Archive for January, 2008

why the war on drugs will never end (CIA)

January 27, 2008

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How the CIA Inflitrated the DEA

Operation Two-Fold

By DOUGLAS VALENTINE

The DEA and its predecessor federal drug law enforcement organizations have always been infiltrated and, to varying degrees, managed by America’s intelligence agencies. The reason is simple enough: the US Government has been protecting its drug smuggling allies, especially in organized crime, since trafficking was first criminalized in 1914. Since then drug law enforcement has been a function of national security in its broadest sense; not just protecting our aristocracy from foreign enemies, but preserving the Establishment’s racial, religious and class prerogatives.

The glitch in the system is that while investigating traffickers, federal drug agents are always unearthing the Establishment’s ties to organized crime and its proxy drug syndicates. US intelligence and security agencies recognized this problem early in the early 1920s and to protect their Establishment patrons (and foreign and domestic drug smuggling allies fighting communists), they dealt with the problem by suborning well-placed drug law enforcement managers and agents.

They have other means at their disposal as well. In 1998, for example, in a series of articles in the San Jose Mercury News, reporter Gary Webb claimed that the CIA had facilitated the flow of crack cocaine to street gangs in Los Angeles. After the Agency vehemently denied the allegations, Webb was denounced by the CIA’s co-conspirators: the New York Times, the Los Angeles Times, and the Washington Post. Frightened into submission by the growls of its biggers and betters, the Mercury News retracted Webb’s story and sent the reporter into internal exile. The CIA’s Inspector General later admitted that Webb was partially right. But being unjustly discredited is the price one pays for tearing the mask off the world’s biggest drug trafficker.

It’s always been that way. Case in point: in 1960 MacMillan published Russ Koen’s book The China Lobby. In it Koen said the Nationalist Chinese were smuggling narcotics into the US, “with the full knowledge and connivance” of their government in Taiwan. He said that “prominent Americans have participated and profited from these transactions.” The idea of prominent Americans profiting from drug trafficking was unthinkable and quick as a flash, Harry J. Anslinger, the Commissioner of the Federal Bureau of Narcotics (FBN), denounced Koen as a fraud. Within weeks Koen’s book was remaindered into obscurity by MacMillan.

Professor Al McCoy’s seminal book The Politics of Heroin, published in 1972, is another example. The CIA knew about McCoy’s research and approached his publisher, demanding that it suppress the book on grounds of national security. Harper Row refused, but agreed to allow the CIA to review the book prior to publication. When McCoy objected, Harper Row said it would not publish the book unless McCoy submitted.

Examples of federal drug law enforcement’s complicity with the CIA also abound and many are recounted in my first book on the subject, The Strength of the Wolf: The Federal Bureau of Narcotics 1930-1968. In my new book, The Strength of the Pack: The Politics, Espionage Intrigues, and Personalities that Defined the DEA, I explain how the CIA infiltrated the DEA and how, under CIA direction, the war on drugs became a template for the war on terror. One example shall be presented in this essay.

The Merry Pranksters

My new book, Strength of the Pack, begins in April 1968, when, in the wake of a huge corruption scandal, the Johnson Administration folded the FBN into a new organization called the Bureau of Narcotics and Dangerous Drugs (BNDD). Attorney General Ramsey Clark announced the appointment of thirty-eight year old John E. Ingersoll as the BNDD’s director. In a letter to me Clark said that Ingersoll “offered a clean break with a past that had ended in corruption and, I hoped, a new progressive, scientific based approach to drug control in a time of deep social unrest.”

Clark appointed Ingersoll while Johnson was president and after the elections, in an attempt to preempt the in-coming Nixon Administration, Clark held a news conference to proclaim the Johnson Administration’s success in cleansing the BNDD of any lingering corruption. “32 Narcotics Agents Resign in Corruption Investigation Here,” read the headline in the 14 December 1968 New York Times. Clark noted that five of the bad agents had been indicted, and that additional prosecutions and resignations would soon be forthcoming.

The Democrats had lost the election, largely because the “law and order” candidate Richard Nixon had promised to win the war on drugs. Ironically, once he was elected president, this vow would pit Nixon against the CIA, which was aiding and abetting the major politicians and generals commanding America’s allies in Vietnam, Laos and Thailand, many of whom were part of a huge Kuomintang drug smuggling network. In order to defeat the Communists, their drug smuggling activities had to be protected. But in order for Nixon to make good on his promise to win the war on drugs, they had to be stopped. Thus began the CIA’s infiltration of the BNDD, and its struggle with Nixon’s anti-Establishment, felonious minions for control over targeting of major traffickers as a mean of managing the war on drugs.

BNDD Director John Ingersoll was totally unprepared for the political tug-of-war he found himself in the midst of. He had joined the Oakland police department in 1956, serving as a motorcycle cop and later as an administrative assistant to the chief. In the mid-1960s he became the police chief in Charlotte, North Carolina where he earned a reputation as a straight arrow and fighter against corruption. But within a year of taking control of the BNDD, Ingersoll realized he was no match for the wily federal drug agents he inherited. They were a cunning and dangerous wolf pack, and the organization’s top officials were among the worst offenders.

As one agent explains, “Most were corrupted by the lure of the underworld. They thought they could check their morality at the door–go out and lie, cheat, and steal–then come back and retrieve it. But you can’t. In fact, if you’re successful because you can lie, cheat, and steal, those things become tools you use in the bureaucracy. You’re talking about guys whose lives depended on their ability to be devious and who become very good at it. So these people became the bosses. Meanwhile the agents were losing their simplicity in subtle ways.”

Ingersoll knew this, but he was also aware of the high priority Nixon placed on winning the war on drugs. Rather than generate a scandal, Ingersoll decided to go outside of the organization, to the CIA, for help in quietly rooting out corruption. The 1975 Rockefeller Commission Report On CIA Activities Within The United States stated that the joint CIA-BNDD anti-corruption program began when Ingersoll became “vitally” concerned that some of his employees might have been corrupted by drug traffickers. Lacking the necessary security apparatus to expunge these corrupt agents, Ingersoll in early 1970 asked the Director of Central Intelligence, Richard Helms, for help building a “counter-intelligence” capacity. The request was “apparently” supported by President Nixon’s Attorney General, John Mitchell.

The man Ingersoll appointed chief inspector of BNDD, Patrick Fuller, had served with IRS investigations for nearly 20 years in California. Fuller was Ingersoll’s close friend, but apart from that, he was incapable of mounting internal security investigations against federal drug agents. When Ingersoll proposed that they turn to the CIA, Fuller readily agreed. The plan, known as Operation Twofold, involved the hiring of CIA officers to spy on ranking BNDD officials suspected of corrupt practices, past and present. As Pat Fuller recalls, “We recruited the CIA officers for BNDD through a proprietary company. A corporation engaged in law enforcement hired research consultants, and three CIA officers posing as private businessmen were hired to do the contact and interview work.”

The principle recruiter was Jerry Soul, assisted by CIA officers John F Murnane, Joseph Cruciani, and Chick Barquin. Then a personnel officer at CIA headquarters, Soul had managed Cuban exiles during the Bay of Pigs invasion, and later directed the CIA’s exile Cuban mercenary army and air force in the Congo.

Apart from one exile Cuban, the CIA officers hired for Operation Twofold were, typically, Anglo paramilitary officers whose careers had stalled due to the gradual reduction of CIA forces in Vietnam and Laos. Those hired were put through the BNDD training course and assigned by Fuller to spy on a particular regional director and his trusted subordinates. According to Fuller, no records were kept and some participants will never be identified because they were “cut-outs” who never went to a BNDD office, but spied from afar and reported clandestinely. Some were not even known to Fuller. All were supposed to be sent overseas but most remained in the US.

Much of Twofold remains a mystery because, as the Rockefeller Commission reported, it “violated the 1947 Act which prohibits the CIA’s participation in law enforcement activities.”

No one was ever prosecuted.

Twofold Case Studies

Twofold was aimed at the BNDD’s top managers. One target was Joseph J. Baca, the assistant Regional Director in Los Angeles. The cousin of a top Mexican cop, Baca in July 1969 was charged by the New Mexico State Police with trafficking in drugs and stolen property. He was accused of arranging burglaries and holdups, and allegedly sold heroin to a drug smuggler. But the local investigations were closed without any adverse action against Baca, so Twofold torpedo Charles “Chuck” Gutensohn was asked to investigate.

Gutensohn had served with the Special Forces in South Vietnam. He left the army in 1964, earned a college degree, and in 1968 joined the CIA. For the next two years, Gutensohn served in Pakse, Laos, one of the major drug transit points between the Golden Triangle and Saigon. He had drug experience and upon returning to the US, Gutensohn was given the choice of being the CIA’s liaison to the BNDD in Laos, or joining Twofold. Gutensohn’s brother Joel, also a Vietnam veteran, had joined the Twofold program six months earlier in Chicago. That being the case, Chuck joined too.

“After meeting with Jerry Soul,” Gutensohn recalls, “I met Fuller at a hotel near Tyson’s Corner. He said that when we communicated, I was to be known as Leo Adams, for Los Angeles. He was to be Walter De Carlo, for Washington, DC.”

Fuller recruited Gutensohn and the other CIA officers because they did not have to be trained in the “tradecraft skills” required for the job of spying on their bosses. But Gutensohn’s cover was blown before he got to LA. As he recalls, “Someone at headquarters was talking and everyone knew. About a month after I arrived, one of the agents said to me, “I hear that Pat Fuller signed your credentials.”

A similar situation occurred in Miami, where Fuller’s targets were Regional Director Ben Theisen and Group Supervisor Pete Scrocca. Terry Burke, who would cap his career as the DEA’s acting administrator in 1990, was one of the Twofold agents assigned to investigate Theisen and Scrocca. Tall and handsome, Burke’s background is fascinating. After serving as a Marine guard at the US Embassy in Rome, he joined the CIA and served as a paramilitary officer in Laos from 1963-1965, working for legendary CIA officer Tony Poshepny at the 118A base near Ban Houei Sai–the epicenter of the Golden Triangle’s opium and heroin trade. Burke received the CIA’s highest award, the Intelligence Star, for gallantry in combat in Laos. He served his next tour in the Philippines but in 1969 was assigned to a dead-end job at CIA headquarters. Knowing his career had stalled, Burke contacted a friend from Italy, Customs Agent Fred Cornetta. Then the agent in charge at Dulles airport, Cornetta persuaded Burke to join the BNDD.

Burke applied and was hired in December 1970. Fuller recruited him into the Twofold operation and assigned him to Pete Scrocca’s group. But instead of spying on his new colleagues, Burke set about proving that he was tough and smart enough to work “undercover cases on bad guys with shotguns in motel rooms.” Burke never sent any negative reports to Fuller, and Theisen and Scrocca eventually accepted him.

Gutensohn and Burke’s experience was not unusual, and Twofold never resulted in a single dismissal of any corrupt BNDD agent. The astonishing reason for this is quite simple. Little did Ingersoll or Fuller know that the CIA never initiates a program unless it is deniable and has “intelligence potential.” Twofold conformed to these criteria: it was deniable because it was, ostensibly, a BNDD program; and it had intelligence potential in so far as it was perfectly suited for Angletonian style “operations within operations.”

As the BNDD’s chief inspector Pat Fuller told me, “There was another operation even I didn’t know about. Why don’t you find out who set that one up, and why?”

Boxes Within Boxes

Well, I did find out about this operation. Quite by accident, while interviewing a DEA agent in Miami, I was introduced to Joseph C DiGennaro, a member of the CIA’s secret facet of Operation Twofold, its unilateral drug operations unit. Hidden behind Fuller’s “inspections” program, the purpose of the CIA’s unilateral drug unit was to identify drug-dealers worldwide, and selectively kidnap and/or assassinate them. As DiGennaro explains, his entry into the program began when an eminent surgeon, a family friend, suggested that he apply for a job with the BNDD. Then working as a stockbroker in New York City, DiGennaro in August 1971 met Fuller at a Howard Johnson’s near the Watergate complex. Fuller told him that if he took the Twofold job, he would be given the code name Novo Yardley. The code name was based on DiGennaro’s posting in New York, and a play on the name of the famous American spy, Herbert Yardley.

DiGennaro took the job and was sent to a CIA security officer to obtain the required clearances. That’s when he was told that he and several other recruits were being “spun-off” from Fuller’s inspection program into the CIA’s unilateral “operational” program. He was told that he had been selected because he had a black belt in Karate and the uncanny ability to remember lists and faces. The background check took 14 months, during which time DiGennaro received intensive combat and tradecraft training. In October 1972 he was sent to BNDD regional headquarters in New York and, as a cover, was assigned to a compliance group that mostly inspected pharmacies. His paychecks came from official BNDD funds, though the program was funded by the CIA through the Department of Interior’s Bureau of Mines. The program had been authorized by the “appropriate” Congressional committee.

DiGennaro’s special group was managed by the CIA’s Special Operations Division (then under Evan Parker, first director of the CIA’s Phoenix Program) in conjunction with the military, which provided assets within foreign military services to keep ex-filtration routes open. Ex-filtration routes were air corridors and roads. The military also cleared air space when captured suspects were brought into the US. DiGennaro spent most of his time on operations in South America, but served in Lebanon and other places too.

Within the CIA’s special anti-drug unit, which numbered about 40 men, were experts in printing, forgery, maritime operations, and telecommunications. The operatives knew one another by first name only. DiGennaro, however, was aware that other BNDD agents, including Joseph Salm and Paul Seema, were in the program. No one else in the BNDD, however, knew about the program. When the call to duty came, DiGennaro would check with Fuller and then take sick time or annual leave to go on missions. There were lots of missions. As his group leader in New York, Joe Quarequio, told me: “Joey was never in the office.”

The job was tracking down, kidnapping, and if they resisted, killing drug dealers. The violence was the result of the “limited window of opportunity” needed to get the job done. Due to the need for plausible deniability, there was minimal contact with the American Embassy where the mission was conducted. DiGennaro had “a Guardian Angel” who “assembled intelligence, developed routines, and contacted informants.” But the host country and its uniformed police and military services were rarely aware of his presence, and there was little coordination with the local BNDD outpost.

The operations were extremely dangerous. As DiGennaro recalls, “There was a case in Colombia. There was seventy-two to ninety-six hours to get it done. I was flown to Colombia where I contacted my Guardian Angel. He had paid someone off and that someone had led him to a cocaine lab. The operators of the lab had been surveilled and followed to their hideout. In order to capture them, we had to work with a local military unit, which we contacted by two-way radio. In this particular instance, someone intercepted the call, and the next thing we know there’s a woman on the radio alerting the suspects. She was an agent of the traffickers inside the local military unit. We hear her screaming at the soldiers. Then she’s shot. We didn’t know who she was calling,” he continues, “so we had to leapfrog by helicopter and military truck to where we thought the subjects were. That time we happened to be right. We got the violators back to the United States. They were incapacitated by drugs and handcuffed in various men’s’ rooms in Chicago and Miami.”

As one DEA Agent recalls, “We’d get a call that there was ‘a present’ waiting for us on the corner of 116th St and Sixth Avenue. We’d go there and find some guy who’d been indicted in the Eastern District of New York, handcuffed to a telephone pole. We’d take him to a safe house for questioning and, if possible, turn him into an informer. Sometimes we’d have him in custody for months. But what did he know?” If you’re a Colombian or a Corsican drug dealer in Argentina, and a few guys with police credentials arrest you, how do you know it’s a CIA operation?

Expendable operative DiGennaro did not see the management apparatus that was directing him. He never knew much about the people the CIA unit was snatching and snuffing either; only that people were prosecuted and that defendants screamed.

DiGennaro’s last operation in 1977 involved the recovery of a satellite that had fallen into a drug dealer’s hands. By then he had all the CIA tradecraft skills required to fly solo; he learned who owned satellite, negotiated for it in good faith, and purchased it back on the black market. Such was the extent of the “parallel mechanism” the CIA had with the BNDD; a mechanism the CIA obviously used not only for anti-drug purposes, but for counter-terror reasons as well.

Fallout

By 1977, some 125 “former” CIA officers had been infiltrated into the DEA at every level of the organization, especially in intelligence units, making everything possible–from black market arms exchanges, to negotiations with terrorists, to political assassination. It also put the CIA in total control of targeting.

However, as the CIA’s influence became pervasive, more and more DEA agents felt its adverse impact on their cases. First the CIA demanded a list of all overseas DEA informants, as well as copies of all its intelligence reports. They got both. Next they began recruiting traffickers the DEA was working on. These recruits were subtracted from the DEA target list. In Chile in 1973, for example, the CIA allowed five drug traffickers to leave the soccer stadium in Santiago where dissidents were being tortured en masse. These traffickers fled to Colombia where they helped form the cartel that would eventually supplied crack cocaine to street gangs in Los Angles, through other CIA assets in Latin America.

As one DEA agent puts it, “The relationship between the CIA and DEA was not as it was originally intended. The CIA does not belong in any type of law enforcement activity, unless it can result in a conviction. Which it rarely does. They should only be supportive, totally.”

In February 1977, as he was about to resign in dismay, this agent and a group of other senior DEA officials felt compelled to document a litany of CIA misdeeds.

The CIA was causing so many problems that in early 1977, outgoing Assistant Administrator for Enforcement Dan Casey sent a three page, single-spaced memorandum to DEA Administrator Peter Bensinger expressing his concern “over the role presently being played by the CIA relative to the gathering of operational intelligence abroad.” Signing off on the memo were six enforcement division chiefs. “All were unanimous in their belief that present CIA programs were likely to cause serious future problems for DEA, both foreign and domestic.” Unilateral CIA programs in foreign countries were a “potential source of conflict and embarrassment and which may have a negative impact on the overall U.S. narcotic reduction effort.” He referenced specific incidents, citing CIA electronic surveillance and the fact that the CIA “will not respond positively to any discovery motion.” Casey foresaw more busted cases and complained that “Many of the subjects who appear in these CIA promoted or controlled surveillances regularly travel to the United States in furtherance of their trafficking activities.” The “de facto immunity” from prosecution enables the CIA assets to “operate much more openly and effectively.”

Casey was especially upset that the CIA demanded that DEA provide telephone numbers for its operations. “This practice is most disturbing because, in effect, it puts DEA in the position of determining which violators will be granted a de facto immunity.” Considering the seriousness of the problem, he recommended that “all DEA support for CIA electronic surveillance be suspended at once.” He asked DDEA Administrator Peter Bensinger to insist that the CIA adhere to guidelines set by the Carte White House Domestic Council, which limited the CIA to gathering strategic intelligence. He advised that DEA personnel not request CIA support “which might end to prejudice the domestic prosecution of any drug trafficker.”

Alas, Bensinger suffered the CIA at the expense of the DEA’s integrity. He ignored Casey and his division chiefs. The Strength of the Pack features examples of how this accommodation with the CIA emasculated the DEA. One major example is the CIA’s Contra Connection, as revealed by Gary Webb. There is also the fact that Manuel Noriega was a CIA asset and that his DEA file was destroyed by CIA infiltrators, paving the way for the invasion of Panama. There was also the Pan Am 103 case in December 1988, in which a bomb was planted by enemy agents who had penetrated a protected CIA drug ring, which was making a “controlled delivery.”

This huge crack in the CIA’s protective shield led to the formation of the CIA’s Counter-Narcotics Center, and business continued as usual. In December 1989, as reported in the 4 May 1990 issue of Newsday, “a small US special operations team both planned and carried” out a raid that resulted in the death of drug lord Jose Gonzalo Rodriguez Gacha, his 17 year old son, and several bodyguards. Pablo Escobar in 1994 was similarly assassinated by a CIA led execution squad.

The Gacha and Escobar hits, and many more like them which the public knows little or nothing about, are extrapolations of those performed by Joey DiGennaro. And the beat goes on. Shortly after he resigned in 1993, DEA chief Robert Bonner revealed that the CIA in 1990 had shipped a ton of pure cocaine to Miami from its Counter Narcotic Center warehouse in Venezuela. The Orwellian “controlled delivery” was accidentally lost.

With Bush’s war on terror, the situation has only gotten worse. In Afghanistan and South West Asia, the DEA is entirely infiltrated and controlled by the CIA and military. DEA headquarters is basically an adjunct of the Oval Office. And the Establishment continues to keep the lid on the story. After sending my manuscript to two reviewers–one with CIA connections, the other with DEA connections–my publisher has stopped communicating with me. I think my editor just wants me to go away.

One can only wonder how deeply America will descend into this vortex of fear and subservience to state security before it vanishes altogether.

Douglas Valentine is the author of The Hotel Tacloban, The Phoenix Program, and TDY. His fourth book, The Strength of the Wolf: The Federal Bureau of Narcotics, 1930-1968, which received the Choice Academic Excellence Award and is being published in Russia. The sequel, The Strength of the Pack, is being published by University Press of Kansas in 2008. For information about Mr. Valentine, and his books and articles, please visit his web sites at www.DouglasValentine.com and http://members.authorsguild.net/valentine

Symbolic Meaning of the Hawk

January 27, 2008
Ran into a hawk the other day at the park, he was screeching at me? Closest I have gotten to a hawk, Me and Jack my dog must have walked right underneath her. She was either trying to scare us away from her kill, or was trying to tell me something.  What could this mean? She had a white belly.
Attributes & symbolic meanings of the hawk:

  • Attention
  • Vision
  • Power
  • Energy
  • Leadership
  • Intensity

We take these indications from observing the hawk in nature. Here we see the hawk has tremendous vision. Their eyesight is phenomenal and a key factor in their incredible hunting abilities. Here the hawk is a message for us to keep our eyes (both physical & spiritual) keen on the areas that most require our attention. Specifically, the hawk beckons us to hone our focus on the areas that are out of balance in our lives. Recognition is the first step to solution.

We derive the essence of power, energy and intensity just by visually appreciating the hawk. Consider its powerful beak and impressive talons. It’s steely stare and intense focus also contribute to the aura of power the hawk holds. As such, the hawk asks us to be aware of the power each of us has over others. Further, we must each respect our potential positions of authority (leadership) and honor all those with whom we interact. It is abhorrent to the hawk’s spirit when we are careless with our power (or worse, dominating, arrogant or mean) when dealing with others.

Furthermore, the hawk is a solar animal which makes it kin to all the attributes summed up by fire and sun. Attributes such as brilliance, clarity, energy, and unification.

In dreams, hawks represent our yearning for freedom and clarity and is often considered a message from the subconscious to use our intellectual power to obtain the freedom we desire in lives.

What’s the Going Price for a Joint?

January 21, 2008

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More Than You Might Think
By PAUL ARMENTANO

What’s the current price for a bag of weed? According to the latest figures from the FBI, the human cost is roughly 739,000 a year.

That’s the number of American citizens arrested in 2006 for possessing small amounts of pot. (Another 91,000 were charged with marijuana-related felonies.) The figure is the highest annual total ever recorded, and is nearly double the number of citizens busted for pot fifteen years ago.

Those arrested face a multitude of consequences, primarily determined by where they live. For example, most Californians charged with violating the state’s pot possession laws face little more than a small fine. By contrast, getting busted with a pinch of weed in Ohio will cost you your driver’s license for at least six months. Move to Texas–well, now you’re looking at a criminal record and up to 180 days in jail. Or if you happen to be a first-time offender, possibly a stint in court-mandated ‘drug rehab’ (one recent study reported that nearly 70 percent of all adults referred to Texas drug treatment programs for weed were referred by the courts), probation, and a hefty legal bill. And don’t even think about getting busted in Oklahoma, where a first time conviction for minor pot possession can net you up to one year in jail, or up to ten years if you’re found guilty of a second offense. Thinking of growing your own? That’ll cost you a $20,000 fine, and–oh yeah–anywhere from two years to life in prison.

Yes, you read that right–life in prison.

Of course, not everyone busted for weed receives jail time. But that doesn’t mean that they don’t suffer significant hardships stemming from their arrest–including (but not limited to): probation and mandatory drug testing, loss of employment, loss of child custody, removal from subsidized housing, asset forfeiture, loss of student aid, loss of voting privileges, and the loss of certain federal welfare benefits such as food stamps.

And yes, some offenders do serve prison time. In fact, according to a 2006 Bureau of Justice Statistics report, 12.7 percent of state inmates and 12.4 percent of federal inmates incarcerated for drug violations are incarcerated for marijuana offenses. In human terms, this means that there are now about 33,655 state inmates and 10,785 federal inmates behind bars for violating marijuana laws. (The report failed to include estimates on the percentage of inmates incarcerated in county jails for pot-related offenses.)

In fiscal terms, this means that taxpayers are spending more than $1 billion annually to imprison pot offenders.

Yet this billion dollar price tag only estimates the financial costs on the ‘back end’ of a marijuana arrest. The criminal justice costs to taxpayers–such as the man-hours it takes a police officer to arrest and process the average pot offender–on the ‘front end’ is far greater, with some economists estimating the financial burden to be in upwards of $7 billion a year. Naturally, as the annual number of pot arrests continues to increase (according to the latest FBI data, marijuana arrests now constitute 44 percent of all illicit drug arrests), these costs are only going to grow larger.

There are alternatives, of course–options that won’t leave this sort of human and fiscal carnage in its wake, and that won’t leave entire generations believing that the police are an instrument of their oppression rather than their protection.

‘Decriminalization,’ as first recommended to Congress in 1972 by President Nixon’s National Commission on Marihuana and Drug Abuse, called for the removal of all criminal and civil penalties for the possession, use, and non-profit distribution of cannabis. Such a policy, if adequately implemented, would eliminate the bulk of the human and fiscal costs currently associated with enforcing pot prohibition.

A second option, ‘regulation,’ would also significantly slash many of society’s prohibition-associated fiscal and human costs. Legalizing the commercial sale and use of cannabis in a manner similar to alcohol, with state-mandated age controls and pot sales restricted to state-licensed stores, could also potentially raise billions of added dollars in tax revenue while simultaneously bringing an end to the more egregious and adverse black-market effects of the plant’s criminalization – such as the production of pot by criminal enterprises and its clandestine cultivation on public lands.

Would either option be perfect? No, probably not. (‘Decriminalization,’ for instance, might indirectly encourage pot use; ‘regulation’ might not entirely eliminate the black market sales of pot.) But how can continue with the status quo? Since, 1990, law enforcement have arrested over 10 million Americans–more than the entire population of Los Angeles county–on pot charges. Yet, according to federal figures, both marijuana production and use are rising. Isn’t it time we began looking at ways to address the marijuana issue that move beyond simply arresting and prosecuting an inordinate amount of otherwise law-abiding Americans? Or must we wait until another 10 million citizens are arrested before our state and federal politicians find the courage to begin this discussion?

Paul Armentano is the Deputy Director for NORML and the NORML Foundation in Washington, DC. He may be contacted at paul@norml.org.

The Fraud of Bushenomics: They’re Looting the Country

January 19, 2008

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The New York Times made it official. The Economy is a problem!

So, now, at last we can discuss it.

Not just discuss it, in rapid order “recession” became the word of the day, from White House, Congress, the Fed and the media.

It’s blamed, mostly, on the subprime crisis.

But that’s not the problem. It’s a symptom. It is the logical, and probably one of the necessary results, of Bushenomics.

Along with low, or no, job growth. Little or no business growth. Depressed wages. And the crashing dollar. (The president has a different vision of the economy. In his vision it’s booming! And the number of jobs is growing! Though there is this little blip.)

The idea under which Bushenomics was sold is this:

  • The rich are the investor class.
  • If the rich have more money, they will invest more.
  • Their investments will create more business.
  • Those businesses will create more wealth, thus improving everyone’s lives and making the nation stronger. They will also create new and better jobs.

Whether or not the people who say such things truly believe them, I cannot say. But that’s their pitch, and the media certainly seems to buy it, as do most of the establishment economists.

A more realistic — and less idealistic — view of Bushenomics is that the Bush administration and its cronies came at the economy with the attitude of oilmen.

  • They inherited a vastly wealth country.
  • They looked at it like the oil under the Alaskan wilderness. They craved to pump it out, turn it into cash and grab as much of that cash as possible.

Wherever possible, they literally sold off the assets. This was called privatization. Our biggest asset — in terms of size — is, of course, our defense establishment. With privatization, one dollar out of every three for direct military operations in Iraq and Afghanistan goes to private contractors like Halliburton and Blackwater. So when someone says, “Support the troops!” with budget appropriations, they should really yell, “Two-thirds support to the troops! One third support to Halliburton, et al.!”

This is just an estimate. The degree of privatization is unknown. Presumably, that’s deliberate. Nor does it count the amount of money the military spends with private purveyors to supply the troops and their operations. It is only the amount that goes directly to private contractors.

But for the most part, the assets of the United States, our collective wealth, could not be sold off in such a direct manner.

In order to turn them into cash, what the administration did was borrow against them.

That is, they cut taxes while continuing to spend lavishly, creating debt.

The debt is owed by all of us, the collective people of the United States.

The tax cuts hugely favored rich people. They also favored unearned income (dividends, capital gains, inherited money) as opposed to the kind of money people have to work for. The very richest got richer.

The spending was — to the degree possible — directed to themselves, their friends and their supporters: Big Pharma, the medical industry, insurance, banking and financial, among others. And, of course, Big Oil, from whom they have spent close to a trillion dollars of our money to conquer a big oil field for private exploitation.

Now let’s take a look at some numbers.

The numbers will tell us if their idealistic tale about unleashing the capitalists to create a better world for us all is correct. Or if it’s a fairy story that masks uncaring greed.

The big number is that the economy has grown.

As measured by the GDP it has. From 2001 to 2007 it went by 35 percent.

GDP stands for Gross Domestic Product. It could more accurately be called Gross Domestic Transactions, because it is the sum of all the financial transactions in the country.

Now let us look at job creation.

In the first six years of the Clinton administration, 13.7 million jobs were created. In the same period, under Bush, only 3.7 million jobs were created. Barely keeping up with population growth, if that. (Source: Fox News)

Now let us look at median income. That’s as opposed to average income (If Bill Gates walks into a bar with 10 people, the average income of everyone in the room goes up by $17,5000,000. But the median income just moves up half a notch, from between the fifth and sixth person, to the sixth person’s income). From 2001 to 2005, median income, for people under 65, went down $2,000.

That’s worth restating. From 2001 to 2005, the income of the average working person declined by $2,000.

Now, let’s look at the value of America’s businesses.

A good rough measure of the market value of America’s best businesses is the stock market. Under Clinton, the Dow Jones went up 324 percent. Wall-to-wall, after the dot.com bubble burst, it more than tripled in value.

Bush arrived in 2001. Since then the Dow Jones is up just 10 percent. Adjusted for inflation, that’s absolutely flat. (It was briefly up 23 percent. It is now below the 10 percent mark, and tumbling down as this is written). Just pain, no gain.

If jobs have not increased, salaries have gone down, and the value of business has not risen, where is that 35 percent growth in the economy?

There is a number called the M3 money supply.

The M1 is basically cash, plus checking and “current” accounts. The M2 adds savings accounts, money market accounts and CDs up to $100,000. The M3 adds in the big CDs, Eurodollar accounts and other large exotics.

Already rising very fast, the M3 took off like a rocket after 2001. The Fed stopped publishing the M3 in 2006 (conspiracy theorists, please note.) But a quick look at the chart of its growth, and assuming its trajectory continued, clearly shows that the M3 grew by something in the range of 35 percent.

The entire growth of the economy under Bushenomics is accounted for by growth in the money supply.

The administration did not directly inflate the economy by 35 percent.

They pumped it by the size of the deficit. The rest happened this way.

When a government is “printing money” (running big deficits), the big fear is inflation.

Particularly in the financial community. Bankers make their money on interest, and inflation eats their profits, point for point.

The administration, very proudly, grew the economy (or at least the amount of money in circulation), without inflation. Which actually is a pretty good trick.

In part, they were able to do so precisely because the policy was a failure.

If it had created business growth — actual business, not just financial business — that would have created jobs. Then there would have been inflationary pressure. Especially if they were good, high paying jobs. If salaries for ordinary people go up, even a little, the total is a big sum because there are so many of us.

But due to free trade, outsourcing, bad economic policy, policies aimed at keeping wages down, and relentless union busting, good jobs were lost, to be replaced with low-wage jobs, when they were replaced at all. The proof is in that median income figure (down $2,000 per worker).

Due to free trade and outsourcing, consumer goods mostly went down too. The exception being in favored industries like pharmaceuticals, insurance and oil.

Finally, and this the key to the next step in the process, the Fed kept interest rates down.

Low interest rates mean that it’s cheap to borrow.

The administration largely believes in supply-side economics (otherwise known as “trickle down,” or “piss on the people.”); if you increase the supply of something, consumers will appear to buy it.

The actual results are a perverse triumph of the idea.

The supply of money was increased. The price of money was kept artificially low.

Think of borrowing as buying money. It is.

People (and businesses and corporations) did rush forward to buy it. Once they had it, what was there to do with it? There was no new trend, no dot.coms, no high techs, no bio techs, no nothing.

So they went out and sold money. That is, they made loans.

There are two big retail loan areas, credit cards and housing loans. Both were pushed very aggressively. With cheap, cheap money available to finance home buying, that market heated up. At the same time, commercial interests started aggressively buying up loans, packaging them together, and reselling them as financial instruments. That created more desire to make more loans (sell money). Financial institutions bought more money (borrowed), in order to sell it at a profit (make loans). Since the loans were quickly resold — and profit taken off the top — the quality of the loans didn’t matter to the people who made them. The housing market — or rather the loans that fueled it — grew into a bubble.

The subprime crisis, the housing bubble, whatever you want to call it, is not the problem.

It’s a symptom of pumping in money with no place to go.

Other symptoms are no job growth, no business growth, no stock market growth, falling median incomes, disappearing pensions and health plans, and the fall of the dollar.

When Bush came into office, a Euro cost 95 cents. Now it costs a $1.50. The Canadian dollar (the Loony) was 70 cents. Now it costs a dollar. Most mainstream economists and pundits will opine that a low dollar is good for American industry, because it will help us sell our goods. That’s only true if we’re producing things that no one else is — or producing them better or cheaper — and we’re not.

Also, many foreign exchange rates are being kept artificially low against the dollar. Some, like many of the oil countries, are pegged to the dollar. They’re making up for it by raising the price of oil (currently traded in dollars). Others, like the Asian manufacturing countries, are keeping their currency down to retain their edge in selling here, thereby canceling whatever advantage we’re supposed to get from declining currency.

One way to think of what the administration has done, is as a leveraged buyout. That’s when someone buys a company, using the company itself as the collateral for the loan used to purchase it, usually at very high interest, then pays off the interest by cutting the work force and salaries, selling outsets and even breaking up the company.

It’s good for the guy who makes the deal, skims the cream off the top and gets rich. (The company that Mitt Romney got rich working for specialized in doing that.) It’s good for the lenders, who get a good return (if the buyer is able to squeeze enough money out of his purchase), but it’s bad for the work force, bad for the company, and, if no one comes along to replace it, bad for the business as a whole.

We’ve experienced a leveraged buyout of the national economy.

Our politicians, the media and economists are just now waking up to the fact that the economy is in trouble.

The current numbers make it clear that we are probably in, or probably headed for, a recession.

Also, the polls show that people are concerned about the economy, and it’s an election year. The people are out ahead of our governing and media and professional economic classes on this, because they live in the real economy, the one that’s been leveraged, and the professionals are either in, or work for, the investor class that has been doing well.

So there is, at last, talk about doing something about the economy.

The Feds will cut interest rates!

George Bush wants a stimulus package. Tax cuts, tax cuts and make my tax cuts permanent! After all, that policy has worked so well. He said the cuts must be at least 1 percent of the GDP. That will be $145 billion.

Harry Reid and Nancy Policy (the King and Queen of Effective Politics) will offer a competing one (tax cuts, tax cuts!). Although they promised pay-as-you-go economic policies from a Democratic legislature.

Pundits in the media talk about a crisis in consumer confidence. And how the fix is to restore it. So we will go out and buy. Presumably on credit.

How about consumers think there’s a problem because there is one. Not because they’re weird emotionally. They reasonably see themselves so overextended, with so little hope of being better earners, that they won’t be able to pay things off. Not even with a one-time government check of somewhere between $300 and $1,200.

In short, most of those solutions will go to making things worse.

The real solutions are pretty obvious and pretty simple.

First, we have to make a choice: Do we want a sound economy for all of us and a strong America? Or do we want to have a few people of unlimited wealth who use that wealth, among other things, to control the government so that it helps them milk more money from the rest of us?

By the way, this is not a call for socialism! Or other ism! Except a call for sensible and effective capitalism. Based on what we’ve seen work and seen fail.

In the real world, there are no such things as free markets.

In the real world, business people manipulate and conspire to control markets, and governments both control and collude with business, while tax policies and government spending have a major affect on the economy.

Let us accept that, and then the argument is only over how best to do it.

Simply giving money to rich people doesn’t work.

Bob Novak, the conservative commentator who calls the investor class “the most creative class,” is flat out wrong. As we’ve seen, outside of their ability to buy influence in politics, the media and the law, the rich are like the rest of us, relatively passive and unimaginative, prone to putting their money in the easiest place that promises a return, in whatever bubble is in fashion at the moment and wherever some salesman who gets their attention tells them.

Money has no mind of its own. It has to be directed toward areas that will generate and support business and good jobs at good wages. As it happens, our economic goals are on the same road as the social good.

The No. 1 target has to be alternative energy.

Energy that can be produced here, in the United States, renewable, nonpolluting, and not, like corn-based ethanol, requiring as much petroleum to produce it as it replaces. One-third of our balance of trade deficit is oil, year in and year out. If the United States can become the world leader in alternative energy and conservation technology, we will, at last, have something to export.

The No. 2 target is infrastructure.

By it’s nature, infrastructure has to be largely produced here with local labor and it stays here.

Hard infrastructure, like roads and bridges, cleaning up New Orleans and the Gulf Coast, protecting our coasts from future storms, internet and phone service as good as Europe’s, Japan’s and Singapore’s.

Soft infrastructure, like education, youth services, parks and recreation programs, public safety, and a saner criminal justice system. The United States has 5 percent of the world’s population and 25 percent of the incarcerated population. That’s expensive. And wasteful. Unsafe streets and high crime are expensive and wasteful.

Infrastructure makes doing business easier, quicker and cheaper. It becomes an invisible subsidy for all businesses. Try to imagine, for example, Fed Ex, that entrepreneurial triumph, without a national web of airports, flight controllers and roads.

The No. 3 target is health care.

Health care in the United States costs at least 50 percent more than the next-highest spending country and double what it does in most other modernized countries. All of them have better health than we do. They live longer and in better condition.

The difference is that they have national health plans. Mostly single-payer, usually tax-supported. Our plans are based on a hodge-podge of a thousand private insurers.

A single-payer national health plan should cut the costs of our health care by at least 25 percent, possibly 50 percent. That’s an astonishing number. That money could go to more productive things. Or to even more health care.

American businesses who supply health care to their employees claim they are noncompetitive with companies from countries that have national health. This will make them more competitive. This will make American labor more competitive.

The No. 4 four target is a balanced budget.

There are, in fact, times for deficit spending. Just as there are times in our personal lives to borrow and times for business to borrow.

This is probably not one of them.

There is an ocean of money sloshing all around the world, looking for a home. If there are real business opportunities in America (like taking the lead in alternative energy, bio tech, and whatever is next around the corner), it will come.

Especially if there is a sound business environment and dollar investments return to being the most reliable in the world. That means paying down our debt.

How can all this be done?

Raising taxes.

On the wealthy. And on corporations. That’s not class warfare. That’s simple practicality.

After your first $20,000, how much of the next 20 do you need, to live, thrive and survive? Damn near all of it. After your first 20 million, now much of the next 20 million do you need? Not a nickel.

The rich will whine, writhe and scream that they won’t do business, they’ll be driven out of business, that business will collapse. Bullshit. If they dislike keeping 20 or 30 or 40 cents of each dollar of profit so much that they won’t take the dollar, someone will come along who gladly will. That’s how markets work.

All of this is pretty straightforward and common sense.

The illogic of Bushenomics is obvious. The results were foreseeable. After all, similar effects took place under Reagan and Bush the Elder, until they reversed courses.

The alternatives are equally obvious. The facts bear out the theory. Go back to Hoover and Roosevelt, then look at the down, up, down, of Bush the Elder, Bill Clinton, and Bush the Lesser. (We do note that there are minor industries dedicated to proving that Franklin Roosevelt was, in the words of CNN’s Glenn Beck, “an evil son of a bitch,” that the New Deal really, really, really didn’t work, and that Bush the Elder was really, really, really responsible for the boom of the Clinton years and that Clinton was responsible for the first recession during the reign of Bush the Lesser. But they are like people who see the image of the Virgin Mary in bread sticks and crullers.)

None of our politicians, pundits or economists are addressing the fundamentals.

The last time we switched from the nonsense of worshiping unmitigated greed, disguised as free marketeering, it took a market crash and the Great Depression to move us out of our public relations-manufactured delusions and make us understand that when we all do well the rich get richer too, so let’s start with the common good.

Based on the dialogue as it stands now, we will go with tinkering and twaddle, doing more of what doesn’t work. And only if the whole things collapses will we address the real problems.
_______

About authorLarry Beinhart is the author of Fog Facts: Searching for Truth in the Land of Spin. Robert McChesney called it the book on the subject “against which all others will be measured.”

His novels include Wag the Dog, on which the film was based, and The Librarian which Rolling Stone described as “John Grisham meets Jon Stewart.”

He was a Fulbright Fellow, he’s won an Edgar, been nominated for two more, a Gold Dagger, an Emmy. He’s been a political consultant, made commercials, lectured at Oxford and he’s a part time ski instructor. His email is beinhart@fogfacts.com

The Gulf of Tonkin and the Strait of Hormuz

January 9, 2008

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By ROBERT FANTINA

As the U.S. government continues to demonstrate its inability to learn from history, an alarming report from the Strait of Hormuz was broadcast to the world on January 7. The Associated Press reported the following: “In what U.S. officials called a serious provocation, Iranian boats harassed and provoked three U.S. Navy ships in the strategic Strait of Hormuz, threatening to explode the American vessels.” These Iranian ships are believed to part of the Iranian Revolutionary Guard’s navy, the organization that the U.S. Congress officially decreed a ‘terrorist’ organization.

Those either old enough to remember, or cognizant enough to understand history, will immediately be reminded of the infamous ‘Gulf of Tonkin’ incident, reported on August 2, 1964. On that day, the U.S. destroyer Maddox, on an espionage mission in the Gulf of Tonkin off the Vietnam coast, reported being fired on by North Vietnamese torpedo patrol boats. In response the Maddox fired back, sinking one boat. Tensions in the area were already growing, and now the world watched and waited.

On August 4 of that same year, the Maddox and the C. Turner Joy, another destroyer, were again patrolling the Gulf of Tonkin. Instruments on the Maddox indicated that it was either attacked or was under attack, and both the Maddox and the C. Turner Joy began firing back, with assistance from U.S. air power.

It was less than 24 hours later when the captain concluded that there might not have been an attack; why the instruments indicated otherwise was not clearly explained. The pilot of a Crusader jet, James B. Stockdale, undertook a reconnaissance flight over the gulf that evening. He was asked if he saw any North Vietnamese attack vessels. Mr. Stockdale did not equivocate in his response. Said he: “Not a one. No boats, no wakes, no ricochets off boats, no boat impacts, no torpedo wakes–nothing but black sea and American firepower.”

Yet this non-event, either misinterpreted or fabricated altogether, was seen by an hysterical U.S. Congress, ever willing to protect America from its enemies, real or imagined, as aggression against the U.S. It also provided members of that august body with some additional ‘I’m-strong- on-Communism’ credentials, which were ever in demand from the end of World War II until the dawn of the world’s newest bugaboo, ‘terrorism.’ Congress quickly passed the so-called ‘Gulf of Tonkin Resolution,’ which empowered President Lyndon Johnson to take all measures he deemed necessary to repel aggression. While this was not the start of the Vietnam War, it represented the first major escalation that did not end for over a decade, and cost the lives of over 50,000 U.S. soldiers, and between 1,000,000 and 2,000,000 Vietnamese citizens. It caused havoc with the U.S. economy, brought near-revolution to American streets and campuses and drew hostility towards the U.S. from most of the world.

Today, an unidentified Pentagon official called this ‘incident’ in the Strait of Hormuz “a serious provocation.” Defense Department spokesman Bryan Whitman referred to it as a “serious incident.” Mr. Gordon Johndore, National Security Council spokesman said the United States urges the Iranians “to refrain from such provocative actions that could lead to a dangerous incident in the future.”

It must be remembered that it was just a month ago that the National Intelligence Estimate (NIE) determined that Iran ceased its nuclear weapons program four years ago. As President Bush was busy rattling his saber, and apparently itching to start yet another war, the NIE took the wind out of his bloody sails. He huffed and puffed and said, inexplicably, that the NIE report proved that Iran was still a great threat to the U.S., but it seemed that no one took him too seriously. Now, however, we have an ‘incident.’ Obviously, we are told, like in the Gulf of Tonkin 44 years ago, the U.S. has been the victim of ‘aggression.’

It is, of course, unimportant to consider that Iran might understandably be a little trigger-happy when it sees U.S. naval vessels approaching. Just because Iran’s next-door neighbor was invaded by the U.S. without provocation, and now is in the midst of a deadly occupation, should not in any way justify Iran’s wariness. The fact that it was only a year ago that Mr. Bush sent a second aircraft carrier to the Persian Gulf for no other reason than to intimidate Iran, and to participate in ‘war games’ (an oxymoron if ever there was one) in clear sight of one of the members of Mr. Bush’s ‘axis of evil,’ should simply be ignored by Iran. The fact that the U.S. has a long and violent history of invading countries that displease it in some way (perhaps they have a democratically elected government that does not bow and scrape to the occupant of the White House throne) should not alarm Iran. Mr. Bush and his spokesman have not said that they plan to invade Iran; they simply said no options are off the table.

One waits in anxious impatience to see how Congress will react. Surely the slowly-dwindling multitudes seeking the Republican and Democratic presidential nominations will race each other to the microphone to denounce Iranian aggression, thus shining their patriotic credentials. Senator Hillary Rodham Clinton (D-NY), who last fall voted to name Iran’s Revolutionary Guard a terrorist organization, can gloat and glow with jingoistic satisfaction that that organization has now proven her right and her critics wrong, at least in her own mind. Perhaps former Massachusetts governor Mitt Romney, stumbling along on the path if not towards the Republican nomination, at least in its general direction, will endorse whatever Mr. Bush proclaims; after all, Mr. Romney has stated that it is Mr. Bush who has kept America safe (save for one or two unfortunate incidents in September of 2001). Will former New York City Mayor Rudolph Giuliani, who never tires of reminding the voters that he and he alone was mayor of New York on September 11 2001 (whatever that may be worth), now raise the specter of Iranian terrorism in the U.S?

One could sit back and laugh at the nonsense proclaimed by the men and women who seek to lead the United States if their actions were not so dangerous. In 1964 an incident not unlike the one that allegedly took place in the Strait of Hormuz on January 8 of this year caused Congress to officially embark on America’s most deadly imperial disaster. ‘Flawed intelligence,’ at best, and outright lies at worst paved the way for the current imperial mess which has the potential to dwarf America’s Vietnam catastrophe. And now, with a lame duck president seeking to salvage his disgraced reputation, one wonders if this reported incident from Iran will have the same effect as the non-incident in the Gulf of Tonkin 44 years ago.

Mr. Bush & Co. have never been particularly interested in facts. They have not had any desire to listen to opposing opinions. They have happily ignored the wishes of the U.S. citizens. They apparently have been very interested in enriching themselves and their cronies, and have focused their desire for riches on oil, at the expense of the blood of their own, and Iraq’s, citizens. They have used fear to get Congress to support their crimes. There is nothing to cause one to think things will be different now. Congress has proved its spinelessness over and over, and we all know that there is no reason for statesmanship when interesting, pander-to-the-fear-of-the-moment sound bytes are so much easier.

Whether or not this current situation leads Congress to justify an invasion of Iran, or other actions that will lead to an invasion, remains to be seen. But the U.S. has not learned from its own history, and another repeat of an unneeded and catastrophic war is not, unfortunately, unthinkable. That the president will not stop it is not surprising; that Congress will be complicit once again is unspeakable.

Robert Fantina is author of ‘Desertion and the American Soldier: 1776–2006.

Imperialist Propaganda: Second Thoughts on Charlie Wilson’s War

January 8, 2008

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By Chalmers Johnson

I have some personal knowledge of Congressmen like Charlie Wilson (D-2nd District, Texas, 1973-1996) because, for close to twenty years, my representative in the 50th Congressional District of California was Republican Randy “Duke” Cunningham, now serving an eight-and-a-half year prison sentence for soliciting and receiving bribes from defense contractors. Wilson and Cunningham held exactly the same plummy committee assignments in the House of Representatives — the Defense Appropriations Subcommittee plus the Intelligence Oversight Committee — from which they could dole out large sums of public money with little or no input from their colleagues or constituents.

Both men flagrantly abused their positions — but with radically different consequences. Cunningham went to jail because he was too stupid to know how to game the system — retire and become a lobbyist — whereas Wilson received the Central Intelligence Agency Clandestine Service’s first “honored colleague” award ever given to an outsider and went on to become a $360,000 per annum lobbyist for Pakistan.

In a secret ceremony at CIA headquarters on June 9, 1993, James Woolsey, Bill Clinton’s first Director of Central Intelligence and one of the agency’s least competent chiefs in its checkered history, said: “The defeat and breakup of the Soviet empire is one of the great events of world history. There were many heroes in this battle, but to Charlie Wilson must go a special recognition.” One important part of that recognition, studiously avoided by the CIA and most subsequent American writers on the subject, is that Wilson’s activities in Afghanistan led directly to a chain of blowback that culminated in the attacks of September 11, 2001 and led to the United States’ current status as the most hated nation on Earth.

On May 25, 2003, (the same month George W. Bush stood on the flight deck of the U.S.S. Abraham Lincoln under a White-House-prepared “Mission Accomplished” banner and proclaimed “major combat operations” at an end in Iraq), I published a review in the Los Angeles Times of the book that provides the data for the film Charlie Wilson’s War. The original edition of the book carried the subtitle, “The Extraordinary Story of the Largest Covert Operation in History — the Arming of the Mujahideen.” The 2007 paperbound edition was subtitled, “The Extraordinary Story of How the Wildest Man in Congress and a Rogue CIA Agent Changed the History of Our Times.” Neither the claim that the Afghan operations were covert nor that they changed history is precisely true.

In my review of the book, I wrote,

“The Central Intelligence Agency has an almost unblemished record of screwing up every ‘secret’ armed intervention it ever undertook. From the overthrow of the Iranian government in 1953 through the rape of Guatemala in 1954, the Bay of Pigs, the failed attempts to assassinate Fidel Castro of Cuba and Patrice Lumumba of the Congo, the Phoenix Program in Vietnam, the ‘secret war’ in Laos, aid to the Greek Colonels who seized power in 1967, the 1973 killing of President Allende in Chile, and Ronald Reagan’s Iran-Contra war against Nicaragua, there is not a single instance in which the Agency’s activities did not prove acutely embarrassing to the United States and devastating to the people being ‘liberated.’ The CIA continues to get away with this bungling primarily because its budget and operations have always been secret and Congress is normally too indifferent to its Constitutional functions to rein in a rogue bureaucracy. Therefore the tale of a purported CIA success story should be of some interest.

“According to the author of Charlie Wilson’s War, the exception to CIA incompetence was the arming between 1979 and 1988 of thousands of Afghan mujahideen (“freedom fighters”). The Agency flooded Afghanistan with an incredible array of extremely dangerous weapons and ‘unapologetically mov[ed] to equip and train cadres of high tech holy warriors in the art of waging a war of urban terror against a modern superpower [in this case, the USSR].’

“The author of this glowing account, [the late] George Crile, was a veteran producer for the CBS television news show ’60 Minutes’ and an exuberant Tom Clancy-type enthusiast for the Afghan caper. He argues that the U.S.’s clandestine involvement in Afghanistan was ‘the largest and most successful CIA operation in history,’ ‘the one morally unambiguous crusade of our time,’ and that ‘there was nothing so romantic and exciting as this war against the Evil Empire.’ Crile’s sole measure of success is killed Soviet soldiers (about 15,000), which undermined Soviet morale and contributed to the disintegration of the Soviet Union in the period 1989 to 1991. That’s the successful part.

“However, he never once mentions that the ‘tens of thousands of fanatical Muslim fundamentalists’ the CIA armed are the same people who in 1996 killed nineteen American airmen at Dhahran, Saudi Arabia, bombed our embassies in Kenya and Tanzania in 1998, blew a hole in the side of the U.S.S. Cole in Aden Harbor in 2000, and on September 11, 2001, flew hijacked airliners into New York’s World Trade Center and the Pentagon.”

Where Did the “Freedom Fighters” Go?

When I wrote those words I did not know (and could not have imagined) that the actor Tom Hanks had already purchased the rights to the book to make into a film in which he would star as Charlie Wilson, with Julia Roberts as his right-wing Texas girlfriend Joanne Herring, and Philip Seymour Hoffman as Gust Avrakotos, the thuggish CIA operative who helped pull off this caper.

What to make of the film (which I found rather boring and old-fashioned)? It makes the U.S. government look like it is populated by a bunch of whoring, drunken sleazebags, so in that sense it’s accurate enough. But there are a number of things both the book and the film are suppressing. As I noted in 2003,

“For the CIA legally to carry out a covert action, the president must sign off on — that is, authorize — a document called a ‘finding.’ Crile repeatedly says that President Carter signed such a finding ordering the CIA to provide covert backing to the mujahideen after the Soviet Union invaded Afghanistan on December 24, 1979. The truth of the matter is that Carter signed the finding on July 3, 1979, six months before the Soviet invasion, and he did so on the advice of his national security adviser, Zbigniew Brzezinski, in order to try to provoke a Russian incursion. Brzezinski has confirmed this sequence of events in an interview with a French newspaper, and former CIA Director [today Secretary of Defense] Robert Gates says so explicitly in his 1996 memoirs. It may surprise Charlie Wilson to learn that his heroic mujahideen were manipulated by Washington like so much cannon fodder in order to give the USSR its own Vietnam. The mujahideen did the job but as subsequent events have made clear, they may not be all that grateful to the United States.”

In the bound galleys of Crile’s book, which his publisher sent to reviewers before publication, there was no mention of any qualifications to his portrait of Wilson as a hero and a patriot. Only in an “epilogue” added to the printed book did Crile quote Wilson as saying, “These things happened. They were glorious and they changed the world. And the people who deserved the credit are the ones who made the sacrifice. And then we fucked up the endgame.” That’s it. Full stop. Director Mike Nichols, too, ends his movie with Wilson’s final sentence emblazoned across the screen. And then the credits roll.

Neither a reader of Crile, nor a viewer of the film based on his book would know that, in talking about the Afghan freedom fighters of the 1980s, we are also talking about the militants of al Qaeda and the Taliban of the 1990s and 2000s. Amid all the hoopla about Wilson’s going out of channels to engineer secret appropriations of millions of dollars to the guerrillas, the reader or viewer would never suspect that, when the Soviet Union withdrew from Afghanistan in 1989, President George H.W. Bush promptly lost interest in the place and simply walked away, leaving it to descend into one of the most horrific civil wars of modern times.

Among those supporting the Afghans (in addition to the U.S.) was the rich, pious Saudi Arabian economist and civil engineer, Osama bin Laden, whom we helped by building up his al Qaeda base at Khost. When bin Laden and his colleagues decided to get even with us for having been used, he had the support of much of the Islamic world. This disaster was brought about by Wilson’s and the CIA’s incompetence as well as their subversion of all the normal channels of political oversight and democratic accountability within the U.S. government. Charlie Wilson’s war thus turned out to have been just another bloody skirmish in the expansion and consolidation of the American empire — and an imperial presidency. The victors were the military-industrial complex and our massive standing armies. The billion dollars’ worth of weapons Wilson secretly supplied to the guerrillas ended up being turned on ourselves.

An Imperialist Comedy

Which brings us back to the movie and its reception here. (It has been banned in Afghanistan.) One of the severe side effects of imperialism in its advanced stages seems to be that it rots the brains of the imperialists. They start believing that they are the bearers of civilization, the bringers of light to “primitives” and “savages” (largely so identified because of their resistance to being “liberated” by us), the carriers of science and modernity to backward peoples, beacons and guides for citizens of the “underdeveloped world.”

Such attitudes are normally accompanied by a racist ideology that proclaims the intrinsic superiority and right to rule of “white” Caucasians. Innumerable European colonialists saw the hand of God in Darwin’s discovery of evolution, so long as it was understood that He had programmed the outcome of evolution in favor of late Victorian Englishmen. (For an excellent short book on this subject, check out Sven Lindquist’s “Exterminate All the Brutes.”)

When imperialist activities produce unmentionable outcomes, such as those well known to anyone paying attention to Afghanistan since about 1990, then ideological thinking kicks in. The horror story is suppressed, or reinterpreted as something benign or ridiculous (a “comedy”), or simply curtailed before the denouement becomes obvious. Thus, for example, Melissa Roddy, a Los Angeles film-maker with inside information from the Charlie Wilson production team, notes that the film’s happy ending came about because Tom Hanks, a co-producer as well as the leading actor, “just can’t deal with this 9/11 thing.”

Similarly, we are told by another insider reviewer, James Rocchi, that the scenario, as originally written by Aaron Sorkin of “West Wing” fame, included the following line for Avrakotos: “Remember I said this: There’s going to be a day when we’re gonna look back and say ‘I’d give anything if [Afghanistan] were overrun with Godless communists’.” This line is nowhere to be found in the final film.

Today there is ample evidence that, when it comes to the freedom of women, education levels, governmental services, relations among different ethnic groups, and quality of life — all were infinitely better under the Afghan communists than under the Taliban or the present government of President Hamid Karzai, which evidently controls little beyond the country’s capital, Kabul. But Americans don’t want to know that — and certainly they get no indication of it from Charlie Wilson’s War, either the book or the film.

The tendency of imperialism to rot the brains of imperialists is particularly on display in the recent spate of articles and reviews in mainstream American newspapers about the film. For reasons not entirely clear, an overwhelming majority of reviewers concluded that Charlie Wilson’s War is a “feel-good comedy” (Lou Lumenick in the New York Post), a “high-living, hard-partying jihad” (A.O. Scott in the New York Times), “a sharp-edged, wickedly funny comedy” (Roger Ebert in the Chicago Sun-Times). Stephen Hunter in the Washington Post wrote of “Mike Nichols’s laff-a-minute chronicle of the congressman’s crusade to ram funding through the House Appropriations Committee to supply arms to the Afghan mujahideen”; while, in a piece entitled “Sex! Drugs! (and Maybe a Little War),” Richard L. Berke in the New York Times offered this stamp of approval: “You can make a movie that is relevant and intelligent — and palatable to a mass audience — if its political pills are sugar-coated.”

When I saw the film, there was only a guffaw or two from the audience over the raunchy sex and sexism of “good-time Charlie,” but certainly no laff-a-minute. The root of this approach to the film probably lies with Tom Hanks himself, who, according to Berke, called it “a serious comedy.” A few reviews qualified their endorsement of Charlie Wilson’s War, but still came down on the side of good old American fun. Rick Groen in the Toronto Globe and Mail, for instance, thought that it was “best to enjoy Charlie Wilson’s War as a thoroughly engaging comedy. Just don’t think about it too much or you may choke on your popcorn.” Peter Rainer noted in the Christian Science Monitor that the “Comedic Charlie Wilson’s War has a tragic punch line.” These reviewers were thundering along with the herd while still trying to maintain a bit of self-respect.

The handful of truly critical reviews have come mostly from blogs and little-known Hollywood fanzines — with one major exception, Kenneth Turan of the Los Angeles Times. In an essay subtitled “‘Charlie Wilson’s War’ celebrates events that came back to haunt Americans,” Turan called the film “an unintentionally sobering narrative of American shouldn’t-have” and added that it was “glib rather than witty, one of those films that comes off as being more pleased with itself than it has a right to be.”

My own view is that if Charlie Wilson’s War is a comedy, it’s the kind that goes over well with a roomful of louts in a college fraternity house. Simply put, it is imperialist propaganda and the tragedy is that four-and-a-half years after we invaded Iraq and destroyed it, such dangerously misleading nonsense is still being offered to a gullible public. The most accurate review so far is James Rocchi’s summing-up for Cinematical: “Charlie Wilson’s War isn’t just bad history; it feels even more malign, like a conscious attempt to induce amnesia.”

Chalmers Johnson is the author of the Blowback TrilogyBlowback (2000), The Sorrows of Empire (2004), and Nemesis: The Last Days of the American Republic (paperbound edition, January 2008).

Copyright 2008 Chalmers Johnson

The Great Law of Peace

January 6, 2008

Our American Heritage

The Iroquois Confederacy

Sojourn Magazine Winter 1998 (707) 964-1674

“(The Iroquois League) was a model social order in many ways superior to the white man ‘s culture of the day. Its democratic form of government more nearly approached perfection than any that has been tried to date.” — Elmore Reaman 1967
Because historians tend to focus on military engagements and changes in national boundaries, our population has little understanding of cultural and social interactions. In an interesting twist of interpretation, Felix Cohen proposed, in a 1952 article called “Americanizing the White Man,” That “(historians) have seen America only as an imitation of Europe,” but that “the real epic of America is the yet unfinished story of the Americanization of the white man.”

He defines Americanism as largely a product of the influence of Indian culture on the white European settlers. In an equally bold statement, Francis Jennings in The Invasion of America: Indians, Colonialism and The Cant of Conquest (1975) states that “What white (American) society owes to Indian society, as much as to any other source, is the mere fact of its existence.”

Early Euro-Americans voluntarily adopted methods, lifestyles, artifacts, and ideas from the indigenous people, often in order to survive. Indians in America provided half the modern world’s domesticated food crops, numerous herbal medicines, clothing, transportation pathways and modes, crafts and artifacts, hygiene methods, and thousands of words including place names and ideas of governance that blended ideals of rugged individuality with concern for the common welfare.

The Iroquois republic had continuously existed since the 14th or 15th century. In 1930, Arthur Pound ‘s Johnson of the Mohawk states, wrote “with the possible exception of the also unwritten British Constitution, deriving from the Magna Carta, the Iroquois Constitution is the longest-existing international constitution in the world.” Known ad “The Great Law of Peace,” this orally transmitted constitution describes a federal union of five (later six) Indian nations: Mohawk, Onondagam Seneca, Oneida, Cayuga and the Tscarora, adopted in 1715. It was only put in writing in 1915 by Arthur C. Parker, archeologist for the State Museum of New York.

The Europeans and Iroquois of the mid-18th century were on more friendly terms. Many English nobles adopted the lifestyle of Indians and joined their nations. The Treaty Councils brought cultural exchanges in which leaders and statesmen met as equals to diplomatically solve problems and alleviate strained relations. The trade of Great Britain and the peace and prosperity of the colonies was dependent upon this alliance.

During the era, Benjamin Franklin published twenty-six treaty accounts and represented the state of Pennsylvania as an Indian commissioner. In the pre-Revolutionary period, when he and his friends were advocating a federal union of the colonies, no European model was found to be suitable. Franklin ‘s contact with the Iroquois influenced many key ideas for a new form of government  federalism, equality, natural rights, freedom of religion, property rights, etc. At the 1744 treaty council, by Franklin ‘s account, Canassatego, speaker for the great council at Onondaga, recommended that the colonies form a union in common defense under a federal government: “We are a powerful Confederacy, and by your observing the same methods our wise forefathers have taken, you will acquire much strength and power; therefore, whatever befalls you, do not fall out with one another.”

In arguing for such a plan, Franklin stressed the fact that the individual nations of the confederacy managed their own internal affairs without interference from the Grand Council.

Twenty years after Franklin ‘s plan was defeated at the Albany congress, it reappeared in the Declaration of Independence and the Articles of Confederation. Franklin, Jefferson, John Adams, and George Washington were all familiar with the Iroquois polity. There is also strong scholarly evidence that European philosophers such as Locke, Roussea, More, and Hobbes were familiar with the societies of the American Indians. The integration of this knowledge into their theories of utopias and natural societies further inspired the U.S. founding fathers.

Even Marx and Engels drew on Iroquois models to support their theories and designs. Engels, like the American revolutionaries a century earlier, was impressed with the Iroquois ‘ ability to achieve economic equality without coercion and to maintain social consensus without a large state apparatus. It is interesting to note that the roots of American democratic government and communism came from similar ideologies  one emphasizing individualism and the other communal holdings both key elements held in balance by the Iroquois. Other scholars see a prototype for the 20th century United Nations in Iroquois thought and constitution.

Each of the Iroquois nations was represented to the Confederate Council by a lord of the confederacy and one war chief. Their league included a system of checks and balances, and no action could be taken without the approval of all five Indian nations. Their notions of equality and liberty extended to women as well as men. In war, they never enslaved captives but offered to adopt those willing to accept the Great Law. Their own members could be alienated or expelled by not following the Great Law, and a non-member could be adopted by proposal or invitation with approval from the lords.

In their constitution, the lords of the confederacy are described as mentors and spiritual guides of the people; their hearts are to be full of peace and goodwill, and their minds full of yearning for the welfare of the people, including those of future generations, their words and actions are to be marked by calm deliberation. They must be honest and have no self-interest; if they become wayward they receive warnings first from the clan women then from the men. If they persist in negative behaviors, they ultimately lose their position and possibly their life. The lords are poorer than the common people. They own few material possessions, and give away presents or plunder acquired by treaty or war. They are above pettiness and corruption, and show no signs of selfishness.

Those who recognized the wisdom and long history of the Iroquois government did not consider the Indians as mere “savages.” Like the Iroquois, Thomas Jefferson believed that public opinion and popular consent were key in maintaining freedom and good government. He held that the power of public opinion was an important reason for the Iroquois ‘ lack of oppressive government and class differences, and for the power to impeach officials who offended governing principles. Like the Iroquois, he also believed that the best government is the least government.

In oratory, the Europeans compared the Iroquois with the Greeks and Romans. Both emphasized ethical proof in their arguments. The Indians ended their orations with the words hiro and kone. Hiro means “I have said,” and kone was spoken as an exclamation of joy or sorrow, depending on the occasion and circumstances. The French pronunciation of these words together became “Iroquois.”

Unlike Europe, the Iroquois society was matri-lineal. Women owned the land and the status f their lineage. They owned all possessions of their husbands after marriage except their horse and rifle; they took charge off the money, and were the tribe ‘s educators and communicators of tradition. They female heirs of the lords of the confederacy were called royaneh (noble). The lord of the confederacy was nominated by women =96 selected for qualities of trustworthiness, good character, honesty, faithfulness to the people and the nation, support of the family, and good management of personal affairs. There was not state religion, and the religious rites and festivals of each nation were safeguarded against being disturbed or interrupted. Civil duties were separated from those of the religious leaders, and festivals were held in the longhouses.

In examining the vision of our forefathers and the many hundreds of years of the Iroquois confederacy ‘s success, we see how far we have strayed in just over two hundred years. More and more a nation of law and order, with vast class and economic distinctions and political favoritism, we would do well to reeducate ourselves in the values of the Iroquois honesty, good character, honor, the power of the spoken word and public opinion, and the high status of women.

We hold these truths to be self-evident, that all men are created equal, and that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the Pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That, when any form of government becomes destructive to these ends, it is the Right of the People to alter or abolish it.

From the Declaration of Independence.

Researched and written by Jerri-Jo Idarius

Outlook worst since dotcom bust

January 5, 2008

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By Chris Giles and Delphine Strauss

Published: January 2 2008 02:00

Britain this year faces the most difficult economic conditions since the dotcom bubble burst, according to the Financial Times ‘ annual survey of leading economists. It shows deepening pessimism about the impact of the global credit squeeze.

The survey of 55 top economists shows confidence has tumbled from a year ago. The experts also fear that compared with 2001-02, the scope for financial authorities to mitigate any downturn is far more limited.

Nearly nine in 10 think public finances are not in good order so there is no leeway for discretionary tax cuts or increases in public expenditure. The third most-mentioned risk to the economy is inflation, limiting the ability of the Bank of England to cut interest rates.

Nearly two-thirds of the economists – from the City, academia and including five former members of the monetary policy committee – thought house prices would fall this year [2008], although there was wide disagreement over the effect of a housing downturn on the economy. Even those usually optimistic sounded a more cautious note after five months of deepening financial market problems.

Sir Alan Budd, provost of Queen’s College Oxford and former chief economic adviser to the Treasury, said: “I’m quite worried … mainly because some of the problems are unprecedented and don’t seem to be responding to treatment.”

Many of the problems stem from abroad, especially the likelihood of a housing market slump in the US.

Sir Howard Davies, director of the London School of Economics, saw a high probability of a recession in the US. He added: “That would be likely to spread to the UK and some other European countries where property prices seem similarly out of line.”

But at home, concerns centre on the limited ability of the government to mitigate any slowdown because it was still running a large deficit when the economy was performing strongly between 2004 and 2007.

Martin Weale, director of the National Institute of Economic and Social Research, said: “The public finances are in very poor shape … HM Treasury has managed several years of self-delusion. No doubt it will explain that it did not foresee the credit crisis and use this as an excuse.”

With inflationary pressures likely to be evident in the first half of 2008, the majority view was that life had got much tougher for the Bank of England, particularly since banks’ unwillingness to lend had reduced the ability of the Bank to influence monetary conditions.

Most, nevertheless, hoped the Bank would choose to turn a blind eye to short-term inflationary pressures and cut interest rates, since they believed that the coming economic slowdown would control inflation and the economy needed the stimulus of looser monetary policy.

With house prices falling across the country, most economists did not think a troubled housing market would be the cause of further weakness.

Some of those predicting the sharpest falls in house prices were also the most confident about the economy’s ability to withstand a housing downturn.

Willem Buiter of the LSE, a former MPC member, predicted prices would decline by 30 per cent over the next couple of years with no major effect.

Richard Lambert, director general of the CBI, said that 2008 would be a difficult year, but that it was important not to exaggerate risks and “talk ourselves into something much worse” than the soft landing he thought likely.

Thinking for Yourself is Now a Crime

January 5, 2008

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Jane Harman and Liberty’s Lost Light

By PAUL CRAIG ROBERTS

What was the greatest failure of 2007? President Bush’s “surge” in Iraq? The decline in the value of the US dollar? Subprime mortgages? No. The greatest failure of 2007 was the newly sworn in Democratic Congress.

The American people’s attempt in November 2006 to rein in a rogue government, which has committed the US to costly military adventures while running roughshod over the US Constitution, failed. Replacing Republicans with Democrats in the House and Senate has made no difference.

The assault on the US Constitution by the Democratic Party is as determined as the assault by the Republicans. On October 23, 2007, the House passed a bill sponsored by California Democratic congresswoman Jane Harman, chairwoman of a Homeland Security subcommittee, that overturns the constitutionally guaranteed rights to free expression, association, and assembly.

The bill passed the House on a vote of 404-6. In the Senate the bill is sponsored by Maine Republican Susan Collins and apparently faces no meaningful opposition.

Harman’s bill is called the “Violent Radicalization and Homegrown Terrorism Prevention Act.“When HR 1955 becomes law, it will create a commission tasked with identifying extremist people, groups, and ideas. The commission will hold hearings around the country, taking testimony and compiling a list of dangerous people and beliefs. The bill will, in short, create massive terrorism in the United States. But the perpetrators of terrorism will not be Muslim terrorists; they will be government agents and fellow citizens.

We are beginning to see who will be the inmates of the detention centers being built in the US by Halliburton under government contract.

Who will be on the “extremist beliefs” list? The answer is: civil libertarians, critics of Israel, 9/11 skeptics, critics of the administration’s wars and foreign policies, critics of the administration’s use of kidnapping, rendition, torture and violation of the Geneva Conventions, and critics of the administration’s spying on Americans. Anyone in the way of a powerful interest group–such as environmentalists opposing politically connected developers–is also a candidate for the list.

The “Extremist Beliefs Commission” is the mechanism for identifying Americans who pose “a threat to domestic security” and a threat of “homegrown terrorism” that “cannot be easily prevented through traditional federal intelligence or law enforcement efforts.”

This bill is a boon for nasty people. That SOB who stole your girlfriend, that hussy who stole your boyfriend, the gun owner next door–just report them to Homeland Security as holders of extreme beliefs. Homeland Security needs suspects, so they are not going to check. Under the new regime, accusation is evidence. Moreover, “our” elected representatives will never admit that they voted for a bill and created an “Extremist Belief Commission” for which there is neither need nor constitutional basis.

That boss who harasses you for coming late to work–he’s a good candidate to be reported; so is that minority employee that you can’t fire for any normal reason. So is the husband of that good-looking woman you have been unable to seduce. Every kind of quarrel and jealousy can now be settled with a phone call to Homeland Security.

Soon Halliburton will be building more detention centers.

Americans are so far removed from the roots of their liberty that they just don’t get it. Most Americans don’t know what habeas corpus is or why it is important to them. But they know what they want, and Jane Harman has given them a new way to settle scores and to advance their own interests.

Even educated liberals believe that the US Constitution is a “living document” that can be changed to mean whatever it needs to mean in order to accommodate some new important cause, such as abortion and legal privileges for minorities and the handicapped. Today it is the “war on terror” that the Constitution must accommodate. Tomorrow it can be the war on whomever or whatever.

Think about it. More than six years ago the World Trade Center and Pentagon were attacked. The US government blamed it on al Qaeda. The 9/11 Commission Report has been subjected to criticism by a large number of qualified people–including the commission’s chairman and co-chairman.

Since 9/11 there have been no terrorist attacks in the US. The FBI has tried to orchestrate a few, but the “terrorist plots” never got beyond talk organized and led by FBI agents. There are no visible extremist groups other than the neoconservatives that control the government in Washington. But somehow the House of Representatives overwhelmingly sees a need to create a commission to take testimony and search out extremist views (outside of Washington, of course).

This search for extremist views comes after President Bush and the Justice (sic) Department declared that the President can ignore habeas corpus, ignore the Geneva Conventions, seize people without evidence, hold them indefinitely without presenting charges, torture them until they confess to some made up crime, and take over the government by declaring an emergency. Of course, none of these “patriotic” views are extremist.

The search for extremist views follows also the granting of contracts to Halliburton to build detention centers in the US. No member of Congress or the executive branch ever explained the need for the detention centers or who the detainees would be. Of course, there is nothing extremist about building detention centers in the US for undisclosed inmates.

Clearly the detention centers are not meant to just stand there empty. Thanks to 2007’s greatest failure–the Democratic Congress–there is to be an “Extremist Beliefs Commission” to secure inmates for Bush’s detention centers.

President Bush promises us that the wars he has launched will cause the “untamed fire of freedom” to “reach the darkest corners of our world.” Meanwhile in America the fire of freedom has not only been tamed but also is being extinguished.

The light of liberty has gone out in the United States.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com

he said Capital Injections Unspun

January 4, 2008

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The mainstream financial media lately have been littered with stories about “capital injections” and “capital infusions” into American corporations from foreign entities such as “sovereign wealth funds” or SWF, and these are reported as a positive development in the credit crisis. But what does this trend really mean? Here are a few samples.

A Complete Subprime User’s Guide, 2007 Edition: Caroline Baum

… heaping such huge losses on Wall Street that its biggest banks had to look overseas for a capital infusion, is a story that will be told for years to come. Maybe Wall Street memories will be longer than the crisis this time around…

… the Wall Street Journal reported that Merrill Lynch & Co. may receive a cash injection from Singapore, increasing investor appetite for higher-yielding assets funded by loans in Japan…

Merrill Gains on WSJ Report of Temasek Investment

… the world’s biggest brokerage firm may receive a cash infusion of as much as $5 billion from Singapore’s state-owned Temasek Holdings Pte….

… Citigroup, the biggest U.S. bank by assets, said Nov. 27 that Abu Dhabi would invest $7.5 billion in the New York-based company. State-controlled China Investment Corp. is buying an almost 10 percent stake in New York-based Morgan Stanley for $5 billion after the second-biggest U.S. securities firm reported a loss of $9.4 billion from mortgage-related holdings on Dec. 19…

Wall Street Gets $25 Billion in Chinese, Mideast Cash

Wall Street Gets $25 Billion in Chinese, Mideast Cash

… Wall Street is turning to Asian and Middle Eastern governments for $25 billion to prop up balance sheets battered by writedowns from the collapse of the U.S. subprime market.

State-controlled China Investment Corp. is buying an almost 10 percent stake in Morgan Stanley for $5 billion after the second-biggest U.S. securities firm reported a loss today of $9.4 billion from mortgage-related holdings. Citigroup Inc., Zurich- based UBS AG and Bear Stearns Cos. also received sovereign money after bad investments depressed profits…

China’s $200 Billion Fund Feels Pressure to Meet Return Goals

… The sovereign wealth fund … in May invested $3 billion for a 9.4 percent stake in New York-based Blackstone Group LP, manager of the world’s biggest buyout fund … China set up Asia’s biggest state-owned investment company after surging trade surpluses helped push the nation’s currency reserves to a record $1.46 trillion…

AntiSpin: This all reminds me of the George Bailey’s line in It’s A Wonderful Life, “Potter’s not selling, he’s buying.” Folks, these are not capital injections, they’re capital withdrawals. Cash is not capital, it’s a medium of exchange. It is being used here to buy capital. OPEC and BRIC now own part of these firms that they did not own before. Americans now do not own part of these firms that they did before. Capital is passing from American hands to OPEC and BRIC. Not the other way around. Never mind the fact that in many instances these are agencies of sovereign governments acquiring ownership of this capital and that we used to call that communism, but nevertheless any euphemism that spins it as though capital were coming in to America would be enough to make George Orwell blush.

Regardless of whatever value judgment you may put on it, it’s critical to understand what’s really been going on through the thick smoke of misleading and opaque rhetoric. Trade deficits such as the earth-shattering records the US has been ringing up represent a country that consumes more than it produces. It pays for that excess consumption with capital. Other countries send us things we wear out and burn up. We send them dollars. They send the dollars back and we send them our corporations (see also USA Fire Sale: 1st Meeting 2010).

As these dollars come back, economists all over the media crow about the capital coming into the US. On April 26, 2004, Barron’s ran a column by David Ranson doing just that, referring to a wave of foreign cash coming into the US as an “inflow of capital”. It’s the exact opposite. Let’s take the example of a farm family which consumes more than its land produces by selling off a few acres every year. Common sense tells us that the farmer is getting poorer, not richer. By Mr. Ranson’s backward logic, we should focus on the money the farmer receives for his sales of capital and call it an “inflow of capital”, and forget that the real capital is actually moving the other way.

When we net it all out, the United States is exchanging capital for consumer goods. Consumer goods come in, capital goes out. This problem is the result of an emphasis on taxation of production over consumption and the creation of credit in excess of savings. It is not a healthy balance and must be corrected if the United States is to maintain and grow its standard of living.

Keep that in mind next time you hear a happy story about “capital injections.”

See also: USA Fire Sale: 1st Meeting 2010

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