“Class is a Dirty Word”

December 27, 2008




Mark Karlin, Editor and Publisher, BuzzFlash.com

December 28, 2007

What Becomes of the Broken Hearted?

It all comes back again in a flood of sickening shock.

The despair that comes with violent political deaths — attacks on the effort of us as humans to govern ourselves in an orderly and peaceful fashion – just breaks your heart and shatters your hopes.

Pakistan has been “Ground Zero” for the largely Saudi financed Al-Qaeda and fundamentalist Islamic terrorists. As one blogger noted, it says it all that Benazir Bhutto is being buried today in Pakistan – victim of an assassination – while Osama bin Laden (the mastermind of 9/11 that Bush swore to capture “dead or alive) is alive – and a “protected man – in the same country.

Elements of the Pakistani intelligence and military have been involved with the Taliban and Al-Qaeda since the rebel war against the Soviet occupation of Afghanistan. Pakistan’s Inter-Services Intelligence agency has long played a role of tolerating, at a minimum, and even cooperating with and sometimes “running,” the Islamic extremists.

As a Los Angeles Times article written in the wake of Bhutto’s assassination notes:

Complicating the situation is the fact that many of the extremist groups have ties to Pakistan’s political establishment, including elements of the government loyal to President Pervez Musharraf, as well as close ties to the military and its intelligence agencies. Bhutto had long criticized such links, and in the wake of her killing Thursday, some of her supporters accused the government of playing a role. One senior U.S. counter-terrorism official also said Washington suspected that rogue officials within the military or intelligence agencies could have been involved, noting that though there is no evidence, they have detested Bhutto for more than a decade.

U.S. intelligence and counter-terrorism agencies, and groups such as the Sept. 11 commission, have said that Pakistan’s Inter-Services Intelligence agency in particular has cultivated relationships with radical groups, using them as proxies to wage war against India while protecting Pakistan’s interests in Afghanistan.

Given the murky area of relationships between the Pakistani military/intelligence infrastructure and the terrorists, the assassination of Bhutto is likely to remain as unresolved as the JFK assassination.

Someone will be blamed, probably Al-Qaeda or one of its many offshoots operating in Pakistan – and one of these groups may very well have provided the shooter – but putting Musharraf in charge of finding out if his own military command was involved is like having Bush investigate the Plame leak.

All we know is that such a murder assaults us all in a way that makes us feel horribly vulnerable.

We have known so much disappointment as a nation: the promise of the civil rights era and the empowerment of women in the ‘60s was whiplashed by a wave of assassinations against liberal icons.

The killing of Harvard- and Oxford-educated Bhutto just gives us that sinking feeling that whenever there is the hope of progress, someone steps in with a gun. These are indeed shots heard round the world because they threaten the very notion that we can be self-governing.

If it can all be taken away in a hail of bullets, how can one not be broken hearted?


As always, music can provide some small measure of solace. We recommend Joan Osborne’s emotionally stirring “cover” of the Motown classic, “Tell me, What Becomes of the Broken Hearted?”


I could have just as well replaced “conservative elite” with “Bush/Cheney administration” in the title of this post, and the point would have been virtually identical. The Bush/Cheney administration is in fact the perfect representative for the conservative elite in the United States. But since the issue is much larger than the Bush/Cheney administration, and since they are not running in the 2008 election (assuming we have one), I think it makes more sense at this time to speak more broadly of the conservative elite in our country as a whole (which includes all the Republican presidential candidates with the exception of Ron Paul), rather than limit the discussion to the Bush/Cheney administration.

Six months ago I posted an essay on DU titled “The Five Pillars of George W. Bush’s Republican Party”. The five pillars that I discussed in that post were:
 The economic royalists
 The militarists
 The propagandists and destroyers of our First Amendment rights
 The crooks
 The gullible

This post is, in part, a refinement of the concepts that I used in my previous post, with emphasis on how lies and propaganda are used to further conservative elitist goals. I noted at the time that there is a good deal of overlap between the five pillars, with many people participating in more than one of them.

However, it may be more useful to look at this in terms of goals, methods, and tools rather than simply as five pillars: The term “economic royalist” represents the goals of the conservative elites, which is the accumulation of wealth and power for themselves. The next three pillars that I listed represent methods. These include stealing and bribing their way to electoral victory, lying and propagandizing about their intentions and the intentions of their political opponents, invading and occupying other countries, and conducting a “War on Terror” where every means, no matter how hideous or evil, is considered justified in the cause of winning their so-called “war”. And last but not least, the gullible make up a large part of the base which they need to maintain their power.


Since the main goal of the conservative elite agenda in our country is to accumulate ever more wealth and power, an understanding of how they do this starts with a review of income inequality in our country over the past several decades:

A brief review our last century’s history of income inequality in the United States

Under the Reagan/Bush/Quail administrations of the 1980s and early 1990s, as with the current Bush/Cheney administration, income inequality in the United States increased tremendously. To put this in historical perspective we need to consider the following, described in economist Paul Krugman’s new book, “The Conscience of a liberal”.

1) Prior to the presidency of Franklin Delano Roosevelt great income disparity existed in our country, with the top 1% of individuals accounting for 17% of annual income and the top 10% accounting for 44% of annual income. (And that’s not even counting income from capital gains, which create even greater income inequality.)

2) FDR, after ascending to the presidency in 1932, initiated a wide range of policies – collectively referred to as the New Deal – which had the effect of substantially reversing income inequality for the first time in U.S. history. These policies included: Progressive taxation; labor protection laws; and several policies to provide a social safety net for Americans and otherwise reduce income inequality, including the Social Security Act of 1935, the GI Bill of Rights, and the development of several policies to facilitate job creation.

3) FDR’s New Deal was so successful that it lasted for several decades, despite tremendous opposition from the conservative elites whose wealth had been reduced.

4) Beginning in the 1980s, right wing conservatives began to have success in dismantling the New Deal, such that today we have income inequality in our country that equals that seen in the pre-New Deal days.

Krugman describes how this has all translated into median family income levels, as shown in this chart, beginning in 1947, when accurate statistics on this issue first became available: Median family income rose steadily (in 2005 dollars) from $22,499 in 1947 to more than double that, $47,173 in 1980. Then, for the next 25 years, except for some moderate growth during the Clinton years, there was almost no growth in median income at all, which rose only to $56,194 by 2005 (85% of that growth accounted for during the Clinton years).

The stagnation of median family income during this period of time was accompanied by a tremendous rise in the wealth of a tiny proportion of our population. This is vividly described by Jack Rasmus, who points out that “More than $1 trillion a year in relative income is now being shifted annually – from roughly 90 million middle and working class families to the wealthiest households and corporations.”

The consequences have been devastating for the middle and working class and the poor: Today, 46 million Americans are without health insurance, which results in thousands of premature deaths every year, including thousands of infants; approximately 7 million Americans who want jobs are unemployed; 12% of American households lack adequate food; approximately 3 million Americans are homeless in any given year; and 37 million Americans are in poverty, while the poverty rate continues to rise under George W. Bush’s administration.

The use of lies and propaganda to transfer more wealth to the already wealthy

How did they do this? I noted above that the transfer of wealth to the wealthy came about largely through a reversal of FDR’s New Deal policies, beginning with the Reagan presidency and accelerating under Bush/Cheney rule. In addition, this is done through direct subsidies to wealthy corporations and deregulation – meaning among other things the relaxing or reversal of laws and regulations that protected worker health and safety and limited the right of corporations to pollute our environment. But how were they able to make these things acceptable enough to the American people that they would tolerate it? The answer of course is lies and propaganda.

Perhaps the biggest lie was “trickle down economics” – the wholly unsubstantiated theory that the creation of policies that increase the wealth of the wealthy will cause a wave of economic prosperity that will “lift all boats” and cause everyone to prosper in the long run. A simple look at the stagnation of median family income and the rising ranks of the poor in our country, concurrent with the accumulation of great fortunes by a tiny percent of our population, reveals that theory for the sham that it is.

Another trick is simply to provide names for bills which do the exact opposite of what the name implies. For example, pass a bill whose main feature is to deregulate pollution controls on corporations, and name it the “Clear Skies Initiative”. Or, in the name of “tax relief”, pass laws that reduce taxes almost entirely on the wealthy while driving our country into bankruptcy and creating the need to starve social programs which benefit the good majority of Americans.

Al Gore, in his book “The Assault on Reason”, describes the basic mode of operation of these conservative elites. Borrowing the term “Economic Royalist” from FDR’s 1934 Democratic Convention speech, Gore describes this group as those:

who are primarily interested in eliminating as much of their own taxation as possible and removing all inconvenient regulatory obstacles. Their ideology – which they and Bush believe with almost religious fervor – is based on several key elements:

First, there is no such thing as “the public interest”; that phrase represents a dangerous fiction created as an excuse to impose unfair burdens on the wealthy and powerful.

Second, laws and regulations are also bad – except when they can be used on behalf of this group, which turns out to be often. It follows, therefore, that whenever laws must be enforced and regulations administered, it is important to assign those responsibilities to individuals who… reliably serve the narrow and specific interests of this small group…

What members of this coalition seem to spend much of their time and energy worrying about is the impact of government policy on the behavior of poor people. They are deeply concerned, for example, that government programs to provide health care, housing, social insurance, and other financial support will adversely affect work incentives….


Since the methods that conservative elites use to maintain and increase their power would be repugnant to most people if they understood the truth behind the methods, those methods must be disguised as something that people can accept:

Legalized bribery disguised as “campaign contributions”

Bribery has been defined as “a crime implying a sum or gift given that alters the behavior of the person in ways not consistent with the duties of that person.” Since bribery of public officials usually requires a great deal of money, those who bribe public officials are almost always powerful and wealthy individuals or corporations – in other words, the conservative elite.

Bribery is technically illegal in our country.

However, largely due to the influence of the conservative elite, bribery of public officials by corporations is legal, as long as two fictions are maintained. The first fiction involves a practice called “money bundling”. That is where a corporation collects small donations of up to $2,000 from a large number of its employees and presents it as a package to a public official whose actions it wants to influence. This practice prevents technical violation of the McCain-Feingold cap of $2,000 on individual contributions, even though the good majority of individuals who contribute the money would never do so except for their felt need to please the corporate owners on whom their jobs depend. George Bush made good use of this practice in his presidential runs by awarding the designation of “Bush Pioneers” to those elites who contributed $100,000 and “Bush Rangers” to those who contributed $200,000.

The other fiction that must be maintained is that the money doesn’t influence the actions of the public official in the performance of his/her public duties. For example, the oil and gas industry contributed over $180 million to Congressional candidates since 1990, including many millions for the 2006 election. During this time, the 2005 energy bill gave out billions of dollars in tax breaks to the oil and gas industry, provided exemptions from the Clean Water Act and Safe Drinking Water Act, and relaxed regulations against the consolidation of utility companies. In order for that to be legal we’re supposed to believe that the contributions had no role in influencing Congressional votes on the energy bill.

Stealing elections – disguised as free market efficiency and preventing “voter fraud”

In 2000: After George Bush’s brother, the governor of Florida, illegally disenfranchised tens of thousands of African Americans from the presidential election on the grounds that they were close computer matches to felons; after a Republican orchestrated riot in Miami-Dade County stopped the vote counting there; and after various other types of election fraud as well, five Republican Supreme Court “Justices” stopped the manual recount of the votes in Florida on grounds that had no Constitutional justification whatsoever, thereby declaring George W. Bush our 43rd President.

Here is evidence of vote switching fraud in national elections from 2002 to 2006; here is evidence of widespread election fraud in 2004; here is evidence of widespread election fraud in 2006; and we learned earlier this year that the Bush administration fired their federal attorneys for either refusing to investigate non-existent election fraud by Democrats or for pursuing too aggressively cases of election fraud perpetrated by Republicans. In fact, the main purpose behind the whole U.S. attorney firing scandal appears to have been the stealing of elections.

Why all this election fraud with so little investigation or even publicizing by our conservative corporate news media?

With respect to the 2000 election, we were told that the disenfranchisement of tens of thousands of African Americans who were close computer matches of felons had to be done in order to stop “voter fraud”. To justify the stopping of the hand counting of votes that would have awarded Al Gore the presidency in 2000, we were told that the hand counting of votes was not reliable. For example, Mary Matalin explained (i.e. lied) on the Chris Matthews show that simply holding a cardboard ballot in one’s hands could produce marks which indicated the presence of an attempted vote.

With regard to the potential for electronic mediated election fraud, most conservative elites say that it is ok to have our votes counted by computers using secret vote counting code, with no means of determining whether or not the vote count is accurate. After all, these are private companies that supply the machines that count our votes. Therefore, it would be interfering with the “free market” to insist that the government conduct investigations or exert controls to ensure that the vote counting is accurate. Furthermore, machines are much more “efficient” at counting votes than are humans – or so goes the logic of the conservative elites.

Propaganda disguised as news

Largely because of the Telecommunications Act of 1996, which relaxed monopoly restrictions on news media ownership, control of the news media in the United States has become much more concentrated in the hands of smaller and smaller numbers of extremely wealthy people and corporations.

As a result, to a large extent what now passes for “news” or serious “journalism” is instead more akin to propaganda with the purpose of delivering a message favored by the wealthy corporations and individuals who own our news media. Eric Alterman described this phenomenon in a recent article in The Nation. With respect to the so-called “mainstream news media”:

Its members consistently defer to conservative Republican Presidents with a history of deliberate deception, allowing them to define their terms… Its members invite Republican Congressmen, known to be not merely unreliable but delusional, to lie about Democratic Congressmen. When challenged, they reply that they cannot be bothered to discern the truth…

And to compound the problem, George Bush has made sure that the news we receive gets twisted in a variety of ways. In order control the news that Americans receive he has denied our First Amendment rights through the use of so-called First Amendment zones to prevent protesters from being heard, by denying access to journalists who criticize him, by threatening to jail reporters who criticize his administration, and by paying shills (with taxpayer dollars) to write government propaganda disguised as news.

Militant nationalism disguised as “patriotism”

War is a prime method that the Bush administration has used to funnel tens of billions of dollars to its cronies. Antonia Juhzs, in her book, “The Bush Agenda – Invading the World, One Economy at a Time”, explains that war with Iraq provided a bonanza of opportunities for Bush and Cheney’s already wealthy corporate friends and supporters. Juhasz explodes the myth that George Bush didn’t have a well thought out plan for post-conflict Iraq:

There was at least one clear plan – an economic plan – the blueprint for which was ready and in Bush administration hands at least two months prior to the invasion. The 107-page three-year contract between the Bush administration and Bearing Point, Inc. of McLean, Virginia, lays out the president’s economic agenda in Iraq. In return for $250 million, Bearing Point provided “technical assistance” to the U.S. Agency for International Development on the restructuring of the Iraqi economy to meet Bush administration goals…

Bearing Point wrote the framework to restructure Iraq from a state-controlled economy to one that guarantees “free markets, free trade and private property” – among other goals… to recommend changes to laws “that impede private sector development, trade and investment”… undertaking a “mass privatization” of Iraq’s state-owned industries.”

Bearing Point’s Draft Statement of Work, “Stimulating Economic Recovery, Reform and Sustained Growth in Iraq”, was completed on February 21, 2003. While it was not available to the public, I was made aware of the document…

The extent to which the Bearing Point contract sets out to transform the Iraqi economy is astonishing. The company specifies changes in every sector of the Iraqi economy… It even specifies propaganda tools to sell these policies to the Iraqi public.
Thus explains why George Bush and Dick Cheney lied us into war with Iraq. And it’s interesting to note that purposeful ignoring of relevant sections of our National Intelligence Estimate (NIE) played a crucial role not only in the Bush/Cheney plan to justify the Iraq War (by noting “claims of Iraqi pursuit of natural uranium {i.e., yellowcake} in Africa are highly dubious.”), but threatens to do the same for the purpose of providing a justification for war with Iran as well.

It’s hard to understand how anyone could fall for this a second time (or a first time for that matter). Undoubtedly, the fear of being accused of being “unpatriotic”, as Republicans do whenever Democrats question their war motives, provides a major motivation to even Democrats to fall in line behind Bush war plans.


You can get a pretty good idea of the truth by just translating everything the conservative elites say into the opposite. Yet, by slavishly and shameless sticking to their ridiculous messages, repeated a million times, they manage to convince a lot of people – that’s why I refer to much of their base as “the gullible”.

They have actually convinced a good many people, for example, that it is us liberals who are the “elite”, rather than them. Never mind that Republicans, until recently, had control of all three branches of government plus the news media. Never mind that wealth was one of the strongest predictors of voting for George Bush in 2000 and 2004. Liberals are “elites” because…. well, because conservative elites say we are.

They twist the word “patriotism” to make it mean support for the Bush/Cheney war agenda, or the war agenda of whatever conservative elite happens to be in power at the time. If “patriotism” is a virtue then it means concern for our fellow Americans or for the progressive ideals on which our country was founded. If it means what conservative elites imply it to mean, then there is no virtue attached to it, and it’s just plain evil.

With regard to the “culture of life” that George Bush and other conservative elites so often claim to live by, George Lakoff pretty well nailed that in his book, “Whose Freedom – The Battle over America’s Most Important Idea”:

So-called pro-life conservatives are typically in favor of the death penalty… They favor conservative policies that result in American having the highest infant mortality rate in the industrialized world… These deaths are a result of conservative policies against prenatal and postnatal care, universal child health insurance…, Medicaid…

If they were really pro-life… they would support programs for pre- and postnatal care, health care for all children, programs to feed and house the hungry and homeless, antipollution programs, and safe food programs. Instead, they let strict father morality dominate over issues of life – that the poor are responsible for their own poverty and that they and their innocent children should suffer for it, and that government should not interfere with corporate profits through public health regulations for clean air and water.
And Lakoff also pretty well nailed their ideology concerning freedom:

The focus of (George Bush’s) presidency is defending and spreading freedom. Yet, progressives see in Bush’s policies not freedom but outrages against freedom. They are indeed outrages against the traditional American ideal of freedom… It is not the American ideal of freedom to invade countries that don’t threaten us, to torture people and defend the practice, to jail people indefinitely without due process, and to spy on our own citizens without warrant.

In short, the success of the whole conservative elitist agenda depends upon making Americans believe that up is down and down is up. Once the smokescreen is cleared, their whole ideology is revealed for what it is – just an excuse to expand their wealth and power and do whatever they want, at the expense of everyone else.

ggdub_camo.jpgAs I read my Monday morning (Oct. 1, 2007) San Jose Mercury News a headline jumped out at me: “Cigarette tax would hurt poor“.

How often do we hear that taxes “hurt” or “punish” one group or another? How often do we hear that taxes are a “burden on the economy” or “cost jobs?” How many politicians talk about providing “tax relief?”

George Lakoff, of the Rockridge Institute writes that this language “frames” taxes as an affliction:

For there to be “relief” there must be an affliction, an afflicted party harmed by the affliction, and a reliever who takes the affliction away and is therefore a hero. And if anybody tries to stop the reliever, he’s a villain wanting the suffering to go on. Add “tax” to the mix and you have a metaphorical frame: Taxation as an affliction, the taxpayer as the afflicted party, the president as the hero, and [people who believe in government] as the villains.

This anti-tax rhetoric results from an anti-government worldview that is pushed by conservatives, in which they portray our government as some kind of enemy of the public. Ronald Reagan is famous for sayings like, “Government is the problem, not the solution” and, “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’ ” The constant use of negative framing like this to describe government and taxes leads regular people to think about their government as a negative, malevolent force. We have been hearing this drumbeat for so long, and with so little pushback to counter these ideas, that many people just accept that this is the way it is.

But are taxes really an affliction? Is government really a negative force in society? Let’s step back from the affliction frame for a second and take a different look at the idea of taxes and government.

Let’s start with the basics. Who is the government? The Constitutions of the United States of America and of the state of California both begin with the words, “We the people.” So “we, the people” are the government. The government is US — you and me! When you think about it this way, it makes the things Ronald Reagan said sound contradictory. How can we, the people be the problem? How can it be scary that we, the people are here to help each other?

What does our government do? Again, back to the basics, our government builds the roads, hires teachers and police and firefighters and judges, and, in the bigger picture, sets up the rules for the society we want. We build roads and the roads allow us to get to the schools, businesses, stores and parks where we work, shop, study and relax. And because we have our schools and jobs and stores and parks, and the rules for the society we want, in theory we are able to live a little better every year. When the government is functioning as it should, these rules enable all of us to pursue happiness and our businesses and people to prosper. And these rules are decided by us through our elections.

In other words, WE decide what our government does and how our money is used to our mutual benefit.

So how can government and taxes be bad if the government is us? Looking at things this way, doesn’t this all mean that taxes are like a savings and investment account where we get back so much more than we put in? And, building on that, since we use the taxes to our mutual benefit aren’t we all better off if there are more taxes rather than less? Doesn’t that just make us all stronger?

What about all the “government bureaucracy” that conservatives complain about? Well, looked at in this new way, the government’s money is our money, so of course we want to be able to account for how it is being spent. That means it has to be tracked every step of the way. We want to know that it is spent honestly and efficiently, and the necessary transparency and the oversight that accomplishes this does require people and procedures.

Conservatives also say government is “inefficient.” But anyone who has worked in a corporation has experienced the alternative. In many corporations a few people at the top decide how things are going to be, and they pass commands down from the top. Anyone who disagrees has the choice to do what they are told or leave. It’s great for the people who are at the very top – but sometimes not so great if you are not.

The processes involved when lots of people get together to decide how to utilize our shared resources can get somewhat cumbersome. Anyone who has ever been in a homeowners association understands this. But in our system of government everyone is involved in making the decisions. This can take longer than it can take in a business, but it also lets all of us have a say.

This is how democracy works. This is the price we pay for letting everyone have a say in how our society is set up. Together we mutually decide how best to build and manage our society, and this can take some time and effort. We decide the best ways to spend our money and we want systems in place so that we know that the money is being used properly.

So we all have a choice. If we want firefighters and police to be there for us when we need them, and if we want good schools and teachers so all of our children have an opportunity to succeed, then we have to pay the necessary taxes to pay for those things. And if we want to continue to have a say in how our government works and what it does, we have to put up with the decision-making process. It’s a part of growing up and taking on the responsibilities.

Or, we go a different way. We can hand those choices and responsibilities over to the “private sector” – the corporations – and let others decide how things are going to be done and how our money and common resources will be used. Thinking about Enron and Katrina and Iraq and our current privatized health care system, I wonder how we can expect that will work out for us?

by Dave Johnson


Reagan yuk!

November 30, 2007



(Peggy Noonan pay attention)

1.First to turn America into a DEBTOR nation
2. First to increase DEBT faster than growth of national income in eight years
3. First to increase DEBT faster than growth of gdp over eight years
4. First to double the deficit in just eight years
5. First to “almost”: triple the national DEBT in just eight years
6. First to increase SPENDING by 80%–over 8 years.
7. First to SPEND more in eight years than was spent in prior 50 years.
8. First to have “real” INTEREST RATES of 8% after averaging 1% over 35 years.
9. First to keep PRIME INTEREST RATES at 20%.
10.First to over value the dollar to the yen at rate of 262 yen to 1 dollar.
11.First to have served as Governor and increase STATE SPENDING by 112%
12.First to have HOME LOAN INTEREST RATES as high as 16%
13. First to CUT TAXES by 60% for his rich pals
14. First to allow the SAVINGS AND LOAN INDUSTRY to be raided after signing a deregulatory bill and proclaiming “I think we have hit the jackpot”. Come and get it the vaults are unguarded.
15. First to deal with TERRORISTS
16. First to send an AUTOGRAPHED BIBLE to a man he called “The Satan of Terrorists”.
17. First to have an ADMIRAL plead the Fifth Amendment.
18. First to have a stealing, lying, gutless wife abusing MARINE LT. COLONEL plead the Fifth Amendment.
19. First to have a “sitting” CABINET MEMBER INDICTED
23. First to have more members of his administration charged with crimes than CUMULATIVE TOTAL OF ALL OTHER PRESIDENTS in the twentieth century
24. First to set a record for the LARGEST ONE DAY PERCENTAGE DECLINE in the DOW in history. 10-19-87
25. First to have over $10,000,000 INCREASE IN WEALTH from serving for 8 years as president.
26. First to testify ”under oath” 130 times that ”I DON’T REMEMBER” .
27. First to have an Admiral with a photographic memory testify 128 times “ I DON’T REMEMBER”.
28. First to undergo BRAIN SURGERY a few months after leaving office. No pain no gain.
29. First to, repeatedly, FALSIFY HIS WIFE’S AGE. As tho anyone cared.
30. First to promote his religious faith and never have an ACTIVE CHURCH MEMBERSHIP.
31. First to never use the term JESUS CHRIST in speeches.
32. First to seek GUIDANCE FROM THE STARS not from God
33. First to have had a SHOTGUN WEDDING.
34. First to have worked as a SHILL in Las Vegas.
35. First to call a Stealing, Lying, Psychotic, wife abusing Marine a “LIAR.
36. First to have been OPENLY ALIENATED from his children.
37. First To have served with ALZHIMERS
38. First to have UNEMPLOYMENT AT 10.8% since great depression.
39. First to attack a small unprotected nation with 88,000 inhabitants and 10,000 bb guns then PROCLAIM -“America stands tall again”— “we have whipped the Vietnam Syndrome”-we have defeated communism”. Gosh! What if we had whipped Cyprus?.
43. #1-In Percent increase in PERSONAL BANKRUPTCIES
44. #1-In recorded MISSTATEMENTS
45. #1-In never having a single press conference in which he did not make at least one or more INCORRECT STATEMENTS.
46. #1-In needing a staff person standby during press conferences to tell the press “WHAT HE REALLY MEANT”.
47. #1-In having SERVICEMEN KILLED during peacetime.
48. #1-In largest DROP IN POPULARITY in one week.
49. #1-In being first to HONOR NAZI STORM TROOPERS by calling them” Innocent Victims”
50. #1-In being first to be labeled “BRAIN DEAD AFFABLE DUNCE’ by this writer.
51. First to lie-over and over-to reporters “I DO NOT DYE MY HAIR my barber uses a special shampoo”
52. First to have a wife who ”forced” him to WEAR THREE SUITS in one day
53. First to boast “Not bad for a DUMB GUY who worked only 20 hours per week”.
54. First to have his wife sit nearby and WHISPER ANSWERS to questions
55. First to FALL ASLEEP while the Pope spoke
56. First to invite the Pope to visit the White House and “BRING THE WIFE AND KIDS”
57. First to have his press secretary remove him from the microphone because he could not answer questions. Then, as the reporter
yelled out “answer my question” he replied “MY HANDLERS WON’T LET ME SPEAK”. Quick get the white coat.
58. First 20th Century president to have historians RATE HIM BELOW every president of the 20th except for Richard Nixon. 1994 Poll.
59. First to give us a First Lady with a past reputation for giving the BEST BJ in Hollywood.
60. First to suggest his eldest son undergo PSYCHIATRIC examination
61. First to have been voted in British polls (twice) as the ”MOST FEARED LEADER IN THE WORLD” sic em Rambo.

62. First to serve as Governor on a ”conservative” platform and INCREASE SPENDING BY 112%.
63. First Governor TO INCREASE personal income taxes by 60%, tax increase on cigarettes by 200%, state tax collections by 152%.
64. First to have a Special Assistant say on national TV “sometimes you had to HIT HIM ON THE HEAD with a 2 x 4 to get his attention”
65. First to have his official biographer state on national TV ‘After he was shot in 1981he GOT SLOWER AND SLOWER EACH YEAR. His speech got slower. He deliberated more and he hesitated more when he spoke. He lost his physical quickness and would not make decisions on the spot. It was a very, very slow and steady mental and physical decline”.
66. First to have a POPULARITY RATING OF ONLY 35% after his first two years in office.
67. First president to have been DIVORCED
68. First president to have the Geriatrics Department of a major
university study his behavior and conclude that AFTER THREE YEARS IN OFFICE HE HAD ALZHIMERS.
69. First to have shacked up with love of his life while wife was in hospital giving birth to first child

———————————— THE TRUTH SHALL SET YOU FREE——————————————-
Clarence Swinney—Burlington NC.—cwswinney@netzero.net


Many of us recall California Governor Arnold Schwarzenegger’s tragic buffoonery at the 2004 Republican National Convention in New York City.

Swept up by the pageantry of it the occasion, California’s governator led the delegates in a cheer as he exhorted them while also warning his television audience:

“Don’t be an economic girlie man! Four more years, four more years!”

How good it felt to the governator at the time. Times were good for him, he had been handpicked by the Enron team to stop a lawsuit from the state of California that Governor Gray Davis and Lieutenant Governor Cruz Bustamante were prepared to initiate against that corrupt corporation for ripping off the Golden State by generating an “energy crisis” and following it up with outrageous usurious costs.

A strategy was quickly developed by Enron in concert with the most perversely selfish of the corporate self interest brigade to recall Davis and install Schwarzenegger, with former California Governor Pete Wilson to help as the former bodybuilder-actor’s minder.

Arnold remained on great terms with Bush until his poll numbers sagged. In his last run for governor he cited a scheduling conflict that prevented him from attending a function at the Reagan Library in Simi Valley that Bush attended.

Despite Schwarzenegger’s glowing personal assurances that all was well that he delivered at the 2004 Republican Convention, his remarks boomeranged and bit him hard the other day as some 350,000 homes were being evacuated at the height of the blazing California wildfires.

Yes, Mr. Governator, in those heady days you were all for Bush and Cheney. There was that war in Iraq that many of us were fearful would never end as long as the neoconservatives were making policy and its impact generated with decisive impact in California the other day.

A major function of National Guard service is to render assistance when state tragedies occur. A tragic thing happened to the California National Guard when their numbers were sorely needed to help while fires raged.

Their numbers had cataclysmically shrunk. There were only 1,500 California National Guard members able to assist during a period of dire need.

So how many California National Guard members are in Iraq? They number 8,000, dwarfing that of those able to answer duty’s call in their home state while residences were going up in smoke and many residents of the affected areas needed to quickly escape to save their lives.

What will it be? Shall we continue to shell out tax dollars for more neoconservative “nation building” in an Iraq War cause that is hopeless? Shall we do so at the expense of ignoring in some cases and severely undercutting in others the nation’s major domestic needs?

The neoconservative wrecking crew of Cheney and Bush stand as rulers with a reverse Midas touch. Whether we deal with issues foreign or domestic calamity is the order of the day as lives are lost in a war launched on a tissue of lies, America roars toward the $10 trillion debt mark, the largest in the history of the planet, the dollar collapses on the world market, and increasing numbers of citizens lose their jobs to foreign outsourcing.

In conclusion, Mr. Governator, there is that matter of economic girlie men. Since you had the whole equation backwards does that ultimately make you the real economic girlie man?
Bill Hare

BY Scott Horton


In civil litigation connected to one of a substantial number of federal prosecutions of campaign funding of contributors to Democratic candidate John Edwards, a federal court has directed the Department of Justice to submit to discovery to ascertain whether improper political motivations stood behind its management of the case. The litigation, entitled Beam v. Gonzales, questions the actions of former Attorney General Alberto Gonzales and Federal Elections Commission chair Robert Lenhard in going after a group of Edwards fundraisers. At the time of the actions taken, Gonzales was counsel to George W. Bush and was heavily (and improperly) involved in shaping and directing Department of Justice prosecutions, and the head of the FEC was Michael Toner. Before his appointment, Toner was Chief Counsel to the Republican National Committee, and prior to that Toner served as General Counsel of the Bush- Cheney Transition Team and General Counsel of the Bush-Cheney 2000 Presidential Campaign.

Senior Republican operatives appear to have targeted John Edwards early in the process of the 2004 presidential election as the most likely Democratic nominee and opponent of the Bush-Cheney reelection effort. Extensively resourced efforts were launched within both FEC and DOJ to go after Edwards’s campaign funding resources, with a particularly ferocious focus on trial lawyers. At the same time, the Justice Department took quite extraordinary steps to camouflage its conduct, for fairly obvious reasons—it was sensitive to the potentially adverse consequences for the Bush Administration and its re-election efforts that would result from the disclosure of its use of the machinery of the criminal justice process to attack a political adversary.

But the camouflaging may have been driven by even darker motives. Evidence recently provided by a Republican attorney deeply involved in a gubernatorial campaign in Alabama provides the most explicit evidence so far of how schemes like the attack on the Edwards donors were coordinated and implemented. In connection with the probe of the politically motivated prosecution of former Governor Don E. Siegelman in Alabama, Dana Jill Simpson, an attorney right in the middle of G.O.P. campaign efforts in the state, describes here how Karl Rove manipulated criminal investigations by calling senior DOJ officials to direct the allocation of resources to target certain matters.

Q: Okay. And did Rob give you the name of the person at — I’m just going to call it Public Integrity — that he thought he understood Karl Rove had spoken to?

A: No, he said it was the head guy there and he said that that guy had agreed to allocate whatever resources, so evidently the guy had the power to allocate resources, you know.

Q: To the Siegelman prosecution?

A: Yes. And that he’d allocate all resources necessary.

Improper White House manipulation of criminal justice machinery took a consistent form: political appointees, acting on White House instructions, would “allocate resources” and “deny resources.” When Rove wanted people “taken out,” copious resources—FBI investigators and prosecutors—would be allocated to concocting a case. When Rove wanted to shield Republican operatives who came under suspicion, federal prosecutors would be fired, transferred, retired or reassigned with regularity. The so-called U.S. Attorneys scandal is one manifestation of this process, but in fact it is reflected in a consistent pattern of dealings that stretch back to the beginning of the Bush Administration.

Papers filed in the Beam case provide further evidence of how the scheme was surreptitiously carried out. It appears that Justice Department lawyers involved in the scheme improperly issued subpoenas to financial institutions designed to collect information on campaign fundraisers for Edwards. The subpoenas were marked with a legend saying that their existence was to be treated as a secret. Since the subpoenas were issued in violation of federal laws protecting the secrecy of information by financial institutions, one has to suspect that this extraordinary step was taken because the Justice Department officials involved knew their conduct was unlawful and sought to obscure that fact by avoiding detection. In any event, the existence of the subpoenas was not a fact entitled to protection. The prosecutors also invoked grand jury secrecy requirements as a reason for maintaining secrecy, a contention which is sure to raise eyebrows in light of the aggressive leaking of grand jury materials in a wide array of political prosecutions. More likely, the prosecutors were extremely anxious to insure that the full breadth of the scheme targeting the Edwards campaign be kept out of public knowledge.

The stench surrounding these prosecutions is enormous and one particular passage of the plaintiffs’ brief stands out to me:

Gonzales personally authorized a small army of nearly 100 federal agents to raid a law office and simultaneously raid the homes of its employees and their families. Indeed, one agent commented about how he had been flown in from Iraq to help find out why American citizens had made contributions to the John Edwards campaign.

This is extremely telling. As Robert Jackson warned, prosecutorial abuse rarely takes the most obvious form. It generally will appear to be far more subtle.

he will pick people that he thinks he should get, rather than pick cases that need to be prosecuted. With the law books filled with a great assortment of crimes, a prosecutor stands a fair chance of finding at least a technical violation of some act on the part of almost anyone. In such a case, it is not a question of discovering the commission of a crime and then looking for the man who has committed it, it is a question of picking the man and then searching the law books, or putting investigators to work, to pin some offense on him.

The FBI agent’s comment is very telling. As the headlines teach us, American security contractors in Iraq have been implicated in enormous crimes, including murder, assault, rape, kidnapping and extortion. In a contractor population of 180,000 for three years the Justice Department, which has direct responsibility for law enforcement, has failed to bring a single prosecution for violent crime. And instead one of the few FBI investigators assigned to Iraq is brought home to America to terrorize people involved in raising campaign funds for Administration opponents. This tells you as clearly as possible what the priorities of the officials directing this case were. They have nothing to do with preserving the integrity of the federal elections process. Rather just the opposite. They are employed to assail political opponents and provide unfair advantage to the Republican Party and its candidates. This is morally corrupt and repugnant.

These prosecutions are beyond simply abusive. They may well have crossed the threshold into criminal conduct. The Judiciary Committee needs to secure Michael Mukasey’s commitment that he will appoint a special prosecutor to investigate how these cases came to be asserted and take appropriate punitive action against those responsible. The wrongdoers here are not the career prosecutors and FBI agents who have front line responsibility for the cases—they are playing the roles assigned to them. The wrongdoers will attempt to hide behind career personnel. The wrongdoers are the political operatives and political appointees who are criminally misusing the criminal justice system.

To enrage the American people as much as possible, Roosevelt needed the first overt attack by Japan to be as bloody as possible, appearing as a sneak attack much as the Japanese had done to the Russians. From that moment up until the attack on Pearl Harbor itself, Roosevelt and his associates made sure that the commanders in Hawaii, General Short and Admiral Kimmel, were kept in the dark as much as possible about the location of the Japanese fleet and it’s intentions, then later scapegoated for the attack. (Congress recently exonerated both Short and Kimmel, posthumously restoring them to their former ranks). But as the Army board had concluded at the time, and subsequent de-classified documents confirmed, Washington DC knew the attack was coming, knew exactly where the Japanese fleet was, and knew where it was headed.On November 29th, Secretary of State Hull showed United Press reporter Joe Leib a message with the time and place of the attack, and the New York Times in it’s special 12/8/41 Pearl Harbor edition, on page 13, reported that the time and place of the attack had been known in advance!The much repeated claim that the Japanese fleet maintained radio silence on it’s way to Hawaii was a lie. Among other intercepts still held in the Archives of the NSA is the UNCODED message sent by the Japanese tanker Shirya stating, “proceeding to a position 30.00 N, 154.20 E. Expect to arrive at that point on 3 December.” (near HI)
> President Lyndon Johnson wanted a war in Vietnam. He wanted it to help his friends who owned defense companies to do a little business. He needed it to get the Pentagon and CIA to quit trying to invade Cuba. And most of all, he needed a provocation to convince the American people that there was really “no other choice”.On August 5, 1964, newspapers across America reported “renewed attacks” against American destroyers operating in Vietnamese waters, specifically the Gulf of Tonkin. The official story was that North Vietnamese torpedo boats launched an “unprovoked attack” on the USS Maddox while it was on “routine patrol”.The truth is that USS Maddox was involved in aggressive intelligence gathering in coordination with actual attacks by South Vietnam and the Laotian Air Force against targets in North Vietnam. The truth is also that there was no attack by torpedo boats against the USS Maddox. Captain John J. Herrick, the task force commander in the Gulf, cabled Washington DC that the report was the result of an “over-eager” sonar man who had picked up the sounds of his own ship’s screws and panicked. But even with this knowledge that the report was false, Lyndon Johnson went on national TV that night to announce the commencement of air strikes against North Vietnam, “retaliation” for an attack that had never occurred.

President George H. W. Bush wanted a war in Iraq. Like Crassus, George Bush is motivated by money. Specifically oil money. But with the OPEC alliance failing to keep limits on oil production in the Mideast, the market was being glutted with oil pumped from underneath Iraq, which sat over roughly 1/3 of the oil reserves of the entire region. George wanted a war to stop that flow of oil, to keep prices (and profits) from falling any further than they already had. But like Roosevelt, he needed the “other side” to make the first move.Iraq had long been trying to acquire greater access to the Persian Gulf, and felt limited confined a narrow strip of land along Kuwait’s northern border, which placed Iraqi interests in close proximity with hostile Iran. George Bush, who had been covertly arming Iraq during its war with Iran, sent word via April Glaspie that the United States would not intervene if Saddam Hussein grabbed a larger part of Kuwait. Saddam fell for the bait and invaded.Of course, Americans were not about to send their sons and daughters to risk their lives for petroleum products. So George Bush arranged a hoax, using a public relations firm which has grown rich on taxpayer money by being most industrious and creative liars! The PR firm concocted a monumental fraud in which the daughter of the Kuwaiti Ambassador to the United States, went on TV pretending to be a nurse, and related a horror story in which Iraqi troops looted the incubators from a Kuwaiti hospital, leaving the premature babies on the cold floor to die. The media, part of the swindle from the start, never bothered asking why the “nurse” didn’t just pick the babies up and wrap them in blankets or something.Enraged by the incubator story, Americans supported operation Desert Storm, which never removed Saddam Hussein from power but which did take Kuwait’s oil off of the market for almost 2 years and limited Iraq’s oil exports to this very day. That our sons and daughters came home with serious and lingering medical illnesses was apparently not too great a price to pay for increased oil profits. But when German Journalists went to Trnopolje, the site of the supposed Concentration Camp. to film a documentary, they discovered that the photo was a fake! The camp at Trnopolje was not a concentration camp but a refugee center. Nor was it surrounded by barbed wire. Careful examination of the original photo revealed that the photographer had shot the photo through a broken section of fence surrounding a tool shed. It was the photographer who was on the inside, shooting out at the refugees.Once again, Americans had been hoaxed into support of actions they might otherwise not have agreed with. While several American Presidents have willingly started wars for personal purposes, perhaps no President has ever carried it to the extreme that Bill Clinton has.Coincident with the expected public statement of Monica Lewinsky following her testimony, Bill Clinton ordered a cruise missile attack on Sudan and Afghanistan, claiming to have had irrefutable proof that bogeyman extraordinaire (and former Afghani ally) Osama Bin Ladin was creating terrorist chemical weapons there. Examination of the photos of the debris revealed none of the expected structures one would find in a laboratory that handled lethal weapons-grade materials. Assurances from the CIA that they had a positive soil test for biological weapons fell on their face when it was revealed that there had been no open soil anywhere near the pre-bombed facility. Sudan requested that international observers come test the remains of the factory for any signs of the nerve gas Clinton had insisted was there. None was found. The Sudanese plant was a harmless aspirin factory, and the owner has sued for damages.


Later examination of the site hit in Afghanistan revealed it to be a mosque.


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Meanwhile, back in Kosovo, stories about genocide and atrocities were flooding the media (in time to distract from the Sudanese embarrassments), just as lurid and sensational and as it turns out often just as fictional as most of William Randolph Hearst’s stories of atrocities against the Cubans.Again, the government and the media were hoaxing Americans. The above photo was shown on all the American networks, claiming to be one of Slobodan Milosovic’s Migs, shot down while attacking civilians. Closer examination (click on the photo) shows it to be stenciled in English!Like Germany under Chancellor Hitler, there have been events in our nation which strike fear into the hearts of the citizens, such as the New York World Trade Tower bombing, the OK City Federal Building, and the Olympic Park bomb (nicely timed to divert the media from witnesses to the TWA 800 shoot down). The media has been very quick to blame such events on “radicals”, “subversives”, “vast right wing conspiracies”, and other “enemies in our midst”, no different than the lies used by Cicero and Hitler.But on closer examination, such “domestic terrorist” events do not appear to be what they are made out to be. The FBI had an informant inside the World Trade Tower bombers, Emad Salam, who offered to sabotage the bomb. The FBI told him “no”. The so-called “hot bed” of white separatism at Elohim City, occasional home to Tim McVeigh in the weeks prior to the OK City bombing, was founded and is being run by an FBI informant!

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And nobody has ever really explained what this second Ryder truck was doing in a secret camp half way from Elohim City to Oklahoma City two weeks before the bombing.So, here we are today. Like the Romans of Crassus’ and Cicero’s time, or the Germans under a newly elected Hitler, we are being warned that a dangerous enemy threatens us, implacable, invisible, omnipresent, and invulnerable as long as our government is hamstrung by that silly old Bill of Rights. Already there have appeared articles debating whether or not “extraordinary measures” (i.e. torture) are not fully justified under certain circumstances such as those we are purported to face.As was the case in Rome and Germany, the government continues to plead with the public for an expansion of its power and authority, to “deal with the crisis”.However, as Casio watch timers are paraded before the cameras, to the stentorian tones of the talking heads’ constant dire warnings, it is legitimate to question just how real the crises is, and how much is the result of political machinations by our own leaders.Are the terrorists really a threat, or just hired actors with bombs and Casio watches, paid for by Cicero and given brown shirts to wear by Hitler?Is terrorism inside the United States really from outside, or is it a stage managed production, designed to cause Americans to believe they have no choice but to surrender the Republic and accept the totalitarian rule of a new emperor, or a new Fuhrer?Once lost, the Romans never got their Republic back. Once lost, the Germans never got their Republic back. In both cases, the nation had to totally collapse before freedom was restored to the people.

Remember that when Crassus tells you that Spartacus approaches.

Remember that when thugs in the streets act in a manner clearly designed to provoke the public fear.

Remember that when the Reichstag burns down.

Remember that when the President lies to you about weapons of mass destruction.

See also: The 9/11 Reichstag Fire



What Really Happened


James Petras is Binghamton University, New York Professor Emeritus of Sociology whose credentials and achievements are long and impressive. He’s a noted academic figure on the left, a well-respected Latin American expert, and a longtime chronicler of the region’s popular struggles as well as being an advisor to the landless workers (MST) in Brazil and unemployed workers in Argentina. Petras is also a prolific author. He’s written hundreds of articles and 63 books (and counting), published in 29 languages, including his latest one and subject of this review – “Rulers and Ruled in the US Empire.”

The book is information rich on a core issue of our time. It discusses the US empire’s “systemic dimensions,” evolving changes in its ruling class, its corporatist system, myths about its coming collapse, contradictions in the current debate on immigration and market liberalization policies, the use of force and genocidal carnage, corruption as a market penetrating tool, the Israeli Lobby’s power and influence, Latin American relations and events in the region, social and armed resistance, and much more in four power-packed parts under 17 subject chapter headings.

It’s all covered below giving readers a detailed sampling of Petras’ thoroughly documented, powerful and insightful account of his subject – who rules America, who’s ruled, the US imperial role in the world economy and politics, and challenges to it in China, Latin America and the Middle East. This is another must-read book by a distinguished intellect and major figure on the left who writes dozens of them. This is his latest.

Part I: The US Empire As A System

Petras distinguishes between who sets policies and rules America and whose interests are served. He defines the ruling class as “people in key positions in financial, corporate and other business institutions” with rules “established, modified and adjusted” as the composition and “shifts in power” within the ruling class change over time. One example is manufacuring’s decline (from outsourcing to low cost countries) as a “multidimensional financial sector” (finance capital) rose in prominence with Wall Street’s influence especially dominant.

Petras defines “finance capital” to include investment banks, pension funds, hedge funds, saving and loan banks, investment funds and many other “operative managers” of a multi-trillion dollar economy they’ve all benefitted hugely from. They’ve been the driving force powering real estate and financial markets speculation, agribusiness, commodity production and manufacturing. Petras calls “finance capital” the “midwife” of wealth and capital as well as a “direct owner of the means of production and distribution.”

He stratifies it into three sub-groups from top to bottom in importance: big private equity bankers and hedge fund managers, Wall street executives, and senior officials of private and Wall Street public equity funds as well as major figures in top law and accounting firms. Political leaders are drawn from their ranks with Wall Street in the lead and one firm in particular standing out – Goldman Sachs. Today, its former CEO Henry Paulson is the de facto US economic czar in charge of proving doomsayers wrong about the US economy with Federal Reserve Chairman Ben Bernanke’s money creation power partnered with him. Both of them must also navigate around the powerful Israeli Lobby and its pro-war agenda that could lead to catastrophic consequences if the US and/or Israel attack Iran and the Middle East explodes and disrupts oil flows.

Petras sees an inevitable split between wealth-first financial ruling class objectives and militarists in the Bush administration, their counterparts in Israel, and the Lobby representing Israeli interests with a stranglehold on most of Congress. The battle lines shape up over Israeli Middle East dominance at the cost of imperial overreach, an escalating trade deficit, a ballooning national debt, decreasing capital inflows to offset it, and a declining dollar as other nations move to euros, yen and pounds sterling. Something has to give, says Petras, as both sides support opposing agendas that only a crisis-provoking widespread backlash may resolve.

For now, however, things couldn’t be better for the ruling class (despite their disrupted plans in Iraq and Afghanistan) with the top 2% of adults in the world owning half its wealth, the top 10% with 85% of it, and the bottom half with just 1%. The result is an unprecedented wealth disparity with corporate CEO’s on average earning over 400 times the median income of wage and salaried workers, and for top-earning speculators and hedge fund managers the ratio is 1000 to one with some having incomes topping a billion dollars a year. In addition, corporate wealth was at a record 43% of 2005 national income accruing to profits, rents and other non-wage/salary sources compared to a declining percentage of it to individuals, except for those at the top gaining hugely.

Petras states: “The growth of monstrous and rigid class inequalities reflects the narrow social base of an economy dominated by finance capital” with the US redistributing far less to its people than other developed nations like those in Western Europe. Democrats are as culpable as Republicans with both parties tied to big monied interests through campaign funding and the power of lobbies. It makes everyone in the political power structure unwilling to change things so they don’t. The result is working Americans suffer hugely while those at the top never had it so good. It signals warnings of a potential worker backlash ahead that for now have gone unheeded. Elitists ignore it at their peril, so far without negative consequences to their dominance, but watch out.

Capitalism or US Workers in Crisis?

Petras notes how for years many on the left and some in the financial community have been predicting the “coming collapse, decline or demise of capitalism” as though (for some) wishing would make it so. They’re still predicting, but it hasn’t happened, and Petras explains why not. It’s because business and government partnered (especially since the 1980s) to let workers take the pain so business could gain and prosper. It’s done it hugely and continues to despite the resurgent summer doomsday predictions still ongoing.

In a letter to clients, noted investment manager Jeremy Grantham explained why business is resilient by comparing the global financial system (with its US anchor) to a giant suspension bridge. Thousands of bolts hold it together, so when some of them fail, even a lot of them, it’s not enough to bring it down. Short of “broad-based….financial metal fatigue,” even more bolts may fail, but he’s betting the bridge will hold, supported by amazing “animal spirits,” at least for now.

Grantham is likely right in the near term, while Petras takes a longer view, and his arguments are compelling. He sees labor today in crisis with living standards declining the result of reduced or eliminated business benefits, government services and stagnating wages. He also lists popular myths predicting doom ahead – the growing budget and current account deficits; ballooning national debt; excess speculation; weakening dollar; high energy costs; outsourcing of jobs at all levels, and more. Petras maintains these problems aren’t as serious as claimed because:

— budget deficits declined in 2006 as tax revenues rose from high-end earners’ greater income at the expense of labor getting less;

— foreign investment in the US remains high;

— the dollar remains the world’s reserve currency; over time, it weakens and strengthens based on interest rates, political events, and the overall level of economic activity; nonetheless, the dollar weakened considerably after the Fed cut interest rates and depreciated to an all-time low against a basket of six of its major peer currencies that include the euro, pound and yen; in addition, the New York Board of Trade index hit its weakest level since it came out in 1973, and the same is true for the Fed’s trade-weighted dollar index since its creation in 1971; what’s ahead? Likely more of the same until everyone believes the dollar is dead; then, watch out;

— a decade-long trade deficit hasn’t caused apocalypse;

— strong economic underpinnings (Grantham’s giant suspension bridge) offset excess speculation, and workers, not capital, take the pain;

— high energy profits overseas are recycled back into dollar-based investments and have been for years although countries like Iran, Venezuela and others are moving away from the dollar at least for now;

— the potential of new technologies is underestimated;

— corporate profits have had their longest ever run of double-digit gains; the number of millionaires and billionaires is growing; the rich are becoming super-rich; and the beneficiaries are largely in North America, Western Europe (plus Russia) and Asia.

Petras concludes that as long as worker exploitation continues, the fundamental law of “casino capitalism” applies – the house never loses, or in this case the neighborhood (of developed nations) with some in it doing better than others and the US their anchor. The weakness of US labor and its history of overpaid, underperforming, corrupted leaders explains why with only 7.4% today in the private sector organized compared to 34.7% in the 1950s. Unless new social and political movements surface under activist leaders, Marx’s “dirty secret” and Adam Smith’s “vile maxim of the masters of mankind” will continue proving “the wealth of all nations” depends on the rich taking it “all for ourselves and (leaving) nothing for” the working class.

Market Liberalization and Forced Emigration

Migration and so-called illegal immigrants make headlines but never the reasons why that are two-fold: fleeing political strife (as in Iraq) or for economic reasons that the imperial globalized market system causes horrifically. The latter forces millions of Mexicans el norte because of NAFTA. Its disastrous effects on their lives leaves them no choice – emigrate or perish.

Petras explains when protective trade barriers come down, millions of small farmers and entrepreneurs are no match for the power of subsidized agribusiness, big manufacturers and corporate service providers. They’re displaced when their livelihoods are lost, and that creates a huge surplus army of labor on the move and an opportunity for business to exploit for profit. It affects all skill types and levels (farm workers to computer specialists to doctors), undermines unions, and allows management to replace higher-paid US workers with low-wage immigrants at their mercy and getting little. Pay is kept low, benefits few or none, working conditions unsafe, unions weakened, and dare complain and be sent home.

Petras notes that as imperial power grows, “the massive movement of dislocated workers toward the imperial center multiplies,” and there’s no end in sight nor will there be as long as highly exploitative sectors like agriculture, construction and low-end manufacturing and services thrive on it. Workers lose and so do “sender” countries. They bore the costs of raising, educating, training and providing services for millions with “receiver” nations getting the benefits. It amounts to multi-billions in the form of critically needed skilled areas lost that include professionals like doctors, nurses, teachers and others. This won’t ever change unless worker movements unite against it.

Empire-Building and Corruption

Petras notes how empire-building “is the driving force of the US economy (especially post-9/11),” corruption a key corporate predator tool to re-divide the world, and nations with the greatest firepower get the choicest slices. Business profit growth depends on exploiting overseas opportunities for their resources, markets and cheap reserve armies of labor with four so-called “BRIC” countries especially targeted:

— China for its cheap labor and opportunities in finance, insurance and real estate;

— India for its low cost information technology services;

— Brazil for its high interest rates that hit 19.5%, were then greatly cut, but are still around 11%; and

— Russia for its high profit oil and gas reserves, transport and luxury goods markets with booming opportunities in real estate once political leaders are bought off in a country rife with corruption as is China.

Petras notes that today over half the top 500 transnational corporations earn most of their profits overseas, and for many it’s 75% of it. This trend will continue, he says, as these companies shift most of their operations abroad for greater cost savings. In addition, “political corruption, not economic efficiency, is the driving force of economic empire-building (with) the scale and scope of Western pillage of the East….unprecedented in recent world history.” It’s from business-friendly legislation on low wages, pensions, job tenure, land use, worker safety and health, all designed for maximum profit. Political leaders are bought off to get state-owned businesses privatized, markets deregulated, wages kept low, with a huge reserve army of exploitable labor the payoff for “the US Imperial System.”

Hierarchy of Empire and Use of Force

Petras explains the US imperial system in terms of its “hierarchy of empire” rankings. Imperial powers top it (the US, EU and Japan) followed by emerging powers (China, Russia, India), semi-autonomous client regimes (Brazil, South Korea, South Africa), and collaborator regimes on the bottom (Egypt, Mexico, Colombia). Then come independent “revolutionary” (social democratic) states like Venezuela and nationalist ones like Iran as well as “contested terrain and regimes in transition (Iraq, Afghanistan, Somalia, Palestine).” Client regimes provide “a crucial link in sustaining imperial powers” by allowing them to project and extend their state and market reach.

One “anomaly” in the hierarchy is Israel. It’s a colonialist and nuclear power and world’s fourth largest military power and arms exporter that’s breathtaking for a country of 7.1 million and 5.4 million Jews. It’s influence over US Middle East policy, however, inordinately outweighs its size with Iraq exhibit A and Iran moving up fast. More on this below.

Petras notes the constant flux within the imperial system the result of wars, national struggles and economic crises. They bring down regimes and elevate others with examples like Russia, the Eastern European states, South Africa and Venezuela. It shows “no singular omnipotent imperial state….unilaterally defines the international or….imperial system (that in the case of the US) proved incapable of….defeating popular….resistance in Iraq and Afghanistan.”

Even in Somalia, a US proxy war is in trouble, but it’s too early to predict the outcome. The easy 2006 overthrow of the popular Islamic Courts Union (ICU) put an unsupported warlord regime in charge (that plundered the country from 1991 – 2005) with predictable results – strong resistance against the US puppet regime and its deeply corrupted Transitional Federal Government (TFG) “president,” Abdullahi Yusuf.

Washington backed a hated regime and an equally detested Ethiopian government that’s been “prop(ping) up its Somali puppet” with a lift from US-supported force. Earlier in 1993-94, the Clinton administration’s intervention failed. It spawned mass opposition, took thousands of Somali lives in retaliation, and ended in defeat and a humiliating US pullout. That may repeat despite Washington’s establishing an African Command (AFRICOM) to solidify its hold on the continent and its strategically important Horn. So far, it’s very much up for grabs with US presence in the region unwelcome and greatly destabilizing. The “empire” never learns, so it’s on to the next target that looks like Iran. More on that below.

Imperialism and Genocide

Petras explains how Korea, Vietnam and other wars hid their true cost in lives, devastation and human wreckage. It’s the way of all empires sweeping over populations like crabgrass. It becomes “an accelerating predisposition to genocides to accomplish political aims,” and in an age of “shock and awe,” it can come with “awesome” speed. An example is from the latest O.R.B. British polling data reporting 1.2 million Iraqi deaths since March, 2003 alone plus another 1.5 million up to that date. The true toll may be even higher with huge uncounted numbers of daily violent and non-violent deaths that one estimate by Gideon Polya places at 3.9 million from 1990 to the present. No one knows for sure, and his estimate may be as good as any other. All of them are horrific.

Petras notes the “quantity” of killings elsewhere – six million Jews and 20 million Soviet civilians in WW II as well as 10 million Chinese civilians in Asia. He explains genocide as policy from a “state (promoted) racialist-exterminationist ideology (as well as from) an historical antipathy of one culture to another.” This allows ruling classes to legitimize their ideology and achieve “uncontested dominance” and ability to economically exploit domestic and overseas markets. An omelet requires breaking eggs. Mass human slaughter is the frequent fallout from consolidating empires with living beings having no more worth than egg shells.

Genocides also result from revolutionary challenges to unpopular puppet rulers with Korea, Indo-China and Iraq Exhibits A, B, and C. Up to eight million perished in Asia, and three (or maybe four) million could be reached in Iraq in 2008 at the present pace. There’s no end to it in sight with billions funding it, and no reporting on the carnage in the mainstream.

Petras reviews examples of imperialism becoming genocide with the Reagan administration alone responsible for its share. It committed multiple proxy genocides in Africa, Afghanistan and Central America, but you’d never know it from reports at the time about a president being prepped for Mount Rushmore with a spot for George Bush beside him until Iraq got him in trouble.

Another unreported genocide is Israel’s six decade-long crusade against the Palestinians with predicable results. It caused many thousands of deaths, mass population displacement, and excessive use of detentions and torture to deny a people freedom and justice in their own land. The policy continues because Israel has a powerful ally in Washington and an even more influential Lobby working on its behalf. More on that below.

Petras notes genocides are “repeated, common practices,” impunity for committing them the norm, and no effective international order is in place to stop them. Victors justice prevails so victims face kangaroo tribunals like the ICTY for Yugoslavia and the equally corrupted one for Iraq. Genocides will only end when imperial powers are defeated and their leaders held to account for their crimes, but that goal is nowhere in sight.

The Global Billionaire Ruling Class

The number of world billionaires reached 946 in March, 2007, they have an estimated combined wealth of $3.5 trillion, and over half of them are in three countries – 415 in the US, 55 in Germany and 53 in Russia where never did so many people lose more so a handful of others could gain so hugely in so short a time. India ranks high as well with 36 billionaires with China next in the region at 20. The number of millionaires exploded as well with close to 10 million in 2007, and in 2006 their numbers grew by an estimated 8.3%.

Balzac was right saying behind every great fortune is a crime (and most often a small fortune as seed money) but likely nowhere more rapaciously than in Russia. Petras notes “Without exception, the transfers of (state) property were achieved through gangster tactics – assassinations, massive theft, and seizure of state resources, illicit stock manipulation and buyouts.” They strip mined over a trillion dollars of Russia’s wealth into private predatory hands who, in turn, stuffed them in offshore accounts. It happens everywhere with the US exhibit A. The Rockefellers, Morgans, Fords and Carnegie’s didn’t amass wealth by being neighborly or nice. They got it the old-fashioned way – by strong-arming and stealing.

In developing countries, it came faster under Washington Consensus rules favoring capital over people with billionaires coming out on top. Latin America has 38 of them, mostly in Brazil (with 30) and Mexico (with industrialist Carlos Slim Helu now the world’s third richest man). These “two countries…. privatized the most lucrative, efficient and largest public monopolies,” and benefitted hugely from regressive taxes, tax exemptions, deregulation, big subsidies, and the ability to hike prices and make vital services unaffordable to millions who can’t pay for them.

“How to become a billionaire,” Petras asked. No need for an MBA or market savvy when the “interface of politics (aka friends in high places) and economics” works much better. The road to super-riches came from privatized state assets that began with bloody military coups in Latin America. In countries like Chile, Colombia and Argentina, results were always the same – great riches at the top, stagnant economies, vast poverty, high unemployment, two-thirds of the region’s population with “inadequate living standards,” and the long shadow of US involvement backing military dictators, business elites, and neoliberal politicians to assure lucrative ties to corporate interests in America. More on this below.

Part II – The Power of Israel and Its Lobby in the US

Petras covered how the Israeli Lobby defeated the Jim Baker Iraq Study Group’s (ISG) proposal released December 6, 2006. Its alternative US Middle East agenda lost out to the Israeli Lobby’s influence on Congress, a massive supportive propaganda campaign in the major media, and Israeli Prime Minister Ehud Olmert being as able to “have the US president under our control” as Ariel Sharon once boasted.

For a time it looked like the ISG plan would prevail with top Bush advisors recommending dialogue with Iran; high-ranking military, active and retired, wanting a phased withdrawal for a failed effort; and the Army, Navy and Marine Corps weekly publications wanting Defense Secretary Rumsfeld sacked shortly before he resigned. Even Big Oil interests backed Baker because stable conditions favor business more than conflict (at least to pump oil), and that won’t happen without a change of course now off the table.

Iran wants rapprochement as well but not on the usual US terms – making demands and offering nothing in return. Iran’s objectives are simple and reasonable – normalized relations and an end to Washington’s confrontational stance and military threats. They’re off the table because the “Israel-First power structure (Lobby-Congress-Mass Media-Democratic Party Donors)” reject them. Syria is just as compliant, but its overtures are also rebuffed for the same reason.

Petras explained that AIPAC wants war with Iran as its top priority objective. In addition, the publications, conferences and press releases of the Conference of Presidents of the Major American Jewish Organizations (CPMAJO) asked their members “to go all-out to fund and back candidates (mostly Democrats) who supported Israel’s military solution to Iran’s nuclear enrichment program” even though IAEA agrees it’s in total compliance with Nuclear Non-Proliferation Treaty rules while Israel violates them with impunity.

In the end, Prime Minister Olmert co-opted George Bush, got him to reject the ISG proposal and ally with Israel’s aim to solidify its Middle East dominance by removing a non-existent Iranian threat with Syria also targeted. In many respects, this flies in the face of logic as many influential US figures know. Petras believes Iran is a key interlocutor for a Middle East settlement that might let Washington retain its strategic Arab allies. Tehran is willing to cooperate but not when its government is lumped with Al-Queda, the Taliban and Iraqi resistance and is being threatened with war. That’s the current condition with renewed Bush administration efforts to prep the public to accept more of it if it comes.

Hamas also has been conciliatory. Its leaders made two peace proposals as a show of good faith, is willing to recognize Israel if Palestinians get justice, pledged a cease-fire in the face of Israeli attacks, and was rebuffed with rejection and an Israeli blockade of Gaza along with frequent hostile incursions. Conflicts rage in Iraq and occupied Palestine, more war threatens in Iran, and the road to peace in the region runs through Jerusalem providing Washington concurs. But it’s not possible, in Petras’ judgment, unless foreign military bases are closed, there’s public control or nationalization of the region’s resources, and Israel ends its colonial occupation of Palestine. So far, those objectives are nowhere in sight.

The Lobby and Media on Lebanon

In Petras’ powerful 2006 book, “The Power of Israel in the United States,” he documented how this power derives from a vast pro-Israel Lobby in the country supporting all aspects of its agenda. It’s position is firm – “Israel is always right, Arabs and Muslims are a threat to peace,” and the US should unconditionally support Israel across the board. In Petras’ view, that’s the main reason why the Bush administration attacked Iraq and may now target Iran and Syria. Israel perceives these countries as threats, Washington seems willing to remove them, and a chorus of media-driven propaganda approves.

They always support Israel and jumped right in last summer backing “Operation Change of Direction” against Hezbollah and “Operation Summer Rain” against Hamas that caused many hundreds of deaths and mass destruction. It was all papered over in the major media and characterized as Israel’s “defensive, existential war for survival against Islamic terrorists.” It was pure baloney. In fact, and unreported, Israel launched dual long-planned aggressive wars with Hezbollah’s capture of three IDF soldiers in Lebanon the pretext and Hamas taking one Israeli corporal the justification in occupied Palestine. Never mentioned are the many thousands of Palestinians illegally abducted, imprisoned and tortured, and that unprovoked aggressive wars and their fallout are war crimes and crimes against humanity.

Also unmentioned is that if Hezbollah and Hamas hadn’t provided the pretexts, Israel (as it’s often done) would have manufactured them to launch its summer aggression. With full US support and backing from its Lobby and dominant media, these type actions continue at the expense of their victims with US taxpayers duped into funding them generously.

US Empire and the Middle East

Petras notes key factors help explain US Middle East policy that in his judgment are “challenged from within and without, are subject to sharp contradictions,” and are likely to fail.

First, is the influence of the Israeli Lobby he documented powerfully as have Mearsheimer and Walt in their work. It’s likely the most potent lobby in Washington and can practically mobilize the entire Congress, every administration and the dominant media to back pro-Israeli policies even when they run counter to US corporate interests that in Middle East means those of Big Oil primarily.

The Lobby wanted war with Iraq and got it. Now its top priority is stiff sanctions and war on Iran, and if the orchestrated media hate frenzy targeting President Mahmoud Ahmadinejad’s Columbia University address September 24 is an indication, it may get it. As Petras notes, the Lobby’s fanatical support for Israel is so extreme and uncompromising, it’s even willing to risk world war and economic collapse to get its way.

Another key factor is the US ability to enlist and co-op client states and proxy forces to serve our interests – the Kurds in Northern Iraq; the Abbas-Dahlan Fatah militants in Palestine; the Sinoria-Hariri-Jumblat pro-US/Israel, anti-Syria/Hezbollah/Hamas alliance in Lebanon; Mubarak in Egypt; King Hussein in Jordan; pro-US regimes in Turkey; the Saudis and others.

Petras then explains how the Israeli Lobby’s influence runs counter to the US “Arab agenda.” It shows up in Washington’s failure to construct a NATO-style power-sharing alliance in the region, except for Turkey and Israel, and the former may not prove solid. The Iraq policy has been disastrous, each tactic tried failed, resistance is unabated, the Arab street overwhelmingly rejects occupation, and Arab leaders offer tepid support.

Petras calls Washington’s permanent war strategy (next targeting Iran and Syria) “an irrational gamble comparable to Hitler’s attack on Russia” that doomed him. Today in the Middle East, attacking these two countries may only compound the Iraq failure with “greater defeats, greater domestic rebellion” and still more wars without end promising gloomy prospects ahead.

Part III – The Possibility of Resistance

Petras discusses China and the “general consensus (it’s) emerging as the next economic superpower” to challenge US dominance. Petras expresses doubts that can only be summarized briefly. He notes Chinese capitalism not only depends on growth and the ability to generate jobs, but also on “the social relations of production, circulation and reproduction.” They come at a high price – ferocious labor exploitation, rampant corruption and nepotism, mass small farmer displacement, firing millions of workers from state-owned and bankrupt enterprises, ending social services, and higher living costs increasing class warfare in the streets against billionaire kleptocrats and foreign investors profiting hugely at the expense of most Chinese.

Petras then distinguishes between “made in China” and Chinese-owned and whether the former enhances China’s growth or foreign investor profits instead. He sees China taking on “features of both a neo-colony and an emerging imperial power,” but mostly the former. He notes the standard of living for most Chinese “declined precipitously;” air, water and ground pollution greatly increased; the quality of life for most Chinese suffers; class inequalities are vast; and gains from a consumerist society for a minority of the population are offset by dirty air, loss of leisure, job security, near rent-free housing, state-provided health care and education, deteriorated working conditions and more. Paradise it’s not, at least for workers, and conditions aren’t improving.

Petras then discusses China’s transition from state to “liberal” capitalism. As it deepened, trade barriers were dismantled; protective labor laws abolished; price controls lifted; the countryside ravaged; a massive new army of unemployed workers created; and an export-driven market strategy followed. The result today is a new class of billionaires and about 2900 former party “princelings” who control around $260 billion of wealth. In addition, property, real estate and construction boomed, an export strategy concentrated development on coastal regions, and domestic consumption is relatively constrained.

In contrast, “millions of construction workers, miners, domestic servants and assembly-line workers (labor) under the most abominable conditions” – long hours, low pay, awful sanitary conditions and little regard for safety in an unregulated environment structured for maximum profit. China today is a “magnet for capitalists and investors worldwide,” a free market paradise that’s hell on workers paying hugely for the country’s marketplace “success.”

Petras envisions China’s capitalism deepening and mainly benefitting foreign investors. He sees their “initial beachheads as minority shareholders” extending into production, distribution, transport, real estate,\
telecommunications, consumer goods and services, entertainment, finance and more and eventually gaining more control. As a result, he believes China’s next great leap forward will be from liberalism to neoliberalism, the country will lose its national identity, it will become a “territorial outpost” for foreign-owned transnationals, and the country’s bid for world power status will be subverted.

Petras sees 21st century China emerging as a “gigantic proxy for imperial powers,” but China won’t be one of them. Its “Great Leap Backwards” will be consummated when the nation’s “share of profits shifts from the national bourgeoisie” to foreign investors in a process now accelerating.

But it won’t come easily as a new generation of China’s leaders may stop or curtail it. In addition, growing mass resistance has now emerged for obvious reasons cited above. Already, close to 100,000 mass demonstrations have occurred involving millions of Chinese protesting a workers’ hell. Social crisis is deepening, class struggle has returned, and the government has taken note. It’s beginning to address concerns but giving back pathetically little considering China’s massive population. Petras calls these remediating actions “too little and too late.” Ahead he sees decentralized protests becoming organized urban worker movements that when joined with displaced farmers may set off a new rebellious period. This may then blossom into “a new revolutionary struggle” that will determine China’s future and its climate for investors.

The US and Latin America

Petras has studied Latin America for decades and knows the region as well as anyone. Here he dispels notions of a revitalized regional populism with US dominance waning. His case is compelling as he argues Washington’s influence has increased in recent years (though not to the level of the 1990s) despite the success of Hugo Chavez and his ability to thwart US efforts to unseat him.

The Bush administration lost out on FTAA but has had other successes:

— bilateral trade agreements with numerous Latin American states from the Caribbean to Chile;

— an expanded number of military bases despite the possible loss of one in Ecuador ahead;

— US business interests in the region flourishing, including in Venezuela where they’re booming; and

— neoliberal free market policies intact despite campaign rhetoric promising change.

Aside from Venezuela and maybe Ecuador (where it’s too soon to tell), the left’s appraisal of progressive change is nowhere in sight, so what are they seeing that’s not there.

Petras assesses the current state of things in the region after reviewing its recent history readers can get from the book. He notes signs of Washington’s declining influence that’s had no adverse affect on corporate interests except in Venezuela where taxes are now fair compared to earlier when they were too low. He also explains so-called center-left regimes in Brazil, Argentina, Bolivia, Uruguay and elsewhere tamed mass social movement demands while embracing 1990s neoliberalism. In Brazil, if fact,President Lula da Silva actually deepened and extended the privatization and restrictive budget policies of the preceding Cardoso regime, and despite his Workers Party background, demobilized mass movements and trade unions instead of supporting them as people expected. Many now see him for what he is – a traitor, but sadly, he’s got company, too much of it.

Of great significance is the way Petras explains four competing regional power blocs representing varying degrees of accommodation or opposition to US policies and interests.

1. The Radical Left

It includes:

— the FARC guerillas in Colombia (active since 1964); some trade union sectors; and peasant and barrio movements in Venezuela;

— the labor confederation CONLUTAS and sectors of Brazil’s Rural Landless Movement (MST);

— sectors of the Bolivian Labor Confederation (COB) and the Andean peasant movements and barrio organizations in El Alto;

— peasant movement sectors (CONAIE) in Ecuador;

— teachers and peasant-indigenous movements in Oaxaca, Guerrero and Chiapas, Mexico;

— nationalist-peasant-left sectors in Peru;

— trade unionist and unemployed sectors in Argentina; and

— other Central and South American social movements and some Marxist groups in several countries.

2. The Pragmatic Left

— Hugo Chavez in Venezuela who combines grassroots participatory democracy and redistributive social policies with support for business interests;

— Evo Morales in Bolivia;

— Fidel Castro in Cuba;

— various large electoral parties and major peasant and trade unions in the region; leftist parties including the PRD in Mexico, FMLN in El Salvador, CUT in Colombia, Chilean Communist Party, Peru’s nationalist parliamentary party, sectors of Brazil’s MST, Bolivia’s MAS governing party, CTA in Argentina, and PIT-CNT in Uruguay.

3. The Pragmatic Neoliberals (the most numerous political block)

— Lula in Brazil;

— Kirchner in Argentina;

— the major trade union confederations in Brazil and Argentina;

— business and financial elite sectors providing subsistence unemployment doles and food aid; and

— similar groups in Ecuador, Nicaragua (the Sandinistas and their split-offs), Paraguay and other countries.

4. The Doctrinaire Neoliberal Regimes

— Calderon in Mexico;

— Uribe in Colombia;

— Bachelet in Chile (in spite of her being imprisoned and tortured under Pinochet);

— the Central American countries: El Salvador, Honduras, Costa Rica and Guatemala;

— Garcia in Peru;

— Paraguay with the region’s largest military base;

— Uruguay’s ex-leftist regime now rightist;

— US-occupied Haiti through proxy thuggish paramilitary UN peacekeepers; and

— the Dominican Republic.

The notion that populism swept Latin America in the new century is pure fantasy. In fact, there’s a “quadrangle of competing and conflicting” regional forces with Washington having less market leverage than in the 1990s “Golden Age of Pillage” but still enough to be dominant and able to keep business flourishing.

Petras continues his analysis with detailed examples of key center-left regimes in Brazil under Lula, Argentina under Kirchner, Uruguay under Vazquez, Bolivia under Morales plus some comments on Peru and Ecuador under leaders preceding their current ones. Each case substantiates the fantasy that these regimes represented “new winds from the Left” sweeping the region. Hot air maybe, but little, if anything, in the way of progressive change despite the beliefs of many intellectuals on the left.

However, that’s not to say leftist forces aren’t strong enough to bubble up and bring change. Insurrectionary forces brought Evo Morales to power in Bolivia and can take him down if he fails them as he’s now doing. The same is true in other countries with Hugo Chavez their model. He challenged US imperialism, brought real social change, has mass public support and thus far withstood US efforts to oust him. In Cuba, Fidel Castro thwarted every Washington effort against him since 1959 and is still in charge, larger than life, although frail and weak following his protracted illness from which he’s still recovering. Petras sees a new generation of young committed leaders emerging in the region. “They are the ‘Left Winds’ of Latin America,” and it’s in them that hope lies.

Foreign Investment (FI) in Latin America

Petras demystifies FI’s impact, explains the risks in attracting it, and exposes six myths about its benefits.

Myth 1.

It’s untrue FI creates new enterprises, market opportunities and more. Most, in fact, aims to buy privatized and other enterprises while crowding out local capital and public initiative.

Myth 2.

FI doesn’t increase export competitiveness. It buys mineral resources for export with little done to create jobs or stimulate the local economy.

Myth 3.

It’s false to think FI provides tax revenue and hard currency. An FI export model creates more indebtedness and a net loss.

Myth 4.

It’s false believing debt repayments to international lenders is key to a good financial standing. Much foreign debt is odious and repaying it harms borrower countries.

Myth 5.

It’s false believing FI provides developing countries needed capital. It’s used instead to buy local companies and control a country’s markets.

Myth 6.

It’s false believing FI attracts further investment. Capital freely moves to wherever it gets the best returns and is anchored nowhere.

Developing countries benefit most by relying less on FI and more on national ownership and investment. The former is predatory. The latter accrues profits to the national treasury and grows the country’s economy. FI demands conditions favoring capital over labor that results in a widening economic gap and greater inequalities in political and social power. The 20 year (1980 – 2000) record of Latin American FI is socially disastrous. Living standards plunged while unemployment and poverty soared. Hardly reasons to attract it and clear ones to stay away or restrict it.

Part IV – An Agenda for Militants

Petras considers FI economic alternatives and ways to buck its strategic countermeasures. FI generally threatens disinvestment when a country wants to enhance its own economy and benefit popular living standards. Hardball tactics cut both ways, and the state can use its own effectively to counter capital flight threats as well as adopt policies in advance serving its needs first ahead of those FI wants to have things its own way.

Petras notes that FI “is incompatible with any notion of an independent, socially progressive country” even though at times it can be useful in a regulated environment controlling it. He explains a country’s own financial and economic resources can be used instead of FI to enhance its internal development and technological advance by reinvesting profits from export industries; controlling foreign trade to increase retention of foreign exchange; investing pension funds productively; imposing a moratorium on debt payments; recovering stolen public treasury funds and unpaid taxes; maximizing under-employed labor, and more.

Most countries can avoid FI by relying on multiple sources of its own capital. They can also employ alternative effective strategies when outside help is needed by minimizing its ownership, employing short-term contracts on favorable terms, imposing stiff penalties on capital flight, and barring it from returning if it leaves. Petras concludes: “The historical and empirical evidence demonstrates that the political, economic and social drawbacks of (FI) far exceed any short-term benefits perceived by its defenders.”

The Middle Class and Social Movements in Latin America

Petras observes that middle class attitudes in the region depend on the “political-economic context” confronting it. It’s attracted to the right under expanding right-wing regimes and to the left in times of economic crisis. On the other hand, under a “popular, anti-dictatorial, anti-imperialist populist government, the middle class supports democratic reforms” but not radical policies harming it for the benefit of the working class. Three examples make his case – in Brazil under Lula when it took over his Workers Party; in Argentina when it benefitted under Menem and Cardoso and later under Kirchner; and in Bolivia under Morales who combines “political demagogy” to his base and neoliberal IMF austerity in his policies attractive to middle class and business interests.

Petras notes social movements failed by not developing political leadership or a program for state power and depended instead on “electoral politicians of the upwardly mobile professional middle class.” The Left’s key challenge, he believes, is to “convert the public sector middle class from anti-neoliberalism to anti-capitalism and anti-imperialism, and to combine urban welfare (with) agrarian reform.”

Iraq and Afghanistan’s Importance in Defeating the Empire

Petras concludes by noting Washington’s imperial wars were stopped in their tracks in Iraq and Afghanistan by resistance too powerful to contain. A “shock and awe” blitzkrieg failed when Iraqis wanted a say in running, rebuilding and transforming their country and rejected its US-installed puppet regime. The country is a wasteland, the nation creation project bankrupt, and the prospect for success bad and worsening with multi-billions expended and nothing gained except huge profits for administration favored contractors that always benefit whoever wins or loses.

The same situation holds in Afghanistan. An easy five week walkover turned into an endless debacle with no end in sight. Washington planned successive wars for unchallengeable world dominance, but local resistance in two countries stopped it cold (so far), may defeat its proxies in Somalia, and resilient opposition in Palestine and South Lebanon may prove equally formidable as well.

The US is now over-extended and its “imperial grand strategy” weakened. It’s made preemptive wars against Iran and Syria and trying again to topple Hugo Chavez less likely, but none of these possibilities are off the table. Cornered and facing defeat, rhetoric is heated making anything possible, and the September 20 Lieberman-Kyl “Sense of the Senate” (no legal force) resolution/amendment to the FY 2008 Defense Authorization bill ratchets up the possibility of attacking Iran and its regional “proxies” with potentially catastrophic fallout the risk.

For now, emboldened resistance and strong anti-war opposition are matched against an administration desperate to turn things around and willing to try anything to do it. How this may end is a crapshoot, the stakes on its outcome too great to risk but may be waged anyway, and the world trembles as it waits and watches. Stay tuned and hope Petras is right believing Iraq and Afghanistan thwarted the empire and prevented further aggression against Iran and beyond, now off the table. Or maybe not. When wounded and cornered, desperate animals and politicians may try anything with nothing to lose. Keep a close watch.

About author Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com.

Greenback Blues

October 6, 2007



by James Surowiecki

Few phrases seem more quaintly outmoded these days than “sound as a dollar.” Once the embodiment of American financial strength, the dollar has spent the past five years getting sand kicked in its face by the world’s currencies, and in recent weeks, thanks to the Federal Reserve’s surprisingly big interest-rate cut, its decline has accelerated. A euro, which you could buy for eighty-six cents in January, 2002, now costs $1.40, and the Canadian loonie, once an easy object of derision, is as valuable as a dollar. In 1922, Ernest Hemingway wrote an article explaining how to live in Paris on a thousand dollars a year. These days, an American in Paris is lucky to spend a thousand dollars a week.

Most Americans, of course, don’t worry too much about the price of dinner at Taillevent. But the dollar’s latest drop, in the minds of many market observers, is bad news even for Americans who stay home. We are, after all, hooked on imported goods—in 2006, the U.S. paid $1.8 trillion for foreign imports—and a weaker dollar should, in theory, make them more expensive. But, despite the daily headlines, there’s little evidence that the situation has provoked anxiety. Indeed, some in Congress are trying to pressure China to revalue its currency upward, which would make the dollar even weaker.

How can Americans, with their love for foreign goods, remain indifferent to the dollar’s drop? Mainly because so far it has had surprisingly little impact on our standard of living. Inflation, for instance, has remained solidly under control—the economy’s core inflation rate was about two per cent over the past twelve months, and it hasn’t been much higher than that in recent years. Even more surprisingly, the prices of imported goods have gone up only slightly. If you travel abroad, you feel like a pauper. Yet if you stay at home you’d be hard-pressed to notice any difference from a decade ago, with the notable exception of the price of oil.

In part, this is because exchange rates move far more quickly than real-world prices, which tend to be what economists call “sticky.” It’s a hassle to print new menus or product catalogues, or to go back and re-tag every item in the store, and it also confuses and alienates customers. So companies tend not to change prices all that often. They also use futures markets to hedge against currency risk, which reduces the need for price increases. And China has played a huge role. Although the dollar’s value has plummeted against the euro, it has fallen much less against the Chinese yuan; that’s because the Chinese government continually buys dollars to prop up their value and insure that Americans can keep buying Chinese exports, which have been fundamental to China’s economic boom.

But what’s most interesting is that foreign companies have essentially chosen to protect U.S. consumers from the effects of the weak dollar. They have resisted increasing prices here, accepting lower profit margins in order to maintain their market share. The American market is too big and too important for them to run the risk of losing customers, and, because it’s so competitive, they generally can’t raise prices without losing market share. So high-end television sets, foreign beer, and luxury cars have all remained relatively affordable, even though the dollars we buy them with are worth much less than they were a few years ago. This is not an entirely new phenomenon: a Federal Reserve study published after the dollar’s crash in 1985-87 suggested that “foreign competitors relinquished profits for market share” by holding down price increases. That tendency is even stronger these days: a recent Federal Reserve study found that changes in the value of the dollar today have half the impact on American prices that they did during the eighties. It’s hardly surprising, then, that over the past three years the prices of imported goods have risen just a little more than two per cent on average annually.

As a result of all this, American consumers are living in a kind of cocoon, where the rules that apply everywhere else seem not to matter. This creates bizarre disjunctions; for example, foreign-made luxury cars are often cheaper to buy in the U.S. than in their home countries. Or consider Halo 3, Microsoft’s new Xbox 360 game. If you buy Halo 3 from Amazon.com, you’ll pay sixty bucks. If you buy it from Amazon.de, in Germany, you’ll pay ninety-three dollars. Adjusted for taxes, this means that German consumers are paying twenty-six per cent more than Americans for the very same product.

The virtues of this peculiar arrangement are obvious: Americans are able to buy far more stuff with their flimsy currency than one would expect. The vice, if there is one, may be that the relative painlessness of the dollar’s decline has made it easier to ignore the reasons for it, like our colossal government debt and the trillions of dollars we’re going to have to spend on Medicare and Social Security for retiring baby boomers. We know that these things matter, but it’s hard to get worried about them when foreign-made DVD players cost twenty-nine dollars. The danger is that if no changes are made, and the dollar continues to fall, the safety net may at some point get yanked away, with China refusing to prop up the dollar anymore and foreign companies finally forced to raise prices. As the chorus of voices lamenting the latest drop in the dollar suggest, it may well be time for Americans to emulate the ant. The problem is that the rest of the world keeps making it too easy for us to be the grasshopper.