Anteing up, betting, and bluffing in the new Great Game
by Pepe Escobar
Future historians may well agree that the 21st century Silk Road first opened for business on Dec. 14, 2009. That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang province in China’s far west. Hyperbole did not deter the spectacularly named Gurbanguly Berdymukhamedov, Turkmenistan’s president, from bragging, “This project has not only commercial or economic value. It is also political. China, through its wise and farsighted policy, has become one of the key guarantors of global security.”
The bottom line is that, by 2013, Shanghai, Guangzhou, and Hong Kong will be cruising to ever more dizzying economic heights courtesy of natural gas supplied by the 1,833-kilometer-long Central Asia Pipeline, then projected to be operating at full capacity. And to think that, in a few more years, China’s big cities will undoubtedly also be getting a taste of Iraq’s fabulous, barely tapped oil reserves, conservatively estimated at 115 billion barrels, but possibly closer to 143 billion barrels, which would put it ahead of Iran. When the Bush administration’s armchair generals launched their Global War on Terror, this was not exactly what they had in mind.
China’s economy is thirsty, and so it’s drinking deeper and planning deeper yet. It craves Iraq’s oil and Turkmenistan’s natural gas, as well as oil from Kazakhstan. Yet instead of spending more than a trillion dollars on an illegal war in Iraq or setting up military bases all over the Greater Middle East and Central Asia, China used its state oil companies to get some of the energy it needed simply by bidding for it in a perfectly legal Iraqi oil auction.
Meanwhile, in the New Great Game in Eurasia, China had the good sense not to send a soldier anywhere or get bogged down in an infinite quagmire in Afghanistan. Instead, the Chinese simply made a direct commercial deal with Turkmenistan and, profiting from that country’s disagreements with Moscow, built itself a pipeline which will provide much of the natural gas it needs.
No wonder the Obama administration’s Eurasian energy czar Richard Morningstar was forced to admit at a congressional hearing that the U.S. simply cannot compete with China when it comes to Central Asia’s energy wealth. If only he had delivered the same message to the Pentagon.
That Iranian Equation
In Beijing, they take the matter of diversifying oil supplies very, very seriously. When oil reached $150 a barrel in 2008 – before the U.S.-unleashed global financial meltdown hit – Chinese state media had taken to calling foreign Big Oil “international petroleum crocodiles,” with the implication that the West’s hidden agenda was ultimately to stop China’s relentless development dead in its tracks.
Twenty-eight percent of what’s left of the world’s proven oil reserves are in the Arab world. China could easily gobble it all up. Few may know that China itself is actually the world’s fifth largest oil producer, at 3.7 million barrels per day (bpd), just below Iran and slightly above Mexico. In 1980, China consumed only 3 percent of the world’s oil. Now, its take is around 10 percent, making it the planet’s second largest consumer. It has already surpassed Japan in that category, even if it’s still way behind the U.S., which eats up 27 percent of global oil each year. According to the International Energy Agency (IEA), China will account for over 40 percent of the increase in global oil demand until 2030. And that’s assuming China will grow at “only” a 6 percent annual rate which, based on present growth, seems unlikely.
Saudi Arabia controls 13 percent of world oil production. At the moment, it is the only swing producer – one, that is, that can move the amount of oil being pumped up or down at will – capable of substantially increasing output. It’s no accident, then, that, pumping 500,000 bpd, it has become one of Beijing’s major oil suppliers. The top three, according to China’s Ministry of Commerce, are Saudi Arabia, Iran, and Angola. By 2013-2014, if all goes well, the Chinese expect to add Iraq to that list in a big way, but first that troubled country’s oil production needs to start cranking up. In the meantime, it’s the Iranian part of the Eurasian energy equation that’s really nerve-racking for China’s leaders.
Chinese companies have invested a staggering $120 billion in Iran’s energy sector over the past five years. Already Iran is China’s number two oil supplier, accounting for up to 14 percent of its imports; and the Chinese energy giant Sinopec has committed an additional $6.5 billion to building oil refineries there. Due to harsh U.N.-imposed and American sanctions and years of economic mismanagement, however, the country lacks the high-tech know-how to provide for itself, and its industrial structure is in a shambles. The head of the National Iranian Oil Company, Ahmad Ghalebani, has publicly admitted that machinery and parts used in Iran’s oil production still have to be imported from China.
Sanctions can be a killer, slowing investment, increasing the cost of trade by over 20 percent, and severely constricting Tehran’s ability to borrow in global markets. Nonetheless, trade between China and Iran grew by 35 percent in 2009 to $27 billion. So while the West has been slamming Iran with sanctions, embargoes, and blockades, Iran has been slowly evolving as a crucial trade corridor for China – as well as Russia and energy-poor India. Unlike the West, they are all investing like crazy there because it’s easy to get concessions from the government; it’s easy and relatively cheap to build infrastructure; and being on the inside when it comes to Iranian energy reserves is a necessity for any country that wants to be a crucial player in Pipelineistan, that contested chessboard of crucial energy pipelines over which much of the New Great Game in Eurasia takes place. Undoubtedly, the leaders of all three countries are offering thanks to whatever gods they care to worship that Washington continues to make it so easy (and lucrative) for them.
Few in the U.S. may know that last year Saudi Arabia – now (re)arming to the teeth, courtesy of Washington, and little short of paranoid about the Iranian nuclear program – offered to supply the Chinese with the same amount of oil the country currently imports from Iran at a much cheaper price. But Beijing, for whom Iran is a key long-term strategic ally, scotched the deal.
As if Iran’s structural problems weren’t enough, the country has done little to diversify its economy beyond oil and natural gas exports in the past 30 years; inflation’s running at more than 20 percent; unemployment at more than 20 percent; and young, well-educated people are fleeing abroad, a major brain drain for that embattled land. And don’t think that’s the end of its litany of problems. It would like to be a full member of the Shanghai Cooperation Organization (SCO) – the multi-layered economic/military cooperation union that is a sort of Asian response to NATO – but is only an official SCO observer because the group does not admit any country under U.N. sanctions. Tehran, in other words, would like some great power protection against the possibility of an attack from the U.S. or Israel. As much as Iran may be on the verge of becoming a far more influential player in the Central Asian energy game thanks to Russian and Chinese investment, it’s extremely unlikely that either of those countries would actually risk war against the U.S. to “save” the Iranian regime.
The Great Escape
From Beijing’s point of view, the title of the movie version of the intractable U.S. vs. Iran conflict and a simmering U.S. vs. China strategic competition in Pipelineistan could be Escape From Hormuz and Malacca.
The Strait of Hormuz is the definition of a potential strategic bottleneck. It is, after all, the only entryway to the Persian Gulf and through it now flow roughly 20 percent of China’s oil imports. At its narrowest, it is only 36 kilometers wide, with Iran to the north and Oman to the south. China’s leaders fret about the constant presence of U.S. aircraft carrier battle groups on station and patrolling nearby.
With Singapore to the North and Indonesia to the south, the Strait of Malacca is another potential bottleneck if ever there was one – and through it flow as much as 80 percent of China’s oil imports. At its narrowest, it is only 54 kilometers wide and like the Strait of Hormuz, its security is also of the made-in-USA variety. In a future face-off with Washington, both straits could quickly be closed or controlled by the U.S. Navy.
Hence, China’s increasing emphasis on developing a land-based Central Asian energy strategy could be summed up as: Bye-bye, Hormuz! Bye-bye, Malacca! And a hearty welcome to a pipeline-driven new Silk Road from the Caspian Sea to China’s Far West in Xinjiang.
Kazakhstan has 3 percent of the world’s proven oil reserves, but its largest oil fields are not far from the Chinese border. China sees that country as a key alternative oil supplier via future pipelines that would link the Kazakh oil fields to Chinese oil refineries in its far west. In fact, China’s first transnational Pipelineistan adventure is already in place: the 2005 China-Kazakhstan oil project, financed by Chinese energy giant CNPC.
Much more is to come, and Chinese leaders expect energy-rich Russia to play a significant part in China’s escape-hatch planning as well. Strategically, this represents a crucial step in regional energy integration, tightening the Russia/China partnership inside the SCO as well as at the U.N. Security Council.
When it comes to oil, the name of the game is the immense Eastern Siberia-Pacific Ocean (ESPO) pipeline. Last August, a 4,000-kilometer-long Russian section from Taishet in eastern Siberia to Nakhodka, still inside Russian territory, was begun. Russian Premier Vladimir Putin hailed ESPO as “a really comprehensive project that has strengthened our energy cooperation.” And in late September, the Russians and the Chinese inaugurated a 999-kilometer-long pipeline from Skovorodino in Russia’s Amur region to the petrochemical hub Daqing in northeast China.
Russia is currently delivering up to 130 million tons of Russian oil a year to Europe. Soon, no less than 50 million tons may be heading to China and the Pacific region as well.
There are, however, hidden tensions between the Russians and the Chinese when it comes to energy matters. The Russian leadership is understandably wary of China’s startling strides in Central Asia, the former Soviet Union’s former “near abroad.” After all, as the Chinese have been doing in Africa in their search for energy, in Central Asia, too, the Chinese are building railways and introducing high-tech trains, among other modern wonders, in exchange for oil and gas concessions.
Despite the simmering tensions between China, Russia, and the U.S., it’s too early to be sure just who is likely to emerge as the victor in the new Great Game in Central Asia, but one thing is clear enough. The Central Asian “stans” are becoming ever more powerful poker players in their own right as Russia tries not to lose its hegemony there, Washington places all its chips on pipelines meant to bypass Russia (including the Baku-Tbilisi-Ceyhan [BTC] pipeline that pumps oil from Azerbaijan to Turkey via Georgia) and China antes up big time for its Central Asian future. Whoever loses, this is a game that the “stans” cannot but profit from.
Recently, our man Gurbanguly, the Turkmen leader, chose China as his go-to country for an extra $4.18 billion loan for the development of South Yolotan, his country’s largest gas field. (The Chinese had already shelled out $3 billion to help develop it.) Energy bureaucrats in Brussels were devastated. With estimated reserves of up to 14 trillion cubic meters of natural gas, the field has the potential to flood the energy-starved European Union with gas for more than 20 years. Goodbye to all that?
In 2009, Turkmenistan’s proven gas reserves were estimated at a staggering 8.1 trillion cubic meters, fourth largest in the world after Russia, Iran, and Qatar. Not surprisingly, from the point of view of Ashgabat, the country’s capital, it invariably seems to be raining gas. Nonetheless, experts doubt that the landlocked, idiosyncratic Central Asian republic actually has enough blue gold to supply Russia (which absorbed 70 percent of Turkmenistan’s supply before the pipeline to China opened), China, Western Europe, and Iran all at the same time.
Currently, Turkmenistan sells its gas to: China via the world’s largest gas pipeline, 7,000 kilometers long and designed for a capacity of 40 billion cubic meters per year, Russia (10 billion cubic meters per year, down from 30 billion per year until 2008), and Iran (14 billion cubic meters per year). Iranian President Mahmoud Ahmadinejad always gets a red-carpet welcome from Gurbanguly, and the Russian energy giant Gazprom, thanks to an improved pricing policy, is treated as a preferred customer.
At present, however, the Chinese are atop the heap, and more generally, whatever happens, there can be little question that Central Asia will be China’s major foreign supplier of natural gas. On the other hand, the fact that Turkmenistan has, in practice, committed its entire future gas exports to China, Russia, and Iran means the virtual death of various trans-Caspian Sea pipeline plans long favored by Washington and the European Union.
IPI vs. TAPI All Over Again
On the oil front, even if all the “stans” sold China every barrel of oil they currently pump, less than half of China’s daily import needs would be met. Ultimately, only the Middle East can quench China’s thirst for oil. According to the International Energy Agency, China’s overall oil needs will rise to 11.3 million barrels per day by 2015, even with domestic production peaking at 4.0 million bpd. Compare that to what some of China’s alternative suppliers are now producing: Angola, 1.4 million bpd; Kazakhstan, 1.4 million as well; and Sudan, 400,000.
On the other hand, Saudi Arabia produces 10.9 million bpd, Iran around 4.0 million, the United Arab Emirates (UAE) 3.0 million, Kuwait 2.7 million – and then there’s Iraq, presently at 2.5 million and likely to reach at least 4.0 million by 2015. Still, Beijing has yet to be fully convinced that this is a safe supply, especially given all those U.S. “forward operating sites” in the UAE, Bahrain, Kuwait, Qatar, and Oman, plus those roaming naval battle groups in the Persian Gulf.
On the gas front, China definitely counts on a South Asian game changer. Beijing has already spent $200 million on the first phase in the construction of a deepwater port at Gwadar in Pakistan’s Balochistan province. It wanted, and got from Islamabad, “sovereign guarantees to the port’s facilities.” Gwadar is only 400 kilometers from Hormuz. With Gwadar, the Chinese Navy would have a home port that would easily allow it to monitor traffic in the strait and someday perhaps even thwart the U.S. Navy’s expansionist designs in the Indian Ocean.
But Gwadar has another, infinitely juicier future role. It could prove the pivot in a competition between two long-discussed pipelines: TAPI and IPI. TAPI stands for the Turkmenistan-Afghanistan-Pakistan-India pipeline, which can never be built as long as U.S. and NATO occupation forces are fighting the resistance umbrella conveniently labeled “Taliban” in Afghanistan. IPI, however, is the Iran-Pakistan-India pipeline, also known as the “peace pipeline” (which, of course, would make TAPI the “war pipeline”). To Washington’s immeasurable distress, last June, Iran and Pakistan finally closed the deal to build the “IP” part of IPI, with Pakistan assuring Iran that either India or China could later be brought into the project.
Whether it’s IP, IPI, or IPC, Gwadar will be a key node. If, under pressure from Washington, which treats Tehran like the plague, India is forced to pull out of the project, China already has made it clear that it wants in. The Chinese would then build a Pipelineistan link from Gwadar along the Karakorum highway in Pakistan to China via the Khunjerab Pass – another overland corridor that would prove immune to U.S. interference. It would have the added benefit of radically cutting down the 20,000-kilometer-long tanker route around the southern rim of Asia.
Arguably, for the Indians it would be a strategically sound move to align with IPI, trumping a deep suspicion that the Chinese will move to outflank them in the search for foreign energy with a “string of pearls” strategy: the setting up of a series of “home ports” along its key oil supply routes from Pakistan to Myanmar. In that case, Gwadar would no longer simply be a “Chinese” port.
As for Washington, it still believes that if TAPI is built, it will help keep India from fully breaking the U.S.-enforced embargo on Iran. Energy-starved Pakistan obviously prefers its “all-weather” ally China, which might commit itself to building all sorts of energy infrastructure within that flood-devastated country. In a nutshell, if the unprecedented energy cooperation between Iran, Pakistan, and China goes forward, it will signal a major defeat for Washington in the New Great Game in Eurasia, with enormous geopolitical and geo-economic repercussions.
For the moment, Beijing’s strategic priority has been to carefully develop a remarkably diverse set of energy-suppliers – a flow of energy that covers Russia, the South China Sea, Central Asia, the East China Sea, the Middle East, Africa, and South America. (China’s forays into Africa and South America will be dealt with in a future installment of our TomDispatch tour of the globe’s energy hotspots.) If China has so far proven masterly in the way it has played its cards in its Pipelineistan “war”, the U.S. hand – bypass Russia, elbow out China, isolate Iran – may soon be called for what it is: a bluff.
Pepe Escobar is the roving correspondent for Asia Times. His latest book is Obama Does Globalistan. He may be reached at pepeasia@yahoo.com.
Wednesday, October 13, 2010
Monday, October 4, 2010
The Judicial Caning of Jason Kenney (George Galloway)
By Rosie DiManno
The Star Columnist
Editorial: Galloway brouhaha (April)
Judge denies Galloway entry (2009
)
Clip: Gallowy on the Hour (Mar. 31, 2009)
Full interview on The Hour
Galloway court filings (PDF)
Jewish group proud of role in ban
Archive of March 24 discussion
YouTube: Galloway speaks at Columbia University
YouTube: Galloway debates Meir Weinstein of the Jewish Defence League of Canada
Galloway on The Hour (2006)
YouTube: Galloway meets Saddam
YouTube: The cat incident
YouTube: Galloway vs. O'Reilly
George Galloway's website
Galloway: Canada can't muzzle me (Guardian)
A selection of George Galloway’s Greatest Hits:
“Iraq is fighting for all the Arabs. Where are the Arab armies?’’
— From an interview with Abu Dhabi TV, as British troops participated in the invasion of Iraq
“Sir, I salute your courage, your strength and your indefatigability.’’
— Spoken to Saddam Hussein, 1994
“Hezbollah has never been a terrorist organization!’’
— Shrieked at a 2006 demonstration
“Democracy in Cuba is more free than in the U.K.’’
— 2006 speech to the Oxford Students Union
“Yes, I did support the Soviet Union, and I think the disappearance of the Soviet Union is the biggest catastrophe of my life. If there was a Soviet Union today, we would not be having this conversation about plunging into a new war in the Middle East, and the U.S. would not be rampaging around the globe.’’
— 2002 interview with The Guardian
“It’s not Jews that we hate. It’s the racist, apartheid occupation of Palestine.’’
— Sunday afternoon, at Toronto’s Trinity-St. Paul’s United Church
George Galloway is not a terrorist. A holy terror, self-aggrandizing loon from the radical left, foaming-at-the-mouth blovian, one-trick pony anti-war crusader and Israel demonizer — all yes. But on the evidence — and the documentation runs to thousands of pages, from U.S. Senate and British Parliamentary briefings to libel action filings — not a direct proponent of or financial contributor to terrorism.
His moral and political relativism, however, leaves much to be desired.
“I hate terrorism, be it by a man with a beard in a tunnel in Tora Bora or a man in a suit in the White House!’’ Galloway thundered Sunday to rapturous applause from an audience of some 600 or so Galloway Groupies, a full-house nuthouse of acolytes who finally got the opportunity to hear their idol speak, live and in person.
Oratory is something Galloway does well, though not so often in Westminster during his multiple terms as an elected MP, 634th out of 645 among House of Commons debate participants, at least after his expulsion from the Labour Party and ideological transition to Respect — The Unity Coalition, a Trotskyist cadre.
The reason for Galloway’s absence from the Commons was his time-consuming rant engagements when not otherwise occupied with blockade-busting “humanitarian aid’’ sorties to Gaza or fomenting revulsion for Israel.
There’s even more time for that now, having lost his seat in the last British election, a rejection that Galloway blames squarely on Jason Kenney, Canada’s Minister of Citizenship and Immigration — “Minister of Censorship and Deportation’’ — and the damaging publicity that attended last year’s successful ploy to keep the rabble-rouser out of a speaking gig in this country.
Kenney is a fool on this file. He handed Galloway a bigger platform for chest-thumping histrionics than the Scotsman would ever have enjoyed on his own dubious merits. A federal court judge said as much this past week, accusing the Conservative government of acting politically to suppress Galloway’s opinions.
Apart from manoeuvering behind the scenes to stop Galloway in his tracks for his dealings with and donations to Gaza’s elected Hamas government — which Canada categorizes as a terrorist organization — Kenney stated publicly and paternalistically at the time: “I believe folks that are supporting and promoting and helping terrorist organizations are not needed to visit Canada.’’
Quick on the heels of the judge’s non-decision last Monday — there was, technically, nothing to overturn because Galloway decided against coming to Canada, advised that he’d likely be denied entry — the limelight-luxuriating “Gorgeous George’’ hopped on a plane to make good his remanded local appearance, an invitation extended by the Toronto Coalition to Stop the War.
Which war the coalition wishes to stop, we’re not entirely sure. If Afghanistan, the Tories have already announced Canada’s troops will pull out next July. If Iraq — Galloway’s primary focus this past decade — Canada was never in.
If they mean Israel’s military aggression against the West Bank and Gaza, then we’re on familiar ground. That was clearly the matter of most hostile opposition among yesterday’s audience, with a simultaneous shout-out to American war deserters, smacked down this past week with the nay-vote on second reading to Gerard Kennedy’s resident status bill.
(“More resisters on the stage,’’ directed one of yesterday’s organizers, as the special guests assembled for Galloway’s arrival.)
In any event, it was a triumphalist turn of the screw for Galloway and his advocates. That included the lawyer who compared Canada’s door-slamming to dissident voices with censorship in Iran and China. “Canada is in line with exactly those countries.’’
Gleefully, Galloway took pugnacious pokes at “the judicial caning of a government minister’’ — that would be Kenney — comparing him, in a somewhat disjointed analogy, to those “who are always ready to fight to the last drop of someone else’s blood,’’ a favourite bumper-sticker refrain from Galloway’s anti-war hymnal that actually has nothing to do with Kenney’s Hamas reasoning.
Claiming that he’s had a rethink about abandoning a libel suit against Kenney, Galloway declared he will now “seek redress,” whilst calling the minister a “liar and deceiver and cheat.” Further, he challenged Kenney to a public debate, presumably when he can fit that in.
On rhetoric alone, Galloway would mop the floor with Kenney. Just recently returned to his radio talk-show pulpit, he is the Rush Limbaugh loudmouth of the ultraleft.
The crux, though, is this: “I am not, nor have I ever been, a terrorist or a supporter of terrorism or any kind of security threat to Canada.’’
No, no, never a threat, agreed. Just a demagogue darling of the idiot-ocracy
The Star Columnist
Editorial: Galloway brouhaha (April)
Judge denies Galloway entry (2009
)
Clip: Gallowy on the Hour (Mar. 31, 2009)
Full interview on The Hour
Galloway court filings (PDF)
Jewish group proud of role in ban
Archive of March 24 discussion
YouTube: Galloway speaks at Columbia University
YouTube: Galloway debates Meir Weinstein of the Jewish Defence League of Canada
Galloway on The Hour (2006)
YouTube: Galloway meets Saddam
YouTube: The cat incident
YouTube: Galloway vs. O'Reilly
George Galloway's website
Galloway: Canada can't muzzle me (Guardian)
A selection of George Galloway’s Greatest Hits:
“Iraq is fighting for all the Arabs. Where are the Arab armies?’’
— From an interview with Abu Dhabi TV, as British troops participated in the invasion of Iraq
“Sir, I salute your courage, your strength and your indefatigability.’’
— Spoken to Saddam Hussein, 1994
“Hezbollah has never been a terrorist organization!’’
— Shrieked at a 2006 demonstration
“Democracy in Cuba is more free than in the U.K.’’
— 2006 speech to the Oxford Students Union
“Yes, I did support the Soviet Union, and I think the disappearance of the Soviet Union is the biggest catastrophe of my life. If there was a Soviet Union today, we would not be having this conversation about plunging into a new war in the Middle East, and the U.S. would not be rampaging around the globe.’’
— 2002 interview with The Guardian
“It’s not Jews that we hate. It’s the racist, apartheid occupation of Palestine.’’
— Sunday afternoon, at Toronto’s Trinity-St. Paul’s United Church
George Galloway is not a terrorist. A holy terror, self-aggrandizing loon from the radical left, foaming-at-the-mouth blovian, one-trick pony anti-war crusader and Israel demonizer — all yes. But on the evidence — and the documentation runs to thousands of pages, from U.S. Senate and British Parliamentary briefings to libel action filings — not a direct proponent of or financial contributor to terrorism.
His moral and political relativism, however, leaves much to be desired.
“I hate terrorism, be it by a man with a beard in a tunnel in Tora Bora or a man in a suit in the White House!’’ Galloway thundered Sunday to rapturous applause from an audience of some 600 or so Galloway Groupies, a full-house nuthouse of acolytes who finally got the opportunity to hear their idol speak, live and in person.
Oratory is something Galloway does well, though not so often in Westminster during his multiple terms as an elected MP, 634th out of 645 among House of Commons debate participants, at least after his expulsion from the Labour Party and ideological transition to Respect — The Unity Coalition, a Trotskyist cadre.
The reason for Galloway’s absence from the Commons was his time-consuming rant engagements when not otherwise occupied with blockade-busting “humanitarian aid’’ sorties to Gaza or fomenting revulsion for Israel.
There’s even more time for that now, having lost his seat in the last British election, a rejection that Galloway blames squarely on Jason Kenney, Canada’s Minister of Citizenship and Immigration — “Minister of Censorship and Deportation’’ — and the damaging publicity that attended last year’s successful ploy to keep the rabble-rouser out of a speaking gig in this country.
Kenney is a fool on this file. He handed Galloway a bigger platform for chest-thumping histrionics than the Scotsman would ever have enjoyed on his own dubious merits. A federal court judge said as much this past week, accusing the Conservative government of acting politically to suppress Galloway’s opinions.
Apart from manoeuvering behind the scenes to stop Galloway in his tracks for his dealings with and donations to Gaza’s elected Hamas government — which Canada categorizes as a terrorist organization — Kenney stated publicly and paternalistically at the time: “I believe folks that are supporting and promoting and helping terrorist organizations are not needed to visit Canada.’’
Quick on the heels of the judge’s non-decision last Monday — there was, technically, nothing to overturn because Galloway decided against coming to Canada, advised that he’d likely be denied entry — the limelight-luxuriating “Gorgeous George’’ hopped on a plane to make good his remanded local appearance, an invitation extended by the Toronto Coalition to Stop the War.
Which war the coalition wishes to stop, we’re not entirely sure. If Afghanistan, the Tories have already announced Canada’s troops will pull out next July. If Iraq — Galloway’s primary focus this past decade — Canada was never in.
If they mean Israel’s military aggression against the West Bank and Gaza, then we’re on familiar ground. That was clearly the matter of most hostile opposition among yesterday’s audience, with a simultaneous shout-out to American war deserters, smacked down this past week with the nay-vote on second reading to Gerard Kennedy’s resident status bill.
(“More resisters on the stage,’’ directed one of yesterday’s organizers, as the special guests assembled for Galloway’s arrival.)
In any event, it was a triumphalist turn of the screw for Galloway and his advocates. That included the lawyer who compared Canada’s door-slamming to dissident voices with censorship in Iran and China. “Canada is in line with exactly those countries.’’
Gleefully, Galloway took pugnacious pokes at “the judicial caning of a government minister’’ — that would be Kenney — comparing him, in a somewhat disjointed analogy, to those “who are always ready to fight to the last drop of someone else’s blood,’’ a favourite bumper-sticker refrain from Galloway’s anti-war hymnal that actually has nothing to do with Kenney’s Hamas reasoning.
Claiming that he’s had a rethink about abandoning a libel suit against Kenney, Galloway declared he will now “seek redress,” whilst calling the minister a “liar and deceiver and cheat.” Further, he challenged Kenney to a public debate, presumably when he can fit that in.
On rhetoric alone, Galloway would mop the floor with Kenney. Just recently returned to his radio talk-show pulpit, he is the Rush Limbaugh loudmouth of the ultraleft.
The crux, though, is this: “I am not, nor have I ever been, a terrorist or a supporter of terrorism or any kind of security threat to Canada.’’
No, no, never a threat, agreed. Just a demagogue darling of the idiot-ocracy
Syphilis and Gonorrhea infection in Guatemala
October 4 , 2010
CIA's Unethical Research Ignored
Guatemalan Research Horrors and US Hypocrisy
By STEPHEN SOLDZ
According to top US officials, abusing people in the name of research without their permission is awful, truly awful. In fact, it is so awful that it takes two Cabinet officials to apologize. That is, if the abuses were committed a long time ago, by researchers who are not around to be held accountable and if there is a friendly foreign government likely to be outraged about the abuse. However, US officials have so far been totally silent about horrific, unethical research conducted by US government researchers within the last decade.
Recently, Secretary of State Hillary Clinton and Secretary of Health and Human Services Kathleen Sebelius profusely apologized for a study conducted by the US Public Health Service in which nearly 700 incarcerated people and soldiers in Guatemala were, without their knowledge, deliberately infected with syphilis and other sexually transmitted diseases in order to test if penicillin could prevent infection. In a statement the two Cabinet secretaries expressed their outrage at "such reprehensible research." In fact, so disturbed is the US government at this research that President Obama reportedly will call the Guatemalan president to apologize again.
This research violated the basic ethical principles that were supposed to guide research done on people -- "human subjects research" in the professional lingo -- since World War II. These principles were codified in the Nuremberg Code internationally and in the Common Rule guiding most research on people conducted or funded by US government agencies, including the Department of Health and Human Services of which the Public Health Service is a part as well as the Defense Department and the CIA. Fundamental to these and all other recent codes of research ethics are two basic principles: informed consent and minimization of harm. Thus, the Nuremberg Code, containing principles developed for the trials of German doctors who conducted horrific experiments in the Nazi concentration camps, begins with the principle of informed consent:
"The voluntary consent of the human subject is absolutely essential. This means that the person involved should have legal capacity to give consent; should be so situated as to be able to exercise free power of choice, without the intervention of any element of force, fraud, deceit, duress, over-reaching, or other ulterior form of constraint or coercion; and should have sufficient knowledge and comprehension of the elements of the subject matter involved as to enable him to make an understanding and enlightened decision. This latter element requires that before the acceptance of an affirmative decision by the experimental subject there should be made known to him the nature, duration, and purpose of the experiment; the method and means by which it is to be conducted; all inconveniences and hazards reasonable to be expected; and the effects upon his health or person which may possibly come from his participation in the experiment."
A little later the Nuremberg Code states the obligation of medical researchers to minimize harm resulting from experimental procedures:
"The experiment should be so conducted as to avoid all unnecessary physical and mental suffering and injury.
"No experiment should be conducted where there is an a priori reason to believe that death or disabling injury will occur; except, perhaps, in those experiments where the experimental physicians also serve as subjects."
The Guatemalan study egregiously violated both these principles and deserves opprobrium. Rather than informed consent, the purpose of the study was deliberately hidden from those infected. These individuals were infected with dangerous, often deadly, illnesses. This research was awful, reprehensible, even horrific, and should never have been contemplated, let alone, conducted. I am glad that it only took a short time since historian Susan M. Reverby of Wellesley College revealed the abuses in a soon-to-be-published paper -- available in preprint form on Reverby's website -- until US government officials vociferously condemned it.
But the US government does not need to look back nearly 65 years to find horrific research conducted by US government researchers. In June 2010, Physicians for Human Rights (PHR) issued a report, Experiments in Torture: Human Subject Research and Experimentation in the “Enhanced” Interrogation Program, that documented research and experimentation conducted in this century by CIA physicians and psychologists related to the abusive techniques used as part of the CIA's "enhanced interrogation" torture program.
These researchers observed the torture of CIA prisoners in the so-called "black sites" and recorded the tortured prisoners’ responses. They paid special attention to the possibility that the torture would kill the prisoners. At times they recommended changes in torture techniques, such as the addition of salt to the water used for the partial drowning techniques that have come to be known as "waterboarding" so as to prevent possible death from induced electrolyte imbalance. This change in procedure allowed the prisoners to be waterboarded many dozens of times while preventing their escape into death. As PHR argued, the main reason for this apparent safety-related research was not the protection of prisoners, but to provide legal cover for the torturers and torture policy-makers by allowing them to claim that medical professionals were assuring the prisoners’ safety.
These abuses were reported by PHR in its peer-review report back in June. (I am one of the authors of that report.) Secretary of Health and Human Services Secretary Kathleen Sebelius was notified by letter of these abuses, abuses that violate the same research ethics principles -- informed consent and minimization of harm -- that were violated by the Guatemalan STD research. But, rather than express her outrage at this "reprehensible research," Secretary Sebelius maintained her silence, as did every government official, other than a CIA press spokesman who denied our claims without presenting the slightest bit of evidence. Secretary Sebelius' department referred an official complaint regarding unethical CIA research to the very same CIA that had already publicly denied the charges. So far, no government agency has committed to investigating these CIA abuses, which occurred far more recently than the Guatemalan horrors.
In response to the over 60 year old Guatemalan abuses, the Secretaries of HHS and State announced the creation of a commission that will undertake to assure that all human subjects research conducted by US researchers meets the highest ethical standards. As NBC News reported:
"In addition to the apology, the U.S. is setting up commissions to ensure that human medical research conducted around the globe meets 'rigorous ethical standards.' U.S. officials are also launching investigations to uncover exactly what happened during the experiments."
If the purpose of the commission is really "to ensure that human medical research conducted around the globe meets 'rigorous ethical standards,'" there cannot be a double standard. The same rules must apply to all researchers, everywhere, and to all research subjects, whoever they are. Ethics are there to protect the despised and powerless, not just those deemed deserving. Those researchers aiding CIA or other classified activities cannot get a free pass. We are at an important juncture, either unethical CIA research is investigated and those responsible are held accountable or the whole regime preventing unethical research that has been developed since the world became aware of Nazi horrors will collapse in hypocrisy. We cannot afford to let that happen.
CIA's Unethical Research Ignored
Guatemalan Research Horrors and US Hypocrisy
By STEPHEN SOLDZ
According to top US officials, abusing people in the name of research without their permission is awful, truly awful. In fact, it is so awful that it takes two Cabinet officials to apologize. That is, if the abuses were committed a long time ago, by researchers who are not around to be held accountable and if there is a friendly foreign government likely to be outraged about the abuse. However, US officials have so far been totally silent about horrific, unethical research conducted by US government researchers within the last decade.
Recently, Secretary of State Hillary Clinton and Secretary of Health and Human Services Kathleen Sebelius profusely apologized for a study conducted by the US Public Health Service in which nearly 700 incarcerated people and soldiers in Guatemala were, without their knowledge, deliberately infected with syphilis and other sexually transmitted diseases in order to test if penicillin could prevent infection. In a statement the two Cabinet secretaries expressed their outrage at "such reprehensible research." In fact, so disturbed is the US government at this research that President Obama reportedly will call the Guatemalan president to apologize again.
This research violated the basic ethical principles that were supposed to guide research done on people -- "human subjects research" in the professional lingo -- since World War II. These principles were codified in the Nuremberg Code internationally and in the Common Rule guiding most research on people conducted or funded by US government agencies, including the Department of Health and Human Services of which the Public Health Service is a part as well as the Defense Department and the CIA. Fundamental to these and all other recent codes of research ethics are two basic principles: informed consent and minimization of harm. Thus, the Nuremberg Code, containing principles developed for the trials of German doctors who conducted horrific experiments in the Nazi concentration camps, begins with the principle of informed consent:
"The voluntary consent of the human subject is absolutely essential. This means that the person involved should have legal capacity to give consent; should be so situated as to be able to exercise free power of choice, without the intervention of any element of force, fraud, deceit, duress, over-reaching, or other ulterior form of constraint or coercion; and should have sufficient knowledge and comprehension of the elements of the subject matter involved as to enable him to make an understanding and enlightened decision. This latter element requires that before the acceptance of an affirmative decision by the experimental subject there should be made known to him the nature, duration, and purpose of the experiment; the method and means by which it is to be conducted; all inconveniences and hazards reasonable to be expected; and the effects upon his health or person which may possibly come from his participation in the experiment."
A little later the Nuremberg Code states the obligation of medical researchers to minimize harm resulting from experimental procedures:
"The experiment should be so conducted as to avoid all unnecessary physical and mental suffering and injury.
"No experiment should be conducted where there is an a priori reason to believe that death or disabling injury will occur; except, perhaps, in those experiments where the experimental physicians also serve as subjects."
The Guatemalan study egregiously violated both these principles and deserves opprobrium. Rather than informed consent, the purpose of the study was deliberately hidden from those infected. These individuals were infected with dangerous, often deadly, illnesses. This research was awful, reprehensible, even horrific, and should never have been contemplated, let alone, conducted. I am glad that it only took a short time since historian Susan M. Reverby of Wellesley College revealed the abuses in a soon-to-be-published paper -- available in preprint form on Reverby's website -- until US government officials vociferously condemned it.
But the US government does not need to look back nearly 65 years to find horrific research conducted by US government researchers. In June 2010, Physicians for Human Rights (PHR) issued a report, Experiments in Torture: Human Subject Research and Experimentation in the “Enhanced” Interrogation Program, that documented research and experimentation conducted in this century by CIA physicians and psychologists related to the abusive techniques used as part of the CIA's "enhanced interrogation" torture program.
These researchers observed the torture of CIA prisoners in the so-called "black sites" and recorded the tortured prisoners’ responses. They paid special attention to the possibility that the torture would kill the prisoners. At times they recommended changes in torture techniques, such as the addition of salt to the water used for the partial drowning techniques that have come to be known as "waterboarding" so as to prevent possible death from induced electrolyte imbalance. This change in procedure allowed the prisoners to be waterboarded many dozens of times while preventing their escape into death. As PHR argued, the main reason for this apparent safety-related research was not the protection of prisoners, but to provide legal cover for the torturers and torture policy-makers by allowing them to claim that medical professionals were assuring the prisoners’ safety.
These abuses were reported by PHR in its peer-review report back in June. (I am one of the authors of that report.) Secretary of Health and Human Services Secretary Kathleen Sebelius was notified by letter of these abuses, abuses that violate the same research ethics principles -- informed consent and minimization of harm -- that were violated by the Guatemalan STD research. But, rather than express her outrage at this "reprehensible research," Secretary Sebelius maintained her silence, as did every government official, other than a CIA press spokesman who denied our claims without presenting the slightest bit of evidence. Secretary Sebelius' department referred an official complaint regarding unethical CIA research to the very same CIA that had already publicly denied the charges. So far, no government agency has committed to investigating these CIA abuses, which occurred far more recently than the Guatemalan horrors.
In response to the over 60 year old Guatemalan abuses, the Secretaries of HHS and State announced the creation of a commission that will undertake to assure that all human subjects research conducted by US researchers meets the highest ethical standards. As NBC News reported:
"In addition to the apology, the U.S. is setting up commissions to ensure that human medical research conducted around the globe meets 'rigorous ethical standards.' U.S. officials are also launching investigations to uncover exactly what happened during the experiments."
If the purpose of the commission is really "to ensure that human medical research conducted around the globe meets 'rigorous ethical standards,'" there cannot be a double standard. The same rules must apply to all researchers, everywhere, and to all research subjects, whoever they are. Ethics are there to protect the despised and powerless, not just those deemed deserving. Those researchers aiding CIA or other classified activities cannot get a free pass. We are at an important juncture, either unethical CIA research is investigated and those responsible are held accountable or the whole regime preventing unethical research that has been developed since the world became aware of Nazi horrors will collapse in hypocrisy. We cannot afford to let that happen.
The Anti-Empire Report
The Anti-Empire Report
In Struggle With the American Mind
By WILLIAM BLUM
October 3 2010
Since the Great Flood hit Pakistan in July ...
many millions have been displaced, evacuated, stranded or lost their homes; numerous roads, schools and health clinics destroyed;
hundreds of villages washed away;
millions of livestock have perished; for the rural poor something akin to a Western stock market crash that wipes out years of savings;
countless farms decimated, including critical crops like corn; officials say the damage is in the hundreds of millions of dollars and it does not appear that Pakistan will recover within the next few years;
infectious diseases are rising sharply;
airplanes of the United States of America have flown over Pakistan and dropped bombs on dozens of occasions.
I direct these remarks to readers who have to deal with Americans who turn into a stone wall upon hearing the United States accused of acting immorally; America, they are convinced, means well; our motives are noble. And if we do something that looks bad, and the badness can't easily be covered up or explained away ... well, great powers have always done things like that, we're no worse than the other great powers of history, and a lot better than most. God bless America.
A certain percentage of such people do change eventually and stop rationalizing; this happens usually after being confronted X-number of times with evidence of the less-than-beautiful behavior of their government around the world. The value of X of course varies with the individual; so don't give up trying to educate the hardened Americans you come in contact with. You never know when your enlightening them about a particular wickedness of their favorite country will be the straw that breaks their imperialist-loving back. (But remember the warning from Friedrich Schiller of Germany: Mit der Dummheit kämpfen Götter selbst vergebens. — "With stupidity even the gods
struggle in vain.")
Here's a recent revelation of wickedness that might serve to move certain of the unenlightened: New evidence has recently come to light that reinforces the view of a CIA role in the murder of Patrice Lumumba, the first prime minister of The Congo following its independence from Belgium in 1960. The United States didn't pull the trigger, but it did just about everything else, including giving the green light to the Congolese officials who had kidnaped Lumumba. CIA Station Chief Larry Devlin, we now know, was consulted by these officials about the transfer of Lumumba to his sworn enemies. Devlin signaled them that he had no objection to it. Lumumba's fate was sealed. (AllAfrica.com, New Evidence Shows U.S. Role in Congo's Decision to Send Patrice Lumumba to His Death, August 1st 2010.)
It was a classic Cold War example of anti-communism carried to absurd and cruel lengths. Years later, Under Secretary of State C. Douglas Dillon told a Senate investigating committee that the National Security Council and President Eisenhower had believed in 1960 that Lumumba was a "very difficult if not impossible person to deal with, and was dangerous to the peace and safety of the world." (See The Select Committee to Study Governmental Operations with Respect to Intelligence Activities (US Senate: The Church Committee), Interim Report: Alleged Assassination Plots Involving Foreign Leaders, November 20, 1975, p.58.)
This statement moved author Jonathan Kwitny to observe in his book , Endless Enemies: The Making of an Unfriendly World: “How far beyond the dreams of a barefoot jungle postal clerk in 1956, that in a few short years he would be dangerous to the peace and safety of the world! The perception seems insane, particularly coming from the National Security Council, which really does have the power to end all human life within hours.”
President Eisenhower personally gave the order to kill the progressive African leader,( as reported in the New York Times, February 22, 1976, p.55 .)
We can't know for sure what life for the Congolese people would have been like had Lumumba been allowed to remain in office. But we do know what followed his assassination — one vicious dictator after another presiding over 50 years of mass murder, rape, and destruction as competing national forces and neighboring states fought endlessly over the vast mineral wealth in the country. The Congo would not hold another democratic election for 46 years.
Overthrowing a country's last great hope, with disastrous consequences, is an historical pattern found throughout the long chronicle of American imperialist interventions, from Iran and Guatemala in the 1950s to Haiti and Afghanistan in the 1990s, with many examples in between. Washington has been working on Hugo Chávez in Venezuela for a decade.
Just like the commercials that warn you "Don't try this at home", I urge you not to waste your time trying to educate the likes of Thomas Friedman of the New York Times, who not long ago referred to "the men and women of the US Army, Navy, Air Force and Marine Corps" as "the most important peacekeepers in the world for the last century." What can you say to such a man? And this is the leading foreign policy columnist for America's "newspaper of record". God help us. The man could use some adult supervision.
A man named Barack Obama
For many years I have not paid a great deal of attention to party politics in the United States. I usually have only a passing knowledge of who's who in Congress. It's policies that interest me much more than politicians. But during the 2008 presidential campaign I kept hearing the name Barack Obama when I turned on the radio, and repeatedly saw his name in headlines in various newspapers. I knew no more than that he was a senator from Illinois and ... Was he black?
Then one day I turned on my kitchen radio and was informed that Obama was about to begin a talk. I decided to listen, and did so for about 15 or 20 minutes while I washed the dishes. I listened, and listened, and then it hit me ... This man is not saying anything! It's all platitude and cliché, very little of what I would call substance. His talk could have been written by a computer, touching all the appropriate bases and saying just what could be expected to give some hope to the pessimistic and to artfully challenge the skepticism of the cynical; feel-good language for every occasion; conventional wisdom for every issue. His supporters, I would later learn, insisted that he had to talk this way to be elected, but once elected — Aha! The real genuine-progressive, anti-war Barack Obama would appear. "Change you can believe in!" Hallelujah! ... They're still saying things like that.
Last week Obama gave the traditional annual speech at the opening of the United Nations General Assembly. To give you an idea of whether the man now sincerely expresses himself "outside the box" at all, here's what he had to say about Pakistan: "Since the rains came and the floodwaters rose in Pakistan, we have pledged our assistance, and we should all support the Pakistani people as they recover and rebuild." Does he think no one in the world knows about the American bombs? Did he think he was speaking before sophisticated international diplomats or making a campaign speech before Iowa farmers?
Plus endless verbiage about the endless Israeli-Palestine issue, which could have been lifted out of almost any speech by any American president of the past 30 years. But no mention at all of Gaza. Oh, excuse me — there was one line: "the young girl in Gaza who wants to have no ceiling on her dreams". Gosh, choke. One would never know that the United States possesses huge leverage over the state of Israel — billions/trillions of dollars of military and economic aid and gifts. An American president with a minimum of courage could force Israel to make concessions, and in a struggle between a thousand-pound gorilla (Israel) and an infant (Hamas) it's the gorilla that has to give some ground.
And this: "We also know from experience that those who defend these [universal] values for their people have been our closest friends and allies, while those who have denied those rights — whether terrorist groups or tyrannical governments — have chosen to be our adversaries."
Such a lie. It would be difficult to name a single brutal dictatorship of the Western world in the second half of the 20th Century that was not supported by the United States; not only supported, but often put into power and kept in power against the wishes of the population. And in recent years as well, Washington has supported very repressive governments, such as Saudi Arabia, Honduras, Indonesia, Egypt, Kosovo, Colombia, and Israel. As to terrorist groups being adversaries of the United States — another item for the future Barack Obama Presidential Liebrary; as I've discussed in this report on several occasions, including last month, the United States has supported terrorist groups for decades. As they've supported US foreign policy.
"Yes, of course it's nice to have a president who speaks in complete sentences. But that they're coherent doesn't make them honest." — John R. MacArthur, publisher of Harper's Magazine.
The secret to understanding US foreign policy
In one of his regular "Reflections" essays, Fidel Castro recently discussed United States hostility towards Venezuela. "What they really want is Venezuela's oil," wrote the Cuban leader. This is a commonly-held viewpoint within the international left. The point is put forth, for example, in Oliver Stone's recent film "South of the Border". I must, however, take exception.
In the post-World War Two period, in Latin America alone, the US has had a similar hostile policy toward progressive governments and movements in Guatemala, Salvador, Nicaragua, Honduras, Grenada, Dominican Republic, Chile, Brazil, Argentina, Cuba, and Bolivia. What these governments and movements all had in common was that they were/are leftist; nothing to do with oil. For more than half a century Washington has been trying to block the rise of any government in Latin America that threatens to offer a viable alternative to the capitalist model. Venezuela of course fits perfectly into that scenario; oil or no oil.
This ideology was the essence of the Cold War all over the world.
The secret to understanding US foreign policy is that there is no secret. Principally, one must come to the realization that the United States strives to dominate the world. Once one understands that, much of the apparent confusion, contradiction, and ambiguity surrounding Washington's policies fades away. To express this striving for dominance numerically, one can consider that since the end of World War Two the United States has:
Endeavored to overthrow more than 50 foreign governments, most of which were democratically-elected.
Grossly interfered in democratic elections in at least 30 countries.
Waged war/military action, either directly or in conjunction with a proxy army, in some 30 countries.
Attempted to assassinate more than 50 foreign leaders.
Dropped bombs on the people of some 30 countries.
Suppressed dozens of populist/nationalist movements in every corner of the world.
The United States institutional war machine has long been, and remains, on automatic pilot.
William Blum is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II, Rogue State: a guide to the World's Only Super Power. and West-Bloc Dissident: a Cold War Political Memoir.
He can be reached at: BBlum6@aol.com
In Struggle With the American Mind
By WILLIAM BLUM
October 3 2010
Since the Great Flood hit Pakistan in July ...
many millions have been displaced, evacuated, stranded or lost their homes; numerous roads, schools and health clinics destroyed;
hundreds of villages washed away;
millions of livestock have perished; for the rural poor something akin to a Western stock market crash that wipes out years of savings;
countless farms decimated, including critical crops like corn; officials say the damage is in the hundreds of millions of dollars and it does not appear that Pakistan will recover within the next few years;
infectious diseases are rising sharply;
airplanes of the United States of America have flown over Pakistan and dropped bombs on dozens of occasions.
I direct these remarks to readers who have to deal with Americans who turn into a stone wall upon hearing the United States accused of acting immorally; America, they are convinced, means well; our motives are noble. And if we do something that looks bad, and the badness can't easily be covered up or explained away ... well, great powers have always done things like that, we're no worse than the other great powers of history, and a lot better than most. God bless America.
A certain percentage of such people do change eventually and stop rationalizing; this happens usually after being confronted X-number of times with evidence of the less-than-beautiful behavior of their government around the world. The value of X of course varies with the individual; so don't give up trying to educate the hardened Americans you come in contact with. You never know when your enlightening them about a particular wickedness of their favorite country will be the straw that breaks their imperialist-loving back. (But remember the warning from Friedrich Schiller of Germany: Mit der Dummheit kämpfen Götter selbst vergebens. — "With stupidity even the gods
struggle in vain.")
Here's a recent revelation of wickedness that might serve to move certain of the unenlightened: New evidence has recently come to light that reinforces the view of a CIA role in the murder of Patrice Lumumba, the first prime minister of The Congo following its independence from Belgium in 1960. The United States didn't pull the trigger, but it did just about everything else, including giving the green light to the Congolese officials who had kidnaped Lumumba. CIA Station Chief Larry Devlin, we now know, was consulted by these officials about the transfer of Lumumba to his sworn enemies. Devlin signaled them that he had no objection to it. Lumumba's fate was sealed. (AllAfrica.com, New Evidence Shows U.S. Role in Congo's Decision to Send Patrice Lumumba to His Death, August 1st 2010.)
It was a classic Cold War example of anti-communism carried to absurd and cruel lengths. Years later, Under Secretary of State C. Douglas Dillon told a Senate investigating committee that the National Security Council and President Eisenhower had believed in 1960 that Lumumba was a "very difficult if not impossible person to deal with, and was dangerous to the peace and safety of the world." (See The Select Committee to Study Governmental Operations with Respect to Intelligence Activities (US Senate: The Church Committee), Interim Report: Alleged Assassination Plots Involving Foreign Leaders, November 20, 1975, p.58.)
This statement moved author Jonathan Kwitny to observe in his book , Endless Enemies: The Making of an Unfriendly World: “How far beyond the dreams of a barefoot jungle postal clerk in 1956, that in a few short years he would be dangerous to the peace and safety of the world! The perception seems insane, particularly coming from the National Security Council, which really does have the power to end all human life within hours.”
President Eisenhower personally gave the order to kill the progressive African leader,( as reported in the New York Times, February 22, 1976, p.55 .)
We can't know for sure what life for the Congolese people would have been like had Lumumba been allowed to remain in office. But we do know what followed his assassination — one vicious dictator after another presiding over 50 years of mass murder, rape, and destruction as competing national forces and neighboring states fought endlessly over the vast mineral wealth in the country. The Congo would not hold another democratic election for 46 years.
Overthrowing a country's last great hope, with disastrous consequences, is an historical pattern found throughout the long chronicle of American imperialist interventions, from Iran and Guatemala in the 1950s to Haiti and Afghanistan in the 1990s, with many examples in between. Washington has been working on Hugo Chávez in Venezuela for a decade.
Just like the commercials that warn you "Don't try this at home", I urge you not to waste your time trying to educate the likes of Thomas Friedman of the New York Times, who not long ago referred to "the men and women of the US Army, Navy, Air Force and Marine Corps" as "the most important peacekeepers in the world for the last century." What can you say to such a man? And this is the leading foreign policy columnist for America's "newspaper of record". God help us. The man could use some adult supervision.
A man named Barack Obama
For many years I have not paid a great deal of attention to party politics in the United States. I usually have only a passing knowledge of who's who in Congress. It's policies that interest me much more than politicians. But during the 2008 presidential campaign I kept hearing the name Barack Obama when I turned on the radio, and repeatedly saw his name in headlines in various newspapers. I knew no more than that he was a senator from Illinois and ... Was he black?
Then one day I turned on my kitchen radio and was informed that Obama was about to begin a talk. I decided to listen, and did so for about 15 or 20 minutes while I washed the dishes. I listened, and listened, and then it hit me ... This man is not saying anything! It's all platitude and cliché, very little of what I would call substance. His talk could have been written by a computer, touching all the appropriate bases and saying just what could be expected to give some hope to the pessimistic and to artfully challenge the skepticism of the cynical; feel-good language for every occasion; conventional wisdom for every issue. His supporters, I would later learn, insisted that he had to talk this way to be elected, but once elected — Aha! The real genuine-progressive, anti-war Barack Obama would appear. "Change you can believe in!" Hallelujah! ... They're still saying things like that.
Last week Obama gave the traditional annual speech at the opening of the United Nations General Assembly. To give you an idea of whether the man now sincerely expresses himself "outside the box" at all, here's what he had to say about Pakistan: "Since the rains came and the floodwaters rose in Pakistan, we have pledged our assistance, and we should all support the Pakistani people as they recover and rebuild." Does he think no one in the world knows about the American bombs? Did he think he was speaking before sophisticated international diplomats or making a campaign speech before Iowa farmers?
Plus endless verbiage about the endless Israeli-Palestine issue, which could have been lifted out of almost any speech by any American president of the past 30 years. But no mention at all of Gaza. Oh, excuse me — there was one line: "the young girl in Gaza who wants to have no ceiling on her dreams". Gosh, choke. One would never know that the United States possesses huge leverage over the state of Israel — billions/trillions of dollars of military and economic aid and gifts. An American president with a minimum of courage could force Israel to make concessions, and in a struggle between a thousand-pound gorilla (Israel) and an infant (Hamas) it's the gorilla that has to give some ground.
And this: "We also know from experience that those who defend these [universal] values for their people have been our closest friends and allies, while those who have denied those rights — whether terrorist groups or tyrannical governments — have chosen to be our adversaries."
Such a lie. It would be difficult to name a single brutal dictatorship of the Western world in the second half of the 20th Century that was not supported by the United States; not only supported, but often put into power and kept in power against the wishes of the population. And in recent years as well, Washington has supported very repressive governments, such as Saudi Arabia, Honduras, Indonesia, Egypt, Kosovo, Colombia, and Israel. As to terrorist groups being adversaries of the United States — another item for the future Barack Obama Presidential Liebrary; as I've discussed in this report on several occasions, including last month, the United States has supported terrorist groups for decades. As they've supported US foreign policy.
"Yes, of course it's nice to have a president who speaks in complete sentences. But that they're coherent doesn't make them honest." — John R. MacArthur, publisher of Harper's Magazine.
The secret to understanding US foreign policy
In one of his regular "Reflections" essays, Fidel Castro recently discussed United States hostility towards Venezuela. "What they really want is Venezuela's oil," wrote the Cuban leader. This is a commonly-held viewpoint within the international left. The point is put forth, for example, in Oliver Stone's recent film "South of the Border". I must, however, take exception.
In the post-World War Two period, in Latin America alone, the US has had a similar hostile policy toward progressive governments and movements in Guatemala, Salvador, Nicaragua, Honduras, Grenada, Dominican Republic, Chile, Brazil, Argentina, Cuba, and Bolivia. What these governments and movements all had in common was that they were/are leftist; nothing to do with oil. For more than half a century Washington has been trying to block the rise of any government in Latin America that threatens to offer a viable alternative to the capitalist model. Venezuela of course fits perfectly into that scenario; oil or no oil.
This ideology was the essence of the Cold War all over the world.
The secret to understanding US foreign policy is that there is no secret. Principally, one must come to the realization that the United States strives to dominate the world. Once one understands that, much of the apparent confusion, contradiction, and ambiguity surrounding Washington's policies fades away. To express this striving for dominance numerically, one can consider that since the end of World War Two the United States has:
Endeavored to overthrow more than 50 foreign governments, most of which were democratically-elected.
Grossly interfered in democratic elections in at least 30 countries.
Waged war/military action, either directly or in conjunction with a proxy army, in some 30 countries.
Attempted to assassinate more than 50 foreign leaders.
Dropped bombs on the people of some 30 countries.
Suppressed dozens of populist/nationalist movements in every corner of the world.
The United States institutional war machine has long been, and remains, on automatic pilot.
William Blum is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II, Rogue State: a guide to the World's Only Super Power. and West-Bloc Dissident: a Cold War Political Memoir.
He can be reached at: BBlum6@aol.com
Wednesday, September 29, 2010
America's China Bashing
September 29 2010
By MICHAEL HUDSON
It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, U.S. politicians and journalists are blaming it for America’s declining economic power. I realize that balance-of-payments accounting and international trade theory are arcane topics, but I promise that by the time you finish this article, you will understand more than 99 per cent of U.S. economists and diplomats striking this self-righteous pose.
The dollar’s double standard gives America an international free ride
For over a century, central banks have managed exchange rates by raising or lowering the interest rate. Countries running trade and payments deficits raise rate to attract foreign funds. The IMF also directs them to impose domestic austerity programs that reduce asset prices for their real estate, stocks and bonds, making them prone to foreign buyouts. Vulture investors and speculators usually have a field day, as they did in the Asian crisis of 1997.
Conversely, low interest rates lead bankers and speculators to seek higher returns abroad, borrowing domestic currency to buy foreign securities or make foreign loans. This capital outflow lowers the exchange rate.
There is a major exception, of course: the United States. Despite running the world’s largest balance-of-payments deficit and also the largest domestic government budget deficit, it has the world’s lowest interest rates and easiest credit. The Federal Reserve has depressed the dollar’s exchange rate by providing nearly free credit to banks at only 0.25 per cent interest. This “quantitative easing” (making it easier to borrow more) aims at preventing U.S. real estate, stocks and bonds from falling further in price. The idea is to save banks from more defaults as the economy slips deeper into negative equity territory. A byproduct of this easy credit is to lower the dollar’s exchange rate – presumably helping U.S. exporters while forcing foreign producers either to raise the dollar price of their goods they sell here or absorb a currency loss.
This policy makes the dollar a managed currency. Low U.S. interest rates and easy credit spur investors to lend abroad or buy foreign assets yielding more than 1 per cent. This dollar outflow forces other countries to protect their currencies from being forced up. So their central banks do not throw the excess dollars they receive onto the “free market,” but keep them in dollar form by buying U.S. Government bonds. So the “Chinese savings,” “yen savings” and “Euro savings” that are spent on U.S. Treasury securities (and earlier, on Fannie Mae bonds to earn a bit more) are not really what Chinese people save in their local yuan, or what Japanese or Europeans save. The money used to buy U.S. Government securities consists of the excess dollars that the American military, American investors and American consumers spend abroad in excess of U.S. earning power. To pretend that these savings are “saved up” by foreigners (who save in their own currency, after all) is Junk Economics Error #1.
By lowering U.S. interest rates to near zero, the U.S. Federal Reserve is doing what the Bank of Japan did after its financial bubble burst in 1990, when it helped Japanese banks “earn their way out of negative equity” by providing cheap credit to obtain a markup by lending to speculators and arbitrageurs to buy foreign bonds paying higher rates. This came to be known as the “carry trade.” Arbitrageurs borrowed yen cheaply and converted them into Euros, dollars, Icelandic kroner or other currencies paying a higher rate, pocketing the difference. This threw yen onto foreign-exchange market, weakening the exchange rate and hence helping Japanese automotive and electronics exporters.
This is the easy credit policy that the Fed is following today. U.S. banks borrow from the Federal Reserve at 0.25 per cent, and lend to speculators at a markup of one or two percentage points. These speculators then look for companies, government bonds, corporate stocks and bonds and any other asset in a foreign currency that they believe may yield more than about 2 per cent (or that are denominated in currencies that may raise in price against the dollar by more than 2 per cent annually), hoping to pocket the difference.
Accusations that Japan, South Korea and Taiwan are “making their currencies cheaper” by recycling their dollar inflows into U.S. Treasury securities simply means that they are trying to maintain their currencies at a stable level. Even so, the yen’s exchange rate has risen as international borrowers pay off their carry-trade debts by re-converting the Euros, dollars and other currencies they borrowed in yen to play the arbitrage game. Paying back these foreign currency loans raises the yen’s price. To prevent this from pricing Japanese exporters out of world markets, Japan’s central bank is trying to stabilize the yen/dollar exchange rate by recycling these payments into the purchase of U.S. Treasury securities – exactly what U.S. officials accuse China of doing. It is how most central banks throughout the world are responding to the global dollar glut. They are increasing their international reserves by the amount of surplus free credit” dollars that the U.S. payments deficit is pumping out. To pretend that China is “manipulating its currency” by doing what central banks have done for over a century is Junk Economics Error #2. Back in the early 1970s, U.S. officials told OPEC governments that if they did not do this, it would be deemed an act of war. And Congress has refused to let China buy U.S. companies – so China can only recycle its dollar inflows by buying Treasury securities, thereby financing the U.S. federal budget deficit.
Every currency is managed by recycling dollars to avoid distorted exchange rates
To pretend that exchange rates are determined mainly by international trade is Junk Economics Error #3. International currency speculation and investment is much larger than the volume of commodity trade. The typical currency bet lasts less than a minute, often being computer-driven by arbitrage swap models. This financial fibrillation has dislodged exchange rates from purchasing-power parity or prices for export and imports.
The largest payments imbalances have little to do with “market forces” for imports and exports. They are what economists call price-inelastic – money spent without regard for price. This is true above all for military spending and maintenance of America’s vast network of foreign bases and political maneuverings to control foreign countries. During the 1960s and ‘70s U.S. military spending accounted for the entire balance-of-payments deficit, as private sector trade and investment remained in balance. Escalation of America’s oil war in the Near East and Pipelinistan, and the hundreds of billions of dollars spent to prop up America-friendly regimes, end up in central banks – whose main option, as noted above, is to send them back to the United States in the form of purchases of U.S. Treasury bills – to finance further federal deficit spending!
None of this can be blamed on China. But any nation that succeeds economically is assumed to be doing so at America’s expense if they do not let U.S. investors siphon off the entire surplus. This attitude that other countries should sacrifice themselves is sweeping Congress, whose China bashing is reminiscent of the Japan-phobia of the late 1980s. The United States convinced the Bank of Japan to raise the yen’s exchange rate in the 1985 Plaza Accord, and then to turn Japan into a bubble economy by flooding it with credit under the 1987 Louvre Accord. Tokyo was humorously referred to as “the 13th Federal Reserve district” for recycling its export earnings in U.S. Treasury bills, becoming the mainstay of the Reagan-Bush budget deficits that financed U.S. global military spending while quadrupling the public debt.
U.S. strategists would not mind seeing China’s economy similarly untracked by letting global speculators bid up the renminbi’s exchange rate – by enough to let Wall Street speculators make hundreds of billions of dollars betting on the run-up. “Free capital markets” and “open financial markets” are euphemisms for setting the renminbi’s exchange rate by U.S. and European currency arbitrage and capital flight. The U.S. balance-of-payments outflow would increase rather than shrink, thanks to the ability of American banks to create nearly “free” credit on their keyboards to convert into Chinese or other currencies, gold or other speculative vehicles that look to rise against the dollar.
“In a world awash with excess savings, we don’t need China’s money,” writes Prof. Krugman. After all, “the Federal Reserve could and should buy up any bonds the Chinese sell.” It’s all just electronic credit. From reading such diatribes, or President Obama’s exchange with Prime Minister Wen Jiabao at the United Nations on September 23, one would not realize that Chinese savers have not sent a single yuan of their own money to the United States.
But that is the point! Krugman should have reminded his readers that the balance of payments consists of much more than just the trade balance in today’s world swamped by financial speculation and military spending. What China “invests” in the United States are the dollars thrown off by the U.S. payments deficit. China would take a loss on the yuan-value of these dollars if it revalues its currency – as it has lost on the dollars it has turned over to Blackrock in the hope of making more than the minimal 1 per cent available on U.S. Treasury securities.
Describing China as “deliberately keeping its currency artificially weak. … feeding a huge trade surplus,” Krugman adds that “in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.” In his reading the problem is not that America has let easy bank credit bid up housing prices for its workers and loaded down their budgets with debt service that, by itself, exceeds the wage levels of most Asian workers. This financialization is largely responsible for the U.S. trade balance moving into deficit (apart from food and arms exports). Homeowners typically pay up to 40 per cent of their income for mortgage debt service and other carrying charges, 15 per cent for other debt (credit card interest and fees, auto loans, student loans, etc.), 11 per cent for FICA wage withholding for Social Security and Medicare, and about 10 to 15 per cent in other taxes (income and excise taxes). To cap matters, the financial burden of debt-leveraged real estate and consumption is aggravated by forced saving pension set-asides turned over to money managers for financial investment in these debt-leveraged financial instruments, and “financialized” wage withholding for Social Security. All these deductions are made before any money is left to buy food, clothing or other basic goods and services.
Chinese currency appreciation would make its exports cost more. But would this spur America rebuild its factories and re-employ the workforce that has been downsized and outsourced? To imagine that long-term investment responds to immediately is Junk Economics Error #4.
The same is true of international commodity trade. “An undervalued currency always promotes trade surpluses,” Krugman explains. But this is only true if trade is “price-elastic,” with other countries able to produce similar goods of their own at only marginally different prices. This is less and less the case as the United States and Europe de-industrialize and as their capital investment shrinks as a result of their expanding financial overhead ends in a wave of negative equity. To assume that higher exchange rates automatically reduce rather than increase a nation’s trade surplus is Junk Economics Error #5. It is a tenet of the free market fundamentalism that Krugman usually criticizes, except where China is concerned.
Krugman urges the United States to do what it “normally does” when other countries subsidize their exports: impose a tariff to offset the supposed subsidy. Congress is increasing the drumbeat of accusations that China is violating international trade rules by protecting itself from financialization. “Democrats in Congress are threatening to … slap huge tariffs on Chinese goods to undermine the advantages Beijing has enjoyed from a currency, the renminbi, that experts say is artificially weakened by 20 to 25 percent.” The aim is to make China “lift the strict controls on its currency, which keep Chinese exports competitive and more factory workers employed.” But such legislation is illegal under world trade rules. This has not stopped the United States in the past, but the believe that it might succeed internationally is Junk Economics Error #6.
This kind of propaganda does not see the United States as guilty of “managing the dollar” by its quantitative easing that depresses the exchange rate below what would be normal for any other economy suffering so gigantic and chronic s payments deficit. What makes this situation inherently unfair is that while the Washington Consensus directs other countries to impose austerity plans, raise their taxes on consumers and cut vital spending, the Bush-Obama administration blames China, not the U.S. financial system or post-Cold War military expansionism.
The cover story is that foreign exchange controls and purchase of U.S. securities keep the renminbi’s exchange rate low, artificially spurring its exports. The reality is that these controls protect China from U.S. banks creating free “keyboard credit” to buy out its companies or load down its economy with loans to be paid off in renminbi whose value will rise against the deficit-prone dollar.
The House Ways and Means Committee is demanding that China raise its exchange rate by 20 per cent. This would enable speculators to put down 1 per cent equity – say, $1 million to borrow $99 million and buy Chinese renminbi forward. The revaluation being demanded would produce a 20,000 per cent profit, turning the $100 million bet (and just $1 million “serious money”) into making $2 billion. It also would bankrupt Chinese exporters who had signed dollarized contracts with U.S. retailers. So it’s the arbitrage opportunity of the century that lobbyists are pressing for, not the welfare of workers.
The Internal Revenue Service treats such trading gains as “capital gains” and taxes them at only 15 per cent, much less than the tax rate on earned income that wage-earners must pay. The Brazilian real has risen by about 25 per cent against the dollar since January 2009. Last week, Brazil’s state oil company, Petrobras, issued $67 billion in shares to exploit the nation’s new oil discoveries. Foreigners have been swamping Brazil’s central bank with a reported $1 billion per day for the past two weeks – about 10 times its daily average in recent months – but this was largely to absorb money entering the country to take part in last week’s issue by the national oil company.
The U.S. and foreign economies alike are suffering from the idea that the way to get rich is by debt leveraging, and that the wealth of nations is whatever banks will lend – the “capitalization rate” of the available surplus. The banker’s dream is to lend against every source of revenue until it ends up being pledged to pay interest. Corporate raiders use business cash flow to pay bankers for the high-interest loans and junk bonds that provide them with takeover credit. Real estate investors use their rental income to service their mortgages, while consumers pay their disposable income as interest (and late fees) to the banks for credit cards, student loans and other debts.
But Paul Krugman and Robin Wells blame China for Wall Street’s junk mortgage binge. Instead of pointing to criminal behavior by the banks, brokerage companies, bond rating agencies and deceptive underwriters, they take the financial sector off the hook: “Just as global imbalances – the savings glut created by surpluses in China and other countries – played an important part in creating the great real estate bubble, they have an important role in blocking recovery now that the bubble has burst.”
This sounds more like what one would hear from a Wall Street lobbyist than from a liberal Democrat. It is as if the real estate bubble didn’t stem from financial fraud, junk mortgages, NINJA loans or the Federal Reserve flooding the U.S. economy with credit to inflate the real estate bubbles and sending electronic dollars abroad to glut the global economy. It’s China’s fault for running large trade surpluses “at the rest of the world’s expense.” The authors do not explain how it helps China or other economies to let foreign investors buy their companies at a 20 per cent return and pay in dollars that must be recycled to the U.S. Treasury earning just 1 per cent. And Congress won’t let the Chinese buy U.S. companies. It blocks such inflows, managing the economy ostensibly on national security grounds – in practice a structural payments deficit.
Wall Street’s idea of “equilibrium” is for foreign countries to financialize themselves along the lines that the United States is doing, then global equilibrium could be restored. But the most successful economies have kept their FIRE-sector costs of living and doing business within reasonable bounds, and are not remotely as debt-leveraged as the United States. German workers pay only about 20 per cent of their income for housing – about half the rate of their U.S. counterparts. German practice is not to make 100 per cent mortgage loans, but to require down payments in the range of 30 per cent such as characterized the United States as recently as the 1980s.
The FIRE sector’s business plan has priced U.S. labor out of world markets. There seems little likelihood of making Chinese and German workers pay rents or mortgage interest as high as the United States? How can American economic strategists force them to raise the price of their college and university tuition so that they must take on the enormous student loans of the magnitude that Americans have to assume? How can they be persuaded to follow the high-cost U.S. practice of adding FICA-type wage withholding to the cost of living to save up pensions, Social Security and medical insurance in advance, instead of the pay-as-you-go basis that Germany quite rightly follows?
Such suggestions are a cover story for America’s own financial mismanagement. The U.S. idea for global equilibrium is to demand that that the rest of the world follow suit in adopting the short-term time frame typical of banks and hedge funds whose business plan is to make money purely from financial maneuvering, not long-term capital investment. Debt creation and the shift of economic planning to Wall Street and similar global financial centers is confused with “wealth creation,” as if it were what Adam Smith was talking about.
A Proposal
China is trying to help by voluntarily cutting back its rare earth exports. It has almost a monopoly, accounting for 97 per cent of global trade in these 17 metallic elements. These exports are “price inelastic.” There is little known replacement cost once existing deposits are depleted. Yet China charges only for the cost of digging these rare metals out of the ground and refining them. They are used in military and other high-technology applications, from guided missile steering systems and computer hard drives to hybrid electric automobile batteries. This has prompted China to recently cut back its exports to save its land from environmental pollution and, incidentally, to build up its own stockpile for future use.
So I have a modest suggestion. If and when China starts re-exporting these metals, raise their price from a few dollars a pound to a few hundred dollars. According to a theory put forth by Paul Krugman and the U.S. Congress, this price increase should slow demand for Chinese exports. It also would help promote world peace and demilitarization, because these rare metals are key elements in missile guidance systems. China should build up its national security stockpile of these key minerals for the future – say, the next prospective five years of production. Let this be a test of the junk paradigms at work.
By MICHAEL HUDSON
It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, U.S. politicians and journalists are blaming it for America’s declining economic power. I realize that balance-of-payments accounting and international trade theory are arcane topics, but I promise that by the time you finish this article, you will understand more than 99 per cent of U.S. economists and diplomats striking this self-righteous pose.
The dollar’s double standard gives America an international free ride
For over a century, central banks have managed exchange rates by raising or lowering the interest rate. Countries running trade and payments deficits raise rate to attract foreign funds. The IMF also directs them to impose domestic austerity programs that reduce asset prices for their real estate, stocks and bonds, making them prone to foreign buyouts. Vulture investors and speculators usually have a field day, as they did in the Asian crisis of 1997.
Conversely, low interest rates lead bankers and speculators to seek higher returns abroad, borrowing domestic currency to buy foreign securities or make foreign loans. This capital outflow lowers the exchange rate.
There is a major exception, of course: the United States. Despite running the world’s largest balance-of-payments deficit and also the largest domestic government budget deficit, it has the world’s lowest interest rates and easiest credit. The Federal Reserve has depressed the dollar’s exchange rate by providing nearly free credit to banks at only 0.25 per cent interest. This “quantitative easing” (making it easier to borrow more) aims at preventing U.S. real estate, stocks and bonds from falling further in price. The idea is to save banks from more defaults as the economy slips deeper into negative equity territory. A byproduct of this easy credit is to lower the dollar’s exchange rate – presumably helping U.S. exporters while forcing foreign producers either to raise the dollar price of their goods they sell here or absorb a currency loss.
This policy makes the dollar a managed currency. Low U.S. interest rates and easy credit spur investors to lend abroad or buy foreign assets yielding more than 1 per cent. This dollar outflow forces other countries to protect their currencies from being forced up. So their central banks do not throw the excess dollars they receive onto the “free market,” but keep them in dollar form by buying U.S. Government bonds. So the “Chinese savings,” “yen savings” and “Euro savings” that are spent on U.S. Treasury securities (and earlier, on Fannie Mae bonds to earn a bit more) are not really what Chinese people save in their local yuan, or what Japanese or Europeans save. The money used to buy U.S. Government securities consists of the excess dollars that the American military, American investors and American consumers spend abroad in excess of U.S. earning power. To pretend that these savings are “saved up” by foreigners (who save in their own currency, after all) is Junk Economics Error #1.
By lowering U.S. interest rates to near zero, the U.S. Federal Reserve is doing what the Bank of Japan did after its financial bubble burst in 1990, when it helped Japanese banks “earn their way out of negative equity” by providing cheap credit to obtain a markup by lending to speculators and arbitrageurs to buy foreign bonds paying higher rates. This came to be known as the “carry trade.” Arbitrageurs borrowed yen cheaply and converted them into Euros, dollars, Icelandic kroner or other currencies paying a higher rate, pocketing the difference. This threw yen onto foreign-exchange market, weakening the exchange rate and hence helping Japanese automotive and electronics exporters.
This is the easy credit policy that the Fed is following today. U.S. banks borrow from the Federal Reserve at 0.25 per cent, and lend to speculators at a markup of one or two percentage points. These speculators then look for companies, government bonds, corporate stocks and bonds and any other asset in a foreign currency that they believe may yield more than about 2 per cent (or that are denominated in currencies that may raise in price against the dollar by more than 2 per cent annually), hoping to pocket the difference.
Accusations that Japan, South Korea and Taiwan are “making their currencies cheaper” by recycling their dollar inflows into U.S. Treasury securities simply means that they are trying to maintain their currencies at a stable level. Even so, the yen’s exchange rate has risen as international borrowers pay off their carry-trade debts by re-converting the Euros, dollars and other currencies they borrowed in yen to play the arbitrage game. Paying back these foreign currency loans raises the yen’s price. To prevent this from pricing Japanese exporters out of world markets, Japan’s central bank is trying to stabilize the yen/dollar exchange rate by recycling these payments into the purchase of U.S. Treasury securities – exactly what U.S. officials accuse China of doing. It is how most central banks throughout the world are responding to the global dollar glut. They are increasing their international reserves by the amount of surplus free credit” dollars that the U.S. payments deficit is pumping out. To pretend that China is “manipulating its currency” by doing what central banks have done for over a century is Junk Economics Error #2. Back in the early 1970s, U.S. officials told OPEC governments that if they did not do this, it would be deemed an act of war. And Congress has refused to let China buy U.S. companies – so China can only recycle its dollar inflows by buying Treasury securities, thereby financing the U.S. federal budget deficit.
Every currency is managed by recycling dollars to avoid distorted exchange rates
To pretend that exchange rates are determined mainly by international trade is Junk Economics Error #3. International currency speculation and investment is much larger than the volume of commodity trade. The typical currency bet lasts less than a minute, often being computer-driven by arbitrage swap models. This financial fibrillation has dislodged exchange rates from purchasing-power parity or prices for export and imports.
The largest payments imbalances have little to do with “market forces” for imports and exports. They are what economists call price-inelastic – money spent without regard for price. This is true above all for military spending and maintenance of America’s vast network of foreign bases and political maneuverings to control foreign countries. During the 1960s and ‘70s U.S. military spending accounted for the entire balance-of-payments deficit, as private sector trade and investment remained in balance. Escalation of America’s oil war in the Near East and Pipelinistan, and the hundreds of billions of dollars spent to prop up America-friendly regimes, end up in central banks – whose main option, as noted above, is to send them back to the United States in the form of purchases of U.S. Treasury bills – to finance further federal deficit spending!
None of this can be blamed on China. But any nation that succeeds economically is assumed to be doing so at America’s expense if they do not let U.S. investors siphon off the entire surplus. This attitude that other countries should sacrifice themselves is sweeping Congress, whose China bashing is reminiscent of the Japan-phobia of the late 1980s. The United States convinced the Bank of Japan to raise the yen’s exchange rate in the 1985 Plaza Accord, and then to turn Japan into a bubble economy by flooding it with credit under the 1987 Louvre Accord. Tokyo was humorously referred to as “the 13th Federal Reserve district” for recycling its export earnings in U.S. Treasury bills, becoming the mainstay of the Reagan-Bush budget deficits that financed U.S. global military spending while quadrupling the public debt.
U.S. strategists would not mind seeing China’s economy similarly untracked by letting global speculators bid up the renminbi’s exchange rate – by enough to let Wall Street speculators make hundreds of billions of dollars betting on the run-up. “Free capital markets” and “open financial markets” are euphemisms for setting the renminbi’s exchange rate by U.S. and European currency arbitrage and capital flight. The U.S. balance-of-payments outflow would increase rather than shrink, thanks to the ability of American banks to create nearly “free” credit on their keyboards to convert into Chinese or other currencies, gold or other speculative vehicles that look to rise against the dollar.
“In a world awash with excess savings, we don’t need China’s money,” writes Prof. Krugman. After all, “the Federal Reserve could and should buy up any bonds the Chinese sell.” It’s all just electronic credit. From reading such diatribes, or President Obama’s exchange with Prime Minister Wen Jiabao at the United Nations on September 23, one would not realize that Chinese savers have not sent a single yuan of their own money to the United States.
But that is the point! Krugman should have reminded his readers that the balance of payments consists of much more than just the trade balance in today’s world swamped by financial speculation and military spending. What China “invests” in the United States are the dollars thrown off by the U.S. payments deficit. China would take a loss on the yuan-value of these dollars if it revalues its currency – as it has lost on the dollars it has turned over to Blackrock in the hope of making more than the minimal 1 per cent available on U.S. Treasury securities.
Describing China as “deliberately keeping its currency artificially weak. … feeding a huge trade surplus,” Krugman adds that “in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.” In his reading the problem is not that America has let easy bank credit bid up housing prices for its workers and loaded down their budgets with debt service that, by itself, exceeds the wage levels of most Asian workers. This financialization is largely responsible for the U.S. trade balance moving into deficit (apart from food and arms exports). Homeowners typically pay up to 40 per cent of their income for mortgage debt service and other carrying charges, 15 per cent for other debt (credit card interest and fees, auto loans, student loans, etc.), 11 per cent for FICA wage withholding for Social Security and Medicare, and about 10 to 15 per cent in other taxes (income and excise taxes). To cap matters, the financial burden of debt-leveraged real estate and consumption is aggravated by forced saving pension set-asides turned over to money managers for financial investment in these debt-leveraged financial instruments, and “financialized” wage withholding for Social Security. All these deductions are made before any money is left to buy food, clothing or other basic goods and services.
Chinese currency appreciation would make its exports cost more. But would this spur America rebuild its factories and re-employ the workforce that has been downsized and outsourced? To imagine that long-term investment responds to immediately is Junk Economics Error #4.
The same is true of international commodity trade. “An undervalued currency always promotes trade surpluses,” Krugman explains. But this is only true if trade is “price-elastic,” with other countries able to produce similar goods of their own at only marginally different prices. This is less and less the case as the United States and Europe de-industrialize and as their capital investment shrinks as a result of their expanding financial overhead ends in a wave of negative equity. To assume that higher exchange rates automatically reduce rather than increase a nation’s trade surplus is Junk Economics Error #5. It is a tenet of the free market fundamentalism that Krugman usually criticizes, except where China is concerned.
Krugman urges the United States to do what it “normally does” when other countries subsidize their exports: impose a tariff to offset the supposed subsidy. Congress is increasing the drumbeat of accusations that China is violating international trade rules by protecting itself from financialization. “Democrats in Congress are threatening to … slap huge tariffs on Chinese goods to undermine the advantages Beijing has enjoyed from a currency, the renminbi, that experts say is artificially weakened by 20 to 25 percent.” The aim is to make China “lift the strict controls on its currency, which keep Chinese exports competitive and more factory workers employed.” But such legislation is illegal under world trade rules. This has not stopped the United States in the past, but the believe that it might succeed internationally is Junk Economics Error #6.
This kind of propaganda does not see the United States as guilty of “managing the dollar” by its quantitative easing that depresses the exchange rate below what would be normal for any other economy suffering so gigantic and chronic s payments deficit. What makes this situation inherently unfair is that while the Washington Consensus directs other countries to impose austerity plans, raise their taxes on consumers and cut vital spending, the Bush-Obama administration blames China, not the U.S. financial system or post-Cold War military expansionism.
The cover story is that foreign exchange controls and purchase of U.S. securities keep the renminbi’s exchange rate low, artificially spurring its exports. The reality is that these controls protect China from U.S. banks creating free “keyboard credit” to buy out its companies or load down its economy with loans to be paid off in renminbi whose value will rise against the deficit-prone dollar.
The House Ways and Means Committee is demanding that China raise its exchange rate by 20 per cent. This would enable speculators to put down 1 per cent equity – say, $1 million to borrow $99 million and buy Chinese renminbi forward. The revaluation being demanded would produce a 20,000 per cent profit, turning the $100 million bet (and just $1 million “serious money”) into making $2 billion. It also would bankrupt Chinese exporters who had signed dollarized contracts with U.S. retailers. So it’s the arbitrage opportunity of the century that lobbyists are pressing for, not the welfare of workers.
The Internal Revenue Service treats such trading gains as “capital gains” and taxes them at only 15 per cent, much less than the tax rate on earned income that wage-earners must pay. The Brazilian real has risen by about 25 per cent against the dollar since January 2009. Last week, Brazil’s state oil company, Petrobras, issued $67 billion in shares to exploit the nation’s new oil discoveries. Foreigners have been swamping Brazil’s central bank with a reported $1 billion per day for the past two weeks – about 10 times its daily average in recent months – but this was largely to absorb money entering the country to take part in last week’s issue by the national oil company.
The U.S. and foreign economies alike are suffering from the idea that the way to get rich is by debt leveraging, and that the wealth of nations is whatever banks will lend – the “capitalization rate” of the available surplus. The banker’s dream is to lend against every source of revenue until it ends up being pledged to pay interest. Corporate raiders use business cash flow to pay bankers for the high-interest loans and junk bonds that provide them with takeover credit. Real estate investors use their rental income to service their mortgages, while consumers pay their disposable income as interest (and late fees) to the banks for credit cards, student loans and other debts.
But Paul Krugman and Robin Wells blame China for Wall Street’s junk mortgage binge. Instead of pointing to criminal behavior by the banks, brokerage companies, bond rating agencies and deceptive underwriters, they take the financial sector off the hook: “Just as global imbalances – the savings glut created by surpluses in China and other countries – played an important part in creating the great real estate bubble, they have an important role in blocking recovery now that the bubble has burst.”
This sounds more like what one would hear from a Wall Street lobbyist than from a liberal Democrat. It is as if the real estate bubble didn’t stem from financial fraud, junk mortgages, NINJA loans or the Federal Reserve flooding the U.S. economy with credit to inflate the real estate bubbles and sending electronic dollars abroad to glut the global economy. It’s China’s fault for running large trade surpluses “at the rest of the world’s expense.” The authors do not explain how it helps China or other economies to let foreign investors buy their companies at a 20 per cent return and pay in dollars that must be recycled to the U.S. Treasury earning just 1 per cent. And Congress won’t let the Chinese buy U.S. companies. It blocks such inflows, managing the economy ostensibly on national security grounds – in practice a structural payments deficit.
Wall Street’s idea of “equilibrium” is for foreign countries to financialize themselves along the lines that the United States is doing, then global equilibrium could be restored. But the most successful economies have kept their FIRE-sector costs of living and doing business within reasonable bounds, and are not remotely as debt-leveraged as the United States. German workers pay only about 20 per cent of their income for housing – about half the rate of their U.S. counterparts. German practice is not to make 100 per cent mortgage loans, but to require down payments in the range of 30 per cent such as characterized the United States as recently as the 1980s.
The FIRE sector’s business plan has priced U.S. labor out of world markets. There seems little likelihood of making Chinese and German workers pay rents or mortgage interest as high as the United States? How can American economic strategists force them to raise the price of their college and university tuition so that they must take on the enormous student loans of the magnitude that Americans have to assume? How can they be persuaded to follow the high-cost U.S. practice of adding FICA-type wage withholding to the cost of living to save up pensions, Social Security and medical insurance in advance, instead of the pay-as-you-go basis that Germany quite rightly follows?
Such suggestions are a cover story for America’s own financial mismanagement. The U.S. idea for global equilibrium is to demand that that the rest of the world follow suit in adopting the short-term time frame typical of banks and hedge funds whose business plan is to make money purely from financial maneuvering, not long-term capital investment. Debt creation and the shift of economic planning to Wall Street and similar global financial centers is confused with “wealth creation,” as if it were what Adam Smith was talking about.
A Proposal
China is trying to help by voluntarily cutting back its rare earth exports. It has almost a monopoly, accounting for 97 per cent of global trade in these 17 metallic elements. These exports are “price inelastic.” There is little known replacement cost once existing deposits are depleted. Yet China charges only for the cost of digging these rare metals out of the ground and refining them. They are used in military and other high-technology applications, from guided missile steering systems and computer hard drives to hybrid electric automobile batteries. This has prompted China to recently cut back its exports to save its land from environmental pollution and, incidentally, to build up its own stockpile for future use.
So I have a modest suggestion. If and when China starts re-exporting these metals, raise their price from a few dollars a pound to a few hundred dollars. According to a theory put forth by Paul Krugman and the U.S. Congress, this price increase should slow demand for Chinese exports. It also would help promote world peace and demilitarization, because these rare metals are key elements in missile guidance systems. China should build up its national security stockpile of these key minerals for the future – say, the next prospective five years of production. Let this be a test of the junk paradigms at work.
Thursday, September 23, 2010
The Real Merchants of Death
By CONN HALLINAN
Accused Russian arms dealer Viktor Bout is a centerpiece for the book “Merchant of Death” and the model for the Hollywood movie “The Lord of War.” Washington apparently traded military hardware to the Thais in order to get him extradited from a Bangkok jail.
Major actor in the international arms trade, or a penny ante operator who can’t hold a candle to the real “merchants of death”?—the U.S., Russia, Britain, France, Italy, and immense corporations like Lockheed Martin, BAE Systems, General Dynamics, Dassault Aviation, Finmeccanica, Boeing, Rosoboronexport, and Northrop Grumman?
The global arms trade is a $60 billion yearly business, of which the U.S. controls nearly 40 percent, and a political and economic juggernaut that defends its turf with the ferocity of a junkyard dog.
Bout is like the guy you buy a Saturday night special from in a back alley. If you want something that will flatten a village you need a Massive Ordinance Penetrator from Boeing, or a General Atomics “Reaper” drone armed with Lockheed Martin “Hellfire” missiles.
The charges against him create an interesting juxtaposition.
The former Russian naval officer is accused of running guns to the Revolutionary Armed Forces of Colombia (FARC), the Taliban, and anti-government insurgents in Somalia. The U.S. has sent some $5 billion in military aid to the Colombian government to fight the FARC, has spent over $300 billion trying to defeat the Taliban, and props up the current Somali government.
There are arms dealers out there, but they are not sitting in a Bangkok prison. The 10 biggest arms exporters are—in order—the United States, Russia, Germany, France, the United Kingdom, Spain, China, Israel, the Netherlands, and Italy. Sweden and Switzerland are close behind. This order shifts from year to year, but one thing never changes: the U.S. is always number one.
According to the Congressional Research Service, due to the current economic downturn, world arms sales dipped 8.5 percent in 2009. But “dipped” is a relative term. The price tag was still $57.5 billion, of which the U.S.’s 39 percent share came to $22.6 billion. Russia was second at $10.4, and France third with $7.4 billion in sales. Other countries split the rest.
Most of the trade—$45.1 billion—focuses on developing nations. Of the top seven arms purchasers in 2008, four of them—India, Malaysia, Pakistan, and Algeria—are countries that can ill afford to put money into weapons systems.
Brazil, Venezuela, Egypt, and Vietnam were also among the bigger arms buyers in 2009, and Iraq is planning to purchase $13 billion in U.S. weaponry. All are countries struggling with poverty.
The U.S. overwhelmingly dominates arms sales to the developing world. In 2008 it cornered 68.4 percent of such sales, and 45.1 percent in 2009. (10) It is currently negotiating a $60 billion arms sale to Saudi Arabia that will probably cost $120 billion when parts and maintenance is added in.
Arms sales many times parallel the foreign policy of the suppliers. When the U.S. sells arms to Egypt, Israel, Jordan, Saudi Arabia, Kuwait, the United Arab Emirates, Colombia, Japan, and South Korea, it is arming its allies against regional antagonists, like Iran, Syria, China and Venezuela. Arms sales to places like Yemen and Somalia support U.S. allies caught up in civil wars.
But the arms trade is also an enormously profitable enterprise for the companies involved, and any effort to curb that trade brings on an assault of lobbyists and political action committees. Lockheed Martin, the world’s largest arms producer, spent over $20 million to lobby Congress in 2009.
The companies have carefully spread their operations to scores of states, so that when an effort is made to cutback or eliminate certain weapons, some local congress member will rise to defend jobs in his or her district.
When a move was made to cut the B-2 stealth bomber—an almost useless aircraft that cost $2.1 billion apiece—its manufacturer, Northrop Grumman, mobilized 383 congressional districts in 46 states to successfully save the plane.
In reality, military spending doesn’t create jobs, it kills them. According to a study by the Center for Economic and Political Research, military spending actually has a negative impact on economic growth. A one percent increase in defense spending—U.S. Defense Secretary Robert Gates’ current proposal—would, over 20 years, reduce GDP by 0.6 percent. That translates into approximately 700,000 jobs, with construction and manufacturing particularly hard hit.
While Gates talks about “efficiencies,” he is not proposing to cut the military budget, just trim things like health care and bureaucracy and shift those savings to support troops in the field.
“The long-term impact of our increased defense spending will be a reduction in GDP of 1.8 percent,” says economist Dean Baker. “The projected job loss from this increase in defense spending would be close to two million [jobs].”
The result of PACs and lobbing efforts by the arms companies is not only continued spending, but also expensive weapons systems that don’t work or are simply unneeded. The U.S. currently has 11 aircraft carriers in spite of the fact that no other nation possesses even one carrier that can match the huge $6.2 billion Nimitz-class vessels in the U.S. fleet.
Lockheed Martin’s taxpayer funded F-35 Joint Strike Fighter—at $184 million apiece, the most expensive weapons system ever built—is, according to arms analysts Pierre Sprey and Winslow Wheeler, an overweight, underpowered turkey that is so complex it will likely spend most of its time in the repair shop. Lockheed Martin is already taking orders from foreign buyers.
Many companies have responded to the recession by buying up enterprises specializing in defense electronics, cyber security, and the hottest new thing: killer robots.
Countries all over the world are clamoring to buy General Atomics’ Predators and Reapers, BAE’s Tiranis, and Israel’s Harpy and Heron, the latter a mega beast the size of a commercial airliner and capable of carrying a wide range of weapons. Predators runs $4.5 million apiece and the larger, more muscular Reaper, $10.5.
The international arms trade will not even notice if Viktor Bout ends up behind bars. Men like Bout are shadowy actors that play on the margins. To have a real impact on the global arms enterprise will require confronting powerful corporations, with their lobbies and their PACs, as well as an immense military establishment.
But according to Frida Berrigan of the Arms and Security Project of the New American Foundation, the Obama Administration is “investigating” how to make the selling of military technology easier.
A number of NGOs, including Amnesty International, the International Network on Small Arms, and Oxfam, are working on an arms trade treaty that would try to keep weapons out of the hands of human rights abusers.
But “human rights abusers” is a slippery term. For the U.S., Venezuela is a human rights abuser and can’t buy U.S. arms, while Honduras and Colombia are okay, even though regimes in both of the latter countries have been accused of working with death squads. The most Venezuelan President Hugo Chavez can be accused of is a certain love of bombast and strong opposition to Washington’s policies in the region.
A United Nations conference on drawing up an arms trade treaty is set for 2012, although there have been no serious negotiations to date. But such a treaty will need to do more than just get a handle on some of the more odious practices currently underway, it most restrict and then move toward an eventual ban on the trade itself.
Accused Russian arms dealer Viktor Bout is a centerpiece for the book “Merchant of Death” and the model for the Hollywood movie “The Lord of War.” Washington apparently traded military hardware to the Thais in order to get him extradited from a Bangkok jail.
Major actor in the international arms trade, or a penny ante operator who can’t hold a candle to the real “merchants of death”?—the U.S., Russia, Britain, France, Italy, and immense corporations like Lockheed Martin, BAE Systems, General Dynamics, Dassault Aviation, Finmeccanica, Boeing, Rosoboronexport, and Northrop Grumman?
The global arms trade is a $60 billion yearly business, of which the U.S. controls nearly 40 percent, and a political and economic juggernaut that defends its turf with the ferocity of a junkyard dog.
Bout is like the guy you buy a Saturday night special from in a back alley. If you want something that will flatten a village you need a Massive Ordinance Penetrator from Boeing, or a General Atomics “Reaper” drone armed with Lockheed Martin “Hellfire” missiles.
The charges against him create an interesting juxtaposition.
The former Russian naval officer is accused of running guns to the Revolutionary Armed Forces of Colombia (FARC), the Taliban, and anti-government insurgents in Somalia. The U.S. has sent some $5 billion in military aid to the Colombian government to fight the FARC, has spent over $300 billion trying to defeat the Taliban, and props up the current Somali government.
There are arms dealers out there, but they are not sitting in a Bangkok prison. The 10 biggest arms exporters are—in order—the United States, Russia, Germany, France, the United Kingdom, Spain, China, Israel, the Netherlands, and Italy. Sweden and Switzerland are close behind. This order shifts from year to year, but one thing never changes: the U.S. is always number one.
According to the Congressional Research Service, due to the current economic downturn, world arms sales dipped 8.5 percent in 2009. But “dipped” is a relative term. The price tag was still $57.5 billion, of which the U.S.’s 39 percent share came to $22.6 billion. Russia was second at $10.4, and France third with $7.4 billion in sales. Other countries split the rest.
Most of the trade—$45.1 billion—focuses on developing nations. Of the top seven arms purchasers in 2008, four of them—India, Malaysia, Pakistan, and Algeria—are countries that can ill afford to put money into weapons systems.
Brazil, Venezuela, Egypt, and Vietnam were also among the bigger arms buyers in 2009, and Iraq is planning to purchase $13 billion in U.S. weaponry. All are countries struggling with poverty.
The U.S. overwhelmingly dominates arms sales to the developing world. In 2008 it cornered 68.4 percent of such sales, and 45.1 percent in 2009. (10) It is currently negotiating a $60 billion arms sale to Saudi Arabia that will probably cost $120 billion when parts and maintenance is added in.
Arms sales many times parallel the foreign policy of the suppliers. When the U.S. sells arms to Egypt, Israel, Jordan, Saudi Arabia, Kuwait, the United Arab Emirates, Colombia, Japan, and South Korea, it is arming its allies against regional antagonists, like Iran, Syria, China and Venezuela. Arms sales to places like Yemen and Somalia support U.S. allies caught up in civil wars.
But the arms trade is also an enormously profitable enterprise for the companies involved, and any effort to curb that trade brings on an assault of lobbyists and political action committees. Lockheed Martin, the world’s largest arms producer, spent over $20 million to lobby Congress in 2009.
The companies have carefully spread their operations to scores of states, so that when an effort is made to cutback or eliminate certain weapons, some local congress member will rise to defend jobs in his or her district.
When a move was made to cut the B-2 stealth bomber—an almost useless aircraft that cost $2.1 billion apiece—its manufacturer, Northrop Grumman, mobilized 383 congressional districts in 46 states to successfully save the plane.
In reality, military spending doesn’t create jobs, it kills them. According to a study by the Center for Economic and Political Research, military spending actually has a negative impact on economic growth. A one percent increase in defense spending—U.S. Defense Secretary Robert Gates’ current proposal—would, over 20 years, reduce GDP by 0.6 percent. That translates into approximately 700,000 jobs, with construction and manufacturing particularly hard hit.
While Gates talks about “efficiencies,” he is not proposing to cut the military budget, just trim things like health care and bureaucracy and shift those savings to support troops in the field.
“The long-term impact of our increased defense spending will be a reduction in GDP of 1.8 percent,” says economist Dean Baker. “The projected job loss from this increase in defense spending would be close to two million [jobs].”
The result of PACs and lobbing efforts by the arms companies is not only continued spending, but also expensive weapons systems that don’t work or are simply unneeded. The U.S. currently has 11 aircraft carriers in spite of the fact that no other nation possesses even one carrier that can match the huge $6.2 billion Nimitz-class vessels in the U.S. fleet.
Lockheed Martin’s taxpayer funded F-35 Joint Strike Fighter—at $184 million apiece, the most expensive weapons system ever built—is, according to arms analysts Pierre Sprey and Winslow Wheeler, an overweight, underpowered turkey that is so complex it will likely spend most of its time in the repair shop. Lockheed Martin is already taking orders from foreign buyers.
Many companies have responded to the recession by buying up enterprises specializing in defense electronics, cyber security, and the hottest new thing: killer robots.
Countries all over the world are clamoring to buy General Atomics’ Predators and Reapers, BAE’s Tiranis, and Israel’s Harpy and Heron, the latter a mega beast the size of a commercial airliner and capable of carrying a wide range of weapons. Predators runs $4.5 million apiece and the larger, more muscular Reaper, $10.5.
The international arms trade will not even notice if Viktor Bout ends up behind bars. Men like Bout are shadowy actors that play on the margins. To have a real impact on the global arms enterprise will require confronting powerful corporations, with their lobbies and their PACs, as well as an immense military establishment.
But according to Frida Berrigan of the Arms and Security Project of the New American Foundation, the Obama Administration is “investigating” how to make the selling of military technology easier.
A number of NGOs, including Amnesty International, the International Network on Small Arms, and Oxfam, are working on an arms trade treaty that would try to keep weapons out of the hands of human rights abusers.
But “human rights abusers” is a slippery term. For the U.S., Venezuela is a human rights abuser and can’t buy U.S. arms, while Honduras and Colombia are okay, even though regimes in both of the latter countries have been accused of working with death squads. The most Venezuelan President Hugo Chavez can be accused of is a certain love of bombast and strong opposition to Washington’s policies in the region.
A United Nations conference on drawing up an arms trade treaty is set for 2012, although there have been no serious negotiations to date. But such a treaty will need to do more than just get a handle on some of the more odious practices currently underway, it most restrict and then move toward an eventual ban on the trade itself.
Sunday, September 12, 2010
There are no good men left here
September 10 - 12, 2010
The Kill Team in Afghanistan and the Kill Team at Home
No Good Men Left Here
By CHRISTOPHER KETCHAM
We already know enough from the Wikileaks Afghan archives to conclude that the news of the so-called “Kill Team” in Afghanistan – twelve US Army soldiers wantonly murdering and mutilating Afghan civilians – is no news at all. It is the norm of empire. It is the monstrous quotidian. Certainly there are many more instances like it that will never come to light.
The soldier who first revealed the predations of the Kill Team, in a post to his parents on Facebook, writes of Afghanistan that “There are no good men left here. It eats away at my conscience every day.” Would that it ate at his fellow Americans. The Team’s work, after all, is ours, paid for by us, abetted by our silence and our receivables, sanctioned by our standing up nowhere to be seen in opposition to a government that renders barbarism as statesmanship. The work, to be sure, consisted of that for which the Team was well-trained, their minds at ease for the labor, the empire having asked of them only to oil their muscles and derange their hearts enough to put into action the deranged policy programmed by the higher-ups behind the laptops and in the lounge chairs. That all war creates victims of soldiers, victimized by their own governments, is forgotten, yet it should be the axiom of the age.
If the Kill Team is guilty of what we’re told, then how judge them? The twelve soldiers now charged with premeditated murder, conspiracy, and “possessing human body parts” were said to have slaughtered innocent men, exploding their bodies with grenades or gunning them down, then laying into the dead flesh with knives. They collected as keepsakes the fingerbones, leg bones, teeth; one soldier carried off an Afghan skull as thanks for the memories.
They are guilty only of bringing the policy to its logical conclusion. The policy is lunatic. It has no purpose beyond its own justification, which is that it must succeed because it is our policy. It cannot succeed because it entails the subjugation of a fractious tribal people who have shown to history again and again that they will not be subjugated. The lunacy of the policy has its predictable effect on the troops who are meant to enforce it. Leaping on corpses to take scalps seems the natural course, the meaningful act in a meaningless affair, the occupation of Afghanistan finally making a twisted sense, freed of the hypocrisies of the political class. We are there with guns to kill other human beings, the corpses as totems of victory – the people subjugated at last! – an accomplishment where there is no victory to be had.
Godspeed, and more please. Or so we are to interpret the message from Congress, whose members, our very own representative kill team, year after year vote the appropriations for the continuing of the lunacy. The real kill team, of course, is in the White House, under the leadership of a Democratic president who, it’s clear by now, is covertly serving out George W. Bush’s third term in office. The kill team is an executive and its minions asserting the right of assassination of any person deemed fit, the Joint Chiefs of Staff drawing up “hit lists” that include American citizens, the Obama Administration expressly authorizing the CIA to bring down the death sentence on its select targets in the manner of a thunderbolt from the skies – no arrest, no charges, no trial, no defense, no prosecution, no process.
The same day the story of our centurions collecting fingerbones in Afghanistan hit the pages of the press, we might have looked to find the Ninth Circuit court, in its own way, educating the faithful soldiers in what is right and what is wrong. The circuit had ruled that the Obama Administration shall be free to continue the torture of human beings under cover of law. The case, Binyam Mohamed vs. Jeppesen Dataplan, Inc. – the defendant, a subsidiary of Boeing, contracts to provide the critical flight planning and logistical support for the CIA’s “extraordinary renditions” – was brought by the ACLU on behalf of five victims of torture. The victims, innocents all, attested that under the watch of the CIA and their other “extraordinary” handlers, they were beaten, their bones broken, their penises cut open, a “hot stinging liquid” poured into the open wounds, bottles pushed into their anuses, their arms shackled as they were hung from ceilings. At least one of them was placed for a month in a room with open sewage.
Barack Obama, following the lead of his predecessor, saw nothing wrong here, no need for truth or reconciliation or, god forbid, an apology, instead intervening in the case to prevent whatever “state secrets” the full hearing of the matter might reveal. And the Ninth Circuit dutifully decided in favor of the secrets to be kept. The court’s work is also, needless to say, part of the kill team. “There are no good men left here.”
The Kill Team in Afghanistan and the Kill Team at Home
No Good Men Left Here
By CHRISTOPHER KETCHAM
We already know enough from the Wikileaks Afghan archives to conclude that the news of the so-called “Kill Team” in Afghanistan – twelve US Army soldiers wantonly murdering and mutilating Afghan civilians – is no news at all. It is the norm of empire. It is the monstrous quotidian. Certainly there are many more instances like it that will never come to light.
The soldier who first revealed the predations of the Kill Team, in a post to his parents on Facebook, writes of Afghanistan that “There are no good men left here. It eats away at my conscience every day.” Would that it ate at his fellow Americans. The Team’s work, after all, is ours, paid for by us, abetted by our silence and our receivables, sanctioned by our standing up nowhere to be seen in opposition to a government that renders barbarism as statesmanship. The work, to be sure, consisted of that for which the Team was well-trained, their minds at ease for the labor, the empire having asked of them only to oil their muscles and derange their hearts enough to put into action the deranged policy programmed by the higher-ups behind the laptops and in the lounge chairs. That all war creates victims of soldiers, victimized by their own governments, is forgotten, yet it should be the axiom of the age.
If the Kill Team is guilty of what we’re told, then how judge them? The twelve soldiers now charged with premeditated murder, conspiracy, and “possessing human body parts” were said to have slaughtered innocent men, exploding their bodies with grenades or gunning them down, then laying into the dead flesh with knives. They collected as keepsakes the fingerbones, leg bones, teeth; one soldier carried off an Afghan skull as thanks for the memories.
They are guilty only of bringing the policy to its logical conclusion. The policy is lunatic. It has no purpose beyond its own justification, which is that it must succeed because it is our policy. It cannot succeed because it entails the subjugation of a fractious tribal people who have shown to history again and again that they will not be subjugated. The lunacy of the policy has its predictable effect on the troops who are meant to enforce it. Leaping on corpses to take scalps seems the natural course, the meaningful act in a meaningless affair, the occupation of Afghanistan finally making a twisted sense, freed of the hypocrisies of the political class. We are there with guns to kill other human beings, the corpses as totems of victory – the people subjugated at last! – an accomplishment where there is no victory to be had.
Godspeed, and more please. Or so we are to interpret the message from Congress, whose members, our very own representative kill team, year after year vote the appropriations for the continuing of the lunacy. The real kill team, of course, is in the White House, under the leadership of a Democratic president who, it’s clear by now, is covertly serving out George W. Bush’s third term in office. The kill team is an executive and its minions asserting the right of assassination of any person deemed fit, the Joint Chiefs of Staff drawing up “hit lists” that include American citizens, the Obama Administration expressly authorizing the CIA to bring down the death sentence on its select targets in the manner of a thunderbolt from the skies – no arrest, no charges, no trial, no defense, no prosecution, no process.
The same day the story of our centurions collecting fingerbones in Afghanistan hit the pages of the press, we might have looked to find the Ninth Circuit court, in its own way, educating the faithful soldiers in what is right and what is wrong. The circuit had ruled that the Obama Administration shall be free to continue the torture of human beings under cover of law. The case, Binyam Mohamed vs. Jeppesen Dataplan, Inc. – the defendant, a subsidiary of Boeing, contracts to provide the critical flight planning and logistical support for the CIA’s “extraordinary renditions” – was brought by the ACLU on behalf of five victims of torture. The victims, innocents all, attested that under the watch of the CIA and their other “extraordinary” handlers, they were beaten, their bones broken, their penises cut open, a “hot stinging liquid” poured into the open wounds, bottles pushed into their anuses, their arms shackled as they were hung from ceilings. At least one of them was placed for a month in a room with open sewage.
Barack Obama, following the lead of his predecessor, saw nothing wrong here, no need for truth or reconciliation or, god forbid, an apology, instead intervening in the case to prevent whatever “state secrets” the full hearing of the matter might reveal. And the Ninth Circuit dutifully decided in favor of the secrets to be kept. The court’s work is also, needless to say, part of the kill team. “There are no good men left here.”
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