equally obvious was the right of the United States to maintain a military base on Cuban soil – Guantanamo Naval Base by name, a vestige of colonialism staring down the throats of the Cuban people, which the US, to this day, refuses to vacate despite the vehement protest of the Castro government.

In the American lexicon, in addition to good and bad bases and missiles, there are good and bad revolutions. The American and French Revolutions were good. The Cuban Revolution is bad. It must be bad because so many people have left Cuba as a result of it.

But at least 100,000 people left the British colonies in America during and after the American Revolution. These Tories could not abide by the political and social changes, both actual and feared, particularly that change which attends all revolutions worthy of the name – Those looked down upon as inferiors no longer know their place. (Or as the US Secretary of State put it after the Russian Revolution: The Bolsheviks sought "to make the ignorant and incapable mass of humanity dominant in the earth."17)

The Tories fled to Nova Scotia and Britain carrying tales of the godless, dissolute, barbaric American revolutionaries. Those who remained and refused to take an oath of allegiance to the new state governments were denied virtually all civil liberties. Many were jailed, murdered, or forced into exile. After the American Civil War, thousands more fled to South America and other points, again disturbed by the social upheaval. How much more is such an exodus to be expected following the Cuban Revolution? – a true social revolution, giving rise to changes much more profound than anything in the American experience. How many more would have left the United States if 90 miles away lay the world's wealthiest nation welcoming their residence and promising all manner of benefits and rewards?
Notes

1. Washington Post, December 25, 2008 ↩
2. Reuters, April 29, 2008 ↩
3. http://usacac.army.mil/cac2/Repository/FM307/FM3-07.pdf ↩
4. U.S. Department of the Army, "Afghanistan, A Country Study" (1986), pp.121, 128, 130, 134, 136, 223, 232-3 ↩
5. Globe & Mail (Toronto), June 19, 2008 ↩
6. BBC News, December 4, 1997, "Taleban [sic] in Texas for talks on gas pipeline" ↩
7. Washington Post, November 23, 2001 ↩
8. United Press International, July 17, 2008 ↩
9. Associated Press, July 3, 2006 ↩
10. New York Times, October 30, 2007 ↩
11. New York Times, December 27, 1977, p.40 ↩
12. Lobster Magazine, Hull, UK, #14, November 1987 ↩
13. William Blum, “Rogue State: A Guide to the World’s Only Superpower”, pp.199-200 ↩
14. Carl Oglesby, "Ravens in the Storm: A Personal History of the 1960s Antiwar Movement" (2008), passim ↩
15. "Khrushchev Remembers" (1971) pp.494, 496 ↩
16. Time magazine, November 2, 1962 ↩
17. Cited by William Appleman Williams, "American Intervention in Russia: 1917-20", in David Horowitz, ed., "Containment and Revolution" (1967). Written in a letter to President Woodrow Wilson by Secretary of State Robert Lansing, uncle of John Foster and Allen Dulles. ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

killinghope.org

The Anti-Empire Report

January 3rd, 2009

www.killinghope.org
America's other glorious war

The Pentagon pushes hard for a large increase in troops for Afghanistan. Barack Obama has been calling for the same since well before the November election. Listen to the drumbeats telling us that the security of the United States and the Free World necessitates increased action in this place called Afghanistan. As urgent as Iraq 2003, it is. Why? What is there about this backward, reactionary, woman-hating, failed state that warrants hundreds of deaths of American and NATO soldiers? That justifies tens of thousands of Afghan deaths since the first US bombing attacks in October 2001?

In early December, reports the Washington Post, "standing at Kandahar Air Field in Afghanistan, Defense Secretary Robert M. Gates said the United States is making a 'sustained commitment' to that country, one that will last 'some protracted period of time'." The story goes on to discuss $300 million in construction projects at this one base to house additional American forces, erecting guard stations and towers and perimeter fencing around the barracks area, putting in vehicle inspection areas, administration offices, cold-storage warehouse, a new power plant, electrical and water distribution systems, communications lines, housing for 1,500 personnel who sustain the systems, maintenance shops, warehouses1 ... America's wealth bleeds out endlessly.

Back in April Maj. Gen. David Rodriguez, commander of the US Army's 82nd Airborne Division, when asked how long it would take to create "lasting stability" in Afghanistan, replied: "In some way, shape or form ... I think it's a generation."2 "Stability", it should be noted, is a code word used regularly by the United States since at least the 1950s to mean that the regime in power is willing and able to behave the way Washington would like it to behave. It is remarkable, and scary, to read the US military writing about how it goes around the world bringing "stability" to (often ungrateful) people. This past October the Army published a manual called "Stability Operations".3 It discusses numerous American interventions all over the world since the 1890s, one example after another of bringing "stability" to benighted peoples. One can picture the young American service members reading it, or having it fed to them in lectures, full of pride to be a member of such an altruistic fighting force.

For those members of the US military in Afghanistan the most enlightening lesson they could receive is that their government's plans for that land of sadness have little or nothing to do with the welfare of the Afghan people. In the late 1970s through much of the 1980s, the country had a government that was relatively progressive, with full rights for women; even a Pentagon report of the time testified to the actuality of women's rights in the country.4 And what happened to that government? The United States was instrumental in overthrowing it. It was replaced by the Taliban.

Since the dissolution of the Soviet Union, US oil companies have been vying with Russia, Iran and other energy interests for the massive, untapped oil and natural gas reserves in the former Soviet republics of Central Asia. The building and protection of oil and gas pipelines in Afghanistan, to continue farther to Pakistan, India, and elsewhere, has been a key objective of US policy since before the 2001 American invasion and occupation of the country, although the subsequent turmoil there has presented serious obstacles to such plans. A planned Turkmenistan-Afghanistan-Pakistan-India pipeline has strong support from Washington because, amongst other reasons, the US is eager to block a competing pipeline that would bring gas to Pakistan and India from Iran.5 But security for such projects remains daunting, and that's where the US and NATO forces come in to play.

In the late 1990s, the American oil company, Unocal, met with Taliban officials in Texas to discuss the pipelines.6 Zalmay Khalilzad, later chosen to be the US ambassador to Afghanistan, worked for Unocal7; Hamid Karzai, later chosen by Washington to be the Afghan president, also reportedly worked for Unocal, although the company denies this. Unocal's talks with the Taliban, conducted with the full knowledge of the Clinton administration, and undeterred by the extreme repression of Taliban society, continued as late as 2000 or 2001.

As for NATO, it has no reason to be fighting in Afghanistan. Indeed, NATO has no legitimate reason for existence at all. Their biggest fear is that "failure" in Afghanistan would make this thought more present in the world's mind. If NATO hadn’t begun to intervene outside of Europe it would have highlighted its uselessness and lack of mission. “Out of area or out of business” it was said.

In June, the Canadian Center for Policy Alternatives published a report saying Taliban and insurgent activity against the US-NATO presence in Kandahar province puts the feasibility of the pipeline project in doubt. The report says southern regions in Afghanistan, including Kandahar, would have to be cleared of insurgent activity and land mines in two years to meet construction and investment schedules.

"Nobody is going to start putting pipe in the ground unless they are satisfied that there is some reasonable insurance that the workers for the pipeline are going to be safe," said Howard Brown, the Canadian representative for the Asian Development Bank, the major funding agency for the pipeline.8

If Americans were asked what they think their country is doing in Afghanistan, their answers would likely be one variation or another of "fighting terrorism", with some kind of connection to 9-11. But what does that mean? Of the tens of thousands of Afghans killed by American/NATO bombs over the course of seven years, how many can it be said had any kind of linkage to any kind of anti-American terrorist act, other than in Afghanistan itself during this period? Not one, as far as we know. The so-called "terrorist training camps" in Afghanistan were set up largely by the Taliban to provide fighters for their civil conflict with the Northern Alliance (minimally less religious fanatics and misogynists than the Taliban, but represented in the present Afghan government). As everyone knows, none of the alleged 9-11 hijackers was an Afghan; 15 of the 19 were from Saudi Arabia; and most of the planning for the attacks appears to have been carried out in Germany and the United States. So, of course, bomb Afghanistan. And keep bombing Afghanistan. And bomb Pakistan. Especially wedding parties (at least six so far).
Israel and Palestine, again, forever

Nothing changes. Including what I have to say on the matter. To prove my point, I'm repeating part of what I wrote in this report in July 2006 ...

There are times when I think this tired old world has gone on a few years too long. What's happening in the Middle East is so depressing. Most discussions of the everlasting Israel-Palestine conflict are variations on the child's eternal defense for misbehavior – "He started it!" Within two minutes of discussing/arguing the latest manifestation of the conflict the participants are back to 1967, then 1948, then biblical times. Instead of getting entangled in who started the current mess, I'd prefer to express what I see as two essential underlying facts of life which remain from one conflict to the next:

1. Israel's existence is not at stake and hasn't been so for decades, if it ever was, regardless of the many de rigueur militant statements by Middle East leaders over the years. If Israel would learn to deal with its neighbors in a non-expansionist, non-military, humane, and respectful manner, engage in full prisoner exchanges, and sincerely strive for a viable two-state (if not one-state) solution, even those who are opposed to the idea of a state based on a particular religion could accept the state of Israel, and the question of its right to exist would scarcely arise in people's minds. But as it is, Israel still uses the issue as a justification for its behavior, as Jews all over the world use the Holocaust and conflating anti-Zionism with anti-Semitism.
2. In a conflict between a thousand-pound gorilla and a mouse, it's the gorilla who has to make concessions in order for the two sides to progress to the next level. What can the Palestinians offer in the way of concession? Israel would reply to that question: "No violent attacks of any kind." But that would leave the status quo ante bellum – a life of unmitigated misery for the occupied, captive Palestinian people, confined to the world's largest open air concentration camp.

It is a wanton act of collective punishment that is depriving the Palestinians of food, electricity, water, money, access to the outside world ... and sleep. Israel has been sending jets flying over Gaza at night triggering sonic booms, traumatizing children. "I want nobody to sleep at night in Gaza," declared Israeli Prime Minister Ehud Olmer9, words suitable for Israel's tombstone.

Israel has created its worst enemies – they helped create Hamas as a counterweight to Fatah in Palestine, and their occupation of Lebanon created Hezbollah. The current terrible bombings can be expected to keep the process going. Since its very beginning, Israel has been almost continually engaged in fighting wars and taking other people's lands. Did not any better way ever occur to the idealistic Zionist pioneers?
The question that may never go away: Who really is Barack Obama?

In his autobiography, "Dreams From My Fathers", Barack Obama writes of taking a job at some point after graduating from Columbia University in 1983. He describes his employer as "a consulting house to multinational corporations" in New York City, and his functions as a "research assistant" and "financial writer".

The odd part of Obama's story is that he doesn't mention the name of his employer. However, a New York Times story of 2007 identifies the company as Business International Corporation.10 Equally odd is that the Times did not remind its readers that the newspaper itself had disclosed in 1977 that Business International had provided cover for four CIA employees in various countries between 1955 and 1960.11

The British journal, Lobster Magazine – which, despite its incongruous name, is a venerable international publication on intelligence matters – has reported that Business International was active in the 1980s promoting the candidacy of Washington-favored candidates in Australia and Fiji.12 In 1987, the CIA overthrew the Fiji government after but one month in office because of its policy of maintaining the island as a nuclear-free zone, meaning that American nuclear-powered or nuclear-weapons-carrying ships could not make port calls.13 After the Fiji coup, the candidate supported by Business International, who was much more amenable to Washington's nuclear desires, was reinstated to power – R.S.K. Mara was Prime Minister or President of Fiji from 1970 to 2000, except for the one-month break in 1987.

In his book, not only doesn't Obama mention his employer's name; he fails to say when he worked there, or why he left the job. There may well be no significance to these omissions, but inasmuch as Business International has a long association with the world of intelligence, covert actions, and attempts to penetrate the radical left – including Students for a Democratic Society (SDS)14 – it's valid to wonder if the inscrutable Mr. Obama is concealing something about his own association with this world.
On socialist Cuba's 50th anniversary, January 1, 2009: Notes on the beginning of its unforgivable revolution.

The existence of a revolutionary socialist government with growing ties to the Soviet Union only 90 miles away, insisted the United States government, was a situation which no self-respecting superpower should tolerate, and in 1961 it undertook an invasion of Cuba.

But less than 50 miles from the Soviet Union sat Pakistan, a close ally of the United States, a member since 1955 of the South-East Asia Treaty Organization (SEATO), the US-created anti-communist alliance. On the very border of the Soviet Union was Iran, an even closer ally of the United States, with its relentless electronic listening posts, aerial surveillance, and infiltration into Russian territory by American agents. And alongside Iran, also bordering the Soviet Union, was Turkey, a member of the Russians' mortal enemy, NATO, since 1951.

In 1962 during the "Cuban Missile Crisis", Washington, seemingly in a state of near-panic, informed the world that the Russians were installing "offensive" missiles in Cuba. The US promptly instituted a "quarantine" of the island – a powerful show of naval and marine forces in the Caribbean would stop and search all vessels heading towards Cuba; any found to contain military cargo would be forced to turn back.

The United States, however, had missiles and bomber bases already in place in Turkey and other missiles in Western Europe pointed toward the Soviet Union. Russian leader Nikita Khrushchev later wrote:

"The Americans had surrounded our country with military bases and threatened us with nuclear weapons, and now they would learn just what it feels like to have enemy missiles pointing at you; we'd be doing nothing more than giving them a little of their own medicine. ... After all, the United States had no moral or legal quarrel with us. We hadn't given the Cubans anything more than the Americans were giving to their allies. We had the same rights and opportunities as the Americans. Our conduct in the international arena was governed by the same rules and limits as the Americans."15

Lest anyone misunderstand, as Khrushchev apparently did, the rules under which Washington was operating, Time magazine was quick to explain. "On the part of the Communists," the magazine declared, "this equating [referring to Khrushchev's offer to mutually remove missiles and bombers from Cuba and Turkey] had obvious tactical motives. On the part of neutralists and pacifists [who welcomed Khrushchev's offer] it betrayed intellectual and moral confusion." The confusion lay, it seems, in not seeing clearly who were the good guys and who were the bad guys, for "The purpose of the U.S. bases [in Turkey] was not to blackmail Russia but to strengthen the defense system of NATO, which had been created as a safeguard against Russian aggression. As a member of NATO, Turkey welcomed the bases as a contribution to her own defense." Cuba, which had been invaded only the year before, could have, it seems, no such concern. Time continued its sermon, which undoubtedly spoke for most Americans:

"Beyond these differences between the two cases, there is an enormous moral difference between U.S. and Russian objectives ... To equate U.S. and Russian bases is in effect to equate U.S. and Russian purposes ... The U.S. bases, such as those in Turkey, have helped keep the peace since World War II, while the Russian bases in Cuba threatened to upset the peace. The Russian bases were intended to further conquest and domination, while U.S. bases were erected to preserve freedom. The difference should have been obvious to all."16

Equally obvious was the right of the United States to maintain a military base on Cuban soil – Guantanamo Naval Base by name, a vestige of colonialism staring down the throats of the Cuban people, which the US, to this day, refuses to vacate despite the vehement protest of the Castro government.

In the American lexicon, in addition to good and bad bases and missiles, there are good and bad revolutions. The American and French Revolutions were good. The Cuban Revolution is bad. It must be bad because so many people have left Cuba as a result of it.

But at least 100,000 people left the British colonies in America during and after the American Revolution. These Tories could not abide by the political and social changes, both actual and feared, particularly that change which attends all revolutions worthy of the name – Those looked down upon as inferiors no longer know their place. (Or as the US Secretary of State put it after the Russian Revolution: The Bolsheviks sought "to make the ignorant and incapable mass of humanity dominant in the earth."17)

The Tories fled to Nova Scotia and Britain carrying tales of the godless, dissolute, barbaric American revolutionaries. Those who remained and refused to take an oath of allegiance to the new state governments were denied virtually all civil liberties. Many were jailed, murdered, or forced into exile. After the American Civil War, thousands more fled to South America and other points, again disturbed by the social upheaval. How much more is such an exodus to be expected following the Cuban Revolution? – a true social revolution, giving rise to changes much more profound than anything in the American experience. How many more would have left the United States if 90 miles away lay the world's wealthiest nation welcoming their residence and promising all manner of benefits and rewards?
Notes

1. Washington Post, December 25, 2008 ↩
2. Reuters, April 29, 2008 ↩
3. http://usacac.army.mil/cac2/Repository/FM307/FM3-07.pdf ↩
4. U.S. Department of the Army, "Afghanistan, A Country Study" (1986), pp.121, 128, 130, 134, 136, 223, 232-3 ↩
5. Globe & Mail (Toronto), June 19, 2008 ↩
6. BBC News, December 4, 1997, "Taleban [sic] in Texas for talks on gas pipeline" ↩
7. Washington Post, November 23, 2001 ↩
8. United Press International, July 17, 2008 ↩
9. Associated Press, July 3, 2006 ↩
10. New York Times, October 30, 2007 ↩
11. New York Times, December 27, 1977, p.40 ↩
12. Lobster Magazine, Hull, UK, #14, November 1987 ↩
13. William Blum, “Rogue State: A Guide to the World’s Only Superpower”, pp.199-200 ↩
14. Carl Oglesby, "Ravens in the Storm: A Personal History of the 1960s Antiwar Movement" (2008), passim ↩
15. "Khrushchev Remembers" (1971) pp.494, 496 ↩
16. Time magazine, November 2, 1962 ↩
17. Cited by William Appleman Williams, "American Intervention in Russia: 1917-20", in David Horowitz, ed., "Containment and Revolution" (1967). Written in a letter to President Woodrow Wilson by Secretary of State Robert Lansing, uncle of John Foster and Allen Dulles. ↩

–

William Blum is the author of:

* Killing Hope: US Military and CIA Interventions Since World War 2
* Rogue State: A Guide to the World's Only Superpower
* West-Bloc Dissident: A Cold War Memoir
* Freeing the World to Death: Essays on the American Empire

Portions of the books can be read, and signed copies purchased, at www.killinghope.org

Previous Anti-Empire Reports can be read at this website.

To add yourself to this mailing list simply send an email to bblum6@aol.com with "add" in the subject line. I'd like your name and city in the message, but that's optional. I ask for your city only in case I'll be speaking in your area.

(Or put "remove" in the subject line to do the opposite.)

Any part of this report may be disseminated without permission. I'd appreciate it if the website were mentioned.

killinghope.org

The Anti-Empire Report January 3rd, 2009 by William Blum

Ruddock: 'No One Told Me'

Former Attorney General takes a leaf out of Howard's book by claiming 'no one told me' when faced with embarrassing facts.

When referring to “the circumstances of [Habib's] rendition [and almost certain torture]”, Ruddock told The Australian, “We were never informed about where he was or what had happened to him”.

Toohey points out:

[Then ASIO chief Dennis] Richardson is a meticulous public servant. He would not tell the senate that ASIO had definitely established where Habib was merely on the basis of supposition. Nor would he tell the senate about something as important as Habib’s “rendition” by the CIA to Egypt, where he was almost certainly tortured, without first ensuring that his minister was informed.

Howard's 'no one told me' approach to awkward issues that he knew he didn't want to know about seems to have been transformed into a general method of administration.

Aggressive war, official propaganda, "state-sponsored lies pursued with a determination reminiscent of the worst regimes of the 20th Century", racism, concentration camps, extra-judicial killings, torture: Howard's government in obsequiously following the Bush regime in a lunge to nazism is more than embarrassing, it is damning and something that they will never be able to live down.

Former Attorney General takes a leaf out of Howard's book by claiming 'no one told me' when faced with embarrassing facts.

When referring to “the circumstances of [Habib's] rendition [and almost certain torture]”, Ruddock told The Australian, “We were never informed about where he was or what had happened to him”.

Toohey points out:

[Then ASIO chief Dennis] Richardson is a meticulous public servant. He would not tell the senate that ASIO had definitely established where Habib was merely on the basis of supposition. Nor would he tell the senate about something as important as Habib’s “rendition” by the CIA to Egypt, where he was almost certainly tortured, without first ensuring that his minister was informed.

Howard's 'no one told me' approach to awkward issues that he knew he didn't want to know about seems to have been transformed into a general method of administration.

Aggressive war, official propaganda, "state-sponsored lies pursued with a determination reminiscent of the worst regimes of the 20th Century", racism, concentration camps, extra-judicial killings, torture: Howard's government in obsequiously following the Bush regime in a lunge to nazism is more than embarrassing, it is damning and something that they will never be able to live down.

Ruddock: 'No One Told Me'

Mad Max in Afghanistan

Nato with their brilliant strategy in Georgia have just successfully cut their own emergency alternative supply route into Afghanistan via Russia. Meanwhile Iran has refused a request for its territory to be used as a supply route. Can't imagine why they would have done that. An airlift of fuel into Afghanistan is impossible due to the huge volumes required.

Moon of Alabama does the math and calculates the resistance can strangle the occupation by targeting the road fuel convoy from the Pakistani port of Karachi to Kandahar and to Kabul via the Khyber pass.

“In the summer months, I would expect to be attacked once or twice a week,” said one manager, unwilling to speak on the record.

“Last week, we were caught up in an attack on a convoy of fuel trucks on a road we are working on. It looked like a war zone, with five diesel tanks burst open by [rocket propelled grenades] and burning diesel flooding out over the road.”

The security companies are circumspect about how many tankers they lose, but he said “multiple dozens” have been lost in the south each month during the summer. In June, fighters set upon a convoy of more than 50 tankers, setting fire to them about 65km south of Kabul....

Forty fuel trucks were destroyed in March near the crossing between the two countries.

However, a western security executive told the FT that for a period last summer some military bases in the south were almost running on empty, “stopping all non-essential movement and offensive operations because of fuel shortages”....

An al-Qaeda member told Asia Times Online on condition of anonymity, "The single strategy of severing NATO's supply lines from Pakistan is the key to success. If the blockage is successfully implemented in 2008, the Western coalition will be forced to leave Afghanistan in 2009, and if implemented next year, the exit is certain by 2010."

Several al-Qaeda cells have apparently been activated in Karachi to monitor the movement of NATO supply convoys....

"Without Russia's support in Afghanistan, NATO would face a new Vietnam, and this is clear to everyone. Militarily, NATO and Russia have a very good and trusting relationship," [Russian Ambassador to Nato] Rogozin said from his Brussels office....

A commenter says:

I would doubt the Russians would seriously imperil Nato supplies lines to Afghanistan. Actually, I would think the more precarious the situation, the more lucrative the operation and thus the Russian oligarchs would be only too happy to deal.

b replies:

Even Russian oligarchs are nationalists ... still you may be right ... why not let NATO slowly bleed to death in Afganistan ...

Mr Rudd, Prime Minister of Australia: Troops. Afghanistan. OUT. NOW!

Nato with their brilliant strategy in Georgia have just successfully cut their own emergency alternative supply route into Afghanistan via Russia. Meanwhile Iran has refused a request for its territory to be used as a supply route. Can't imagine why they would have done that. An airlift of fuel into Afghanistan is impossible due to the huge volumes required.

Moon of Alabama does the math and calculates the resistance can strangle the occupation by targeting the road fuel convoy from the Pakistani port of Karachi to Kandahar and to Kabul via the Khyber pass.

“In the summer months, I would expect to be attacked once or twice a week,” said one manager, unwilling to speak on the record.

“Last week, we were caught up in an attack on a convoy of fuel trucks on a road we are working on. It looked like a war zone, with five diesel tanks burst open by [rocket propelled grenades] and burning diesel flooding out over the road.”

The security companies are circumspect about how many tankers they lose, but he said “multiple dozens” have been lost in the south each month during the summer. In June, fighters set upon a convoy of more than 50 tankers, setting fire to them about 65km south of Kabul....

Forty fuel trucks were destroyed in March near the crossing between the two countries.

However, a western security executive told the FT that for a period last summer some military bases in the south were almost running on empty, “stopping all non-essential movement and offensive operations because of fuel shortages”....

An al-Qaeda member told Asia Times Online on condition of anonymity, "The single strategy of severing NATO's supply lines from Pakistan is the key to success. If the blockage is successfully implemented in 2008, the Western coalition will be forced to leave Afghanistan in 2009, and if implemented next year, the exit is certain by 2010."

Several al-Qaeda cells have apparently been activated in Karachi to monitor the movement of NATO supply convoys....

"Without Russia's support in Afghanistan, NATO would face a new Vietnam, and this is clear to everyone. Militarily, NATO and Russia have a very good and trusting relationship," [Russian Ambassador to Nato] Rogozin said from his Brussels office....

A commenter says:

I would doubt the Russians would seriously imperil Nato supplies lines to Afghanistan. Actually, I would think the more precarious the situation, the more lucrative the operation and thus the Russian oligarchs would be only too happy to deal.

b replies:

Even Russian oligarchs are nationalists ... still you may be right ... why not let NATO slowly bleed to death in Afganistan ...

Mr Rudd, Prime Minister of Australia: Troops. Afghanistan. OUT. NOW!

Mad Max in Afghanistan

Beijing Olympics: Protest Song

The Truth is Still There (free mp3 download)

The Truth is Still There (free mp3 download)

Beijing Olympics: Protest Song

Bin Laden Driver Convicted

link

What next? His barber? Actually they should probably get that bloke too - he's done a shocking job on Bin Laden's facial hair. Get his tailor and his cobbler while you are at it. A man of Mr. Bin Laden's reputed wealth really should be better served.

The 'trial' however was a complete farce. The 'jury' of military officers brought down a guilty verdict and a sentence of five and a half years, but "as soon as the sentence was issued, however, the Pentagon made it clear that it had no intention of releasing Hamdan. It says that it retains the right to keep him in prison for an indefinite period."

A travesty of justice, no more than a show trial. An incompetent show trial at that. This can only do harm to the reputation of the United States, and for no gain. If you are going to have a show trial, you need to get the tortured dupes to admit to some substantial crime, like murder, bombing or sabotage. If the guy is no more than a driver, then all the publicity can only backfire if you bring down a verdict of guilty and an award of a life sentence.

Meanwhile President Bush, a major war criminal, has the chutzpah to "denounce the detention of political dissidents and religious activists" in China ahead of his visit to the Beijing Olympic games.

The Guantanamo Bay concentration camp should be condemned by the Australian Government as well as by all decent observers as a grave injustice which should be immediately closed.

link

What next? His barber? Actually they should probably get that bloke too - he's done a shocking job on Bin Laden's facial hair. Get his tailor and his cobbler while you are at it. A man of Mr. Bin Laden's reputed wealth really should be better served.

The 'trial' however was a complete farce. The 'jury' of military officers brought down a guilty verdict and a sentence of five and a half years, but "as soon as the sentence was issued, however, the Pentagon made it clear that it had no intention of releasing Hamdan. It says that it retains the right to keep him in prison for an indefinite period."

A travesty of justice, no more than a show trial. An incompetent show trial at that. This can only do harm to the reputation of the United States, and for no gain. If you are going to have a show trial, you need to get the tortured dupes to admit to some substantial crime, like murder, bombing or sabotage. If the guy is no more than a driver, then all the publicity can only backfire if you bring down a verdict of guilty and an award of a life sentence.

Meanwhile President Bush, a major war criminal, has the chutzpah to "denounce the detention of political dissidents and religious activists" in China ahead of his visit to the Beijing Olympic games.

The Guantanamo Bay concentration camp should be condemned by the Australian Government as well as by all decent observers as a grave injustice which should be immediately closed.

Bin Laden Driver Convicted