March 17, 2007
The Nation’s Pulse
By Ben Stein
Published 3/12/2007 12:09:31 AM
A few days ago, a man from a slick new magazine about business sent me an e-mail. He wanted me to do a column for him about what was “new, hot and exciting — or terrible — in business today.” The only catch was that he did not want me to complain about the rich. This is what I sent him:
Here is what’s new and hot and exciting (or terrible) in the world of money today:
The average wage of the American worker adjusted for inflation is lower than it was in 1973. The only way that Americans have been able to maintain their standard of living at the middle and lower ends has been to send more family members to work and to draw down savings or go into debt or both.
The most sought after jobs in the United States now are jobs in finance in which basically almost no money is raised for new steel mills or coal mines, but immense sums are raised to buy companies, recapitalize them — which means pay the new owners immense special dividends and other payments for going to the trouble of taking over the company. This process results in fantastically well-paid investment bankers and private equity “financial engineers” and has no measurably beneficial effect on the economy generally. It does facilitate the making of ever younger millionaires and an ever more leveraged American corporate structure.
An entire new class of financial entity has been created called “the hedge fund.” It is new not in the sense that there were not always funds that hedged by selling short or buying assets uncorrelated with other assets. The new part of this phenomenon is that it is based on a demonstrably false premise: that these entities can consistently outperform wide stock indexes. They have not and cannot, and yet their managers and employees for a time are paid stupendously well.
As with the private equity function, the main effect is to siphon money from productive enterprise into financial manipulation. Or, to put it another way, to siphon money from Main Street to Greenwich or Wall Street.
Starting MBA’s at hedge funds, which are basically gaming enterprises, get paid multi-six figure sums. Starting teachers in the state of Florida get paid $28,000 a year.
Here’s what else is new and exciting (or terrible) in money: there is real poverty among the soldiers who fight our wars. There are fist fights to get children into $30,000 a year kindergartens and pre-schools in the right neighborhoods in Manhattan. There are 40 million Americans without health care insurance. There are almost 40 million baby boomers with no savings for retirement. There is a long waiting list for Bentleys at the dealership in Beverly Hills.
There are soldiers’ wives selling blood to buy toys for their kids. There is a man selling non-functioning body armor who threw a $10 million Bat Mitzvah for his daughter.
In Brentwood, where the houses start at $3 million, the housewives complain about what a terrible country America is. In Clinton, South Carolina, where the textile mill closed fifteen years ago and there is real hardship, the young men still believe in America and their fiancees at Presbyterian College wait for them while they fight in Iraq.
This is a small part of what’s new and exciting (or terrible) in America in the world of money right now.
I never heard back from the man at the slick new business magazine.
Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He also writes “Ben Stein’s Diary” for every issue of The American Spectator‘s monthly print edition. You can now subscribe to Ben Stein’s Diary for just $1.95 per month. Click here to subscribe. And to subscribe to the full magazine, click here.
March 11, 2007
Washington’s escalation of threats against Iran is driven by a determination to secure control of the region’s energy resources
Friday March 9, 2007
In the energy-rich Middle East, only two countries have failed to subordinate themselves to Washington’s basic demands: Iran and Syria. Accordingly both are enemies, Iran by far the more important. As was the norm during the cold war, resort to violence is regularly justified as a reaction to the malign influence of the main enemy, often on the flimsiest of pretexts. Unsurprisingly, as Bush sends more troops to Iraq, tales surface of Iranian interference in the internal affairs of Iraq – a country otherwise free from any foreign interference – on the tacit assumption that Washington rules the world.
In the cold war-like mentality in Washington, Tehran is portrayed as the pinnacle in the so-called Shia crescent that stretches from Iran to Hizbullah in Lebanon, through Shia southern Iraq and Syria. And again unsurprisingly, the “surge” in Iraq and escalation of threats and accusations against Iran is accompanied by grudging willingness to attend a conference of regional powers, with the agenda limited to Iraq.
Presumably this minimal gesture toward diplomacy is intended to allay the growing fears and anger elicited by Washington’s heightened aggressiveness. These concerns are given new substance in a detailed study of “the Iraq effect” by terrorism experts Peter Bergen and Paul Cruickshank, revealing that the Iraq war “has increased terrorism sevenfold worldwide”. An “Iran effect” could be even more severe.
For the US, the primary issue in the Middle East has been, and remains, effective control of its unparalleled energy resources. Access is a secondary matter. Once the oil is on the seas it goes anywhere. Control is understood to be an instrument of global dominance. Iranian influence in the “crescent” challenges US control. By an accident of geography, the world’s major oil resources are in largely Shia areas of the Middle East: southern Iraq, adjacent regions of Saudi Arabia and Iran, with some of the major reserves of natural gas as well. Washington’s worst nightmare would be a loose Shia alliance controlling most of the world’s oil and independent of the US.
Such a bloc, if it emerges, might even join the Asian Energy Security Grid based in China. Iran could be a lynchpin. If the Bush planners bring that about, they will have seriously undermined the US position of power in the world.
To Washington, Tehran’s principal offence has been its defiance, going back to the overthrow of the Shah in 1979 and the hostage crisis at the US embassy. In retribution, Washington turned to support Saddam Hussein’s aggression against Iran, which left hundreds of thousands dead. Then came murderous sanctions and, under Bush, rejection of Iranian diplomatic efforts.
Last July, Israel invaded Lebanon, the fifth invasion since 1978. As before, US support was a critical factor, the pretexts quickly collapse on inspection, and the consequences for the people of Lebanon are severe. Among the reasons for the US-Israel invasion is that Hizbullah’s rockets could be a deterrent to a US-Israeli attack on Iran. Despite the sabre-rattling it is, I suspect, unlikely that the Bush administration will attack Iran. Public opinion in the US and around the world is overwhelmingly opposed. It appears that the US military and intelligence community is also opposed. Iran cannot defend itself against US attack, but it can respond in other ways, among them by inciting even more havoc in Iraq. Some issue warnings that are far more grave, among them the British military historian Corelli Barnett, who writes that “an attack on Iran would effectively launch world war three”.
Then again, a predator becomes even more dangerous, and less predictable, when wounded. In desperation to salvage something, the administration might risk even greater disasters. The Bush administration has created an unimaginable catastrophe in Iraq. It has been unable to establish a reliable client state within, and cannot withdraw without facing the possible loss of control of the Middle East’s energy resources.
Meanwhile Washington may be seeking to destabilise Iran from within. The ethnic mix in Iran is complex; much of the population isn’t Persian. There are secessionist tendencies and it is likely that Washington is trying to stir them up – in Khuzestan on the Gulf, for example, where Iran’s oil is concentrated, a region that is largely Arab, not Persian.
Threat escalation also serves to pressure others to join US efforts to strangle Iran economically, with predictable success in Europe. Another predictable consequence, presumably intended, is to induce the Iranian leadership to be as repressive as possible, fomenting disorder while undermining reformers.
It is also necessary to demonise the leadership. In the west, any wild statement by President Ahmadinejad is circulated in headlines, dubiously translated. But Ahmadinejad has no control over foreign policy, which is in the hands of his superior, the Supreme Leader Ayatollah Ali Khamenei. The US media tend to ignore Khamenei’s statements, especially if they are conciliatory. It’s widely reported when Ahmadinejad says Israel shouldn’t exist – but there is silence when Khamenei says that Iran supports the Arab League position on Israel-Palestine, calling for normalisation of relations with Israel if it accepts the international consensus of a two-state settlement.
The US invasion of Iraq virtually instructed Iran to develop a nuclear deterrent. The message was that the US attacks at will, as long as the target is defenceless. Now Iran is ringed by US forces in Afghanistan, Iraq, Turkey and the Persian Gulf, and close by are nuclear-armed Pakistan and Israel, the regional superpower, thanks to US support.
In 2003, Iran offered negotiations on all outstanding issues, including nuclear policies and Israel-Palestine relations. Washington’s response was to censure the Swiss diplomat who brought the offer. The following year, the EU and Iran reached an agreement that Iran would suspend enriching uranium; in return the EU would provide “firm guarantees on security issues” – code for US-Israeli threats to bomb Iran.
Apparently under US pressure, Europe did not live up to the bargain. Iran then resumed uranium enrichment. A genuine interest in preventing the development of nuclear weapons in Iran would lead Washington to implement the EU bargain, agree to meaningful negotiations and join with others to move toward integrating Iran into the international economic system.
© Noam Chomsky, New York Times Syndicate
· Noam Chomsky is co-author, with Gilbert Achcar, of Perilous Power: The Middle East and US Foreign Policy