Showing posts with label Bush Psychopath. Show all posts
Showing posts with label Bush Psychopath. Show all posts
Wednesday, October 29, 2008
Saturday, October 25, 2008
Breaking Babylon
Wrecked Iraq
What was once the most advanced Middle Eastern society - economically, socially, and technologically - has become an economic basket case, rivaling the most desperate countries in the world
Michael Schwartz.
What the Good News from Iraq Really Means
As the Smoke Clears in Iraq: Even before the spectacular presidential election campaign became a national obsession, and the worst economic crisis since the Great Depression crowded out other news, coverage of the Iraq War had dwindled to next to nothing. National newspapers had long since discontinued their daily feasts of multiple — usually front page – reports on the country, replacing them with meager meals of mostly inside-the-fold summary stories. On broadcast and cable TV channels, where violence in Iraq had once been the nightly lead, whole news cycles went by without a mention of the war.
The tone of the coverage also changed. The powerful reports of desperate battles and miserable Iraqis disappeared. There are still occasional stories about high-profile bombings or military campaigns in obscure places, but the bulk of the news is about quiescence in old hot spots, political maneuvering by Iraqi factions, and the newly emerging routines of ordinary life.
A typical "return to normal life" piece appeared October 11th in the New York Times under the headline, "Schools Open, and the First Test is Iraqi Safety." Featured was a Baghdad schoolteacher welcoming her students by assuring them that "security has returned to Baghdad, city of peace."
Even as his report began, though, Times reporter Sam Dagher hedged the "return to normal" theme. Here was his first paragraph in full:
"On the first day of school, 10-year-old Basma Osama looked uneasy standing in formation under an already stifling morning sun. She and dozens of schoolmates listened to a teacher's pep talk — probably a necessary one, given the barren and garbage-strewn playground."
This glimpse of the degraded conditions at one Baghdad public school, amplified in the body of Dagher's article by other examples, is symptomatic of the larger reality in Iraq. In a sense, the (often exaggerated) decline in violence in that country has allowed foreign reporters to move around enough to report on the real conditions facing Iraqis, and so should have provided US readers with a far fuller picture of the devastation George Bush's war wrought.
In reality, though, since there are far fewer foreign reporters moving around a quieter Iraq, far less news is coming out of that wrecked land. The major newspapers and networks have drastically reduced their staffs there and — with a relative trickle of exceptions like Dagher's fine report — what's left is often little more than a collection of pronouncements from the US military, or Iraqi and American political leaders in Baghdad and Washington, framing the American public's image of the situation there.
In addition, the devastation that is now Iraq is not of a kind that can always be easily explained in a short report, nor for that matter is it any longer easily repaired. In many cities, an American reliance on artillery and air power during the worst days of fighting helped devastate the Iraqi infrastructure. Political and economic changes imposed by the American occupation did damage of another kind, often depriving Iraqis not just of their livelihoods but of the very tools they would now need to launch a major reconstruction effort in their own country.
As a consequence, what was once the most advanced Middle Eastern society — economically, socially, and technologically — has become an economic basket case, rivaling the most desperate countries in the world. Only the (as yet unfulfilled) promise of oil riches, which probably cannot be effectively accessed or used until US forces withdraw from the country, provides a glimmer of hope that Iraq will someday lift itself out of the abyss into which the US invasion pushed it.
Consider only a small sampling of the devastation.
The Economy: Fundamental to the American occupation was the desire to annihilate Saddam Hussein's Baathist state apparatus and the economic system it commanded. A key aspect of this was the closing down of the vast majority of state-owned economic enterprises (with the exception of those involved in oil extraction and electrical generation).
In all, 192 establishments, adding up to 35% of the Iraqi economy, were shuttered in the summer and fall of 2003. These included basic manufacturing processes like leather tanning and tractor assembly that supplied other sectors, transportation firms that dominated national commerce, and maintenance enterprises that housed virtually all the technicians and engineers qualified to service the electrical, water, oil, and other infrastructural systems in the country.
Justified as the way to bring a modern free-enterprise system to backward Iraq, this draconian program was put in place by the President's proconsul in Baghdad, L. Paul Bremer III. The result? An immediate depression that only deepened in the years to follow.
One measure of this policy's impact can be found in the demise of the leather goods industry, a key pre-invasion sector of Iraq's non-petroleum economy. When a government-owned tanning operation, which all by itself employed 30,000 workers and supplied leather to an entire industry, was shuttered in late 2003, it deprived shoe-makers and other leather goods establishments of their key resource. Within a year, employment in the industry had dropped from 200,000 workers to a mere 20,000.
By the time Bremer left Iraq in the spring of 2004, the inhabitants of many cities faced 60% unemployment. Meanwhile, the country's agriculture, a key component of its economy, was also victimized by the dismantling of government establishments and services. The lush farming areas between the Tigris and Euphrates rivers suffered badly. The once-thriving date palm industry was a typical casualty. It suffered deadly infestations of pests when the occupation eliminated a government-run insecticide spraying program. Even oil refinery-based industrial towns like Baiji became cities of slums when plants devoted to non-petroleum activities were shuttered.
This economic devastation fueled the insurgency by generating desperation, anger, and willing recruits. The explosion of resistance, in turn, tended to obscure — at least for western news services — the desperate circumstances under which ordinary Iraqis labored.
As violence has subsided in Baghdad and elsewhere, demands for relief have come to the fore. These are not easily answered by a still largely non-functional central government in Baghdad whose administrative and economic apparatus was long ago dismantled, and many of whose key technical personnel had fled into exile. Meanwhile, in early 2006, the American occupation declared that further reconstruction work would be the responsibility of Iraqis. It is not clear into what channels the growing discontent over an economy that remains largely in the tank and a government that still cannot deliver ordinary services will flow.
Electricity: A critical factor in Iraq's collapse has been its decaying electrical grid. In areas where the insurgency raged, facilities involved in producing and transmitting electricity were targeted, both by the insurgents and US forces, each trying to deprive the other of needed resources. In addition, Bremer eliminated the government-owned maintenance and engineering enterprises that had been holding the electrical system together ever since the U.N. sanctions regime after the 1991 Gulf War deprived Iraq of material needed to repair and upgrade its facilities. Maintenance and replacement contracts were given instead to multinational companies with little knowledge of the existing system and — due to cost-plus contracting — every incentive to replace facilities with their own proprietary technology. In the meantime, many Iraqi technicians left the country.
The successor Iraqi governments, deprived of the capacity to manage the system's reconstruction, continued the US occupation policy of contracting with foreign companies. Even in areas of the country relatively unaffected by the fighting, those companies did the lucrative thing, replacing entire sections of the electric grid, often with inappropriate but exquisitely expensive equipment and technology.
A combination of factors — including pressure from the insurgency, the soaring costs of security, and an almost unparalleled record of endemic waste and corruption — led to costs well beyond those originally offered for the already overpriced projects. Many were then abandoned before completion as funding ran out. Completed projects were often shabbily done and just as often proved incompatible with existing facilities, introducing new inefficiencies.
In one altogether-too-typical case, Bechtel installed 26 natural gas turbines in areas where no natural gas was available. The turbines were then converted to oil, which reduced their capacity by 50% and led to a rapid sludge build-up in the equipment requiring expensive maintenance no Iraqi technicians had been trained to perform. In location after location, the turbines became inoperative.
Even before the invasion, the decrepit electrical system could not meet national demand. No province had uninterrupted service and certain areas had far less than 12 hours of service per day. The vast investments by the occupation and its successor regimes have increased electrical capacity since the invasion of 2003, but these gains have not come close to keeping up with skyrocketing demand created by the presence of hundreds of thousands of troops, private security personnel, and occupation officials, as well as by the introduction of all manner of electronic devices and products in the post-invasion period. Recent U.N. reports indicate that, in the last year, electrical capacity has slipped to less than half of demand. With priority going to military and government operations, many Baghdad neighborhoods experience less than two hours of publicly provided electricity a day, forcing citizens and business enterprises to utilize expensive and polluting gasoline generators.
In spring of this year, 81% of Iraqis reported that they had experienced inadequate electricity in the previous month. During the heat of summer and the cold of winter, these shortages create real health emergencies.
In 2004, the U.N. estimated that $20 billion in reconstruction funds would be needed for a fully operative electrical grid. The estimates now range from $40 billion to $80 billion.
Water: The Tigris and Euphrates rivers, which flow through the country from the northwest to the southeast, have since time immemorial irrigated the rich farming land that lay between them, nurtured the fish that are a staple of the Iraqi diet, and provided water for animal and human consumption. American-style warfare, with its reliance on tank, artillery, and air power, often resulted in the cratering of streets in upstream Sunni cities like Tal Afar, Falluja, and Samarra where the insurgency was strongest. One result was the wrecking of already weakened underground sewage systems. In the Sadr City section of Baghdad, for instance, where much fighting has taken place and American air power was called in regularly, there is now a lake of sewage clearly visible on satellite photographs.
The ultimate destination of significant parts of the filth from devastated sewage systems was the two rivers. Five years worth of such waste flowing through the streets and into those rivers has left them thoroughly contaminated. Their water can no longer be safely drunk by humans or animals, the remaining fish cannot be safely eaten, and the contaminated water reportedly withers the crops it irrigates.
Iraq's never-adequate water purification system has proven woefully insufficient to handle this massive flow of contamination, while inadequate electric supplies insure that the country's few functional purification plants are less than effective.
In many cities, the sewage system must be entirely reconstructed, but repairs cannot even begin without a viable electrical system, a reinvigorated engineering and construction sector, and a government capable of marshalling these resources. None of these prerequisites currently exist.
Schools: Education has been a victim of all the various pathologies current in Iraqi society. During the initial invasion, the US military often commandeered schools as forward bases, attracted by their well-defined perimeters, open spaces for vehicles, and many rooms for offices and barracks. Two incidents in which American gunfire from an occupied elementary school killed Iraqi civilians in the conservative Sunni city of Falluja may have been the literal sparks that started the insurgency. Many schools would subsequently be rendered uninhabitable by destructive battles fought in or near them.
Under the US occupation's de-Baathification policy, thousands of teachers who belonged to the Baath Party were fired, leaving hundreds of thousands of students teacherless. In addition, the shuttering of government enterprises deprived the schools of supplies — including books and teaching materials — as well as urgently needed maintenance.
The American solution, as with the electric grid, was to hire multinational firms to repair the schools and rehabilitate school systems. The result was an orgy of corruption accompanied by very little practical aid. Local school officials complained that facilities with no windows, heating, or toilet facilities were repainted and declared fit for use.
The dwindling central government presence made schools inviting arenas for sectarian conflict, with administrators, teachers, and especially college professors removed, kidnapped, or assassinated for ideological reasons. This, in turn, stimulated a mass exodus of teachers, intellectuals, and scientists from the country, removing precious human capital essential for future reconstruction.
Finally, in Baghdad, the US military began installing ten-foot tall cement walls around scores of communities and neighborhoods to wall off participants in the sectarian violence. As a result, schoolchildren were often separated from their schools, reducing attendance at the few intact facilities to those students who happened to live within the imprisoning walls.
This fall, as some of these walls were dismantled, residents discovered that many of the schools were virtually unusable. The Times's Dagher offered a vivid description, for instance, of a school in the Dolaie neighborhood which "is falling apart, and overwhelmed by the children of almost 4,000 Shiite refugee families who have settled in the Chukouk camp nearby. The roof is caving in, classroom floors and hallways are stripped bare, and in the playground a pile of burnt trash was smoldering."
The Dysfunctional Society: Much has been made in the US presidential campaign of the $70 billion oil surplus the Iraqi government built up in these last years as oil prices soared. In actuality, most of it is currently being held in American financial institutions, with various American politicians threatening to confiscate it if it is not constructively spent. Yet even this bounty reflects the devastation of the war.
De-Baathification and subsequent chaos rendered the Iraqi government incapable of effectively administering projects that lay outside the fortified, American-controlled Green Zone in the heart of Baghdad. A vast flight of the educated class to Syria, Jordan, and other countries also deprived it of the managers and technicians needed to undertake serious reconstruction on a large scale.
As a consequence, less than 25% of the funds budgeted for facility construction and reconstruction last year were even spent. Some government ministries spent less than 1% of their allocations. In the meantime, the large oil surpluses have become magnets for massive governmental corruption, further infuriating frustrated citizens who, after five years, still often lack the most basic services. Transparency International's 2008 "corruption perceptions index" listed Iraq as tied for 178th place among the 180 countries evaluated.
The Iraq that has emerged from the American invasion and occupation is now a thoroughly wrecked land, housing a largely dysfunctional society. More than a million Iraqis may have died; millions have fled their homes; many millions of others have been scarred by war, insurgency and counterinsurgency operations, extreme sectarian violence, and soaring levels of common criminality. Education and medical systems have essentially collapsed and, even today, with every kind of violence in decline, Iraq remains one of the most dangerous societies on earth.
As its crisis deepened, the various areas of social and technical devastation became ever more entwined, reinforcing one another. The country's degraded sewage and water systems, for example, have spawned two consecutive years of widespread cholera. It seems likely that this year, the disease will only subside when the cold weather makes further contagion impossible, but this "solution" also guarantees its reoccurrence each year until water purification systems are rebuilt.
In the meantime, cholera victims cannot rely on Iraq's once vaunted medical system, since two-thirds of the country's doctors have fled, its hospitals are often in a state of advanced decay and disrepair, drugs remain scarce, and equipment, if available at all, is outdated. The rebuilding of the water and medical systems, however, cannot get fully underway unless the electrical system is restored to reasonable shape. Repair of the electrical grid awaits a reliable oil and gas pipeline system to provide fuel for generators, and this cannot be constructed without the expertise of technicians who have left the country, or newly trained specialists that the educational system is now incapable of producing. And so it goes.
On a daily basis, this cauldron of misery renews powerful feelings of discontent, which explains why American military leaders regularly insist that the country's current relative quiescence is, at best, "fragile." They believe only the most minimal reductions in US forces in Iraq (still hovering at close to 150,000 troops) are advisable.
Even if Washington prefers to ignore Iraqi realities, military officials working close to the ground know that the country's state of disrepair, and an inability to deal with it in any reasonably prompt way, leaves a population in steaming discontent. At any moment, this could explode in further sectarian violence or yet another violent effort to expel the US forces from the country.
Michael Schwartz's new book, War Without End: The Iraq Debacle in Context (Haymarket, 2008), has just been released. It explains just how the militarized geopolitics of oil led the US to dismantle the Iraqi state and economy while fueling sectarian civil war inside that country. A professor of sociology at Stony Brook State University, Schwartz has written extensively on popular protest and insurgency. His work on Iraq has appeared in numerous outlets, including TomDispatch, Asia Times, Mother Jones, and Contexts. A video of him discussing "wrecked Iraq" can be seen by clicking here. His email address is ms42@optonline.net.
Original article posted here.
What was once the most advanced Middle Eastern society - economically, socially, and technologically - has become an economic basket case, rivaling the most desperate countries in the world
Michael Schwartz.
What the Good News from Iraq Really Means
As the Smoke Clears in Iraq: Even before the spectacular presidential election campaign became a national obsession, and the worst economic crisis since the Great Depression crowded out other news, coverage of the Iraq War had dwindled to next to nothing. National newspapers had long since discontinued their daily feasts of multiple — usually front page – reports on the country, replacing them with meager meals of mostly inside-the-fold summary stories. On broadcast and cable TV channels, where violence in Iraq had once been the nightly lead, whole news cycles went by without a mention of the war.
The tone of the coverage also changed. The powerful reports of desperate battles and miserable Iraqis disappeared. There are still occasional stories about high-profile bombings or military campaigns in obscure places, but the bulk of the news is about quiescence in old hot spots, political maneuvering by Iraqi factions, and the newly emerging routines of ordinary life.
A typical "return to normal life" piece appeared October 11th in the New York Times under the headline, "Schools Open, and the First Test is Iraqi Safety." Featured was a Baghdad schoolteacher welcoming her students by assuring them that "security has returned to Baghdad, city of peace."
Even as his report began, though, Times reporter Sam Dagher hedged the "return to normal" theme. Here was his first paragraph in full:
"On the first day of school, 10-year-old Basma Osama looked uneasy standing in formation under an already stifling morning sun. She and dozens of schoolmates listened to a teacher's pep talk — probably a necessary one, given the barren and garbage-strewn playground."
This glimpse of the degraded conditions at one Baghdad public school, amplified in the body of Dagher's article by other examples, is symptomatic of the larger reality in Iraq. In a sense, the (often exaggerated) decline in violence in that country has allowed foreign reporters to move around enough to report on the real conditions facing Iraqis, and so should have provided US readers with a far fuller picture of the devastation George Bush's war wrought.
In reality, though, since there are far fewer foreign reporters moving around a quieter Iraq, far less news is coming out of that wrecked land. The major newspapers and networks have drastically reduced their staffs there and — with a relative trickle of exceptions like Dagher's fine report — what's left is often little more than a collection of pronouncements from the US military, or Iraqi and American political leaders in Baghdad and Washington, framing the American public's image of the situation there.
In addition, the devastation that is now Iraq is not of a kind that can always be easily explained in a short report, nor for that matter is it any longer easily repaired. In many cities, an American reliance on artillery and air power during the worst days of fighting helped devastate the Iraqi infrastructure. Political and economic changes imposed by the American occupation did damage of another kind, often depriving Iraqis not just of their livelihoods but of the very tools they would now need to launch a major reconstruction effort in their own country.
As a consequence, what was once the most advanced Middle Eastern society — economically, socially, and technologically — has become an economic basket case, rivaling the most desperate countries in the world. Only the (as yet unfulfilled) promise of oil riches, which probably cannot be effectively accessed or used until US forces withdraw from the country, provides a glimmer of hope that Iraq will someday lift itself out of the abyss into which the US invasion pushed it.
Consider only a small sampling of the devastation.
The Economy: Fundamental to the American occupation was the desire to annihilate Saddam Hussein's Baathist state apparatus and the economic system it commanded. A key aspect of this was the closing down of the vast majority of state-owned economic enterprises (with the exception of those involved in oil extraction and electrical generation).
In all, 192 establishments, adding up to 35% of the Iraqi economy, were shuttered in the summer and fall of 2003. These included basic manufacturing processes like leather tanning and tractor assembly that supplied other sectors, transportation firms that dominated national commerce, and maintenance enterprises that housed virtually all the technicians and engineers qualified to service the electrical, water, oil, and other infrastructural systems in the country.
Justified as the way to bring a modern free-enterprise system to backward Iraq, this draconian program was put in place by the President's proconsul in Baghdad, L. Paul Bremer III. The result? An immediate depression that only deepened in the years to follow.
One measure of this policy's impact can be found in the demise of the leather goods industry, a key pre-invasion sector of Iraq's non-petroleum economy. When a government-owned tanning operation, which all by itself employed 30,000 workers and supplied leather to an entire industry, was shuttered in late 2003, it deprived shoe-makers and other leather goods establishments of their key resource. Within a year, employment in the industry had dropped from 200,000 workers to a mere 20,000.
By the time Bremer left Iraq in the spring of 2004, the inhabitants of many cities faced 60% unemployment. Meanwhile, the country's agriculture, a key component of its economy, was also victimized by the dismantling of government establishments and services. The lush farming areas between the Tigris and Euphrates rivers suffered badly. The once-thriving date palm industry was a typical casualty. It suffered deadly infestations of pests when the occupation eliminated a government-run insecticide spraying program. Even oil refinery-based industrial towns like Baiji became cities of slums when plants devoted to non-petroleum activities were shuttered.
This economic devastation fueled the insurgency by generating desperation, anger, and willing recruits. The explosion of resistance, in turn, tended to obscure — at least for western news services — the desperate circumstances under which ordinary Iraqis labored.
As violence has subsided in Baghdad and elsewhere, demands for relief have come to the fore. These are not easily answered by a still largely non-functional central government in Baghdad whose administrative and economic apparatus was long ago dismantled, and many of whose key technical personnel had fled into exile. Meanwhile, in early 2006, the American occupation declared that further reconstruction work would be the responsibility of Iraqis. It is not clear into what channels the growing discontent over an economy that remains largely in the tank and a government that still cannot deliver ordinary services will flow.
Electricity: A critical factor in Iraq's collapse has been its decaying electrical grid. In areas where the insurgency raged, facilities involved in producing and transmitting electricity were targeted, both by the insurgents and US forces, each trying to deprive the other of needed resources. In addition, Bremer eliminated the government-owned maintenance and engineering enterprises that had been holding the electrical system together ever since the U.N. sanctions regime after the 1991 Gulf War deprived Iraq of material needed to repair and upgrade its facilities. Maintenance and replacement contracts were given instead to multinational companies with little knowledge of the existing system and — due to cost-plus contracting — every incentive to replace facilities with their own proprietary technology. In the meantime, many Iraqi technicians left the country.
The successor Iraqi governments, deprived of the capacity to manage the system's reconstruction, continued the US occupation policy of contracting with foreign companies. Even in areas of the country relatively unaffected by the fighting, those companies did the lucrative thing, replacing entire sections of the electric grid, often with inappropriate but exquisitely expensive equipment and technology.
A combination of factors — including pressure from the insurgency, the soaring costs of security, and an almost unparalleled record of endemic waste and corruption — led to costs well beyond those originally offered for the already overpriced projects. Many were then abandoned before completion as funding ran out. Completed projects were often shabbily done and just as often proved incompatible with existing facilities, introducing new inefficiencies.
In one altogether-too-typical case, Bechtel installed 26 natural gas turbines in areas where no natural gas was available. The turbines were then converted to oil, which reduced their capacity by 50% and led to a rapid sludge build-up in the equipment requiring expensive maintenance no Iraqi technicians had been trained to perform. In location after location, the turbines became inoperative.
Even before the invasion, the decrepit electrical system could not meet national demand. No province had uninterrupted service and certain areas had far less than 12 hours of service per day. The vast investments by the occupation and its successor regimes have increased electrical capacity since the invasion of 2003, but these gains have not come close to keeping up with skyrocketing demand created by the presence of hundreds of thousands of troops, private security personnel, and occupation officials, as well as by the introduction of all manner of electronic devices and products in the post-invasion period. Recent U.N. reports indicate that, in the last year, electrical capacity has slipped to less than half of demand. With priority going to military and government operations, many Baghdad neighborhoods experience less than two hours of publicly provided electricity a day, forcing citizens and business enterprises to utilize expensive and polluting gasoline generators.
In spring of this year, 81% of Iraqis reported that they had experienced inadequate electricity in the previous month. During the heat of summer and the cold of winter, these shortages create real health emergencies.
In 2004, the U.N. estimated that $20 billion in reconstruction funds would be needed for a fully operative electrical grid. The estimates now range from $40 billion to $80 billion.
Water: The Tigris and Euphrates rivers, which flow through the country from the northwest to the southeast, have since time immemorial irrigated the rich farming land that lay between them, nurtured the fish that are a staple of the Iraqi diet, and provided water for animal and human consumption. American-style warfare, with its reliance on tank, artillery, and air power, often resulted in the cratering of streets in upstream Sunni cities like Tal Afar, Falluja, and Samarra where the insurgency was strongest. One result was the wrecking of already weakened underground sewage systems. In the Sadr City section of Baghdad, for instance, where much fighting has taken place and American air power was called in regularly, there is now a lake of sewage clearly visible on satellite photographs.
The ultimate destination of significant parts of the filth from devastated sewage systems was the two rivers. Five years worth of such waste flowing through the streets and into those rivers has left them thoroughly contaminated. Their water can no longer be safely drunk by humans or animals, the remaining fish cannot be safely eaten, and the contaminated water reportedly withers the crops it irrigates.
Iraq's never-adequate water purification system has proven woefully insufficient to handle this massive flow of contamination, while inadequate electric supplies insure that the country's few functional purification plants are less than effective.
In many cities, the sewage system must be entirely reconstructed, but repairs cannot even begin without a viable electrical system, a reinvigorated engineering and construction sector, and a government capable of marshalling these resources. None of these prerequisites currently exist.
Schools: Education has been a victim of all the various pathologies current in Iraqi society. During the initial invasion, the US military often commandeered schools as forward bases, attracted by their well-defined perimeters, open spaces for vehicles, and many rooms for offices and barracks. Two incidents in which American gunfire from an occupied elementary school killed Iraqi civilians in the conservative Sunni city of Falluja may have been the literal sparks that started the insurgency. Many schools would subsequently be rendered uninhabitable by destructive battles fought in or near them.
Under the US occupation's de-Baathification policy, thousands of teachers who belonged to the Baath Party were fired, leaving hundreds of thousands of students teacherless. In addition, the shuttering of government enterprises deprived the schools of supplies — including books and teaching materials — as well as urgently needed maintenance.
The American solution, as with the electric grid, was to hire multinational firms to repair the schools and rehabilitate school systems. The result was an orgy of corruption accompanied by very little practical aid. Local school officials complained that facilities with no windows, heating, or toilet facilities were repainted and declared fit for use.
The dwindling central government presence made schools inviting arenas for sectarian conflict, with administrators, teachers, and especially college professors removed, kidnapped, or assassinated for ideological reasons. This, in turn, stimulated a mass exodus of teachers, intellectuals, and scientists from the country, removing precious human capital essential for future reconstruction.
Finally, in Baghdad, the US military began installing ten-foot tall cement walls around scores of communities and neighborhoods to wall off participants in the sectarian violence. As a result, schoolchildren were often separated from their schools, reducing attendance at the few intact facilities to those students who happened to live within the imprisoning walls.
This fall, as some of these walls were dismantled, residents discovered that many of the schools were virtually unusable. The Times's Dagher offered a vivid description, for instance, of a school in the Dolaie neighborhood which "is falling apart, and overwhelmed by the children of almost 4,000 Shiite refugee families who have settled in the Chukouk camp nearby. The roof is caving in, classroom floors and hallways are stripped bare, and in the playground a pile of burnt trash was smoldering."
The Dysfunctional Society: Much has been made in the US presidential campaign of the $70 billion oil surplus the Iraqi government built up in these last years as oil prices soared. In actuality, most of it is currently being held in American financial institutions, with various American politicians threatening to confiscate it if it is not constructively spent. Yet even this bounty reflects the devastation of the war.
De-Baathification and subsequent chaos rendered the Iraqi government incapable of effectively administering projects that lay outside the fortified, American-controlled Green Zone in the heart of Baghdad. A vast flight of the educated class to Syria, Jordan, and other countries also deprived it of the managers and technicians needed to undertake serious reconstruction on a large scale.
As a consequence, less than 25% of the funds budgeted for facility construction and reconstruction last year were even spent. Some government ministries spent less than 1% of their allocations. In the meantime, the large oil surpluses have become magnets for massive governmental corruption, further infuriating frustrated citizens who, after five years, still often lack the most basic services. Transparency International's 2008 "corruption perceptions index" listed Iraq as tied for 178th place among the 180 countries evaluated.
The Iraq that has emerged from the American invasion and occupation is now a thoroughly wrecked land, housing a largely dysfunctional society. More than a million Iraqis may have died; millions have fled their homes; many millions of others have been scarred by war, insurgency and counterinsurgency operations, extreme sectarian violence, and soaring levels of common criminality. Education and medical systems have essentially collapsed and, even today, with every kind of violence in decline, Iraq remains one of the most dangerous societies on earth.
As its crisis deepened, the various areas of social and technical devastation became ever more entwined, reinforcing one another. The country's degraded sewage and water systems, for example, have spawned two consecutive years of widespread cholera. It seems likely that this year, the disease will only subside when the cold weather makes further contagion impossible, but this "solution" also guarantees its reoccurrence each year until water purification systems are rebuilt.
In the meantime, cholera victims cannot rely on Iraq's once vaunted medical system, since two-thirds of the country's doctors have fled, its hospitals are often in a state of advanced decay and disrepair, drugs remain scarce, and equipment, if available at all, is outdated. The rebuilding of the water and medical systems, however, cannot get fully underway unless the electrical system is restored to reasonable shape. Repair of the electrical grid awaits a reliable oil and gas pipeline system to provide fuel for generators, and this cannot be constructed without the expertise of technicians who have left the country, or newly trained specialists that the educational system is now incapable of producing. And so it goes.
On a daily basis, this cauldron of misery renews powerful feelings of discontent, which explains why American military leaders regularly insist that the country's current relative quiescence is, at best, "fragile." They believe only the most minimal reductions in US forces in Iraq (still hovering at close to 150,000 troops) are advisable.
Even if Washington prefers to ignore Iraqi realities, military officials working close to the ground know that the country's state of disrepair, and an inability to deal with it in any reasonably prompt way, leaves a population in steaming discontent. At any moment, this could explode in further sectarian violence or yet another violent effort to expel the US forces from the country.
Michael Schwartz's new book, War Without End: The Iraq Debacle in Context (Haymarket, 2008), has just been released. It explains just how the militarized geopolitics of oil led the US to dismantle the Iraqi state and economy while fueling sectarian civil war inside that country. A professor of sociology at Stony Brook State University, Schwartz has written extensively on popular protest and insurgency. His work on Iraq has appeared in numerous outlets, including TomDispatch, Asia Times, Mother Jones, and Contexts. A video of him discussing "wrecked Iraq" can be seen by clicking here. His email address is ms42@optonline.net.
Original article posted here.
Wednesday, October 22, 2008
A weakened America means genocide in Iran possibly on hold (as we expected, every day a weakened US signals greater peace prospects)
Attack on Iran Off the Table?
By Ray McGovern
On Sept. 23, the neoconservative chiefs of the Washington Post's editorial page mourned, in a tone much like what one hears on the death of a close friend, that "a military strike by the United States or Israel on Iran is not likely in the coming months." One could almost hear a wistful sigh, as they complained that efforts to stop Iran's nuclear program has "slipped down Washington's list of priorities … as Iran races toward accumulating enough uranium for a bomb."
We are spared, this go-round, from "mushroom clouds." But racing to a bomb? Never mind that the 16 agencies of the U.S. intelligence community concluded in a formal National Intelligence Estimate last November that work on the nuclear weapons-related part of Iran's nuclear program was halted in mid-2003. And never mind that Thomas Fingar, National Intelligence Director Mike McConnell's deputy for national estimates, reiterated that judgment as recently as Sept. 4. Never mind that the Post's own Walter Pincus reported on Sept. 10 that Fingar added that Iran has not restarted its nuclear weapons work. Hey, the editorial fellows know best.
The good news is that the bottom line of the Sept. 23 editorial marks one of those rare occasions when the Post's opinion editors have managed to reach a correct conclusion on the Middle East. It is true that the likelihood of an Israeli or U.S.-Israeli attack on Iran has receded in recent months. The more interesting questions are (1) why? And (2) under what circumstances might such an attack become likely again?
The Post attributes the stepping back by Israel and the U.S. to "the financial crisis and the worsening violence in Afghanistan and Pakistan." These are two contributing factors but, in my judgment, not the most important ones. Not surprisingly, the Post and other charter members of the Fawning Corporate Media (FCM) omit or play down factors they would prefer not to address.
Russia and Deterrence
More important than the bear market is the Russian bear that, after a 17-year hibernation, has awakened with loud growls commensurate with Russia's growing strength and assertiveness. The catalyst was the fiasco in Georgia, in which the Russians saw the hands of the neocons in Washington and their doppelgänger, the extreme Right in Israel.
You would hardly know it from FCM coverage, but the fiasco began when Georgian President Mikheil Saakashvili ordered his American- and Israeli-trained Georgian armed forces to launch an attack on the city of Tskhinvali, capital of South Ossetia, on the night of Aug. 6-7, killing not only many civilians but a number of Russian observers as well.
It may be true that our State Department officials had counseled Saakashvili against baiting the Russian bear, but it is abundantly clear to anyone paying attention to such things that State is regularly undercut/overruled by White House functionaries like arch-neocon Elliott F. Abrams (F. for Fiasco). His encomia include those earned for his key role in other major fiascoes like the one that brought about the unconscionable situation today in Gaza. (Would that the president's father had let Abrams sit in jail, rather than pardoning him after he was convicted for perjuring himself in testimony to Congress on the Iran-Contra fiasco.)
In any event, it is almost certainly true that Russian Prime Minister Vladimir Putin saw folks like Abrams, Vice President Dick Cheney, and their Israeli counterparts as being behind the attack on South Ossetia. For centuries the Russians have been concerned – call it paranoid – over threats coming from their soft southern underbelly, and their reaction could have come as no surprise to anyone familiar with Russian history – or, by analogy, those familiar with American history and the Monroe Doctrine, for example.
Even neocon Randy Scheunemann, foreign policy adviser to Sen. John McCain and former lobbyist for Georgia's Saakashvili, would have known that. And this lends credence to speculation that that is precisely why Scheunemann is said to have egged on the Georgian president. Russia's reaction was totally predictable, and it enabled McCain to "stand up to Russia" with very strong rhetoric and not-so-subtle suggestions that his foreign policy experience provides an important advantage over his opponent in meeting the growing danger of a resurgent Russia.
Russia's leaders are likely to have seen in Saakashvili's provocation, in the attempt to get NATO membership for Georgia and Ukraine, in the deployment of anti-missile defenses in Poland and the Czech Republic, and in hasty U.S. recognition of an independent Kosovo indignities that Russia should no longer tolerate.
I can visualize Russian generals telling Putin:
Enough! Look at the weakened Americans. They have destroyed what's left of their Army and Marine Corps, spreading them out and demoralizing them in two unwinnable wars. We know how bad it is with just one unwinnable war. It has not been that long since Afghanistan. But, Vladimir Vladimirovich, before we indulge ourselves with schadenfreude, consider what such actions betoken – total recklessness of a kind we have seen only rarely in Washington.
Who can assure us that "the crazies" – the Cheney-Abrams-Bush cabal – will not encourage the Israelis to precipitate the kind of armed provocation vis-à-vis Iran that would "justify" America's springing to the defense of its "ally" to bomb and missile-attack Iran? You are aware of the importance of the Israel lobby, and how American politicians vie with one another to prove themselves the most passionately in love with Israel.
Periodic attempts by Congress to require President Bush to seek congressional approval before ordering a strike on Iran have failed miserably. So his hands are free for another "preemptive war" before he leaves office. After all, Bush has publicly promised the Israelis he will deal with the "Iranian threat" before then. Besides, our political analysts suggest that Bush and Cheney might think that wider war would help the Republicans in the November election
No big bear likes to have its nose tweaked. But the Russian reaction to Georgia was not merely one of pique. It became a well-planned strategic move to disabuse Israel and the United States of the notion that Russia would sit still for an attack on Iran, a very important country in Russia's general neighborhood. After Georgia, the Russians were bent on sweeping such plans "off the table," so to speak, and seem to have succeeded.
The signs of new Russian assertiveness are in the public domain, although the FCM has not given them much prominence. What is more telling is the effect on Israel and the United States. Since early August there has been a sharp decline in the formulaic rhetoric against Iran's "path toward nuclear weapons," especially among U.S. policymakers and in American media following the conflict in Georgia and the expiration of the latest "ultimatum" served on Iran to stop its nuclear program.
The change in official Israeli statements was the most pronounced. After a consistently hawkish stance toward Iran, Israel's president, Shimon Peres told London's Sunday Times in early September:
"There are two ways to deal with Iran's nuclear threat; a military and a civilian way. I don't believe in the military option – any kind of military option … an attack can trigger a bigger war."
And then came the bombshell from Ehud Olmert in his valedictory interview appearing in the Israeli daily Yediot Ahronot on Sept. 29. Olmert argued that Israel had lost its "sense of proportion" in believing it could deal with Iran militarily.
Not Russia Alone
It is a curious twist, but to their great credit, senior military officers Adm. William Fallon, who quit rather than let himself be on the receiving end of an order to attack Iran, and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, fought and continue to fight a rearguard action against the dreams and plans of "the crazies" in the White House to attack Iran. Fallon famously declared that the U.S. military was not going to "do Iran on my watch" as commander of Centcom.
In addition to his outspoken opposition to opening a "third front" in the area of Iraq and Afghanistan, Mullen has done much behind the scenes to talk sense into the Israelis. From the Israeli press we know that Mullen went so far as to warn his Israeli counterparts not to even think about another incident like the one on June 8, 1967, when Israeli jets and torpedo boats deliberately did their utmost to sink the intelligence collector USS Liberty off the Sinai coast.
A gutsy move. The Israelis know that Mullen knows that that attack was deliberate – not some sort of unfortunate mistake. Mullen could have raised no more neuralgic an issue in taking a shot across any Israeli bow that might be thinking of a provocation of some sort in the Persian Gulf.
Hats off to the new admirals… who outshine predecessor admirals who bowed to pressure from President Lyndon Johnson to portray the Israeli air and torpedo strikes on the USS Liberty, which took the lives of 34 U.S. sailors and wounded more than 170 others, as a mistake in the fog of war – despite unimpeachable evidence it was deliberate.
Hats off, too, to the grassroots movements that succeeded in quashing resolutions in both houses of Congress calling for the equivalent of a blockade of Iran. Several members actually withdrew their earlier sponsorship of the resolution in the wake of public pressure. Many of them came to realize that facilitating a new war might make them vulnerable to charges of poor judgment – the kind of charges that sabotaged Sen. Hillary Clinton, who, ironically, thought she had done the politically smart thing in voting to give the president authority to attack Iraq.
Not Completely Out of the Woods
There remain as many "crazies" among the Israeli leadership as there are here in Washington – crazies who continue to believe that Iran must be attacked while the going is good. And it will never be as good as it is with Bush and Cheney in the White House. If the Randy Scheunemanns of this world are capable of goading the likes of Saakashvili into irresponsible action, they can try to do the same with a wink and a nod to the crazies in Tel Aviv.
The fact that the McCain/Palin campaign seems to be in serious jeopardy provides still more incentive for recklessness. If, as all seem to agree, a terrorist event of some kind might give the edge to McCain, many could argue that the same result could be achieved by a wider war including Iran, requiring the senior, seasoned leadership of one who has "worn the uniform."
And there is still more incentive for Bush and Cheney to look with favor on an attack on Iran… very personal incentive. It is a safe bet that if John McCain loses, Bush and Cheney and others will be plagued by various legal actions against them for the war crimes for which they are clearly responsible. Such would also be possible under a President McCain or Palin – but much less likely.
But attacking Iran would be crazy, you say. Not for nothing have many of the folks around Bush and Cheney been referred to as "the crazies" since the early Eighties. Some are still there; and they do things.
In April 2006, one of my Veteran Intelligence Professionals for Sanity (VIPS) colleagues, in a conversation with Marine Gen. Anthony Zinni, asked the general if he thought the U.S. or the U.S.-cum-Israel would attack Iran. Zinni shook his head vigorously, saying, "That would be crazy." Then he stopped and quickly added that we are dealing with "the crazies."
Ray McGovern was chief of the Soviet Foreign Policy Branch at the beginning of his 27-year career as a CIA analyst. He is co-founder of VIPS, and now works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in inner-city Washington.
Original article posted here.
By Ray McGovern
On Sept. 23, the neoconservative chiefs of the Washington Post's editorial page mourned, in a tone much like what one hears on the death of a close friend, that "a military strike by the United States or Israel on Iran is not likely in the coming months." One could almost hear a wistful sigh, as they complained that efforts to stop Iran's nuclear program has "slipped down Washington's list of priorities … as Iran races toward accumulating enough uranium for a bomb."
We are spared, this go-round, from "mushroom clouds." But racing to a bomb? Never mind that the 16 agencies of the U.S. intelligence community concluded in a formal National Intelligence Estimate last November that work on the nuclear weapons-related part of Iran's nuclear program was halted in mid-2003. And never mind that Thomas Fingar, National Intelligence Director Mike McConnell's deputy for national estimates, reiterated that judgment as recently as Sept. 4. Never mind that the Post's own Walter Pincus reported on Sept. 10 that Fingar added that Iran has not restarted its nuclear weapons work. Hey, the editorial fellows know best.
The good news is that the bottom line of the Sept. 23 editorial marks one of those rare occasions when the Post's opinion editors have managed to reach a correct conclusion on the Middle East. It is true that the likelihood of an Israeli or U.S.-Israeli attack on Iran has receded in recent months. The more interesting questions are (1) why? And (2) under what circumstances might such an attack become likely again?
The Post attributes the stepping back by Israel and the U.S. to "the financial crisis and the worsening violence in Afghanistan and Pakistan." These are two contributing factors but, in my judgment, not the most important ones. Not surprisingly, the Post and other charter members of the Fawning Corporate Media (FCM) omit or play down factors they would prefer not to address.
Russia and Deterrence
More important than the bear market is the Russian bear that, after a 17-year hibernation, has awakened with loud growls commensurate with Russia's growing strength and assertiveness. The catalyst was the fiasco in Georgia, in which the Russians saw the hands of the neocons in Washington and their doppelgänger, the extreme Right in Israel.
You would hardly know it from FCM coverage, but the fiasco began when Georgian President Mikheil Saakashvili ordered his American- and Israeli-trained Georgian armed forces to launch an attack on the city of Tskhinvali, capital of South Ossetia, on the night of Aug. 6-7, killing not only many civilians but a number of Russian observers as well.
It may be true that our State Department officials had counseled Saakashvili against baiting the Russian bear, but it is abundantly clear to anyone paying attention to such things that State is regularly undercut/overruled by White House functionaries like arch-neocon Elliott F. Abrams (F. for Fiasco). His encomia include those earned for his key role in other major fiascoes like the one that brought about the unconscionable situation today in Gaza. (Would that the president's father had let Abrams sit in jail, rather than pardoning him after he was convicted for perjuring himself in testimony to Congress on the Iran-Contra fiasco.)
In any event, it is almost certainly true that Russian Prime Minister Vladimir Putin saw folks like Abrams, Vice President Dick Cheney, and their Israeli counterparts as being behind the attack on South Ossetia. For centuries the Russians have been concerned – call it paranoid – over threats coming from their soft southern underbelly, and their reaction could have come as no surprise to anyone familiar with Russian history – or, by analogy, those familiar with American history and the Monroe Doctrine, for example.
Even neocon Randy Scheunemann, foreign policy adviser to Sen. John McCain and former lobbyist for Georgia's Saakashvili, would have known that. And this lends credence to speculation that that is precisely why Scheunemann is said to have egged on the Georgian president. Russia's reaction was totally predictable, and it enabled McCain to "stand up to Russia" with very strong rhetoric and not-so-subtle suggestions that his foreign policy experience provides an important advantage over his opponent in meeting the growing danger of a resurgent Russia.
Russia's leaders are likely to have seen in Saakashvili's provocation, in the attempt to get NATO membership for Georgia and Ukraine, in the deployment of anti-missile defenses in Poland and the Czech Republic, and in hasty U.S. recognition of an independent Kosovo indignities that Russia should no longer tolerate.
I can visualize Russian generals telling Putin:
Enough! Look at the weakened Americans. They have destroyed what's left of their Army and Marine Corps, spreading them out and demoralizing them in two unwinnable wars. We know how bad it is with just one unwinnable war. It has not been that long since Afghanistan. But, Vladimir Vladimirovich, before we indulge ourselves with schadenfreude, consider what such actions betoken – total recklessness of a kind we have seen only rarely in Washington.
Who can assure us that "the crazies" – the Cheney-Abrams-Bush cabal – will not encourage the Israelis to precipitate the kind of armed provocation vis-à-vis Iran that would "justify" America's springing to the defense of its "ally" to bomb and missile-attack Iran? You are aware of the importance of the Israel lobby, and how American politicians vie with one another to prove themselves the most passionately in love with Israel.
Periodic attempts by Congress to require President Bush to seek congressional approval before ordering a strike on Iran have failed miserably. So his hands are free for another "preemptive war" before he leaves office. After all, Bush has publicly promised the Israelis he will deal with the "Iranian threat" before then. Besides, our political analysts suggest that Bush and Cheney might think that wider war would help the Republicans in the November election
No big bear likes to have its nose tweaked. But the Russian reaction to Georgia was not merely one of pique. It became a well-planned strategic move to disabuse Israel and the United States of the notion that Russia would sit still for an attack on Iran, a very important country in Russia's general neighborhood. After Georgia, the Russians were bent on sweeping such plans "off the table," so to speak, and seem to have succeeded.
The signs of new Russian assertiveness are in the public domain, although the FCM has not given them much prominence. What is more telling is the effect on Israel and the United States. Since early August there has been a sharp decline in the formulaic rhetoric against Iran's "path toward nuclear weapons," especially among U.S. policymakers and in American media following the conflict in Georgia and the expiration of the latest "ultimatum" served on Iran to stop its nuclear program.
The change in official Israeli statements was the most pronounced. After a consistently hawkish stance toward Iran, Israel's president, Shimon Peres told London's Sunday Times in early September:
"There are two ways to deal with Iran's nuclear threat; a military and a civilian way. I don't believe in the military option – any kind of military option … an attack can trigger a bigger war."
And then came the bombshell from Ehud Olmert in his valedictory interview appearing in the Israeli daily Yediot Ahronot on Sept. 29. Olmert argued that Israel had lost its "sense of proportion" in believing it could deal with Iran militarily.
Not Russia Alone
It is a curious twist, but to their great credit, senior military officers Adm. William Fallon, who quit rather than let himself be on the receiving end of an order to attack Iran, and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, fought and continue to fight a rearguard action against the dreams and plans of "the crazies" in the White House to attack Iran. Fallon famously declared that the U.S. military was not going to "do Iran on my watch" as commander of Centcom.
In addition to his outspoken opposition to opening a "third front" in the area of Iraq and Afghanistan, Mullen has done much behind the scenes to talk sense into the Israelis. From the Israeli press we know that Mullen went so far as to warn his Israeli counterparts not to even think about another incident like the one on June 8, 1967, when Israeli jets and torpedo boats deliberately did their utmost to sink the intelligence collector USS Liberty off the Sinai coast.
A gutsy move. The Israelis know that Mullen knows that that attack was deliberate – not some sort of unfortunate mistake. Mullen could have raised no more neuralgic an issue in taking a shot across any Israeli bow that might be thinking of a provocation of some sort in the Persian Gulf.
Hats off to the new admirals… who outshine predecessor admirals who bowed to pressure from President Lyndon Johnson to portray the Israeli air and torpedo strikes on the USS Liberty, which took the lives of 34 U.S. sailors and wounded more than 170 others, as a mistake in the fog of war – despite unimpeachable evidence it was deliberate.
Hats off, too, to the grassroots movements that succeeded in quashing resolutions in both houses of Congress calling for the equivalent of a blockade of Iran. Several members actually withdrew their earlier sponsorship of the resolution in the wake of public pressure. Many of them came to realize that facilitating a new war might make them vulnerable to charges of poor judgment – the kind of charges that sabotaged Sen. Hillary Clinton, who, ironically, thought she had done the politically smart thing in voting to give the president authority to attack Iraq.
Not Completely Out of the Woods
There remain as many "crazies" among the Israeli leadership as there are here in Washington – crazies who continue to believe that Iran must be attacked while the going is good. And it will never be as good as it is with Bush and Cheney in the White House. If the Randy Scheunemanns of this world are capable of goading the likes of Saakashvili into irresponsible action, they can try to do the same with a wink and a nod to the crazies in Tel Aviv.
The fact that the McCain/Palin campaign seems to be in serious jeopardy provides still more incentive for recklessness. If, as all seem to agree, a terrorist event of some kind might give the edge to McCain, many could argue that the same result could be achieved by a wider war including Iran, requiring the senior, seasoned leadership of one who has "worn the uniform."
And there is still more incentive for Bush and Cheney to look with favor on an attack on Iran… very personal incentive. It is a safe bet that if John McCain loses, Bush and Cheney and others will be plagued by various legal actions against them for the war crimes for which they are clearly responsible. Such would also be possible under a President McCain or Palin – but much less likely.
But attacking Iran would be crazy, you say. Not for nothing have many of the folks around Bush and Cheney been referred to as "the crazies" since the early Eighties. Some are still there; and they do things.
In April 2006, one of my Veteran Intelligence Professionals for Sanity (VIPS) colleagues, in a conversation with Marine Gen. Anthony Zinni, asked the general if he thought the U.S. or the U.S.-cum-Israel would attack Iran. Zinni shook his head vigorously, saying, "That would be crazy." Then he stopped and quickly added that we are dealing with "the crazies."
Ray McGovern was chief of the Soviet Foreign Policy Branch at the beginning of his 27-year career as a CIA analyst. He is co-founder of VIPS, and now works with Tell the Word, the publishing arm of the ecumenical Church of the Saviour in inner-city Washington.
Original article posted here.
Monday, October 20, 2008
Saturday, October 18, 2008
Thursday, October 16, 2008
The dying Rethugs
Goodbye, GOPThe neocons killed the Republican Party. Will they stay for the funeral? |
| by Justin Raimondo |
| Barring a catastrophe – a terrorist attack on American soil, a calamitous gaffe, or the documented revelation that he really is a Muslim after all – it looks like Barack Obama is going to be the 44th president of these United States. Not only that, but I'd bet the farm we'll have a Democratic Congress, one with a working majority that relegates the Republicans to the role of back bench naysayers whose dissent barely registers. Last year, Paul Craig Roberts expressed the hopes of many American voters when he wrote: "If we are fortunate, Republicans will complete their self-destruction before they extinguish the Constitution and destroy America." It looks like he's going to get his wish. What killed the GOP was the war and its inevitable aftermath – the economic blowback that is even now whipping across the landscape and downing Wall Street's mightiest edifices. Not only that, but the general air of uncertainty and fear generated by the war and its economic and psychological ripple effects have created a crisis of confidence, one that threatens our well-being in an immediate way. Entrepreneurs don't like uncertainty, because business relations require regularity, or at least some degree of predictability. They also assume a degree of honesty, but truth has been in short supply lately, as the history of the Iraq war, from conception to inception, sadly demonstrates. After the American people found out they'd been deceived – that there were no "weapons of mass destruction," that we never had a chance of being greeted as "liberators," and that, far from paying for itself, as Paul Wolfowitz infamously averred, we'd be stuck with a $3 trillion bill – they cut the GOP loose and haven't yet looked back. This has always been the Republicans' war, no matter how enthusiastically most of the Democratic leadership initially supported it. The war we're supposedly "winning" has been the overarching theme of the McCain campaign, and he doesn't seem comfortable talking about anything else – unless it's why we must guarantee the borders of every obscure ex-Soviet "republic" for all time. The prime-time speakers at the Republican convention echoed the party line on the war, ad nauseam, and the entire event was one long paean to militarism and the glory of war. There were more uniforms in that convention hall than at the graduating ceremonies of West Point and Annapolis combined, and all the talk was of valor on the battlefield. Perhaps they should change their name to the Praetorian Party. They put all their eggs in one basket, and those eggs were hatched by the cowbirds of conservatism, the fabled neoconservatives. The history of this crew is too well-known to go into here in any detail: indeed, their narcissism has provided researchers with an overabundance of material that documents their hegira from far Left to far Right. Suffice to say that this vexatious faction entered the bloodstream of the conservative movement during the Cold War years, when pro-war (that's the Vietnam War) Democrats jumped ship and joined the GOP in protest over "McGovernism," i.e., a Democratic Party that rejected the politics of LBJ, Hubert Humphrey, and the neocons' favorite Democratic politician, Sen. Henry "Scoop" Jackson (D-Boeing). The sudden infusion of a bunch of highbrow leftist intellectuals into the conservative movement was welcomed by the organs of respectable conservative opinion, such as National Review. A few dissenters, such as Russell Kirk, Pat Buchanan, and the editors of Chronicles magazine, warned their fellows of trouble to come, but they were ignored. The neocons were bringing not only intellectual respectability and attention from liberal redoubts in the media and academia, but also hauling in plenty of dough. The big conservative foundations poured money into neocon projects and subsidized their up-and-coming intellectual dromedaries, driving out dissenters and imprinting the movement with their peculiar obsessions – first and foremost, an unmitigated militarism. Whatever else the neocons believed in – and this often seemed to change with the political seasons – the one constant was and is a firm belief in the efficacy of U.S. military intervention around the world. The leading neocon magazine, the Weekly Standard, once published a screed by Max Boot entitled "The Case for American Empire" – a title that seems curiously archaic today. However, back in the neocons' heyday, when the Iraq war was still a "cakewalk," the big disagreement among Those in the Know was whether America should formally acknowledge being an empire (Niall Ferguson) or not (Robert Kagan). This intra-neocon fight was just a strategic dispute: no one disputed the wisdom of global intervention. When Ron Paul warned his fellow Republicans that the empire is unsustainable, he was vilified by the neocons and the party establishment, derided as a kook, and practically drummed out of the party by the arbiters of political correctness, neocon style. They didn't even let him on the convention floor during McCain's coronation, and they refused to count his votes. Now that the disaster Paul predicted has befallen them, one can only stand and watch their spectacular implosion with the utmost satisfaction. What's particularly entertaining is the speed with which the neocons are now deserting the sinking ship of the GOP, like those small mammalian creatures they resemble in mien and spirit. Charles Krauthammer, David Brooks, David Frum – having destroyed the GOP and the conservative movement, they leave it a dried-up husk and move on to their next unwitting host. It's in somewhat dubious taste to say "I told you so," but that hasn't stopped me yet, so I'll say it again, as I did in February of last year: "We are in for some very dramatic times. With the leading figures in Congress and among the presidential candidates so far from the popular will on the major question of the day – the war – and with major economic problems on the horizon (if Alan Greenspan is right, Tuesday's huge drop in the stock market may be a hint of things to come), this country could be headed for some major turmoil. … "The consequences of our foreign policy do not just redound overseas: the political and cultural 'blowback' of the Iraq war, and whatever other wars come out of our initial intervention, is already straining the limits of our constitutional form of government, as well as putting tremendous economic pressure on a system that could break down at any moment. We have borrowed our children into penury, and now we're working on their children, who are going to inherit much less than we had to start with. "With all these rising crises looming, the American Empire promises to be the shortest-lived imperial expansion in world history. After a long and brilliant record as a successful ongoing project in limited government and representative democracy, will the American experiment end in a flashy display of military prowess punctuated by a noisy economic and political implosion?" The events of the past few weeks have definitively answered that question in the affirmative. I predict it won't be long before we're hearing the rhetoric of war employed by the re-designers of our economy: instead of a "war on terrorism," we'll soon be fighting a "war on recession" – and it will be considered close to treasonous if anyone so much as mentions the D-word in this regard. In any case, the new reality – or, rather, the newly realized reality – imposes radical restraints on us that rule out foreign wars of aggression, or "liberation," and require a concentration of our resources at home. Yet such a sudden change is going to take some getting used to by the lords of Washington, who are accustomed to thinking of the world as their playground. In the wake of such a sea-change, very often people go right on acting as if absolutely nothing had occurred, oblivious to the new reality until they run right into it, head first. That's what's happened, so far: the imperial pretensions of our presidential candidates, for example, show no signs of abating. They're still talking about bailing out the Georgian economy (the one in the Caucasus), when people right here in this country are being foreclosed out of their homes. They don't understand the full implications of what's happening to their beloved empire, but they will soon enough. The first politician to grasp the new reality, and successfully adapt to it, will go far. It's a pity that none of the current crop seem to get it. ~ Justin RaimondoOriginal article posted here. |
So much for Bushmonkey broken ideology. Don't let the door hit your ass on the way out!
Bush set to go with a whimper
By Jim Lobe
WASHINGTON - With only three months left in office, United States President George W Bush appears increasingly determined to calm the international waters he so vigorously churned up, especially during his first term.
In just the last several days, he has effectively rehabilitated a charter member of the "axis of evil" - North Korea - by agreeing to take it off the State Department's list of state sponsors of terrorism in exchange for Pyongyang's agreement to resume its dismantling of a key nuclear facility and cooperate with US and international inspectors.
As for the other surviving member of the axis, Iran, leaks from the State Department and elsewhere over the last several days suggest that Bush will announce Washington's intention to open a US Interest Section in Tehran shortly after the November 4 presidential elections, effectively re-establishing diplomatic relations that were broken off 29 years ago.
Although both moves were foreseen already last summer, neo-conservatives and other hawks in and outside the administration who have steadfastly opposed any detente with either country are furious.
"It is ... the final crash and burn of a once-inspiring global effort to confront and reverse nuclear proliferation, thereby protecting America and its friends," wrote former UN ambassador John Bolton in Monday's Wall Street Journal about the North Korea deal.
"Having bent the knee to North Korea, Secretary of State Condoleezza Rice appears primed to do the same with Iran, despite that regime's egregious and extensive involvement in terrorism and the acceleration of its nuclear program," continued Bolton, who is often thought to express the off-the-record views of Vice President Dick Cheney.
He predicted that Washington will actually open its Interest Section "within days" after the election despite the fact that Tehran has not yet given its approval. "Hard as it is to believe, there may be worse yet to come," Bolton concluded.
Worse for the hawks, the two moves also tend to undercut the foundering election campaign of Republican presidential candidate, Senator John McCain, in precisely those very few remaining areas - national security and the "war on terror" - in which, according to public opinion polls, he is generally perceived as stronger and more experienced than his Democratic rival, Senator Barack Obama.
McCain, who has joked about bombing Iran on the campaign trail, until recently opposed any direct diplomatic engagement with Tehran unless it complied with UN Security Council demands that it freeze its uranium-enrichment program. And he reacted to the latest agreement with Pyongyang by effectively withholding his support.
"I expect the administration to explain exactly how this new verification agreement advances American interests and those of its allies," he said after the State Department announced that it would take Pyongyang off the terrorism list. Obama, on the other hand, called the deal a "modest step forward".
Indeed, on a range of key foreign policy issues - including the priority to be given to Israel-Palestinian peace talks, Afghanistan, Pakistan, Russia after its intervention in Georgia, and even Taiwan, to which McCain supports several big-ticket arms systems currently opposed by both the administration and Obama - Bush now appears closer to the Democratic candidate than to his fellow Republican.
Many of McCain's closest advisers include neo-conservatives and nationalist hawks whose views were decisive in shaping what became known as the "Bush Doctrine" and inspiring the fateful US invasion of Iraq during the president's first term.
In that respect, Bush's latest moves reflect the culmination of a "realist restoration" during his second term, one that has witnessed a gradual decline in the hawks' influence and a return to a more traditional reliance by Washington on diplomacy and multilateralism, particularly in coordination with key Western allies, as the preferred option for solving international problems.
That restoration has been led by Rice and senior career diplomats in the State Department, the intelligence community, and, since late 2006, by Pentagon chief Robert Gates and the Joint Chiefs of Staff whose conviction that the US armed forces are badly overstretched and cannot afford to fight yet another war, be it on the Korean peninsula, the Middle East, or, for that matter, in the Caucasus, has clearly had an impact in the Oval Office.
The current financial crisis has no doubt enhanced the White House's appreciation for the degree to which the United States is dependent on foreign powers - not all of them necessarily friendly - and their cooperation, thus strengthening the realists' position as the administration plays out its term.
Their efforts - and now Bush's, too - are directed primarily at trying to undo the damage to Washington's global position inflicted by the hawks not only during their period of dominance from 9/11 to the end of the first term, but also as a result of their furious rear-guard actions during the second term against realist efforts to engage North Korea and Iran.
While North Korea's nuclear-weapons program was effectively frozen by a series of accords between Pyongyang and the Bill Clinton administration between 1994 and 2001, Bush's refusal to continue where Clinton left off - as he had been advised by his realist secretary of state at the time, retired General Colin Powell - led to Pyongyang's withdrawal from the Non-Proliferation Treaty (NPT) and eventually to its detonation of a nuclear device in Oct 2006.
Bush finally yielded to Rice's appeal to engage Pyongyang directly, a mission undertaken by her Assistant Secretary of State for East Asian Affairs, Christopher Hill. By then, however, Washington's hand had been so badly weakened that Hill was forced to settle for a de-nuclearization accord that inevitably fell short of Bush's one-time promise of a virtually full-proof verification regime that would permit inspectors to go virtually anywhere at any time to suspected, as well as known, nuclear sites.
To the bitter protests of the hawks, last weekend's announcement that North Korea had been removed from the terrorism list in exchange for its agreement to a more limited inspection regime confirmed that Bush had once more retreated from his maximalist demands. "This isn't diplomacy, it's lunacy," one unnamed former administration official told The Weekly Standard's Stephen Hayes, who is also known to be close to Cheney.
Realists - including members of the 2006 Iraq Study Group headed by former secretary of state James Baker - have long urged Bush to drop preconditions for direct negotiations with Tehran. In June, the chairman of the Joint Chiefs, Admiral Michael Mullen called for a "broad dialogue" with Iran.
Less than one month later, Bush sent a senior State Department official to participate for the first time in talks between the other permanent UN Security Council members, Germany, and Iran, amid reports that Iran had successfully tested advanced centrifuges that would permit it to accelerate its uranium-enrichment program. He also tentatively agreed to Rice's idea of opening an Interest Section at that time, but the announcement was reportedly put off when Cheney and others opposed to the move argued that it could harm McCain's election chances.
The well-connected Washington Post columnist David Ignatius reported Sunday, however, that the announcement will be made after the election in mid-November, a report echoed by Bolton the following day.
Jim Lobe's blog on US foreign policy, and particularly the neo-conservative influence in the Bush administration, can be read at http://www.ips.org/blog/jimlobe/.
Tuesday, October 14, 2008
You've just been bought and sold: to a bank
Rescue for the Few, Debt Slavery for the Many
By MICHAEL HUDSON
We are now entering the financial End Time. Bailout “Plan A” (buy the junk mortgages) has failed, “Plan B” (buy ersatz stocks in the banks to recapitalize them without wiping out current mismanagers) is fizzling, and the debts still can’t be paid. That is the reality Wall Street avoids confronting. “First they ignore you, then they denounce you, and then they say that they knew what you were saying all the time,” said Gandhi. The same might be said of today’s overhang of debts in excess of the economy’s ability to pay. First the policy makers pretend that they can be paid, then they denounce the pessimists as spreading panic, and then they say that of course students have been taught for four thousand years now how the “magic of compound interest” keeps on doubling and redoubling debts faster than the economy can squeeze out an economic surplus to pay.
What has ended is the idea that “the magic of compound interest” can make economies rich without having to work and without industry. I hope we have seen the end of derivatives formulae seeking to make money by playing in a zero-sum game. A debt overhang always ends either in foreclosure of the debtor’s property, or in a debt annulment to preserve the economy’s overall freedom and equity.
This means that the postmodern economy as we know it must end – either in financial polarization and debt peonage to a new oligarchic elite, or in a debt cancellation, a Jubilee Year to rescue society. But when the government says that it is reviewing “all” the options, this reality is not one of them. Treasury Secretary Henry Paulson’s first option was to buy packages of junk mortgages (collateralized debt obligations, CDOs) to save the wealthiest institutional investors from having to take a loss on their bad bets. When this was not enough, he came up with “Plan B,” to give money to banks. But whereas Britain and European countries talked of nationalizing banks or at least taking a controlling interest, Mr. Paulson gave in to his Wall Street cronies and promised that the government’s stock purchases would not be real. There would be no dilution of existing shareholders, and the government’s investment would be non-voting. To cap the giveaway to his cronies, Mr. Paulson even agreed not to ask executives to give up their golden parachutes, exorbitant annual bonuses or salaries.
Plan A (the $700 billion to buy mortgage-backed junk that the private sector will not buy) failed partly because it let financial institutions avoid putting a fair value on the debt packages they were selling. Instead of telling the truth about their financial position by marking assets to market prices), they can “mark to model,” Enron-style. We have seen the result: A solid week of plunging stock market prices. The public media call this a panic, but there is nothing irrational about it. Who in their right mind would buy securities or buy into a bank without knowing what the securities were worth? Faith in junk mathematical models has ended.
So we still await a public response to the problem of how to write down debts. Whose economic interest will have to give: that of debtors, as increasingly has been the case over the past eight centuries; or that of creditors, which have fought back to create a neoliberal economy controlled by the FIRE sector?
It is not too late to decide which road to take, but Wall Street bankers and creditors have taken the lead in positioning themselves. Seeing which way the political winds were blowing, they moved to empty out the Treasury before the November 3 elections much like medieval citizens fleeing a horde of Mongolian raiders under Genghis Khan. “We’re moving. Clean out the cupboards,” much as Lehman Brothers emptied out their foreign bank accounts in Britain and elsewhere just before declaring bankruptcy, taking what they could and steering it to their best friends.
The pretense was that a bailout was needed to restore confidence. But the ensuing week showed that the claims were false. It didn’t turn the stock market around as promised. The Dow Jones Industrial Average fell 2,200 points from Wednesday, October 1 through the following Friday October 10 – eight straight trading days, not even pausing for the usual zigzags. Friday’s plunge was 100 points a minute for the first seven minutes – a 690 point drop to under 8000. Each 100 points was more than a 1 percent drop, which was reflected on the NASDAQ. Nothing could withstand the pressure of so many Americans cashing in their mutual funds overnight and so many foreigners in earlier time zones putting in sell-at-market orders.
Short sellers made one of the largest and quickest fortunes ever, and then covered their positions by buying back the stocks they had pre-sold. This pushed prices up even into positive territory just before 10:30 AM when George Bush began to speak. Half the financial stocks showed gains – a sign that the Plunge Protection Team had jumped in. But Mr. Bush said nothing helpful and stocks went back into freefall, ending down another 128 points despite the upcoming weekend G7 meeting. There was no talk at all of reducing debt levels – only of giving more money to banks, insurance companies and other money managers, as if “pushing on a string” somehow would lead them to lend yet more to an already debt-ridden economy.
If Congress really wanted to restore confidence, here’s what it might have done: First, mark to market, not to model. Investors no longer believe America’s Enron-style accounting, debt rating agencies or monoline risk insurers. They don’t trust U.S. banks to be honest about their financial positions. They worry about the fraud charges brought by attorneys general in eleven states against predatory lenders such as Countrywide and Wachovia that Citibank, JPMorgan Chase and Bank of America were so eager to buy.
So is it too late for Congress to change its mind and repeal the giveaway? If the $700 billion handout didn’t stabilize the unsalvageable for small investors, pension funds and even the financial sector itself, what did it do?
What the Fed has been doing while the media have not been looking?
Let’s put the giveaway in perspective. While Senators and Congressmen subject to voters’ choice were debating $700 billion for the major Wall Street contributors to both parties (admittedly only for starters, Mr. Paulson explained), the Federal Reserve already had given even more, without any public discussion and without the major media noticing. Since Bear Stearns failed in March, the Federal Reserve has used the small print of its charter to go outside its normal customers (which are supposed to be commercial banks), to give investment banks, brokerage houses and now large corporations almost indiscriminately some $875 billion in “cash for trash” swaps. (The statistics are released each week in the Fed’s H41 report.) Like Aladdin offering new lamps for old, the Fed has exchanged Treasury securities for junk mortgages and other securities that brokerage houses and investment banks did not have time to pawn off onto OPEC, Asian sovereign wealth funds or other investors.
The press lauds Mr. Bernanke as “a student of the Great Depression.” If he were, he should know that what led to the 1929 collapse were harsh U.S. Government creditor policies toward its World War I Allied governments. This created a situation where the Federal Reserve had to provide easy credit to hold interest rates artificially low so as to encourage U.S. investors to lend to Britain and Germany, which would use these dollar inflows to pay their Inter-Ally arms and reparations debts. Mr. Bernanke’s predecessor, Alan Greenspan, promoted easy credit simply for ideological reasons, to enrich Wall Street by enabling it to sell more debt.
A student of the Great Depression would understand the conflicts of interest between retail commercial banking and wholesale investment banking and money management that led Congress to pass the Glass-Steagall Act in 1933 – conflicts unleashed once again when Pres. Clinton backed then-Fed Chairman Alan Greenspan and Republican leader (and McCain hero) Senator Phil Gramm in leading the repeal of this act, opening up the floodgates to today’s financial double-dealing that has cost the American economy so much.
If Mr. Bernanke does know this history, his behavior is simply that of an opportunistic student of the art of political self-advancement, toadying to Wall Street in campaigning for one last great rip-off before the Bush Administration goes out of business. The Fed has given Wall Street newly minted Treasury bonds, added to the national debt out of thin air. It has done this without feeling any need to rationalize it by drawing absurd public-relations pictures about how the government may “make a profit for taxpayers.”
The Fed Chairman is not elected democratically. He traditionally is designated by the Wall Street financial sector that the Fed is supposed to regulate, acting as its lobbyist for creditor interests – the top 10 percent of the population – against that of the indebted “bottom 90 percent.” This “independence of the central bank” is trumpeted as a hallmark of democracy. But it is undemocratic, precisely by being isolated from public control.
The Age of Oligarchy
Treasury Secretary Paulson has no such luxury. The Treasury is supposed to represent the national interest, not that of bankers – even though its head these days is drawn from Wall Street and acts as its lobbyist. Mr. Paulson presented his almost totalitarian giveaway gruffly to Congress on a take-it-or-leave it basis, announcing that if Congress did not save Wall Street from taking losses on its mountain of bad loans, the banks were willing to crash the economy out of spite. “Please don’t make us wreck the economy,” he said in effect. As Margaret Thatcher used to say while selling off the British government’s crown jewels in the 1980s, TINA: There is no alternative.
In making this bold threat Mr. Paulson behaved as arrogantly as Lehman’s CEO Richard Fuld did when he tried to bluff Korea and other prospective investors into paying the full, fictitiously high book value for his company. (His bluff failed and Lehman went bankrupt, wiping out its shareholders, including the employees and managers who held 30 percent of its stock.) There turned out to be an alternative after all. Responding to the loudest public condemnation in memory, Congress called Mr. Paulson’s bluff.
What made his $700 billion Troubled Asset Relief Program (TARP) so much more visible to the media than the Fed’s actions is that Congress is involved, and this is an election year. The level of deception and false argument is therefore enormous – along with a few tradeoffs and tax cuts to distract attention. Erstwhile Republican opponent Sen. Jeff Sessions of Alabama came right out and said that “This bill has been packaged with a lot of very popular things to give it even more momentum,” so that (as The New York Times explained), “instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.”
Left behind while Wall Street’s believers in the rapture of free markets were swept up to heaven by “socialism for the rich” have been mortgage debtors, student-loan debtors, the Pension Benefit Guarantee Corporation (PBGC, some $25 billion short), the Federal Deposit Insurance Corporation (FDIC, about $40 billion short), as well as Social Security which, we are warned, may run up a trillion dollar deficit thirty or forty years down the line. Only the wealthiest have been beneficiaries, not voters, homeowners and other debtors.
Still, Congress was panicked into acting on Friday, October 3, because a week earlier, September 26, stocks fell 777 points after Congressmen responded to an unprecedented volume of voter protest against the bailout. “This sucker could go down,” Pres. Bush warned as Wall Street’s lobbyists blamed the market downturn to the failure of Congress to preserve the “monetary system,” and specifically the banks and insurance companies that already had lost their net worth and were plunging deeper into Negative Equity territory. Democratic leaders Barney Frank and House Speaker Nancy Pelosi said, in effect, “Look what you’ve done! You irresponsible politicians are grandstanding on principle, and wiping out peoples’ stock market savings and threatening their pension funds. If you don’t give Wall Street firms enough money to cover their losses so that everyone wins, they’ll kill the economy until they get their way.” Well, they didn’t quite say this, but that was basically their message. It certainly was Wall Street’s message: “Wall Street to Economy: Your money or your life.”
So Congress gave in. Democrats ran like lemmings to “save the economy.” Yet the stock market fell a few hundred points, and kept on plunging all week long, much worse and much faster than had occurred right after Congress had initially defeated the bill.
The “Reality Problem”
What did the “free market” theory underlying the giveaway leave out of account? For starters, “the monetary system” turns out to be a euphemism for the fortunes of financial gamblers using junk mathematics (the Merton-Scholes derivatives formula) based on junk economics (blessed with Nobel Prizes) to buy, speculate and even to insure junk mortgages, junk bonds and junk commercial paper and derivatives based on their relative prices. So what is left out first of all was full knowledge of the value of what is being bought and sold. Mark-to-market models leave the price up to the investment bankers. If trust existed and there really was honor among these thieves, a government bailout would not be necessary, because “the market” could clear.
“Free market” ideology assumes that each party will act in his or her self-interest. If this is so, why should foreign governments accumulate more dollar claims on the U.S. Treasury, which already owes their central banks $4 trillion? When there hardly were enough Treasury securities to go around even as the United States ran unprecedented federal budget deficits, U.S. officials urged these banks and sovereign wealth funds to buy packaged mortgages yielding a higher rate of return. And at least by buying these bonds, foreign governments would not be accused of funding America’s war in Iraq that most of their voters opposed. But investors made a fatal mistake in believing U.S. representations of the value of their junk-mortgage packages. This trust has now been lost, all the more so since the bailout’s permission to keep on “marking to market.”
Congress thought that its $700 billion would distract attention at least until the November 4 election. But to no avail. Markets fell 157 points on Giveaway Friday, and kept on going down another 800 points on Monday, October 6 (to about 9500) before bouncing 500 points off the floor, only to fall even more through Friday. So the giveaway failed in its stated purpose to rescue stock market investors (“peoples’ capitalism”) or their pension funds. But that was not its real purpose. The time simply had come to clear out and take whatever one could.
Making banks and insurers in the zero-sum derivative game whole, so that winners can collect their bets while losers can sell their bad investments to the Treasury, is supposed to re-inflate the credit pyramid. The idea is to solve the debt problem with yet more debt to prop up housing prices once again to unaffordable levels! This is not a long-term solution, but it would give insiders enough time to arrange a do-over and get out of the game more quickly, to sell out their junk mortgages and junk bonds to the proverbial “greater fool” – in this case, the “greater fool of last resort,” the U.S. Treasury, as long as it can be run by Mr. Paulson or, under Mr. Obama, perhaps the former Goldman-Sachs official Robert Rubin.
The banks are to “earn” their way out of their negative equity position by selling more of their product – credit – to increase the economy’s debt levels and hence receive more interest payments. The problem is that most families are already “loaned up.” They have no more discretionary income to pledge to carry more debt. Without writing down their debts, there will be no fresh lending, and hence no source of credit and purchasing power for new autos, appliances, goods and services in general. Debt deflation is being imposed on the “real” economy. Creditors and speculators alone are to be made whole.
If no revenue was available for future Social Security, public health care and repair the nation’s depleted infrastructure before this giveaway, think of how bare the cupboard must be now that the government has run up the recent trillions of dollars in new debt rather than writing off a penny of the bad mortgage debts being blamed for causing the debacle.
We can see where this is leading. The wealthiest 1 percent of the population will come into possession of even more returns to wealth than the 57 percent that they are now taking. In contrast to the Statue of Liberty’s inscription “give me your poor … yearning to breathe free,” the Fed – and now the Treasury, with Congressional blessing – is taking from the public purse and giving to America’s wealthiest investors and insiders. This “Robin Hood in Reverse” program is being done without strings, without asking banks to stop paying dividends, exorbitant executive salaries and golden parachutes, and without taking over banks with negative net worth of the kind that many homeowners are experiencing.
Nobody is talking about a debt write-down or moratorium. The subprime mortgage problem could have been solved by writing down just $1 or $2 trillion of the face value and interest rates of predatory loans. Instead, the $10+ trillion in financial-sector damage in recent weeks reflects Wall Street’s fraudulent packaging and sale of junk mortgages at unrealistically high prices, using junk mathematics to calculate junk derivatives and sell them to gullible investors who believe that the pretenses these mathematics, credit ratings and projected income have a basis in reality.
The amazing feature of today’s crash is how many Wall Street firms actually believed that the game of musical financial chairs could go on before they had to stop dancing and indeed, escape from the room. I remember one day back in the 1970s when I warned Frank Zarb of Lazard Freres about the likelihood of Third World debt defaults, and suggested that the firm should do an ability-to-pay analysis. “We don’t have to do any such thing,” he replied. “We have the schedule of what they owe right here in this IMF report.” It was a thick printout of the scheduled debt service for an African country that soon became insolvent. But Wall Street’s mentalité was that of Herbert Hoover on the eve of the Great Depression: A debt is a debt, and that is that. The response is to blame the victim, as if the irresponsibility lies with debtors rather than creditors.
No reversal of the Bush tax cuts is offered to re-inflate the economy, no move toward more progressive taxation of Wall Street speculators who pay only a 15 percent “capital gains” tax rate instead of the much higher income-tax and FICA withholding rates that wage-earners pay. (Wall Street has its own golden parachute program, so why should it pay for Social Security for the rest of society?) There is to be no reduction in the special tax benefits for real estate, whose tax favoritism led to the crisis by “freeing” more income from the tax collector to be pledged to mortgage bankers as interest. The Bubble Economy is to be re-inflated by Fannie Mae, Freddie Mac and the FHA lending to help buyers bid up housing and commercial office prices once again to a rate that promises to impose debt peonage on homeowners.
The budget deficit will soar, without any prosecution of tax evasion scams by UBS or KPMG. Instead of a fiscal or regulatory comet driving these dinosaurs to extinction, the climate has turned more conducive to their proliferation. Our Age of Deception is to be locked in even more tightly. The Congressional bailout’s suspension of mark-to-market rules to rely on Wall Street’s “self-regulation” should win a prize for Oxymoron of 2008 as investors have no clue as to what financial assets are worth. No wonder lending has dried up, especially to banks themselves.
Just as financial victims fail to vote and support their self-interest, predators also turn out to pursue self-defeating “free market” strategies. The financial sector’s short-termism is the greatest enemy to its survival. It has translated its wealth into a fatal political control of its legal climate, blocking [with the explicit support of Barack Obama, Editors] Congressional efforts to rewrite the oppressive bankruptcy laws that credit-card banks lobbied so hard to pass, [with vital help from Joe Biden, the senior senator from credit card company HQ, the state of Delaware, Editors] crucial. These hard bankruptcy terms prevent the courts from renegotiating homeowner debts to keep property occupied, accelerating the real estate price collapse. The result is today’s negative equity, posing the question of just who is to bear the cost of bring debts back in line with the economy’s ability to pay. Will it be the financial institutions that sponsored asset-price inflation and lobbied for deregulation of lenders? Or, will it be the debtors who thought they were riding the wave to get an inflationary free lunch?
Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole – and will act as collecting agent for the overhead of bad debts the economy has run up.
Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is – credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it.
Will voters see the asymmetry in Congress’s failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation’s bankruptcy laws to free families from debt peonage – and free housing markets from the price declines that result from today’s proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street’s corporate raiders and “shareholder activists” have loaded then down?
Evidently not.
Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). 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 reached via his website, mh@michael-hudson.com
Original article posted here.
By MICHAEL HUDSON
We are now entering the financial End Time. Bailout “Plan A” (buy the junk mortgages) has failed, “Plan B” (buy ersatz stocks in the banks to recapitalize them without wiping out current mismanagers) is fizzling, and the debts still can’t be paid. That is the reality Wall Street avoids confronting. “First they ignore you, then they denounce you, and then they say that they knew what you were saying all the time,” said Gandhi. The same might be said of today’s overhang of debts in excess of the economy’s ability to pay. First the policy makers pretend that they can be paid, then they denounce the pessimists as spreading panic, and then they say that of course students have been taught for four thousand years now how the “magic of compound interest” keeps on doubling and redoubling debts faster than the economy can squeeze out an economic surplus to pay.
What has ended is the idea that “the magic of compound interest” can make economies rich without having to work and without industry. I hope we have seen the end of derivatives formulae seeking to make money by playing in a zero-sum game. A debt overhang always ends either in foreclosure of the debtor’s property, or in a debt annulment to preserve the economy’s overall freedom and equity.
This means that the postmodern economy as we know it must end – either in financial polarization and debt peonage to a new oligarchic elite, or in a debt cancellation, a Jubilee Year to rescue society. But when the government says that it is reviewing “all” the options, this reality is not one of them. Treasury Secretary Henry Paulson’s first option was to buy packages of junk mortgages (collateralized debt obligations, CDOs) to save the wealthiest institutional investors from having to take a loss on their bad bets. When this was not enough, he came up with “Plan B,” to give money to banks. But whereas Britain and European countries talked of nationalizing banks or at least taking a controlling interest, Mr. Paulson gave in to his Wall Street cronies and promised that the government’s stock purchases would not be real. There would be no dilution of existing shareholders, and the government’s investment would be non-voting. To cap the giveaway to his cronies, Mr. Paulson even agreed not to ask executives to give up their golden parachutes, exorbitant annual bonuses or salaries.
Plan A (the $700 billion to buy mortgage-backed junk that the private sector will not buy) failed partly because it let financial institutions avoid putting a fair value on the debt packages they were selling. Instead of telling the truth about their financial position by marking assets to market prices), they can “mark to model,” Enron-style. We have seen the result: A solid week of plunging stock market prices. The public media call this a panic, but there is nothing irrational about it. Who in their right mind would buy securities or buy into a bank without knowing what the securities were worth? Faith in junk mathematical models has ended.
So we still await a public response to the problem of how to write down debts. Whose economic interest will have to give: that of debtors, as increasingly has been the case over the past eight centuries; or that of creditors, which have fought back to create a neoliberal economy controlled by the FIRE sector?
It is not too late to decide which road to take, but Wall Street bankers and creditors have taken the lead in positioning themselves. Seeing which way the political winds were blowing, they moved to empty out the Treasury before the November 3 elections much like medieval citizens fleeing a horde of Mongolian raiders under Genghis Khan. “We’re moving. Clean out the cupboards,” much as Lehman Brothers emptied out their foreign bank accounts in Britain and elsewhere just before declaring bankruptcy, taking what they could and steering it to their best friends.
The pretense was that a bailout was needed to restore confidence. But the ensuing week showed that the claims were false. It didn’t turn the stock market around as promised. The Dow Jones Industrial Average fell 2,200 points from Wednesday, October 1 through the following Friday October 10 – eight straight trading days, not even pausing for the usual zigzags. Friday’s plunge was 100 points a minute for the first seven minutes – a 690 point drop to under 8000. Each 100 points was more than a 1 percent drop, which was reflected on the NASDAQ. Nothing could withstand the pressure of so many Americans cashing in their mutual funds overnight and so many foreigners in earlier time zones putting in sell-at-market orders.
Short sellers made one of the largest and quickest fortunes ever, and then covered their positions by buying back the stocks they had pre-sold. This pushed prices up even into positive territory just before 10:30 AM when George Bush began to speak. Half the financial stocks showed gains – a sign that the Plunge Protection Team had jumped in. But Mr. Bush said nothing helpful and stocks went back into freefall, ending down another 128 points despite the upcoming weekend G7 meeting. There was no talk at all of reducing debt levels – only of giving more money to banks, insurance companies and other money managers, as if “pushing on a string” somehow would lead them to lend yet more to an already debt-ridden economy.
If Congress really wanted to restore confidence, here’s what it might have done: First, mark to market, not to model. Investors no longer believe America’s Enron-style accounting, debt rating agencies or monoline risk insurers. They don’t trust U.S. banks to be honest about their financial positions. They worry about the fraud charges brought by attorneys general in eleven states against predatory lenders such as Countrywide and Wachovia that Citibank, JPMorgan Chase and Bank of America were so eager to buy.
So is it too late for Congress to change its mind and repeal the giveaway? If the $700 billion handout didn’t stabilize the unsalvageable for small investors, pension funds and even the financial sector itself, what did it do?
What the Fed has been doing while the media have not been looking?
Let’s put the giveaway in perspective. While Senators and Congressmen subject to voters’ choice were debating $700 billion for the major Wall Street contributors to both parties (admittedly only for starters, Mr. Paulson explained), the Federal Reserve already had given even more, without any public discussion and without the major media noticing. Since Bear Stearns failed in March, the Federal Reserve has used the small print of its charter to go outside its normal customers (which are supposed to be commercial banks), to give investment banks, brokerage houses and now large corporations almost indiscriminately some $875 billion in “cash for trash” swaps. (The statistics are released each week in the Fed’s H41 report.) Like Aladdin offering new lamps for old, the Fed has exchanged Treasury securities for junk mortgages and other securities that brokerage houses and investment banks did not have time to pawn off onto OPEC, Asian sovereign wealth funds or other investors.
The press lauds Mr. Bernanke as “a student of the Great Depression.” If he were, he should know that what led to the 1929 collapse were harsh U.S. Government creditor policies toward its World War I Allied governments. This created a situation where the Federal Reserve had to provide easy credit to hold interest rates artificially low so as to encourage U.S. investors to lend to Britain and Germany, which would use these dollar inflows to pay their Inter-Ally arms and reparations debts. Mr. Bernanke’s predecessor, Alan Greenspan, promoted easy credit simply for ideological reasons, to enrich Wall Street by enabling it to sell more debt.
A student of the Great Depression would understand the conflicts of interest between retail commercial banking and wholesale investment banking and money management that led Congress to pass the Glass-Steagall Act in 1933 – conflicts unleashed once again when Pres. Clinton backed then-Fed Chairman Alan Greenspan and Republican leader (and McCain hero) Senator Phil Gramm in leading the repeal of this act, opening up the floodgates to today’s financial double-dealing that has cost the American economy so much.
If Mr. Bernanke does know this history, his behavior is simply that of an opportunistic student of the art of political self-advancement, toadying to Wall Street in campaigning for one last great rip-off before the Bush Administration goes out of business. The Fed has given Wall Street newly minted Treasury bonds, added to the national debt out of thin air. It has done this without feeling any need to rationalize it by drawing absurd public-relations pictures about how the government may “make a profit for taxpayers.”
The Fed Chairman is not elected democratically. He traditionally is designated by the Wall Street financial sector that the Fed is supposed to regulate, acting as its lobbyist for creditor interests – the top 10 percent of the population – against that of the indebted “bottom 90 percent.” This “independence of the central bank” is trumpeted as a hallmark of democracy. But it is undemocratic, precisely by being isolated from public control.
The Age of Oligarchy
Treasury Secretary Paulson has no such luxury. The Treasury is supposed to represent the national interest, not that of bankers – even though its head these days is drawn from Wall Street and acts as its lobbyist. Mr. Paulson presented his almost totalitarian giveaway gruffly to Congress on a take-it-or-leave it basis, announcing that if Congress did not save Wall Street from taking losses on its mountain of bad loans, the banks were willing to crash the economy out of spite. “Please don’t make us wreck the economy,” he said in effect. As Margaret Thatcher used to say while selling off the British government’s crown jewels in the 1980s, TINA: There is no alternative.
In making this bold threat Mr. Paulson behaved as arrogantly as Lehman’s CEO Richard Fuld did when he tried to bluff Korea and other prospective investors into paying the full, fictitiously high book value for his company. (His bluff failed and Lehman went bankrupt, wiping out its shareholders, including the employees and managers who held 30 percent of its stock.) There turned out to be an alternative after all. Responding to the loudest public condemnation in memory, Congress called Mr. Paulson’s bluff.
What made his $700 billion Troubled Asset Relief Program (TARP) so much more visible to the media than the Fed’s actions is that Congress is involved, and this is an election year. The level of deception and false argument is therefore enormous – along with a few tradeoffs and tax cuts to distract attention. Erstwhile Republican opponent Sen. Jeff Sessions of Alabama came right out and said that “This bill has been packaged with a lot of very popular things to give it even more momentum,” so that (as The New York Times explained), “instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.”
Left behind while Wall Street’s believers in the rapture of free markets were swept up to heaven by “socialism for the rich” have been mortgage debtors, student-loan debtors, the Pension Benefit Guarantee Corporation (PBGC, some $25 billion short), the Federal Deposit Insurance Corporation (FDIC, about $40 billion short), as well as Social Security which, we are warned, may run up a trillion dollar deficit thirty or forty years down the line. Only the wealthiest have been beneficiaries, not voters, homeowners and other debtors.
Still, Congress was panicked into acting on Friday, October 3, because a week earlier, September 26, stocks fell 777 points after Congressmen responded to an unprecedented volume of voter protest against the bailout. “This sucker could go down,” Pres. Bush warned as Wall Street’s lobbyists blamed the market downturn to the failure of Congress to preserve the “monetary system,” and specifically the banks and insurance companies that already had lost their net worth and were plunging deeper into Negative Equity territory. Democratic leaders Barney Frank and House Speaker Nancy Pelosi said, in effect, “Look what you’ve done! You irresponsible politicians are grandstanding on principle, and wiping out peoples’ stock market savings and threatening their pension funds. If you don’t give Wall Street firms enough money to cover their losses so that everyone wins, they’ll kill the economy until they get their way.” Well, they didn’t quite say this, but that was basically their message. It certainly was Wall Street’s message: “Wall Street to Economy: Your money or your life.”
So Congress gave in. Democrats ran like lemmings to “save the economy.” Yet the stock market fell a few hundred points, and kept on plunging all week long, much worse and much faster than had occurred right after Congress had initially defeated the bill.
The “Reality Problem”
What did the “free market” theory underlying the giveaway leave out of account? For starters, “the monetary system” turns out to be a euphemism for the fortunes of financial gamblers using junk mathematics (the Merton-Scholes derivatives formula) based on junk economics (blessed with Nobel Prizes) to buy, speculate and even to insure junk mortgages, junk bonds and junk commercial paper and derivatives based on their relative prices. So what is left out first of all was full knowledge of the value of what is being bought and sold. Mark-to-market models leave the price up to the investment bankers. If trust existed and there really was honor among these thieves, a government bailout would not be necessary, because “the market” could clear.
“Free market” ideology assumes that each party will act in his or her self-interest. If this is so, why should foreign governments accumulate more dollar claims on the U.S. Treasury, which already owes their central banks $4 trillion? When there hardly were enough Treasury securities to go around even as the United States ran unprecedented federal budget deficits, U.S. officials urged these banks and sovereign wealth funds to buy packaged mortgages yielding a higher rate of return. And at least by buying these bonds, foreign governments would not be accused of funding America’s war in Iraq that most of their voters opposed. But investors made a fatal mistake in believing U.S. representations of the value of their junk-mortgage packages. This trust has now been lost, all the more so since the bailout’s permission to keep on “marking to market.”
Congress thought that its $700 billion would distract attention at least until the November 4 election. But to no avail. Markets fell 157 points on Giveaway Friday, and kept on going down another 800 points on Monday, October 6 (to about 9500) before bouncing 500 points off the floor, only to fall even more through Friday. So the giveaway failed in its stated purpose to rescue stock market investors (“peoples’ capitalism”) or their pension funds. But that was not its real purpose. The time simply had come to clear out and take whatever one could.
Making banks and insurers in the zero-sum derivative game whole, so that winners can collect their bets while losers can sell their bad investments to the Treasury, is supposed to re-inflate the credit pyramid. The idea is to solve the debt problem with yet more debt to prop up housing prices once again to unaffordable levels! This is not a long-term solution, but it would give insiders enough time to arrange a do-over and get out of the game more quickly, to sell out their junk mortgages and junk bonds to the proverbial “greater fool” – in this case, the “greater fool of last resort,” the U.S. Treasury, as long as it can be run by Mr. Paulson or, under Mr. Obama, perhaps the former Goldman-Sachs official Robert Rubin.
The banks are to “earn” their way out of their negative equity position by selling more of their product – credit – to increase the economy’s debt levels and hence receive more interest payments. The problem is that most families are already “loaned up.” They have no more discretionary income to pledge to carry more debt. Without writing down their debts, there will be no fresh lending, and hence no source of credit and purchasing power for new autos, appliances, goods and services in general. Debt deflation is being imposed on the “real” economy. Creditors and speculators alone are to be made whole.
If no revenue was available for future Social Security, public health care and repair the nation’s depleted infrastructure before this giveaway, think of how bare the cupboard must be now that the government has run up the recent trillions of dollars in new debt rather than writing off a penny of the bad mortgage debts being blamed for causing the debacle.
We can see where this is leading. The wealthiest 1 percent of the population will come into possession of even more returns to wealth than the 57 percent that they are now taking. In contrast to the Statue of Liberty’s inscription “give me your poor … yearning to breathe free,” the Fed – and now the Treasury, with Congressional blessing – is taking from the public purse and giving to America’s wealthiest investors and insiders. This “Robin Hood in Reverse” program is being done without strings, without asking banks to stop paying dividends, exorbitant executive salaries and golden parachutes, and without taking over banks with negative net worth of the kind that many homeowners are experiencing.
Nobody is talking about a debt write-down or moratorium. The subprime mortgage problem could have been solved by writing down just $1 or $2 trillion of the face value and interest rates of predatory loans. Instead, the $10+ trillion in financial-sector damage in recent weeks reflects Wall Street’s fraudulent packaging and sale of junk mortgages at unrealistically high prices, using junk mathematics to calculate junk derivatives and sell them to gullible investors who believe that the pretenses these mathematics, credit ratings and projected income have a basis in reality.
The amazing feature of today’s crash is how many Wall Street firms actually believed that the game of musical financial chairs could go on before they had to stop dancing and indeed, escape from the room. I remember one day back in the 1970s when I warned Frank Zarb of Lazard Freres about the likelihood of Third World debt defaults, and suggested that the firm should do an ability-to-pay analysis. “We don’t have to do any such thing,” he replied. “We have the schedule of what they owe right here in this IMF report.” It was a thick printout of the scheduled debt service for an African country that soon became insolvent. But Wall Street’s mentalité was that of Herbert Hoover on the eve of the Great Depression: A debt is a debt, and that is that. The response is to blame the victim, as if the irresponsibility lies with debtors rather than creditors.
No reversal of the Bush tax cuts is offered to re-inflate the economy, no move toward more progressive taxation of Wall Street speculators who pay only a 15 percent “capital gains” tax rate instead of the much higher income-tax and FICA withholding rates that wage-earners pay. (Wall Street has its own golden parachute program, so why should it pay for Social Security for the rest of society?) There is to be no reduction in the special tax benefits for real estate, whose tax favoritism led to the crisis by “freeing” more income from the tax collector to be pledged to mortgage bankers as interest. The Bubble Economy is to be re-inflated by Fannie Mae, Freddie Mac and the FHA lending to help buyers bid up housing and commercial office prices once again to a rate that promises to impose debt peonage on homeowners.
The budget deficit will soar, without any prosecution of tax evasion scams by UBS or KPMG. Instead of a fiscal or regulatory comet driving these dinosaurs to extinction, the climate has turned more conducive to their proliferation. Our Age of Deception is to be locked in even more tightly. The Congressional bailout’s suspension of mark-to-market rules to rely on Wall Street’s “self-regulation” should win a prize for Oxymoron of 2008 as investors have no clue as to what financial assets are worth. No wonder lending has dried up, especially to banks themselves.
Just as financial victims fail to vote and support their self-interest, predators also turn out to pursue self-defeating “free market” strategies. The financial sector’s short-termism is the greatest enemy to its survival. It has translated its wealth into a fatal political control of its legal climate, blocking [with the explicit support of Barack Obama, Editors] Congressional efforts to rewrite the oppressive bankruptcy laws that credit-card banks lobbied so hard to pass, [with vital help from Joe Biden, the senior senator from credit card company HQ, the state of Delaware, Editors] crucial. These hard bankruptcy terms prevent the courts from renegotiating homeowner debts to keep property occupied, accelerating the real estate price collapse. The result is today’s negative equity, posing the question of just who is to bear the cost of bring debts back in line with the economy’s ability to pay. Will it be the financial institutions that sponsored asset-price inflation and lobbied for deregulation of lenders? Or, will it be the debtors who thought they were riding the wave to get an inflationary free lunch?
Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole – and will act as collecting agent for the overhead of bad debts the economy has run up.
Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is – credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it.
Will voters see the asymmetry in Congress’s failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation’s bankruptcy laws to free families from debt peonage – and free housing markets from the price declines that result from today’s proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street’s corporate raiders and “shareholder activists” have loaded then down?
Evidently not.
Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). 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 reached via his website, mh@michael-hudson.com
Original article posted here.
Thursday, October 09, 2008
What we already knew
New Evidence Shows Bush Had No Plan to Catch bin Laden After 9/11
By Gareth Porter
New evidence from former U.S. officials reveals that the George W. Bush administration failed to adopt any plan to block the retreat of Osama bin Laden and other al Qaeda leaders from Afghanistan to Pakistan in the first weeks after 9/11.
That failure was directly related to the fact that top administration officials gave priority to planning for war with Iraq over military action against al Qaeda in Afghanistan.
As a result, the United States had far too few troops and strategic airlift capacity in the area to cover the large number of possible exit routes through the border area when bin Laden escaped in late 2001.
Because it had not been directed to plan for that contingency, the U.S. military had to turn down an offer by Pakistani President Pervez Musharraf in late November 2001 to send 60,000 troops to the border passes to intercept him, according to accounts provided by former U.S. officials involved in the issue.
On Nov. 12, 2001, as Northern Alliance troops were marching on Kabul with little resistance, the CIA had intelligence that bin Laden was headed for a cave complex in the Tora Bora mountains close to the Pakistani border.
The war had ended much more quickly than expected only days earlier. CENTCOM commander Tommy Franks, who was responsible for the war in Afghanistan, had no forces in position to block bin Laden's exit.
Franks asked Lt. Gen. Paul T. Mikolashek, commander of Army Central Command (ARCENT), whether his command could provide a blocking force between al Qaeda and the Pakistani border, according to David W. Lamm, who was then commander of ARCENT Kuwait.
Lamm, a retired Army colonel, recalled in an interview that there was no way to fulfill the CENTCOM commander's request, because ARCENT had neither the troops nor the strategic lift in Kuwait required to put such a force in place. "You looked at that request, and you just shook your head," recalled Lamm, now chief of staff of the Near East South Asia Center for Strategic Studies at the National Defense University.
Franks apparently already realized that he would need Pakistani help in blocking the al Qaeda exit from Tora Bora. Secretary of Defense Donald Rumsfeld told a National Security Council meeting that Franks "wants the (Pakistanis) to close the transit points between Afghanistan and Pakistan to seal what's going in and out," according to the National Security Council meeting transcript in Bob Woodward's book Bush at War.
Bush responded that they would need to "press Musharraf to do that."
A few days later, Franks made an unannounced trip to Islamabad to ask Musharraf to deploy troops along the Pakistan-Afghan border near Tora Bora.
A deputy to Franks, Lt. Gen. Mike DeLong, later claimed that Musharraf had refused Franks' request for regular Pakistani troops to be repositioned from the north to the border near the Tora Bora area. DeLong wrote in his 2004 book Inside Centcom that Musharraf had said he "couldn't do that" because it would spark a "civil war" with a hostile tribal population.
But U.S. Ambassador Wendy Chamberlin, who accompanied Franks to the meeting with Musharraf, provided an account of the meeting to this writer that contradicts DeLong's claim.
Chamberlin, now president of the Middle East Institute in Washington, recalled that the Pakistani president told Franks that CENTCOM had vastly underestimated what was required to block bin Laden's exit from Afghanistan. Musharraf said, "Look, you are missing the point: There are 150 valleys through which al Qaeda are going to stream into Pakistan," according to Chamberlin.
Although Musharraf admitted that the Pakistani government had never exercised control over the border area, the former diplomat recalled, he said this was "a good time to begin." The Pakistani president offered to redeploy 60,000 troops to the area from the border with India but said his army would need airlift assistance from the United States to carry out the redeployment.
But the Pakistani redeployment never happened, according to Lamm, because it wasn't logistically feasible. Lamm recalled that it would have required an entire aviation brigade, including hundreds of helicopters, and hundreds of support troops to deliver that many combat troops to the border region -- far more than were available.
Lamm said the ARCENT had so few strategic lift resources that it had to use commercial aircraft at one point to move U.S. supplies in and out of Afghanistan.
Even if the helicopters had been available, however, they could not have operated with high effectiveness in the mountainous Afghanistan-Pakistan border region near the Tora Bora caves, according to Lamm, because of the combination of high altitude and extreme weather.
Franks did manage to insert 1,200 Marines into Kandahar on Nov. 26 to establish control of the air base there. They were carried to the base by helicopters from an aircraft carrier that had steamed into the Gulf from the Pacific, according to Lamm.
The Marines patrolled roads in the Kandahar area hoping to intercept al Qaeda officials heading toward Pakistan. But DeLong, now retired from the Army, said in an interview that the Marines would not have been able to undertake the blocking mission at the border. "It wouldn't have worked -- even if we could have gotten them up there," he said. "There weren't enough to police 1,500 kilometers of border."
U.S. troops probably would also have faced armed resistance from the local tribal population in the border region, according to DeLong. The tribesmen in local villages near the border "liked bin Laden," he said, "because he had given them millions of dollars."
Had the Bush administration's priority been to capture or kill the al Qaeda leadership, it would have deployed the necessary ground troops and airlift resources in the area over a period of months before the offensive in Afghanistan began.
"You could have moved American troops along the Pakistani border before you went into Afghanistan," said Lamm. But that would have meant waiting until spring 2002 to take the offensive against the Taliban, according to Lamm.
The views of Bush's key advisers, however, ruled out any such plan from the start. During the summer of 2001, Rumsfeld had refused to develop contingency plans for military action against al Qaeda in Afghanistan despite a National Security Presidential Directive adopted at the Deputies' Committee level in July and by the Principles on Sept. 4 that called for such planning, according to the 9/11 Commission report.
Rumsfeld and Deputy Defense Secretary Paul Wolfowitz resisted such planning for Afghanistan because they were hoping that the White House would move quickly on military intervention in Iraq. According to the 9/11 Commission, at four deputies' meetings on Iraq between May 31 and July 26, 2001, Wolfowitz pushed his idea to have U.S. troops seize all the oil fields in southern Iraq.
Even after Sept. 11, Rumsfeld, Wolfowitz and Vice President Dick Cheney continued to resist any military engagement in Afghanistan, because they were hoping for war against Iraq instead.
Bush's top-secret order of Sept. 17 for war with Afghanistan also directed the Pentagon to begin planning for an invasion of Iraq, according to journalist James Bamford's book A Pretext for War.
Cheney and Rumsfeld pushed for a quick victory in Afghanistan in National Security Council meetings in October, as recounted by both Woodward and Undersecretary of Defense Douglas Feith. Lost in the eagerness to wrap up the Taliban and get on with the Iraq War was any possibility of preventing bin Laden's escape to Pakistan.
Tuesday, October 07, 2008
The worst news of all
The Pentagon’s alarming project: Avian Flu Biowar Vaccine
By F. William Engdahl
There is alarming evidence accumulated by serious scientific sources that the US Government is about to or already has ‘weaponized’ Avian Flu. If the reports are accurate, this could unleash a new pandemic on the planet that could be more devastating than the 1918 Spanish Flu epidemic which killed an estimated 30 million people worldwide before it eventually died out. Pentagon and NIH experiments with remains in frozen state of the 1918 virus are the height of scientific folly. Is the United States about to unleash a new racially selective pandemic through the process of mandatory vaccination with an alleged vaccine "against" Avian Flu?
There is reason to believe that sections of the international pharmaceutical industry cartel are acting in concert with the US Government to develop a genetically modified H5N1 virus substance that could unleash a man-made pandemic, perhaps more deadly than the 1918 ‘Spanish Influenza’ pandemic claiming up to 30 million lives.1
Rima E. Laibow, MD, head of the Natural Solutions Foundation, a citizen watchdog group monitoring the pharmaceutical industry states, "Our best intelligence estimate is that pandemic Avian Flu has already been created through genetic engineering in the United States, fusing the deadly genome of the 1918 Pandemic, misnamed the ‘Spanish Flu’, with the DNA of the innocuous H5N1 virus in a growth medium of human kidney cells, according to the National Institutes of Health and the vaccine’s manufacturer. Some virologists believe that this would insure that the man-made mutant virus recognizes human cells and knows how to invade them." 2
If true, as Laibow points out, "A basic virological fact that the public has not been told is that it is impossible to make a vaccine against a virus that does not yet exist. Public relations efforts to the contrary, IF a vaccine is being made against the Avian Flu virus in its pandemic form, that means that the pandemic virus must already exist, period, end of discussion."3
The genome of the 1918 pandemic, the so-called "Spanish Flu", was recently intentionally resurrected by the United States government from a frozen corpse that died of the flu in 1918 in Alaska. Because of that resurrection, both the Avian Flu, and its "vaccine" are now a significant threat to public health.
The Spanish Flu, which was not Spanish at all, was created in the US through an early bioweapons program and injected into healthy young men (i.e., ’soldiers’) as the first mandatory vaccination in the military during World War I. The "Spanish Flu", which originated in Kansas on US Military bases, was one of the deadliest pandemics in modern history. It was also one of the most successful biological weapons ever created, until now.Aspartame and Tyson Foods doubts
To date, there have only been around 385 human cases of Avian Flu identified worldwide (assuming those identifications are trustworthy, of course), with 243 deaths. To put the absurdity of this effort into perspective, Laibow points out, Sudden Cardiac Death (SCD), which researchers believe is heavily associated with aspartame consumption, is a leading cause of death which, according to the CDC, for example, killed 460,000 Americans in 1999 and the numbers keep rising (www.cdc.gov/mmwr/preview/mmwrhtml/mm5106a3.htm.)
But, aspartame is not under criticism. Interesting as a footnote on Aspartame, G.D. Searle, the Chicago drugs company that held the patent on Aspartame was in danger of losing its license from the US Government Food & Drug Administration in the 1980’s until Donald Rumsfeld, out of Government, was named President of Searle. Rumsfeld used his contacts in Washington to get the FDA to approve Aspartame despite known tests showing serious health effects on rats.
As I document in detail in my book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, the same Don Rumsfeld went on to become chairman and principal stockholder of a California pharmaceutical company, Gilead Sciences Inc., which developed and patented Tamiflu in 1996, first as a drug for AIDS, later as a vaccine for H5N1 Avian Flu. In 1997 Donald H. Rumsfeld was named Chairman of the Board of Gilead Sciences, where he remained until early 2001 when he became Defense Secretary. As Secretary he refused to sell his stock at the time he came under conflict of interest allegations when he ordered $1 billion worth of Tamiflu be bought to injected into the US military personnel as a "precaution." It was later proven that Tamiflu was in no antidote for H5N1 and its side effects were sometimes very severe.
Laibow adds, "Given the shockingly obvious lack of any threat from an un-weaponized H5N1 virus, how can we explain the Bush Administration spending billions of dollars preparing each of the 50 States, for what it calls the ‘inevitable Bird Flu pandemic,’ which they say could kill half or more of all Americans and similar numbers of people around the globe?"4
Ominously, on June 3, Associated Press reported, "Tyson Foods Inc. has begun killing and burying the carcasses of 15,000 hens from a flock that tested positive for exposure to a strain of the bird flu in northwest Arkansas, state officials said Tuesday."
Tyson Foods is the largest industrialized producer of chickens in the world and has been repeatedly under attack for its unsanitary conditions of breeding and slaughtering. In January 2005, a US Government Accountability Office (GAO) report to the US Senate, "Safety in the Meat and Poultry Industry," concluded that US meat and poultry processing plants had "one of the highest rates of injury and illness of any industry." They cited exposure to "dangerous chemicals, blood, faecal matter, exacerbated by poor ventilation and often extreme temperatures. Workers typically faced hazardous conditions, loud noise, must work in narrow confines with sharp tools and dangerous machinery."
The industrialization of chicken-raising and slaughtering in the USA has progressed to the point that by 2003 when the first cases of H5N1 Avian Flu virus were reported from Asia, five giant multinational agribusiness companies dominated the production and processing of chicken meat in the United States. The five companies were Tyson Foods, the largest in the world; Gold Kist Inc; Pilgrim’s Pride; ConAgra Poultry; and Perdue Farms.5 Most outbreaks of Avian Flu in Asia have been traced back to such mass chicken industrial factory centers.6
In May this year, The Canadian Press reported from Toronto, "An experiment mating H5N1 avian flu viruses and a strain of human flu in a laboratory produced a surprising number of hybrid viruses that were biologically fit, a new study reveals. And while none of the offspring viruses was as virulent as the original H5N1, about one in five were lethal to mice at low doses, showing they retained at least a portion of the power of their dangerous parent." 7
The Toronto article went on, "The work suggests that under the right circumstances - and no one is clear what all of those are - the two types of flu viruses could swap genes in a way that might allow the H5N1 virus to acquire the capacity to trigger a pandemic. That process is called reassortment. ‘This study is just showing exactly that: There is a risk this virus can successfully reassort with a human virus,’ said Richard Webby, director of the World Health Organization's collaborating centre for influenza research at St. Jude Hospital in Memphis, Tennessee." 8
Pentagon Bioweapon research
Prof. Mathew Meselson, a professor of molecular biology at Harvard, and well-respected scientist in the area of chemical and biological warfare, confirms that the United States government has extensively researched and developed biological weapons in the past. Meselson described an American facility, north of Terre Haute, Indiana, built in 1944 that would have produced 500,000 four pound anthrax bombs monthly once in full operation.
Meselson was part of a team that proved the accidental release of anthrax at a Soviet facility in 1979, disproved charges of biological warfare in Laos and Cambodia in the late 1970s, and was a driving force behind popularizing the Chemical Weapons Convention in 1994.
Since coming in office, the Bush-Cheney Administration has done much to weaken that Chemical Weapons Convention as well as ones on biological weapons. One of George W. Bush’s first acts as President in early 2001 was to oppose a proposed international Biological and Toxic Weapons Protocol, without explanation, leading to the death of the talks.
In a 2004 study, the British Medical Association warned that the world was perhaps only a few years away from "terrifying biological weapons capable of killing only people of specific ethnic groups," citing advances in genetic weapons technology. 9
The US Department of Homeland Security has ominously enough announced it is ordering production and stockpiling of a pandemic influenza vaccine: "The U.S. Government is taking steps to minimize the need to make vaccine allocation decisions by supporting efforts to increase domestic influenza vaccine production capacity. Significant funding is being
provided to develop new vaccine technologies that allow production of enough pandemic influenza vaccine for any person in the United States who wants to be vaccinated within six months of a pandemic declaration." 10The curious role of Sanofi Pasteur
The US Government has been financing the development of a vaccine against H5N1 on a "fast track" basis since 2004. Sanofi Pasteur in Swiftwater, Pennsylvania, a subsidiary of the giant French pharmaceutical firm, the third largest in the world, manufactured an inactivated vaccine made from an H5N1 virus isolated in Southeast Asia in 2004. Sanofi Pasteur, part of the French-based Sanofi Aventis Group, was awarded a contract by the US Government’s National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), NIAID to manufacture the H5N1 vaccine in May 2004.11
In April 2007 the FDA approved the Sanofi Pasteur vaccine for H5N1 even though one year before the FDA cited Sanofi Pasteur for producing contaminated Fluzone vaccines.12 The FDA approved H5N1 vaccine is itself apparently not really effective in event of a human-to-human outbreak of Avian Flu. On announcing its approval, the FDA stated, "two injections given 28 days apart may provide ‘limited’ protection if a pandemic occurs. About 45% of people who got the vaccine in a study developed an immune response to the virus."13
Until now H5N1 has not mutated into a form that can easily spread from person to person. Is that what the researchers at Sanofi Pasteur and various labs under contract to the US Government are engaged in? If so it would be classified Top Secret, clearly. The respected British magazine, New Scientist, commented, "If H5N1 does mutate, it is unclear if vaccines developed now would still work against a pandemic strain. Manufacturers could tailor a new vaccine to that strain, but current production methods take months."14
The magazine noted that research on the Sanofi vaccine was conducted by the National Institutes of Health as part of the US Government's efforts to prepare for a flu pandemic. The salient question is whether they prepare "for a flu pandemic" or whether they prepare a flu pandemic. Why is the US Government spending hundreds of millions of taxpayer dollars to stockpile this H5N1 vaccine which likely would not work against such a pandemic outbreak?
On July 2, 2008, the London Daily Telegraph newspaper reported, "Three Polish doctors and six nurses are facing criminal prosecution after a number of homeless people died following medical trials for a vaccine to the H5N1 bird-flu virus." 15
The report added that the medical staff, from the northern town of Grudziadz, were being investigated over medical trials on as many as 350 homeless and poor people last year, which prosecutors say involved an untried vaccine to the highly-contagious virus. Authorities claim that the alleged victims received €3 to be tested with what they thought was a conventional flu vaccine but, according to investigators, was actually an anti bird-flu drug. The director of a Grudziadz homeless centre, Mieczyslaw Waclawski, told a Polish newspaper that last year, 21 people from his centre died, a figure well above the average of about eight.
The Polish report did not specify if it was the vaccine being developed under contract to the US Government Department of Homeland Security by Sanofi-Pasteur. However, it is known that Sanofi-Pasteur has been producing large quantities of such a vaccine at a factory they have in China.
Dr. Laibow reports that the "Pandemic Avian Flu Vaccine" was scheduled to be delivered to the United States this month by the French vaccine maker, Sanofi Pasteur, from a facility they own in China, where it is being produced. The US Government issued its "Vaccine" allocation plan in July. Laibow fears that a most sinister scenario of a deliberate release of Avian Flu pathogens on the population that could activate martial law and forced vaccination with resulting deaths in the millions could be imminent. Spanish Flu virus revived by Pentagon
In 2003 US Army scientists created ‘Spanish Flu’ virus in the laboratory. According to a report at the time by the watchdog group, The Sunshine Project, which monitors biological and chemical weapons research of the United States Government issued a statement that "The 'Spanish Flu' influenza virus that killed 20-40 million people in 1918 is currently under reconstruction. Several genes of the extraordinarily lethal 1918 flu virus have been isolated and introduced into contemporary flu strains. These proved to be lethal for mice, while virus constructs with genes from a current flu virus types had hardly any effect. These experiments may easily be abused for military purposes, but provide little benefit from a medical or public health point of view."
They continued, "The 1918 Spanish Flu was highly infectious and – in comparison to contemporary flu viruses – killed a very high percentage of those infected, including many younger people. The Spanish Flu alone caused the medium life expectancy in the US in 1918 to drop by 10 years. Hence, flu viruses are perceived today as a serious biological warfare threat. Just two weeks ago, a 15 million dollar research grant was awarded in the US to develop protective measures especially against a bioterrorist attack with flu viruses."
The statement added, "Despite the very dangerous nature of the 1918 virus, efforts to reconstruct it started in the mid 1990s, when Dr Jeffrey Taubenberger from the US Armed Forces Institute of Pathology in Washington DC succeeded in recovering and sequencing fragments of the viral RNA from preserved tissues of 1918 victims. In the current issue of the scientific journal Emerging Infectious Diseases new genetic details of the 1918 flu virus will be published."
Most ominously, they report, "But after (partially) unravelling the genetic sequence of the virus, the scientists went a step further and began bringing the Spanish flu back to life. Unnoticed by the public, they succeeded in creating a live virus containing two 1918 genes that proved to be very lethal in animal experiments. This experiment is only one genetic step away from taking the 1918 demon entirely out of the bottle." 16
They conclude, "A resuscitation of the Spanish flu is neither necessary nor warranted from a public health point of view. Allegedly, the recent experiments sought to test the efficacy of existing antiviral drugs on the 1918 construct. But there is little need for antiviral drugs against the 1918 strain if the 1918 strain had not been recreated in the first place. ‘It simply does not make any scientific sense to create a new threat just to develop new countermeasures against it.’ says Jan van Aken, biologist with the Sunshine Project, ‘Genetic characterization of influenza strains has important biomedical applications. But it is not justifiable to recreate this particularly dangerous eradicated strain that could wreak havoc if released, deliberately or accidentally.’"17
Let us sincerely hope not, but as Prof. Stephen Block, Stanford University biophysicist with years of experience in classified Pentagon and US Government biological research remarked in another context, "We’re tempted to say that nobody in their right mind would ever use these things." Block added, "But not everybody is in their right mind…" 18Sanofi Pasteur delivers H5N1 vaccine
On April 28 of this year in an official Press Release from Sanofi Pasteur US headquarters in Swiftwater, Pennsylvania and Lyon, France, the company stated, "Sanofi Pasteur, the vaccines division of Sanofi-Aventis Group, announced today that the US Department of Health and Human Services (HHS) has accepted H5N1 bulk vaccine antigen to produce approximately 38.5 million doses of vaccine to protect against a new strain of avian influenza. Sanofi Pasteur has a multi-year contract with HHS as part of its pandemic program, and will receive a payment of $192.5 million booked in the second quarter of 2008 for acceptance of the bulk vaccine lot."19
Then, on June 16 of this year, Sanofi Pasteur issued the following release announcing that it will, "donate 60 million doses of H5N1 vaccine to the World Health Organization (WHO) over 3 years for the establishment of an H5N1 vaccine global stockpile."
The President and CEO of Sanofi Pasteur, Wayne Pisano, said in the release, "The H5N1 virus is currently circulating in some of the poorest regions of the world and an outbreak of pandemic influenza would most likely hit populations living in areas with limited access to vaccines. This donation of H5N1 vaccine aims to address the needs of those most vulnerable populations. In addition to supporting the efforts of governments," Pisano added, "it is essential that industry collaborates with international organizations such as WHO, the Bill and Melinda Gates Foundation and other global health players. This is the best way to build a stockpile of vaccines for developing nations, ready to be deployed on the ground in the event of a pandemic flu outbreak."20
The Bill and Melinda Gates Foundation, in addition to being a financial supporter of the so-called Doomsday Seed Vault in the Arctic, has dedicated its foundation billions to support population control especially inAfrica. Among other projects they, as well as the Rockefeller Foundation, are financing The Alliance for a Green Revolution in Africa, whose head is former UN Secretary General Kofi Annan. 21
As the world's leading influenza vaccine manufacturer, Sanofi Pasteur produces approximately half of the influenza vaccine distributed worldwide. In the US it produced more than 40 percent of the influenza vaccine distributed for the 2007-2008 influenza season. The fact that the US Government has revived the 1918 Spanish Flu virus to make "tests" indicates that anything is possible. There are in this world some people not in their "right mind." God forbid if it is so in this instance.
F. William Engdahl is author of Seeds of Destruction: the Hidden Agenda of Genetic Manipulation
He may be contacted through his website, www.engdahl.oilgeopolitics.net. (see details on William engdahl's book below)
Notes
1 Alfred W. Crosby, America’s Forgotten Pandemic: The Influenza of 1918, Cambridge, Cambridge University Press, 1989, pp.207-8. The Spanish Influenza was unusual in that it struck infants as well as elderly. Crosby described its effects: "a disease that turned people the color of wet ashes and drowned them in the fluids of their own bodies and inspired names like the ‘purple death.’
2 Rima E. Laibow, M.D., Weaponized Avian Flu Intelligence Report, in http://www.healthfreedomusa.org/?p=742
3 Ibid.
4 Ibid.
5 F. William Engdahl, Saat der Zerstörung: Die dunkle Seite der Gen-Manipulation, Kopp Verlag, Rottenburg am Neckar,2007, pp. 269-271.
6 GRAIN, Fowl Play: The Poultry Industry’s Central Role in the Bird Flu Crisis, http://www.grain.org/go/birdflu , February 2006. In their report they note, "The transformation of poultry production in Asia in recent decades is staggering. In the Southeast Asian countries where most of the bird flu outbreaks are concentrated—Thailand, Indonesia, and Viet Nam—production jumped eightfold in just 30 years, from around 300,000 metric tonnes (mt) of chicken meat in 1971 to 2,440,000 mt in 2001. China’s production of chicken tripled during the 1990s to over 9 million metric tons per year." (Cited in Engdahl, Op. Cit., p. 288.).
7 As well, a report by a Canadian organization, Beyond Factory Farming, described the transmission likely pathways from the giant industrialized chicken centers: ‘In Thailand, China and Vietnam there is a highly developed industrial poultry industry which has expanded dramatically in the past decade. The large poultry companies raise millions of birds, hatch chicks to supply other intensive poultry operations, export live birds and eggs to countries such as Nigeria (where the first Highly Pathogenic Avian Influenza outbreak in Africa was recently reported) and produce and export feed which often includes "litter" (i.e., manure) in the ingredients.
…
‘Manure that may contain live virus is spread on surrounding farmland, or exported as fertilizer, and through run-off may end up in surface waters where wild birds feed and rest. Chicken manure is even found in fish farm feed formulations where it is introduced directly into the aquatic environment. Wild birds and poultry that
have fallen victim to HPAI in Asia, Turkey and Nigeria appear to have been directly exposed to HPAI virus originating in the factory farm system. In Asia, a flock of wild ducks died from HPAI—after having come into contact with the disease at a remote lake where a fish farm used feed pellets made from poultry litter from a factory farm. In Turkey a massive cull of backyard flocks—and the deaths of three children—took place after a nearby factory farm sold sick and dying birds to local peasants at cut rate prices. Nigeria has a large and poorly regulated factory poultry production sector which is supplied with chicks from factory farms in China.’ (Engdahl, Op. Cit., p. 289)
8 Study shows hybrids of bird flu and human flu viruses fit well, could occur, The Canadian Press, Toronto, undated. May 2008.
Ibid.
9 F. William Engdahl, Op. Cit., pp. 262-263.
10 United States Department of Homeland Security, Health & Human Services Department, Guidance on Allocating and Targeting Pandemic Influenza Vaccine, p. 2, accessed in http://www.pandemicflu.gov/vaccine/allocationguidance.pdf.
11 NIH News, NIAID Initiates Trial of Experimental Avian Flu Vaccine, Washington, D.C., March 23, 2005, accessed in http://www3.niaid.nih.gov/news/newsreleases/2005/avianfluvax.htm.
12 Quoted in, sanofi pasteur, The Largest Company In The World Devoted To Human Vaccines, April 18, 2007, accessed at http://noonehastodie.blogspot.com/2007/04/sanofi-pasteur-largest-company-in-world.html
13 The New Scientist, US Approves First Bird Flu Vaccine for People, 17 April, 2007, accessed at http://www.newscientist.com/channel/health/bird-flu/dn11626-us-approves-first-bird-flu-vaccine-for-people.html
14 Ibid.
15 Matthew Day, Homeless people die after bird flu vaccine trial in Poland, Daily Telegraph, July 2, 2008, accessed in http://www.telegraph.co.uk/news/worldnews/europe/poland/2235676/Homeless-people-die-after-bird-flu-vaccine-trial-in-Poland.html.
16 The Sunshine Project, Lethal Virus from 1918 Genetically Reconstructed: US Army scientists create ‘Spanish Flu’ virus in laboratory - medical benefit questionable, 9 October 2003, accessed at http://www.sunshine-project.org/publications/pr/pr091003.html.
17 Ibid.
18 Cited in F. William Engdahl, Op. Cit., p. 277.
19 Press Release of Sanofi Pasteur, U.S. Government accepts $192 million of sanofi pasteur H5N1 bulk vaccine antigen for pandemic stockpile: Vaccine for new strain of virus broadens government readiness program, April 28, 2008, accessed at
http://198.73.159.214/sanofi-pasteur2/ImageServlet?imageCode=22971&siteCode=SP_CORP
20 Press Release of Sanofi Pasteur, Sanofi Pasteur to donate 60 million doses of H5N1 vaccine to WHO over 3 years for its influenza vaccine global stockpile, June 16, 2008, accessed at
http://198.73.159.214/sanofi-pasteur2/ImageServlet?imageCode=22987&siteCode=SP_CORP.
21 William Engdahl, ‘Doomsday Seed Vault’ in the Arctic: Bill Gates, Rockefeller and the GMO giants know something we don’t, in Global Research, December 4, 2007, accessed in http://www.globalresearch.ca/index.php?context=va&aid=7529
Original article posted here.
By F. William Engdahl
There is alarming evidence accumulated by serious scientific sources that the US Government is about to or already has ‘weaponized’ Avian Flu. If the reports are accurate, this could unleash a new pandemic on the planet that could be more devastating than the 1918 Spanish Flu epidemic which killed an estimated 30 million people worldwide before it eventually died out. Pentagon and NIH experiments with remains in frozen state of the 1918 virus are the height of scientific folly. Is the United States about to unleash a new racially selective pandemic through the process of mandatory vaccination with an alleged vaccine "against" Avian Flu?
There is reason to believe that sections of the international pharmaceutical industry cartel are acting in concert with the US Government to develop a genetically modified H5N1 virus substance that could unleash a man-made pandemic, perhaps more deadly than the 1918 ‘Spanish Influenza’ pandemic claiming up to 30 million lives.1
Rima E. Laibow, MD, head of the Natural Solutions Foundation, a citizen watchdog group monitoring the pharmaceutical industry states, "Our best intelligence estimate is that pandemic Avian Flu has already been created through genetic engineering in the United States, fusing the deadly genome of the 1918 Pandemic, misnamed the ‘Spanish Flu’, with the DNA of the innocuous H5N1 virus in a growth medium of human kidney cells, according to the National Institutes of Health and the vaccine’s manufacturer. Some virologists believe that this would insure that the man-made mutant virus recognizes human cells and knows how to invade them." 2
If true, as Laibow points out, "A basic virological fact that the public has not been told is that it is impossible to make a vaccine against a virus that does not yet exist. Public relations efforts to the contrary, IF a vaccine is being made against the Avian Flu virus in its pandemic form, that means that the pandemic virus must already exist, period, end of discussion."3
The genome of the 1918 pandemic, the so-called "Spanish Flu", was recently intentionally resurrected by the United States government from a frozen corpse that died of the flu in 1918 in Alaska. Because of that resurrection, both the Avian Flu, and its "vaccine" are now a significant threat to public health.
The Spanish Flu, which was not Spanish at all, was created in the US through an early bioweapons program and injected into healthy young men (i.e., ’soldiers’) as the first mandatory vaccination in the military during World War I. The "Spanish Flu", which originated in Kansas on US Military bases, was one of the deadliest pandemics in modern history. It was also one of the most successful biological weapons ever created, until now.Aspartame and Tyson Foods doubts
To date, there have only been around 385 human cases of Avian Flu identified worldwide (assuming those identifications are trustworthy, of course), with 243 deaths. To put the absurdity of this effort into perspective, Laibow points out, Sudden Cardiac Death (SCD), which researchers believe is heavily associated with aspartame consumption, is a leading cause of death which, according to the CDC, for example, killed 460,000 Americans in 1999 and the numbers keep rising (www.cdc.gov/mmwr/preview/mmwrhtml/mm5106a3.htm.)
But, aspartame is not under criticism. Interesting as a footnote on Aspartame, G.D. Searle, the Chicago drugs company that held the patent on Aspartame was in danger of losing its license from the US Government Food & Drug Administration in the 1980’s until Donald Rumsfeld, out of Government, was named President of Searle. Rumsfeld used his contacts in Washington to get the FDA to approve Aspartame despite known tests showing serious health effects on rats.
As I document in detail in my book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, the same Don Rumsfeld went on to become chairman and principal stockholder of a California pharmaceutical company, Gilead Sciences Inc., which developed and patented Tamiflu in 1996, first as a drug for AIDS, later as a vaccine for H5N1 Avian Flu. In 1997 Donald H. Rumsfeld was named Chairman of the Board of Gilead Sciences, where he remained until early 2001 when he became Defense Secretary. As Secretary he refused to sell his stock at the time he came under conflict of interest allegations when he ordered $1 billion worth of Tamiflu be bought to injected into the US military personnel as a "precaution." It was later proven that Tamiflu was in no antidote for H5N1 and its side effects were sometimes very severe.
Laibow adds, "Given the shockingly obvious lack of any threat from an un-weaponized H5N1 virus, how can we explain the Bush Administration spending billions of dollars preparing each of the 50 States, for what it calls the ‘inevitable Bird Flu pandemic,’ which they say could kill half or more of all Americans and similar numbers of people around the globe?"4
Ominously, on June 3, Associated Press reported, "Tyson Foods Inc. has begun killing and burying the carcasses of 15,000 hens from a flock that tested positive for exposure to a strain of the bird flu in northwest Arkansas, state officials said Tuesday."
Tyson Foods is the largest industrialized producer of chickens in the world and has been repeatedly under attack for its unsanitary conditions of breeding and slaughtering. In January 2005, a US Government Accountability Office (GAO) report to the US Senate, "Safety in the Meat and Poultry Industry," concluded that US meat and poultry processing plants had "one of the highest rates of injury and illness of any industry." They cited exposure to "dangerous chemicals, blood, faecal matter, exacerbated by poor ventilation and often extreme temperatures. Workers typically faced hazardous conditions, loud noise, must work in narrow confines with sharp tools and dangerous machinery."
The industrialization of chicken-raising and slaughtering in the USA has progressed to the point that by 2003 when the first cases of H5N1 Avian Flu virus were reported from Asia, five giant multinational agribusiness companies dominated the production and processing of chicken meat in the United States. The five companies were Tyson Foods, the largest in the world; Gold Kist Inc; Pilgrim’s Pride; ConAgra Poultry; and Perdue Farms.5 Most outbreaks of Avian Flu in Asia have been traced back to such mass chicken industrial factory centers.6
In May this year, The Canadian Press reported from Toronto, "An experiment mating H5N1 avian flu viruses and a strain of human flu in a laboratory produced a surprising number of hybrid viruses that were biologically fit, a new study reveals. And while none of the offspring viruses was as virulent as the original H5N1, about one in five were lethal to mice at low doses, showing they retained at least a portion of the power of their dangerous parent." 7
The Toronto article went on, "The work suggests that under the right circumstances - and no one is clear what all of those are - the two types of flu viruses could swap genes in a way that might allow the H5N1 virus to acquire the capacity to trigger a pandemic. That process is called reassortment. ‘This study is just showing exactly that: There is a risk this virus can successfully reassort with a human virus,’ said Richard Webby, director of the World Health Organization's collaborating centre for influenza research at St. Jude Hospital in Memphis, Tennessee." 8
Pentagon Bioweapon research
Prof. Mathew Meselson, a professor of molecular biology at Harvard, and well-respected scientist in the area of chemical and biological warfare, confirms that the United States government has extensively researched and developed biological weapons in the past. Meselson described an American facility, north of Terre Haute, Indiana, built in 1944 that would have produced 500,000 four pound anthrax bombs monthly once in full operation.
Meselson was part of a team that proved the accidental release of anthrax at a Soviet facility in 1979, disproved charges of biological warfare in Laos and Cambodia in the late 1970s, and was a driving force behind popularizing the Chemical Weapons Convention in 1994.
Since coming in office, the Bush-Cheney Administration has done much to weaken that Chemical Weapons Convention as well as ones on biological weapons. One of George W. Bush’s first acts as President in early 2001 was to oppose a proposed international Biological and Toxic Weapons Protocol, without explanation, leading to the death of the talks.
In a 2004 study, the British Medical Association warned that the world was perhaps only a few years away from "terrifying biological weapons capable of killing only people of specific ethnic groups," citing advances in genetic weapons technology. 9
The US Department of Homeland Security has ominously enough announced it is ordering production and stockpiling of a pandemic influenza vaccine: "The U.S. Government is taking steps to minimize the need to make vaccine allocation decisions by supporting efforts to increase domestic influenza vaccine production capacity. Significant funding is being
provided to develop new vaccine technologies that allow production of enough pandemic influenza vaccine for any person in the United States who wants to be vaccinated within six months of a pandemic declaration." 10The curious role of Sanofi Pasteur
The US Government has been financing the development of a vaccine against H5N1 on a "fast track" basis since 2004. Sanofi Pasteur in Swiftwater, Pennsylvania, a subsidiary of the giant French pharmaceutical firm, the third largest in the world, manufactured an inactivated vaccine made from an H5N1 virus isolated in Southeast Asia in 2004. Sanofi Pasteur, part of the French-based Sanofi Aventis Group, was awarded a contract by the US Government’s National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), NIAID to manufacture the H5N1 vaccine in May 2004.11
In April 2007 the FDA approved the Sanofi Pasteur vaccine for H5N1 even though one year before the FDA cited Sanofi Pasteur for producing contaminated Fluzone vaccines.12 The FDA approved H5N1 vaccine is itself apparently not really effective in event of a human-to-human outbreak of Avian Flu. On announcing its approval, the FDA stated, "two injections given 28 days apart may provide ‘limited’ protection if a pandemic occurs. About 45% of people who got the vaccine in a study developed an immune response to the virus."13
Until now H5N1 has not mutated into a form that can easily spread from person to person. Is that what the researchers at Sanofi Pasteur and various labs under contract to the US Government are engaged in? If so it would be classified Top Secret, clearly. The respected British magazine, New Scientist, commented, "If H5N1 does mutate, it is unclear if vaccines developed now would still work against a pandemic strain. Manufacturers could tailor a new vaccine to that strain, but current production methods take months."14
The magazine noted that research on the Sanofi vaccine was conducted by the National Institutes of Health as part of the US Government's efforts to prepare for a flu pandemic. The salient question is whether they prepare "for a flu pandemic" or whether they prepare a flu pandemic. Why is the US Government spending hundreds of millions of taxpayer dollars to stockpile this H5N1 vaccine which likely would not work against such a pandemic outbreak?
On July 2, 2008, the London Daily Telegraph newspaper reported, "Three Polish doctors and six nurses are facing criminal prosecution after a number of homeless people died following medical trials for a vaccine to the H5N1 bird-flu virus." 15
The report added that the medical staff, from the northern town of Grudziadz, were being investigated over medical trials on as many as 350 homeless and poor people last year, which prosecutors say involved an untried vaccine to the highly-contagious virus. Authorities claim that the alleged victims received €3 to be tested with what they thought was a conventional flu vaccine but, according to investigators, was actually an anti bird-flu drug. The director of a Grudziadz homeless centre, Mieczyslaw Waclawski, told a Polish newspaper that last year, 21 people from his centre died, a figure well above the average of about eight.
The Polish report did not specify if it was the vaccine being developed under contract to the US Government Department of Homeland Security by Sanofi-Pasteur. However, it is known that Sanofi-Pasteur has been producing large quantities of such a vaccine at a factory they have in China.
Dr. Laibow reports that the "Pandemic Avian Flu Vaccine" was scheduled to be delivered to the United States this month by the French vaccine maker, Sanofi Pasteur, from a facility they own in China, where it is being produced. The US Government issued its "Vaccine" allocation plan in July. Laibow fears that a most sinister scenario of a deliberate release of Avian Flu pathogens on the population that could activate martial law and forced vaccination with resulting deaths in the millions could be imminent. Spanish Flu virus revived by Pentagon
In 2003 US Army scientists created ‘Spanish Flu’ virus in the laboratory. According to a report at the time by the watchdog group, The Sunshine Project, which monitors biological and chemical weapons research of the United States Government issued a statement that "The 'Spanish Flu' influenza virus that killed 20-40 million people in 1918 is currently under reconstruction. Several genes of the extraordinarily lethal 1918 flu virus have been isolated and introduced into contemporary flu strains. These proved to be lethal for mice, while virus constructs with genes from a current flu virus types had hardly any effect. These experiments may easily be abused for military purposes, but provide little benefit from a medical or public health point of view."
They continued, "The 1918 Spanish Flu was highly infectious and – in comparison to contemporary flu viruses – killed a very high percentage of those infected, including many younger people. The Spanish Flu alone caused the medium life expectancy in the US in 1918 to drop by 10 years. Hence, flu viruses are perceived today as a serious biological warfare threat. Just two weeks ago, a 15 million dollar research grant was awarded in the US to develop protective measures especially against a bioterrorist attack with flu viruses."
The statement added, "Despite the very dangerous nature of the 1918 virus, efforts to reconstruct it started in the mid 1990s, when Dr Jeffrey Taubenberger from the US Armed Forces Institute of Pathology in Washington DC succeeded in recovering and sequencing fragments of the viral RNA from preserved tissues of 1918 victims. In the current issue of the scientific journal Emerging Infectious Diseases new genetic details of the 1918 flu virus will be published."
Most ominously, they report, "But after (partially) unravelling the genetic sequence of the virus, the scientists went a step further and began bringing the Spanish flu back to life. Unnoticed by the public, they succeeded in creating a live virus containing two 1918 genes that proved to be very lethal in animal experiments. This experiment is only one genetic step away from taking the 1918 demon entirely out of the bottle." 16
They conclude, "A resuscitation of the Spanish flu is neither necessary nor warranted from a public health point of view. Allegedly, the recent experiments sought to test the efficacy of existing antiviral drugs on the 1918 construct. But there is little need for antiviral drugs against the 1918 strain if the 1918 strain had not been recreated in the first place. ‘It simply does not make any scientific sense to create a new threat just to develop new countermeasures against it.’ says Jan van Aken, biologist with the Sunshine Project, ‘Genetic characterization of influenza strains has important biomedical applications. But it is not justifiable to recreate this particularly dangerous eradicated strain that could wreak havoc if released, deliberately or accidentally.’"17
Let us sincerely hope not, but as Prof. Stephen Block, Stanford University biophysicist with years of experience in classified Pentagon and US Government biological research remarked in another context, "We’re tempted to say that nobody in their right mind would ever use these things." Block added, "But not everybody is in their right mind…" 18Sanofi Pasteur delivers H5N1 vaccine
On April 28 of this year in an official Press Release from Sanofi Pasteur US headquarters in Swiftwater, Pennsylvania and Lyon, France, the company stated, "Sanofi Pasteur, the vaccines division of Sanofi-Aventis Group, announced today that the US Department of Health and Human Services (HHS) has accepted H5N1 bulk vaccine antigen to produce approximately 38.5 million doses of vaccine to protect against a new strain of avian influenza. Sanofi Pasteur has a multi-year contract with HHS as part of its pandemic program, and will receive a payment of $192.5 million booked in the second quarter of 2008 for acceptance of the bulk vaccine lot."19
Then, on June 16 of this year, Sanofi Pasteur issued the following release announcing that it will, "donate 60 million doses of H5N1 vaccine to the World Health Organization (WHO) over 3 years for the establishment of an H5N1 vaccine global stockpile."
The President and CEO of Sanofi Pasteur, Wayne Pisano, said in the release, "The H5N1 virus is currently circulating in some of the poorest regions of the world and an outbreak of pandemic influenza would most likely hit populations living in areas with limited access to vaccines. This donation of H5N1 vaccine aims to address the needs of those most vulnerable populations. In addition to supporting the efforts of governments," Pisano added, "it is essential that industry collaborates with international organizations such as WHO, the Bill and Melinda Gates Foundation and other global health players. This is the best way to build a stockpile of vaccines for developing nations, ready to be deployed on the ground in the event of a pandemic flu outbreak."20
The Bill and Melinda Gates Foundation, in addition to being a financial supporter of the so-called Doomsday Seed Vault in the Arctic, has dedicated its foundation billions to support population control especially inAfrica. Among other projects they, as well as the Rockefeller Foundation, are financing The Alliance for a Green Revolution in Africa, whose head is former UN Secretary General Kofi Annan. 21
As the world's leading influenza vaccine manufacturer, Sanofi Pasteur produces approximately half of the influenza vaccine distributed worldwide. In the US it produced more than 40 percent of the influenza vaccine distributed for the 2007-2008 influenza season. The fact that the US Government has revived the 1918 Spanish Flu virus to make "tests" indicates that anything is possible. There are in this world some people not in their "right mind." God forbid if it is so in this instance.
F. William Engdahl is author of Seeds of Destruction: the Hidden Agenda of Genetic Manipulation
He may be contacted through his website, www.engdahl.oilgeopolitics.net. (see details on William engdahl's book below)
Notes
1 Alfred W. Crosby, America’s Forgotten Pandemic: The Influenza of 1918, Cambridge, Cambridge University Press, 1989, pp.207-8. The Spanish Influenza was unusual in that it struck infants as well as elderly. Crosby described its effects: "a disease that turned people the color of wet ashes and drowned them in the fluids of their own bodies and inspired names like the ‘purple death.’
2 Rima E. Laibow, M.D., Weaponized Avian Flu Intelligence Report, in http://www.healthfreedomusa.org/?p=742
3 Ibid.
4 Ibid.
5 F. William Engdahl, Saat der Zerstörung: Die dunkle Seite der Gen-Manipulation, Kopp Verlag, Rottenburg am Neckar,2007, pp. 269-271.
6 GRAIN, Fowl Play: The Poultry Industry’s Central Role in the Bird Flu Crisis, http://www.grain.org/go/birdflu , February 2006. In their report they note, "The transformation of poultry production in Asia in recent decades is staggering. In the Southeast Asian countries where most of the bird flu outbreaks are concentrated—Thailand, Indonesia, and Viet Nam—production jumped eightfold in just 30 years, from around 300,000 metric tonnes (mt) of chicken meat in 1971 to 2,440,000 mt in 2001. China’s production of chicken tripled during the 1990s to over 9 million metric tons per year." (Cited in Engdahl, Op. Cit., p. 288.).
7 As well, a report by a Canadian organization, Beyond Factory Farming, described the transmission likely pathways from the giant industrialized chicken centers: ‘In Thailand, China and Vietnam there is a highly developed industrial poultry industry which has expanded dramatically in the past decade. The large poultry companies raise millions of birds, hatch chicks to supply other intensive poultry operations, export live birds and eggs to countries such as Nigeria (where the first Highly Pathogenic Avian Influenza outbreak in Africa was recently reported) and produce and export feed which often includes "litter" (i.e., manure) in the ingredients.
…
‘Manure that may contain live virus is spread on surrounding farmland, or exported as fertilizer, and through run-off may end up in surface waters where wild birds feed and rest. Chicken manure is even found in fish farm feed formulations where it is introduced directly into the aquatic environment. Wild birds and poultry that
have fallen victim to HPAI in Asia, Turkey and Nigeria appear to have been directly exposed to HPAI virus originating in the factory farm system. In Asia, a flock of wild ducks died from HPAI—after having come into contact with the disease at a remote lake where a fish farm used feed pellets made from poultry litter from a factory farm. In Turkey a massive cull of backyard flocks—and the deaths of three children—took place after a nearby factory farm sold sick and dying birds to local peasants at cut rate prices. Nigeria has a large and poorly regulated factory poultry production sector which is supplied with chicks from factory farms in China.’ (Engdahl, Op. Cit., p. 289)
8 Study shows hybrids of bird flu and human flu viruses fit well, could occur, The Canadian Press, Toronto, undated. May 2008.
Ibid.
9 F. William Engdahl, Op. Cit., pp. 262-263.
10 United States Department of Homeland Security, Health & Human Services Department, Guidance on Allocating and Targeting Pandemic Influenza Vaccine, p. 2, accessed in http://www.pandemicflu.gov/vaccine/allocationguidance.pdf.
11 NIH News, NIAID Initiates Trial of Experimental Avian Flu Vaccine, Washington, D.C., March 23, 2005, accessed in http://www3.niaid.nih.gov/news/newsreleases/2005/avianfluvax.htm.
12 Quoted in, sanofi pasteur, The Largest Company In The World Devoted To Human Vaccines, April 18, 2007, accessed at http://noonehastodie.blogspot.com/2007/04/sanofi-pasteur-largest-company-in-world.html
13 The New Scientist, US Approves First Bird Flu Vaccine for People, 17 April, 2007, accessed at http://www.newscientist.com/channel/health/bird-flu/dn11626-us-approves-first-bird-flu-vaccine-for-people.html
14 Ibid.
15 Matthew Day, Homeless people die after bird flu vaccine trial in Poland, Daily Telegraph, July 2, 2008, accessed in http://www.telegraph.co.uk/news/worldnews/europe/poland/2235676/Homeless-people-die-after-bird-flu-vaccine-trial-in-Poland.html.
16 The Sunshine Project, Lethal Virus from 1918 Genetically Reconstructed: US Army scientists create ‘Spanish Flu’ virus in laboratory - medical benefit questionable, 9 October 2003, accessed at http://www.sunshine-project.org/publications/pr/pr091003.html.
17 Ibid.
18 Cited in F. William Engdahl, Op. Cit., p. 277.
19 Press Release of Sanofi Pasteur, U.S. Government accepts $192 million of sanofi pasteur H5N1 bulk vaccine antigen for pandemic stockpile: Vaccine for new strain of virus broadens government readiness program, April 28, 2008, accessed at
http://198.73.159.214/sanofi-pasteur2/ImageServlet?imageCode=22971&siteCode=SP_CORP
20 Press Release of Sanofi Pasteur, Sanofi Pasteur to donate 60 million doses of H5N1 vaccine to WHO over 3 years for its influenza vaccine global stockpile, June 16, 2008, accessed at
http://198.73.159.214/sanofi-pasteur2/ImageServlet?imageCode=22987&siteCode=SP_CORP.
21 William Engdahl, ‘Doomsday Seed Vault’ in the Arctic: Bill Gates, Rockefeller and the GMO giants know something we don’t, in Global Research, December 4, 2007, accessed in http://www.globalresearch.ca/index.php?context=va&aid=7529
Original article posted here.
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