Friday, February 28, 2003
Thursday, February 27, 2003
Wednesday, February 26, 2003
Just where this awful system leads is evident from an intriguing exchange last year between CNN's reporter in the occupied West Bank town of Ramallah, and Eason Jordan, one of CNN's top honchos in Atlanta.
Finally!! A detailed explanation about WHY it's the oil. READ THIS!
On Feb. 19, I linked to three articles that discussed why the United States faces serious macroeconomic problems associated with its trade deficit, budget deficit, and mounting debt (now two thirds of GDP), and why this could be a drive for a war against Iraq. I knew there was something important there, but I didn't quite put it all together. But other people have:
I introduce to you the most important article I've read all year: The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth, by W. Clark, originally published on Indymedia here and here.
In a nutshell, it's about currency. One of the United States' greatest assets is the dollar. The Federal Reserve prints money which is the de facto global currency. Other nations have to have reserves of dollars for two reasons: 1) to guard their currency in volatile currency markets by selling or buying dollars and 2) to buy items like oil which trade in dollars. The fact that oil has been traded in dollars since the 1970's is the source of the term "Petrodollars". Because other nations need dollars, their value is strengthened. Folks like Greider (see Feb 19 post) note that our trade deficit and debts are mounting: this could have caused capital flight in another country, but our position as central bank has prevented that until now. But according to Clark, Iraq, Iran, and OPEC have taken steps towards having their oil transactions conducted in Euros (Iraq started in 2000). This could do serious damage to the dollar, and if a run started, our debts could be called due. Whammo. The United States strategy: take Iraq, return its oil accounts to dollars, up oil production, undermine OPEC, and protect the dollar. Read W.Clark for a much more thorough treatise.
Corroboration by others: Clark was followed up by an equally cogent article here by Peter Dale Scott, a co-founder of Berkeley's Peace and Conflict Studies program. It is called "Bush’s Deep Reasons for War on Iraq: Oil, Petrodollars, and the OPEC Euro Question." (Check out Peter's other articles on oil, drugs, war, and al-Queda.)
Finally, W.Clark shared his article with Cóilín Nunan, who gave another (and shorter) explanation of the idea, with new references. It is published at the Irish Feasta.org.
UPDATE: A good primier on the problem of the trade deficit, by Mark Weisbrot of the Center for Economic and Policy Research. Alternative views from the Cato Institute. A more technical testimony by the Economic Policy Institute, which gives lots of background and is concerned about our trade deficit.
Tuesday, February 25, 2003
Media companies stand to gain a lot from a relaxation of the ownership caps. So it is no surprise that NBC/General Electric, ABC/Disney and CBS/Viacom have all filed comments with the FCC.
Wednesday, February 19, 2003
Pop music played a crucial role in the national debate over the Vietnam War. By the late 1960's, radio stations across the country were crackling with blatantly political songs that became mainstream hits. After the National Guard killed four antiwar demonstrators at Kent State University in Ohio in the spring of 1970, Crosby, Stills, Nash and Young recorded a song, simply titled "Ohio," about the horror of the event, criticizing President Richard Nixon by name. The song was rushed onto the air while sentiment was still high, and became both an antiwar anthem and a huge moneymaker.
Update: This article is #2 on the list of most emailed articles from the New York Times. I guess the issue is finally starting to hit mainstream awareness.
Decline of Empire
I have now come across three articles with largely the same thesis: the United States has been gutting itself economically in terms of its debt and blooming trade deficit. Each says that the financial health of the American Empire is in danger over the long term. William Greider, editor of The Nation and a powerhouse in analyzing international trade issues, spells out the general idea in the most depth. His article "The End of Empire" was published Sept. 5 and is perhaps the most compelling and in depth of the three:
You can't sustain an empire from a debtor's weakening position--sooner or later the creditors pull the plug. That humiliating lesson was learned by Great Britain early in the last century, and the United States faces a similar reckoning ahead. The US financial position is rapidly deteriorating, due mainly to America's persistent and growing trade deficit. US ambitions to run the world, in other words, are heavily mortgaged.
The other two articles contend that the spectre of economic decline is the impetus behind our drive towards war with Iraq. I previously linked to Marshall Auerback's Jan. 14 article entitled "Occupying the Iraqi oil fields ... or how America restores its international credit rating." Auerback's financial analysis complement's Greider's (he dips his toes into military analysis and does poorly, but that doesn't matter). A quote:
Because foreigners with past euphoric expectations bought a huge volume of U.S. stocks in the Bubble period and have yet to sell, and because the unsustainable U.S. current account deficit makes the U.S. dollar vulnerable, the U.S. economy is now very vulnerable to cross border flows. Consequently, the risks of a derivative/speculative unwind dollar/financial crisis along the lines of that experienced in Mexico in 1994, emerging Asia and Russia in 1998, or Argentina in 2002 remains exceedingly high. How to solve this problem? What are Bush’s real intentions? Simple: construct a military plan in Iraq which achieves the objective of “regime change” and disarmament whilst concomitantly becoming a self-financing proposition. Occupy the Iraqi oil fields.
George Monbiot's article from Feb. 18 hits a different side of the issue. He doesn't explicitly address the trade deficit issue. But he brings up a related point:
Just as it was in the early 1930s, the US is suffering from surpluses of commodities, manufactured products, manufacturing capacity and money. Just as it was then, it is also faced with a surplus of labour, yet the two surpluses, as before, cannot be profitably matched. This problem has been developing in the US since 1973. It has now tried every available means of solving it and, by doing so, maintaining its global dominance. The only remaining, politically viable option is war.
How do these ideas mesh? How can we have a surplus of commodities, manufacturing capacity and money, yet have a trade deficit? Here is my understanding of the issue: the lean mean corporation ups profits by increasing production at the same time that it reduces costs. Dropping labor costs help the individual corporation, and can increase efficiency, but if everyone is laying off workers or paying lower wages in Malaysia or Mexico, then who will buy the goods?
(Warning: mumbo jumbo alert as I try to sort out my understanding of things below).
The arguments of Monbiot and Greider are, in a broad sense, linked. Monbiot's discussion of surplus production is familiar to me--I read it in Greider's book One World, Ready or Not. Greider said that really, a lot of the stuff about trade agreements obscurs the more important struggle between nations: trying to get grab a part of the limited production is to be done. Different countries fight for manufacturing plants in the same way that different cities and states within the US do. This allows corporations to play different regions against one another for lower prices, tax breaks, and lighter regulatory restrictions. Clearly, wages do not go to zero, and are regularly above subsistence by at least a little. So a long term effect of trade is that prosperity is evened out regionally. But lower wages for most workers does limit the amount your buyers. Thus the limited demand for products and the idea of oversupply...it's not that people wouldn't like your products, but there are a limitations to what people can afford. Some people are comparatively wealthy and everyone is fighting to get those customers. Greider, in One Worldsays that oversupply also comes from corporations fighting an all-or-nothing game: you win market share by being as cheap as possible and producing as much as possible. The price goes down, however. Even worse, those that produce a lot but get underpriced end up holding the bag.
The effect of multinational corporations ruling much American politics (economics, fiscal policy, and trade policy, certainly) is connected to the following decisions: so-called "free trade" agreements which lower the cost of labor in the U.S., a funneling of government spending and subsidies not to education or social welfare, but to the military and corporate tax breaks (Monbiot calls it "military Keynesianism"), and both budget and trade deficits.
Media Consolidation Flier
Flier about the FCC review of media ownership rules which I handed out to a thousand people at the S.F. peace demonstration Feb. 16. Change it if you want.
Tuesday, February 18, 2003
Blix and ElBaradei vs. Powell and Blair
Discrepancies between Powell's and Blair's claims and the reports by inspectors Blix and ElBaradei.
Thursday, February 13, 2003
Hussein al-Queda Valentine Farce
I wrote the following letter to the editor to the Reno Gazette-Journal. They called me and said it would be published soon, but that was before the latest Bin Laden tape came out:
Because of the new Bin Laden tape, they may not publish the letter, but they should. I am astounded at the extent to which the media is uncritically parroting Powell’s contention that the tapes establish a connection between al-Queda and Saddam Hussein’s regime. Because nothing we’ve heard makes that connection. There is an ideological gulf between Bin Laden’s fundamentalist Islam and Hussein’s secular dictatorship. The British intelligence report I referred to said that these differences have kept the groups apart. The latest tape has Bin Laden (if it is Bin Laden) addressing the Iraqi people and, it seems, denouncing Saddam Hussein.
This is from antiwar.com (via www.thismodernworld.com):
And, for what it’s worth, from Tom Tomorrow at thismodernworld.com:
When the radical folks at Berkeley Liberation Radio were asking for independent translations of Bin Laden tapes over a year ago, I felt their skepticism was overdone--I'd actually heard of an independent assessment from a Berkeley professor for one tape. But right now I'm troubled by a story that is more spin than substance, but which may be the P.R. move the administration needs to start the war.
Thursday, February 06, 2003
Iraq's Catch 22
I wrote this in response to the article in http://www.counterpunch.org entitled "A Riposte to Gen. Powell: Where are the Incubators?".
A real head-scratcher is the United States’ use of arms inspections to gather intelligence about where to target our bombs, and the resulting (and perhaps legitimate) motivation for Iraq to hide weapons from inspectors, whether or not they are weapons of mass destruction. In his address to the UN Security Council, Colin Powell derided Iraq for claiming that inspectors were being used for espionage and intelligence gathering on the part of the U.S. But such espionage clearly happened in the past. From the NYTimes on 1/7/99: "United States officials said today that American spies had worked undercover on teams of United Nations arms inspectors" (1). A March 1999 article in the Washington Post make it clear that the U.S. used U.N. inspections as a cover for gathering data about the Iraqi military (2). With the extent of information gathered (read that Post article!), it was probably used to help target the U.S. & British “Desert Fox” bombing campaign of Dec. 1998. Could such espionage be happening again? The team of inspectors assembled last November had 30 inspectors from the United States, more than any other country. Hans Blix said in a Reuters article that he “could not rule out the possibility that there might be spies on his team”(3). Given the history of U.S. behavior, and the weak position of Iraq to protest, I think it’s very likely that U.S. weapons inspectors on the UNSCOM team are gathering intelligence.
So Iraq is caught in this situation where it must show where its arms are at the same time that it is facing a war where showing its arms will place it at a disadvantage. It breaks down to a gnarly game. I personally feel like Iraq is and has been practicing deception. But in a sense, the military buildup on the part of the U.S.--combined with its history of using weapons inspectors as spies--may have made inspections LESS likely to work. Proponents for the military buildup say that they made inspections more likely to work because non-compliance would face serious repercussions--a serious threat of force was at hand. However, it has been my perception, and that of many others, that Bush & Co wanted war, period, and that they never intended to let the inspections work. (I’ve read plenty of opinions saying that war is almost inevitable now because the military mobilization has a momentum of its own and that it would be politically damaging to Bush to lose face and back down.) If Iraq has the same perception--that war is inevitable--then it makes sense for them to hide things. The hawks in the Bush Administration made war seem inevitable. If war is and has been inevitable, then an Iraqi strategy that plays games with the inspections is not just mischievous and stubborn--it is a rational response. If you’re pretty sure that inspections WON’T work and that you’re going to war anyway--then plan your strategy for the war and hide your weapons.
Perhaps you find my argument has holes. I have my doubts, too. Inspections were happening and if Iraq really wanted to avoid war, it could have cooperated completely. But I think my criticism has some validity: Bush&Co were saber rattling so strongly that they were at first reluctant to involve the UN, reluctant to go the route of inspections, and were critical of Iraq’s compliance from the very start. If Iraq has been playing games, the US has been, too. I think the extent of military buildup has undermined the inspections by giving Iraq a real incentive NOT to comply: you don’t want to show your arms when you are pretty sure you are going to war.
To clinch my argument, I note that Bush&Co have had the position that even if inspections go through and Iraq disarms, they still wanted Saddam Hussein out. So, Hussein has not had the option of just disarming--either he takes the nation to war or he accepts a potentially unsafe offer for asylum from Saudi Arabia. If he wants to stay in power, his only options have been 1) disarm and hope that the international community will prevent the U.S. from still seeking a "regime change" or 2) go ahead with war, in which case obfuscating inspections is the logical course.
This is similar to the situation in North Korea. In Paul Krugman's analysis, our belligerent posturing towards the "Axis of Evil" and a doctrine of pre-emptive strikes have meant that for North Korea "there is no point in playing nice"--instead, go ahead and become a nuclear power--it earns respect (4). Similarly, as much as you want to characterize Iraq's behavior as obfuscatory (and I think it is)--it may have been the behavior we have provoked.
(3) Institute for Public Accuracy press release. http://www.accuracy.org/press_releases/PR111802.htm
--TheExperiment also discusses this Catch 22 and has an interview here.
--A 1999 article, The Hijacking of UNSCOM, by Susan Wright.