Stand and Fight
by The Editors
The fight is over.
Let the fight begin.
First, we grieve for what was lost--the opportunity, which flickered
for a moment early on election day and then died, to steer the nation
onto a more reasonable and less destructive path. At the same time,
we salute the efforts of those many millions who mobilized themselves
to achieve a better outcome.
Next, we are angry about what the election of George W. Bush portends
for the country. Bush's victory will tighten the grip of the
Republican Party's virtual monopoly on the institutions of the
federal government. The checks and balances on presidential power
contemplated by the country's Founders are in tatters. Bush's
election gives him the chance to shape the Supreme Court to his
purposes: two branches of the government possibly lost in a single
election. Roe v. Wade and a host of other protections of basic human
rights are at risk. Bush is bound to try to assist the Christian
right in its fantastical efforts to "Christianize" public
institutions. Further inroads into the liberties of Americans are
likely, through a "Patriot Act II" and other legislation as well as
by executive fiat. In the near term, a terrible acceleration of the
violence in Iraq may be in the offing. In the longer term, new
aggressive wars may be launched. The transfer through regressive tax
cuts of hundreds of billions more from the poor and the middle class
to the rich and the super-rich has been announced.
Anger should lead to action. TV anchors and the candidates themselves
call for a new civility and ask the public to "come together" as one
people. Pay no attention. The progressive movement in this country
has suffered a huge reversal. But the struggle for the country's
future--and its very soul--was anything but settled. It will be
renewed at a higher level of intensity, and for higher stakes. There
must be a fierce, protracted resistance in defense of democracy. The
Nation dedicates itself to this cause. As a journalistic institution
unbeholden to and uninfluenced by any economic interest or political
power, we will continue to provide truthful information not available
on a timely basis--or sometimes at all--from the mainstream news
media, which too often during the campaign took slanders and pumped
them up into running news stories while failing to hold the
Administration accountable for its exaggerations and outright lies.
What might the Democratic Party learn from this election? First, that
a posture of meekness, resignation and accommodation leads to
failure. At no time during the campaign did the Democratic candidate
discuss in an honest way the single most important issue facing the
country: how to disengage from the war in Iraq. Second, that money,
while it can indeed make a major difference, is not the party's
problem; the familiar excuse that Republicans raise more campaign
funds was extinguished this year. Nor was the country at large
indifferent to Bush's alliance with industrial plunderers and his
shameful schemes to dismantle social, economic and environmental
protections; almost half the electorate voted against these things.
It would be a mistake to adopt the television stereotype of red
states and blue states. Many states of both colors were in fact
almost evenly divided. The Democratic elite are out of touch, as
Republicans claim. They have lost reliable connections to ordinary
people, including some long loyal constituencies. John Kerry did not
lose this election in the South (those defeats were fully expected).
He lost it in leading industrial states that, given their economic
condition, should have belonged to the Democrats. Kerry advocated
establishment views, on trade and globalization, for instance, that
distanced him from his natural constituency. He could not find the
words and images to speak authentically about their lives. He did not
offer plausible remedies to their pain.
Events are likely to create new chances for opposition and
resistance. At home and abroad, Bush has inherited his own messes.
The sputtering American economy is now Bush's to repair. A much
larger threat to his presidency is the deepening crisis of the global
economy, now burdened by swollen US trade deficits and towering
indebtedness to foreign creditors, including major trading partners
like China. The establishment in both parties avoided this subject
throughout the campaign, perhaps because they know it will mean a
very painful economic reckoning.
The debacle in Iraq that Bush created will also be his to face. At
least half of the country understands that the war in Iraq is
unwinnable. The most immediate need, perhaps, is for a revived
antiwar movement, which not only calls for a withdrawal from Iraq but
opposes and prevents new bloody adventures.
The Democratic Party is not the only vehicle for change.
Historically, that party's finest moments have come when it was
pushed into action from outside by popular movements, from the labor
movement to the civil rights movement to the women's movement to the
gay-rights movement. Such movements--independent of the Democratic
Party but powerfully influencing it--must foster and increase their
strength. The Nation will support these movements.
We must all stand and fight.
This article can be found on the web at:
http://www.thenation.com/doc.mhtml?i=20041122&s=editors
Visit The Nation
http://www.thenation.com/
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STAND AND FIGHT!
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
STAND AND FIGHT!
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Hammered
by John Nichols
Any election result that gives Tom DeLay cause for celebration--and,
make no mistake, the 2004 election gave the dark prince of Congress
plenty to celebrate--ought to send a sharp shiver through the
American body politic. Indeed, as depressing as the presidential
election results were, the news from House and Senate contests around
the country was worse. Now--or at least for as long as he can keep
ahead of his many legal and ethical challenges--DeLay will be the
dominant figure in Congress.
House Republicans went into the 2004 election cycle with a 227-205
advantage over the Democrats; they're likely to finish it with a
233-199 advantage. That's not a big shift, but it does represent a
dramatic victory for DeLay, the GOP majority leader, who redrew the
political map of Texas in order to increase his grip on the House. Of
five Democratic incumbents who had their districts drawn out from
under them, four lost. Only Representative Chet Edwards, who in one
of the nicer bits of electoral irony represents George W. Bush's
ranch in Crawford, won re-election. The one other bit of good news
was that the Democratic incumbent whom DeLay really wanted to beat,
progressive Lloyd Doggett, outsmarted the man they call The Hammer by
moving into a new district and building a coalition of working-class
Latinos and Austin-area liberals who gave him an easy win--and status
as the Lone Star antithesis of DeLay.
A few other races also went against DeLay's plan. Georgia Democrat
Cynthia McKinney fought her way back from a 2002 defeat and promises
to be a welcome thorn in the side of both Republican and Democratic
leaders. Colorado Democrat John Salazar, a rancher who ran on the
all-but-forgotten theme that Republican policies are bad for rural
America, won a GOP seat. The senior Republican in the House, Phil
Crane of Illinois, got beaten by Democrat Melissa Bean, whose
campaign focused on the need to protect the environment from the
right-wing wrecking crew in Congress. Bean will join a number of new
women in the House, including such progressives as Pennsylvania's
Allyson Schwartz and Florida's Debbie Wasserman Schultz, both of whom
emphasized the need for real healthcare reform.
Unfortunately, the good news tended to be about individual triumphs
because there was no clear set of Democratic themes and issues in
Congressional races. Democrats may get more focused once Congress
comes back into session; since they will be unable to pass much
legislation, their primary task now is to hold the line against an
energized Republican majority that promises a DeLay-driven agenda of
more tax cuts for the rich, opening up the Arctic National Wildlife
Refuge and privatizing Social Security. Minority leader Nancy Pelosi,
who after the Texas losses should feel less need to play to the
party's right, may get a chance to fight one of those battles soon if
Republicans try to use a lame-duck session of the House to pass
Bush's Central America Free Trade Agreement, which would extend
NAFTA-style free-trade policies south of Mexico. Another fight on
reauthorization of the Administration's "fast track" authority to
negotiate such agreements could come in March.
Pelosi will have her work cut out for her, however. And the Senate
will be a less effective buffer against DeLay's extremism than it was
in Bush's first term. Despite decent recruitment of candidates and
solid fundraising by the Senatorial Campaign Committee chair Jon
Corzine, the Democrats had a disastrous November 2. Minority leader
Tom Daschle became the first Senate leader to lose his seat since a
young Arizonan named Barry Goldwater swept out majority leader Ernest
McFarland. The Democrats lost five open Southern seats that had been
theirs. They also lost a contest for a Republican seat in Oklahoma
that seemed at one point to be winnable, and for the seat held by
Alaska Senator Lisa Murkowski, whose appointment by her father had
supposedly left her vulnerable. Had Democrats moved quickly enough,
they might have picked up a GOP seat in Kentucky, where incumbent Jim
Bunning's bizarre behavior almost shifted the seat to Democrat Dan
Mongiardo. But money for Mongiardo was too little, too late.
Democrats did pick up GOP seats in Colorado, where Ken Salazar won
comfortably, and in Illinois, where Barack Obama was a landslide
winner. Obama, to his credit, came out fighting, noting on election
night that "you still need sixty votes in the Senate to make things
happen." The likely new Senate Democratic leader, Nevada's Harry
Reid, should follow Obama's feisty example. Reid, who sided with
Daschle when the South Dakotan endorsed Bush's request for authority
to use force in Iraq, would do well to note that while Daschle went
down, the Democrats who broke ranks with their party leadership to
oppose the resolution were re-elected. Among them is Wisconsin
Senator Russ Feingold, who also clashed with Daschle before becoming
the only senator to oppose the Patriot Act. Against a millionaire
opponent who earned strong GOP backing, Feingold criticized the war,
defended the Constitution and was re-elected by a landslide--running
almost 150,000 votes ahead of the Democratic presidential ticket.
This article can be found on the web at:
http://www.thenation.com/doc.mhtml?i=20041122&s=nichols
Visit The Nation
http://www.thenation.com/
Subscribe to The Nation:
https://ssl.thenation.com/
by John Nichols
Any election result that gives Tom DeLay cause for celebration--and,
make no mistake, the 2004 election gave the dark prince of Congress
plenty to celebrate--ought to send a sharp shiver through the
American body politic. Indeed, as depressing as the presidential
election results were, the news from House and Senate contests around
the country was worse. Now--or at least for as long as he can keep
ahead of his many legal and ethical challenges--DeLay will be the
dominant figure in Congress.
House Republicans went into the 2004 election cycle with a 227-205
advantage over the Democrats; they're likely to finish it with a
233-199 advantage. That's not a big shift, but it does represent a
dramatic victory for DeLay, the GOP majority leader, who redrew the
political map of Texas in order to increase his grip on the House. Of
five Democratic incumbents who had their districts drawn out from
under them, four lost. Only Representative Chet Edwards, who in one
of the nicer bits of electoral irony represents George W. Bush's
ranch in Crawford, won re-election. The one other bit of good news
was that the Democratic incumbent whom DeLay really wanted to beat,
progressive Lloyd Doggett, outsmarted the man they call The Hammer by
moving into a new district and building a coalition of working-class
Latinos and Austin-area liberals who gave him an easy win--and status
as the Lone Star antithesis of DeLay.
A few other races also went against DeLay's plan. Georgia Democrat
Cynthia McKinney fought her way back from a 2002 defeat and promises
to be a welcome thorn in the side of both Republican and Democratic
leaders. Colorado Democrat John Salazar, a rancher who ran on the
all-but-forgotten theme that Republican policies are bad for rural
America, won a GOP seat. The senior Republican in the House, Phil
Crane of Illinois, got beaten by Democrat Melissa Bean, whose
campaign focused on the need to protect the environment from the
right-wing wrecking crew in Congress. Bean will join a number of new
women in the House, including such progressives as Pennsylvania's
Allyson Schwartz and Florida's Debbie Wasserman Schultz, both of whom
emphasized the need for real healthcare reform.
Unfortunately, the good news tended to be about individual triumphs
because there was no clear set of Democratic themes and issues in
Congressional races. Democrats may get more focused once Congress
comes back into session; since they will be unable to pass much
legislation, their primary task now is to hold the line against an
energized Republican majority that promises a DeLay-driven agenda of
more tax cuts for the rich, opening up the Arctic National Wildlife
Refuge and privatizing Social Security. Minority leader Nancy Pelosi,
who after the Texas losses should feel less need to play to the
party's right, may get a chance to fight one of those battles soon if
Republicans try to use a lame-duck session of the House to pass
Bush's Central America Free Trade Agreement, which would extend
NAFTA-style free-trade policies south of Mexico. Another fight on
reauthorization of the Administration's "fast track" authority to
negotiate such agreements could come in March.
Pelosi will have her work cut out for her, however. And the Senate
will be a less effective buffer against DeLay's extremism than it was
in Bush's first term. Despite decent recruitment of candidates and
solid fundraising by the Senatorial Campaign Committee chair Jon
Corzine, the Democrats had a disastrous November 2. Minority leader
Tom Daschle became the first Senate leader to lose his seat since a
young Arizonan named Barry Goldwater swept out majority leader Ernest
McFarland. The Democrats lost five open Southern seats that had been
theirs. They also lost a contest for a Republican seat in Oklahoma
that seemed at one point to be winnable, and for the seat held by
Alaska Senator Lisa Murkowski, whose appointment by her father had
supposedly left her vulnerable. Had Democrats moved quickly enough,
they might have picked up a GOP seat in Kentucky, where incumbent Jim
Bunning's bizarre behavior almost shifted the seat to Democrat Dan
Mongiardo. But money for Mongiardo was too little, too late.
Democrats did pick up GOP seats in Colorado, where Ken Salazar won
comfortably, and in Illinois, where Barack Obama was a landslide
winner. Obama, to his credit, came out fighting, noting on election
night that "you still need sixty votes in the Senate to make things
happen." The likely new Senate Democratic leader, Nevada's Harry
Reid, should follow Obama's feisty example. Reid, who sided with
Daschle when the South Dakotan endorsed Bush's request for authority
to use force in Iraq, would do well to note that while Daschle went
down, the Democrats who broke ranks with their party leadership to
oppose the resolution were re-elected. Among them is Wisconsin
Senator Russ Feingold, who also clashed with Daschle before becoming
the only senator to oppose the Patriot Act. Against a millionaire
opponent who earned strong GOP backing, Feingold criticized the war,
defended the Constitution and was re-elected by a landslide--running
almost 150,000 votes ahead of the Democratic presidential ticket.
This article can be found on the web at:
http://www.thenation.com/doc.mhtml?i=20041122&s=nichols
Visit The Nation
http://www.thenation.com/
Subscribe to The Nation:
https://ssl.thenation.com/
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
regynalonglank
- Posts: 1514
- Joined: Tue Sep 14, 2004 1:11 pm
- Location: in constant motion
- Contact:
the only thing i have really been able to come up with that i can do, me, myself, right now, is to live like it is the way i want it to be. be the future. to radiate from the center out...to keep flowing so that it can't come back at me, i don't want what's outside to get in and mess up my good thing. i have to shine that out, and make a river of yummy ponds of sweet around me and you and everywhere...cuz that's all i know how to do
\v/
/ \
just listen to the drum
/ \
just listen to the drum
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
We're All Israelis Now
Reflections on the Bush vicotry
Professor Mark Levine, U.C. Irvine | 11.04.2004
We‚re all Israelis Now By Mark LeVine
Three years ago, as the pungent odor of what was left of the World Trade Center slowly pervaded my neighborhood, I wrote a piece called „We‚re all Israelis Now.‰ I didn‚t invent the idea; in the hours since the attacks I had heard several commentators say essentially the same thing, although our meanings were in fact diametrically opposed. For them, the September 11 attacks had constituted a tragic wake up call to America about the mortal threat posed by Muslim terrorism, which Israel had been living through for decades and whose methods the US would now have to copy if it wanted to „win the war on terror.‰
For me, however, the attacks suggested a more troubling scenario: That like Israelis, Americans would never face the causes of the extreme violence perpetrated against us by those whose oppression we have supported and even enforced, and engage in the honest introspection of what our role has been in generating the kind of hatred that turns commuter jets into cruise missiles. Instead, my gut told me that we‚d acquiesce to President Bush‚s use of the war to realize the long-held imperial, even apocalyptic visions of the neoliberal Right, ones that find great sympathy with its Israeli counterpart.
As I watch George W. Bush celebrate his reelection I realize I never could have imagined just how much like Israelis we would become. Think about it: in Israel, the majority of Jewish citizens support the policies of Ariel Sharon despite the large-scale, systematic (and according to international law, criminal) violence his government deploys against Palestinian society, despite the worsening economic situation for the lower middle class religious voters who constitute his main base of support, despite rising international opprobrium and isolation. Sound familiar?
As for the country‚s „liberal‰ opposition, it‚s in a shambles, politically and morally bankrupt because in fact it was a willing participant in creating and preserving the system that is now eating away at the heart of Israeli society. Aside from occasional plaintive oped pieces by members of its progressive wing, the Labor Party can and will do nothing fundamentally to challenge Sharon‚s policies. Why? Because they reflect an impulse, nurtured by the Labor movement during its decades in power, that is buried deep in the heart of Zionism: to build an exclusively Jewish society on as much of the ancient homeland as possible, with little regard for the fate of the country‚s native inhabitants.
As any native American will remind us, America was built on a similar holy quest. So it shouldn‚t surprise us that the parallels between Israel‚s mini-empire and America‚s Iraq adventure are striking.
It‚s not just that America‚s occupation is faring as terribly as Israel‚s. In the last week--with more than enough time to influence the election--doctors from America‚s leading research hospitals published a study demonstrating that US forces have killed upwards of 100,000 Iraqis, the majority of them women and children killed by American bombs. In the context of the slow destructuring of the Iraqi state and the sowing of chaos across the country, this death toll comes perilously close to meeting the legal definition of genocide, which includes the intent to destroy a national group (in this case, a nation-state) coupled with activities that include killing, causing mental harm, and creating conditions bad enough to cause destruction of part of the nation. That about describes the situation I saw in my visit to the country this spring, and the condition most Iraqi friends describe today in my frequent emails and phone conversations with them.
Yet before November 2 Americans could at least say they weren‚t directly responsible for the disaster that has unfolded there in Iraq, since an unelected President had taken the country to war under false pretenses. No more. As of today, American society has declared its support for the invasion, and as such is morally and politically culpable for every single one of those 100,000 dead, and every single one of the tens of thousands of deaths that are sure to follow.
To put it bluntly, Americans have chosen to return a man to the White House who has supervised the killing of as many civilians as Slobodan Milosevic. We have signed onto a President who sanctions torture, who wantonly rejects any international treaty--Kyoto, the ABM and the International Criminal Court--that doesn‚t suit his messianic agenda. Who truly believes „God Almighty‰ is on his side.
America, in short, has become a criminal nation, and it must be stopped. (Yes, there are many other criminal nations, but aside from Israel how many even have the pretense of democracy? Russia? The Sudan? China? India is perhaps one; and given its sordid occupation of Kashmir it shouldn‚t surprise that a US-India-Israel axis of occupation and Islamophobia is one of the most prominent features of the world‚s geo-strategic post-9/11 landscape.)
In Israel most citizens know full well the realities of their occupation; even right-wing newspapers routinely publish articles that describe its details with enough clarity to make any ignorance willful. This dynamic is in fact why Israelis have responded to the civil war with Palestinians by increasing the dehumanization of the occupation, accompanied by a fervent practice of getting on with life no matter what‚s happening ten or fifteen miles away in „the Territories.‰ The alternative, actually working to stop the insanity of the occupation, would lead to much more hatred and violence within Israel and between Jews than Palestinians could ever hope to inflict on Israeli society from the outside.
The situation is almost identical vis-à-vis the American perspective on Iraq. Abu Ghraib? Mass civilian casualties caused by a war launched on demonstrably false pretenses? The erosion of civil liberties? The transfer of hundreds of billions of dollars of tax payer money (not to mention Iraqi resources and capital) by the US government to its corporate allies? To more than 70% of America‚s eligible votes--that is, the approximately thirty percent that voted for Bush and the forty percent that didn‚t feel this situation was compelling enough to warrant their taking the time to vote--none of it really matters. America is great and strong and can do what it wants, and to hell with anyone who gets in our way, especially if they fight back.
The numbing acceptance of large scale and systematic violence perpetrated by the state as a normal part of its exercise of power and the willingness of a plurality of the electorate to support parties and policies which are manifestly against their economic and social interests (as demonstrated by the increase in poverty and economic insecurity across the board in Israel and the US produced by the last two decades of neoliberalism) sadly characterize both societies today. This is why I never shared the optimism friends who thought this situation would help elect Kerry. Like Israel‚s Barak or Peres, in the context of a post-9/11 militant globalization, John Kerry offered Americans little more than Bush lite on the most crucial issue of the day. In America‚s increasingly obese culture, is there any wonder we chose SuperSize over Nutrasweet?
So here we are, three years after the tragic day of 9/11. The smell of charred metal, fuel and flesh no longer pervades the five boroughs of New York; instead it wafts across the major cities of Iraq (where most Americans don‚t have to smell it, but I can attest from personal experience that the odor in Baghdad is as pungent as in Queens). The Bush Administration is free to proceed with a violently imperialist foreign policy with little fear of repercussion or political cost at home--who cares about abroad?--the Left is stupefied at its own political and moral incompetence, and the people at large are increasingly split between a fundamentalist religious-nationalist camp, and a yuppie-liberal camp that has no real legs to stand on and has little hope of engaging the millions of poor and working class who have moved to the right because of „social issues.‰ Indeed, it is clear that they don‚t care if the rich are getting richer and the environment is going to Hell, as long as they‚re on the road to Heaven--or at least the Second Coming.
This situation reveals something dark, even frightening about America‚s collective character. Making the situation worse are the reasons why people voted for President Bush: the belief that he better represents America‚s „moral values,‰ along with the faith that he, not Kerry, will fight a „better and more efficient war on terror.‰ What kind of moral values the occupation of Iraq represents no one dares say. What kind of terror the US military has wrought in Iraq most Americans don‚t want to know.
Better to „stay the course‰ and pray for the safe return of the troops. Leave the troubling moral lessons of Iraq to be exorcised by Hollywood‚s or Nintendo‚s latest version of Rambo, helicoptering across the sands of Iraq blasting away yet more hapless Iraqi soldiers (as if enough weren‚t killed in the real war) and rescuing whatever is left of America‚s honor once the reality of a determined anti-colonial resistance drives America out of Iraq--the common fate of occupying powers across history.
Until such time, however, unimagined damage will likely be done to the world and America‚s standing in it. What are progressives to do about it? Whether in Israel or the US the liberal opposition--the Labor Party in Israel, the Democrats in the US--have proven themselves to be politically and morally bankrupt. They are dying parties and should be abandoned as quickly as possible in favor of the hard work of slowly building truly populist progressive parties that can reach out to, engage and challenge their more conservative and often religions compatriots who today look Right, not Left, to address their most basic needs.
In the meantime, the international community, especially the EU, most assert a defiant tone against US and Israeli militarism and perform the novel but fundamental role acting as a counterweight and alternative to America‚s imperial vision (at the same time, however, they must move beyond a narrow anti-American and anti-Zionist anti-imperialism to a broader critique of the larger system of Middle Eastern autocracy and violence, whose victims are no less deserving of our concern than Palestinians or Iraqis). But this will not happen on its own; it‚s up to citizens across the continent to ensure that their governments don‚t take the easy road of adopting a pragmatic approach of supporting the status quo and „working‰ with the Bush administration, while waiting for America to bleed itself dry in Iraq and other imperial adventures.
One thing is for sure. Bush and his millenarian policies can‚t be defeated by the kind of violence and hatred that guides his worldview. As Antonio Gramsci warned us seventy years ago, a „war of maneuver‰ or frontal assault on an advanced capitalist state by the Left cannot be won. Instead we need to dust off our copies of Gramsci‚s Prison Notebooks and buy a copy of Subcomandante Marcos‚s dispatches from the Lacondan jungle. Then perhaps we can find clues on how to fight a better and more efficient „war of position‰ against the terrifying prospect of four more years of George W. Bush.
While the Left has often turned to Gramsci for guidance, most commentators have ignored one of his most important insights: that however negative a role religion played in Italian society, it constituted the most important social force in the struggle against capitalism and fascism, without which the Left could never hope to achieve social hegemony against the bourgeoisie. This is because religion contains the kernel of „common sense‰ of the masses whose natural instinct is to rebel against the domination of the capitalist elite. But because it is largely unformed or articulated, it is easily manipulated by that elite--as Thomas Frank has so eloquently shown in his recent What‚s the Matter with Kansas and Michael Lerner and other Tikkun writers have argued for the last decade--and needs to be joined to the „good sense‰ of radically progressive intellectuals in order to shape the kind of ideology and political program that could attract the majority of the poor and middle class. But in this dialog the secular intellectuals would be transformed as much as the religious masses, creating the kind of organic unity that helped propel the religious Right from the margins of their party to the center of power.
It‚s sad but telling that a sickly political prisoner in fascist Italy writing from memory on scraps of paper could anticipate the struggle facing America today better than most contemporary leaders of the so-called Left (it also shows why Tikkun is more relevant now than ever). But never fear, if John Ashcroft has his way many of us will soon have a similar opportunity to learn the benefits of solitary confinement for producing innovative social theory. In the meantime if progressives don‚t figure out how to reach working class conservative Christians, before to long we will all be living through Bush‚s dreamt of apocalypse.
Mark Levine, a contributing editor to Tikkun magazine, teaches political science at University of California, Irvine.
Reflections on the Bush vicotry
Professor Mark Levine, U.C. Irvine | 11.04.2004
We‚re all Israelis Now By Mark LeVine
Three years ago, as the pungent odor of what was left of the World Trade Center slowly pervaded my neighborhood, I wrote a piece called „We‚re all Israelis Now.‰ I didn‚t invent the idea; in the hours since the attacks I had heard several commentators say essentially the same thing, although our meanings were in fact diametrically opposed. For them, the September 11 attacks had constituted a tragic wake up call to America about the mortal threat posed by Muslim terrorism, which Israel had been living through for decades and whose methods the US would now have to copy if it wanted to „win the war on terror.‰
For me, however, the attacks suggested a more troubling scenario: That like Israelis, Americans would never face the causes of the extreme violence perpetrated against us by those whose oppression we have supported and even enforced, and engage in the honest introspection of what our role has been in generating the kind of hatred that turns commuter jets into cruise missiles. Instead, my gut told me that we‚d acquiesce to President Bush‚s use of the war to realize the long-held imperial, even apocalyptic visions of the neoliberal Right, ones that find great sympathy with its Israeli counterpart.
As I watch George W. Bush celebrate his reelection I realize I never could have imagined just how much like Israelis we would become. Think about it: in Israel, the majority of Jewish citizens support the policies of Ariel Sharon despite the large-scale, systematic (and according to international law, criminal) violence his government deploys against Palestinian society, despite the worsening economic situation for the lower middle class religious voters who constitute his main base of support, despite rising international opprobrium and isolation. Sound familiar?
As for the country‚s „liberal‰ opposition, it‚s in a shambles, politically and morally bankrupt because in fact it was a willing participant in creating and preserving the system that is now eating away at the heart of Israeli society. Aside from occasional plaintive oped pieces by members of its progressive wing, the Labor Party can and will do nothing fundamentally to challenge Sharon‚s policies. Why? Because they reflect an impulse, nurtured by the Labor movement during its decades in power, that is buried deep in the heart of Zionism: to build an exclusively Jewish society on as much of the ancient homeland as possible, with little regard for the fate of the country‚s native inhabitants.
As any native American will remind us, America was built on a similar holy quest. So it shouldn‚t surprise us that the parallels between Israel‚s mini-empire and America‚s Iraq adventure are striking.
It‚s not just that America‚s occupation is faring as terribly as Israel‚s. In the last week--with more than enough time to influence the election--doctors from America‚s leading research hospitals published a study demonstrating that US forces have killed upwards of 100,000 Iraqis, the majority of them women and children killed by American bombs. In the context of the slow destructuring of the Iraqi state and the sowing of chaos across the country, this death toll comes perilously close to meeting the legal definition of genocide, which includes the intent to destroy a national group (in this case, a nation-state) coupled with activities that include killing, causing mental harm, and creating conditions bad enough to cause destruction of part of the nation. That about describes the situation I saw in my visit to the country this spring, and the condition most Iraqi friends describe today in my frequent emails and phone conversations with them.
Yet before November 2 Americans could at least say they weren‚t directly responsible for the disaster that has unfolded there in Iraq, since an unelected President had taken the country to war under false pretenses. No more. As of today, American society has declared its support for the invasion, and as such is morally and politically culpable for every single one of those 100,000 dead, and every single one of the tens of thousands of deaths that are sure to follow.
To put it bluntly, Americans have chosen to return a man to the White House who has supervised the killing of as many civilians as Slobodan Milosevic. We have signed onto a President who sanctions torture, who wantonly rejects any international treaty--Kyoto, the ABM and the International Criminal Court--that doesn‚t suit his messianic agenda. Who truly believes „God Almighty‰ is on his side.
America, in short, has become a criminal nation, and it must be stopped. (Yes, there are many other criminal nations, but aside from Israel how many even have the pretense of democracy? Russia? The Sudan? China? India is perhaps one; and given its sordid occupation of Kashmir it shouldn‚t surprise that a US-India-Israel axis of occupation and Islamophobia is one of the most prominent features of the world‚s geo-strategic post-9/11 landscape.)
In Israel most citizens know full well the realities of their occupation; even right-wing newspapers routinely publish articles that describe its details with enough clarity to make any ignorance willful. This dynamic is in fact why Israelis have responded to the civil war with Palestinians by increasing the dehumanization of the occupation, accompanied by a fervent practice of getting on with life no matter what‚s happening ten or fifteen miles away in „the Territories.‰ The alternative, actually working to stop the insanity of the occupation, would lead to much more hatred and violence within Israel and between Jews than Palestinians could ever hope to inflict on Israeli society from the outside.
The situation is almost identical vis-à-vis the American perspective on Iraq. Abu Ghraib? Mass civilian casualties caused by a war launched on demonstrably false pretenses? The erosion of civil liberties? The transfer of hundreds of billions of dollars of tax payer money (not to mention Iraqi resources and capital) by the US government to its corporate allies? To more than 70% of America‚s eligible votes--that is, the approximately thirty percent that voted for Bush and the forty percent that didn‚t feel this situation was compelling enough to warrant their taking the time to vote--none of it really matters. America is great and strong and can do what it wants, and to hell with anyone who gets in our way, especially if they fight back.
The numbing acceptance of large scale and systematic violence perpetrated by the state as a normal part of its exercise of power and the willingness of a plurality of the electorate to support parties and policies which are manifestly against their economic and social interests (as demonstrated by the increase in poverty and economic insecurity across the board in Israel and the US produced by the last two decades of neoliberalism) sadly characterize both societies today. This is why I never shared the optimism friends who thought this situation would help elect Kerry. Like Israel‚s Barak or Peres, in the context of a post-9/11 militant globalization, John Kerry offered Americans little more than Bush lite on the most crucial issue of the day. In America‚s increasingly obese culture, is there any wonder we chose SuperSize over Nutrasweet?
So here we are, three years after the tragic day of 9/11. The smell of charred metal, fuel and flesh no longer pervades the five boroughs of New York; instead it wafts across the major cities of Iraq (where most Americans don‚t have to smell it, but I can attest from personal experience that the odor in Baghdad is as pungent as in Queens). The Bush Administration is free to proceed with a violently imperialist foreign policy with little fear of repercussion or political cost at home--who cares about abroad?--the Left is stupefied at its own political and moral incompetence, and the people at large are increasingly split between a fundamentalist religious-nationalist camp, and a yuppie-liberal camp that has no real legs to stand on and has little hope of engaging the millions of poor and working class who have moved to the right because of „social issues.‰ Indeed, it is clear that they don‚t care if the rich are getting richer and the environment is going to Hell, as long as they‚re on the road to Heaven--or at least the Second Coming.
This situation reveals something dark, even frightening about America‚s collective character. Making the situation worse are the reasons why people voted for President Bush: the belief that he better represents America‚s „moral values,‰ along with the faith that he, not Kerry, will fight a „better and more efficient war on terror.‰ What kind of moral values the occupation of Iraq represents no one dares say. What kind of terror the US military has wrought in Iraq most Americans don‚t want to know.
Better to „stay the course‰ and pray for the safe return of the troops. Leave the troubling moral lessons of Iraq to be exorcised by Hollywood‚s or Nintendo‚s latest version of Rambo, helicoptering across the sands of Iraq blasting away yet more hapless Iraqi soldiers (as if enough weren‚t killed in the real war) and rescuing whatever is left of America‚s honor once the reality of a determined anti-colonial resistance drives America out of Iraq--the common fate of occupying powers across history.
Until such time, however, unimagined damage will likely be done to the world and America‚s standing in it. What are progressives to do about it? Whether in Israel or the US the liberal opposition--the Labor Party in Israel, the Democrats in the US--have proven themselves to be politically and morally bankrupt. They are dying parties and should be abandoned as quickly as possible in favor of the hard work of slowly building truly populist progressive parties that can reach out to, engage and challenge their more conservative and often religions compatriots who today look Right, not Left, to address their most basic needs.
In the meantime, the international community, especially the EU, most assert a defiant tone against US and Israeli militarism and perform the novel but fundamental role acting as a counterweight and alternative to America‚s imperial vision (at the same time, however, they must move beyond a narrow anti-American and anti-Zionist anti-imperialism to a broader critique of the larger system of Middle Eastern autocracy and violence, whose victims are no less deserving of our concern than Palestinians or Iraqis). But this will not happen on its own; it‚s up to citizens across the continent to ensure that their governments don‚t take the easy road of adopting a pragmatic approach of supporting the status quo and „working‰ with the Bush administration, while waiting for America to bleed itself dry in Iraq and other imperial adventures.
One thing is for sure. Bush and his millenarian policies can‚t be defeated by the kind of violence and hatred that guides his worldview. As Antonio Gramsci warned us seventy years ago, a „war of maneuver‰ or frontal assault on an advanced capitalist state by the Left cannot be won. Instead we need to dust off our copies of Gramsci‚s Prison Notebooks and buy a copy of Subcomandante Marcos‚s dispatches from the Lacondan jungle. Then perhaps we can find clues on how to fight a better and more efficient „war of position‰ against the terrifying prospect of four more years of George W. Bush.
While the Left has often turned to Gramsci for guidance, most commentators have ignored one of his most important insights: that however negative a role religion played in Italian society, it constituted the most important social force in the struggle against capitalism and fascism, without which the Left could never hope to achieve social hegemony against the bourgeoisie. This is because religion contains the kernel of „common sense‰ of the masses whose natural instinct is to rebel against the domination of the capitalist elite. But because it is largely unformed or articulated, it is easily manipulated by that elite--as Thomas Frank has so eloquently shown in his recent What‚s the Matter with Kansas and Michael Lerner and other Tikkun writers have argued for the last decade--and needs to be joined to the „good sense‰ of radically progressive intellectuals in order to shape the kind of ideology and political program that could attract the majority of the poor and middle class. But in this dialog the secular intellectuals would be transformed as much as the religious masses, creating the kind of organic unity that helped propel the religious Right from the margins of their party to the center of power.
It‚s sad but telling that a sickly political prisoner in fascist Italy writing from memory on scraps of paper could anticipate the struggle facing America today better than most contemporary leaders of the so-called Left (it also shows why Tikkun is more relevant now than ever). But never fear, if John Ashcroft has his way many of us will soon have a similar opportunity to learn the benefits of solitary confinement for producing innovative social theory. In the meantime if progressives don‚t figure out how to reach working class conservative Christians, before to long we will all be living through Bush‚s dreamt of apocalypse.
Mark Levine, a contributing editor to Tikkun magazine, teaches political science at University of California, Irvine.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
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The Imminent Peak and Decline of World Oil
SRA Quarterly I 2004
By C. J. Campbell*
An Issue of Mindset
The World’s population at the time of Christ was about 300 million, but with the help of primitive yet sustainable agriculture it grew slowly over the following seventeen centuries to 500 million. Then came coal that fired the Industrial Revolution facilitating manufacturing, transport and trade, and supplied also new type of energy that could be stored in the form of financial capital. That, in turn, laid the foundations of classical economic theory which extolled the open market as a means to conquer and control the constraints of Nature. The population doubled. The Coal Age was followed by the Oil Age that dawned in the 1850s providing a new more efficient energy supply which, once found, flowed from the ground without the help of pick and shovel. It prompted an epoch of unparalleled prosperity during which the world’s population grew six-fold exactly in parallel with oil production. The world was perceived to be embarking on a trajectory of limitless growth. It was at the same time recognised that wealth was unevenly distributed, but that was widely seen as a temporary imbalance while the developing world developed to attain the obese status of the developed.
A steady flow of oil-based energy to make all this possible was assumed to be as much a part of the natural order of things as are the rivers that flow from the mountains to the sea. There was nothing that could resist the march of man’s ingenuity; and there was nothing that open markets could not deliver. In political terms, two hot wars and a cold one during the twentieth century saw the virtual extinction of central planning, as the planet’s resources were converted to man’s use and misuse. The natural food supply was supplemented by new crop varieties relying on irrigation, synthetic nutrients and pesticides made from petroleum. The sky became festooned with vapour trails as tourists flocked in their masses to distant sunny beaches, while a continual convoy of container ships brought consumer durables from the most distant tentacles of the global market. A new trade in people developed as enterprising merchants found ways to export labour to the richer countries. Organised crime reached new heights as the quest for affluence took on a sinister turn.
In short, the twentieth century was an epoch of unparalleled prosperity that came to be seen as the natural order of things, being the legitimate and attainable objective for everyone.
The New Realism
But beneath the surface, doubts began to manifest themselves. Was this really the manifold destiny of man? Were the resources of the planet limitless? Were we perpetrating a mass extinction of species unparalleled in geological history? Were we exceeding the carrying capacity of the planet with its thin skin of sensitive atmosphere? Were the aquifers being drained and the fish stocks depleted? Gradually a new sub-current of awareness began to spread through the thinking world. Scientists spotted a hole in the protective ozone layer letting in potentially dangerous radiation. The temperatures began to rise, and questions were asked if emissions from man’s activities were changing the climate with unpredictable consequences. Some feared that a consequential rise in sea-level might drown many of the world’s cities, which were themselves becoming over-crowded and unsustainable.
But this new awareness, while often attracting lip-service from politicians, created new conflicts between so-called Optimists with a faith in traditional market mechanisms and the so-called Pessimists, who saw the need for a fundamental change in global management. Eco-warriors began to demonstrate against star-studded financiers contributing party funds. Politics in the West entered a vacuum as the traditional divide between right and left was submerged by the new affluence, while conditions elsewhere often degenerated into strife, conflict, civil war and disintegration.
The Role of Petroleum
A simple inventory reveals the central role of oil and natural gas in the modern world. The roads are choked with traffic, including enormous trucks transporting goods. Electricity, widely generated from oil and gas, provides light and power, heating and cooling throughout the world, as well as playing a critical part in most manufacturing processes. Petrochemicals and plastics are everywhere. But most important of all is the role of oil and gas in agriculture, fuelling the tractor, powering the irrigation pump, providing the synthetic nutrients and pesticides, and transporting the produce to market.
It seems only sensible therefore to ask just where this precious energy supply comes from and how much is left. More important than the amounts themselves is the issue of production rate. It has to follow a natural pattern: growing slowly from initial discovery to reach a peak before declining to exhaustion. The turning point at peak when growth gives way to decline is likely to be a discontinuity of historic and unprecedented proportions, given the central role of oil and gas in the economy.
The oil industry has been finding and producing oil for 150 years and has now learnt a great deal about its occurrence in nature. In short, it learnt that oil is derived from algae that proliferated at times of global warming to be preserved in stagnant rifts as the continents moved apart. In fact, the great bulk of the world’s oil comes from just two such epochs about 90 and 150 million years ago. Gas comes both from vegetal remains, as found for example in the deltas of tropical rivers, and ordinary oil where that has been heated excessively on deep burial. Once formed, the oil and gas, being under high pressure, moved upwards through the rocks. Some was dissipated; some escaped at the surface; but some was trapped in geological folds and against faults, where it occurs in the minute pores between the sand grains. Oil in a reservoir is like rising damp in an old wall, save that it moves faster being under high pressure.
The industry, with the help of modern seismic surveys and geochemistry, has now mapped the world’s more prospective areas, and has found most of the giant fields, which tend to be located early, being too large too miss. It is therefore now much easier to determine how much is left to find and produce than was previously the case. This progress has not however been matched by improvements in the reporting practices, which remain clouded and obscure. But for this confusion, the depletion of reserves and the corresponding decline in production would be self-evident.
Trends of Discovery and Production
It is axiomatic that oil and gas have to be found before they can be produced for the simple reason that they were formed in the geological past, as described above. It follows that production has to mirror earlier discovery after a time-lag. The discovery trend therefore provides a sound basis for forecasting future production.
To determine this vital indicator, we have to ask three simple questions:
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What was found, distinguishing all the many different categories, each with its own costs, characteristics and above all depletion profile;
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How much was found, measuring the volumes in the rock and the percentage recoverable;
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When was it found, backdating any revisions to the date of the original discovery.
While there are naturally degrees of uncertainty in all estimates, answering these questions poses no particular scientific or technical challenge. The problems arise in the reporting practices, which need to be explained briefly. They arose in the early days of the United States, which is almost unique in that the mineral rights belong to the landowner. It meant that the fields were physically divided instead of each owner having a percentage of the total, as was normally the case outside the United States. The reserves of each owner were a financial asset against which money could be borrowed. The Securities and Exchange Commission accordingly moved to impose strict rules about what could be reported for financial purposes. In short, Proved Producing Reserves refer to the estimated future production of current wells, whereas Proved Undeveloped Reserves refer to what can be produced by infill wells that have not yet been drilled.
It is a perfectly satisfactory system for the purpose for which it was designed. It was also applied outside the United States where the fields were produced as single entities, despite diverse ownership, with the full field reserves being routinely determined. The companies however found it expedient to follow the spirit of the SEC rules to report conservative estimates, which accordingly were revised upwards over time to present a comforting image of steady growth and good management. In practice, the companies tended to report the minimum they needed to present satisfactory financial results, building up for themselves a useful inventory of under-reported reserves that could be used to cushion the impact of any setback or disappointment that might arise. It was a perfectly pragmatic and sensible system for most purposes. It is only when we want to understand depletion that we need the right numbers, attributed to the right discovery dates.
Another major distortion arose with the expropriation of the holdings of the foreign companies in the major producing countries, which started in Mexico (1938) and Iran (1951) being followed in most of the others during the 1970s. Had the companies retained these relatively cheap and easy sources of supply they would have had good reason to produce them before turning to the difficult and costly sources offshore and in hostile environments. In those circumstances, the impact of rising cost and growing shortage would have been gradual and self-evident. But when they lost their prime sources, they had to turn elsewhere, and they worked flat out, imposing on the main producing governments the difficult task of matching production against demand to support price. These pressures led to the creation of OPEC, which decided to impose quotas on its members based in part on their reserves. In 1985, Kuwait added 50% to its reserves although nothing particular changed in the oilfields, reporting, as it transpires, not the reserves left but the total found. Three years later Venezuela doubled its reserves by the inclusion of large amounts of heavy oil, which had been known for many years but not previously counted as reserves. That led other Middle East countries to retaliate with massive overnight increases to protect their quota. In fact, it may have made sense to base quota on the amount found, not the remaining reserves, to avoid having to re-negotiate as production changed the relationships. It explains why the numbers have barely changed since. The question of how much was found involves an estimate of what percentage is recoverable, which in turn gave room for manipulation, with Saudi Arabia now claiming an extreme and implausible recovery of as much as 70%.
In short, the reserve estimates in the public domain, as published for example by the trade journals and the BP Statistical Review of World Energy, are grossly unreliable, giving an entirely misleading indication of the status of depletion. Another confusing practice is the reporting of Reserve to Production Ratio quoted in years. It is clearly absurd to imagine that production can remain constant for a given number of years and then stop dead overnight, when all fields are observed to decline gradually to exhaustion. It has misled many analysts, notably the International Energy Agency, to imagine that the reserves are sufficient to support growing production far into the future.
Still another source of confusion is a new study by the US Geological Survey, published in 2000 which was a departure from earlier estimates. It made an evaluation of the world’s basins applying a wide range of subjective probability for the amounts available to discovery over a 30-year period from 1995. An extreme example in East Greenland illustrates the issue, with the study claiming that there was a 95% probability of more than zero, namely at least one barrel, and a 5% probability of more than 112 Gb (billion barrels), from which a mean value of 47 Gb was computed. The USGS itself did not forecast future production as such, but others used the meanvalue as a basis for their scenarios, evidently not understanding its true meaning. In addition, the study applied a range of Reserve Growth factors of between 20% and 120%, evidently not appreciating that if the fields of the past should prove larger than estimated, it simply means that the decline in discovery would be even steeper.
But, fortunately, Harry Longwell[ii], a senior executive with ExxonMobil, has now thrown new light onto the matter publishing a graph on which Figure 1 is based, showing valid discovery estimates backdated to the discovery of the fields concerned. It is a straightforward task to forecast future discovery by extrapolating the decline, which has been relentless for forty years.
Figure 1
Determining the past discovery record is the first step in forecasting future production. Production in an individual field is observed to rise rapidly to peak, as the high-pressure oil is tapped, declining slowly thereafter to exhaustion. In other words, peak comes before the midpoint of depletion, when half the total has been produced. But in a country with a large number of fields found at different dates, the profiles average out to give a more symmetrical pattern, as first identifed by M.King Hubbert[iii], who correctly forecast in 1956 that the US-48 would peak around 1970. Such a model implies an unconstrained environment. It has not applied to the OPEC countries due to quota restrictions, nor to the world as a whole, which has been heavily influenced by the OPEC distortion that served to lower and delay the peak that would otherwise have been passed in the 1990s.
Still another issue to resolve is exactly what is being measured. The term Conventional is commonly applied to the relatively easy and cheap oil that follows such a pattern, although there is no standard definition of the term, adding to the confusion. Producing the heavy oils and bitumen of particularly Venezuela and Canada is more of a mining process, giving a very different long and low depletion profile. Polar and deepwater oil and gas, and Natural Gas Liquids have their own characteristics and profiles, further compounding the confusions.
The Date of Peak
It is evident from the foregoing discussion that estimating the date of peak is not an exact science, given the atrociously unreliable reporting practices. That said, careful investigation, using the skills of a detective and accessing confidential industry sources, can give a reasonable approximation, again subject to assumptions about economic factors that affect the level of demand and therefore actual production.
Figure 2
Many alternative elaborate models involving creaming curves, parabolic fractals and derivative logistic curves can contribute to the solution of the production profile, but there is much to be said for simplicity, given especially the uncertain nature of much of the data. The so-called ASPO[iv] model is a straightforward approach. It evaluates each country starting with published reserves and past production, which are duly adjusted to remove the worst of the anomalies, and then extrapolated to give the full discovery trend. The depletion rate (annual production as a percentage of what is left) and the midpoint of depletion may then be calculated. Most countries have now passed their midpoint, and the model assumes that their production will decline at the current depletion rate. Production to midpoint in the other countries is assessed on their individual circumstances, but since most are close to midpoint the assumptions are not critical. The model has a certain self-adjusting mechanism for if production turns out to be higher or lower than forecast that triggers a higher or lower depletion rate for the remainder.
It is much more difficult to model gas, although it is subject to the same depletion constraints. More was generated in nature than was the case for oil, but more was lost over geological time. In practice, gas has generally been produced at far below capacity, being constrained by pipeline limits. A typical profile accordingly gives a long plateau ending in an abrupt and unannounced cliff that arrives when the in-built spare capacity has been exhausted, as is now being experienced in the United States.
The resulting depletion model for oil and gas is illustrated in Figure 2. It shows that so-called Regular Oil (broadly the same as the ill-defined term, Conventional) reaches a peak in 2005, and that all liquids do so two years later[v].
Consequences
It comes as a rather shattering blow to find that the World’s premier energy supply that has driven economic prosperity for 150 years is within a few years of commencing its terminal decline. Do the numbers lie? Has some important factor been overlooked? Will miracle new technology kick in to radically change the position? Will new investment yield massive surprise discoveries in unlikely places? It further prompts the even more important question that, if this picture is even approximately right, why are governments not at this moment planning radical new strategies to deal with the situation?
No one can pretend to have the answers, but there are signs of a new awakening. The oil industry appears to have consciously, or unconsciously, grasped the issue in its actions, if not its words. It explains why the major companies have merged, reducing their number from seven to four; why they are shedding and outsourcing staff; and refraining from investment in refinery and marketing, which would surely be needed if throughput were to increase as officially projected by for example the International Energy Agency. ExxonMobil reveals that less than half the needed production to meet demand by 2010 can come from known fields; and BP, adopting a sunburst as its new logo, says that BP stands no longer for the venerable British Petroleum but for Beyond Petroleum. Meanwhile, Shell causes a furore in investment circles by downgrading its Proved Undeveloped Reserves by 20%, revealing that it has consumed its cushion of under-reported reserves which in the past would have made good any temporary set-back.
Many protestors carried placards reading No War for Oil in their opposition to the invasion of Iraq. Their objection may have been over-simplified, but there is at least a hint that control of the Middle East, having about one-third the World’s remaining oil, was one of the factors influencing the United States, which now imports 60% of its needs. It notably expresses no particular concern about many other regimes of questionable merit around the World.
The media, including the financial press, begin to pick up the story. They commonly express the so-called “balanced” view contrasting the so-called Optimists, who reject the notion of depletion, against the Pessimists, who draw attention to the reality of the discovery record. But there has been a subtle shift of emphasis taking the latter position much more seriously than hitherto. Curiously, the US Department of Defense has commissioned a major study by the Arlington Institute[vi] outlining the need for the United States to develop alternative energies as a matter of urgency, possibly revealing that it is deemed a Defense issue following the failed outcome of the Iraq engagement. The UK Department of Trade and Industry publishes a plot showing that the country’s oil and gas will be virtually exhausted by 2020[vii].
In short, public awareness is gradually growing. But there is little indication that the World’s governments are ready to actually admit to the gravity of the situation. They perceive themselves to be have been elected to deliver good news, and generally find it easier to react to a crisis than prepare for one. They are aided in their evasion of the issue by the International Energy Agency, which continues to issue absurd and implausible reports with its ample authority, in turn prompting similar studies[viii] by the European Union amongst others. It is hard to believe that the officials are so grossly mis-informed and ignorant of the essentials of depletion, but it is equally hard to believe that they are dedicated to deliberately misleading the countries for whom they are responsible.
The explanation perhaps returns to the issue of mindset, for the implications of reality are truly devastating, likely to undermine that world’s entire economic structure, which is built on perpetual growth, albeit overlain by business cycles. The reality of depletion undermines the bedrock of economic theory, with its conviction that shortage in an open market is impossible and that one resource seamlessly replaces another as the need arises. A few enlightened economists[ix] do address these issues, seeing energy, not money, as the essential driver of the world’s condition, but they are far from the mainstream. In short, it seems that we are the victims of a momentum, driven blindly even onward towards the crisis without hope of changing direction.
Nature however follows her own rules that far transcend the machinations of Homo Sapiens. It does not take too great a feat of imagination to picture what she has in store, although we can touch only on a few elements arising over the next two decades as depletion begins to bite in earnest. Important as depletion itself is, the growing perception of it may have an even greater impact, affecting attitudes and aspirations in many unseen ways. This may partly explain the reluctance of governments to address the issue, fearing that warnings might be self-fulfilling.
The rampant consumerism of to-day is clearly insupportable even for the affluent countries. The vision of the brightly-lit supermarket with its well-stocked shelves and ticking cash registers will have passed into history as high energy costs lead to a decline in transport and trade. This in itself has monumental implications leading to unemployment with grave social and political consequences. Urban conditions, already tense in many towns, will become extremely difficult. Armed vigilantes with large dogs will protect banks, shops and residential areas, as already witnessed in, for example, Bogota.
The World’s affluent owe their wealth to the shrewd manipulation of their financial assets on the stockmarkets, built on the assumption of perpetual if cyclic growth. New wealth has come primarily from indirect tax subsidies that treat remuneration as an allowable corporate operating expense. Much of this pseudo-capital will be destroyed by the economic slump that arises as investors begin to perceive reality. The Dow-Jones will have to sink, perhaps to one-third of its present level. The more perceptive investors will have discovered that there is in fact no safe haven, some even being forced to see merit in a plot of land sufficient to support them and their families.
The Maastricht Treaty has already paved the way for the European Union to move towards greater regionalism by dictating that no decision shall be taken at a level higher than it need be. Many countries are already subject to more extreme variants, suffering fragmentation, civil wars and warlordism, often on tribal lines. This trend can only increase in the future as small communities re-discover their identity and work towards their common good and survival. Membership to a community will become an extreme privilege, and high walls will be needed to keep out vagrants and marauding gangs of desperate people. The current wave of so-called terrorism is a foretaste, as the dispossessed react. The ones most at risk will be the presently most developed: the Afghans, for example, have already discovered how to live on little. Indeed, Christ may have got it right when he predicted that the Meek shall inherit the Earth.
If this is a realistic view of the landscape twenty years hence, it is hardly surprising that governments fail to goad themselves to prepare for it. What can they actually do to avert such a bleak outcome? But some places may survive better than others. Ireland, for example, could face the challenge reasonably well, if it closed its frontiers and reverted to self-sufficiency. It has a modest population, its previous excess having been removed by famine and emigration in the 19th Century, and it has well-watered green fields. Village windmills could provide lighting. Wood pellets from coppiced woods could provide minimal heating, while tidal rotors could supply Dublin with electricity. Co-operative farms could develop, and the cart-horse make a come back. Food could be bought in village markets; people could sing in pubs and drink local ale. The threats to the climate might recede, and the natural environment might generally recover.
One simple solution would be to adopt the proposed Rimini Protocol[x], that requires importing countries to cut their imports to match world depletion rate, now running at about 2.5% a year. It would leave world prices in reasonable relationship to actual cost, removing the threat of profiteering by the Middle East countries or whoever controls them. It would encourage the consumers to avoid waste, now running at a monumental level, and turn to renewable energies wherever possible. It would ease the tensions of the transition to the new world of declining oil supply.
These meandering thoughts aim to do no more than raise awareness of the many alternative issues and outcomes, which cannot be usefully defined or foretold. There remains however one single, irrefutable and over-riding element; namely that the world’s principal energy source that has made possible the excesses of the past century is heading into terminal decline without hope of reprieve.
Notes
*Chairman, Association for the Study of Peak Oil and Gas. Campbell took a D.Phil in geology at Oxford in 1957, before joining the oil industry. His career took him to Trinidad, Colombia, Australia, Papua, United States, United Kingdom, Ireland and Norway working variously for Texaco, BP, Amoco, Shenandoah, Aran and Fina. He started as an exploration geologist and ended as an Executive Vice-President. A second career opened in 1990 with a study of depletion with consultations to industry and government. He has written four books, many scientific papers and articles, also giving lectures and broadcasts. He was the founder of ASPO (The Association for the Study of Peak Oil and Gas), a network of scientists, now representing in most European countries.
USGS, 2000, World petroleum assessment - Description and results; DDS-60
[ii]Longwell H.,2002, The future of the oil and gas industry: past approaches ,new challenges; World Energy 5/3 2002
[iii] Hubbert M.K., 1956, Nuclear energy and the fossil fuels; Amer. Petrol. Inst. Drilling & Production Practice. Proc. Spring Meeting, San Antonio, Texas. 7-25.
[iv] See www.peakoil.net
[v] See ASPO Newsletter (www.asponews.org and www.peakoil.net ) and Campbell C.J.,1997 The Coming Oil Crisis; Multi-Science ISBN 0 906522 11 0
[vi] The Arlington Institute, 2003, A Strategy: Moving America Away From Oil, Office of Net Assessment Office of the Secretary of Defense, Department of Defense, Washington. http://www.arlingtoninstitute.org/libra ... %20Oil.pdf
[vii] Department of Trade and Industry, 2003, Petroleum potential of the United Kingdom Continental Shelf.
[viii]European Commission, 1999, European Union Energy Outlook To 2020; Special Issue, November 1999
[ix] Daly H., 2003, Steady-state economics; The Social Contract v8. n.3
[x] Campbell C.J., 2003, in The economics of the noble path conference, Rimini, Pio Manzu Research, (www.piomanzu.com)
© 2003-5. Sanders Research Associates. All rights reserved.
SRA Quarterly I 2004
By C. J. Campbell*
An Issue of Mindset
The World’s population at the time of Christ was about 300 million, but with the help of primitive yet sustainable agriculture it grew slowly over the following seventeen centuries to 500 million. Then came coal that fired the Industrial Revolution facilitating manufacturing, transport and trade, and supplied also new type of energy that could be stored in the form of financial capital. That, in turn, laid the foundations of classical economic theory which extolled the open market as a means to conquer and control the constraints of Nature. The population doubled. The Coal Age was followed by the Oil Age that dawned in the 1850s providing a new more efficient energy supply which, once found, flowed from the ground without the help of pick and shovel. It prompted an epoch of unparalleled prosperity during which the world’s population grew six-fold exactly in parallel with oil production. The world was perceived to be embarking on a trajectory of limitless growth. It was at the same time recognised that wealth was unevenly distributed, but that was widely seen as a temporary imbalance while the developing world developed to attain the obese status of the developed.
A steady flow of oil-based energy to make all this possible was assumed to be as much a part of the natural order of things as are the rivers that flow from the mountains to the sea. There was nothing that could resist the march of man’s ingenuity; and there was nothing that open markets could not deliver. In political terms, two hot wars and a cold one during the twentieth century saw the virtual extinction of central planning, as the planet’s resources were converted to man’s use and misuse. The natural food supply was supplemented by new crop varieties relying on irrigation, synthetic nutrients and pesticides made from petroleum. The sky became festooned with vapour trails as tourists flocked in their masses to distant sunny beaches, while a continual convoy of container ships brought consumer durables from the most distant tentacles of the global market. A new trade in people developed as enterprising merchants found ways to export labour to the richer countries. Organised crime reached new heights as the quest for affluence took on a sinister turn.
In short, the twentieth century was an epoch of unparalleled prosperity that came to be seen as the natural order of things, being the legitimate and attainable objective for everyone.
The New Realism
But beneath the surface, doubts began to manifest themselves. Was this really the manifold destiny of man? Were the resources of the planet limitless? Were we perpetrating a mass extinction of species unparalleled in geological history? Were we exceeding the carrying capacity of the planet with its thin skin of sensitive atmosphere? Were the aquifers being drained and the fish stocks depleted? Gradually a new sub-current of awareness began to spread through the thinking world. Scientists spotted a hole in the protective ozone layer letting in potentially dangerous radiation. The temperatures began to rise, and questions were asked if emissions from man’s activities were changing the climate with unpredictable consequences. Some feared that a consequential rise in sea-level might drown many of the world’s cities, which were themselves becoming over-crowded and unsustainable.
But this new awareness, while often attracting lip-service from politicians, created new conflicts between so-called Optimists with a faith in traditional market mechanisms and the so-called Pessimists, who saw the need for a fundamental change in global management. Eco-warriors began to demonstrate against star-studded financiers contributing party funds. Politics in the West entered a vacuum as the traditional divide between right and left was submerged by the new affluence, while conditions elsewhere often degenerated into strife, conflict, civil war and disintegration.
The Role of Petroleum
A simple inventory reveals the central role of oil and natural gas in the modern world. The roads are choked with traffic, including enormous trucks transporting goods. Electricity, widely generated from oil and gas, provides light and power, heating and cooling throughout the world, as well as playing a critical part in most manufacturing processes. Petrochemicals and plastics are everywhere. But most important of all is the role of oil and gas in agriculture, fuelling the tractor, powering the irrigation pump, providing the synthetic nutrients and pesticides, and transporting the produce to market.
It seems only sensible therefore to ask just where this precious energy supply comes from and how much is left. More important than the amounts themselves is the issue of production rate. It has to follow a natural pattern: growing slowly from initial discovery to reach a peak before declining to exhaustion. The turning point at peak when growth gives way to decline is likely to be a discontinuity of historic and unprecedented proportions, given the central role of oil and gas in the economy.
The oil industry has been finding and producing oil for 150 years and has now learnt a great deal about its occurrence in nature. In short, it learnt that oil is derived from algae that proliferated at times of global warming to be preserved in stagnant rifts as the continents moved apart. In fact, the great bulk of the world’s oil comes from just two such epochs about 90 and 150 million years ago. Gas comes both from vegetal remains, as found for example in the deltas of tropical rivers, and ordinary oil where that has been heated excessively on deep burial. Once formed, the oil and gas, being under high pressure, moved upwards through the rocks. Some was dissipated; some escaped at the surface; but some was trapped in geological folds and against faults, where it occurs in the minute pores between the sand grains. Oil in a reservoir is like rising damp in an old wall, save that it moves faster being under high pressure.
The industry, with the help of modern seismic surveys and geochemistry, has now mapped the world’s more prospective areas, and has found most of the giant fields, which tend to be located early, being too large too miss. It is therefore now much easier to determine how much is left to find and produce than was previously the case. This progress has not however been matched by improvements in the reporting practices, which remain clouded and obscure. But for this confusion, the depletion of reserves and the corresponding decline in production would be self-evident.
Trends of Discovery and Production
It is axiomatic that oil and gas have to be found before they can be produced for the simple reason that they were formed in the geological past, as described above. It follows that production has to mirror earlier discovery after a time-lag. The discovery trend therefore provides a sound basis for forecasting future production.
To determine this vital indicator, we have to ask three simple questions:
*
What was found, distinguishing all the many different categories, each with its own costs, characteristics and above all depletion profile;
*
How much was found, measuring the volumes in the rock and the percentage recoverable;
*
When was it found, backdating any revisions to the date of the original discovery.
While there are naturally degrees of uncertainty in all estimates, answering these questions poses no particular scientific or technical challenge. The problems arise in the reporting practices, which need to be explained briefly. They arose in the early days of the United States, which is almost unique in that the mineral rights belong to the landowner. It meant that the fields were physically divided instead of each owner having a percentage of the total, as was normally the case outside the United States. The reserves of each owner were a financial asset against which money could be borrowed. The Securities and Exchange Commission accordingly moved to impose strict rules about what could be reported for financial purposes. In short, Proved Producing Reserves refer to the estimated future production of current wells, whereas Proved Undeveloped Reserves refer to what can be produced by infill wells that have not yet been drilled.
It is a perfectly satisfactory system for the purpose for which it was designed. It was also applied outside the United States where the fields were produced as single entities, despite diverse ownership, with the full field reserves being routinely determined. The companies however found it expedient to follow the spirit of the SEC rules to report conservative estimates, which accordingly were revised upwards over time to present a comforting image of steady growth and good management. In practice, the companies tended to report the minimum they needed to present satisfactory financial results, building up for themselves a useful inventory of under-reported reserves that could be used to cushion the impact of any setback or disappointment that might arise. It was a perfectly pragmatic and sensible system for most purposes. It is only when we want to understand depletion that we need the right numbers, attributed to the right discovery dates.
Another major distortion arose with the expropriation of the holdings of the foreign companies in the major producing countries, which started in Mexico (1938) and Iran (1951) being followed in most of the others during the 1970s. Had the companies retained these relatively cheap and easy sources of supply they would have had good reason to produce them before turning to the difficult and costly sources offshore and in hostile environments. In those circumstances, the impact of rising cost and growing shortage would have been gradual and self-evident. But when they lost their prime sources, they had to turn elsewhere, and they worked flat out, imposing on the main producing governments the difficult task of matching production against demand to support price. These pressures led to the creation of OPEC, which decided to impose quotas on its members based in part on their reserves. In 1985, Kuwait added 50% to its reserves although nothing particular changed in the oilfields, reporting, as it transpires, not the reserves left but the total found. Three years later Venezuela doubled its reserves by the inclusion of large amounts of heavy oil, which had been known for many years but not previously counted as reserves. That led other Middle East countries to retaliate with massive overnight increases to protect their quota. In fact, it may have made sense to base quota on the amount found, not the remaining reserves, to avoid having to re-negotiate as production changed the relationships. It explains why the numbers have barely changed since. The question of how much was found involves an estimate of what percentage is recoverable, which in turn gave room for manipulation, with Saudi Arabia now claiming an extreme and implausible recovery of as much as 70%.
In short, the reserve estimates in the public domain, as published for example by the trade journals and the BP Statistical Review of World Energy, are grossly unreliable, giving an entirely misleading indication of the status of depletion. Another confusing practice is the reporting of Reserve to Production Ratio quoted in years. It is clearly absurd to imagine that production can remain constant for a given number of years and then stop dead overnight, when all fields are observed to decline gradually to exhaustion. It has misled many analysts, notably the International Energy Agency, to imagine that the reserves are sufficient to support growing production far into the future.
Still another source of confusion is a new study by the US Geological Survey, published in 2000 which was a departure from earlier estimates. It made an evaluation of the world’s basins applying a wide range of subjective probability for the amounts available to discovery over a 30-year period from 1995. An extreme example in East Greenland illustrates the issue, with the study claiming that there was a 95% probability of more than zero, namely at least one barrel, and a 5% probability of more than 112 Gb (billion barrels), from which a mean value of 47 Gb was computed. The USGS itself did not forecast future production as such, but others used the meanvalue as a basis for their scenarios, evidently not understanding its true meaning. In addition, the study applied a range of Reserve Growth factors of between 20% and 120%, evidently not appreciating that if the fields of the past should prove larger than estimated, it simply means that the decline in discovery would be even steeper.
But, fortunately, Harry Longwell[ii], a senior executive with ExxonMobil, has now thrown new light onto the matter publishing a graph on which Figure 1 is based, showing valid discovery estimates backdated to the discovery of the fields concerned. It is a straightforward task to forecast future discovery by extrapolating the decline, which has been relentless for forty years.
Figure 1
Determining the past discovery record is the first step in forecasting future production. Production in an individual field is observed to rise rapidly to peak, as the high-pressure oil is tapped, declining slowly thereafter to exhaustion. In other words, peak comes before the midpoint of depletion, when half the total has been produced. But in a country with a large number of fields found at different dates, the profiles average out to give a more symmetrical pattern, as first identifed by M.King Hubbert[iii], who correctly forecast in 1956 that the US-48 would peak around 1970. Such a model implies an unconstrained environment. It has not applied to the OPEC countries due to quota restrictions, nor to the world as a whole, which has been heavily influenced by the OPEC distortion that served to lower and delay the peak that would otherwise have been passed in the 1990s.
Still another issue to resolve is exactly what is being measured. The term Conventional is commonly applied to the relatively easy and cheap oil that follows such a pattern, although there is no standard definition of the term, adding to the confusion. Producing the heavy oils and bitumen of particularly Venezuela and Canada is more of a mining process, giving a very different long and low depletion profile. Polar and deepwater oil and gas, and Natural Gas Liquids have their own characteristics and profiles, further compounding the confusions.
The Date of Peak
It is evident from the foregoing discussion that estimating the date of peak is not an exact science, given the atrociously unreliable reporting practices. That said, careful investigation, using the skills of a detective and accessing confidential industry sources, can give a reasonable approximation, again subject to assumptions about economic factors that affect the level of demand and therefore actual production.
Figure 2
Many alternative elaborate models involving creaming curves, parabolic fractals and derivative logistic curves can contribute to the solution of the production profile, but there is much to be said for simplicity, given especially the uncertain nature of much of the data. The so-called ASPO[iv] model is a straightforward approach. It evaluates each country starting with published reserves and past production, which are duly adjusted to remove the worst of the anomalies, and then extrapolated to give the full discovery trend. The depletion rate (annual production as a percentage of what is left) and the midpoint of depletion may then be calculated. Most countries have now passed their midpoint, and the model assumes that their production will decline at the current depletion rate. Production to midpoint in the other countries is assessed on their individual circumstances, but since most are close to midpoint the assumptions are not critical. The model has a certain self-adjusting mechanism for if production turns out to be higher or lower than forecast that triggers a higher or lower depletion rate for the remainder.
It is much more difficult to model gas, although it is subject to the same depletion constraints. More was generated in nature than was the case for oil, but more was lost over geological time. In practice, gas has generally been produced at far below capacity, being constrained by pipeline limits. A typical profile accordingly gives a long plateau ending in an abrupt and unannounced cliff that arrives when the in-built spare capacity has been exhausted, as is now being experienced in the United States.
The resulting depletion model for oil and gas is illustrated in Figure 2. It shows that so-called Regular Oil (broadly the same as the ill-defined term, Conventional) reaches a peak in 2005, and that all liquids do so two years later[v].
Consequences
It comes as a rather shattering blow to find that the World’s premier energy supply that has driven economic prosperity for 150 years is within a few years of commencing its terminal decline. Do the numbers lie? Has some important factor been overlooked? Will miracle new technology kick in to radically change the position? Will new investment yield massive surprise discoveries in unlikely places? It further prompts the even more important question that, if this picture is even approximately right, why are governments not at this moment planning radical new strategies to deal with the situation?
No one can pretend to have the answers, but there are signs of a new awakening. The oil industry appears to have consciously, or unconsciously, grasped the issue in its actions, if not its words. It explains why the major companies have merged, reducing their number from seven to four; why they are shedding and outsourcing staff; and refraining from investment in refinery and marketing, which would surely be needed if throughput were to increase as officially projected by for example the International Energy Agency. ExxonMobil reveals that less than half the needed production to meet demand by 2010 can come from known fields; and BP, adopting a sunburst as its new logo, says that BP stands no longer for the venerable British Petroleum but for Beyond Petroleum. Meanwhile, Shell causes a furore in investment circles by downgrading its Proved Undeveloped Reserves by 20%, revealing that it has consumed its cushion of under-reported reserves which in the past would have made good any temporary set-back.
Many protestors carried placards reading No War for Oil in their opposition to the invasion of Iraq. Their objection may have been over-simplified, but there is at least a hint that control of the Middle East, having about one-third the World’s remaining oil, was one of the factors influencing the United States, which now imports 60% of its needs. It notably expresses no particular concern about many other regimes of questionable merit around the World.
The media, including the financial press, begin to pick up the story. They commonly express the so-called “balanced” view contrasting the so-called Optimists, who reject the notion of depletion, against the Pessimists, who draw attention to the reality of the discovery record. But there has been a subtle shift of emphasis taking the latter position much more seriously than hitherto. Curiously, the US Department of Defense has commissioned a major study by the Arlington Institute[vi] outlining the need for the United States to develop alternative energies as a matter of urgency, possibly revealing that it is deemed a Defense issue following the failed outcome of the Iraq engagement. The UK Department of Trade and Industry publishes a plot showing that the country’s oil and gas will be virtually exhausted by 2020[vii].
In short, public awareness is gradually growing. But there is little indication that the World’s governments are ready to actually admit to the gravity of the situation. They perceive themselves to be have been elected to deliver good news, and generally find it easier to react to a crisis than prepare for one. They are aided in their evasion of the issue by the International Energy Agency, which continues to issue absurd and implausible reports with its ample authority, in turn prompting similar studies[viii] by the European Union amongst others. It is hard to believe that the officials are so grossly mis-informed and ignorant of the essentials of depletion, but it is equally hard to believe that they are dedicated to deliberately misleading the countries for whom they are responsible.
The explanation perhaps returns to the issue of mindset, for the implications of reality are truly devastating, likely to undermine that world’s entire economic structure, which is built on perpetual growth, albeit overlain by business cycles. The reality of depletion undermines the bedrock of economic theory, with its conviction that shortage in an open market is impossible and that one resource seamlessly replaces another as the need arises. A few enlightened economists[ix] do address these issues, seeing energy, not money, as the essential driver of the world’s condition, but they are far from the mainstream. In short, it seems that we are the victims of a momentum, driven blindly even onward towards the crisis without hope of changing direction.
Nature however follows her own rules that far transcend the machinations of Homo Sapiens. It does not take too great a feat of imagination to picture what she has in store, although we can touch only on a few elements arising over the next two decades as depletion begins to bite in earnest. Important as depletion itself is, the growing perception of it may have an even greater impact, affecting attitudes and aspirations in many unseen ways. This may partly explain the reluctance of governments to address the issue, fearing that warnings might be self-fulfilling.
The rampant consumerism of to-day is clearly insupportable even for the affluent countries. The vision of the brightly-lit supermarket with its well-stocked shelves and ticking cash registers will have passed into history as high energy costs lead to a decline in transport and trade. This in itself has monumental implications leading to unemployment with grave social and political consequences. Urban conditions, already tense in many towns, will become extremely difficult. Armed vigilantes with large dogs will protect banks, shops and residential areas, as already witnessed in, for example, Bogota.
The World’s affluent owe their wealth to the shrewd manipulation of their financial assets on the stockmarkets, built on the assumption of perpetual if cyclic growth. New wealth has come primarily from indirect tax subsidies that treat remuneration as an allowable corporate operating expense. Much of this pseudo-capital will be destroyed by the economic slump that arises as investors begin to perceive reality. The Dow-Jones will have to sink, perhaps to one-third of its present level. The more perceptive investors will have discovered that there is in fact no safe haven, some even being forced to see merit in a plot of land sufficient to support them and their families.
The Maastricht Treaty has already paved the way for the European Union to move towards greater regionalism by dictating that no decision shall be taken at a level higher than it need be. Many countries are already subject to more extreme variants, suffering fragmentation, civil wars and warlordism, often on tribal lines. This trend can only increase in the future as small communities re-discover their identity and work towards their common good and survival. Membership to a community will become an extreme privilege, and high walls will be needed to keep out vagrants and marauding gangs of desperate people. The current wave of so-called terrorism is a foretaste, as the dispossessed react. The ones most at risk will be the presently most developed: the Afghans, for example, have already discovered how to live on little. Indeed, Christ may have got it right when he predicted that the Meek shall inherit the Earth.
If this is a realistic view of the landscape twenty years hence, it is hardly surprising that governments fail to goad themselves to prepare for it. What can they actually do to avert such a bleak outcome? But some places may survive better than others. Ireland, for example, could face the challenge reasonably well, if it closed its frontiers and reverted to self-sufficiency. It has a modest population, its previous excess having been removed by famine and emigration in the 19th Century, and it has well-watered green fields. Village windmills could provide lighting. Wood pellets from coppiced woods could provide minimal heating, while tidal rotors could supply Dublin with electricity. Co-operative farms could develop, and the cart-horse make a come back. Food could be bought in village markets; people could sing in pubs and drink local ale. The threats to the climate might recede, and the natural environment might generally recover.
One simple solution would be to adopt the proposed Rimini Protocol[x], that requires importing countries to cut their imports to match world depletion rate, now running at about 2.5% a year. It would leave world prices in reasonable relationship to actual cost, removing the threat of profiteering by the Middle East countries or whoever controls them. It would encourage the consumers to avoid waste, now running at a monumental level, and turn to renewable energies wherever possible. It would ease the tensions of the transition to the new world of declining oil supply.
These meandering thoughts aim to do no more than raise awareness of the many alternative issues and outcomes, which cannot be usefully defined or foretold. There remains however one single, irrefutable and over-riding element; namely that the world’s principal energy source that has made possible the excesses of the past century is heading into terminal decline without hope of reprieve.
Notes
*Chairman, Association for the Study of Peak Oil and Gas. Campbell took a D.Phil in geology at Oxford in 1957, before joining the oil industry. His career took him to Trinidad, Colombia, Australia, Papua, United States, United Kingdom, Ireland and Norway working variously for Texaco, BP, Amoco, Shenandoah, Aran and Fina. He started as an exploration geologist and ended as an Executive Vice-President. A second career opened in 1990 with a study of depletion with consultations to industry and government. He has written four books, many scientific papers and articles, also giving lectures and broadcasts. He was the founder of ASPO (The Association for the Study of Peak Oil and Gas), a network of scientists, now representing in most European countries.
USGS, 2000, World petroleum assessment - Description and results; DDS-60
[ii]Longwell H.,2002, The future of the oil and gas industry: past approaches ,new challenges; World Energy 5/3 2002
[iii] Hubbert M.K., 1956, Nuclear energy and the fossil fuels; Amer. Petrol. Inst. Drilling & Production Practice. Proc. Spring Meeting, San Antonio, Texas. 7-25.
[iv] See www.peakoil.net
[v] See ASPO Newsletter (www.asponews.org and www.peakoil.net ) and Campbell C.J.,1997 The Coming Oil Crisis; Multi-Science ISBN 0 906522 11 0
[vi] The Arlington Institute, 2003, A Strategy: Moving America Away From Oil, Office of Net Assessment Office of the Secretary of Defense, Department of Defense, Washington. http://www.arlingtoninstitute.org/libra ... %20Oil.pdf
[vii] Department of Trade and Industry, 2003, Petroleum potential of the United Kingdom Continental Shelf.
[viii]European Commission, 1999, European Union Energy Outlook To 2020; Special Issue, November 1999
[ix] Daly H., 2003, Steady-state economics; The Social Contract v8. n.3
[x] Campbell C.J., 2003, in The economics of the noble path conference, Rimini, Pio Manzu Research, (www.piomanzu.com)
© 2003-5. Sanders Research Associates. All rights reserved.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
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cowboyangel
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The negative return economy: a discourse on America’s black budget
July 4, 2004
Fascinating and lucrative patriotism,
The negative return economy: a discourse on America’s black budget*
*(Forthcoming in World Affairs, Journal of International Issues)
By Chris Sanders and Catherine Austin Fitts
Keep the people frightened
Of things they cannot know
Is the secret of the Tomb
If they knew what you and I know
They would know it is just men
Who rob them, cheat them, kill them
Then start it all again
Orville X
Introduction
The United States government has operated a secret budgeting and spending program for decades outside the framework of the American Constitution. The institutional and political roots of this system of clandestine finance reach back to at least a century. The turn of the 19th and 20th centuries saw the consolidation of American industry and banking under the control of a restrictive cartel that for all practical purposes assumed control of the economy. The great magnates of American industry and finance in the late nineteenth century were superb practitioners of covert operations. Witness to this fact are the institutions set up during the twentieth century through which their descendants maintain control.
This paper is a summary of the structure of the American political economy which fits the facts better than the official model. Officially, American capitalism is characterised by democracy, opportunity, self-improvement, open and free markets, and constructive regulation for the public good, in short, happiness. Under this construct America has never fought a war of aggression and harbours no designs to do so. Its leaders have the nation’s interests at heart, and its politicians listen to their constituencies. The truth is different. Why the United States is so widely misunderstood is due in part to a controlled educational system and media. As the system evolved over the decades, time lent it legitimacy spanning the political spectrum. Gustavus Meyers, author of the seminal work History of the Great American Fortunes and no panegyrist, believed – following Marx as did many on the left – that the consolidation of American industry was inevitable and that the men who accomplished it were acting their part in a predetermined historical evolution. Once monopoly control had been achieved, the proletariat would rise and its dictatorship would begin. We shy away from such determinism; nothing happens but as a consequence of what men do and choose to do. If Meyers were alive today, he would still be waiting.
Black Budget? What Black Budget?
At the time of the attack on the World Trade Center and the Pentagon in September 2001 according to the Government Accounting Office (GAO), Pentagon had incurred $3.4 trillion of “undocumentable transactions,” that is to say that there were $3.4 trillion worth of financial transactions for which there was no discernible purpose. The day before the attack, Secretary of Defense Donald Rumsfeld warned that the lack of control over its budget was a greater danger to the national security of the United States than terrorism. After the attacks, the government stopped publicly disclosing information about “undocumentable transactions”.
Blame the Bookkeeper
The problem is not restricted to the Pentagon but affects the entire spectrum of government agencies and departments from the Bureau of Indian Affairs to the Defense Department. For a number of years the GAO has compiled a parallel set of books for the Federal Government called the Financial Report of the United States. This report attempts to impose “Generally Accepted Accounting Principles” to the government’s financial reporting process in order to give a clearer picture of the government’s actual assets and liabilities and thereby enable better planning. Neither the Pentagon nor the Department of Housing and Urban Development (HUD), to name just two, have ever been able to pass a GAO audit on this basis.
Significantly, the government does not employ double entry bookkeeping in the preparation of its accounts. This has been standard accounting practice since the seventeenth century, which classifies and tracks sources and uses of funds to create an accurate picture of a business (or public) enterprise. Today the Pentagon utilises no accountable means of tracking money authorised by Congress from its initial authorisation to its use, say in developing a fighter plane. Running a 21st century military machine using antique accounting methods is an anomalous situation with interesting implications, not least of which is that government agencies cannot, or will not, explain what they are doing with the money that is appropriated for their operations by Congress.
A similar state of affairs prevails at the Department of Housing and Urban Development (HUD). It exists primarily, at least in law, to ensure that low income Americans have access to affordable housing, which HUD provides as well as both credit and credit insurance on a nationwide scale. Yet HUD has never compiled information on its activities so that it or anyone else can see, by place, whether or not its activities in that place make money, lose money, or are simply irrelevant.
Conflict of Interests
Few Americans are probably aware that Lockheed Martin, builder of the F22 air superiority fighter, is also a major outside contractor supplying financial control and accounting systems to the Pentagon. The Pentagon for its part is Lockheed Martin’s biggest customer. This example is by no means unique. Lockheed also has a subsidiary employed by HUD to administer housing in American cities, an unusual diversification for a corporation the majority of whose business is done with the military and intelligence agencies. [ii]
Similarly Dyncorp (recently acquired by Computer Sciences Corporation) is another contractor that, like Lockheed, derives almost all its revenue from government security and military contracts. It is also a contractor supplying information technology to a variety of government agencies including the Pentagon, HUD, the Securities and Exchange Commission (SEC) and the Department of Justice. At the Department of Justice it manages the case management software used by DOJ lawyers to manage investigations. [iii]
A prime example of overlapping interests is Herbert “Pug” Winokur. Not only was he on Dyncorp’s board of directors but he is also the Enron director in charge of that company’s risk management committee, and a long-standing board member of the Harvard Management Corporation, which invests in HUD projects.
AMS Inc., a computer software firm hired by HUD in 1996 to take over the management of its internal software for accounting and financial control, presided in two short years over an explosion in undocumentable transactions of nearly $76 billion. AMS violated fiduciary and control practices by installing its own equipment and software with no parallel runs against the legacy software and accounting system. In those same two years, HUD’s management more than tripled the volume of loan and insurance business being pushed through the system. Anyone familiar with running such systems in a bank or an insurance company immediately understands that a decision such as this (for it had to be a decision) would result in huge losses. [iv] Is this incompetence or design? Only the credulous would believe accident: the reward for Charles Rossotti, president of AMS, was to be named Internal Revenue Service (IRS) Commissioner at the Department of the Treasury, from which position he oversaw significant Treasury contract amendments to AMS. He was a direct beneficiary of this as a special White House waiver permitted Rossotti and his wife to retain their AMS stock.
Government’s response to criticism
The reaction of many people to the sorts of facts related above is to dismiss them as no more than evidence of incompetence and accident. The government does little to resist this sort of interpretation; on the contrary, it encourages it. For example, in response to calls for an investigation of its financial control, the Pentagon countered with an offer to investigate credit card abuse. Complaints about the performance of outside contractors such as AMS have been answered by a government-wide contract award to IBM for the standardisation of IT systems and practices. IBM, in turn, has awarded subcontracts to AMS, Lockheed, Dyncorp, SAIC and Accenture (formerly spun out from Arthur Andersen of Enron fame). It is these firms that have failed to provide systems that can pass a GAO audit. This manoeuvring and the government’s justifications affront common sense and are unethical. As private sector firms, they have to pass audits before their own accounts can be approved and reported to shareholders. Yet they routinely fail to meet the same standard for the government.
Often the government blames the previous, outgoing administration. However, consider that the incoming Bush administration replaced all the senior Clinton political appointees except: the Comptroller of the Currency, John D. Hawke; IRS commissioner Charles Rossotti (formerly of AMS); Comptroller General David Walker (Formerly of Arthur Andersen [v]– see http://www.npr.org/programs/npc/2001/01 ... alker.html) and CIA director George Tenet. In short, the key positions necessary for the control of the federal credit, financial control, audit and intelligence.
Comptroller of the Currency, John D. Hawke
control of the federal credit
IRS commissioner Charles Rossotti
financial control
Comptroller General David Walker
audit
CIA director George Tenet
intelligence
This undisturbed transition from Democratic to Republican administrations represents a remarkable cross-party consensus, and highlights the real positions of power. With the exception of Rossotti, all these men are still in place in 2004. And Rossotti? He left the IRS to become a senior adviser to the Carlyle Group for information technology. A more richly symbolic and meaningful job move could scarcely be imagined. Carlyle’s business is global venture venture capital, which is to say it invests in corporate acquisitions all over the world with a speciality in arms manufacturers and technology. The large levels of undocumentable transactions at HUD and the Department of Defense inevitably inspire curiosity. Where is the money associated with those transactions? It is no great leap of imagination to wonder equally where the Carlyle Group raises the money with which to finance its acquisitions. [vi]
The trusts are dead. Long live the trusts
The cartelisation of the American economy was for all intents and purposes completed by the end of the first decade of the twentieth century. [vii] In 1889, America’s leading banker JP Morgan held a meeting at his 5th Avenue mansion in New York. Its purpose was to reach a consensus whereby the owners of America’s railroads merged their competing interests. [viii] This was no mere group of transportation executives agreeing to fix prices. The railroads also controlled the nation’s coalfields and oil supplies, and were tightly bound to the nation’s largest banks. The creation of the Federal Reserve in 1914 completed this process of consolidation. In effect, Congress ceded control of the US currency system and the federal credit to the banks, thereby officially recognizing the cartel. This placed a relatively small number of men in a position to set prices across the economy with a degree of control heretofore unknown in US history.
The banking cartel’s interest in war
American foreign policy and the wars that America has fought over the course of the twentieth century (including the Spanish American War in 1898 [ix] and the present War on Terror) have successfully extended the cartel’s control over the world economy. The American Civil War was fought to determine control of the US economy. [x] Most Americans would explain the last 150 years of warfare as sadly necessary for reasons beyond America’s control. The implication is that America has accumulated its preponderant international position by some providential accident and not by design. Arguments for a contrary view elicit derisive accusations of falling victim to “conspiracy theory.” Reassuringly, they believe that self-interested individuals and organisations are incapable of collaboration to achieve common ends. When JP Morgan sat the owners of America’s railroads around a table and hammered out a non-compete agreement, it was no accident. Similarly, neither have America’s wars been accidents; they have been far more profitable than is widely understood. The US confiscated billions of dollars worth of German and Japanese war treasure at the end of World War Two. President Truman made a conscious decision to not reveal this to the public or repatriate it. Instead, it was used to finance covert operations. [xi]
Command economy
Popular myth has it that the trusts were broken up in the first decade of the twentieth century thanks to the crusade of Theodore Roosevelt on behalf of the middle class. Roosevelt certainly used his public stance against “big business” to successfully bid for campaign money from the very businessmen whom he was attacking. This perhaps explains why he subsequently signed legislation repealing criminal penalties for those same businessmen. This is a common trait of “liberal” or “progressive” presidents. The second Roosevelt, Franklin, is remembered as the champion of the downtrodden, who put an end to the Great Depression. It was he who established the nation’s social security system which in reality was (and is) funded by a highly regressive tax on its beneficiaries. Matching contributions from business were allowed to be deducted as a business expense before tax which simply extended the regressive nature of the program by financing business’ share out of foregone tax revenue. Roosevelt, a superb politician, won a landslide victory on a platform of reform which he adroitly sidestepped fulfilling. Instead, he declared a national economic emergency, short-circuiting any constitutional challenge to his power in the court. He promptly defaulted on the gold clause in the government’s bond contracts, and established the Exchange Stabilisation Fund (ESF) in 1934. Ostensibly meant to promote dollar stability in the foreign exchanges, the Fund in practice was and is something quite different. It is exempt from reporting to Congress and is answerable only to the President and Secretary of the Treasury. It is, in short, an undisclosed fund that can tap federal credit.
Apparatus of a Command Economy
The establishment of the ESF was an extension of the same logic behind the creation of the Federal Reserve in 1914. The latter, the Fed, was also created in response to a crisis: the crash of 1907. The Wall Street legend credits JP Morgan’s genius and patriotism with saving the Nation. In reality, the crash and resulting depression enabled Morgan to destroy his competitors, buy up their assets and in the process revealed to the nation and the world just how powerful the banks and Morgan were. Not all were grateful, and some demanded legislative action to bring the federal credit and national monetary system under public oversight and control. In a campaign of masterful political legerdemain, the Federal Reserve was created in 1912 by an act of Congress to do just this. But by creating it as a private corporation owned by the banks, Congress effectively ceded to the banks a position even stronger than they had occupied before. Even today it is not widely understood that the Fed is a privately held business owned by the very interests that it nominally regulates. Thus the control of federal credit and the US monetary system and the rich flow of insider information that results from that control are veiled from public view and are privately controlled in secret which rather explains the Delphic nature of the Fed’s chairman.
The extension of secret control was not limited to finance. The National Security Act of 1947 created the Central Intelligence Agency (CIA) and the National Security Council (NSC) and consolidated control of the three armed services under one roof at the Pentagon. This merely served to extend this principle of secrecy to the field of “national security.” Like the Fed, the CIA was exempted from public disclosure of its budget and was given budgetary control over the entire intelligence community, while the National Security Council was set up as a policy-making body separate from the existing organs of state policy such as the State Department and the military commands reporting directly to the president.
The CIA Act of 1949 created a budget mechanism that allowed the CIA to spend as much money as it wanted “without regard to the provisions of law and regulations relating to the expenditure of government funds.” In short, the CIA has a way to fund anything –legal or illegal – behind the protection of national security law. [xii]
Implementation
Having created the bureaucratic means to conceive and make policy in secret, the next development was to create the means to implement it. The main issue was how to control money flows in the national economy. The government’s solution was to assume a commanding position in the credit markets. To that end, it created first the Federal Housing Authority in 1934 (forerunner of HUD and now part of HUD) [xiii] and subsequently Ginnie Mae and then Fannie Mae and Freddie Mac, which are government sponsored enterprises (GSEs) to supply mortgage finance and insurance for homebuyers. The underlying political purpose is more subtle. Combined with the power of the Federal Reserve (i.e. the cartel) to set the price of money, the ESF, the GSEs, and latterly the Department of Housing and Urban Development (HUD), have proven to be a powerful force for regulating money flows and demand in the US economy.
The military, too, was reformed with the adoption for the first time in American history of a wartime military budget and force structure in peacetime. In the early 60s this was fine tuned with the adoption of an explicit cost-plus acquisition process. The justification for this was, as usual, national security. This military budget has proven as effective in regulating the industrial sector as control over home finance has proven in regulating credit. Together they confer virtual control over the economy as conventionally measured in terms of money GDP.
Credit, credit, and more credit
A few moments reflection on the institutional structure briefly outlined above makes clear the central importance of the federal credit in underwriting it. The federal government underwrites the GSEs by extending to them a subsidised line of credit from the Treasury. An additional indirect subsidy in the form of lower borrowing costs flows from the belief in the marketplace that this constitutes an implicit government guarantee of their solvency. While this subject from time to time excites controversy, the truth is that the GSEs are not the only corporate entities benefiting from government support. Since the failure of Continental Illinois in the early 80s, the government has informally made it clear that it stands behind the banking system. This was made even more explicit with the bailout of Citibank in the early 90s and the implicit subsidy that the entire banking industry received as a result. Nor are financial institutions the only ones to enjoy this kind of support. Both Lockheed Martin and Chrysler have been effectively saved from insolvency by the taxpayer in the past, presumably due to their status as major defence contractors.
Such a system places a significant value premium on sheer size, if for no other reason than what the banking system cheerfully and disingenuously refers to as the “too-big-to-fail” doctrine. But for industrial firms, too, there is significant value in having a contracting relationship with the Pentagon. Not only is there the economic nirvana of cost-plus contracting but, if you are big enough, your fundamental business risk is underwritten for national security reasons. Thus, there is a tendency for firms to migrate their businesses to military rather than purely civilian markets; today the Boeing Company is a perfect case study of this in action. And a result is that civilian business in sector after sector has been driven into insolvency or into acquisition by the very national security industry that is ostensibly protecting them. [xiv]
The dynamics of cost-plus contracting are such that profits rise as costs rise. [xv] This explains a great deal about the size of American military budgets, which have risen inexorably over the years even as military preparedness has fallen. [xvi] But as we have seen, the losses in terms of lower productivity are felt across wide swaths of the economy as non-military contracting competition is squeezed out or acquired. Obviously these losses in the real economy have to be financed, producing a higher demand for credit than would otherwise be the case. Given declining productivity and a narrowing production base, it was inevitable that at some point net exports would become negative, a condition that the US entered in 1982 and which has intensified since. Today the US net foreign debt [xvii] is on the order of $3,000 billion (30% of GDP) and is increasing at a rate of some $500 billion per year (5% of GDP). [xviii
Concentrating capital
To finance such a large foreign borrowing requirement without currency depreciation requires both the ability to control as much of the national cash flow as possible as well as the collaboration of at least a few key foreign countries to achieve the same sort of control over international cash flows. In the latter case, this takes the form, in part, of ever larger amounts of intervention on the part of those countries running dollar surpluses and strong net export positions to prevent the markets from driving the dollar lower. In practice this means that they accumulate more and more dollars, which they in turn invest in US Treasury securities. Foreigners now own some 45% of US Treasury debt outstanding. In January this year the Bank of Japan intervened in the currency markets on behalf of Japan’s Ministry of Finance, purchasing a whopping $69 billion in that month alone, or more than 30% of its total intervention in 2003 which was itself a record year.
Current trends
All of this may seem to have little to do with the black budget, which most people associate with intelligence covert “black” operations. The truth, however, is that the black budget cannot be understood in isolation without understanding the political, historical and economic context from which it springs. One way of understanding this is by comparing trends. For example, in 1950 the Dow Jones Industrials stood at 200, and today the Dow is at 10,600. In 1950 narcotics trafficking was a relatively unknown crime in the United States. Today it is endemic, and not only in cities but in smaller towns and rural communities as well. In 1950 the US possessed most of the world’s gold and was the world’s biggest creditor. Today it is the world’s biggest debtor. In 1950 the US was a major exporter of industrial goods to the rest of the world. On current trends the US is not self-sufficient in manufactured goods and will not even have a manufacturing industry worth the name by 2020.
Then and now…
1950 Dow Jones Industrials at 200
2004 Dow Jones Industrials 10,600
1950 Drug trafficking virtually unknown
2004 Drug trafficking endemic
1950 US had the largest gold reserves
2004 Gold reserves …
1950 US world’s biggest creditor
2004 US world’s biggest debtor
1950 US industrial giant
2004 US no longer self-sufficient
Narcotics trafficking and the stock market
Is there a connection between these trends or are they random? It may seem strange to think of a positive correlation between narcotics trafficking and the stock market, but consider: in the late 90s the US Department of Justice estimated that the proceeds of such trade entering the US banking system were between $500 and $1.000 billion annually, or more than 5-10% of GDP. Now the proceeds of crime need to find a way into legitimate, that is legal, channels or they are worthless to the holders. If one further imagines that the banking system earns a fee of 1% for handling this flow (rather low considering that money laundering is a seller’s market) then the profits for the banks from this activity are on the order of $5 to $10 billion. Applying Citigroup’s current stock market multiple of 15 or so to this yields a market capitalisation of anywhere from $65 to $115 billion. One can thus readily see the importance of the illegal drug trade to the financial services industry. As it happens, this trade in illegal profits is concentrated in four states: Texas, New York, Florida and California, or four Federal Reserve districts: Dallas, New York, Atlanta and San Francisco. Can anyone seriously suppose that the Fed is unaware of this if the Department of Justice is? It, after all, handles the flows.
Narcotics trafficking and the National Interest
One reason for the Fed’s silence is that agencies of the government itself have been involved in drug trafficking for sixty years or more. [xix] For the purposes of understanding the black budget, one needs to be aware of the American practice of opening the American consumer market for drugs to foreign exporters in order to pursue strategic objectives abroad. The portability of narcotics and the huge price mark up from production to point of sale makes them a particularly useful source of financing for covert operations. Even more important is that the proceeds from narcotics sales fall completely outside conventional, constitutional channels of funding. This helps explain the ubiquitous presence of narcotics trafficking in zones of conflict around the world, from Columbia to Afghanistan. [xx]
Little examined, however, is the impact of narcotics trafficking on communities and economies at the point of sale. Consider, for example, the impact on real estate markets and financial services. Real estate is an attractive area in which to employ the cash surplus resulting from narcotics sales because it is, as an industry, entirely unregulated with respect to money laundering. Because cash is an acceptable and in some places familiar method of payment, large sums can be disposed of easily and with little comment. This can and does result in considerable distortion to local demand, and in turn provide fuel for real estate speculation and increased credit demand to finance it along with considerable opportunities for speculation and fraud. [xxi] The Iran Contra episode during the 1980s contained all these elements; although many are familiar with the sale of arms to Iran to provide cash to finance CIA backed guerrillas in Nicaragua and death squads in El Salvador, less well-known is the systematic looting of local financial institutions and narcotics sales in the US. Banking allows the application of leverage to the cash that is generated by “illegal” activity while simultaneously making it possible to launder the funds. And when a bank fails, it is the shareholders, uninsured depositors and the taxpayer who pick up the bill. The point here us that narcotics trafficking creates a milieu in which the incentives to engage in uneconomic activity are greater than those to engage in economic activity. In a word, the profits from stealing are higher than the profits from playing by the rules.
What counts from a public policy point of view in the cartelised economy is the ability to control and concentrate cash flows of any kind. To this end, it is less important that a bank fails than that the federal credit is available to make good the losses. In doing so, the cash cost of losses is shifted, or socialised, to the national taxpayer base. As long, therefore, as there are willing lenders to the Federal Government, the game can go on.
Technology gives an edge
Government’s power combined with advancing computer technology has over the last thirty years vastly simplified the task of managing the national--and by extension the international--cash flow. Politically, the American victory in the Second World War meant that the entire West and its dependencies were co-opted into the International Monetary Fund (IMF) negotiated at Bretton Woods in 1944. Forty-five years later, the collapse of the Soviet Union in 1989 meant that for the first time in history there was no alternative monetary or political choice in the international arena. The British Empire had surrendered to the Americans precisely because America, represented an alternative to sterling, namely the dollar.
Today the US presides over a more or less fully closed global monetary system centred on the dollar. In practice this means that those countries within the system must exchange real value in the form of manufactures and commodities with the US cartel in exchange for dollars, which are no more than an accounting entry created out of thin air. This is analogous to a company with no assets exchanging watered stock for cash, and indeed this is no accident. It was a favoured technique by which the JP Morgans of the nineteenth century successfully financed the consolidation of American industry and finance. Today their heirs are busily dong the same thing, but on a global scale.
The diagram is a stylized representation of the relationship between the cartel and its allies outside the United States. Flows are both concrete and abstract. Concrete flows are manufactures, narcotics and commodities (mainly oil) inwards and arms outwards. Abstract flows are money outwards in payment for concrete flows inwards, which profits are recycled inwards where they both finance the inflation of the Federal Credit as well as buying political influence.
Technology has transformed the possibilities for creative management in banking. Its sheer number-crunching power has rendered the cost of iterative calculations to more or less zero. This has enabled the creation of a new sector in the industry, the derivatives business, which is nothing more than the breaking down of financial instruments such as stocks and bonds into their constitutive parts. This has increased the power of the banks many-fold, thanks to the cooperation of the Federal Reserve and Congress, who have allowed the banks to not only self-regulate their derivatives portfolios and businesses but have enacted rules to force other banks to use derivatives to “control” risk. In practice this has meant that the most profitable business of the banks has been moved off balance sheet, in effect creating a high level of secrecy in their business. It also confers a huge advantage on the largest banks to whom the others have to come for their derivatives. This has, in part, fuelled the manic consolidation in banking over the last twenty five years and has been applied with tremendous success internationally thanks to the imposition of the Basel Accords on money and banking which have forced other country’s financial institutions to either cooperate, which in practice has largely meant be acquired, or go out of business.
The banks’ tactics have been copied and refined by industry. An excellent example of this is the case of Enron, nominally an industrial company engaged in the production and transport of petroleum and natural gas, but which was transformed into a highly leveraged financial operation with a huge off balance sheet business trading derivatives. It secured a release from regulatory oversight by the time-tested method of purchasing lawmakers and by suborning its auditors. This gave it the power to restate earnings, virtually at will, simply by changing the assumptions on future interest rates embedded in the options, swaps and futures contracts constituting its unregulated derivatives book. Enron is a model also of the increasingly blurred distinction between the public and private sector. It employed as many as twenty CIA officers. One of its senior executives, Thomas White, was an army general before joining Enron and then left Enron to become Secretary of the Army. Enron executives were intimately involved with Vice President Richard Cheney’s energy task force. It is difficult to avoid concluding that Enron was anything other than a money-laundering operation employed in the interest of “National Security” on behalf of the cartel. [xxii]
The US has embarked on a costly global military adventure the outcome of which is anything but certain. This marks the culmination of more than fifty years of nearly continuous overt and covert warfare. In this it is supported by the most sophisticated financing apparatus in history, capable of mobilising the cash generated from a wide variety of activities both open and covert. The price has been the progressive hollowing out of the American economy itself, and the progressive erosion of civil liberties and the rule of law. The black budget is not the cause of this but the means.
About the authors
Catherine Austin Fitts is the founder of Solari, Inc and a member of the advisory board of Sanders Research Associates. Ms. Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, and President of The Hamilton Securities Group, Inc. She is a graduate of the University of Pennsylvania and The Wharton School.
Chris Sanders is a principle of Sanders Research Associates in London. Mr. Sanders has been a banker and asset manager for 21 years, and is a visiting professor in international finance at the School of Public Administration at the University of Göteburg in Sweden. He has degrees from in political science from Duke University and Arabic literature from the University of Michigan. He began his financial career as a private banker with Citibank in Saudi Arabia in 1979. Since 1984, he has lived in London and worked in the international investment management industry. He founded Sanders Research Associates in 1997.
Remark attributed to a Wall Street broker in 1895 describing J.P. Morgan. Gustavus Meyers (2002). History of the Great American Fortunes. University Press of the Pacific, Volume 3, p.225. Morgan, regularly portrayed as a patriot, was at the time deeply engrossed in relieving the government of its gold reserve.
[ii] Lockheed’s contract was recently terminated by HUD--an action that the company is contesting.
[iii] Dyncorp was appointed as well to run the Department of Justice’s asset forfeiture program in 1993, winning a $60 million five year contract to do so.
[iv] For an insider’s account of the problems at HUD, see Catherine Austin Fitts, The Myth of the Rule of Law at www.sandersresearch.com.
[v] See http://www.npr.org/programs/npc/2001/01 ... alker.html
[vi] See Dan Briody (2003), The Iron Triangle, Inside the Secret World of the Carlyle Group. John Wiley & Sons: Hoboken. ISBN 0-471-28108-5. Carlyle’s phenomenal success as an investment firm owes a great deal to its ability to lure former political figures and senior industry executives onto its executive team and advisory board. Examples are former US President George H.W. Bush and former British Prime Minister John Major; Frank Carlucci, former deputy director of the CIA and former Secretary of Defense; James Baker III, former Secretary of State; Richard Darman former director of the Office of Management and Budget; Colin Powell, former Chairman of the Joint Chiefs of Staff and present Secretary of State (a Carlucci protégé); William Kennard, former head of the Federal Communications Commission; Arthur Levitt, former chairman of the Securities and Exchange Commission; Park Tae Joon, former Prime Minister of the Republic of Korea, and Louis Gerstner, former chairman of IBM. Of some interest as well has been the involvement of the Bin Laden family as major private investors in the Carlyle Group, represented by Shafiq Bin Laden, a brother of Osama Bin Laden.
[vii] For a brilliant history of the rise of America’s elite and its disenchantment with democracy and free markets, see Sven Beckert (2001). The Monied Metropolis. Cambridge University Press: Cambridge. ISBN 0521790395.
[viii] Gustavus Meyers (2002). History of the Great American Fortunes, Volume 3. University Press of the Pacific: Honolulu. (Reprint of the 1910 edition), p.225.
[ix] See Walter Karp ((1979). The Politics of War. Harper & Row: New York) for an analysis of the move to war in the case of both the war with Spain and WWI. Of particular interest here is Woodrow Wilson’s extension of a domestic security apparatus ostensibly to deal with a supposed foreign threat during war time. In fact, the draconian legislation and executive orders that created the FBI as a new appendage of the Department of Justice was hardly used during wartime, but were deployed after the war against domestic political opponents in the labour unions and the Progressive Movement.
[x] See Beckert, op. cit.
[xi] See Tim Weiner ((1990) Blank Check: The Pentagon’s Black Budget, Warner Publishing) and Sterling and Peggy Seagrave ((2003) Gold Warriors, Verso Press: New York). There is ample evidence that these funds were invested and have grown substantially in the years since, and are still used to further political and personal agendas.
[xii] Seagrave, Sterling and Peggy, op. cit., pp 119-120. The use of National Security as a rationale for acts that would otherwise be considered unconstitutional and illegal has become embedded in the America legal system, a curious inversion of original intent. Franklin Roosevelt declared a national economic emergency in the 30s which was used to justify extraordinary measures by the executive, including the abrogation of the government’s obligations to redeem government debt I gold. The Supreme Court refused to hear a case contesting the administration’s action. More recently, the government intervened in a labour dispute between the International Longshoremen Workers Union and the Pacific Maritime Association, citing the Patriot Act of 2001 and equating the union’s position to economic “terrorism”. In fact, rather than the union striking, the PMA locked the union out of the ports. Government intervention was in the form of the direct intercession of Tom Ridge, head of the Department of Homeland Security to force the union to accede to PMA demands.
[xiii] Notably, this is the same year in which the Exchange Stabilisation Fund was set up.
[xiv] In a similar fashion, manufacturing firms have migrated into finance, finding it easier to make money by arbitrage than by competition. Thus General Motors manufactures cars as collateral for its leasing business; similarly GE or Boeing make as much or more money out of financing the purchase of their products than from making them.
[xv] This is to say nothing of the wholesale transfer gratis of research undertaken at the taxpayer’s expense; for example nuclear technology transferred to the power industry.
[xvi] See Franklin Spinney, The Defense Death Spiral, www.d-n-i.net for an in depth analysis of the micro economics of military procurement and its impact on force readiness.
[xvii] This is the cumulative borrowing from abroad to finance net exports (or the trade deficit if you prefer).
[xviii] The annual rate of increase is the current account deficit.
[xix] See Alfred McCoy (1991). The Politics of Heroin in South East Asia. 2nd ed. Lawrence Hill Books: Brooklyn. ISBN 1556521251. McCoy documents thoroughly the genesis of US wartime cooperation with the mafia in Italy during WWII and its post-war toleration of narcotics trafficking in the US as a quid pro quo for the cooperation of Corsican and Italian organised crime in its covert war against the Communist Party in France and Italy. In Asia, it supported the opium and heroin business of a Chinese nationalist army in Burma after the Chinese Revolution in 1948. In Indochina the US supplanted French colonial rule after the French defeat at Dien Bien Phu, inheriting in the process French covert ties to opium production amongst the Hmong hill tribes. With overt American intervention in 1965 the importance of this traffic grew enormously, financing an escalation of the ground war in Laos.
See also Seagrave, Sterling and Peggy, op. cit. There is ample international precedent for American involvement in narcotics trafficking, beginning with the British organisation of opium production in Bengal two centuries ago and of its illegal distribution into China. For that matter, Japan turned Manchuria under its occupation into the biggest producer of opium and refined opiates in the world, the cash flow from which proved to be immensely useful to the operations of Japan’s Manchurian Army and intelligence services.
[xx] Peter Dale Scott (2003). Drugs, Oil and War: the United States in Afghanistan, Columbia and Indochina. Rowman & Littlefield Pub: Oxford. ISBN 0742525228.
[xxi] See Roger Morris ((1999) Partners in Power: The Clintons and Their America, Regnery Publishing) for a case study of the interaction of covert operations, narcotics trafficking, financial markets and politics in Arkansas during the governorship of Bill Clinton.
[xxii] See Catherine Austin Fitts and Daniel Armstrong, The Real Deal About Enron at www.sandersresearch.com.
July 4, 2004
Fascinating and lucrative patriotism,
The negative return economy: a discourse on America’s black budget*
*(Forthcoming in World Affairs, Journal of International Issues)
By Chris Sanders and Catherine Austin Fitts
Keep the people frightened
Of things they cannot know
Is the secret of the Tomb
If they knew what you and I know
They would know it is just men
Who rob them, cheat them, kill them
Then start it all again
Orville X
Introduction
The United States government has operated a secret budgeting and spending program for decades outside the framework of the American Constitution. The institutional and political roots of this system of clandestine finance reach back to at least a century. The turn of the 19th and 20th centuries saw the consolidation of American industry and banking under the control of a restrictive cartel that for all practical purposes assumed control of the economy. The great magnates of American industry and finance in the late nineteenth century were superb practitioners of covert operations. Witness to this fact are the institutions set up during the twentieth century through which their descendants maintain control.
This paper is a summary of the structure of the American political economy which fits the facts better than the official model. Officially, American capitalism is characterised by democracy, opportunity, self-improvement, open and free markets, and constructive regulation for the public good, in short, happiness. Under this construct America has never fought a war of aggression and harbours no designs to do so. Its leaders have the nation’s interests at heart, and its politicians listen to their constituencies. The truth is different. Why the United States is so widely misunderstood is due in part to a controlled educational system and media. As the system evolved over the decades, time lent it legitimacy spanning the political spectrum. Gustavus Meyers, author of the seminal work History of the Great American Fortunes and no panegyrist, believed – following Marx as did many on the left – that the consolidation of American industry was inevitable and that the men who accomplished it were acting their part in a predetermined historical evolution. Once monopoly control had been achieved, the proletariat would rise and its dictatorship would begin. We shy away from such determinism; nothing happens but as a consequence of what men do and choose to do. If Meyers were alive today, he would still be waiting.
Black Budget? What Black Budget?
At the time of the attack on the World Trade Center and the Pentagon in September 2001 according to the Government Accounting Office (GAO), Pentagon had incurred $3.4 trillion of “undocumentable transactions,” that is to say that there were $3.4 trillion worth of financial transactions for which there was no discernible purpose. The day before the attack, Secretary of Defense Donald Rumsfeld warned that the lack of control over its budget was a greater danger to the national security of the United States than terrorism. After the attacks, the government stopped publicly disclosing information about “undocumentable transactions”.
Blame the Bookkeeper
The problem is not restricted to the Pentagon but affects the entire spectrum of government agencies and departments from the Bureau of Indian Affairs to the Defense Department. For a number of years the GAO has compiled a parallel set of books for the Federal Government called the Financial Report of the United States. This report attempts to impose “Generally Accepted Accounting Principles” to the government’s financial reporting process in order to give a clearer picture of the government’s actual assets and liabilities and thereby enable better planning. Neither the Pentagon nor the Department of Housing and Urban Development (HUD), to name just two, have ever been able to pass a GAO audit on this basis.
Significantly, the government does not employ double entry bookkeeping in the preparation of its accounts. This has been standard accounting practice since the seventeenth century, which classifies and tracks sources and uses of funds to create an accurate picture of a business (or public) enterprise. Today the Pentagon utilises no accountable means of tracking money authorised by Congress from its initial authorisation to its use, say in developing a fighter plane. Running a 21st century military machine using antique accounting methods is an anomalous situation with interesting implications, not least of which is that government agencies cannot, or will not, explain what they are doing with the money that is appropriated for their operations by Congress.
A similar state of affairs prevails at the Department of Housing and Urban Development (HUD). It exists primarily, at least in law, to ensure that low income Americans have access to affordable housing, which HUD provides as well as both credit and credit insurance on a nationwide scale. Yet HUD has never compiled information on its activities so that it or anyone else can see, by place, whether or not its activities in that place make money, lose money, or are simply irrelevant.
Conflict of Interests
Few Americans are probably aware that Lockheed Martin, builder of the F22 air superiority fighter, is also a major outside contractor supplying financial control and accounting systems to the Pentagon. The Pentagon for its part is Lockheed Martin’s biggest customer. This example is by no means unique. Lockheed also has a subsidiary employed by HUD to administer housing in American cities, an unusual diversification for a corporation the majority of whose business is done with the military and intelligence agencies. [ii]
Similarly Dyncorp (recently acquired by Computer Sciences Corporation) is another contractor that, like Lockheed, derives almost all its revenue from government security and military contracts. It is also a contractor supplying information technology to a variety of government agencies including the Pentagon, HUD, the Securities and Exchange Commission (SEC) and the Department of Justice. At the Department of Justice it manages the case management software used by DOJ lawyers to manage investigations. [iii]
A prime example of overlapping interests is Herbert “Pug” Winokur. Not only was he on Dyncorp’s board of directors but he is also the Enron director in charge of that company’s risk management committee, and a long-standing board member of the Harvard Management Corporation, which invests in HUD projects.
AMS Inc., a computer software firm hired by HUD in 1996 to take over the management of its internal software for accounting and financial control, presided in two short years over an explosion in undocumentable transactions of nearly $76 billion. AMS violated fiduciary and control practices by installing its own equipment and software with no parallel runs against the legacy software and accounting system. In those same two years, HUD’s management more than tripled the volume of loan and insurance business being pushed through the system. Anyone familiar with running such systems in a bank or an insurance company immediately understands that a decision such as this (for it had to be a decision) would result in huge losses. [iv] Is this incompetence or design? Only the credulous would believe accident: the reward for Charles Rossotti, president of AMS, was to be named Internal Revenue Service (IRS) Commissioner at the Department of the Treasury, from which position he oversaw significant Treasury contract amendments to AMS. He was a direct beneficiary of this as a special White House waiver permitted Rossotti and his wife to retain their AMS stock.
Government’s response to criticism
The reaction of many people to the sorts of facts related above is to dismiss them as no more than evidence of incompetence and accident. The government does little to resist this sort of interpretation; on the contrary, it encourages it. For example, in response to calls for an investigation of its financial control, the Pentagon countered with an offer to investigate credit card abuse. Complaints about the performance of outside contractors such as AMS have been answered by a government-wide contract award to IBM for the standardisation of IT systems and practices. IBM, in turn, has awarded subcontracts to AMS, Lockheed, Dyncorp, SAIC and Accenture (formerly spun out from Arthur Andersen of Enron fame). It is these firms that have failed to provide systems that can pass a GAO audit. This manoeuvring and the government’s justifications affront common sense and are unethical. As private sector firms, they have to pass audits before their own accounts can be approved and reported to shareholders. Yet they routinely fail to meet the same standard for the government.
Often the government blames the previous, outgoing administration. However, consider that the incoming Bush administration replaced all the senior Clinton political appointees except: the Comptroller of the Currency, John D. Hawke; IRS commissioner Charles Rossotti (formerly of AMS); Comptroller General David Walker (Formerly of Arthur Andersen [v]– see http://www.npr.org/programs/npc/2001/01 ... alker.html) and CIA director George Tenet. In short, the key positions necessary for the control of the federal credit, financial control, audit and intelligence.
Comptroller of the Currency, John D. Hawke
control of the federal credit
IRS commissioner Charles Rossotti
financial control
Comptroller General David Walker
audit
CIA director George Tenet
intelligence
This undisturbed transition from Democratic to Republican administrations represents a remarkable cross-party consensus, and highlights the real positions of power. With the exception of Rossotti, all these men are still in place in 2004. And Rossotti? He left the IRS to become a senior adviser to the Carlyle Group for information technology. A more richly symbolic and meaningful job move could scarcely be imagined. Carlyle’s business is global venture venture capital, which is to say it invests in corporate acquisitions all over the world with a speciality in arms manufacturers and technology. The large levels of undocumentable transactions at HUD and the Department of Defense inevitably inspire curiosity. Where is the money associated with those transactions? It is no great leap of imagination to wonder equally where the Carlyle Group raises the money with which to finance its acquisitions. [vi]
The trusts are dead. Long live the trusts
The cartelisation of the American economy was for all intents and purposes completed by the end of the first decade of the twentieth century. [vii] In 1889, America’s leading banker JP Morgan held a meeting at his 5th Avenue mansion in New York. Its purpose was to reach a consensus whereby the owners of America’s railroads merged their competing interests. [viii] This was no mere group of transportation executives agreeing to fix prices. The railroads also controlled the nation’s coalfields and oil supplies, and were tightly bound to the nation’s largest banks. The creation of the Federal Reserve in 1914 completed this process of consolidation. In effect, Congress ceded control of the US currency system and the federal credit to the banks, thereby officially recognizing the cartel. This placed a relatively small number of men in a position to set prices across the economy with a degree of control heretofore unknown in US history.
The banking cartel’s interest in war
American foreign policy and the wars that America has fought over the course of the twentieth century (including the Spanish American War in 1898 [ix] and the present War on Terror) have successfully extended the cartel’s control over the world economy. The American Civil War was fought to determine control of the US economy. [x] Most Americans would explain the last 150 years of warfare as sadly necessary for reasons beyond America’s control. The implication is that America has accumulated its preponderant international position by some providential accident and not by design. Arguments for a contrary view elicit derisive accusations of falling victim to “conspiracy theory.” Reassuringly, they believe that self-interested individuals and organisations are incapable of collaboration to achieve common ends. When JP Morgan sat the owners of America’s railroads around a table and hammered out a non-compete agreement, it was no accident. Similarly, neither have America’s wars been accidents; they have been far more profitable than is widely understood. The US confiscated billions of dollars worth of German and Japanese war treasure at the end of World War Two. President Truman made a conscious decision to not reveal this to the public or repatriate it. Instead, it was used to finance covert operations. [xi]
Command economy
Popular myth has it that the trusts were broken up in the first decade of the twentieth century thanks to the crusade of Theodore Roosevelt on behalf of the middle class. Roosevelt certainly used his public stance against “big business” to successfully bid for campaign money from the very businessmen whom he was attacking. This perhaps explains why he subsequently signed legislation repealing criminal penalties for those same businessmen. This is a common trait of “liberal” or “progressive” presidents. The second Roosevelt, Franklin, is remembered as the champion of the downtrodden, who put an end to the Great Depression. It was he who established the nation’s social security system which in reality was (and is) funded by a highly regressive tax on its beneficiaries. Matching contributions from business were allowed to be deducted as a business expense before tax which simply extended the regressive nature of the program by financing business’ share out of foregone tax revenue. Roosevelt, a superb politician, won a landslide victory on a platform of reform which he adroitly sidestepped fulfilling. Instead, he declared a national economic emergency, short-circuiting any constitutional challenge to his power in the court. He promptly defaulted on the gold clause in the government’s bond contracts, and established the Exchange Stabilisation Fund (ESF) in 1934. Ostensibly meant to promote dollar stability in the foreign exchanges, the Fund in practice was and is something quite different. It is exempt from reporting to Congress and is answerable only to the President and Secretary of the Treasury. It is, in short, an undisclosed fund that can tap federal credit.
Apparatus of a Command Economy
The establishment of the ESF was an extension of the same logic behind the creation of the Federal Reserve in 1914. The latter, the Fed, was also created in response to a crisis: the crash of 1907. The Wall Street legend credits JP Morgan’s genius and patriotism with saving the Nation. In reality, the crash and resulting depression enabled Morgan to destroy his competitors, buy up their assets and in the process revealed to the nation and the world just how powerful the banks and Morgan were. Not all were grateful, and some demanded legislative action to bring the federal credit and national monetary system under public oversight and control. In a campaign of masterful political legerdemain, the Federal Reserve was created in 1912 by an act of Congress to do just this. But by creating it as a private corporation owned by the banks, Congress effectively ceded to the banks a position even stronger than they had occupied before. Even today it is not widely understood that the Fed is a privately held business owned by the very interests that it nominally regulates. Thus the control of federal credit and the US monetary system and the rich flow of insider information that results from that control are veiled from public view and are privately controlled in secret which rather explains the Delphic nature of the Fed’s chairman.
The extension of secret control was not limited to finance. The National Security Act of 1947 created the Central Intelligence Agency (CIA) and the National Security Council (NSC) and consolidated control of the three armed services under one roof at the Pentagon. This merely served to extend this principle of secrecy to the field of “national security.” Like the Fed, the CIA was exempted from public disclosure of its budget and was given budgetary control over the entire intelligence community, while the National Security Council was set up as a policy-making body separate from the existing organs of state policy such as the State Department and the military commands reporting directly to the president.
The CIA Act of 1949 created a budget mechanism that allowed the CIA to spend as much money as it wanted “without regard to the provisions of law and regulations relating to the expenditure of government funds.” In short, the CIA has a way to fund anything –legal or illegal – behind the protection of national security law. [xii]
Implementation
Having created the bureaucratic means to conceive and make policy in secret, the next development was to create the means to implement it. The main issue was how to control money flows in the national economy. The government’s solution was to assume a commanding position in the credit markets. To that end, it created first the Federal Housing Authority in 1934 (forerunner of HUD and now part of HUD) [xiii] and subsequently Ginnie Mae and then Fannie Mae and Freddie Mac, which are government sponsored enterprises (GSEs) to supply mortgage finance and insurance for homebuyers. The underlying political purpose is more subtle. Combined with the power of the Federal Reserve (i.e. the cartel) to set the price of money, the ESF, the GSEs, and latterly the Department of Housing and Urban Development (HUD), have proven to be a powerful force for regulating money flows and demand in the US economy.
The military, too, was reformed with the adoption for the first time in American history of a wartime military budget and force structure in peacetime. In the early 60s this was fine tuned with the adoption of an explicit cost-plus acquisition process. The justification for this was, as usual, national security. This military budget has proven as effective in regulating the industrial sector as control over home finance has proven in regulating credit. Together they confer virtual control over the economy as conventionally measured in terms of money GDP.
Credit, credit, and more credit
A few moments reflection on the institutional structure briefly outlined above makes clear the central importance of the federal credit in underwriting it. The federal government underwrites the GSEs by extending to them a subsidised line of credit from the Treasury. An additional indirect subsidy in the form of lower borrowing costs flows from the belief in the marketplace that this constitutes an implicit government guarantee of their solvency. While this subject from time to time excites controversy, the truth is that the GSEs are not the only corporate entities benefiting from government support. Since the failure of Continental Illinois in the early 80s, the government has informally made it clear that it stands behind the banking system. This was made even more explicit with the bailout of Citibank in the early 90s and the implicit subsidy that the entire banking industry received as a result. Nor are financial institutions the only ones to enjoy this kind of support. Both Lockheed Martin and Chrysler have been effectively saved from insolvency by the taxpayer in the past, presumably due to their status as major defence contractors.
Such a system places a significant value premium on sheer size, if for no other reason than what the banking system cheerfully and disingenuously refers to as the “too-big-to-fail” doctrine. But for industrial firms, too, there is significant value in having a contracting relationship with the Pentagon. Not only is there the economic nirvana of cost-plus contracting but, if you are big enough, your fundamental business risk is underwritten for national security reasons. Thus, there is a tendency for firms to migrate their businesses to military rather than purely civilian markets; today the Boeing Company is a perfect case study of this in action. And a result is that civilian business in sector after sector has been driven into insolvency or into acquisition by the very national security industry that is ostensibly protecting them. [xiv]
The dynamics of cost-plus contracting are such that profits rise as costs rise. [xv] This explains a great deal about the size of American military budgets, which have risen inexorably over the years even as military preparedness has fallen. [xvi] But as we have seen, the losses in terms of lower productivity are felt across wide swaths of the economy as non-military contracting competition is squeezed out or acquired. Obviously these losses in the real economy have to be financed, producing a higher demand for credit than would otherwise be the case. Given declining productivity and a narrowing production base, it was inevitable that at some point net exports would become negative, a condition that the US entered in 1982 and which has intensified since. Today the US net foreign debt [xvii] is on the order of $3,000 billion (30% of GDP) and is increasing at a rate of some $500 billion per year (5% of GDP). [xviii
Concentrating capital
To finance such a large foreign borrowing requirement without currency depreciation requires both the ability to control as much of the national cash flow as possible as well as the collaboration of at least a few key foreign countries to achieve the same sort of control over international cash flows. In the latter case, this takes the form, in part, of ever larger amounts of intervention on the part of those countries running dollar surpluses and strong net export positions to prevent the markets from driving the dollar lower. In practice this means that they accumulate more and more dollars, which they in turn invest in US Treasury securities. Foreigners now own some 45% of US Treasury debt outstanding. In January this year the Bank of Japan intervened in the currency markets on behalf of Japan’s Ministry of Finance, purchasing a whopping $69 billion in that month alone, or more than 30% of its total intervention in 2003 which was itself a record year.
Current trends
All of this may seem to have little to do with the black budget, which most people associate with intelligence covert “black” operations. The truth, however, is that the black budget cannot be understood in isolation without understanding the political, historical and economic context from which it springs. One way of understanding this is by comparing trends. For example, in 1950 the Dow Jones Industrials stood at 200, and today the Dow is at 10,600. In 1950 narcotics trafficking was a relatively unknown crime in the United States. Today it is endemic, and not only in cities but in smaller towns and rural communities as well. In 1950 the US possessed most of the world’s gold and was the world’s biggest creditor. Today it is the world’s biggest debtor. In 1950 the US was a major exporter of industrial goods to the rest of the world. On current trends the US is not self-sufficient in manufactured goods and will not even have a manufacturing industry worth the name by 2020.
Then and now…
1950 Dow Jones Industrials at 200
2004 Dow Jones Industrials 10,600
1950 Drug trafficking virtually unknown
2004 Drug trafficking endemic
1950 US had the largest gold reserves
2004 Gold reserves …
1950 US world’s biggest creditor
2004 US world’s biggest debtor
1950 US industrial giant
2004 US no longer self-sufficient
Narcotics trafficking and the stock market
Is there a connection between these trends or are they random? It may seem strange to think of a positive correlation between narcotics trafficking and the stock market, but consider: in the late 90s the US Department of Justice estimated that the proceeds of such trade entering the US banking system were between $500 and $1.000 billion annually, or more than 5-10% of GDP. Now the proceeds of crime need to find a way into legitimate, that is legal, channels or they are worthless to the holders. If one further imagines that the banking system earns a fee of 1% for handling this flow (rather low considering that money laundering is a seller’s market) then the profits for the banks from this activity are on the order of $5 to $10 billion. Applying Citigroup’s current stock market multiple of 15 or so to this yields a market capitalisation of anywhere from $65 to $115 billion. One can thus readily see the importance of the illegal drug trade to the financial services industry. As it happens, this trade in illegal profits is concentrated in four states: Texas, New York, Florida and California, or four Federal Reserve districts: Dallas, New York, Atlanta and San Francisco. Can anyone seriously suppose that the Fed is unaware of this if the Department of Justice is? It, after all, handles the flows.
Narcotics trafficking and the National Interest
One reason for the Fed’s silence is that agencies of the government itself have been involved in drug trafficking for sixty years or more. [xix] For the purposes of understanding the black budget, one needs to be aware of the American practice of opening the American consumer market for drugs to foreign exporters in order to pursue strategic objectives abroad. The portability of narcotics and the huge price mark up from production to point of sale makes them a particularly useful source of financing for covert operations. Even more important is that the proceeds from narcotics sales fall completely outside conventional, constitutional channels of funding. This helps explain the ubiquitous presence of narcotics trafficking in zones of conflict around the world, from Columbia to Afghanistan. [xx]
Little examined, however, is the impact of narcotics trafficking on communities and economies at the point of sale. Consider, for example, the impact on real estate markets and financial services. Real estate is an attractive area in which to employ the cash surplus resulting from narcotics sales because it is, as an industry, entirely unregulated with respect to money laundering. Because cash is an acceptable and in some places familiar method of payment, large sums can be disposed of easily and with little comment. This can and does result in considerable distortion to local demand, and in turn provide fuel for real estate speculation and increased credit demand to finance it along with considerable opportunities for speculation and fraud. [xxi] The Iran Contra episode during the 1980s contained all these elements; although many are familiar with the sale of arms to Iran to provide cash to finance CIA backed guerrillas in Nicaragua and death squads in El Salvador, less well-known is the systematic looting of local financial institutions and narcotics sales in the US. Banking allows the application of leverage to the cash that is generated by “illegal” activity while simultaneously making it possible to launder the funds. And when a bank fails, it is the shareholders, uninsured depositors and the taxpayer who pick up the bill. The point here us that narcotics trafficking creates a milieu in which the incentives to engage in uneconomic activity are greater than those to engage in economic activity. In a word, the profits from stealing are higher than the profits from playing by the rules.
What counts from a public policy point of view in the cartelised economy is the ability to control and concentrate cash flows of any kind. To this end, it is less important that a bank fails than that the federal credit is available to make good the losses. In doing so, the cash cost of losses is shifted, or socialised, to the national taxpayer base. As long, therefore, as there are willing lenders to the Federal Government, the game can go on.
Technology gives an edge
Government’s power combined with advancing computer technology has over the last thirty years vastly simplified the task of managing the national--and by extension the international--cash flow. Politically, the American victory in the Second World War meant that the entire West and its dependencies were co-opted into the International Monetary Fund (IMF) negotiated at Bretton Woods in 1944. Forty-five years later, the collapse of the Soviet Union in 1989 meant that for the first time in history there was no alternative monetary or political choice in the international arena. The British Empire had surrendered to the Americans precisely because America, represented an alternative to sterling, namely the dollar.
Today the US presides over a more or less fully closed global monetary system centred on the dollar. In practice this means that those countries within the system must exchange real value in the form of manufactures and commodities with the US cartel in exchange for dollars, which are no more than an accounting entry created out of thin air. This is analogous to a company with no assets exchanging watered stock for cash, and indeed this is no accident. It was a favoured technique by which the JP Morgans of the nineteenth century successfully financed the consolidation of American industry and finance. Today their heirs are busily dong the same thing, but on a global scale.
The diagram is a stylized representation of the relationship between the cartel and its allies outside the United States. Flows are both concrete and abstract. Concrete flows are manufactures, narcotics and commodities (mainly oil) inwards and arms outwards. Abstract flows are money outwards in payment for concrete flows inwards, which profits are recycled inwards where they both finance the inflation of the Federal Credit as well as buying political influence.
Technology has transformed the possibilities for creative management in banking. Its sheer number-crunching power has rendered the cost of iterative calculations to more or less zero. This has enabled the creation of a new sector in the industry, the derivatives business, which is nothing more than the breaking down of financial instruments such as stocks and bonds into their constitutive parts. This has increased the power of the banks many-fold, thanks to the cooperation of the Federal Reserve and Congress, who have allowed the banks to not only self-regulate their derivatives portfolios and businesses but have enacted rules to force other banks to use derivatives to “control” risk. In practice this has meant that the most profitable business of the banks has been moved off balance sheet, in effect creating a high level of secrecy in their business. It also confers a huge advantage on the largest banks to whom the others have to come for their derivatives. This has, in part, fuelled the manic consolidation in banking over the last twenty five years and has been applied with tremendous success internationally thanks to the imposition of the Basel Accords on money and banking which have forced other country’s financial institutions to either cooperate, which in practice has largely meant be acquired, or go out of business.
The banks’ tactics have been copied and refined by industry. An excellent example of this is the case of Enron, nominally an industrial company engaged in the production and transport of petroleum and natural gas, but which was transformed into a highly leveraged financial operation with a huge off balance sheet business trading derivatives. It secured a release from regulatory oversight by the time-tested method of purchasing lawmakers and by suborning its auditors. This gave it the power to restate earnings, virtually at will, simply by changing the assumptions on future interest rates embedded in the options, swaps and futures contracts constituting its unregulated derivatives book. Enron is a model also of the increasingly blurred distinction between the public and private sector. It employed as many as twenty CIA officers. One of its senior executives, Thomas White, was an army general before joining Enron and then left Enron to become Secretary of the Army. Enron executives were intimately involved with Vice President Richard Cheney’s energy task force. It is difficult to avoid concluding that Enron was anything other than a money-laundering operation employed in the interest of “National Security” on behalf of the cartel. [xxii]
The US has embarked on a costly global military adventure the outcome of which is anything but certain. This marks the culmination of more than fifty years of nearly continuous overt and covert warfare. In this it is supported by the most sophisticated financing apparatus in history, capable of mobilising the cash generated from a wide variety of activities both open and covert. The price has been the progressive hollowing out of the American economy itself, and the progressive erosion of civil liberties and the rule of law. The black budget is not the cause of this but the means.
About the authors
Catherine Austin Fitts is the founder of Solari, Inc and a member of the advisory board of Sanders Research Associates. Ms. Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, and President of The Hamilton Securities Group, Inc. She is a graduate of the University of Pennsylvania and The Wharton School.
Chris Sanders is a principle of Sanders Research Associates in London. Mr. Sanders has been a banker and asset manager for 21 years, and is a visiting professor in international finance at the School of Public Administration at the University of Göteburg in Sweden. He has degrees from in political science from Duke University and Arabic literature from the University of Michigan. He began his financial career as a private banker with Citibank in Saudi Arabia in 1979. Since 1984, he has lived in London and worked in the international investment management industry. He founded Sanders Research Associates in 1997.
Remark attributed to a Wall Street broker in 1895 describing J.P. Morgan. Gustavus Meyers (2002). History of the Great American Fortunes. University Press of the Pacific, Volume 3, p.225. Morgan, regularly portrayed as a patriot, was at the time deeply engrossed in relieving the government of its gold reserve.
[ii] Lockheed’s contract was recently terminated by HUD--an action that the company is contesting.
[iii] Dyncorp was appointed as well to run the Department of Justice’s asset forfeiture program in 1993, winning a $60 million five year contract to do so.
[iv] For an insider’s account of the problems at HUD, see Catherine Austin Fitts, The Myth of the Rule of Law at www.sandersresearch.com.
[v] See http://www.npr.org/programs/npc/2001/01 ... alker.html
[vi] See Dan Briody (2003), The Iron Triangle, Inside the Secret World of the Carlyle Group. John Wiley & Sons: Hoboken. ISBN 0-471-28108-5. Carlyle’s phenomenal success as an investment firm owes a great deal to its ability to lure former political figures and senior industry executives onto its executive team and advisory board. Examples are former US President George H.W. Bush and former British Prime Minister John Major; Frank Carlucci, former deputy director of the CIA and former Secretary of Defense; James Baker III, former Secretary of State; Richard Darman former director of the Office of Management and Budget; Colin Powell, former Chairman of the Joint Chiefs of Staff and present Secretary of State (a Carlucci protégé); William Kennard, former head of the Federal Communications Commission; Arthur Levitt, former chairman of the Securities and Exchange Commission; Park Tae Joon, former Prime Minister of the Republic of Korea, and Louis Gerstner, former chairman of IBM. Of some interest as well has been the involvement of the Bin Laden family as major private investors in the Carlyle Group, represented by Shafiq Bin Laden, a brother of Osama Bin Laden.
[vii] For a brilliant history of the rise of America’s elite and its disenchantment with democracy and free markets, see Sven Beckert (2001). The Monied Metropolis. Cambridge University Press: Cambridge. ISBN 0521790395.
[viii] Gustavus Meyers (2002). History of the Great American Fortunes, Volume 3. University Press of the Pacific: Honolulu. (Reprint of the 1910 edition), p.225.
[ix] See Walter Karp ((1979). The Politics of War. Harper & Row: New York) for an analysis of the move to war in the case of both the war with Spain and WWI. Of particular interest here is Woodrow Wilson’s extension of a domestic security apparatus ostensibly to deal with a supposed foreign threat during war time. In fact, the draconian legislation and executive orders that created the FBI as a new appendage of the Department of Justice was hardly used during wartime, but were deployed after the war against domestic political opponents in the labour unions and the Progressive Movement.
[x] See Beckert, op. cit.
[xi] See Tim Weiner ((1990) Blank Check: The Pentagon’s Black Budget, Warner Publishing) and Sterling and Peggy Seagrave ((2003) Gold Warriors, Verso Press: New York). There is ample evidence that these funds were invested and have grown substantially in the years since, and are still used to further political and personal agendas.
[xii] Seagrave, Sterling and Peggy, op. cit., pp 119-120. The use of National Security as a rationale for acts that would otherwise be considered unconstitutional and illegal has become embedded in the America legal system, a curious inversion of original intent. Franklin Roosevelt declared a national economic emergency in the 30s which was used to justify extraordinary measures by the executive, including the abrogation of the government’s obligations to redeem government debt I gold. The Supreme Court refused to hear a case contesting the administration’s action. More recently, the government intervened in a labour dispute between the International Longshoremen Workers Union and the Pacific Maritime Association, citing the Patriot Act of 2001 and equating the union’s position to economic “terrorism”. In fact, rather than the union striking, the PMA locked the union out of the ports. Government intervention was in the form of the direct intercession of Tom Ridge, head of the Department of Homeland Security to force the union to accede to PMA demands.
[xiii] Notably, this is the same year in which the Exchange Stabilisation Fund was set up.
[xiv] In a similar fashion, manufacturing firms have migrated into finance, finding it easier to make money by arbitrage than by competition. Thus General Motors manufactures cars as collateral for its leasing business; similarly GE or Boeing make as much or more money out of financing the purchase of their products than from making them.
[xv] This is to say nothing of the wholesale transfer gratis of research undertaken at the taxpayer’s expense; for example nuclear technology transferred to the power industry.
[xvi] See Franklin Spinney, The Defense Death Spiral, www.d-n-i.net for an in depth analysis of the micro economics of military procurement and its impact on force readiness.
[xvii] This is the cumulative borrowing from abroad to finance net exports (or the trade deficit if you prefer).
[xviii] The annual rate of increase is the current account deficit.
[xix] See Alfred McCoy (1991). The Politics of Heroin in South East Asia. 2nd ed. Lawrence Hill Books: Brooklyn. ISBN 1556521251. McCoy documents thoroughly the genesis of US wartime cooperation with the mafia in Italy during WWII and its post-war toleration of narcotics trafficking in the US as a quid pro quo for the cooperation of Corsican and Italian organised crime in its covert war against the Communist Party in France and Italy. In Asia, it supported the opium and heroin business of a Chinese nationalist army in Burma after the Chinese Revolution in 1948. In Indochina the US supplanted French colonial rule after the French defeat at Dien Bien Phu, inheriting in the process French covert ties to opium production amongst the Hmong hill tribes. With overt American intervention in 1965 the importance of this traffic grew enormously, financing an escalation of the ground war in Laos.
See also Seagrave, Sterling and Peggy, op. cit. There is ample international precedent for American involvement in narcotics trafficking, beginning with the British organisation of opium production in Bengal two centuries ago and of its illegal distribution into China. For that matter, Japan turned Manchuria under its occupation into the biggest producer of opium and refined opiates in the world, the cash flow from which proved to be immensely useful to the operations of Japan’s Manchurian Army and intelligence services.
[xx] Peter Dale Scott (2003). Drugs, Oil and War: the United States in Afghanistan, Columbia and Indochina. Rowman & Littlefield Pub: Oxford. ISBN 0742525228.
[xxi] See Roger Morris ((1999) Partners in Power: The Clintons and Their America, Regnery Publishing) for a case study of the interaction of covert operations, narcotics trafficking, financial markets and politics in Arkansas during the governorship of Bill Clinton.
[xxii] See Catherine Austin Fitts and Daniel Armstrong, The Real Deal About Enron at www.sandersresearch.com.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
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Anatomy of the Financial Collapse of the US Economy
The Ghost of Adam Smith
May 24, 2004
Commentary
May 24, 2004
The ghost of Adam Smith
or why the perps of 911 are hiding in plain site
Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property.
Adam Smith (1976) An Inquiry into the Nature and Causes of the Wealth of Nations, Volume 2, Book V, Oxford, Clarendon Press, ISBN 0-19-828184-6, p. 710
Wall Street: does she or doesn’t she?
In a few short weeks Wall Street has changed its mind again. In March the Street thought that the Fed would not raise interest rates this year. Today money market forward rates are pricing two hundred basis points of tightening within a year and three hundred by the end of 2005. Bond market yields have risen to reflect these expectations, but not nearly enough if they are indeed right about where Fed funds are headed. Technical analysts are excited because bond yields have surged above their longer term averages. Currency markets have bought dollars on the assumption that higher interest rates and stronger growth in the US are good reasons to sell yen and euros. Stocks on the other hand have fallen as that market worries about the impact of higher interest rates on corporate profits. And commodities other than oil have fallen on the prospect of tighter money and a slower world economy.
This change of mind has apparently been driven by the improvement in the US employment outlook. Wage and salary accruals by American corporations have been climbing for a year, but are still being outpaced by corporate profits. Absent a collapse in demand, it is plain that the job outlook has improved. The long jobless recovery is finally producing results for the work force, at least for the non-manufacturing work force.
Manufacturing employment stopped falling for the first time in nearly four years in February. A paltry 37,000 jobs have been created since. The lack of job creation in manufacturing is pertinent because it will only be by making things with high value added and selling them abroad that the US will be able to stabilise its massive trade deficit. The trade deficit in goods was a mind-boggling $57 billion in March, representing an annual rate of $687 billion. The ratio of exports to imports has fallen steadily for the last forty years, from 1.2 times imports to a mere 70%. As we have observed in other articles, the trade deficit and dependence on foreign finance have become systematic and structural, begging the question: can the US external account be stabilised at all?
To globalise today means to specialise
It has become almost as fashionable to discuss and accept globalisation as it has become to change one’s economic forecasts to fit short term market price action. One problem that this raises is that globalisation does not mean the same thing to all people. In its most generic sense globalisation has been with us at least since the 17th century. But what it means today is not simply interconnectedness, but rather a particular type of interconnectedness in which the areas that we define as nation-states become more specialised economically, more hierarchical politically and dis-intermediated by networks of internationally connected interest groups.
So today we see the US becoming specialised in finance and war, China in manufacturing, India in services, and so on. The US political economy is becoming more hierarchical as a consequence with a widening gap in incomes and wealth and collapsing constitutional government. And a variety of networks have evolved with a stake in globalisation and with interests shared internationally with similar networks. One of these is what we call the International Security Complex.
Viewed from this perspective, American deindustrialisation is the result of a sort of economic specialisation, in which high value added production is moved offshore while the onshore (American) economy concentrates in low economic value-added but high political value-added finance and “security.” This is not generally justified or analysed as such; it is rather excused on the basis that the US economy is better than others at “innovation” and “ideas.” One can measure the impact of this on the US by counting the number of lost manufacturing jobs, looking at the proportion of GDP devoted to national security and finance, noting the huge role of government in venture capital, education, research and development, and observing the balance sheet consequences. These can be summed up in a debt to GDP ratio of over 330% and a net foreign debt of 33% of GDP.
In the specialised, globalised world, what is national security?
This sort of “specialisation” violates the most basic assumptions underlying the concept of national security because it exports strategically vital portions of the national supply and manufacturing chain. One of the best examples of this is the fact that virtually all of the world’s semiconductor manufacturing is conducted in one industrial park on the island of Taiwan. From a national point of view this is a grave risk to American security that extends the American security frontier unnecessarily to Asia. From an International Security Complex point of view it is a perfectly rational and even desirable situation since the relationship between the military establishments of the two countries is probably closer even than that between the two militaries and their respective diplomatic establishments. The example par excellence is the relationship between the US and Japan, where the post war development of the Japanese economy owed a much to the opening of American markets and the symbiotic relationship that was built between the ruling elites in both countries.[ii]
Specialisation on this scale depends on the completely free circulation of capital and goods unchecked. There is nothing particularly new about this. Indeed, the world economy before the First World War was arguably freer than it is today. But today’s global economy is more specialised, and is becoming more so. For example, American firms increasingly contract out production to factories that may actually be located in several countries, with raw materials and parts being moved between them. What used to be the company warehouse is a container. What appears superficially to be a very flexible system is in fact very vulnerable to outside disruption and attack, because corporations organised in this way no longer maintain internally the inventories, personnel, and operating systems that would allow them to cope with a disruption to the supply chain. What applies to the corporation applies to the nation as well.
The nation is dead. Long live the network!
One way to make the point more clear is to approach it in terms of a network. A global system based on nations that internalise as much as possible of the production process is closer to a distributed network with many powerful nodes and hence more resilient to outside shocks. However, evolving globalisation is an excellent example of a system conforming to a power law distribution in which only a few nodes are really powerful. Indeed, the system seems to tend towards a system in which only one node has real power. The problem is that such a system is stable until something disrupts the centre causing it to become highly unstable and vulnerable to complete collapse.[iii]
This has enormous implications for investors. The models that most of them (at least the ones that are not insiders) are using are based on explicit or implicit risk calculations that assume a distributed and hence more stable world. As the world transitions towards a less distributed topology, characteristics that used to limit systemic risk are lost.
Consider the evolution of pension fund management. Originally pension funds adopted relative performance benchmarks as opposed to absolute return objectives because of the demonstrable fact that most fund managers could not beat market indices. This logic was always in our view a bit of a red herring because a benchmark is just another portfolio and an arbitrary one at that. But once most pension funds moved to benchmarking performance, the entire industry gravitated toward the same portfolio. This inevitably reduced the diversification benefits inherent in stock diversification in the first place with the result that the benchmark became the security. The S&P 500 is now the stock. This has happened to one degree or another in every market that the pensions are invested in, since anyone who wants to bid for their business has to adopt their methodology. This inbuilt bias has a powerful leavening effect on market practice. Recognising this, the pension funds have cast their nets wider and wider for non-correlated style and performance, with the ultimate effect that every area that they move into eventually loses that attraction. The end result is the same. Diversification benefits are attenuated and risk rises.
The rich are getting richer
There are parallels in the political system, and for related causes. Rising risk means rising volatility, and rising volatility has an interesting by product: the rich get richer and the poor get poorer. The dynamic behind this is various and compelling. To begin with, it is only the rich that can exploit the significant market mispricing that greater volatility brings because they are the only ones with the cash to take advantage of it or sufficient assets to secure the credit lines necessary to short the markets. At the same time, the finance sector which intermediates the flow of cash and securities has emerged from each business cycle since the Second World War bigger than the last. We have noted in other articles the extraordinary degree to which even the industrial sector owes its profitability to finance. If you doubt this, think of GE Capital, GMAC, Boeing aircraft leasing and so on. Taken together, it represents more than a quarter of GDP. But even this understates the size of the sector. Given that the Fed is a private monopoly owned by the sector it supervises, monetary policy is necessarily biased towards financial goals as opposed to production goals.
It is therefore no wonder that labour is viewed solely as a factor of production the money cost of which must be minimised. The benefits and risk-reducing characteristics of community equity, a stable work force, quality output and so on take second seat in a system that values earnings per share more highly and where industrial output is chiefly valuable as collateral for a leasing or insurance transaction rather than for dependability and longevity. Place becomes unimportant, and it matters not where the collateral is produced as long as it is produced cheaply.[iv] The self-reinforcing and self-organising aspects of the system are evident and have resulted in a natural bias to politics, where the disinterest displayed by finance to workers is mimicked by the disdain with which the politicians view the voters, since it is less votes than money that makes possible the acquisition of the valuable franchises that are represented by seats in Parliament or Congress. How else is one to understand the purchase of a mayoralty in New York by a billionaire whose fortune came from the marketing of a mediocre market information system or a Senator’s seat by an executive from Goldman Sachs? This is not an electoral system so much as a system for marketing tax farms to the highest bidder.
911
Indeed, wherever one looks, one finds systems that are increasingly dominated by fewer and fewer major nodes. The consequence of the failure of one or more of those nodes would be a massive increase in volatility. It is no wonder that Wall Street economists don’t know which end is up; they are trying to do the impossible, predicting short term outcomes against a backdrop of massive uncertainty and a vested interest in the status quo.
The truth of the matter is that “globalisation” has brought us to a point where almost any event could initiate a cascade of consequences beyond the control of even the legendary Greenspan and the Exchange Stabilisation Fund. 911 may well have been that event. Economically, it wrecked the attempts that were underway at the time to investigate and control the rampant fraud and abuse that had resulted in the collapse of the government’s accounting and financial control systems and it has resulted in a runaway spending spree and balance of payments catastrophe. Politically, it wrecked any serious attempt to negotiate a viable compromise in the Middle East. Militarily it has exposed grave weakness at the heart of the American war machine. Morally, its consequences have revealed the absence of any ethical foundation to the so-called New World Order and the absence of a framework of law to order it.
About the only thing that doesn’t seem widely exposed is exactly who was responsible for 911 itself.[v] But the answer to that question is hiding in plain sight. When a few more people see it, we expect the cascade to begin in earnest. Revolutions have started from much less.
Chris Sanders
[email protected]
The decline in manufacturing jobs has been precipitous in the last four years. This is not business as usual; it represents a major change in the structure of the US economy, and can be traced to 1970, the defeat in Vietnam, and the collapse of the Bretton Woods system. The ascendancy of the finance sector in the US can be traced to the latter development, as increased volatility in interest rates and foreign exchange markets disrupted the production sector.
[ii] It is important to note that specialisation such as this has nothing whatsoever to do with competitive advantage in the sense that the term was used by Adam Smith. Taiwan has no special endowment that makes it a better place to manufacture semiconductors. The competitive “advantage” that such countries display is a desirable labour force; desirable because it is cheaper than comparable labour at home.
[iii] See Albert- László Barabási (2002) Linked, Cambridge Massachusetts, Perseus Publishing ISBN 0-7832-0667-9 for an excellent discussion of ordered versus random networks.
[iv] For a detailed case study of the consequences of a systemic bias in favour of finance over production see Sanders Research Associates Ltd. Piracy on the Delaware by Paul Atkinson. It is the story of the dismemberment of Sun Shipbuilding, one of America’s premier industrial companies.
[v] Read Blowback from the blowhards (2), Sanders Research Associates, Not important? Think again, May 22, 2004.
May 24, 2004
Commentary
May 24, 2004
The ghost of Adam Smith
or why the perps of 911 are hiding in plain site
Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property.
Adam Smith (1976) An Inquiry into the Nature and Causes of the Wealth of Nations, Volume 2, Book V, Oxford, Clarendon Press, ISBN 0-19-828184-6, p. 710
Wall Street: does she or doesn’t she?
In a few short weeks Wall Street has changed its mind again. In March the Street thought that the Fed would not raise interest rates this year. Today money market forward rates are pricing two hundred basis points of tightening within a year and three hundred by the end of 2005. Bond market yields have risen to reflect these expectations, but not nearly enough if they are indeed right about where Fed funds are headed. Technical analysts are excited because bond yields have surged above their longer term averages. Currency markets have bought dollars on the assumption that higher interest rates and stronger growth in the US are good reasons to sell yen and euros. Stocks on the other hand have fallen as that market worries about the impact of higher interest rates on corporate profits. And commodities other than oil have fallen on the prospect of tighter money and a slower world economy.
This change of mind has apparently been driven by the improvement in the US employment outlook. Wage and salary accruals by American corporations have been climbing for a year, but are still being outpaced by corporate profits. Absent a collapse in demand, it is plain that the job outlook has improved. The long jobless recovery is finally producing results for the work force, at least for the non-manufacturing work force.
Manufacturing employment stopped falling for the first time in nearly four years in February. A paltry 37,000 jobs have been created since. The lack of job creation in manufacturing is pertinent because it will only be by making things with high value added and selling them abroad that the US will be able to stabilise its massive trade deficit. The trade deficit in goods was a mind-boggling $57 billion in March, representing an annual rate of $687 billion. The ratio of exports to imports has fallen steadily for the last forty years, from 1.2 times imports to a mere 70%. As we have observed in other articles, the trade deficit and dependence on foreign finance have become systematic and structural, begging the question: can the US external account be stabilised at all?
To globalise today means to specialise
It has become almost as fashionable to discuss and accept globalisation as it has become to change one’s economic forecasts to fit short term market price action. One problem that this raises is that globalisation does not mean the same thing to all people. In its most generic sense globalisation has been with us at least since the 17th century. But what it means today is not simply interconnectedness, but rather a particular type of interconnectedness in which the areas that we define as nation-states become more specialised economically, more hierarchical politically and dis-intermediated by networks of internationally connected interest groups.
So today we see the US becoming specialised in finance and war, China in manufacturing, India in services, and so on. The US political economy is becoming more hierarchical as a consequence with a widening gap in incomes and wealth and collapsing constitutional government. And a variety of networks have evolved with a stake in globalisation and with interests shared internationally with similar networks. One of these is what we call the International Security Complex.
Viewed from this perspective, American deindustrialisation is the result of a sort of economic specialisation, in which high value added production is moved offshore while the onshore (American) economy concentrates in low economic value-added but high political value-added finance and “security.” This is not generally justified or analysed as such; it is rather excused on the basis that the US economy is better than others at “innovation” and “ideas.” One can measure the impact of this on the US by counting the number of lost manufacturing jobs, looking at the proportion of GDP devoted to national security and finance, noting the huge role of government in venture capital, education, research and development, and observing the balance sheet consequences. These can be summed up in a debt to GDP ratio of over 330% and a net foreign debt of 33% of GDP.
In the specialised, globalised world, what is national security?
This sort of “specialisation” violates the most basic assumptions underlying the concept of national security because it exports strategically vital portions of the national supply and manufacturing chain. One of the best examples of this is the fact that virtually all of the world’s semiconductor manufacturing is conducted in one industrial park on the island of Taiwan. From a national point of view this is a grave risk to American security that extends the American security frontier unnecessarily to Asia. From an International Security Complex point of view it is a perfectly rational and even desirable situation since the relationship between the military establishments of the two countries is probably closer even than that between the two militaries and their respective diplomatic establishments. The example par excellence is the relationship between the US and Japan, where the post war development of the Japanese economy owed a much to the opening of American markets and the symbiotic relationship that was built between the ruling elites in both countries.[ii]
Specialisation on this scale depends on the completely free circulation of capital and goods unchecked. There is nothing particularly new about this. Indeed, the world economy before the First World War was arguably freer than it is today. But today’s global economy is more specialised, and is becoming more so. For example, American firms increasingly contract out production to factories that may actually be located in several countries, with raw materials and parts being moved between them. What used to be the company warehouse is a container. What appears superficially to be a very flexible system is in fact very vulnerable to outside disruption and attack, because corporations organised in this way no longer maintain internally the inventories, personnel, and operating systems that would allow them to cope with a disruption to the supply chain. What applies to the corporation applies to the nation as well.
The nation is dead. Long live the network!
One way to make the point more clear is to approach it in terms of a network. A global system based on nations that internalise as much as possible of the production process is closer to a distributed network with many powerful nodes and hence more resilient to outside shocks. However, evolving globalisation is an excellent example of a system conforming to a power law distribution in which only a few nodes are really powerful. Indeed, the system seems to tend towards a system in which only one node has real power. The problem is that such a system is stable until something disrupts the centre causing it to become highly unstable and vulnerable to complete collapse.[iii]
This has enormous implications for investors. The models that most of them (at least the ones that are not insiders) are using are based on explicit or implicit risk calculations that assume a distributed and hence more stable world. As the world transitions towards a less distributed topology, characteristics that used to limit systemic risk are lost.
Consider the evolution of pension fund management. Originally pension funds adopted relative performance benchmarks as opposed to absolute return objectives because of the demonstrable fact that most fund managers could not beat market indices. This logic was always in our view a bit of a red herring because a benchmark is just another portfolio and an arbitrary one at that. But once most pension funds moved to benchmarking performance, the entire industry gravitated toward the same portfolio. This inevitably reduced the diversification benefits inherent in stock diversification in the first place with the result that the benchmark became the security. The S&P 500 is now the stock. This has happened to one degree or another in every market that the pensions are invested in, since anyone who wants to bid for their business has to adopt their methodology. This inbuilt bias has a powerful leavening effect on market practice. Recognising this, the pension funds have cast their nets wider and wider for non-correlated style and performance, with the ultimate effect that every area that they move into eventually loses that attraction. The end result is the same. Diversification benefits are attenuated and risk rises.
The rich are getting richer
There are parallels in the political system, and for related causes. Rising risk means rising volatility, and rising volatility has an interesting by product: the rich get richer and the poor get poorer. The dynamic behind this is various and compelling. To begin with, it is only the rich that can exploit the significant market mispricing that greater volatility brings because they are the only ones with the cash to take advantage of it or sufficient assets to secure the credit lines necessary to short the markets. At the same time, the finance sector which intermediates the flow of cash and securities has emerged from each business cycle since the Second World War bigger than the last. We have noted in other articles the extraordinary degree to which even the industrial sector owes its profitability to finance. If you doubt this, think of GE Capital, GMAC, Boeing aircraft leasing and so on. Taken together, it represents more than a quarter of GDP. But even this understates the size of the sector. Given that the Fed is a private monopoly owned by the sector it supervises, monetary policy is necessarily biased towards financial goals as opposed to production goals.
It is therefore no wonder that labour is viewed solely as a factor of production the money cost of which must be minimised. The benefits and risk-reducing characteristics of community equity, a stable work force, quality output and so on take second seat in a system that values earnings per share more highly and where industrial output is chiefly valuable as collateral for a leasing or insurance transaction rather than for dependability and longevity. Place becomes unimportant, and it matters not where the collateral is produced as long as it is produced cheaply.[iv] The self-reinforcing and self-organising aspects of the system are evident and have resulted in a natural bias to politics, where the disinterest displayed by finance to workers is mimicked by the disdain with which the politicians view the voters, since it is less votes than money that makes possible the acquisition of the valuable franchises that are represented by seats in Parliament or Congress. How else is one to understand the purchase of a mayoralty in New York by a billionaire whose fortune came from the marketing of a mediocre market information system or a Senator’s seat by an executive from Goldman Sachs? This is not an electoral system so much as a system for marketing tax farms to the highest bidder.
911
Indeed, wherever one looks, one finds systems that are increasingly dominated by fewer and fewer major nodes. The consequence of the failure of one or more of those nodes would be a massive increase in volatility. It is no wonder that Wall Street economists don’t know which end is up; they are trying to do the impossible, predicting short term outcomes against a backdrop of massive uncertainty and a vested interest in the status quo.
The truth of the matter is that “globalisation” has brought us to a point where almost any event could initiate a cascade of consequences beyond the control of even the legendary Greenspan and the Exchange Stabilisation Fund. 911 may well have been that event. Economically, it wrecked the attempts that were underway at the time to investigate and control the rampant fraud and abuse that had resulted in the collapse of the government’s accounting and financial control systems and it has resulted in a runaway spending spree and balance of payments catastrophe. Politically, it wrecked any serious attempt to negotiate a viable compromise in the Middle East. Militarily it has exposed grave weakness at the heart of the American war machine. Morally, its consequences have revealed the absence of any ethical foundation to the so-called New World Order and the absence of a framework of law to order it.
About the only thing that doesn’t seem widely exposed is exactly who was responsible for 911 itself.[v] But the answer to that question is hiding in plain sight. When a few more people see it, we expect the cascade to begin in earnest. Revolutions have started from much less.
Chris Sanders
[email protected]
The decline in manufacturing jobs has been precipitous in the last four years. This is not business as usual; it represents a major change in the structure of the US economy, and can be traced to 1970, the defeat in Vietnam, and the collapse of the Bretton Woods system. The ascendancy of the finance sector in the US can be traced to the latter development, as increased volatility in interest rates and foreign exchange markets disrupted the production sector.
[ii] It is important to note that specialisation such as this has nothing whatsoever to do with competitive advantage in the sense that the term was used by Adam Smith. Taiwan has no special endowment that makes it a better place to manufacture semiconductors. The competitive “advantage” that such countries display is a desirable labour force; desirable because it is cheaper than comparable labour at home.
[iii] See Albert- László Barabási (2002) Linked, Cambridge Massachusetts, Perseus Publishing ISBN 0-7832-0667-9 for an excellent discussion of ordered versus random networks.
[iv] For a detailed case study of the consequences of a systemic bias in favour of finance over production see Sanders Research Associates Ltd. Piracy on the Delaware by Paul Atkinson. It is the story of the dismemberment of Sun Shipbuilding, one of America’s premier industrial companies.
[v] Read Blowback from the blowhards (2), Sanders Research Associates, Not important? Think again, May 22, 2004.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
This Klingon Works For Me
QamuIs Heg qaq law' lorvIs yInqaq puS
(Better to die on your feet than live on your knees)
(Better to die on your feet than live on your knees)
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Published on Thursday, November 4, 2004 by CommonDreams.org
The Democrats Need a Spiritual Left
by Rabbi Michael Lerner
For years the Democrats have been telling themselves "it's the economy, stupid." Yet consistently for dozens of years millions of middle income Americans have voted against their own economic interests to support Republicans who have tapped a deeper set of needs.
Tens of millions of Americans feel betrayed by a society that seems to place materialism and selfishness above moral values. They know that "looking out for number one" has become the common sense of our society, but they want a life that is about something more --- a framework of meaning and purpose to their lives that would transcend the grasping and narcissism that surrounds them. Sure, they will admit that they have material needs, and that they worry about adequate health care, stability in employment, and enough money to give their kids a college education. But even more deeply they want their lives to have meaning --- and they respond to candidates who seem to care about values and some sense of transcendent purpose.
Many of these voters have found a "politics of meaning" in the political Right. In the Right wing churches and synagogues these voters are presented with a coherent worldview that speaks to their "meaning needs." Most of these churches and synagogues demonstrate a high level of caring for their members, even if the flip side is a willingness to demean those on the outside. Yet what members experience directly is a level of mutual caring that they rarely find in the rest of the society. And a sense of community that is offered them nowhere else, a community that has as its central theme that life has value because it is connected to some higher meaning than one's success in the marketplace.
It's easy to see how this hunger gets manipulated in ways that liberals find offensive and contradictory. The frantic attempts to preserve family by denying gays the right to get married, the talk about being conservatives while meanwhile supporting Bush policies that accelerate the destruction of the environment and do nothing to encourage respect for God's creation or an ethos of awe and wonder to replace the ethos of turning nature into a commodity, the intense focus on preserving the powerless fetus and a culture of life without a concomitant commitment to medical research (stem cell research/HIV-AIDS), gun control and healthcare reform., the claim to care about others and then deny them a living wage and an ecologically sustainable environment --- all this is rightly perceived by liberals as a level of inconsistency that makes them dismiss as hypocrites the voters who have been moving to the Right.
Yet liberals, trapped in a long-standing disdain for religion and tone-deaf to the spiritual needs that underlie the move to the Right, have been unable to engage these voters in a serious dialogue. Rightly angry at the way that some religious communities have been mired in authoritarianism, racism, sexism and homophobia, the liberal world has developed such a knee-jerk hostility to religion that it has both marginalized those many people on the Left who actually do have spiritual yearnings and simultaneously refused to acknowledge that many who move to the Right have legitimate complaints about the ethos of selfishness in American life.
Imagine if John Kerry had been able to counter George Bush by insisting that a serious religious person would never turn his back on the suffering of the poor, that the bible's injunction to love one's neighbor required us to provide health care for all, and that the New Testament's command to "turn the other cheek" should give us a predisposition against responding to violence with violence.
Imagine a Democratic Party that could talk about the strength that comes from love and generosity and applied that to foreign policy and homeland security.
Imagine a Democratic Party that could talk of a New Bottom Line, so that American institutions get judged efficient, rational and productive not only to the extent that they maximize money and power, but also to the extent that they maximize people's capacities to be loving and caring, ethically and ecologically sensitive, and capable of responding to the universe with awe and wonder.
Imagine a Democratic Party that could call for schools to teach gratitude, generosity, caring for others, and celebration of the wonders that daily surround us! Such a Democratic Party, continuing to embrace its agenda for economic fairness and multi-cultural inclusiveness, would have won in 2004 and can win in the future. (Please don't tell me that this is happening outside the Democratic Party in the Greens or in other leftie groups --- because except for a few tiny exceptions it is not! I remember how hard I tried to get Ralph Nader to think and talk in these terms in 2000, and how little response I got substantively from the Green Party when I suggested reformulating their excessively politically correct policy orientation in ways that would speak to this spiritual consciousness. The hostility of the Left to spirituality is so deep, in fact, that when they hear us in Tikkun talking this way they often can't even hear what we are saying ---- so they systematically mis-hear it and say that we are calling for the Left to take up the politics of the Right, which is exactly the opposite of our point --- speaking to spiritual needs actually leads to a more radical critique of the dynamics of corporate capitalism and corporate globalization, not to a mimicking of right-wing policies).
If the Democrats were to foster a religions/spiritual Left, they would no longer pick candidates who support preemptive wars or who appease corporate power. They would reject the cynical realism that led them to pretend to be born-again militarists, a deception that fooled no one and only revealed their contempt for the intelligence of most Americans. Instead of assuming that most Americans are either stupid or reactionary, a religious Left would understand that many Americans who are on the Right actually share the same concern for a world based on love and generosity that underlies Left politics, even though lefties often hide their value attachments.
Yet to move in this direction, many Democrats would have to give up their attachment to a core belief: that those who voted for Bush are fundamentally stupid or evil. Its time they got over that elitist self-righteousness and developed strategies that could affirm their common humanity with those who voted for the Right. Teaching themselves to see the good in the rest of the American public would be a critical first step in liberals and progressives learning how to teach the rest of American society how to see that same goodness in the rest of the people on this planet. It is this spiritual lesson --- that our own well-being depends on the well-being of everyone else on the planet and on the well-being of the earth --- a lesson rooted deeply in the spiritual wisdom of virtually every religion on the planet, that could be the center of a revived Democratic Party.
Yet to take that seriously, the Democrats are going to have to get over the false and demeaning perception that the Americans who voted for Bush could never be moved to care about the well being of anyone but themselves. That transformation in the Democrats would make them into serious contenders.
The last time Democrats had real social power was when they linked their legislative agenda with a spiritual politics articulated by Martin Luther King. We cannot wait for the reappearance of that kind of charasmatic leader to begin the process of rebuilding a spiritual/religious Left.
Rabbi Michael Lerner is national co-chair (with Cornel West and Susannah Heschel) of The Tikkun Community, an interfaith organization that seeks to build on the political vision articulated above and more fully explained in their Core Vision which you can read at www.Tikkun.org; editor of TIKKUN, a bimonthly Jewish Critique of Politics, Culture and Society, author of "Spirit Matters: Global Healing and the Wisdom of the Soul", and rabbi of Beyt Tikkun synagogue in San Francisco.
The Democrats Need a Spiritual Left
by Rabbi Michael Lerner
For years the Democrats have been telling themselves "it's the economy, stupid." Yet consistently for dozens of years millions of middle income Americans have voted against their own economic interests to support Republicans who have tapped a deeper set of needs.
Tens of millions of Americans feel betrayed by a society that seems to place materialism and selfishness above moral values. They know that "looking out for number one" has become the common sense of our society, but they want a life that is about something more --- a framework of meaning and purpose to their lives that would transcend the grasping and narcissism that surrounds them. Sure, they will admit that they have material needs, and that they worry about adequate health care, stability in employment, and enough money to give their kids a college education. But even more deeply they want their lives to have meaning --- and they respond to candidates who seem to care about values and some sense of transcendent purpose.
Many of these voters have found a "politics of meaning" in the political Right. In the Right wing churches and synagogues these voters are presented with a coherent worldview that speaks to their "meaning needs." Most of these churches and synagogues demonstrate a high level of caring for their members, even if the flip side is a willingness to demean those on the outside. Yet what members experience directly is a level of mutual caring that they rarely find in the rest of the society. And a sense of community that is offered them nowhere else, a community that has as its central theme that life has value because it is connected to some higher meaning than one's success in the marketplace.
It's easy to see how this hunger gets manipulated in ways that liberals find offensive and contradictory. The frantic attempts to preserve family by denying gays the right to get married, the talk about being conservatives while meanwhile supporting Bush policies that accelerate the destruction of the environment and do nothing to encourage respect for God's creation or an ethos of awe and wonder to replace the ethos of turning nature into a commodity, the intense focus on preserving the powerless fetus and a culture of life without a concomitant commitment to medical research (stem cell research/HIV-AIDS), gun control and healthcare reform., the claim to care about others and then deny them a living wage and an ecologically sustainable environment --- all this is rightly perceived by liberals as a level of inconsistency that makes them dismiss as hypocrites the voters who have been moving to the Right.
Yet liberals, trapped in a long-standing disdain for religion and tone-deaf to the spiritual needs that underlie the move to the Right, have been unable to engage these voters in a serious dialogue. Rightly angry at the way that some religious communities have been mired in authoritarianism, racism, sexism and homophobia, the liberal world has developed such a knee-jerk hostility to religion that it has both marginalized those many people on the Left who actually do have spiritual yearnings and simultaneously refused to acknowledge that many who move to the Right have legitimate complaints about the ethos of selfishness in American life.
Imagine if John Kerry had been able to counter George Bush by insisting that a serious religious person would never turn his back on the suffering of the poor, that the bible's injunction to love one's neighbor required us to provide health care for all, and that the New Testament's command to "turn the other cheek" should give us a predisposition against responding to violence with violence.
Imagine a Democratic Party that could talk about the strength that comes from love and generosity and applied that to foreign policy and homeland security.
Imagine a Democratic Party that could talk of a New Bottom Line, so that American institutions get judged efficient, rational and productive not only to the extent that they maximize money and power, but also to the extent that they maximize people's capacities to be loving and caring, ethically and ecologically sensitive, and capable of responding to the universe with awe and wonder.
Imagine a Democratic Party that could call for schools to teach gratitude, generosity, caring for others, and celebration of the wonders that daily surround us! Such a Democratic Party, continuing to embrace its agenda for economic fairness and multi-cultural inclusiveness, would have won in 2004 and can win in the future. (Please don't tell me that this is happening outside the Democratic Party in the Greens or in other leftie groups --- because except for a few tiny exceptions it is not! I remember how hard I tried to get Ralph Nader to think and talk in these terms in 2000, and how little response I got substantively from the Green Party when I suggested reformulating their excessively politically correct policy orientation in ways that would speak to this spiritual consciousness. The hostility of the Left to spirituality is so deep, in fact, that when they hear us in Tikkun talking this way they often can't even hear what we are saying ---- so they systematically mis-hear it and say that we are calling for the Left to take up the politics of the Right, which is exactly the opposite of our point --- speaking to spiritual needs actually leads to a more radical critique of the dynamics of corporate capitalism and corporate globalization, not to a mimicking of right-wing policies).
If the Democrats were to foster a religions/spiritual Left, they would no longer pick candidates who support preemptive wars or who appease corporate power. They would reject the cynical realism that led them to pretend to be born-again militarists, a deception that fooled no one and only revealed their contempt for the intelligence of most Americans. Instead of assuming that most Americans are either stupid or reactionary, a religious Left would understand that many Americans who are on the Right actually share the same concern for a world based on love and generosity that underlies Left politics, even though lefties often hide their value attachments.
Yet to move in this direction, many Democrats would have to give up their attachment to a core belief: that those who voted for Bush are fundamentally stupid or evil. Its time they got over that elitist self-righteousness and developed strategies that could affirm their common humanity with those who voted for the Right. Teaching themselves to see the good in the rest of the American public would be a critical first step in liberals and progressives learning how to teach the rest of American society how to see that same goodness in the rest of the people on this planet. It is this spiritual lesson --- that our own well-being depends on the well-being of everyone else on the planet and on the well-being of the earth --- a lesson rooted deeply in the spiritual wisdom of virtually every religion on the planet, that could be the center of a revived Democratic Party.
Yet to take that seriously, the Democrats are going to have to get over the false and demeaning perception that the Americans who voted for Bush could never be moved to care about the well being of anyone but themselves. That transformation in the Democrats would make them into serious contenders.
The last time Democrats had real social power was when they linked their legislative agenda with a spiritual politics articulated by Martin Luther King. We cannot wait for the reappearance of that kind of charasmatic leader to begin the process of rebuilding a spiritual/religious Left.
Rabbi Michael Lerner is national co-chair (with Cornel West and Susannah Heschel) of The Tikkun Community, an interfaith organization that seeks to build on the political vision articulated above and more fully explained in their Core Vision which you can read at www.Tikkun.org; editor of TIKKUN, a bimonthly Jewish Critique of Politics, Culture and Society, author of "Spirit Matters: Global Healing and the Wisdom of the Soul", and rabbi of Beyt Tikkun synagogue in San Francisco.
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Published on Wednesday, November 3, 2004 by CommonDreams.org
How to Vote for Peace, Against the Patriot Act, and Win Elections
by John Stauber
Only one U.S. Senator had the courage and the commitment to civil liberties to vote against the Patriot Act in the weeks after the terror attacks of 9/11. Pop quiz, quick, name that Senator! If you said the late Sen. Paul Wellstone, you'd be wrong. Even the feisty progressive from Minnesota failed to oppose John Ashcroft's attack on civil liberties sold as essential to fight Bush's war on terror.
The lone opponent of the Patriot Act was Sen. Russ Feingold of Wisconsin, Wellstone's colleague across the Mississippi River.
Fast forward to the fall of 2002 and the run-up to Bush's war on Iraq. Democratic senators, including Hillary Clinton, Tom Daschle, John Edwards and John Kerry all voted to give President Bush the authority to attack Saddam Hussein. Russ Feingold voted against the war. I spoke at the time with a Feingold staff member who worried that these two votes would doom Feingold in his 2004 race for re-election. "We'll be bashed viciously as weak on terror and anti-war, they'll trash us mercilessly and it will cost Russ his race."
Probably just what advisors to Kerry and Edwards were thinking. Indeed, Feingold's 2004 opponent Republican Tim Michels, a millionaire construction company owner and a former US Army Ranger, beat three Republicans to win his party's nomination. Michels dumped over a million dollars of his own money into an aggressive advertising campaign skewering Feingold as weak on terror and not supportive of the troops. However, when the polls closed at 8 PM on November 2nd, with no votes even counted yet, all the major media declared the race over and predicted Feingold's victory based on the exit polls alone.
John Kerry voted for the Patriot Act and the war, and was barely beating George Bush in Wisconsin. Russ Feingold proves that an anti-war, populist Democrat, a maverick campaigning to get big money out of politics, can win and win big. But given a choice between a real Republican and a Democrat such as John Kerry who voted for the war, many voters will choose the Republican.
How can progressives build a movement for power that wins elections and changes the current disastrous course of our country? Sheldon Rampton and I examine the rise of the Right in our somewhat prescient book Banana Republicans: How the Right Wing is Turning America into a One-Party State. On November 2nd, despite the massive mobilization by liberal groups and funders, the Right tightened its one-party control of all branches of the federal government. Russ Feingold, the lone dissenter against the Patriot Act, the independent midwesterner who fought and won against the leadership of his own party on campaign finance reform, the hard core opponent of the war on Iraq and unflinching supporter of the troops, shows that there is a way to win with principles, civility, courage and conviction.
John Stauber is the Executive Director of the Center for Media & Democracy in Madison, Wisconsin. http://www.prwatch.org/ and co-author with Sheldon Rampton of: Banana Republicans: How the Right Wing is Turning America Into a One-Party State, Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraq, Mad Cow USA: Could the Nightmare Happen Here?, Toxic Sludge Is Good For You
How to Vote for Peace, Against the Patriot Act, and Win Elections
by John Stauber
Only one U.S. Senator had the courage and the commitment to civil liberties to vote against the Patriot Act in the weeks after the terror attacks of 9/11. Pop quiz, quick, name that Senator! If you said the late Sen. Paul Wellstone, you'd be wrong. Even the feisty progressive from Minnesota failed to oppose John Ashcroft's attack on civil liberties sold as essential to fight Bush's war on terror.
The lone opponent of the Patriot Act was Sen. Russ Feingold of Wisconsin, Wellstone's colleague across the Mississippi River.
Fast forward to the fall of 2002 and the run-up to Bush's war on Iraq. Democratic senators, including Hillary Clinton, Tom Daschle, John Edwards and John Kerry all voted to give President Bush the authority to attack Saddam Hussein. Russ Feingold voted against the war. I spoke at the time with a Feingold staff member who worried that these two votes would doom Feingold in his 2004 race for re-election. "We'll be bashed viciously as weak on terror and anti-war, they'll trash us mercilessly and it will cost Russ his race."
Probably just what advisors to Kerry and Edwards were thinking. Indeed, Feingold's 2004 opponent Republican Tim Michels, a millionaire construction company owner and a former US Army Ranger, beat three Republicans to win his party's nomination. Michels dumped over a million dollars of his own money into an aggressive advertising campaign skewering Feingold as weak on terror and not supportive of the troops. However, when the polls closed at 8 PM on November 2nd, with no votes even counted yet, all the major media declared the race over and predicted Feingold's victory based on the exit polls alone.
John Kerry voted for the Patriot Act and the war, and was barely beating George Bush in Wisconsin. Russ Feingold proves that an anti-war, populist Democrat, a maverick campaigning to get big money out of politics, can win and win big. But given a choice between a real Republican and a Democrat such as John Kerry who voted for the war, many voters will choose the Republican.
How can progressives build a movement for power that wins elections and changes the current disastrous course of our country? Sheldon Rampton and I examine the rise of the Right in our somewhat prescient book Banana Republicans: How the Right Wing is Turning America into a One-Party State. On November 2nd, despite the massive mobilization by liberal groups and funders, the Right tightened its one-party control of all branches of the federal government. Russ Feingold, the lone dissenter against the Patriot Act, the independent midwesterner who fought and won against the leadership of his own party on campaign finance reform, the hard core opponent of the war on Iraq and unflinching supporter of the troops, shows that there is a way to win with principles, civility, courage and conviction.
John Stauber is the Executive Director of the Center for Media & Democracy in Madison, Wisconsin. http://www.prwatch.org/ and co-author with Sheldon Rampton of: Banana Republicans: How the Right Wing is Turning America Into a One-Party State, Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraq, Mad Cow USA: Could the Nightmare Happen Here?, Toxic Sludge Is Good For You
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
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geekster
- Posts: 4865
- Joined: Wed Sep 08, 2004 2:53 pm
- Location: Hospice For The Terminally Breathing
- Contact:
Does this mean you don't want this for your birthday?
http://www.talkingpresidents.com/produc ... lter.shtml
I can always take it back or maybe exchange it for
http://www.talkingpresidents.com/produc ... h-td.shtml
http://www.talkingpresidents.com/produc ... lter.shtml
I can always take it back or maybe exchange it for
http://www.talkingpresidents.com/produc ... h-td.shtml
Pabst Blue Ribbon - The beer that made Gerlach famous.
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DVD Burner
- Posts: 11031
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cowboyangel
- Posts: 6986
- Joined: Fri May 14, 2004 10:32 pm
Future generations will struggle to escape the legacy of the disaster in Iraq
Our betrayals and broken promises have created a kind of irreversible disease that cannot be forgiven
By Robert Fisk in Baghdad - 11 October 2004
http://www.counterpunch.org/fisk10112004.html
I am writing a book about our need to escape from history--or rather about our inability to escape the effects of the decisions taken by our fathers and grandfathers. My father was a soldier in the First World War or, as it says on the back of his campaign medal, "The Great War for Civilisation''--which is the title I've chosen for my book. In the space of just 17 months after my father's war ended, the victors had drawn the borders of Northern Ireland, Yugoslavia and most of the Middle East. And I have spent all my professional life watching the people inside those borders burn.
I once sat down with old Malcolm Macdonald, Britain's former colonial secretary, to discuss his handover of the Irish treaty ports to De Valera before the Second World War, thus depriving Britain of three great harbours during the Battle of the Atlantic. It was a step which earned Macdonald the undying contempt of Winston Churchill. Inevitably, though, we ended up talking about his vain attempts to solve the "Palestine problem" in the 1930s. In the Commons, Churchill angrily condemned Macdonald for restricting Jewish immigration to Palestine. I still have my notes of what Macdonald said to me.
"We have a terrific argument in House of Commons, and when we met in the division lobby afterwards, Churchill accused me of being pro-Arab. He said that Arabs were savages and that they ate nothing but camel dung. I could see that it was no good trying to persuade him to change his views. So I suddenly told him that I wished I had a son. He asked me why, and I said I was reading a book called My Early Life by Winston Churchill, and that I would want any son of mine to live that life. At this point, tears appeared in Churchill's eyes and he put his arms round me, saying, 'Malcolm, Malcolm.' The next day a package arrived for me from Churchill containing a signed copy of his latest volume of the life of Marlborough.''
My father worshipped Churchill, and pleaded with a friend to ask Churchill to sign a book for him; which is why I have in my library today Marlborough: His Life and Times, with the words "Inscribed by Winston S Churchill 1948" in the great man's own hand.
I still take the book out from time to time to look at that handwriting and to reflect that this was a man who sent our armies to Gallipoli, who shook hands with Michael Collins, who stood alone against Adolf Hitler, who campaigned for Zionism in Palestine and sent King Faisal to Iraq as a consolation prize for losing Syria to the French.
"The situation that confronted HM Government in Iraq at the beginning of 1921 was a most unsatisfactory one,'' Churchill would write in his The World Crisis: The Aftermath, of the insurgency against British rule. His friend Gertrude Bell--and here I am indebted to HVF Winstone's splendid and revised biography of Britain's "oriental secretary" in Baghdad--was that same year trying to set up an "Arab government with British advisors'' in Baghdad so that Britain's army of occupation could leave Iraq.
"I don't know what hanky panky the Allies are up to about the mandates,'' she wrote, "but I am all on the side of the League of Nations in protesting that they must be made public ... everyone from the Euphrates provinces says the people there won't accept Sunni officials and the (provisional) Council goes on blandly appointing them ... a Shia of Karbala (sic) has at last accepted the Ministry of Education ...''
Bell attended Churchill's famous--or infamous--Cairo conference where the British decided the future of most of the Middle East. TE Lawrence was there, of course, along with just about every Brit who thought he or she understood the region. "I'll tell you about our conference,'' Bell wrote to a friend in her jolly hockey-sticks way. "It has been wonderful. We covered more work in a fortnight than has been got through in a year. Mr Churchill was admirable ...''
It quite takes the breath away; the British thought they could fix the Middle East in 14 days. And so we laid the borders of Iraq and laid out the future for what Churchill would, much later, refer to as the "hell disaster'' of Palestine. I'll always remember the way that Macdonald, talking to me in his Sevenoaks home 26 years ago, turned to me during our conversation. "In Palestine, I failed,'' he said. "And that is why you are in Beirut today.''
And he was right, of course. Had we really "fixed" the Middle East, I wouldn't have spent the last 29 years of my life travelling from one bloody war to another amid the lies and deceit of our leaders and the surrogates they appointed to rule over the Arabs. Had we really "fixed" the Middle East, Ken Bigley would not have been murdered in Iraq last week.
Can we escape? Can we one day say--both the West and the peoples of the Middle East--"Enough! Let us start again!'' I fear we cannot. Our betrayals and our broken promises--to Jews as well as Arabs--have created a kind of irreversible disease, something that will not go away and cannot and will not be forgiven for generations.
Look, for example, how we egged on Saddam to invade Iran in 1980, how we patronised him for eight terrible years with export credits and guns and aircraft and chemicals for gas. Looking back now, we were doing something else. By supporting Saddam's war, we were helping an entire generation of Iraqis to learn to fight--and die.
I called up my old friend Tony Clifton in Australia this week. He and I reported the 1980-88 Iran-Iraq war from both sides. "Just think,'' he said. "All these millions of Iraqis were taught about how to fight a big army. They used to use their tanks as static positions with just their gun barrels pointing over the earth to stop the Iranians. But they weren't allowed to use their initiative. But now Saddam has gone and all those lieutenants and captains are older and can use their initiative and their fighting abilities against the Americans. I think that's why the resistance in Iraq is so successful.''
I suspect that Clifton is right, and that the eight-year war with Iran which we were so keen on is intimately connected to the current insurgency and the savagery with which it is being conducted by the Iraqi gunmen and suicide killers.
And what of the Americans themselves? I've been re-reading Seymour Hersh's stunning 1970 account of the My Lai massacre in Vietnam. And there's something about the casual attitude to death and cruelty in the way that Medina and Calley did their killings there that I find chillingly familiar.
The Americans have a professional army in Iraq, but it is becoming frighteningly casual about the way it kills women and children in Fallujah, simply denying that its air strikes are killing the innocent, and insists that all 120 dead in their Samarra operation are all insurgents when this cannot possibly be true. What about the latest wedding party carnage, another American "success" against terrorism? Because journalists can scarcely travel in Iraq any more, there is no longer any independent witness to this awful war. What is going on in Ramadi and Hilla and all the other cities where US forces carry out their brutal raids?
Tony Blair still thinks his hideous invasion was not a mistake. He still seems to believe in his own version of The Great War for Civilisation, just as my father once believed in it. And now I wonder what terrors this disaster holds in store for our future generations, who will also ask themselves if they can escape from history.
www.independent.co.uk
go to top
http://www.robert-fisk.com
Our betrayals and broken promises have created a kind of irreversible disease that cannot be forgiven
By Robert Fisk in Baghdad - 11 October 2004
http://www.counterpunch.org/fisk10112004.html
I am writing a book about our need to escape from history--or rather about our inability to escape the effects of the decisions taken by our fathers and grandfathers. My father was a soldier in the First World War or, as it says on the back of his campaign medal, "The Great War for Civilisation''--which is the title I've chosen for my book. In the space of just 17 months after my father's war ended, the victors had drawn the borders of Northern Ireland, Yugoslavia and most of the Middle East. And I have spent all my professional life watching the people inside those borders burn.
I once sat down with old Malcolm Macdonald, Britain's former colonial secretary, to discuss his handover of the Irish treaty ports to De Valera before the Second World War, thus depriving Britain of three great harbours during the Battle of the Atlantic. It was a step which earned Macdonald the undying contempt of Winston Churchill. Inevitably, though, we ended up talking about his vain attempts to solve the "Palestine problem" in the 1930s. In the Commons, Churchill angrily condemned Macdonald for restricting Jewish immigration to Palestine. I still have my notes of what Macdonald said to me.
"We have a terrific argument in House of Commons, and when we met in the division lobby afterwards, Churchill accused me of being pro-Arab. He said that Arabs were savages and that they ate nothing but camel dung. I could see that it was no good trying to persuade him to change his views. So I suddenly told him that I wished I had a son. He asked me why, and I said I was reading a book called My Early Life by Winston Churchill, and that I would want any son of mine to live that life. At this point, tears appeared in Churchill's eyes and he put his arms round me, saying, 'Malcolm, Malcolm.' The next day a package arrived for me from Churchill containing a signed copy of his latest volume of the life of Marlborough.''
My father worshipped Churchill, and pleaded with a friend to ask Churchill to sign a book for him; which is why I have in my library today Marlborough: His Life and Times, with the words "Inscribed by Winston S Churchill 1948" in the great man's own hand.
I still take the book out from time to time to look at that handwriting and to reflect that this was a man who sent our armies to Gallipoli, who shook hands with Michael Collins, who stood alone against Adolf Hitler, who campaigned for Zionism in Palestine and sent King Faisal to Iraq as a consolation prize for losing Syria to the French.
"The situation that confronted HM Government in Iraq at the beginning of 1921 was a most unsatisfactory one,'' Churchill would write in his The World Crisis: The Aftermath, of the insurgency against British rule. His friend Gertrude Bell--and here I am indebted to HVF Winstone's splendid and revised biography of Britain's "oriental secretary" in Baghdad--was that same year trying to set up an "Arab government with British advisors'' in Baghdad so that Britain's army of occupation could leave Iraq.
"I don't know what hanky panky the Allies are up to about the mandates,'' she wrote, "but I am all on the side of the League of Nations in protesting that they must be made public ... everyone from the Euphrates provinces says the people there won't accept Sunni officials and the (provisional) Council goes on blandly appointing them ... a Shia of Karbala (sic) has at last accepted the Ministry of Education ...''
Bell attended Churchill's famous--or infamous--Cairo conference where the British decided the future of most of the Middle East. TE Lawrence was there, of course, along with just about every Brit who thought he or she understood the region. "I'll tell you about our conference,'' Bell wrote to a friend in her jolly hockey-sticks way. "It has been wonderful. We covered more work in a fortnight than has been got through in a year. Mr Churchill was admirable ...''
It quite takes the breath away; the British thought they could fix the Middle East in 14 days. And so we laid the borders of Iraq and laid out the future for what Churchill would, much later, refer to as the "hell disaster'' of Palestine. I'll always remember the way that Macdonald, talking to me in his Sevenoaks home 26 years ago, turned to me during our conversation. "In Palestine, I failed,'' he said. "And that is why you are in Beirut today.''
And he was right, of course. Had we really "fixed" the Middle East, I wouldn't have spent the last 29 years of my life travelling from one bloody war to another amid the lies and deceit of our leaders and the surrogates they appointed to rule over the Arabs. Had we really "fixed" the Middle East, Ken Bigley would not have been murdered in Iraq last week.
Can we escape? Can we one day say--both the West and the peoples of the Middle East--"Enough! Let us start again!'' I fear we cannot. Our betrayals and our broken promises--to Jews as well as Arabs--have created a kind of irreversible disease, something that will not go away and cannot and will not be forgiven for generations.
Look, for example, how we egged on Saddam to invade Iran in 1980, how we patronised him for eight terrible years with export credits and guns and aircraft and chemicals for gas. Looking back now, we were doing something else. By supporting Saddam's war, we were helping an entire generation of Iraqis to learn to fight--and die.
I called up my old friend Tony Clifton in Australia this week. He and I reported the 1980-88 Iran-Iraq war from both sides. "Just think,'' he said. "All these millions of Iraqis were taught about how to fight a big army. They used to use their tanks as static positions with just their gun barrels pointing over the earth to stop the Iranians. But they weren't allowed to use their initiative. But now Saddam has gone and all those lieutenants and captains are older and can use their initiative and their fighting abilities against the Americans. I think that's why the resistance in Iraq is so successful.''
I suspect that Clifton is right, and that the eight-year war with Iran which we were so keen on is intimately connected to the current insurgency and the savagery with which it is being conducted by the Iraqi gunmen and suicide killers.
And what of the Americans themselves? I've been re-reading Seymour Hersh's stunning 1970 account of the My Lai massacre in Vietnam. And there's something about the casual attitude to death and cruelty in the way that Medina and Calley did their killings there that I find chillingly familiar.
The Americans have a professional army in Iraq, but it is becoming frighteningly casual about the way it kills women and children in Fallujah, simply denying that its air strikes are killing the innocent, and insists that all 120 dead in their Samarra operation are all insurgents when this cannot possibly be true. What about the latest wedding party carnage, another American "success" against terrorism? Because journalists can scarcely travel in Iraq any more, there is no longer any independent witness to this awful war. What is going on in Ramadi and Hilla and all the other cities where US forces carry out their brutal raids?
Tony Blair still thinks his hideous invasion was not a mistake. He still seems to believe in his own version of The Great War for Civilisation, just as my father once believed in it. And now I wonder what terrors this disaster holds in store for our future generations, who will also ask themselves if they can escape from history.
www.independent.co.uk
go to top
http://www.robert-fisk.com
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
-
Discosybil
- Posts: 154
- Joined: Sun Sep 05, 2004 9:00 am
- Location: Kansas?
I find all this facinating reading. Keep us posted on your book. In the meantime, after the harrassment I received daily from work, people trying to change my mind who I should vote for, I will officially change my party next week from Republican to Democrat. I realized how much the Republican party has changed. Bush wants to work with Democrats but only if they believe in what he believes in. I am shocked when people say the only reason they voted for Bush was because he is a god fearing man. HELLO? I'm shocked by the people who talk about how wishy washy Kerry was. Was Bush ever a Senator? And I guess I'm sad for the future of women, gays, our children and our country.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
-
Discosybil
- Posts: 154
- Joined: Sun Sep 05, 2004 9:00 am
- Location: Kansas?
I find all this facinating reading. Keep us posted on your book. In the meantime, after the harrassment I received daily from work, people trying to change my mind who I should vote for, I will officially change my party next week from Republican to Democrat. I realized how much the Republican party has changed. Bush wants to work with Democrats but only if they believe in what he believes in. I am shocked when people say the only reason they voted for Bush was because he is a god fearing man. HELLO? I'm shocked by the people who talk about how wishy washy Kerry was. Was Bush ever a Senator? And I guess I'm sad for the future of women, gays, our children and our country.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
-
Discosybil
- Posts: 154
- Joined: Sun Sep 05, 2004 9:00 am
- Location: Kansas?
I find all this facinating reading. Keep us posted on your book. In the meantime, after the harrassment I received daily from work, people trying to change my mind who I should vote for, I will officially change my party next week from Republican to Democrat. I realized how much the Republican party has changed. Bush wants to work with Democrats but only if they believe in what he believes in. I am shocked when people say the only reason they voted for Bush was because he is a god fearing man. HELLO? I'm shocked by the people who talk about how wishy washy Kerry was. Was Bush ever a Senator? And I guess I'm sad for the future of women, gays, our children and our country.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
It's frightening to think how our country may turn out.
Thank god, I can let it all go Labor Day weekend.
-
Simply Joel
- Posts: 3483
- Joined: Wed Mar 31, 2004 9:08 am
- Location: Land of Lincoln
- Contact:
Re: This Klingon Works For Me
on your feet or on your knees...cowboyangel wrote:QamuIs Heg qaq law' lorvIs yInqaq puS
(Better to die on your feet than live on your knees)
just remember, the good shooter's are aiming for center mass.
-
Simply Joel
- Posts: 3483
- Joined: Wed Mar 31, 2004 9:08 am
- Location: Land of Lincoln
- Contact:
as well as, the incessant whining of people that can't see beyond their own personal demons to see that in 4 years they have another opportunity to vote again... and with luck and a lot of work, they could actually be in the white house once again... but whining and complaining seem to be their strong suit.cowboyangel wrote:Future generations will struggle to escape the legacy of the disaster in Iraq
and all of the previously posted whining reminds me why i work to be stoically conservative.
Democrats... snatching defeat from the jaws of victory, daily!
slap my salmon, baby
slap my salmon, baby
-
thinkcooper
- Posts: 174
- Joined: Mon Jul 26, 2004 9:47 pm
- Burning Since: 1996
- Camp Name: Illumination Village - Spiral Oasis
- Location: East side Santa Cruz- can you keep those seals quiet?
CBA, I'm a libertarian that voted against Bush, for Kerry, because I believe 1. he should have been fired for his failures and 2. he's going to escalate the conflict into the next crusade. Anyway, that was then, this is now.
I hope that the left and dems see this election as the point where they reassess their perspective about and oppositions to the 2nd amendment. I believe ensuring the means to stand up to an overbearing government that doesn't trust the citizenry is why the 2nd amendment was built into the constitution. I also believe that now is time to stand up for and speak one's beliefs, but with the backing of real individual power that isn't dependant on an easily monitored digital network for ditribution.
My reccomendations? Keep stating your beliefs, and acquire an AR-15 patterned semi auto. Readily available, light, reliable, many spares, easy to carry lots of rounds; reloading components are easy to come by as well. It's a simple diversification in your portfolio for freedom.
The left changing tack on the 2nd amendment would have transformed many like me, that believe in the 2nd amendment, not for the right to hunt, but for the right to oppose a tyranny, into Kerry supporters. This would have been especially true in rural areas like Ohio.
I can't think of a better left leaning community to start pitching this idea to than those here on e-playa.
You are almost to the one incredibly out spoken, independant thinking survivalists that have been exposed to firearms, at least during the old days on the playa, and would likely feel more safe and comfortable around them with the right training.
Consider me a crackpot if you need to, but I'm certain that if the left had changed their position on gun rights we would be celebrating a Kerry victory.
I hope that the left and dems see this election as the point where they reassess their perspective about and oppositions to the 2nd amendment. I believe ensuring the means to stand up to an overbearing government that doesn't trust the citizenry is why the 2nd amendment was built into the constitution. I also believe that now is time to stand up for and speak one's beliefs, but with the backing of real individual power that isn't dependant on an easily monitored digital network for ditribution.
My reccomendations? Keep stating your beliefs, and acquire an AR-15 patterned semi auto. Readily available, light, reliable, many spares, easy to carry lots of rounds; reloading components are easy to come by as well. It's a simple diversification in your portfolio for freedom.
The left changing tack on the 2nd amendment would have transformed many like me, that believe in the 2nd amendment, not for the right to hunt, but for the right to oppose a tyranny, into Kerry supporters. This would have been especially true in rural areas like Ohio.
I can't think of a better left leaning community to start pitching this idea to than those here on e-playa.
You are almost to the one incredibly out spoken, independant thinking survivalists that have been exposed to firearms, at least during the old days on the playa, and would likely feel more safe and comfortable around them with the right training.
Consider me a crackpot if you need to, but I'm certain that if the left had changed their position on gun rights we would be celebrating a Kerry victory.
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Simply Joel
- Posts: 3483
- Joined: Wed Mar 31, 2004 9:08 am
- Location: Land of Lincoln
- Contact:
quite an assertion, T'cooper.thinkcooper wrote:...but I'm certain that if the left had changed their position on gun rights we would be celebrating a Kerry victory.
if i may add, if Kerry could have been believable on defense, he would have gotten at least one more vote.
Democrats... snatching defeat from the jaws of victory, daily!
slap my salmon, baby
slap my salmon, baby
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thinkcooper
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Joel,Simply Joel wrote:quite an assertion, T'cooper.thinkcooper wrote:...but I'm certain that if the left had changed their position on gun rights we would be celebrating a Kerry victory.
if i may add, if Kerry could have been believable on defense, he would have gotten at least one more vote.
Speculate on the numbers of NRA members that are members solely because it's the only voice that supports a traditionally rightwing-based pro 2nd amendment position. There are members, like I once was, that don't want to see religion intertwined with politics. For years I was a single issue 2nd amendment voter, and that always had me siding with conservatives, even though my personal beliefs were pure libertarian.
I believe I have an historical responsibilty to own firearms to oppose tyranny in my government whether it's non-secular, oppresive, or worse - fascist, and that I'll hopefully never ever need those tools. But if there were to be a struggle such as the rights of a group of people to marry that turned revolutionary, and I was too old or feeble to pull a trigger in support, I'd share my tools with the young and willing.
Here's a quote from George Will:
"Polls indicate that another 14 million Americans think they are NRA members and an additional 28 million think they are affiliated in some way with the NRA because of their membership in one or more of the 35,000 shooting and hunting clubs."
I think that there would have been another 100,000 pro 2nd ammendment voters, anti Bush voters out there in Ohio. It would have put the tally within the range of needing to count the provisional ballots and would likely have turned today into a very different set of talking heads.
Pure speculation
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cowboyangel
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Simply Joel wrote:cowboyangel wrote:Future generations will struggle to escape the legacy of the disaster in Iraq
and all of the previously posted whining reminds me why i work to be stoically conservative.
and describes also why your mind appears to be a little closed at times as well
"We'll know our disinformation program is complete when everything the American public believe is false."- William Casey, CIA Director 1981
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Simply Joel
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i haven't let my brain fall out due to being too opened minded...cowboyangel wrote:and describes also why your mind appears to be a little closed at times as wellSimply Joel wrote:and all of the previously posted whining reminds me why i work to be stoically conservative.cowboyangel wrote:Future generations will struggle to escape the legacy of the disaster in Iraq
and who are you to accuse anyone of narrow minded thinking, CA?
stone throwers shouldn't live in glass houses.
Democrats... snatching defeat from the jaws of victory, daily!
slap my salmon, baby
slap my salmon, baby
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Simply Joel
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T'cooper, there is another analysis of the 2nd Amendment, the specific language is...
"Amendment II
A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed. "
"a well regulated militia... the right of the people" means the National Guard-like entity, not every swinging Richard that can afford a weapon nor those morons running around the woods in campflague calling themselves "militias"
"Amendment II
A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed. "
"a well regulated militia... the right of the people" means the National Guard-like entity, not every swinging Richard that can afford a weapon nor those morons running around the woods in campflague calling themselves "militias"
Democrats... snatching defeat from the jaws of victory, daily!
slap my salmon, baby
slap my salmon, baby
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Rob the Wop
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Nope.Simply Joel wrote:"a well regulated militia... the right of the people" means the National Guard-like entity, not every swinging Richard that can afford a weapon nor those morons running around the woods in campflague calling themselves "militias"
At the time the Constitution was written, the 'army' of the Revoluionary war was composed of the citizens willing to fight. They had been fighting without formal training for a year and didn't receive real training until 1778. The intent was NOT a governmentally regulated body being the only citizens having the right to bear arms. The founding fathers were very vocal on individual citizen's rights to be an armed populus. They were well educated in history and even Machievelli defended the population's right to weaponary in the Prince, and this was the handbook for tyrants.
They purpose behind the 2nd amendmant was to have the populus armed and trained in the event that our own governement descended into tyranny. At the time, they required a trained and armed populus to accomplish their war. If you really need cites, I can toss in a bunch of quotes by Jefferson and the like- but a cursory overview of European history from about the 1500s to 1775 should show the basis behind a lot of the ideas behind the Constitution. An armed populus to defend against tyrannical government bodies (which happened a LOT during that timeframe) was one of the key ideals (hence the 2nd amendment, rather than the 6th or later).
[b]The other, other white meat.[/b]
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samtzu
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What Rob said. IT astounds me how people rewrite the constitution to suit their own ends, and not according to what the founding fathers meant within their cultural context. Rob is correct... as always.
The revolutionary does not grow up because he cannot grow, while the creative individual cannot grow up because he keeps growing ~~ Eric Hoffer
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Simply Joel
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GuinivereElise
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thinkcooper
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You positive about that? I recall seeing some arguments that referenced the period language definition of the term "militia" and the defintion from that time wasn't purely a formal/state sanctioned militia such as the national guard. It was citizenry that took up arms, such as those who fought side by side with the regular constitutional army against the british during our revolutionary war.Simply Joel wrote: ... a well regulated militia means the National Guard-like entity, not every swinging Richard that can afford a weapon nor those morons running around the woods in campflague calling themselves "militias"
Here's something that supports the way I interpret the term Militia- source = http://www.free-definition.com/Militia.html
>>>>>
Militia
Definition, Meaning, Explanation
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A militia is a group of citizens organized to provide paramilitary service. It is usually a supplementary or reserve army, composed of non-professional soldiers and not necessarily directly supported or sanctioned by the government, thereby distinguishing it from the regular army of a nation. It can serve to supplement the regular military as an irregular reserve, or it can oppose it, for example to resist a military coup.
The term militia also denote the entire able-bodied population of a nation that can be called upon to defend itself against an enemy. In some circumstances, this "enemy" is defined as domestic political opponents of the government, such as strikers. In nearly all cases the role, or even the existence of a militia, is controversial. For these reasons legal restrictions may be placed on the mobilisation or use of militia.
Militia can also mean the police in the Soviet Union/Russia and most other East European countries.
<<<<<
The bigger interperative question in my mind comes from how you define the phrase "well regulated". I view a regulated militia as a group of citizens that all are sufficiently disciplined (trained) and armed to stand up in the face of opposition.
Here's a definition I found that supports the term regulated to mean first disciplined and orderly and second governed. "Governed" tends to be the way the folks who want to restrict 2nd amendment rights interpret to justify registration. At least, that's how I see it. BTW, I'm a shitty debater and certainly no legal scholar.
source = http://www.hyperdictionary.com/dictionary/regulated
>>>>
Definition:
1.[adj] marked by system or regularity or discipline; "a quiet ordered house"; "an orderly universe"; "a well regulated life"
2. [adj] controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature"
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samtzu
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Yeah... who the hell was this Jesus guy, anyway? Why should we do unto others as we would have others do unto us, and what is this "Love thy enemies" bullshit?GuinivereElise wrote:It astounds me how people do the exact same thing with the Bible...samtzu wrote:What Rob said. IT astounds me how people rewrite the constitution to suit their own ends, and not according to what the founding fathers meant within their cultural context. Rob is correct... as always.
The revolutionary does not grow up because he cannot grow, while the creative individual cannot grow up because he keeps growing ~~ Eric Hoffer