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Friday, August 01, 2014

Understanding Argentina's Pseudo-Debt Crisis

 

ImagesFor those who are interested in Argentina's recent troubles with the debt vultures, here is Chapter VII from my book The Blood Bankers. (New York: Basic Books, 2005).  

No important political or economic event can be Images-6 understood without an historical analysis.  

This chapter provides the essential historical background  that you need to understand where Argentina's current crisis came from, and its "debt problem" is so deep-rooted. 

Download 07FINALFINALCHAPTERSEVENARGENTINA42112003.

Griesa_thomas.jpg_1328648940 Images-7Here are a few of my recent TV and newspaper interviews on the subject: (1),  (2), and (3). And here is the 2012 US Court of Appeals decision that upheld US Federal District Court Judge Thomas P. Griesa's 2011 rulings in favor of the vulture funds. 

 
Download USCOURTS-ca2-12-00916-0.pdf
 
More later!  Stay tuned! 

August 1, 2014 at 05:30 PM | Permalink | Comments (0)

Friday, August 26, 2011

Gaddafi's Fellow Travelers
James S. Henry

(An earlier version of this appeared today as a Forbes column.)

GaddafiCartoon I recall one cold wintry Saturday evening about three years ago in Vermont,  and a dinner conversation among a small group of former business colleagues, including  HBS Professor Michael E. Porter, the eminent competitive strategist.

He’d just returned from Tripoli, where he’d been working on what he told us was a  “strategy project” for the Gaddafi regime with a raft of consultants from Monitor Group, the Cambridge-based consulting firm that he’d helped to found in the early 1980s.  

For about thirty minutes or so he shared with us how excited they all were to be working to reform the Libyan economy, and how Colonel Gaddafi and his sons now really seemed to “get it.”

Clearly Prof. Porter felt this was all pretty cool. When asPorterked about the issue of democracy and the rule of law, he rather quickly brushed aside such concerns, suggesting that they were sort of beside the point – after all, as the case of China supposedly demonstrated, all those annoying traditional liberal values sometimes just need to get out of the way of progress.

At the end of all this, there was a brief silence. I suspect that most of those at the table were slightly discomforted by Prof. Porter’s blunt, hard-nosed neoliberal analysis, and certainly by his apparent intoxication with the infamous Libyan dictator. But he was,  after all,  an eminent Harvard professor. And unlike us, he’d not only been to the country, but had met its most senior leaders personally.

Finally, however, my friend Roger Kline, a wise old McKinsey partner, broke the silence with a simple, direct, slightly impolitic question,  which would be answered only by the silence that it provoked from Professor Porter:  “Doesn’t it ever bother you at all, Michael, to be working for a terrorist?

***

As the spirit of doom hovers over the last remnants of Muammar Gaddafi’s 42-year-long dictatorship, and most Libyans are celebrating his departure with sheer delight, there is much less joy in a handful of top-tier academic and professional-class households in Cambridge, Princeton, Georgetown, Baltimore,  East Lansing, and London.Porter'sNeoliberalSoup

For Mighty Muammar has indeed struck out -- contrary to the hopes  and  expectations of some of our very best and brightest experts on  “competitive country strategy," “global democratic governance," "the idea that is America,” and “soft power.”

After all, from their perspective, whatever Gaddafi's flaws, his blood-stained but deep-pocketed regime was certainly not like that of Kim Jong Il.

Unlike Kim, Gaddafi had been willing to pay quite handsomely to PinochetDemocracyBlood hear them spout off about their pet aerie-faerie neoliberal theories of political and economic development.

 
Meanwhile, Gaddifi's  government also ordered up an expensive grab-bag of university grants, endowments, special education for Libyan police and diplomats, ginned-up degrees for his dim-witted family members, lots of slick lobbying and lawyering, plus a large number of custom press portraits by leading Western academics gurus none of whom ever bothered to disclose the fact that they were all on Brother Leader's  payroll.

This sordid tale first began to trickle out about two years ago from the Libyan opposition,  but it really picked up steam after the Revolution began in February 2011.  The interested reader can look here, here, here, here, and here for  the gory details.

But right now, just as the Gaddafis are about to take their rightful place in history’s waste bin, it is worth recalling the highlights  for several reasons.Hanfstaengl

First, we’d like to make sure that all of the leading academic   collaborateurs who helped to legitimate Gaddafi's abattoir receive their due: the  very first installment of the “Milton Friedman/ "Putzi" Hanfstaengl Iron Cross Award. Friedman_pinochet

Second, we'd like to require all these collaborateurs to donate the millions of dollars of blood money and the  thousands of frequent flier miles they accumulated as unregistered foreign agents for Gaddafi’s regime to Libya’s teeming hospitals and orphanages.

Together, these two simple steps might help to insure that this kind of totally uncool dictatorship rebranding is brought to a screeching halt.

REBRANDING GADDAFI

Images This tale really began in 2003, when the Gaddafi regime, seeking to end an annoying economic  boycott,  gave its solemn word  to swear off terrorism forever, cease dabbling in nuclear technology, pay compensation for the 1988 Pan Am 103/Lockerbie bombing, and "accept responsibility for the actions of its officials,” whatever that meant.

Not surprisingly, given Gaddafi's horrific track record, most ordinary Westerners, not to mention the hard-pressed LBUSHBLAIRBERLUSCONIibyan opposition, were deeply skeptical.

But Western leaders and policy experts were curiously much more receptive to Libya’s extraordinary effort to upgrade its image from “terror camp” to “the West’s best new pragmatic partner in the Middle East."

Indeed, it turned out to be a very fertile time for this kind of rebranding effort. First, even though Libya’s U-turn had largely been  motivated by economic self-interest, George W. Bush, Tony Blair, and Silvio Berlusconi welcomed it as a badly-needed victory in the “war on terror.”  Berlusconi and Blair even flew directly to Tripoli to welcome the “reborn” Gaddafi back into the community of nations.

BERLUSCONIGADDAFI Nor, in the US, was the welcome committee just limited to Republicans. In July  2008, Democrats Carl Levin and (now Vice President) Joe Biden played a key role in guiding S.1330 through the US Senate.

This  scurrilous bill, signed into law by President Bush, controversially granted Gaddafi complete legal immunity for the Lockerbie bombing, so long as he paid a (rather paltry) agreed-upon sum to the victims’ families.

Second, Libya’s U-turn opened the door to a whole bevy of Holy-Water merchants and academic medicine men. These instant Libyan "experts" were eager to offer Gaddafi not only absolution, but also their very latest pet theories about everything from “competitive clusters" and "strong democracy" to “the Third Way.”

They were also eager to see test such theories in Gaddafi’s living laboratory -- especially if the dictator was willing to subsidize the  clinical trials. Not since Boris Yeltsin, General Suharto, and General Pinochet have neoliberal academics had such a golden opportunity to test their theories on real live human subjects at country scale.  BLAIRGADDAFI

Third, to a large extent mainly for PR purposes,  Western experts also made much of their opportunity to "dialogue" in person with real live Libyans. Well, perhaps not so much with the nascent opposition, which was mainly abroad, in hiding,  in jail, or dead.

 Of course, according to Gaddafi & Sons, confirmed by US intelligence officials like John Negroponte – who got much of his info about Libya from his brother Nicholas, who got it from Gaddafi & Sons (see below) – the Libyan opposition consisted of radical "al Qaeda” sympathizers or the members of “dissident tribes” in Libya’s supposedly “very tribal” society, anyway.

Their received image of Libya, seen through Gaddafi-colored lens, was curiously similar to the self-image that South Africa’s apartheid regime used to project – a deeply “tribal” society that required strong-armed rule to preserve it  from the radical horde at the gates.

75px-Snake-oil In any case,  Western experts were generally quite happy to take the Gaddafis’ word -- and his moolah --  for all this, and to participate in  one-sided “dialogues” with Brother Leader  himself whenever he was able to spare the time.

This delighted Brother Leader. No doubt this was partly because of  3076876128_8511664b49_s his  deep intellectual curiousity about the very latest  economic and political theories. But, more practically, it also meant that prominent Western expert after expert had to fly  thousands of miles to Tripoli and back just to help his regime flaunt its wares on Libyan State TV and lend him unprecedented respectability.

Ultimately, you see, Gaddafi had  all these neoliberal academics pegged to the tee.

He understood from the start that many were frustrated by their powerlessness in (more) democratic Western societies.  Their secret wet dream is the absolute dictator who takes them seriously, and able and willing to test their theories on command, without the need for messy democratic processes.

Indeed, Gaddafi's personal power n Libya was so complete that he never even bothered to give himself a formal title other than "Colonel."

THE CARAVAN

Toadies_-_Mister_Love_300px From 2004 on, therefore, Tripoli became a kind of alternative Mecca for a veritable “Who’s Who” of leading Western intelligentsia. Among the key interlocutors were Professor Porter; Cambridge  University/LSE’s   “Baron” Anthony Giddens and George Joffe; LSE’s Director Sir Howard Davies (now resigned), and Professor David Held,  its leading expert on “globalization;”  and Monitor Group’s Rajeev Singh Molares (now at Alcatel), Mark Fuller (recently resigned as its Chair), and Bruce J. Allyn (formerly the head of Monitor’s Moscow office).

75px-Francis_Fukuyama Others who tagged along for the camel ride included Ann-Marie 75px-Lewis-pre Slaughter, Dean of Princeton’s Woodrow Wilson School; Princeton Professors Bernard Lewis and Andrew Moravcsik; the insidious neo-con Richard Perle (2 visits); MIT Professor Emeritus Nicholas Negroponte (several visits), brother of  US DNI John Negroponte, and the former head of the MIT Media Labs,  who was very eager to get Libyan funding for his ill-fated pet “One 75px-Voa_chinese_Joseph_Nye_03Aug10 Laptop Per Child” project; a flurry of other Harvard profs, including the Kennedy School’s Robert Putnam, Joseph Nye, and Marshall Ganz, an organizer-guru who became involved in another tidy little dictatorship, Syria; and Johns Hopkins' "end of history" champion Francis Fukuyama, who made history himself by pulling down a record $80,000 for a single audience with Brother Leader.

Perle  Nor were journalists entirely immune from the attractions of the 75x75 Libyan honeypot. Here,  the Monitor ringmasters also went for high-profile celebrities, including Al Jazeera's David Frost, who collected $91,429 for a single visit.  They also nearly  recruited several others before the project got terminated.  One Monitor project memo reports, for example,  that:

“Monitor approached (Fareed) Zakaria who said that he is very interested in travelling to Libya in order to meet with the Leader….Monitor also approached ( the New York Times’ Thomas) Friedman who said that he was interested in travelling to Libya at some point in the future.

Images-4 Collectively this respectability caravan made dozens of such Gaddafi-tour site visits, logging tens of thousands of First Class miles and receiving millions of dollars in fees to commune about the “New Libya" – all the while helping to launder the regime’s  blood-stained image.

This activity seems to have gone far beyond simply helping Libya to restructure its economy and political system along more open,  competitive lines. Indeed, it is now clear that the regime probably never seriously intended any meaningful reforms, but was mainly trying to curry influence and favors.

The experts’ punch list included such dubious activities as ghost-writing Saif Gaddafi’s PhD thesis; helping to design a “national security agency” for Libya (!), quite probably with inputs from folks like the Negropontes and Richard Dearlove, the Monitor “senior advisor” who ran the UK’s MI6 from 1999 to 2004; offering to ghost-write a puffed-up version of Brother Leader’s collected works;  and, all along, orchestrating a flurry of favorable press coverage in influential papers like the Washingon Post, the New York Times, the International Herald, and the Guardian.

All of this was done without without ever bothering (until this Spring, in the case of Monitor Company) to register as what many of these high-toned folks truly turned out to be:  foreign agents of the Government of Libya.

BETTER SAIF THAN SORRY

There are many glaring examples of outright shilling for the Gaddafis by these brown-nosing academic and consulting mercenaries, but a handful captures the essential odor.

Images-7 One good example was LSE Professor Emeritus/ Blair confidant/ Baron Anthony Gidden’s bold March 2007 speculation in the UK’s Guardian newspaper that Colonel Gaddafi’s Libya might soon turn out to be “the Norway of North Africa.” The piece mentioned Lord Giddens’ impressive academic credentials, but  it neglected to mention the fact that he had received $67,000 in fees from Libya, plus First Class round-trip travel expenses for at least two hajjs to visit with Brother Leader and his staff in Tripoli.

Another example is Rutgers Professor Emeritus Ben Barber’s even more wildly enthusiastic August 2007 Washington Post endorsement of the “surprisingly flexible and pragmatic” Gaddafi andImages-5 his “gifted son Saif.” Of course Saif is much more familiar to the rest of us now for his blood-curdling “rivers of blood” speech on February 20, 2011, which contributed mightily to the subsequent polarization and bloodshed.

Images-6 Professor Barber’s piece reminded his readers that he was a  best-selling author and a Distinguished Senior Fellow at the think-tank Demos. But it neglected to mention the fact that he’d also made multiple all-expense-paid trips to Tripoli, for which he’d been paid at least $100,000 in fees by the Libyan Government.

A third example is HBS Professor Michael E. Porter’s February 23 2007 Business Week interview, in which he reported that he had “taken on” a consulting project in Libya,  as if this were some kind of beneficent act. Gaddafi,  he maintained with a straight face, MarkFuller  wasn’t really a dictator after all: “In a sense, decision-making is widely distributed in (Libya). People [consider Libya] a dictatorship, but it really doesn't work that way. That is another reason for optimism.” (Emphasis added).

75px-Monitor.svg Prof. Porter neglected to mention the fact that he and FullerJoe1 Monitor Group, the Cambridge consulting firm that he, plus HBS grads Joe Fuller and Mark Fuller, had founded in the early 1980s, were not only earning several million dollars for their Libyan strategy work, but were also up to their proverbial eyeballs in a second multi-million dollar PR project to bolster Gaddafi’s image.

THE IMPACT

All this salacious material is interesting.  But did it really have any harmful impacts on Libya?  Or is all this merely frivolous second-guessing?

The answer is that this kind of orchestrated air-brushing of the Gaddafi regime by leading Western consultants and academics clearly was not only enormously harmful to the interests of most Libyans, but also that these negative impacts were entirely foreseeable – and, indeed, were anticipated by many critics who had the same intuitive reaction as Roger Kline (see above.)

✔ The academic white-washing helped to conceal the fact that the Gaddafi regime was enormously unpopular with its own people – that the opposition was broad based, that high-level corruption was rife, and that  the “tribal”/al Qaeda paradigm of the Libyan opposition was simplistic and dangerously misleading, not to mention self-serving for the Gaddafi clan.

Academic air-brushing also contributed to the misleading view that “reforming Libya" was mainly just a technocratic exercise for the insider-elite and their Western advisors,  to which constitutive matters like elections, rights, the rule of law, and genuine popular representation could take a back seat.

The bevy of  big-name Western intellectuals and consultants who courted the Gaddafis not only inflated their egos even larger than they already were, but also encouraged them to believe they could easily  buy influence, as well as arms, in the West -- and delay fundamental political reforms.

In short, the white-washing and the kid glove treatment of the Gaddafi regime by leading Western academics may well have discouraged that regime from pursuing deeper political reforms much earlier, and from negotiating in good faith once conflict increased.Fellowtraveler

In other words, it probably cost lives.  

 If and when the Gaddafi clan is captured and put on trial, either in  Libya or before the ICC, we hope that these courts seize the opportunity to examine the conduct and responsibilty of these  neoliberal fellow travelers of dictatorship very closely.     

***

So, in the waning hours of the Gaddafi regime,  it is important to recall that Brother Leader and his band of thugs did not simply become a menace to Libya’s people and the world on their own.

Nor was his particular brand of madness simply due to the “usual suspects:” anti-Western radicalism, liberation ideology,  Gaddafi's own imperialistic ambitions in Africa, his idiosyncratic version of political Islam, or even the fact that he spent far too much time spent frolicking in the desert sun with Ukrainian nurses.

No – while Gaddafi’s buddies in Venezuela still portray  him as a stalwart opponent of Western imperialism,  the fact is that in recent years he actually continued to increase his influence in the West only with the really quite extraordinary assistance of prominent, high-priced, incredibly smart, but ultimately quite gullible Western “friends.”

(c) JSH 2011

 

August 26, 2011 at 04:47 PM | Permalink | Comments (0)

Monday, October 26, 2009

"WHAT MIDDLE CLASS"?

Global Wealth Inequality (2007-08 Average)
James S. Henry and Brent Blackwelder
(Click chart)

Globaldistoffshore200809 Res Ipsa Loquitur.

October 26, 2009 at 01:44 PM | Permalink | Comments (0)

Friday, October 02, 2009

Pittsburgh's State of Siege

Suppressiing Dissent With High-Priced Cop Toys

James S. Henry
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3953363973_bdf039ae20 Studentinjury2

You didn't hear much about it from any major US news organizations, but there was a very disturbing case of gratuitous police-led violence and intimidation at the G20 Summit in Pittsburgh on September 23rd-25th, 2009. Perhaps the only consolation is that it allowed those of us who were there to get a close look at some of the disturbing "brave new world:  technologies for anti-democratic crowd control. These were initially developed by the US military to fight terrorists on the high seas and abroad, in places like Afghanistan, Somalia, and Iraq, but are now coming home to roost.  Indeed, ironically enough, this is one of the few remaining global growth industries where the US is still the undisputed world leader, as we'll see below.


Police2 One local newspaper account described  the events at the Pittsburgh G20  as a "clash" between the police, protesters, and college students. 

Indeed, a handful of storefronts were reportedly broken on Thursday September 24 by a  few unknown vandals. 

However, based on our own visit to the summit,  interviews with several students and other eye witnesses,  and a careful review of the significant amount of video footage that is available online, the only real "clash"  that occurred in Pittsburgh on September 23-25, 2009, was between lawless policing and the Bill of Rights. 

The most aggressive large-scale policing abuses occurred from 9 pm to 11:30 pm on Friday September 25th near Schenley Park, in the middle of the University of Pittsburgh campus. This was miles away from the downtown area where the G20 had met, and, in any case, it was hours after the G20 had ended.

This particular case of aggressive policing -- "Hammer and Anvil," as the operation was described on police scanners -- was clearly not just a matter of a few "bad apples." 

Rather, it appears to have been part of a willful, highly-organized, one-sided, rather  high-tech experiment or training exercise in very aggressive crowd control by nothing less than a really scary uniformed mob.

New York police sometimes describe their firemen counterparts, tongue in cheek, as "robbers with boots." In this case we have no hesitation at all in describing this uniformed mob in Pittsburgh as "assailants with badges."

Their actions resulted in the unlawful suppression of the civil rights of  hundreds of otherwise-peaceful students who were just "hanging out with their friends on a Friday night in Oakland," or attending a free jazz/blues concert in Schenley Park. 

Essentially they got trapped in a cyclone of conflicting and inconsistent police directives to "leave the area." The result was nearly 200 arrests, gassings, beatings, and the deployment of dogs and rubber bullets against dozens of innocent people.

In addition to the students,  this aggressive policing also assaulted the civil rights of a small number of relatively-peaceful protesters and quite a few ordinary Pittsburgh residents, most of whom were as innocent as bystanders can possibly be these days. 

Why did this occur?  In addition to whatever top-down "experiment" or training action was being conducted there appears to have been an extraordinary amojnt of pent-up police frustration and anger.  For example, one student overheard a policeman piling out of a rented Budget van near Schenley Park around 9:50 PM Friday.

The officer was heard to exclaim, "Time to kick some ass!"

This is disturbing, but perhaps not all that surprising. After all, thousands of police had  basically stood around for days in  riot gear, sweltering in the "Indian Summer" heat, dealing with  the tensions associated with potential terrorist attacks as well as all the hassles of managing large-scale protest marches, even if peaceful.There was also the inevitable tensions of social class and culture among police, Guardsman, and college students.

On the other hand, precisely because such tensions are so predictable, those in direct command or higher political office, and, indeed University officials, should have acted forcefully to corral them.

JOIN THE CLUB


ArrestedstudentposedwithpoliceAll this means that Pittsburgh  has unfortunately now joined the growing list of  cities around the world that have experienced such serious conflicts -- mainly in connection with  economic summits or national political conventions.

The list of summit frays includes this summer's G-8 in Italylast Spring's G20 in London,  the September '08 RNC in Minneapolis,  the '04 RNC in New York City, Miami's Free Trade Area of the Americas Summit (11/03),  Quebec (4/01),  Naples (3/01), Montreal (10/00),  Prague 9/00), Washington D.C. (4/00),  the  November '99 WTO "Battle in Seattle," the J18 in London (6/99), Madrid (10/1994), and Berlin (9/88).

President Obama had  originally selected Pittsburgh for the G20 because he hoped to showcase its recovery  since the 1980s, especially in the last  few years, under a Democratic Mayor, in a Democratic state that he barely carried in the 2008 Presidential contest. 

In seeking to explain such events, therefore, it alway helps to keep a firm eye on the question -- whose interests did really  this serve?

In retrospect, the failure of these leaders to control the police at the G20 has created a serious blemish on the city's reputation for good government. It may have also to some extent undermined Obama’s relations with college students and other activists  who worked so hard for his election in this key state. And it certainly did not help the reputation of the Democratic Party in Pittsburgh or Pensylvania at large.

TIANANMEN FLASHBACKS

To journalists like me who happened to have been in Beijing in May 1989, during the buildup to the June 4th massacre in Tiananmen Square,  Pittsburgh also bears an interesting resemblance. The analogy may sound a little strained, but bear with me.  

(1)  As in Beijing, there was a very large deputized police force from all over the country.  These included  over 1000 police "volunteers" (out of 4000 total police and 2500 National Guardsmen) who were ported in just for the G20.

According to the conventional wisdom, not being from the same community is likely to reduce your inhibitions when it comes to macing and kicking the crap out of unarmed, defenseless young people.

The guest policeman also included several hundred police who were under the command of Miami Police 2076 Chief John F. Timoney,  pioneer of the infamous "Miami model" for suppressing protest that was first deployed at the Miami Free Trade Area of the Americas Conference in November 2003. (Here’s the Miami model checklist, most of which was repeated in Pittsburgh.)

As one writer has observed, Timoney, who  also served as Police Chief in Philadelphia,   "(L)iterally transformed the city into a police state war zone with tanks, blockades and “non-lethal” (but severely damaging) artillery."

It is unclear to what extent he played a similar role behind-the-scenes in Pittsburgh this year, but there certainly is a strong sulfurous odor.     Scaredstudents

(2) As in Beijing, In Pittsburgh there were no identifying badges on officers' uniforms, and they also refused to provide any identifying personal information in response to questions. Several photographers also complained about receiving threats and actual damage to their cameras.

(3) As in Beijing, there was simply no  direct contest between the power of the security forces once they mobilized, and those of the unarmed students.   The only kind of victory that the students could possibly have one in both cases was a moral one -- by essentially sacrificing their bodies and their rights to a tidal wave of repression.

Indeed, the "clash" theory of these events looks even odder once we take into account the  fact that on Friday night in Pittsburgh, for example, unarmed students and protesters faced  hundreds of police in full riot gear,  armed for bear with equipped  muzzled attack dogs, gas, smoke canisters, rubber bullets, bean-bag shotguns, pepper pellets, long-range pepper spray,  at least four UH-60 Black Hawk helicopters (courtesty of New York Governor Patterson and his National Guard's 3-142nd Assault Helicopter Battalion unit),  plus several brand new "acoustic cannons" (see below). There were also probably dozens of undercover agents provocateurs -- at least three of whom were actually "outed" by the students. 

The police were also actively monitoring student communications on web sites like Twitter.

 From this angle, a key difference with Bejing  in 1989 was that the Chinese authorities felt genuinely  threatened by the growth of student power and the democracy movement, and feared being ousted,from power.  and  were therefore able to justify their brutality as part of a zero-sum game. In the case of Pittsburgh, whatever police violence occurred was entirely gratuitous.

Police6 (4) As in Beijing, the Pittsburgh police  really liked deploying loud, repetitive warnings, broadcast from sound-trucks -- like the following,  broadcast  repeatedly last Thursday and Friday: 

"I hereby declare this to be an unlawful assembly. I order all those assembled to immediately disburse. You must leave the immediate vicinity. If you remain in this immediate vicinity, you will be in violation of the Pennsylvania crimes code, no matter what your purpose is. You must leave. If you do not disburse, you may be arrested and/or subject to other police action. Other police action may include actual physical removal, the use of riot control agents, and/or less lethal munitions, which could risk of injury to those who remain."

The fact is that this warning was itself completely unlawful.  Putting on the NYCLU lawyer's hat for a moment, absent a "clear and present danger" to the public peace, these threats violated the First Amendment's explicit recognition of right to "peacefully assemble.” 

In effect, the fact is that the police and National Guard in Pittsburgh  temporarily seized control over public streets, parks, and other public spaces, and exercised it arbitrarily.  By the time the victims of these outrageous civil rights infringements have their day in court, the damage will have been long since done.

(5) As in Beijing, the police and military decided  to launch their biggest raid late at nightafter the summit had ended most major mediaPolice11 had gone home, and the courts had closed for the weekend.

Of course, there were no tanks, no real bullets, and no fatalities in Pittsburgh. Unlike the April '09 G20 and the Genoa G8 protests, no civilians died as a direct result of police actions. But the Pittsburgh students who were on the receiving end of all this unprovoked police brutality -- like one who was shot four times in the back and legs with rubber bullets, and another who was gassed and shot in the face -- may be forgiven for wondering just how close they came to emulating their peers in Europe.

GLOBAL  COP TOYS

Police behavior at all these global summits has evolved over time into a rather high-tech affair that would make Iranian crowd control experts turn  bright green with envy. 

5c6c33b0-9c3f-49e6-8ca5-d5aea8751de5_300 For example,  last week's G20 featured one of the largest US deployments ever against civilian demonstrators of  "LRADS," or acoustic cannons

These sophisticated  "phase array" device s emit a targeted 30-degree beam of 100+decibel  sound that is effective up to several hundred yards, and is potentially very harmful to the human ear. 

LRAD2Manufactured by San Diego's tiny American Technology Corporation (NASDQ: ATCO), the $37,500 so-call "500X" version of the sound cannon that was used in Pittsburg was developed at the behest of the US military, reportedly in response to the USS Cole incident in 2000,  to help the Navy repel hostile forces at sea.

The Pittsburgh units  were apparently  purchased by  local sheriffs' departments across the country with the help of recent grants from the US Department of Homeland Security. Officially the grants have been justtified in the name of improving communications with the public, by permitting clearer voice channels (!), but that's a cover story -- the true purpose is crowd control. ( Roll tape: LRAD-500X_SDCo_Sheriff1).

Other recent ATCO customers include the US Army (for "force protection" in Iraq  and Afghanistan), and  the US Navy and the navies of Japan and Singapore, for communicating with potentially-hostile vessels at sea. 

In 2008 ATCO flogged its wares at the biannual China Police Forum, Asia's largest mart for police security equipment. Obviously China would make a terrific reference customer, since it is one of the global front-runners in the brutal suppression of mass dissent.

ATCO also has a 2007 contract with the US Marine Corps' "Joint Non-Lethal Weapons Program" to develop new, even more powerful weapons, euphemistically branded  "acoustic hailing devices." Saakashvili

Police3 Until recently the most widely-publicized use of LRADS had been against Somali pirates. The devices have also been deployed against "insurgents" by the US military in Fallujah,  by the increasingly-unpopular, anything-but-democratic regime of Mikhail Saakashvili in the Republic of Georgia, and by New York City at the RNC in 2005.

Just two weeks before the Pittsburgh G20,  they turned up  in San Diego, where the Sheriff's Department provoked controversy by stationing them near a Congressional town hall forum -- just in case.

This growing  use of LRADs for domestic crowd control in theSomalis_called_pirates_while_the_West_du US is worrisome, not only because it is a potent anti-civil liberties weapon, because -- just like tasers,  rubber bullets, OC gas, and other so-called "non-lethal but actually just "less lethal" weapons" -- they can cause serious injuries to ears, and perhaps even provoke strokes. 

TECHNOLOGY BLOWBACK

For all the homeland security technology buffs in the audience, you may rest assured that LRADs are hardly the  only Military potential "less-lethal" free speech-and-assembly killers in the pipeline. 

In the last decade the non-lethal weapons arena has exploded, and the US appears to be  far ahead, assisted by ample  R&D grants and purchase contracts from organizations like the Department of Justice's "National Institute of Justice," DHS's multi-billion dollar Homeland Security Grant Program, the U.S Coast Guard, and the Security Advanced Research Projects Agency, and DOD's Joint Non-Lethal Weapons Directorate (JNLWD) Program

The industry has also been aided by key contractors like ATCO, spearheaded by legendary engineer, inventor, and entrepreneur "Woody" Norris;  and Penn State's Advanced Research Lab -- home of the Institute for Emerging Defense Technologies.   NIJ also works closely with police organizations like PERF, and international organizations like the UK's Home Office Scientific Development Branch.

In the first instance, the development of such non-lethal technologies is usually justified by their potential for providing an alternative to heavier weaponry, thereby reducing civilian casualties in combat situations.

The fact that the US military now has at least 750 military bases around the world, and has also recently  been playing an important "military policing" role in countries like Somalia, Haiti, Bosnia, Iraq, and Afghanistan, underscored DOD's rationale for these technologies.

The problem is that just as in the case of the LRAD,  once developed, it is very difficult to wall such technologies out of the US, or restrict them to "pro-civilian/pro-democratic" uses, like providing clearer amplification for outdoor announcements.  

Even aside from their technical merits, the competitive nature of the global law enforcement equipment industry  virtually insures that every tin-horn US sheriff, as well as every Chinese party boss in Urumqi, will soon have access to these very latest tools in the arsenal for suppressing dissent.  

The ultimate irony, of course, is that the first generation of all  these powerful new free speech suppressors have all been developed,  not by authoritarian China, Iran, Burma or North Korea, but by US,  ostensibly still the leader of the "Free World." 

TOYS IN THE PIPELINE

So what's in store for those who are on the front lines of popular dissent?  We assume that some of the juiciest details are classified. But even a cursory review of public sources reveals that the following new crowd-control technologies may soon be coming to an economic summit near you.  (See this recent UK review for more details.). 

"Area Denial Systems." This is a powerful new "directed-energy" device that generates a precise, targeted beam of "millimeter waves," producing an "intolerable heating sensation on an adversary's skin." 

Under development by the US military since at least the late 1980s, this class of "non-lethal" weapons is now close to field deployment. Its key advantage over LRADs is that it has about ten times the range. Raytheon is already supplying its "Silent Guardian" version of the system to the US Army.

The next step required to bring this product to the police market will be to make it smaller and more mobile. According to this week's New Scientist, a new highly-portable, battery-powered version of the system, called the "Thermal Laser," will soon become available -- though it has yet to show that demonstrate conclusively that it is within the bounds of the UN Binding Protocol on Laser Weapons.
Apple-1984

New Riot-Control Chemicals and Delivery Systems.

Subject to the dicey question of whether these new "calmative," drug-like agents are outside the boundaries of the 1993 Chemical Weapons Convention (to which the US and 187 other countries are signatories), these would not irritate their targets, unlike pepper spray or tear gas, but calm them down.

In the words of one DOD/JNLWD research director:  "We need something...like anesthetic agents, that would put everyone to sleep or in a good mood..." Or as the former Marine Corps commander of the program said," "I would like a magic dust that would put everyone in a building to sleep.." Among the delivery mechanisms considered: drinking water, aerosol spray, or rubber bullet. (Apparently the old-fashioned, tried-and-true "light up, inhale, and pass on" method is not a candidate.) The College of Medicine at Penn State's ARL, locGluegunated 135 miles east of Pittsburgh, has been especially active in advocating the advantages of such new chemical weapons.
Unfortunately for it, DOD apparently believes that the CWC and its current regulations prohibit it from funding the developing such magic dust directly, so it is working through DOJ and DOE to do so.

Glue Guns. If all else fails, UK's Home Office reports that another approach to "less- lethal" crowd control weaponry is also making progress -- a gigantic glue gun that sprays at least some 30 feet, bemingling its target audience in one huge adhesive dissident-ball.

Apparently still unsolved is the question of precisely what becomes of all those who are stuck together, or how the police avoid becoming entangled with them. But undoubtedly millions of pounds  are being devoted to solving these issues even as we speak.

SUMMARY

I went to Pittsburgh last week on behalf of  Tax Justice Network, a global NGO that is concerned about the harmful impacts that tax havens and dodgy behavior by First World banks, MNCs, lawyers, and accountants are having, especially on developing countries. I was under no illusion that the reforms we   were rather politely advocating would quickly be adopted, but at least we'd  say our piece,  if anyone cared to listen.

I came away with the depressing sense that the G20 summit, like its many predecessors,  was never intended  to be a listening post for independent, outside opinions. But even worse, it had actually become, in practice, an excuse for the criminalization of dissent in capital cities all over the globe, even in those that are nominally the most free,  by way of the vast new security measures that it requires and subsidizes,and the repressive tactics that it legitimized. 

In this day and age, of course,  we are told that almost any amount of security is too little.  And this heightened sense of insecurity  is certainly not aided by having the world's top 20 leaders regularly shuffling from pitstop to pitstop,  trying to conduct the world’s business from a traveling roadshow.

But I was struck by just how unnecessary,  senseless, and counterproductive almost all of the repressive policing tactics deployed in Pittsburgh really were -- how they ran roughshod over many of our  most precious freedoms, freedoms  that we are supposedly trying to protect.   And to what a degree whatever “terrorists” there are out there have already won, by  succeeding in creating a society that is really is often ruled by fear instead of justice, by force instead of discourse.

Rather than, say,  simply allowing the overwhelmingly non-violent demonstrators and students at that peaceful Friday night blues concert  to have their say, instead some 200 people were arrested and scores were gassed, clubbed, rubber-bulleted, and imprinted with galling memories that will last a lifetime. The City of Pittsburgh and its residents will certainly be fighting criminal cases and civil rights law suits for years to come.  I supposed we are meant to be consoled by the fact that, as the New York Times chose to emphasize this week, things are much more repressive in Guinea.

So perhaps it is time to establish a permanent location for all these global summits. Perhaps one of the Caribbean tax havens, like Antigua or St. Kitts, would do -- journalists always like the sun, and after TJN gets done with them, these havens are going to need to find a new calling anyway!  

***


   









 




October 2, 2009 at 08:47 AM | Permalink | Comments (3)

Saturday, September 20, 2008

SOCIALISM FOR BANKERS, SAVAGE CAPITALISM FOR EVERYONE ELSE?
Bailout Jeopardizes the Entire Progressive Agenda
James S. Henry

Classwar "“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” --  Warren Buffet, June 2008

Ladies and gentlemen: pardon my intemperance,  but it is high time for some moral outrage --  and a little good old-fashioned class warfare as well, in the sense of a return to seriously-progressive taxation and equity returns for public financing.

After all, as this week's proposed record-setting Wall Street277_cartoon_bank_bailout_hurwitt_sm bailout with taxpayer money demonstrates once again,  those in charge of running this country have no problem whatsoever waging "class warfare" against the rest of us -- the middle classes, workers and the poor -- whenever it suits their interests.

At a time when millions of Americans are facing bankruptcy and the risk of losing their homes without any help whatsoever from Washington DC,  the CEOs and speculators who created this mess, and the top 1 percent of households that owns at least 34 percent of financial stocks, and the top 10 percent that owns 85 percent of them, have teamed up with their "bipartisan" cronies in Congress, the US Treasury and the White House to stick us with the bill, plus all of the risk, plus none of the upside.

Upon close inspection, the Treasury's proposal is nothing more than a bum's rush for unlimited power over hundreds of $billions, to be distributed at Secretary Paulson's discretion behind closed doors and without adequate Congressional oversight.

This time they have gone too far.

As discussed below, the cost of this bailout could easily jeopardize our ability to pay for the entire economic reform program that millions of ordinary citizens across both major parties have been demanding.

Rpaulsonmedium260

Some kind of bailout may indeed be needed from the standpoint of managing the so-called "systemic risk" to our financial system.

However, as discussed below, the Paulson plan does not really tackle the real problem head on. Thsi is the fact that many financial institutions, including hundreds of banks, are undercapitalized, and need more equity per dollar of debt, not just fewer bad assets.

To provide that, we may well want to mandate debt restructurings and debt swaps, or provide more equity capital .

If private markets can't deliver and we need to inject public capital into financial services companies on a temporary basis, so be it. But it should only be in return for equity returns that compensate the pubilc for the huge risks that it is taking.

Call that "socialism" if you wish -- I think we are already well beyond that point -- sort of like Chilean economists became in 1983, when the entire private banking sector collapsed and was nationalized -- successfully -- by the heretofore "Los Chicago Boys."

To me, public equity investment, in combination with increased progressive taxation, should be viewed as just one possible way to get these companies the equity they need, while providing fair compensation to the suppliers of capital and participation in any "upside," if there is one.

Absent such measures, progressives certainly have much less reason to support this plan. After all, the increased public debt burdens that it would impose are so large that they could easily jeopardize our ability to pay for the entire economic reform program that millions of ordinary citizens (across both major parties) have been demanding.

From this angle, the Paulson program, in effect, is a cleverly-designed program to "nationalize" hundreds of billions of risky, lousy assets of  private financial institutions, without acquiring any public stake in the private institutions themselves, and without raising any tax revenue from the class of people who not only created this mess, but would now like to be bailed out. 

Any mega-bailout should come at a high price for those who made it necessary.

In particular, we must make sure that the butcher's bill is paid by the tiny elite that was responsible for creating this mess in the first place.

This is not about retribution. It is about insuring taxpayers are truly rewarded for the risks that they are taking -- isn't that the capitalist way?  And it is also about making sure that this kind of thing never happens again.

After all, the real tragedy of this bailout is its opportunity cost. Consider a well-managed $1 trillion "matching" investment in strategic growth sectors like energy and health....If we really wanted to insure our competitive health, we would not be investing $1 trillion in lousy bank portolios generated by the chicanery-prone financial services sector.

CAPITALISTS AT THE TROUGH

Bush_bernanke_080118_mn In financial terms, this latest Wall Street bailout is likely to cost US taxpayers at least $100-$150 billion per year of new debt service costs -- just for starters.

This estimate is consistent with the $700 billion ("at any point in time") that President Bush and Treasury Secretary Hank Paulson are requesting from Congress this week to fund their virtually-unfettered ("unreviewable by any court") new "Troubled Asset Relief Program." (TARP)

The sheer scale of Paulson's proposal implies that federal authorities plan to acquire at least $3 trillion of mortgage-backed securities, derivatives, and other distressed assets from private firms -- on top of Fannie/ Freddie Mac's $5.3 trillion mortgage securities portfolio. How the Fed and the Treasury actually propose to determine the fair market value of all these untrade-able assets is anyone's guess. But since  40 percent derive from the exuberant, fraud-prone days of 2006-7, they will probably all be subject to steep (60-90 percent) discounts from book value.

27_scaredwoman_lgl That's consistent with the 78 percent  "haircut" that Merrill Lynch took on the value of  its entire mortgage-backed securities portfolio earlier this month -- actually, more like a 94.6% haircut, the portion that it received in cash.

This implies, by the way, that if the Federal Government were required to "mark to market" their $29 billion March 2008 investment in Bear Stearns' securities, it would now have a cash value of just $1.6 billion. Not a very hopeful sign from a taxpayer's standpoint.

Paulson's latest proposal dictates another sharp increase in the federal debt limit, to $11.313 trillion. This limit stood at just $5.8 trillion when Bush took office in 2001.  By October 2007 it stood at $9.8 trillion. Then it jumped again to $10.6 trillion in July 2008, during in the Fannie/Freddie meltdown. As of March 2008, the actual amount of Federal debt outstanding was $9.82, just six months behind the limit and gaining.   

Newborrowing2_3

All this new TARP debt will be on top of $200 billion of new debt that was issued to buy Fannie/Freddie's preferred stock, plus the assumed risk for their $1.7 trillion of debt and $3.1 trillion of agency mortgage-backed securities.

It is also in addition to  the $85 billion 2-year credit line that Federal Reserve just extended to AIG, the $29 billion "non-recourse" loan provided for the Bear Stearns deal noted above; $63 billion of similar Federal Reserve lending to banks this year; $180 billion of newly-available Federal Reserve "reciprocal currency swap lines:" $5 billion of other emergency Treasury buybacks of mortgage-backed securities;  $12 billion of Treasury-funded FDIC losses on commercial bank failures this year (including IndyMac's record failure in July); perhaps another $455 billion of Federal Reserve loans already collateralized by very risky bank assets;  and the FDIC's request for up to $400 billion of Treasury-backed borrowings to handle  the many new bank failures yet to come.

There is also the record $486+ billion budget deficit  (net of $180 billion borrowed this year from Social Security trust fund) that the Bush Administration has compiled for 2008/09, drivem in part by the continued $12-$15 billion per month cost of the Iraq and Afghan Wars and the impact of the deepening recession on tax revenues. Longer term,  there is also the projected $1.7 trillion to $2.7 trillion "long run" cost of those wars (through 2017). 

All told, then, we're talking about borrowing at least another $1-1.4 trillion of federal debt to finance a record level of lousy banking.

COMPARED TO WHAT?

By comparison, Detroit's latest request for a mere $25 billion bailout looks miserly. And if we were in Vienna, we would say, "We wish we could play it on the piano!"

Compared to other bailouts, this is by far the largest ever.

For example, the total amount of debt relief provided to all Third World countries by the World Bank/IMF, export credit agencies, and foreign governments from 1970 to 2006 totaled just $334 billion ($2008), about 8 percent of all the loans. (Henry, 2007). Charleskeating45_2

The savings and loan bailout in the late 1980s cost just $170 billion ($2008).

And the FDIC's 1984 bailout of Continental Illiinois, the largest bank failure up to this year, was (in $2008) just $8 billion (eventually reduced to $1.6 billion by asset recoveries).

Meanwhile, compared with other countries that are well on their way to building forward-looking "sovereign wealth funds" to make strategic investments all over the world, the US seems to be on a drive to create this introverted "sovereign toxic debt dump." 

CASH COST

No one has a very precise idea of how much all this will cost, not only because many of the securities are complex and thinly traded,  but also because their value depends to a great extent on the future of the US housing market. Housing prices  have already fallen by 20-32 percent in the top 20 markets since mid-2006, and they continue to fall in 11 out of 20  major markets, especially Florida,  southern California, and Arizona, where the roller-coaster has been the most steep.

Failboat

At current T-bond rates (2-4 percent for 2-10 year bonds, the most likely maturities), near-term cash cost of this year's bailu is likely to be an extra $40 to $60 billion a year in interest payments alone. 

Furthermore, since the borrowed funds will be invested in high-risk assets, the most important potential costs involve  capital risk. There's a good chance that, as in the case of Bear Stearns, we'll ultimately get much less than $.50 for each $1 borrowed and invested. For example, Fannie and Freddie alone could easily be sitting on $500 billion of losses (=$2 trillion/$5.3 trillion* 50% default*50% asset recovery).

This could easily make the long-run cost of this bailout to taxpayers at least $150 billion a year.   

No wonder traders on the floor of the New York Stock Exchange reportedly broke out singing "the Internationale" when they heard about the bailout.

But the direct financial costs of the bailout are only the beginning....

HIJACKING THE FUTURE

Middleclass_2 Last week's events produced terabytes of erudite discussion by an army of Wall Street journalists, prophets and pundits about short-selling rules, "covered bonds," and the structure of the financial services.

This is absolutely par for the course, as modern financial crisis journalism is concerned -- the "story" is always told mainly from the standpoint of what's in it for the industry, the banks, the regulators, and the investors.   

For the 90 percent of Americans who own no money-market funds, and less than 15 percent of all stocks and bonds, however, this bailout means just one thing.

All of the money has just been spent.  And it has not been spent on you.

For example, unless we demand an increase in taxes on the rich, big banks, and  big corporations, as well as some public equity  in exchange for the use of all this money, we can expect that the long-term costs of this bailout will "crowd out" almost all of the $140 to $160 billion of new federal programs that Barack Obama proposed. It will certainly make it impossible for Obama to finance his programs without either borrowing even more heavily, or going well beyond the  tax increases (on oil companies and the upper middle classes) that he has proposed.

Without such changes, there will be no federal money available for comprehensive health insurance, or the reform of the health care delivery system.Obamaagendacost

There will be no additional funding for pre-school education, child care, or college tuition.

There will be no additional funding for investments in energy conservation, wind, or  solar power.

There will be no additional investments in national infrastructure (e.g., the reconstruction of our aging roads, highways, and bridges to "somewhere.")

Highway privatization and toll roads, here we come.

There will be no money to bail out the millions of Americans who are on the brink of losing their homes.

The supply of housing loans and other credit will remain tight, despite the bailout.

Indeed, if the economic elite has its way,  the long-sought dream of "a home for every middle-class American family" may be abandoned as a goal of government policy.

Meanwhile, the government-sponsored consolidation of the financial services industry will make financial services more profitable than ever.

This is good news for the "owners of the means of finance." For the rest of us, it means steeper fees and rates.  And if we fail to keep up with the new charges, we'll  face the rough justice delivered by the latest  bankruptcy "reform," which was rammed through the Congress in 2005 with support from many top Democrats.   

103473_f520 There will be no money to shore up the long-run drain on Social Security or Medicare.

Indeed, ironically enough, this latest bank bailout may even increase the financial pressure to privatize these comparatively successful government programs.

There will be no extra money to house our thousands of new homeless people,  relieve poverty, rebuild New Orleans, or support immigration reform.

There will be no additional funds for national parks.

Indeed, we might as well start  by privatizing our national and state parks, and drilling for oil and gas in the Arctic National Wildlife Refuge,  Yosemite,  the Grand Canyon, and right off the Santa Barbara coast. We're going to need those federal lease royalties. (Perhaps the oil barons will lend us an advance.) 

There will be no funds available for increased homeland security.

There will certainly be no "middle-class" tax cut.  Absent a progressive tax reform, the only "cut" the middle class is going to receive is another sharp reduction in  living standards.

TRUMPING REAGAN

All told, the Bush/Paulson "permissive banking/ massive bailout" model  beats even the old 1980s vintage Reagan formula, which tried to force government down-sizing with huge tax cuts. 

Contrary to the sales pitch, those cuts never produced any incremental tax revenues, let alone any significant down-sizing.  It has simply proved too easy for the federal government to borrow. And "conservatives" can always find wars, farm subsidies, defense contractors,  and "bridges to nowhere" to spend the money on, just as fast as liberals. 

Lately, however, it appears that US debt levels may indeed be reaching the point where they could impose a limit on increased spending.  Given the sheer size of the new federal debt obligations, foreign creditors,who have recently been supplying more than half of new Federal borrowing, have been muttering about taking their lending elsewhere. And outside the financial services industry, Main Street companies are concerned being "crowded out" by record federal borrowing.

THE ALTERNATIVE -- THE "GET REAL" NEW DEAL

To make sure that real economic reform is still feasible, we need to demand a "Get Real/ New Deal" from Congress right now. 

At a minimum, this Get Real/New Deal package should consider measures like: 

(1) The restoration of stiff progressive income and estate taxes on the top 1 percent of the population (with net incomes over $500,000 a year and estates over $5 million) -- especially on excessive CEO and hedge fund manager compensation;

(2) Much more aggressive enforcement and tougher penalties against big-ticket corporate and individual tax dodgers;

(3) Tougher regulation of financial institutions  -- possibly by a new agency that, unlike the US Federal Reserve, the SEC, and the US Treasury, is not "captive" to the industry;

(4) A crackdown on the offshore havens that have been used by leading banks, corporations,  and hedge funds to circumvent our securities and tax laws;

(5) The immediate revision of the punitive bankruptcy law that Congress enacted in 2005 at the behest of this now-bankrupt elite; and

(6) While we are at it, stiff "pro-green" luxury taxes on mega-mansions, private jets, Land Rovers, yachts, and all other energy-inefficient upscale toys. 

We also need (7) a National Commission to investigate the root causes of this financial crisis from top to bottom, and actually (unlike the hapless, ineffectual 9/11 Commission) hold people accountable.

Finaily, if the pubilc is going to provide so much of the risk capital for this restructuring, we should demand (8) public equity in the private financial institutions that receive so much of our help.

This will permit taxpayers to share in the upside of this restructuring, rather than just the downside risks.

Along the way, this will require that we explain to Secretary Paulson that this country is not Goldman Sachs. Even after 8 years of President Bush, this is still a democracy. 

Secretary Paulson is not going to be given unfettered discretion to hand out closet "liquidity injections" to his buddies on the street -- no matter how worthy they are. 

Dp1774112 Over time, this progressive Real/ New Deal would help raise the hundreds of billions in new tax revenue needed to offset the costs of this bailout.

This will be essential, if the Federal Government is to be able to afford key reforms like health insurance, clean energy, and investments in education.

These may not matter very much to Wall Street executives, financial analysts, Treasury and Federal Reserve executives, or the more than 120-130 Members of Congress and 40-45 US Senators who earn more than $1 million a year -- and are already covered by a generous "national health care" package of their own design.

But these  are the key "systemic risks" that ordinary Americans face. 

These reforms may sound ambitious. So is the bailout.  And the reforms that we are discussing are only fair.

After all, we the American people have recently been the very model of forgiveness and understanding. 

We have tolerated and footed the bill for stolen elections,  highly-preventable terrorist attacks, gross mismanagement of "natural" disasters, prolonged, poorly conceived, costly wars, rampant high-level corruption, pervasive violations of the US Constitution,  and the systematic looting of the Treasury by politically-connected  defense contractors, oil companies, oligopolistic cable TV and telecommunications firms, hedge fund operators, big-ticket tax evaders, and our top classes in general.

Does "class" still matter in America?  You betcha -- perhaps more than ever. But enough is enough.  Call your Congressperson now. Demand a"Get Real/ New Deal" qualifier to the bailout package before it is too late. We deserve to get much more for our money. So do our kids.

(c) SubmergingMarkets, 2008



September 20, 2008 at 04:41 PM | Permalink | Comments (0) | TrackBack

Sunday, May 11, 2008

BRINGING THE WAR BACK HOME (Part I.)
Jordan C. Haerter, 19, Killed In Ramadi
James S. Henry

"To save this world, you asked this man to die.
Would this man, could he see you now, ask why?"
-- Auden

Sag_harbor_3Monday April 28th was an unusually chilly wet morning in Sag Harbor, New York, even for April, our "cruelest month."  But that didn't prevent more than a third of Sag Harbor's 2,200 year-around residents from lining the flag-lined streets and filling the Old Whalers' Church to capacity to mourn the loss of  US Marine Lance Corporal Jordan C. Haerter, age 19.

Even apart from the drizzle, there was hardly a dry eye in the38191822_2 village. The Rev. Steven Howarth offered a moving recollection of Jordan's short life, describing his popularity, impatience with book learning, determination to learn to fly at 16 and to join the military at 17, and his courage under fire. The minister asked the crowd to take comfort in the fact that Jordan would undoubtedly be granted eternal life in the after-world.

After the service, a long cortege made its way slowly to Oakland Cemetery, where Jordan Haerter was buried with full military honors, accompanied by his family, dozens of classmates, scores of police, firemen, Marines in dress uniform,  local American Legion members, and a squadron of motorcyclists Funeral068_2from an organization called the Patriotic Guard. More than a hundred school children from Jordan's former elementary school stood in the rain across from the church, carrying little star-spangled American flags and signs that read, "We will remember." Every local newspaper, radio station, and TV station in the Hamptons carried extensive coverage of the funeral and Jordan's story.

Everyone agreed that Jordan had behaved courageously in Iraq, and that his death was a tragic loss for the whole community.

Standing in the rain that day, and at the wake the afternoon before, I found myself struggling with very mixed emotions about this young man's death. On the one hand, I was proud of his courage and sacrifice. On the other, I couldn't help wondering why on earth he had decided to enlist and serve in a war that for many years has been so discredited. Who was responsible for that? Was this only George Bush's war, or do we all bear some responsibility for the fact that young men and women from all across this country -- not to mention scores of Iraqis -- continue to die every day?  Given the fact that bad wars  will continue to be a reality, what special responsibility do military recruiters, high school principles, teachers, guidance counselors, religious and political leaders, veterans, and other leaders in the community bear for at least making sure that the Jordan Haerters of this world make truly-informed decisions when they enlist?   

YET ANOTHER STATISTIC

Less than one week earlier, Jordan had become another statistic in the seemly-interminable Iraq War. At approximately 7:30 a.m. Baghdad time on April 22nd, Jordan and another Marine had been killed by a suicide bomber at a military checkpoint in Ramadi, the capital of Anbar Province in Iraq. Two Iraqi policemen and 24 other Iraqis were also injured in the incident.

According to military sources, Haerter, an ace rifleman -- his platoon's  "high shooter" --  was credited with shooting the driver of the bomb-laden truck before it detonated, quite possibly saving the lives of more than 30 Marines and Iraqis who were standing nearby.

Haerter became Sag Harbor's first Iraq War casualty, and indeed, its first combat fatality since World War II. He was also the first Suffolk County resident, 31st Long Islander, 203rd New Yorker, 4053rd American soldier (plus 186 contractors), and 253rd American 19-year old to die in Iraq since the US-backed invasion in March 2003.

Jordan had been in Iraq just one month, on his very first trip ever outside the US.

PREPARING FOR WAR

Obithaerter

Jordan, a life-long Sag Harbor resident,  was  the only child of Christian Haerter and JoAnn Lyles, who had been divorced in the 1990s. Christian, 50, ran a water treatment business and JoAnn, with whom Jordan lived, worked at a building supply company. Jordan's grandfather Werner, a tool-and-die maker at the local Bulova Watch plant until  it closed in 1981, had emigrated to Sag Harbor from Germany by way of Canada in 1953. He died in 1994, when Jordan was four. 

Jordan was reportedly a well-liked, pretty conventional teenager with average-to-good grades and a bit of a willful streak. According to local newspaper accounts, his passions were for driving a small outboard motor boat on Peconic Bay, hanging out with his friends, driving his 1991 Toyota 4Runner on muddy back-trails around Sag Harbor, and eating his grandmother Lilly Haerter's spaetzle and home-grown blueberries.

There was also flying. According to a widely-repeated story about Jordan, at age 16, he'd started taking flying lessons on his own, even though he had not informed his parents and was not yet old enough to legally drive himself to airport.

Jordan was just as single-minded about joining the Marines. He and a high school classmate -- Josh DiStefano, one of his closest friends --  entered the US 38220457Marine Corps together in September 2006, just three months after graduating from Sag Harbor's Pierson High School, and one month after Jordan turned 18.

According to another close friend, Jordan had met a Marine recruiter at Pierson's annual "Career Day" that spring. Soon after, at a meeting with a high school guidance counselor, he stunned his mother with the news that he had decided to join the Marines. 

At the time Jordan was still just 17, so his parents still had to sign off on his four-year commitment to the Marines' delayed-entry program. They did so reluctantly, but without much opposition  -- they'd always encouraged Jordan to be action-oriented and to get a "real world" education.  Jordan apparently used the enlistment bonus that he collected from the Marines to buy a new Dodge Ram pickup truck -- the same truck that his friend Josh would drive in Jordan's April 28th funeral procession.

WHERE WERE THE WARNING LABELS?

Jordan's reasons for joining the Marines are not entirely clear. Of course most young men his age are now avoiding military service like the plague. That is one reason why there has  been a crisis in military recruiting.

This, in turn,  is partly because the five-year old Iraq War is by now widely regarded by most Americans as an unmitigated fiasco, none of whose official justifications -- WMDs, Saddam's supposed ties to Al Qaeda, "democratization," or even the value of controlling Iraq's oil supplies -- have held up.

At best we are now down to a faith-based argument about whether things will be more  or less disastrous if we exit the country now rather than at some ill-defined time in the future -- not exactly an inspiring ground for enlisting.

What is clear that Iraq is a very dangerous way to spend one's youth. Not only have there been more than 4075 US military fatalities, but there have also been at least 30,000 Americans physically wounded, 3000-5000 of whom have injuries so severe that they probably would have died in earlier wars that lacked today's rapid medical evacuations.

According to a RAND studyPtsd1 released in April, 31.7 percent, or 520,000 of the 1.64 million American military personnel who have served in Iraq or Afghanistan since 2001 also suffer from "post-traumatic stress syndrome" (PTSD), depression, and/or "traumatic brain injury" (TBI) induced by explosive devices. These "less visible" injuries have not only contributed  to a surge in suicides by US military personnel -- an estimated 6000 suicides in 2005 alone, growing at 20 percent in 2006-2007, with more than 12,000 attempts each year. Thus the number of  Iraq-related suicide deaths in the American military far exceeds the number of combat deaths.

These mental injuries also impose a high cost on the families and friends of returning veterans, especially given the acute shortage of psychiatric care for returning veterans and their families. The Rand study found that only about half of those with such conditions were getting treatment, and half of those who have been treated got inadequate treatment.

Ptsdap Some cynics have even suggested that the military's understatement of these problems is partly due to the fact that the US military is so dependent on "voluntary" reenlistment that it is afraid to focus on PTSD and TBI  -- both of which are amplified by the long tours of duty that troops are facing.

There is also evidence that such battlefield risks are systematically understated by recruiters, who are under severe pressure to fill quotas. Certainly there are is nothing comparable to the hazard warnings, "truth in lending," and SEC  anti-fraud disclosure notices attached to, say,  cigarette packages, drug prescriptions, car purchases, mortgages, and private equity investments that apply to these life-and-death enlistment decisions by 17-19 year olds. This has lead to widespread demands for new "truth in recruiting" standards, and restrictions on recruiter access to the nation's public high schools.

Finally, from an economic standpoint, military service -- now entirely voluntary, except for the "stop-loss" orders that has affected more than 80,000 reservists -- is simply not very competitive, as discussed below. Unless a student has virtually no civilian job alternatives, and either can't get into college  at all or can't afford to go, the military is likely to be a losing economic proposition, unless it somehow plays a role in some longer-term career plan (see below).

WHAT WAS HE THINKING?

As noted, Jordan's family says that his decision to join the Marines came as a complete surprise.

While other family members had served in the military, there was no tradition of volunteering for duty in Jordan's family. His grandfather Werner, whom Jordan had known as a child, had been drafted into the German Army in World War II, and his other grandfather John Lyle had been drafted into the US Army. Jordan's father Christian had never served.381918131

He spoke no foreign languages and,  as noted, he'd never traveled outside the US. In high school, he'd shown no particular interest in world events or history. Although he appears to have supported the War after enlisting, he'd never expressed strong feelings about the Iraq War before doing so.   

From age five on, Jordan had enjoyed playing shoot-'em-up games on the computer, which he would later actually compare with some of his experiences in the military. He'd also insisted that his Halloween costumes, meticulously designed by his mother, be accurate copies of those worn by soldiers in America's Revolutionary War. But such interests didn't differ all that much from those of any other Sag Harbor boys.

Nor does it seem that Jordan's decision to enlist in the Marines for the minimum term of four years strictly  a matter of short-term job opportunities. True, he had probably received a small ($10,000 or less) signing bounty for enlisting. At the time of his death, however, Lance Cpl Haerter's "E-3" pay grade was earning him just  $19,044 a year before taxes, plus food and housing allowances. By his fourth year in the service, depending on his rank, that might have increased to $25,000 per year at most -- less than $12 per hour. But that wage rate should have been easy for Jordan to beat in the Hamptons.   

A TIDY PLAN

What appears more likely is that Jordan's decision to enlist was part of a longer-term career plan, which tended to understate the risks of being a Marine in Iraq, and overstate the chances of using military service as a stepping stone.  His family says that after hisNew_logo_19 four-year commitment to the Marines, he intended to join the Sag Harbor Village Police Department, get married, and eventually take over his father's water treatment business.

For the first 18 months of Jordan's enlistment,  this plan appeared to be on track. He was assigned to "the Walking Dead," Alpha Company,  First Battalion, the 9th Marine Regiment out of Camp LeJeune, North Carolina.  which had served with distinction in Vietnam, Korea, and World War II. After boot camp at Parris Island in South Carolina and another year of training at Camp LeJeune and in northern Virginia and California, he was sent to Iraq in March 2008.

Once there, things also seemed to go well at first.  On Monday April 21,  the very day before his death, Jordan's mother received a letter from him, in which Jordan reported that Iraq was "easier than I expected," and assured her that he would take care to return home safely.

Unfortunately, as we'll discuss below,  all this overlooked just a few complexities -- the unpredictable, maniacal nature of the Iraq War, and the tensions that are deeply embedded in the US military's  "surge" strategy.....especially in Jordan's first and only Iraqi destination, Ramadi. (Continued in Part II.)

                                         (c) SubmergingMarkets, 2008


 


May 11, 2008 at 01:40 AM | Permalink | Comments (0) | TrackBack

Thursday, April 17, 2008

SNATCHING VICTORY?
The Democrats Descend Into the Politics of Mutually-Assured Destruction
James S. Henry

On an occasion of this kind, it becomes more than a moral duty to speak one's mind. It becomes a pleasure.

-- Oscar Wilde

Isn't this a pretty picture?  080204news_election_3

On the one hand, after seven long years of catastrophic incompetence in Washington, our country is literally begging for new ideas and leadership, especially from the erstwhile Party of the Opposition.

Recent polls show that an unprecedented 81 percent of Americans believe their country is "on the wrong track," while President Bush's approval rating has sunk to an all-time low of 28 percent. There is a growing popular demand for decisive government action on any number of issues that have been festering while "Nero" Bush and "Imperator" Cheney have been fiddling.

THE DEMAND FOR CHANGE

John "McSame's" feisty personality notwithstanding, this is not the ideal moment to be plumping for free-market solutions, let alone more tax cuts for the extremely rich,  hands-off deregulation for our wondrous mortgage banking, health care, automotive, airlines, handgun, coal-fired utility, and social insurance industries, and the unending prospect of more unilateral, open-ended wars.

No -- this is a time that cries out for smart, can-do, progressive, and -- yes -- youthful government.

Its precise slogan should be:  Yes, we had better -- or else.

 
REAL ISSUES

At the risk of depressing our readers, among the many tough issues that demand this  pragmatic approach right now are the following:

>Containing the mortgage crisis and the deep recession that it has produced.
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Withdrawing from Iraq as soon as possible, while discouraging Iran from filling the void.
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Intensifying the hunt for Bin Laden, without losing Pakistan and Afghanistan to a Taleban revival.
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Protecting our nation against the genuine on-going global terrorist menace.
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Fixing our high-cost, inhumane health insurance system once and for all.
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Biting the bullet on climate change and global warming.1101940404_400_2
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Rebuilding public education and college assistance
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Guaranteeing the financial integrity of Social Security and Medicare.
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Restoring civil liberties and reversing the drift toward a state of siege.
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Reviving American's reputation in the world and its relations with key allies.

20080404_poll_graphic190> Revising our increasingly disfunctional "free trade" agreements.
>Reviving efforts to prosecute corrupt politicians, war profiteers, and big-ticket tax evaders to the limits of the law, as opposed to granting them Presidential pardons.
>Slashing government waste, especially the bloated $800+billion "total war"  budget and the huge agro-industry subsidies that are literally wiping out poor farmers all over the world. 

All together,  this adds up to a demand for nothing less than at least a decade of intense regime change right here at home.

THE SUPPLY OF CHANGE ?

Is the Party of the Opposition up to this challenge?  Unfortunately, the habitually ham-handed Democratic Party,  as well as much of broadcast journalism,  have responded to the soaring demand for substantive change and attention to real issues by focusing on.....Well, what, exactly?

Hilarydailynews Let's see.  If last night's televised debate in Philadelphia is any indication, both candidate Hillary Clinton and the news media -- or at least pro-Hillary flacks like ABC News' George Stephanopoulos and the ponderous, self-important Charles Gibson --  are far more concerned with (1) Obama's Rev. Wright's alleged relationships with Rev. Farrakhan and a visiting Hamas associate, (2) Obama's even more tangential relationship with an obscure former Chicago "Weatherman" named Ayers, (3)his recent (really quite defensible) "Bittergate" comments about the roots of working-class culture, and (4) the torturous question of whether or not the Junior Senator from Illinois should demonstrate his patriotism by wearing a flag pin on his lapel.

>>As if Hillary and Bill have not accumulated a long list of even more dubious relationships,  several of whom had to be pardoned.

>>As if  Stephanopolous did not get his questions about Ayers directly from Fox News' mad-hatter host Sean Hannity the day before the debate.

>> As if there were not -- by definition -- quite a few other black males at Louis Farrakhan's  rather successful 1995 "Million Man March" in Washington, D.C.  -- at least 670,000 to 1 million, according to one careful aerial survey.

>>As if one could find a single photo on the Internet of John McCain wearing a flag pin -- although George W. Bush wears one all the time. George_w_bush

>>As if Gibson and his sidekick did not tilt so far to starboard in their questioning that one Washington Post journalist titled his review,  "In Pa. Debate, The Clear Loser Is ABC."

LAST GASP

This attempt to focus on a series of jaundiced Obama "gotchas" is actually a sign of Hillary's increasing desperation. 

Obviously she is furious at having been repeatedly up-staged and out-campaigned over the past year -- despite her vast experience, wealth, and connections with wealthy donors and lobbyists, not to mention Bill. The smooth-talking Chicago upstart with the Harvard Law degree and the Bill Clinton-like hard luck story is actually trying to deprive her of her rightful place in history!

Hillary's focus on character assassination also reflects her sheer frustration at the fact that Obama now clearly has the inside track for the nomination.

This has not been a pleasant month for Ms.Clinton. She's just fired her long-time campaign strategist, after firing her campaign manager. She's just been caught in a bald-face lie about coming under fire in Tuzla. Her lead in Pennsylvania has dropped to five points. With just 10 primaries left to go, Obama is now at least 139 delegates ahead. Even if Hillary captures, as expected, more than half of the delegates elected in these primaries, she will still need to win two-thirds of the remaining 319 uncommitted "superdelegates."  Obama just needs 125. (Click on chart.)Slideone_2

That's a pretty large gap for Hillary to overcome -- especially considering the fact that Obama's fund-raising machine allows him to outspend his rival by two-to-one in key states.

This explains Hillary's increasing reliance on negative advertising in Pennsylvania and the other primary states, her endless repetitions of the Rev. Wright and "Bittergate" story, and her grasping at all those other petty straws in last night's debate -- even while conceding that Obama, with all his flaws, could still beat John McCain in November.

In short, those of us who long for probing discussions of serious issues will probably have to look elsewhere than Hillary, let alone ABC News.  And we should certainly not expect to hear much about them until Hillary faces facts and does the right thing -- which, just to spell it out for her clearly, is not to remain in this race "until the last dog dies."

(c) SubmergingMarkets, 2008      

  

 




 

 

 


 

April 17, 2008 at 05:01 AM | Permalink | Comments (0) | TrackBack

Tuesday, February 12, 2008

John McCain: "No We Can't"
Reviving The "Daisy" Strategy in 2008
James S. Henry

Mccain_bomb_4 My friends:  we have spent far too much time and treasure on the prolonged, intense, but ultimately intra-familial and largely issues-free beauty contest between Hillary Clinton and Barack Obama.   

Now that that contest is finally drawing to a close, it is time for us to focus like a gamma-ray laser on the real enemy in the fast-approaching November 2008 Presidential election -- Senator John McCain, the bellicose 5'7" septuagenarian fly-boy from Arizona.  

What is it about Air Force-trained Republican Senators from Arizona, anyway? 

Mccain_bushhug767929_3 In many respects this year's race recalls 1964, when Senator Barry Goldwater, another war-mongering, outspoken, short-tempered Air Force veteran and Republican Presidential candidate from Arizona,  scared the B'Jesus out of the entire country with his threats to use nuclear weapons preemptively ("Let's lob a nuclear bomb into the men's room at the Kremlin").

Usually such pro-war designs are kept well hidden until after the election, as the Bush Administration did in 2000 --  and, indeed, as President Lyndon Johnson did in the 1964 election, when he made Goldwater out to be a mad-man (the "Daisy" strategy," after the notorious political ad by that name: Download 20_johnson_64.mov). Johnson conveniently failed to tell the public during the election campaign that he was also a mad-man, already planning to park more than 500,000 US troops in Vietnam within a year.   

In any case, not since 1964 have the Democrats faced a Republican candidate who is as openly pro-war as John McCain is. This should provide them with  a remarkable opportunity for party unity,  a clear brand, and victory in November.     

Gopteam_071664r1 However, it is very important to reunite the Party and get moving. McCain is already attracting fuzzy-minded support from  moderate Democrats and independents who are beguiled by his tough-guy "maverick" image -- especially lower middle-class white males who are (a) bearing the brunt of this year's  economic downturn, and (b) not entirely comfortable with voting for either  Barack  ("the black guy"_ or ("that woman") Hillary. Oddly enough, many of these folks also claim to be anti-war.

Partly because the Democrats have been so distracted by their own interminable (..19 debates??!...six months of primaries?) nominating process, the most  telling criticisms of John McCain have so far been provided by his enemies among the Very Far Right Ranters (VFRRs), including leading professional ranters  like Anne Coulter, Rush Limbaugh, and James C. Dodson. This crew complains that McCain doesn't quite pass muster on pet right issues like undocumented immigration, gay marriage, and tax cuts. Ironically, Barry Goldwater himself would have also failed these same litmus tests. Indeed, if the 1964 Presidential election had been fought on social issues and the economy rather than on war and peace, the former Air Force Major General from Arizona would most likely have carried many more states than the 6 that he did carry. Defeating Goldwater in 1964 may not have absolutely required the war-mongering issue, but it certainly helped.  

Some conservatives have also criticized McCain's preference for voluptuous office assistants and fly-boy-style socializing.  From their angle, he also lacks appropriate Christian zeal, was once involved in the shady "Keating Five" savings-and-loan scandal,  and has an intermittent work ethic.

Indeed, in the last five Congresses he missed an incredible 21 percent of all Senate votes, including 56 percent in the current 110th Congress. This high rate of absenteeism is also no doubt partly due to the Presidential race, McCain's long-standing battle with cancer, and the fact that at age 71.5,  he is already the oldest living leading Presidential candidate ever, having already lived longer than over half of all US Presidents.

Images_2 The real problem for Democrats and independents, however, should not be McCain's lack of religious fervor, moldy old rumors about the Keating Five or extra-marital relationships, his age, or even his absenteeism, unless that is due to health problems.

And after this year's endless bouts of the smooth-talking ignoramus the Rt. Reverend Huckabee, the lack of religious zeal and ideological purity in a leading Republican candidate is really rather refreshing.

No -- our core problems with John McCain are twofold. First,  whenever he actually manages to show up in the Senate and legislate, the  results are usually far to the right of what most Democrats, independents, and sensible people in general stand for  -- and what both Barack and Hillary, in particular,  stand for.

For example,  while Barack and Hillary have both earned lifetime voting scores from the American Conservative Union (ACU) of just 8 percent, McCain's  lifetime score is 82. While this may be insufficient for VFRRs like Limbaugh and Coulter, it is well above the tail end of the Republican Senate distribution.

McCain may have mellowed slightly in recent years -- in 2006, for example, his ACU score was just 65.  However, this is still higher than any Senate Democrat, and it is more than three times the 17 rating scored by McCain's turncoat friend Joe Lieberman.  Indeed, on a wide range of key issues that progressives and independents should really care about --  from Supreme Court nominations and extending Bush's tax cuts for the rich to the State Children's Health Insurance program, setting a timetable for withdrawal from Iraq, and  bankruptcy reform, and even on his own trademark issues like campaign finance, immigration, the definition of torture, and the Bush tax cuts, the senior Senator from the Grand Canyon state is usually a big disappointment.   

20071113_mccain Second, and even more important, on the most crucial issue of our time, the conduct of present and future wars,  McCain appears to have quite frankly gone completely off the rails.

Misguided Democratic Party strategists like John Podesta, Mark Penn, and Bob Schrum notwithstanding,  this issue of the war, and not just "the economy" or "health care," should be at center stage for this election. 

This is precisely because, on the one hand,  military affairs are supposed to be McCain's core competence, and because, on the other hand, he has gotten this central issue completely wrong.      

As discussed below, while millions of Iraqis continue to vote with their feet and either flee abroad or stay there, McCain just keeps repeating the big lie that "the surge is working."

In fact the main reasons that US military casualties,  and, to a lesser extent, Iraqi civilian casualties have dropped is not because of "the surge," but because (a) Baghdad has been ethnically cleansed, and is now a sharply divided, Shiite-dominated enclave;  (b) Sunni insurgents, fed up with al-Qaeda, have decided temporarily to ally with the "occupiers" and assert control over the "foreign terrorists;" and (c) Iran has temporarily decided to cut down on its support for attacks on US troops, in the interests of undermining the "neocon" coalition in the US, Saudi Arabia, and Israel that is plumping for a McCain-style bombing. (See the video below).

None of this implies that the surge has achieved anything more than a kind of stop-gap temporary stabilization of this very ill patient's condition -- a Bush Adminstration effort that just happens to coincide with a Presidential election year. Since it is unlikely that the surge is sustainable, in terms of troops and dollars, and since its benefits are likely to be temporary, McCain should be compelled to explain on every possible occasion whether the slim increased chance that a Republican president will get elected is really worth the price.

466284925_964c617f1f_oBut McCain is at least consistent. Apparently he also still believes that the Vietnam War could have been won with just a little more persistence and less interference from Washington.
 

For all his putative military experience, therefore,  in the grand tradition of Major General/ Senator Goldwater and Air Force General Curtis {"Bombs Away") LeMay,  in his 20 hours of flight time over North Vietnam, and his five years of captivity, apparently John McCain never 250pxcurtis_lemay_usaf managed to learn the fundamental lesson that millions of ground troops have learned the hard way -- that guerrilla wars, and, indeed, wars on terror,  are ultimately won or lost by political and economic development, not by military tactics. And, furthermore,  that the blind over-application of military force to a hostile civilian population by an occupying army and Air Force can actually increase enemy resistance much faster than it can be controlled.

Far from repeating the 2004 Kerry campaign's central mistake and focusing this campaign only on the US economy, therefore, it will be vital for us to keep McCain's extraordinary appetite for war in plain view.

The more general question of why so many Air Force professionals -- including, for example, the Israeli General who was widely blamed for mismanaging last year's conflict with Hezbollah in Lebanon -- tend to systematically overestimate the efficacy of military power, will be left for another time. Plainly this is not just an Arizona malady.

 For the interested reader, the following is a smattering of sundry provocative materials with respect to Senator McCain. Not all of it is worth taking seriously --- some of it even resembles the scurrilous attacks on John Kerry's war record in 2004,  when McCain, it should be recalled, came to Kerry's defense.  We've presented it here in the interests of of airing it out and redirecting our attention to the clear and present danger of a Republican Party that, even in its death throes,  may still be able to unite around this "great white hawk" from Arizona. 

 

The "Surge" Is Working?"
"100 More Years in Iraq?"

""MIA Cover-Up Artist?""

""War Hero?""

 

From VietnamVeteransAgainstJohnMcCain:

FACT SHEET:  Military record of John Sidney McCain

"Both McCain III’s father and grandfather were Admirals in the United States Navy.  His father Admiral  John S. ”Junior” McCain was commander of U.S. forces in Europe - later commander of American forces in Vietnam while McCain III was being held prisoner of war. His grandfather John S. McCain, Sr. commanded naval aviation at the Battle of Okinawa in 1945. McCain III, like his father and grandfather, also attended the United States Naval Academy.  McCain III finished near the bottom of his graduating class in 1958.

McCain III lost five U.S. Navy aircraft: Images_2

1 - Student pilot McCain III lost jet number one in 1958 when he plunged into Corpus Christi Bay while practicing landings.

2 - Pilot McCain III lost another plane two years later while he was deployed in the Mediterranean. ”Flying too low over the Iberian Peninsula, he took out some power lines  which led to a spate of newspaper stories in which he was predictably identified as the son of an admiral.

3 - Pilot McCain III lost number three in 1965 when he was returning from flying a Navy trainer solo to Philadelphia for an Army-Navy football game.  McCain III radioed, ”I’ve got a flameout” and ejected at one thousand feet. The plane crashed to the ground and McCain III floated to a deserted beach.

4 - Combat pilot McCain III lost his fourth on July 29, 1967, soon after he was assigned to the USS Forrestal as an A-4 Skyhawk combat pilot. While waiting his turn for takeoff, an accidently fired rocket slammed into McCain Jr’s. plane. He escaped from the burning aircraft, but the explosions that followed killed 134 sailors, destroyed at least 20 aircraft, and threatened to sink the ship.

5 - Combat pilot McCain III lost a fifth plane three months later (Oct. 26, 1967) during his 23rd mission over North Vietnam when he failed to avoid a surface-to-air missile. McCain III ejected from the plane breaking both arms and a leg in the process and subsequently parachuted into Truc Bach Lake near Hanoi. After being pulled from the lake by the North Vietnamese, McCain III was bayoneted in his left foot and shoulder and struck by a rifle butt. He was then transported to the Hoa Lo Prison, also known as the Hanoi Hilton.

Mccain1 The 1973 New York Daily News labeled POW McCain III a “PW Songbird” On McCain III’s fourth day of being denied medical treatment, slapped, and threatened with death by the communist (they were demanding military information in exchange for medical treatment), McCain III broke and told his interrogator, ”O.K., I’ll give you military information if you will take me to the hospital.” U.S. News and World Report, May 14, 1973 article written by former POW John McCain.

It was then that the communist learned that McCain III’s father was Admiral John S. McCain, the soon-to-be commander of all U.S. Forces in the Pacific. The Vietnamese rushed McCain III to Gai Lam military hospital (U.S. government documents), a medical facility normally unavailable for U.S. POWs. By Nov. 9, 1967 (U.S. government documents) Hanoi press was quoting McCain III describing his mission including the number of aircraft in his flight, information about rescue ships, and the order of which U.S. attacks would take place. 

While in still in North Vietnam’s military hospital, McCain III gave an interview to prominent French television reporter Francois Chalais for a series titled Life in Hanoi. Chalais’ interview with McCain III was aired in Europe. Vietnamese doctors operated on McCain’s Leg in early December, 1967. Six weeks after he was shot down, McCain was taken from the hospital and delivered to a U.S. POW camp, In May of 1968,  McCain III allowed himself to be interviewed by two North Vietnamese generals at separate times.”  May 14, 1973 article written by former POW John McCain In August 1968, other POWs learned for the first time that John McCain III had been taken prisoner. Mccain_bush_hug

On June 5, 1969,  the New York Daily News  reported  in  a article headlined  Reds Say PW Songbird Is Pilot Son of Admiral,   “ . . . Hanoi has aired a broadcast in which the pilot son of  United States Commander in the Pacific, Adm. John McCain, purportedly admits to having  bombed civilian targets in North Vietnam and praises medical treatment he has received since being taken prisoner . . .” 

The Washington Post explained McCain III’s broadcast: “The English- Language broadcast beamed at South Vietnam was one of a series using American prisoners. It was in response to a plea by Defense Secretary Melvin S. Laird, May 19, that North Vietnam treat prisoners according to the humanitarian standards set forth by the Geneva Convention.”

Mcaincu1 In 1970, McCain III agreed to an interview with Dr. Fernando Barral, a Spanish psychiatrist who was living in Cuba at the time. The meeting between Barral and McCain III (which was photographed by the Vietnamese) took place away from the prison at the office of the Committee for Foreign Cultural Relations in Hanoi (declassified government document). During the meeting, POW McCain sipped coffee and ate oranges and cakes with the Cuban. While talking with Barral, McCain III further seriously violated the military Code of Conduct by failing to evade answering questions ”to the utmost of his ability” when he, according government documents, helped Barral by answering questions in Spanish, a language McCain had learned in school. The interview was published  in January 1970.

McCain III was released from North Vietnam March 15, 1973 In 1993, during one of his many trips back to Hanoi, McCain asked the Vietnamese not to make public any records they hold pertaining to returned U.S.  POWs.  McCain III claims, that while a POW, he tried to kill himself.

McCain III was awarded “medals for valor” equal to nearly a medal-and-a-half for each hour he spent in combat For 23 combat missions (an estimated 20 hours over enemy territory), the U.S. Navy awarded McCain III, the son of famous admirals, a Silver Star, a Legion of Merit Mcain_bu2 for Valor, a Distinguished Flying Cross, three Bronze Stars, two Commendation medals plus two Purple Hearts and a dozen service medals.

McCain had roughly 20 hours in combat,” explains Bill Bell, a veteran of Vietnam and former chief of the U.S. Office for POW/MIA Affairs -- the first official U.S. representative in Vietnam since the 1973 fall of Saigon. “Since McCain got 28 medals,” Bell continued, “that equals to about a medal-and-a-half for each hour he spent in combat.  There were infantry guys -- grunts on the ground -- who had more than 7,000 hours in combat and I can tell you that there were times and situations where I’m sure a prison cell would have looked pretty good to them by comparison. The question really is how many guys got that number of medals for not being shot down.”

For years, McCain has been an unchecked master at manipulating an overly friendly and biased news media. The former POW turned Congressman, turned U.S. Senator, has managed to gloss over his failures as a pilot and his collaborations with the enemy to become America’s POW-hero presidential candidate."

Another Bellicose Wack-a-Doodle?

"Legendary Temper Could Undermine McCain" Friday, May 25, 2007  By RALPH VARTABEDIAN and MICHAEL FINNEGAN

SPECIAL FROM THE LOS ANGELES TIMES

0_12_300_227_mccain_lieberman" An angry, profane exchange between Sen. John McCain, R-Ariz., and another Republican senator last week prompted a new round of questions about whether McCain's legendary temper is becoming a liability in his campaign for the presidency. In a private meeting just off the Senate floor, McCain got into a shouting match with Sen. John Cornyn, R-Texas, over details of a compromise on immigration legislation. Cornyn accused McCain of being too busy with his campaign to take part in the negotiations, prompting McCain to utter, "F... you." McCain spokesman Danny Diaz acknowledged that a "spirited exchange" took place but said media reports over the weekend had exaggerated its intensity. McCain's political handlers have plenty of experience in explaining McCain's salty language and strident attacks. His temper has ranged far and wide, directed at other members of the Senate, congressional staffers, heads of government agencies, corporate chieftains, high-ranking military officers and teenage campaign volunteers.

McCain has shouted at people for any number of reasons, including errors of judgment, disagreements on public policy and even how to set up a podium. "In McCain's world, there aren't legitimate differences of opinions," said David Keene, chairman of the American Conservative Union, which differs with McCain on some conservative issues. "There is his way and there is evil. That is how he approaches issues. That is one of the reasons for conservative nervousness about him." His temper has been an issue for years. In the 2000 presidential primaries, McCain was dubbed "Senator Hothead" by Newsweek.

That year, he won endorsement from only a few Senate colleagues, not so much because of his conservative credentials but because of his frequent attacks and volatile personality. "McCain notes," which offer apologies after heated words, are held by many members of Congress. McCain has written about what he describes as his impatience in three books. "Although I try to refrain from being intentionally discourteous, I am demonstrative in showing my displeasure. I am often impatient and can speak and act abruptly," he wrote in "Why Courage Matters" in 2004. In a 1999 interview with the Los Angeles Times, McCain admitted, "I do everything I can to keep my anger under control. I wake up daily and tell myself, 'You must do everything possible to stay cool, calm and collected today.' "

One bureaucrat who felt McCain's wrath was former NASA administrator Daniel Goldin, who was called in by McCain in 1999, not long after a $125 million probe crashed on Mars because of confusion over the use of metric units. McCain's Senate Commerce Committee had oversight over NASA. "McCain went ballistic the moment Goldin walked into McCain's office," said a participant in the meeting. "He was shouting and using profanity, saying he was sick of NASA's screw-ups. It went on for a few minutes and then he kicked Goldin out of the office." Goldin started walking down the hallway but was summoned back to the senator's office by a McCain aide. "When he came back in, McCain started yelling at Goldin all over again. And then McCain kicked Goldin out a second time, before he ever said a word," the source said.

Julian Zelizer, a history and politics professor at Boston University, said the spectacle of a senator getting into "yelling matches with his colleague" undermines his leadership image. "It is an issue he needs to be cautious with," Zelizer said. Until the latest flap, McCain had managed lately to quell the image that he is easily angered. His campaign leadership took sharp exception to the entire matter, characterizing it as political theater. "If something is written every time members of Congress and leading politicians, behind closed doors, try to get the other's attention, and tempers flare, you'd run out of ink," said John Weaver, McCain's chief campaign strategist. Nonetheless, the issue was used effectively in the 2000 primaries by opponents who planted rumors that he was unstable because of his years as a prisoner of war in North Vietnam. Although some ex-POWs did have psychological problems, McCain came through the experience in good psychological shape, said Navy doctors.

As for his temper, "John McCain is John McCain," said Dr. Bob Hain, director of the Navy's Robert E. Mitchell Center for Prisoner of War Studies. Meanwhile, Democrats said McCain was in deep trouble on the matter. "Apparently, John McCain's do-anything-to-win campaign strategy doesn't include anger management classes," said Damien LaVera, Democratic National Committee spokesman. "We have had eight years of cowboy diplomacy and McCain is even more of a cowboy than the current president," said Roger Salazar, a Democratic political consultant who worked for John Edwards in 2004. "The public wants somebody who is strong but can sit across from allies and adversaries without lunging at them."

(c) SubmergingMarkets, 2008

February 12, 2008 at 03:45 PM | Permalink | Comments (0) | TrackBack

Friday, December 15, 2006

Blood Diamonds
Part 1: The Empire Strikes Back!
by James S. Henry

"...(O)ne of the great dramas of Africa: extremely rich areas are reduced to theaters of misery...."

-- Rafael Marques, Angolan journalist (July 2006)

"For each $9 of rough diamonds sold abroad, our customers, after cutting them, collect something like $56..." 

-- Sandra Vasconcelos, Endiama (2005)

"We found the Kalahari clean. For years and years the Bushman have lived off the land....thousands of years...We did not buy the Kalahari. God gave it to us. He did not loan it to us. He gave it to us. Forever. I do not speak in anger, because I am not angry. But I want the freedom that we once had."

-- Bushman, Last Voice of an Ancient Tongue, Ulwazi Radio, 1997 

 


Wdclogo_2 The global diamond industry, led by giants like De Beers, RTZBHP10m_1 Bililton, and Alrosa  Co Ltd., Russia's state-owned diamond company,  a handful of aggressive independents like Israel's Lev LevievBeny Steinmetz's BSG Group, and Daniel Gertier's DGI, a hundred other key "diamantaires" in New York,  Ramat-Gan, Antwerp,  Dubai, Mumbai, and Hong Kong,  and leading "diamond industry banks" like ABN-AMRO, is not exactly renowned for its abiding concern about the welfare of the millions of diamond miners, cutters,  polishers, and their families who live in developing countries.

But the industry -- whose top five corporate members still control more than 80 percent of the 160 million carets that are produced and sold each year into the $70 billlion  world-wide retail diamond jewelry market -- certainly does have an undeniable long-standing concern for its own product's image.

PERENNIAL FEARS

Indeed, for decades, observers of the diamond industry have warned that it was teetering on the brink of a price collapse, because the industry's prosperity has been based on a combination of artificial demand and equally-artificial -- but often more unstable -- control over supply.

Most of the doomsayers have always predicted that the inevitable downfall, when itGlitter_cover came, would arrive from the supply side, in the form of some major new diamond find that produced a flood of raw diamonds onto the global market.

The precise culprits, in turn, were expected to be artificial diamonds (in the 1960s and 1970s), "an avalanche of Australian diamonds" (in the 1980s,) and Russian diamonds (in the 1990s.)

This supply-side pessimism has lately been muted, given the failure of the earlier predictions and the fact that raw diamond prices -- though not, buyers beware,  retail diamond resale prices!! --  have recently increased at a hefty 10-12 percent per year.  There is also some evidence that really big "kimberlite mines" are becoming harder and harder to find.

However, there are still an awful lot of raw diamonds out there waiting to found, and one does still hear warnings about the long-overpredicted Malthusian glut, now from new sources like deep mines in Angola, Namibia's offshore fields, Gabon, Zambia, and the Canadian Northwest.

THE REAL THREAT?

Meanwhile, the other key threat to the industry's artificial price structure -- where_787698_diamonds300 retail prices are at least 7 to 10 times the cost of raw diamonds -- comes from the demand side. This is the concern that diamonds may lose the patina of glamour, rarity and respectability that the industry has carefully cultivated since the 1940s.

It is therefore not surprising that the industry has been deeply disturbed by the December 8, 2006, release of Blood Diamond, a block-buster Hollywood film that stars Leonard DiCaprio, Jennifer Connelly, and Djinmon Hounsou.

0521686369 While extraordinarily violent and a bit too long, the film is entertaining, mildly informative, and far from "foolish" -- the sniff that it received from one snide NYT reviewer -- who clearly knew nothing about the subject matter, other than, perhaps, the fact that the Times' own Fortunoff- and Tiffany-laden ad department didn't care for  the film. 

Indeed,  this film does provide the most critical big-screen view to date of the diamond industry's sordid global track record, not only in Africa, but also in Brazil, India, Russia, and, indeed, Canada and Australia, where diamonds have often been used to finance civil wars, corruption, and environmental degradation, and  indigenous peoples often been pushed aside to make room for the industry's priorities.

Surely the film is a small offset to decades of the diamond cartel's shameless exploitation of Hollywood films, leading ladies like Marilyn Monroe, Elisabeth Taylor, and Lauren Bacall, and scores of supermodels, rock stars, and impresarios.

INDUSTRY WHITE WASH
 

Chap1adj240Dismayed at the potential negative impact of the film ever since the industry first learned about Blood Diamond in late 2005, it is reportedly spending at least an extra $15 million on a  PR campaign that responds to the film  -- in addition to the $200 million per year that the World Diamond Council already spends on regular marketing.

For example, if you Google "blood diamonds," for example, you'll see that the industry has purchased top billing for its own version of the "facts" regarding this film. Always eager for a new marketing angle, some diamond merchants have also seized the opportunity to pitch their own product lines as "conflict diamond - free."

DEF JAM'S  BLACK WASH

This shameless PR campaign has also included a "black wash" effort by the multimillionaire hip hop impresario Russell Simmons, whoRussell_simmons_100x100 launched his own diamond jewelry line by way of the Simmons Jewelry Co. in 2004,  in partnershp with long-time New York diamond dealer M. Fabrikant & Sons.

Simmonslogo Simmons, who admits to "making a lot of money by selling diamonds," rushed back to New York on December 6 from a whirlwind nine-day private jet tour of diamond mines in South Africa and Botswana -- but, admittedly,  not in conflict-ridden Sierre Leone, Angola, the Congo, the Ivory Coast or Chad.

Simmons was originally scheduled to travel with one of his latest flames, the  27-year old Czech supermodel and Fortunoff promoter, Petra Nemcova. But Petra reportedly preferred to stay home and accept a huge diamond engagement ring of her own from British singer/soldier James Blunt, whose 2005 pop hit "You're Beautiful" was recently nominated the "fourth most annoying thing in Britain," next to cold-callers, queue-jumpers, and caravans.

The timing of Simmons' trip, which he filmed for UUtube, just happened to coincide with the December 8 release of the Warner Brothers feature.

Farrakha Upon his return, Simmons held a press conference, accompanied by his estranged wife Kimora Lee Simmons and Dr. Benjamin  F. Chavis Mohammed, a former civil rights activitist and fellow investor in the jewelry company who is perhaps best remembered for being fired as NAACP Director in 1994  after settling a costly sexual harassment suit, and for joining the Rev. Louis Farrakhan's Nation of islam. Simmons' astounding conclusion from his wonder-tour: "Bling isn't so bad."

Whatever the credibility of Simmons and his fellow instant experts, it was  evidently not enough to save M. Fabricant & Sons,  which filed for Chapter 11 in November.

THE GODS MUST (STILL) BE CRAZY

Simmons managed to tour a few major diamond mines on his African safari, but apparently heKalaharibush lacked time to examine the contentious land dispute between the Kalahari  San Bushmen, the members of one of Africa's oldest indigenous groups,  and the Botswana Government -- with the diamond industry's influence lurking right offstage.

In the 1990s, after diamond deposits were reportedly discovered on the Bushmen's traditional lands, the Botwana Government -- which owns 15 percent of De Beers, is a 50-50 partner with De Beers in the Debswana diamond venture, the largest diamond producer in Africa, and derives half its revenue from diamond mining -- has pressured the Bushmen to leave their tribal lands.

The methods used were not subtle. To force the Bushmen into resettlement camps outside the Reserve, the Botswana Government closed schools and clinics, cut off water supplies, and subjected members of the group to threats, beatings, and other forms of intimidation for hunting on their own land -- all of it ordained by F.G. Mogae, Botswana's President,  who declared in February 2005 that he 'could not allow the Bushmen to return to the Kalahari." Those who have been resettled have been living in destitution, without jobs and little to do except drink. (See a recent BBC video on the subject.) 

WeareveryhappyThankfully, on December 13, 2006, Botswana's High Court ruled that in 2002, more than 1000 Bushmen had been illegally evicted by the Botswana Government from the Central Kalahari Game Reserve, where they'd lived for 30,000 years.

The Botswana Attorney General has already attempted to attached strict conditions to the ruling, so this struggle is far from over. But at least the first prolonged legal battle has been won -- thanks to the determination of the Bushmen, public-spirited lawyers like Gordon Bennett, their legal counsel, courageous crusaders like Professor Kenneth Good, and  NGOs like Survival International, which has supported the legal battle.

In the wake of this decision, as usual,  the global diamond industry, led by De Beers, has denied that any responsibility whatsoever for the displacement of the Bushmen.

Images_6However, the fact is that De Beers and other companies has been prospecting actively in the Kalahari Reserve, especially around the Bushman community of Gope (see this video),  where De Beers has falsely claimed that no Bushmen were living when it started mining. It has actively opposed recognizing the rights of indigeneous peoples in Africa. In 2002, at the time of the eviction, Debswana's Managing Director -- appointed by De Beers -- commented that "The government was justified in removing the Basarwa (Bushmen)….’.

De Beers' behavior in Botswana has so outraged activists that they have joinedBoycottdebeerslogo together with prominent actors like Julie Christie and several Nemcova-like supermodels who used to appear in De Beers ads, in an appeal for people to boycott the now-UK-based giant -- which has lately been trying to move downstream into retail diamonds.

However, De Beers is far from alone in this effort.  Indeed, as has often been the case with  "conflict diamonds," less well-known foreign companies have been permitted to do much of the nastier pioneering. 

In Botswana's case, these have included Vancouver-based Motapa Diamonds and Isle of Jersey-based Petra Diamonds Ltd. both of which have have obtained licenses to explore and develop milliions of acres, including CKGR lands. Petra is not unfamiliar with "conflict diamonds;" it is perhaps best known for a failed 2000 attempt to invest in a $1 billion diamond project in the war-torn DR Congo, in which Zimbabwe's corrupt dicator, Robert Mugabe, reportedly held a 40 percent interest.

In the case of Botswana, in September 2005 Petra acquired the country's largest single prospecting license -- covering 30,000 square miles, nearly the size of Austria -- by purchasing Kalahari Diamonds Ltd, a company that was 20 percent owned by BHP Billiton and 10 percent by the World Bank/IFC -- which apparently saw the sponsorship of CKGR mining as somehow consistent with its own financial imperatives, if not its developmental mission. (!!!). Petra has also licensed proprietary explorations technology from BHP Billiton, and offered it development rights, a front-runner for the Australian giant.

Blood_1 Meanwhile, at least 29 of the 239 Bushmen who filed the lawsuit have perished while living in settlement camps, waiting for the case to be decided, and many others are impoverished. 

Perhaps the diamond industry's $15 million might be better spent simply helping these Bushmen return to their homes -- and also settling up with  the Nama people in South Africa, the Intuit and Kree peoples in Canada, and the aborigines in Australia.

FAR CRY

Meanwhile, as we'll examine in Part II, despite the "Kimberly Process" that was adopted by many -- but not all -- key diamond producers in 2003, the fact is that diamonds continue to pour out of conflict zones like the Congo, Ghana, and the Ivory Coast, providing the revenues that finance continuing bloodshed.

The industry's vaunted estimate that they account for just "1 percent" of total production is based on thin air -- there are so many loopholes in the current transnational supply chain that there is just no way of knowing. Of course, given the scale of the global industry, and the poverty of the countries involved, even a tiny percent of the global market can make a huge difference on the ground.

Furthermore, in cases like Angola, the Kimberly Process has provided an excuse for corrupt governments to team up with private security firms and diamond traders to crack down on independent alluvial miners.

Finally, the diamond industry still has much work to do on other fronts --  pollution, deforestation, and, most important, the task of creating a fairer division of the spoils, in an industry where the overwhelming share of value-added is still captured by just a handful of First World countries. 

The objective here is not to kill the golden goose. In principal, the diamond industry should be able to reduce world inequality and poverty, since almost all retail buyers are relatively-affluent people in rich countries, while more than 80 percent of all retail diamonds come from poor countries.

But beyond eliminating traffic in "blood diamonds," however,  we should also demand that this industry starts to redress its even more fundamental misbehaviors.

                                                           ***

(c) SubmergingMarkets,2006


December 15, 2006 at 12:06 PM | Permalink | Comments (0) | TrackBack

Thursday, November 30, 2006

ASSASSINATION POLITICS
Learning the Lessons from Decades of "Conspiracies"
James S. Henry

Gemayelglass_416body_afp_1 Conspiracy buffs of the world, rejoice!   High-stakes political assassinations and the_42343976_litvinenko_pa203b  inscrutable tales of intrigue that inevitably accompany them are back in the headlines!

In the last few months we've had  new evidence surfacing about old cases like RFK and JFK that have been unresolved for decades.

We also have many exciting new cases emerging from places like London, Beirut, Moscow, and Gaza -- cases that promise to be unresolved for decades to come. 

It cetainly won't  be possible to resolve all these cases here, though a few winks and Jfkbobby_1 nods toward our favorite theories will be hard to resist.

However, there are some very important implications to be drawn from examining  these political assassination cases side-by-side  -- especially for the bloodless abstractions put forth by the tiny, vocal group of unabashed neoimperialists at the Council on Foreign Relations, the Harvard Law Schoolthe National Review, and the American Enterprise Institute who have  been trying to rehabilitate assassination as an acceptable tool of US foreign policy.      

Andrei_kozlovUPSURGE

In recent weeks we've been treated to a flurry of assassination news, including the dramatic polonium -210Anna_politkov_1 poisoning of former KGB agent and Putin critic Alexander Litvinenko in London;  the gangland-style slayings of investigative journalist Anna Politkovskaya and Andrei Kozlov, Deputy Governor of the Russian Central Bank, in Moscow; the fatal ambush of the Lebanese Christian Falangist leader Pierre Gemayel in Beirut; and UN approval for an international tribunal to pursue another Lebanese case, the February 2005 slaying of Prime Minister Rafik Hariri.

_42342514_rafik_ap203bodyWhile players like the Russian mafia and other "private enemies" cannot be completely ruled out in these cases, it is suspected that most of them were "political assassinations," in the sense that the perpetrators were sponsored by hostile states or key factions within them, which were motivated by the  desire to eliminate politically-influentlal enemies -- often across international borders.

In principle such political assassinations are to be distinguished from purely-terrorist attacks, as well as from attempts to eliminate "military" leaders  -- for example, the_41844670_newspaper_b203_ap1 June 2006 US Predator attack on Abu Musab Al-Zarqawi,  the July 2006 explosion that killed the Chechnyan rebel Shamil Basayev, and Israel's innumerable targeted assassinations in the West Bank and Gaza.

BasayevIn practice these distinctions often break down, given the fact that assassinations also terrorize, and that leaders like Basayev, Sheik Yassin, and  Al-Zarqawi have also played important political roles in insurgent organizations.

But part of the price of being an insurgent from a state-less organization, rather than a conventional politician, journalist,  agent of the state, or crusading bishop (Romero) is that one's enemies find it much more legally and socially acceptable, as well as more useful, to kill quite openly, and to take credit for the achievement.

This kind of official credit-taking rarely occurs for the type of cases cited earlier. Even if the targets happen to be corrupt politicians or blood-stained former KGB agents, they are deemed to be more "respectable" than the typical insurgent; indeed, conspiring to eliminate them is usually against the law. So responsibility must be hidden -- in many cases, for decades.

CASE REOPENED?

Images1_4This brings us to the other recent events that have brought this subject back to the surface. These include the 43rd anniversary of the (by now faintly-observed) assassination of JFK on November 22, 1963 in Dallas, and the recent release of "Bobby," a feature film about events at the Ambassador Hotel in Los Angeles on RFK's last day, June 5, 1968.

They also include a striking news report that aired on BBC 2 on November 20,Images_5 highlighting the new findings of filmmaker Shane O'Sullivan about the RFK assassination. According to O'Sullivan, a careful reexamination of photos taken of the crowd that fateful night at the Ambassador has disclosed the presence, in proximity,  of at least three long-time CIA covert operatives who had already become notorious among JFK "assassination buffs" (we wear that label proudly)  for other reasons. The men in question were not  random associates -- they had all held senior positions in 1962-64 at JM/WAVE, the huge Miami CIA station that was heavily involved in anti-Castro plots and the recruitment of allies among Cuban exiles, US veterans, and the Mafia.

Ciamorales1According to O'Sullivan, these were Gordon Campbell, the former Deputy Director of  JM/WAVE; George Joannides, the former Director of Psychology Warfare at JM/WAVE;  and most interesting of all, David Sanchez Morales, a senior assassinations and sabotage expert who also worked for the CIA in Venezuela, Uruguay, Laos, and Vietnam, and also reportedly developed a close relationship with Chicago mob boss John Rosseli. Roselli's body ended up in an oil drum off the coast of Miami, a week before he was supposed to testify before the House Select Committee on Assassination that was reinvestigating the JFK case.  

   

November 30, 2006 at 03:58 AM | Permalink | Comments (0) | TrackBack

Thursday, August 17, 2006

"SO MUCH FOR THE WALL...."
Israel's Strategic Blunders, Round Two
James S. Henry

Almost everyone except the bovine US President -- who also believes that US-backed forces are winning in Iraq, Afghanistan, and the "GWOT," despite mounting evidence to the contrary -- now acknowledges that Israel has suffered an important strategic setback at the hands of Hezbollah.

Indeed, the "soul-searchers" reportedly include a majority of Israelis, many members of the IDF, leading US and Israeli security analysts,  and Prime Minister Ehud Olmert himself. As one leading Israeli journalist put it today, "This is not merely a military defeat. This is a strategic failure whose far-reaching consequences are still not clear." 

Lessons (Re-) Learned?

Aaaa17

 In hindsight, both Israel and the US should now (re)-learn some very costly lessons about the risks of taking on a highly-motivated, well-trained and adequately-armed guerilla army on its own turf. They also have now an opportunity to remember some important lessons about the limitations of purely-military solutions to such conflicts.    

 As in the case of  the US strategic bombing campaign in Vietnam, Nato's air war in Kosovo (1999), and, indeed, the Allied air war against the Nazis during World War II, Israel's month-long air war against Hezbollah has largely failed to accomplish its strategic objectives. In particular, Hezbollah's ability launch dozens of missiles into northern Israel went utterly unscathed, with the largest single number of missles launched on August 12, the day before the ceasefire.

 Given the elaborate ground defenses, arsenal, and trained force that Hezbollah was able to pre-position in South Lebanon, its ground forces also avoided the knock-out blow that Israel and Washington had hoped for.060811_isreal_tanks_300

 By far the most effective "weapons" on the ground were not Iranian-supplied long-range missiles, drones, cruise missiles, or even Katushyas, but a combination of disciplined ccombat training and tactics,  heavy investments in combat engineering, remote sensing, and other defensive equipment, and sophisticated anti-tank missiles, many of which appear to have been supplied by Russia, by way of Iran and Syria.

On the other hand, proponents of anti-missile defense systems, "smart bombs," 60-ton Merkava tanks,  border walls/electronic fences, and "infowar" clearly have some work to do. None of these systems performed very well for Israel during this conflict.   

 The widespread bombing campaign exacted a horrific price from Lebanon's civilian population, uniting most political factions within Lebanon against Israel rather than against Hezbollah, at least temporarily.

 Only part of this campaign's horrific civilian toll in Lebanon can be explained by Hezbollah's propensity to "swim" in the civilian sea -- part was simply due to targeting mistakes on made by the Israeli Air Force and its intelligence sources, and part was due to deliberate choices made to go after "dual use" targets,  including oil refineries, bridges, power plants, and transportation vehicles. News_2

 The Summer War has also greatly boosted political support for Hezbollah on the "Arab street" throughout the Middle East, converting initial criticisms by the Saudis, Egypt, Jordan,  Kuwait, and other conservative regimes into widespread expressions of support. We suspect that much of this official support is insincere, but it probably reflects a genuine fear that these regimes have of their own people. 

 Syria, which had been under strong political pressure to continue its detachment from Lebanon, has been "reaccredited" by Israel's excesses during the conflict -- able to assume the self-righteous role of Lebanon's protector against foreign aggression. On the other hand, the Baathist regime may also now be in a stronger negotiating position with respect to the West.

_39800141_nasrallah300ap_1  Iran's hardcore anti-reformers have so far only been strengthened by Hezbollah's performance to date in this conflict, and by Israel's costly tactics. Nor were they discouraged from pursuing their nuclear development program. Their only real challenge now will be to replenish Hezbollah's sorely-depleted missile arsenal, and to find ways around the "ceasefire's" prohibition on Hezbollah repositioning.
Rpg29

 Most important, Hezbollah's ability to define victory as "not losing" against one of the world's most powerful armies has certainly not encouraged other radical groups around the planet to lay down their arms and pursue peaceful alternatives.

 For every Hezbollah fighter that was killed by the Israelis in the last month, the heavy bombing campaign probably generated several new recruits -- not only in Lebanon, but also in Afghanistan, Iraq, Kashmir, and the West Bank.Abdullah_1

  • In short, as a result of this strategic setback, Condi Rice's Panglossian "birth pangs of democracy" are likely to prove more prolonged and painful than ever.   


WAS THERE ANY ALTERNATIVE?

 At a tactical level, clearly Israel and the US both need to do much work to do regarding the failures of their intelligence operations with respect to Hezbollah's arsenal and military preparations. We can add this to the lengthy list of their  other intelligence failures in the last decade alone.

 The preference for high-altitude offensive bombing,  naval shelling, and open-field tank/ heavy vehicle warfare over hard-slog ground offensives also needs to be reexamined. To the extent that this reflects a preference for arms-length "hi-tech warfare," and a reluctance to sacrifice infantry for the sake of defeating dedicated militants like Hezbollah, this may indeed rise to the level of the same "morale/ will to die"  handicap that has crippled other many colonial armies,  in places like Vietnam, Algeria, China, and (long ago) the US itself.      
_40384_victory14806
 At a strategic level, the notion that the "enemy" simply consists of a finite stock of "fanatical terrorists," motivated primarily by "Islamo-fascist" dogma, or -- as Benjamin Netanyahu put it last week -- "12th century religious doctrines," is simple-minded and unhelpful. Among other things, they were clearly very professional, highly-trained soldiers. Unless military planners come to appreciate the political implications of what they do, and the real nature of their enemies, they may lose the war both on and off the battlefield.

 Another key point here is that the "Islamofascist" categorization, and the tendency to lump all "Islamic radicals" and "terrorists" together, has blinded both the US and Israel crucial schisms -- for example, the Alawite-Sunni rivalries that have been so important in Syria, Shiite-Sunni rivalries in Iraq, Bahrain, and Lebanon, and secular - religious rivalries in Palestinine.  

 True, it is now very late in the day, and the long-term failure of Israel and its enemies in the region to make any progress at the bargaining table may indeed mean that this overall story is headed for a terrible climax._41429427_soldier_getty_203body_1

From this angle,
 however, perhaps the one good thing about this strategic disaster is that it may remind Israel and the US that, whatever the final outcome of any attempt to solve the problems of the Middle East by military means,  it will not be cheap, easy, or devoid of surprises.

  • (c) JSH, SubmergingMarkets, 2006     

 
   
 

 

 

         

 


August 17, 2006 at 02:54 PM | Permalink | Comments (0) | TrackBack

Tuesday, July 04, 2006

DEFENDING THE FIRST AMENDMENT ON LONG ISLAND
Federal Judge Orders Southampton Village to Allow Free Speech On July 4th!!
James S. Henry

(Note: The following is a brief account of this year's conflict between the First Amendment and the Village of Southampton, New York, by Tony Ernst, a reporter for WPKN/ WKPM, 89.5 in Bridgeport, Connecticut.)

=========================================================

Images_4In Southampton Village, Long Island, a dispute over whether advocacy groups for the Bill  Rights and against the Iraq war can march in the July 4 Independence Day parade was resolved Monday morning by a Federal Judge.

The First Amendment rights of the groups were affirmed by Judge Joanna Seybert of the District Court in Islip.

Judge Seybert issued an order directing that the plaintiffs will be able to  march and freely engage in political speech at the July 4 parade in Southampton Village, without interference from Village authorities. Thumb_opxfidisa4

Last month, members of the Peconic Quakers, the South Fork  Unitarian-Universalists,the East End Bill of Rights Defense Committee, and the East End Vets were told by organizers of the parade, the Village of Southampton's "Commission on Veterans Patriotic Events,"  that they could not march with signs of protest as they had done in previous years.

James S. Henry,  the attorney for the plaintiffs, remarked on the irony of having  to go to court to exercise his constitutional rights on July 4th.

A law suit filed by the plaintiffs is still pending.

Those wanting to join the marchers should meet at 9:30am on Tuesday July 4
at the parking lot of Our Lady of Poland Church on Maple Street south of the Southampton Railroad station.

***

(c) SubmergingMarkets, 2006

July 4, 2006 at 09:22 AM | Permalink | Comments (0) | TrackBack

Friday, March 03, 2006

"IRAQ'S MOMENTOUS ELECTION, ONE YEAR LATER"
Iraq War Supporters Are Running For Cover
James S. Henry

Image532d3700a1c2427ba5bfefe7f6f417c0_1For those who have not been paying attention in class, the so-called "Iraq War" has recently been setting new records for violence, brutality, and terror -- with at least 379 to 1300 iraqi fatalities in the last week alone, in the wake of the bombing of the 1,062-year old Al-Askariya shrine at Samarra.

Nor did the apprentice Iraqi Army -- with its 20,000-man force, trained by the US military at the phenomenal cost of $15 billion to date, or $750,000 per soldier -- prove to be much help in quelling the violence. This is not really surprising --  after all, this Army shares the same divided loyalties as the population at large.

While a few senior US military officers have issued  Westmoreland-like statements assuring us that "the crisis has passed," and that this is not -- I repeat --  not a "civil war," it is hard to know what else to call it.

Iraq_cupola_samarra200x150_2A few journalists have speculated that, ironically enough,  all the increased violence and polarization may undermine the Pentagon's "hopes" to reduce the number of US troops in Iraq to 100,000 by year end.

Those "hopes," however,  are vague. One suspects that they have always been mainly for public consumption,  including the morale of US troops. We only began to hear about them last fall when opposition to the war really soared in the US.

Images2_2The Pentagon's not-so-secret hope -- among senior planners, at least -- is different. This is to turn Iraq into a neutered or even pro-US -- better yet for cosmetic purposes,  "democratic" -- regime right in the heart of the Middle East, complete with permanent basing rightsimmunity for US personnel from war crimes prosecution by the International Criminal Court, and, naturally enough, the occasional juicy construction, security, arms, and oil contract for friendly US and UK enterprises  -- at least so long as they are not owned by Dubai. 

ALL AGAINST ALL?

Ph2005071302301It is this vision that is most threatened by the recent surge in Iraqi violence.  Clearly this is no longer just a "foreign terrorist/ dead-ender-led insurgency" against the US and its apprentice army.

Nor has the US-guided constitutional process, and continuous interventions by our heady Ambassadors in Baghdad -- safe behind the walls of the world's largest US embassy -- succeeded in stabilizing the country.

Rather, Iraq is now engaged in a complex, multi-sided bloodbath, fought along age-old religious, ethnic, and clan lines by well-armed groups. While American battle deaths continue, almost all the casualties are now Iraqis felled by Iraqis.

Furthermore, this inter-Iraqi violence goes well beyond the suicide bombings that still garner most of the media's attention. It escalated sharply in the last year, long before the Samarra bombing, and even as the vaunted constitutional process was unfolding.

For example, as reported by the Guardian this week, the former director of the Baghdad Morgue recently fled the country, fearing for his life after reporting that more than 7000 Iraqis had been tortured and murdered by "death squads."

According to the former head of the UN's human rights office in Iraq, most of these victims had been tortured by the Badr Brigade, the military wing of SCIRI, the Supreme Council for the Islamic Revolution in Iraq.

As we reported over a year ago on this site, SCIRI is not just some fringe element. It is one of Iraq's two key Shiite-led political factions, and one of the principle victors in the December 2005 parliamentary elections. Unfortunately, our expectations have been fulfilled. Upon acquiring power, SCIRI has behaved exactly as anyone familiar with its history -- but apparently not the US military -- would have expected.

TOUGH LIBERALS?

Meanwhile, among America's befuddled liberal intelligentsia, hard-nosed realism has been sorely missing.  The December election and its January 2005 predecessor were events that most neoliberal observers --  for example,  the American Prospect  -- could not praise highly enough:

Iraqis have concluded one of the most successful constitutional processes in history. Rarely, if ever, before has an important country moved from tyranny to pluralism so quickly, with so little bloodshed, and with such a quality and degree of popular participation.

This assessment was spectacularly wrong. Iraq's constitutional process has not led to "pluralism," much less staunched the bloodshed. 

Rather -- no doubt with ample assistance from Iranian secret agents,  "foreign fighters," and other officious intermeddlers  --  the process has exacerbated social and religious  divisions --  divisions that Iraq was always noted for mitigating.

The continued US presence has also helped to legitimize the extremists, letting them fly the "national liberation" flag. We have reached the point where country's armed private militias are expanding faster than the US-trained police and army. 

ITomfriedman109qn this perilous Somalia-like situation, with US troops viewed as part of the problem, and shot at by all sides, it is harder and harder to justify incremental American casualties.

Indeed, about the only thing that all Iraqi factions  -- apart from some Kurds and the country's dwindling minority of remaining secularists -- agree on now is the desire for the US military to leave.  We should respect their wishes.

TOO FEW TROOPS?

By now, even arch-conservative pundits like William F. Buckley have agreed that the Iraq War was a costly mistake, and that a US withdrawal is called for. 

Meanwhile, however, some die-hard US neoliberal defenders of the war -- including tough-guys like the New York Times' Tom Friedman and Vanity Fair's Christopher Hitchens -- are still denying the existence of Iraq's deep-seated, historically-specific obstacles to democratization and unified self-rule, as well as the overwhelming opposition in Iraq to the US presence.

Images3_1Of course, admitting that local history actually matters might require one to study Middle Eastern history a little more closely, or perhaps even learn Arabic.

Images1_3It might also interfere with certain pet theories, like the "inevitable triumph of technology and free markets over local markets, nations, peoples, customs and practices," or the "inevitable struggle to the death between Islamic extremism and Western democracy."

From the standpoint of these and other warhawks, our only mistake in Iraq was really quite simple -- the Bush Administration sent in too few troops.

On closer inspection, this claim spins itself into the ground faster than a Halliburton drill bit. 

  • One key reason why more troops were not available was the fact that the war's supporters -- not only the Bush Administration, but also leading Democrats like Hillary Clinton, John Kerry, and Joe Lieberman,  and their pundit camp followers -- failed to persuade anyone other than Mad Tony Blair that a variety of cockamamie  theories about "democratizing the Middle East," the "connection" between Saddam and al-Qaeda,  and WMDs had any validity whatsoever.
  • Second, while a handful of Pentagon skeptics did support larger troop commitments before the invasion, they were in the minority -- and not just because of Rumsfeld's desire to fight the war with a high-tech army. Most of the war planners and pro-war enthusiasts alike were swept away by Friedman-like naievete about the enthusiasm of ordinary Iraqis for US-backed "liberation." They systematically underestimated the Iraqis' nationalism and their resentment of occupation -- especially by  armies of "Christian" nationals from the US and the UK. In retrospect, it is easy to say that even more troops were needed to maintain order and suppress resistance. But the larger US presence would have provoked even more resistance. 
  • As most US commanders agreed, the "more troops" answer is flawed from a technical perspective, given the nature of the insurgency. It would have provided more targets for suicide bombers, without delivering a remedy for their simple IED and sniper tactics.  While more troops might have provided better border interdiction, Iraq has a larger land mass than Vietnam, and twice as many neighbors. For the "more troops" claim to work with any certainty,  the number would have had to rival Vietnam proportions -- at least 500,000, probably for several years. The US military manpower system has already experienced great strains trying to sustain its 133,000 commitment to Iraq with a volunteer army -- to be effective, the "more troops" approach might well have required a military draft. 

Apart from New York's Congressman Rangle, who may have just been tweaking the establishment's chin for his black constituents, not even the most aggressive neoliberal warhawk has ever proposed that. 

Ever since WMDs failed to turn up and Saddam's connection to al-Qaeda turned out to be a canard, 
the neoliberal warhawks have been running for cover -- worried, quite rightly, that history will not take kindly to their dissembling, and their collaboration with the Bush Administration's neoimperialists.  

For much of the last three years this cover story was provided by the expectation of "nation building," "democratization," and the "training of the Iraqi Army" --  achievements that always seemed to be, conveniently enough, just around the corner.   

As the last week's events have dramatized, these are all more mirages in the desert. We've run out of time and excuses.  

   (c)SubmergingMarkets, 2006.

 

 

March 3, 2006 at 11:28 AM | Permalink | Comments (2) | TrackBack

Monday, November 21, 2005

SOVIET EXPECTATIONS Vs. REALITY IN THE AFGHAN WAR
Striking Parallels to the US Experience in Iraq
James S. Henry

Vivod11 Thanks to the current national debate over the Iraq War it is now clear to everyone except a few die-hard NCIs (NeoConservative Imperialists) that the real issue about the Iraq War is "constructive withdrawal:" not whether, but precisely when and how.

There are many examples in history of unilateral military withdrawals -- including Israel's withdrawal from South Lebanon in May 2000 and from Gaza August 2005,  the US withdrawal from Beirut in 1984, and the French withdrawal from Algeria in 1962.  

But as we debate the most constructive way for the US to withdraw from Iraq, one of the most interesting experiences for us to consider - ironicially enough -- is the painful Soviet experience in Afghanistan. 

Images The following excerpt is from a pre-9/11 report by the US-based National Security Archives on  the lessons learned by the Soviet Union from its  brutal, unilateral 1979-89 invasion and occupation of Afghanistan.

The Soviet Army intervened in Afghanistan in December 1979, about six months after US President Jimmy Carter signed off on a secret proposal by National Security advisor Zbigniew Brezinski to aid the opponents of the pro-Soviet Afghan regime -- hoping to entrap them into a Vietnam-like quagmire.

Images1_1 For better or worse, apparently this effort succeeded -- with a little help from Soviet cupidity. The Soviet military only left the country in December 1989, after an unsuccessful decade-long effort to defeat Afghan's determined insurgents -- many of whom were US-backed Islamic militants.

The resulting intervention ended up costing the Soviet Union 15,000 of its own troops, 50,000 causalties, and billions in hard currency, and contributed heavily to a domestic heroin and HIV/AIDs epidemic that continues to this day. An estimated 1 million Afghanis also perished because of the war, and more than 2 million refugees had to abandon their homes in Afghanistan for refuge in Pakistan and Iran. Images2

The war also provided a training ground for many of the Islamist rebels who eventually played a critical role in "terrorist" activities all over the world, including Chechnya, Kashmir, the Sudan, and al-Qaeda's disparate efforts against the US and Israel.

Many observers believe that the Afghan invasion was one of the greatest strategic blunders in Soviet history, and that it contributed heavily to weakening and destabilizing "the Russian bear." Indeed, former US officials like Brzezinski still like to take credit for this effort, viewing it as the final nudge that toppled the entire Soviet Empire. (They are rather less eager to take credit for the other long-term byproduct of the Afghan War, the rise of political-Islamic extremism.)

In any case, as the following excerpt makes clear, there are many resemblances -- some of them almost eerie --  to the recent US intervention in Iraq.

The old cliche still has force -- those who ignore history are condemned to repeat it.

THE  SOVIET AFGHAN EXPERIENCE - EXCERPTS

.Mujahidin2250 ....."Believing that there was no single country in the world which was not ripe for socialism, party ideologues like Mikhail Suslov and Boris Ponomarev saw Afghanistan as a "second Mongolia." Such conceptualization of the situation led to the attempts to impose alien social and economic practices on Afghan society, such as the forced land reform.

The Soviet decision makers did not anticipate the influential role of Islam in the Afghan society.  There were very few experts on Islam in the Soviet government and the academic institutions.  The highest leadership was poorly informed about the strength of religious beliefs among the masses of the Afghan population.

Political and military leaders were surprised to find that rather than being perceived as a progressive anti-imperialist force, the Afghanis as foreign invaders, and "infidels." Reports from Afghanistan show the growing awareness of the "Islamic factor" on the part of Soviet military and political personnel.

The Afghan communist PDPA never was a unified party; it was split along ethnic and tribal lines. The infighting between the "Khalq" and the "Parcham" factions made the tasks of controlling the situation much more challenging for Moscow notwithstanding the great number of Soviet advisors at every level of the party and state apparatus.

Erug407a The Soviet underestimation of ethnic tensions within Afghan society was one of the reasons of the unsuccessful policy of national reconciliation.

The war in Afghanistan had a major impact on domestic politics in the Soviet Union.  It was one of the key factors in the delegitimization of Communist Party rule. Civil society reacted to the intervention by marginalizing the Afghan veterans.  The army was demoralized as a result of being perceived as an invader. .

The prominent dissident and human rights activist, Academician Andrei Sakharov, publicly denounced the atrocities committed by the Soviet Army in Afghanistan.

The image of the Soviet Army fighting against Islam in Afghanistan also contributed to a rapid rise of Islamic fundamentalism in the Central Asian republics and possibly to the strengthening of the independence movement in Chechnya, both of which continue to pose major security threats to Russia today.

The Soviet Army also quickly realized the inadequacy of its preparation and planning for the mission in Afghanistan. The initial mission—to guard cities and installations—was soon expanded to combat, and kept growing over time.Oni4

The Soviet reservists, who comprised the majority of the troops initially sent in, were pulled into full-scale combat operations against the rebels, while the regular Afghan army was often unreliable because of the desertions and lack of discipline.

The Soviet troops had absolutely no anti-guerrilla training.  While the formal mission of the troops was to protect the civilians from the anti-government forces, in reality, Soviet soldiers often found themselves fighting against the civilians they intended to protect, which sometimes led to indiscriminate killing of local people.

Operations to pursue and capture rebel formations were often unsuccessful and had to be repeated several times in the same area because the rebels retreated to the mountains and returned to their home villages as soon as the Soviet forces returned to their garrisons.

3 Soviet traditional weaponry and military equipment, especially armored cars and tanks were extremely vulnerable on Afghani terrain.

The Soviet troops also suffered from the confusion about their goals—the initial official mission was to protect the PDPA regime; however, when the troops reached Kabul, their orders were to overthrow Amin and his regime.

Then the mission was changed once again, but the leadership was not willing to admit that the Soviet troops were essentially fighting the Afghan civil war for the PDPA. The notion of the "internationalist duty" that the Soviet Limited Contingent was fulfilling in Afghanistan was essentially ideological, based on the idea that Soviet troops were protecting the socialist revolution in Afghanistan whereas the experience on the ground immediately undermined such justifications.

The realization that there could be no military solution to the conflict in Afghanistan came to the Soviet military leadership very early on.  The issue of troop withdrawal and the search for a political solution was discussed as early as 1980, but no real steps in that direction were taken, and the Limited Contingent continued to fight in Afghanistan without a clearly defined objective.Vivod12

Early military reports emphasized the difficulty of fighting on the mountainous terrain, for which the Soviet Army had no training whatsoever. Parallels with the American War in Vietnam were obvious and frequently referred to by the Soviet military officers...."

<center><font color="red">(c) SubmergingMarkets, 2005</font></center>

November 21, 2005 at 04:37 PM | Permalink | Comments (0) | TrackBack

Saturday, November 05, 2005

BUSH HEADS SOUTH
Receives Rousing Welcome In Argentina...
Fox News Analysis

160_ap_bush_051104President Bush received an incredibly warm welcome at the 34-nation Summit of the Americas in Mar de la Plata, as thousands of ordinary people from all over the Continent turned out to hail his presence.
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The effervescent US President was clearly buoyed by polls that showed that he still commands the support of an incredible 80 percent of Republicans -- otherwise known as his "base."

True, "non-base" support is reportedly a little less certain. Overall, in this week's latest polls, 59 percent expressed "disapproval," while 42 percent expressed "strong" disapproval." A quarter of the US population surveyed reported "violent morning sickness...."

However, knowledgeable insiders have called this a "temporary setback" that will be easily corrected if and when Presidential advisor Karl Rove, recently distracted by the Pflame investigation, starts covering the bases again.

The President, speaking through an interpreter, voiced optimism that "Free trade and liberal investment policies, plus a few billion dollars on defense, corn subsidiies, and our brand new military base in Paraguay" would completely change the lifestyles of the estimated 100 million Latin Americans who remain below the $1 per day world poverty line.
0511_maradona_a

Said Bush, "These policies have only been tried for a decade or two. They need to be given a chance. Right here in Argentina, you've seen how well they've worked, right?"
160_vicente_051104
Bush's sentiments were echoed by Vincente Fox, Mexico's amazingly popular lame-duck President, and Paul Martin, the astonishing Canadian PM, whose own popularity ratings have recently been taken to record levels by the Gomery Report, which documented the disappearance of $250 million of government funds, mainly by way of Mr. Martin's own party.
160x_martin2_051104
Said Martin: "We are quite pleased to have become a wholly-owned subsidiary of US multinationals. We didn't think we'd like the sensation, but it has become an experience that we really look forward to every night. You will also learn to enjoy it. Now if only the US would pay us that $3.5 billion...."

Said Fox: "Yes, it is true, millions of Mexican small farmers have been wiped out by free trade. But this criticism is baseless. Just look at all the remittances they are sending back home from the US !"

Meanwhile, the US President had an especially warm greeting from Diego Maradona, the famous Argentine soccer star, now in recovery. Maradona used a colloquial Argentine expression to describe just how delighted he is to finally have this particular American President visit his country.
Images
Elsewhere, Cuba's Fidel Castro, who was not permitted to attend the summit, was reported to have decided to remove all restrictions on US trade and investment with Cuba, after having listened to President Bush's persuasive arguments.

Said the aging inveterate leftist leader, "I knew we were doing something wrong. Now I finally know what it was. We were way off base!"

After a prolonged negotiating session on Saturday, in which Summit delegates basically agreed to continue to debate the merits of free trade for a long time to come, Bush departed for a Sunday meeting in Brasiia with yet another embattled President, Luis Ignacio da Silva ("Lula.")

Brasilia is a pretty lonely, desolate, and distinctly un-Brazilian place on a Saturday night, because all the whores and politicians have flown back to Rio or Sao Paulo for the weekend, and one is just left with all these 1950s-vintage monuments to Brazil's cement industry. But perhaps President Bush will find a little solace taking a moonlit walk on the empty esplanades, wandering through the otherwise flat, lifeless landscape that Robert Campos once called "the revenge of a Communist architect against capitalist society."

(c)SubmergingMarkets, 2005

November 5, 2005 at 11:42 PM | Permalink | Comments (1) | TrackBack

Monday, June 13, 2005

"Earth to Ms. Clinton - There's A War On!"
...And Most Americans Want An Exit Plan!

Splashtop(Note to readers:  The US anti-war movement is picking up steam. This week, four US Congressman -- two Democrats and two Republicans -- introduced the first resolution demanding a definite time for a withdrawal, and the UK announced that it will begin transferring  its 9000 troops in Iraq to Afghanistan over the next 18 months, following in Italy's footsteps.  As discussed below, recent opinion polls shows that sixty percent of Americans want at least some troops withdrawn now. 


Meanwhile, diehard supporters of the War,   like
the New York Times' Thomas Friedman, are getting nervous and somewhat desperate. This week, in the face of the opinion polls and the UK withdraw,  Friedman proposed  doublling the number of US troops in Vietnam...oops, Iraq. Many of us still recall Friedman's candid April 2003 interview with the leading Israeli newspaper Ha'aretz:

"This  is not a war that the masses wanted. This is a war of an elite,  I could give you the names of 25 people, all of whom sit without a 5-block radius of my Washington, D.C. office, who, if you had exiled them to a desert island a year and a half ago, the Iraq War would not have happened." (T.Friedman, interview,  Ha'aretz, April 5, 2003).  

This time around we will listen to this special-interest driven "elite" no more.

Late last month we received a curious fund-raising letter from a New York-based organization called "the Friends of Hillary," disguised as an opinion poll. We're not registered Democrats or Republicans, and often receive and discard similar solicitations from both parties, marveling at their persistence. But this one struck us as especially odd and ineffectual,  even if it had given a jot about the recipient's actual opinion, which is doubtful.

It started off by asking us to "rank the following issues in order of their importance,"  and then gave the following closed-ended list:

"Economy/Jobs," "Environment," "Social Security/Medicare," "Education," "Homeland Security," "Health Care," "Tax Cuts," "Reproductive Rights," "Separation of Church and State."

Now of course all these are more or less important,  but they are at best topics,  not "issues."  One hopes that this confusion does not reflect some deeper unreadiness on the part of Hillary and her friends to articulate specific policy alternatives.

Most of them are also so-called "bread and butter issues," a Democratic mainstay.  This is as if Hilary & Co. have learned nothing from the last two elections:  millions of middle-class Americans have in fact  been willing to support candidates who are diametrically opposed to their own "bread and butter" interests,  on matters like tax cuts, health care, and Social Security -- so long as they perceive that these candidates take a principled stand on something they do care about. 

091604allaskThat's not what really bothered us about Hillary's pseudo-poll, however.   After all, Senator Clinton is a lifelong "policy wonk," who could probably wax eloquent for hours on any one of these policy arenas, unscripted....whoohhhhh! 

Rather, the really annoying, patronizing thing about Hillary's poll was the fact that one of the most important current issues of all, the fiasco in Iraq and what to do about it,  did not even reach the start gate.

That is especially puzzling,  because the latest US public opinion polls show not only that President Bush's popularity is on the ropes,  but also that American support for the Iraq War is falling like a rock -- virtually to European levels.

According to the latest Gallup Poll, for  example, almost six in ten Americans now say the  US should withdraw some or all of its troops;  58 percent say the war "wasn't worth it;" 31  percent want some troops withdrawn now; 28 percent want all troops withdrawn immediately; and only 36 percent support maintaining or increasing US forces in Iraq.

What's most interesting about this poll is that while opposition to the war has commanded a majority for some time, genuine support for it has stayed in the "upper 40s" range -- but now it is collapsing.  That indicates the even some Bush loyalists must be taking another look.

Furthermore, a closer look at the 42 percent who still believe that the war was somehow  "worth it" reveals that this poll was really a kind of intelligence test -- since over half of these folks still believe that the War had  something to do with September 11th (9/42)  protecting the US,  showing that the world "cannot mess with the US," or finding WMDs (!) 

Fewer than 20 out of every 100 Americans buy the frayed Administration line that our presence in Iraq is about "exporting democracy to the Middle  East" -- at least with respect to that justification, most Americans now recognize a used car salesman when they see one.

Pr050613i_3Most of these results echo a ABC/Washington Post poll last week, which found that 65 percent of Americans thought the US was "bogged down" in Iraq, while 73 percent thought that US casualty levels -- now more than 1703 dead and 12855 wounded and counting -- are "unacceptable;" 52 percent thought that the War has not contributed to US security

Two out of three Americans correctly preceive that President Bush does not have a clear plan for ending the war, while 45 percent fear that we are "heading for the same kind of involvement in Iraq as in Vietnam. " Just 41 percent approve of the way President Bush has been handling Iraq -- presumably the same crowd that still thinks the invasion was about 9/11.   

Several other recent opinion polls have also found very similar trends.

In the wake of all this mounting evidence for the War's unpopularity,  as well as rising US and Coalition casualty levels and all the other recent setbacks on the ground in Iraq, even some Republican Congressmen have called for  President Bush to set a firm timetable for the withdrawal of US troops.

IraqusgoneSo far, however,  no leading Democrats have followed suit. Indeed, the hapless Democratic Party, riven by special interests and virtually devoid of courageous, thoughtful leadership,  has so far not been able to profit one iota from President Bush's shrinking popularity. Its own popularity also tied an historic low in the latest ABC/Washington Post poll. 

Perhaps this should not surprise us. After all, almost all Congressional Democrats, including Hillary, took the "safe" road politically and naively followed President Bush into Iraq, voting for all his proposals on the War.

Most likely  they are now trying to take the safe road again, waiting for this  lame duck President to do the right thing and change course.  Of course that kind of midcourse correction has never been his style -- he is nothing if not "linear."      

Meanwhile, deserted by their mainstream political leaders, ordinary Americans have been  left to "vote with their feet" -- another striking resemblance to the Vietnam War era.

1 Despite offering record incentives, US Army recruiters have now missed their goals for four months in a row, and are accepting record levels of sub-high school graduate recruits to make up the difference.

If that particular trend continues,  the Iraq War could soon come to resemble Vietnam in even more unpleasant ways.

If this leadership void continues, and no top Democrat or Republican emerges to take a principled stand against the war,  we should be prepared  to take it to the streets one more time -- and show our support for the troops by demanding their return home from this senseless, costly, bloodthirsty, interminable conflict. 

(c) SubmergingMarkets.Com, 2005.

 

   

June 13, 2005 at 09:29 PM | Permalink | Comments (1) | TrackBack

Saturday, June 04, 2005

Confronting Venezuela
Jeremy Bigwood and James S. Henry

Download venezuela_article.pdf 

Chavez4fIn recent months there have been mounting tensions between the Bush Administration and Venezuela’s popularly-elected, if left-leaning, President, Hugo Chavez -- culminating in a series of heated confrontations over the past two weeks, and Condi Rice's interventionist rhetoric at the OAS summit in Miami this weekend. 

If this were the mid-20th century, Latin America watchers might fear that they were witnessing the early stages of yet another US-backed coup, like those that ousted other popularly-elected, if left-leaning, governments in Guatemala (1954, 1963), Argentina (1962, 1976), Brazil (1964), the Dominican Republic (1965), Bolivia (1971), Chile (1973), and indeed Venezuela itself (1948).

Today, 15 years into the “post-dictatorship” era, Latin America is still struggling to recover from  the disastrous long-term effects of these US-backed regime changes.

AngrycondiThese efforts may or may not have warded off socialist revolutions, but they undoubtedly produced a hit parade of corrupt, repressive dictatorships. They also persuaded a whole generation of progressive young Latin Americans that the only route to social justice was by way of violent revolution, and contributed mightily to the entire region’s excessive debts and economic regression -- and a surfeit of hostility  toward the US. 

Fortunately, those Cold War days are long gone – or are they?


 

The latest developments in the Bush-Chavez joropo came this week, with the release of a strongly-worded protest letter from PROVEA, an otherwise highly-regarded Venezuelan human rights organization that has often criticized President Hugo Chavez.

Usbrownfield_1Addressed to US Ambassador William Brownfield in Caracas, PROVEA’s letter expresses grave concern about a steady stream of increasingly menacing statements that have been emanating from senior members of the Bush Administration. PROVEA believes that, taken together, these statements are creating a climate of fear, and threatening Venezuela’s sovereignty and self-determination:

“We wish to express to you and your government our concern about the tone, the frequency and the possible implications of the declarations of high-level officials of the present U.S. administration regarding Venezuela.”

PROVEA’s letter singles out recent statements by US Secretary of State Condoleeza Rice, Roger Noriega, the Assistant Secretary of State for Western Hemisphere Affairs, and several right-wing members of Congress. It also takes note of a fiction-filled white paper on Venezuela by the Center for Security Policy, an obscure right-wing think tank that apparently just cannot get its fill of aggressive US foreign policy.

According to PROVEA, these aggressive statements have grossly misrepresented Venezuela’s situation by using terms like “dictatorship” to describe the Chavez government, and by implying that he is on the verge of establishing some kind ofCondoleezarice05 refuge for FARC rebels and al-Qaeda terrorists just across the Caribbean from us – worst of all, paid for by our own oil purchases.

PROVEA has also reminded US Ambassador Brownfield that, for what it is worth, the US and Venezuela have both signed the Articles of the Organization of American States (OAS) Charter, which is supposed to its member countries' rights of self-determination. Of course in this Boltonian Era, with an international treaty and a few bolivars you can buy a café Negro.

Nacional_noriegaThe comments by PROVEA (the Venezuelan Program for Education and Action in Human Rights) are interesting because this organization is no mere Chavez mouthpiece. It is a 17-year old NGO funded mainly by Protestant and Catholic churches, whose work has often been cited by international human rights monitoring organizations like Human Rights Watch and Amnesty International. Indeed, the US State Department has often relied on PROVEA’s assessments in its annual “Country Reports of Human Rights Practices,” and has described the organization as “a highly respected human rights NGO.”

PROVEA's comments also reflect a growing concern among independent observers that Washington and Caracas may be on the road to an even sharper confrontation. Several other recent events have also contributed to this perception.

WILL THE REAL TERRORIST HAVEN PLEASE STAND UP?

To begin with, there is the recent dispute over the fate of the 77-year old Cuban-Venezuelan terror suspect Luis Posada Carriles. In late May, he was arrested by the Department of Homeland Security in Miami. He’d sought refuge there after winning an early release from a Panamanian prison, where he had served 3 years for allegedly plotting to kill Cuba’s President Fidel Castro.

At first the Bush Adminstration claimed that it couldn’t find Posada Carriles, but after he turned up on a Miami TV station, a former FBI agent tracked him down and elided that excuse. Needless to say, the fact that a notorious, convicted international terrorist was able to enter the US at will and then disappear into hiding hasn’t done much for Homeland Security’s image. The fact that he also apparently  still had a US passport  in his own name was also something of a puzzle. Cuba2

As international terrorists go, Sr. Posada Carriles certainly is a poster boy. Venezuela has requested his extradition to try him again for his alleged role in the 1976 bombing of a Cuban airplane that killed 73 people, including several Venezuelan citizens. The Bush Administration is jumping through hoops trying to dodge this request, which appears to be perfectly normal under international law – it is, in fact, a right that the US itself exercises frequently. At last glance, an El Salvador judge had suddenly expressed interest in extradicting Posada Carriles for unspecified charges in that country, where he reportedly worked with the CIA during the contra wars and hid out in the 1990s.

Separately, Castro would also like to try Posada Carriles  for his alleged role in a Havana bombing that killed an Italian tourist, plus several others assination attempts.  Sr. Posada Carriles, who has a long history of involvement with both the CIA and anti-Castro Miami exiles, claims that he is innocent. So far the U.S. government has refused to hand him over, asserting that the Venezuelan extradition request is not detailed enough. Both the Castro and Chavez governments have organized massive street protests over this episode, and Venezuela has threatened to sever diplomatic ties.
Bushchavez
President Bush has resisted the temptation to invite Posada Carriles to the White House and award him the Medal of Freedom. But just last week, Bush did meet another indicted Venezuelan for 15 minutes in the White House -- María Corina Machado, an elitista opposition leader who is facing charges of “conspiracy” to overthrow Chavez. Her organization, Súmate, has received grants from the US Government to help organize the 2004 anti-Chavez recall referendum – which he won handily anyway. Sumate has also received donations from wealthy Venezuelans and Cuban-Americans who are opposed to Chavez. Ms. Corina Machado's head must be spinning with all the attention suddenly lavished upon her -- Condi Rice is also expected to meet with her in Miami. this week.

Since the Chavez Government has often been accused – to date, at least, without proof – of harboring international terrorists from groups like Spain’s ETA, Colombia’s FARC, and even some leading members of al-Qaeda, this is an especially interesting development. Interestingly, Spain, which also has a huge stake in fighting these groups,  maintains warm relations with Hugo. Machadobush1

From Chavez’ standpoint, if there are any terrorists who just happen to have been hiding out in Venezuela’s vast reaches, this would be a perfect time to do the right thing and make the trade -- by turning them over to  the International Criminal Court, for example.

COLOMBIA/PERU TENSIONS

As the guerilla war in neighboring Colombia has escalated, with US military aid to the Colombian government approaching $3 billion, there have also been several incidents that have convinced the US,  at least, that Chavez is aiding Colombia's left-wing guerillas. This issue was highlighted in December 2004, when Rodrigo Granda, a senior spokesman for the FARC, was seized while attending a conference in Caracas.  Two years earlier,  Caracas had also played host to former Peruvian spymaster  and arms dealer Vladimiro Montesinos -- though it is  still not clear  _931067_montesinos100_1precisely who was protecting him there. Rodrigo_granda

FREE TRADE ZONE

With left-leaning, democratically-elected governments now in place all over Latin America, and Hugo’s position at home more secure than ever, he has seized the opportunity to barnstorm across the continent to support increased Latin American integration, and – to Washington’s immense displeasure – to oppose one of the Bush Administration favorite neoliberal proposals, the “Free Trade Zone of the Americas.” Chavez alone is not responsible for stalling the treaty – Brazil’s Lula has also said that it is off the agenda for now. But Hugo’s vocal opposition has not earned him any reward miles in Washington.

OIL SQUEEZE

Venezuela_oilWith  oil prices at record levels, and the US relying on Venezuela for supplying more than 1.2 million barrels per day of oil, up to 15 percent of all US oil imports, Venezuela has been feeling its oats. The surge in oil revenues has permitted Chavez to increase domestic spending, shore up his political base, and “strut his stuff” all over the continent. The US still accounts for more than 60 percent of Venezuela’s oil exports. To reduce this dependency, Chavez has started to negotiate new long-term contracts with other hungry markets, especially China. This has also not been popular with the Bush Administration, whose own popularity has been hurt at least as much as Hugo’s has been helped by soaring energy prices.

OTHER IRRITANTS

Chavez_castroChavez’s close relationship with Cuba in general and Fidel in particular is another thumb-in-the-eye for US policymakers. Chavez has agreed to provide the island with oil at subsidized prices – partly in exchange for several thousand Cuban doctors. Meanwhile, he is also upgrading Venezuela’s ill-equipped military, ordering 100,000 AK-103s and 10 helicopters from Russia to replace his army’s 50-year old FAL rifles.

Meanwhile, Colombia, one of the few remaining US allies in the region, makes all the Galils that it wants under license from Israel, without any protests from Washington.

It is not as if Chavez has only been dealing with Russia and Cuba. Spain is also selling him fast boats for drug control, and Brazil is selling him Super Tucano airplanes for border patrol. The US DEA is privately delighted with these acquisitions, and with Hugo’s cooperation on the anti-drug front in general, but it is unlikely to come to his defense in public.

Rumsfeld_1At a news conference in Brazil last March, Donald Rumsfeld, the peripatetic US Secretary of Defense, commented that “I can’t imagine why Venezuela needs 100,000 AK-47s.’ Perhaps Rumsfeld should get a briefing on the difference between AK-103s and AK-47s. He should also read the PROVEA letter.

SUMMARY

The stark reality is that, despite its vaunted “superpower” status, the US really doesn’t have much leverage with Venezuela -- unless Chavez does something incredibly stupid, a possibility that we cannot entirely rule out if tensions continue to escalate. 

Apart from that possibility, it appears that Venezuela is the true “superpower” in this situation. With oil markets tight, the US economy slowing, and the Chinese market waiting in the wings, this is hardly the time to mess with a major oil supplier.

Chavez’ popularity has also increased sharply since last year’s referendum, and this is not just because of the surge in petrodollars. After fumbling the April 2002 coup and punting last year’s referendum, the hapless Venezuelan opposition has demonstrated conclusively that it is far better at schmoozing in Miami, Houston, and Washington than at organizing an effective grassroots political movement. It should return home, end its  financial ties to gringos and right-wing Cuban exiles, and work harder.

As for US military options,  so long as Chavez keeps his own Army happy,  observes international law, and also maintains popular support, there aren’t any. Cold War triumphaliists and national security experts who think otherwise are advised to take a crash course in Caribbean tanker routes, US refinery economics, and the capabilities of the latest generation of Russian anti-ship missiles.20000425_xnsof_navy_3m82

More fundamentally, the real reason that a self-educated populist blowhard like Chavez has managed to win at least four nationwide electoral contests since 1998 is neither because he is a ruthless thug or a brilliant demagogue.

Rather, it is because the avaricious, short-sighted Venezuelan elite that dominated the country’s economy, executive branch, legislature, judiciary, military, press, and church for four decades, with close support from the USG and Wall Street, left the country a debt-laden, corruption-ridden mess. (See The Blood Bankers for all the gory details.)

Every time the US government lectures Hugo, muscles him, or tries to artificially inseminate its friends and hirelings in the “Venezuelan opposition” into Venezuelan history, it merely reminds people of this unfortunate fact.

(C) SubmergingMarkets.Com, 2005

June 4, 2005 at 05:09 PM | Permalink | Comments (1) | TrackBack

Wednesday, May 18, 2005

"I AM NOT NOW, NOR HAVE I EVER BEEN, AN OIL TRADER!"
George Galloway Kicks Senate Butt

Coleman_before_after_1This week's developments in the so-called Iraq Oil-for-Food scandal  ("OFF") have turned out to be nothing less than a fiasco for the US Senate's Permanent Investigations Subcommittee and its feckless freshman Republican Chairman, Minnesota's Norm Coleman.

2410geob
In the first place, a newly-released minority staff report by Democrats on the Subcommittee shows that Bayoil USA, a Houston-based oil trading company headed by David B. Chalmers, Jr., now under indictment,  was by far the most important single conduit for the illegal surcharges pocketed by Saddam Hussein under the program. 

The report showed that more than half of Iraq's oil sales that generated surcharges for Saddam were made to US buyers during the period September 2000 to September 2002, most of them right under the nose of the Bush Administration and the US Treasury's rather lackadaisical Office of Foreign Assets Control.

Other US companies that have reportedly received subpoenas in the on-going surcharges investigation include ExxonMobil, ChevronTexaco, and Houston's El Paso Corp, as well as prominent Texas oilman Oscar S. Wyatt Jr., who was also deeply involved in supporting and profiting from oil-for-food. Wya_wyatt_136x155_1

Next,  British MP George Galloway, appearing voluntarily before the Subcommittee, deliverered a feisty denial of allegations that he had personally profited from the oil allocations, as well as a withering assault on the last twenty years of US policies toward Iraq.

Meeting little resistance from the badly-outgunned Senators, Galloway made the points that

  • He met with Saddam no more times than Donald Rumsfeld, who had met with Saddam  to sell arms and provide maps, while Galloway met him to seek peace and encourage arms inspections;

  • He had actually opposed Saddam's policies way back in 1990, while the first Bush Adminstration was still making loans and selling arms to Saddam; 
  • He had always opposed the oil-for-food program as a poor substitute for lifting sanctions, which unfairly punished all Iraqis for the sins of its dicator -- especially its children, up to 1 million of whom may have died because of increased infant mortality;
  • The Subcommittee's investigation was a "smokescreen" that distracted attention from far more serious issues -- such as the disappearance of more than $8.8 billion of Iraqi national funds during the first year after the US invasion. 

The combative Scot's  hard-hitting testimony makes compelling viewing.

Meanwhile, we recall that back in June 2003, J. Bryan Williams III -- ExxonMobil's former head of global crude procurements, and the US'  hand-picked UN overseer on the Iraq Sanctions Committee, in charge of making sure that Saddam did not obtain any illicit income from the oil-for-food program -- pled guilty to evading taxes on $7 million,  including a $2 million kickback to help Mobil win business in Kazakhstan's oil dictatorship.

So there is at least some good news here, Senators --  if you want to find big-time corruption in the international oil trade, you don't have to go looking for it in London, Moscow, or Paris.

Jspades_1These developments also help to put Senator Coleman's continual "head-hunting" of UN Secretary General Kofi Annan in perspective. While there's no evidence that Kofi profited personally from OFF,  his minions were probably not squeeky-clean.  But the enormous profits earned by Saddam's "fellow travelers" in Houston make them seem like pikers.   

Furthermore, while Kofi is certainly not much of an effective manager,  we now know from the Bolton hearings that administrative skill doesn't count for very much with the Bush Administration.060504

Indeed, it appears that Annan's key fault is that he had the temerity to oppose the Iraq invasion, and even to label the War "illegal" -- once the invasion had already occurred.  With Paul Volcker's final report on the oil-for-food scandal due out soon, and US Ambassador to the UN John Bolton (!) likely to arrive as soon as he clears the Senate and adjusts his meds, the outlook for the summer is definitely for more fireworks.

                                    ***

                  (c) SubmergingMarkets.Com, 2005.    

May 18, 2005 at 01:54 PM | Permalink | Comments (1) | TrackBack

Friday, December 10, 2004

Global Growth, Poverty, and Inequality
Part I. A Little Christmas Cheer?
James S. Henry and Andrew Hellman

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Americhurch_2 The Christmas season is a very special time of year, when Americans, in particular,  engage in a veritable month-long orgy of holiday revels and festivities, including eggnog sipping, Santa sitting, package wrapping, neighborhood caroling, tree decorating, menorah lighting, turkey stuffing, and generally speaking, spending, getting, and giving as much as possible, at least with respect to their immediate friends and family.

We certainly don’t wish to question the legitimacy of all these festivities. After all, as this November’s Presidential election has reminded us, ours is surely one of the most powerful, vehement, unapologetic Judeo-Christian empires in world history.  Like all other such empires, it has every right to celebrate its triumph while it lasts.   

13933269_2 According to the latest opinion surveys, this is indeed an incredibly religious nation, at least if we take Americans at their word.  More than 85% of Americans adults consider themselves “Christians,” another 1.5% consider themselves “Jews," 84% pray every week, 81% believe in life after death, 60% believe the Bible is “totally accurate in all its teachings,59% support teaching creationism in public schools,  and fully 32% -- 70 million people, including 66% of all evangelicals --  would even support a Constitutional Amendment to make Christianity the official US national religion. 

In light of all this apparent religious fervor, it is disturbing to read several recent analyses by OXFAM and the UN of certain persistent, grim social realities around the world – and our paltry efforts to redress them. Is the intensity of our religious rhetoric and this season's celebrations just a way of escaping these unpleasant realities?  

CHRISTMAS CHEER?

·          According to the UN’s International Labor Organization (December 2004), among those still waiting for economic justice are nearly three-quarters of the world’s population – 4.7 billion people --  who somehow manage to survive on less than $2.50 per day. These include 1.4 billion working poor, half of the 2.8 billion people on the planet who are employed. 

·          According to the UN’s Food and Agricultural Organization (December 2004),  the world’s poor now include at least 852 million people who go to bed hungry each night – an increase of 20 million since 1997. The continuing problem of mass famine has many side-effects – including an estimated 20 million low-birth-rate babies that are born in developing countries each year, and another 5 million children who simply die of malnutrition each year. In some countries, like Bangladesh, half of all children under the age of six are malnourished.

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·          Overall, for the 5.1 billion residents of low- and middle-income countries, average life expectancy remains about 20-30 percent shorter than the 78 year average that those who live in First World countries now enjoy. By 2015, this will produce a shortfall of some 50 million poor children and several hundred million poor adults.  But at least this will help us realize the perhaps otherwise-unachievable “Millennium Development Goals” for poverty reduction.

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·          According to UNICEF (December 2004), more than 1 billion children – half of all children in the world -- are now growing up hungry, in unhealthy places that are suffering from severe poverty, war, and diseases like HIV/AIDs.

·          According to Oxfam (December 2004),  First World countries have basically reneged on their 1970 promise to commit .7 percent of national income to aid to poor countries.  Last year such aid amounted to just .24 percent of national income among OECD nations,  half the 1960s average.  And the US commitment level was just  .14 percent, the lowest of any First World country, and less than a tenth of the Iraq War’s cost to date.

·          This month’s 10th UN Conference on Climate Change (COP-10) in Johannesburg reviewed a growing body of evidence that suggests that climate change is accelerating, and that the world’s poor will be among its worst victims.  Among the effects that are already becoming evident are widespread droughts, rising sea levels, increasingly severe tropical storms,  coastal flooding and wetlands damage, tropical diseases, the destruction of coral reefs and arctic ecosystems, and, God forbid, a reversal of the ocean’s “thermohaline” currents. 

Overall, as the conference concluded,  for world’s poorest countries – and many island economies – the threat of such effects is much more threatening than “global terrorism.” 

So far, however, the US – which with less than one-twentieth of the world’s population, still produces over a fifth of the world’s greenhouse gases --  seems determined to do nothing but stand by and watch while energy-intensive “economic growth” continues.  This year’s oil price increases have slowed the sales of gas-guzzling SUVs somewhat,  yet more than 2.75 million Navigators, Hummers, Land Rovers, Suburbans, and Expeditions have already been sold. The  US stock of passenger cars and light trucks, which accounts for more than 60 percent of all US oil consumption, is fast approaching 220 million -- almost 1 per person of driving age.

Meanwhile, leading neoconservative economists and their fellow-travelers in the Anglo-American media continue to tout conventional measures of “growth” and “poverty.” Indeed, according to the most corybantic analysts,  a free-market-induced “end to poverty as we have defined it”  has either already arrived, or will only require the poor to hold their breath just a little bit longer – until, say, 2015. 

As we will see in Part II of this series, this claim turns out to be -- like so many other elements of modern neoconservative dogma – a preposterous falsehood.  But it does help to shelter our favorite dogmas – religious and otherwise --  from a day of reckoning with the truth.

èèè

(Next: Part II: Is this Really Not the Best of All Possible Worlds?)
© James S. Henry and Andrew Hellman, SubmergingMarkets™, 2004

December 10, 2004 at 03:16 PM | Permalink | Comments (0) | TrackBack

Saturday, October 30, 2004

IRAQI FUBAR:
The Road to God Knows Where

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We have made a desert and called it “peace” – or, at least, “Iraqi democracy.”

Whatever Americans may choose to believe about whether they are really better off with Saddam Hussein gone, it is by now evident that, nineteen months after the US invasion of Iraq, most ordinary Iraqis feel much less secure, much less well-off, and more anti-American than ever before. 

Indeed, the country appears to be spiraling out of control. Nor is it clear that even a sharp post-US election crackdown by Coalition Forces, with all the attendant Iraqi casualties that it is likely to produce, will be able to turn this trend around.
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So far, neither leading US Presidential candidate appears to have fully come to grips with this deteriorating situation in Iraq,  or the fundamental strategic blunders that underlie it. At least they are not saying so in public.   
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A rather undistinguished, pig-headed,  President continues to defend his faith-based initiative for “democratizing” the Middle East. 

A rather undistinguished junior Senator from Massachusetts -– who has spent much of his life trying to be on all sides of recent US wars -- continues to argue that the key problems with the Iraq War have been tactical – too few troops and equipment,  too little Allied support, too few trained Iraqis, careless handling of high explosives, and so forth.
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Neither of these positions is realistic.

Indeed, as we will argue below, regardless of who is elected US President on November 2, the facts on the ground in Iraq are now pointing relentlessly toward one seemingly counter-intuitive conclusion:

The US will only be able to stabilize Iraq, preserve that country's national unity, win more support for the interim government,  undermine the role of “foreign terrorists” in the country, and secure a modicum of domestic and international support for “democratization” if and when it links the calendar for Iraqi democratization and constitutional reform to a firm, near-term timetable for the withdrawal of all US forces (though not necessarily all Coalition forces) from the country. 


October 30, 2004 at 06:29 PM | Permalink | Comments (1) | TrackBack

Wednesday, September 22, 2004

Democracy in America and Elsewhere:
Part III: How the US Stacks Up:
-
A. Qualifying Voters

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James S. Henry and Caleb Kleppner
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These are curious times, with President George W. Bush, long an outspoken critic of “nation-building” and the UN, now become a radical Wilsonian, declaring to the General Assembly this week his intention to establish a “UN Democracy Fund” to propagate democracy around the world.

We certainly wish President Bush much greater success than President Woodrow Wilson, who saw his own favorite proposal to “make the world safe for democracy,” the Versailles Treaty, throttled by Republican Senators who opposed the League of Nations, and suffered a stroke in the ensuing battle.

Knowing President Bush, he will probably not be dissuaded from his mission by this unhappy history, or by the fact that many other world leaders, like France's Chirac and Brazil's Lula, are now much more concerned about fighting global poverty and taxing "global bads" like arms traffic, anonymous capital in offshore havens -- an idea we first proposed in the early 1990s -- and environmental pollution than they are about neo-Wilsonian evangelism.

But of course any suggestion by the US that democracy can actually be propagated by multilateral consensus rather than by unilateral military aggression is always to be welcomed.
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Before proceeding any farther with this latest American crusade to sow democracy abroad, however, it may be helpful to examine how the US itself really stacks up as a “democracy," relative to "best democratic practices" around the world.

One approach to this subject would be to start off with a comparison with other leading First World democracies like the UK or France. After all, at the outset, one might think that only such countries have the well-educated, politically-engaged citizenry, political traditions, affluence, and technical know-how needed to implement truly state-of-the-art democratic processes.

However, following the lead of former President Jimmy Carter’s brief comparative analysis of Peru in 2001, we find it more interesting to see how the US compares with younger developing democracies that lack all these advantages – much less access to the yet-to-be-created UN Democracy Fund.

In our case, we’ve chosen Brazil, the world’s sixth most populous country, with 180 million inhabitants, two-thirds of South America’s economic activity, a federal system and a long history of slavery (like the US).

As we’ll see, our overall finding is that while Brazil’s democracy has plenty of room for improvement, it already boasts a much more democratic electoral system than the United States of America.

BRAZIL VS. THE US -- AND THE WINNER IS.....
From 1937 to 1945, and again from April 1964 until early 1985, Brazil was ruled by (US-backed) military dictatorships. Since then, however, Brazilians have freely voted to elect their President three times. They’ve also elected their bicameral National Congress, 26 state governors and legislatures, and thousands of city mayors and councilmen every two years.
Brazil

While Brazil’s electoral institutions are by no means perfect, and its campaign finance laws and federal structure have many of the same drawbacks as the US, it has recently been working very hard to improve these institutions. I

Indeed, it turns out that Brazil is making remarkable progress toward effective representative democracy, especially for a country with enormous social problems, a high degree of economic and social inequality, and a per capita income just one third of the US level
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Brazil’s new democracy provides a striking contrast along many dimensions – in particular, the processes and structures by which it (1) qualifies voters, (2) conducts campaigns, (3) administers voting, and (4) provides fair representation of voter preferences. The following essay focuses in on the first of these elements; the sequel will deal with the others.

QUALIFYING VOTERS

Gld_box 1. Mandatory Voting/Registration
To begin with, Brazil treats voting as a civic duty, like military service (which is obligatory, with alternative service available) and paying taxes. Voting is mandatory for all citizens age 18 to 70, except for illiterates.

Actually “mandatory voting” is a misnomer – people are just required to show up at a polling station or consular office and submit a vote, which can be blank. There are fines for violators who lack valid excuses, like illness.

Brazil adopted mandatory voting in part to overcome the apathy induced by more than two decades of military rule. It is just one of many countries that have mandatory voting, including Australia, Belgium, Cyprus, Greece, Luxembourg, Liechtenstein, one Swiss canton, Egypt, Fiji, Singapore, Thailand, Argentina, Bolivia, Costa Rica, the Dominican Republic, Ecuador, Uruguay, and Venezuela.
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Mandatory voting in Brazil is facilitated by the fact that, as in 82 other countries, all Brazilians age 18 or over are required to obtain a national identity card, with their photo, fingerprint, signature, place and date of birth, and parents’ names.

These cards, which are now becoming digital, are needed to qualify for government services and to conduct financial and legal transactions. They also enable cardholders to vote at polling booths anywhere in the country, eliminating the need for a separate, costly voter registration process.

To encourage voter turnout, Brazil also makes Election Day a national holiday, and often holds its elections on Sundays. Any eligible voter may be required to assist for free at the polls.

Mandatory voting, plus Brazil’s proportional representation system (See Part IIIB), have yielded voter turnouts in recent national elections that have routinely exceeded 75 percent of the voting-age population (VAP).

By comparison, US voter turnouts have recently averaged less than 45 percent of the VAP.

Brazil’s mandatory system has also had many other benefits. It has probably increased turnout the most among social groups that have much less access to education and income, thereby boosting their “voice” in the political system. It has also placed pressure on public authorities to implement efficient voting procedures, and shifted responsibility for registration and turnout away from Brazil’s political parties, allowing them to focus on campaigning.
Lula

As one might expect, mandatory voting does produce slightly more blank votes as a proportion of all votes than we see in US elections. But the system also seems to have made voting more habitual.

Some countries, like Austria and the Netherlands, have recently abandoned the practice, and Brazil is also considering this, now that the population has re-acquired the voting habit. As Brazil matures, especially given its use of proportional representation, it may well be able to follow in the footsteps of these other countries and eliminate mandatory voting without sacrificing high turnout.

The US. Voting is entirely voluntary in the US, and there are no national identity cards or centralized voter registration systems. Originally, many states viewed voter registration as undemocratic. But in the course of the 19th century, growing concerns over vote fraud, combined with the desire in some states to curb voting by blacks and the lower classes, led to the widespread adoption of stricter voter registration laws. By now, every state but North Dakota requires voters to “register” before they can “vote.” US elections are also never held on Sundays, nor is Election Day a national holiday.
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As we’ll examine closer in Part IIIB, the US’ “winner-take-all” electoral system is also highly inefficient, with more than 95 percent of all Congressional incumbents now re-elected, and almost all US House and Senate races now a foregone conclusion. So US voters are naturally not eager to participate in such “Potemkin” elections, which are approaching Soviet-like party reelection rates (though the US does have TWO Soviet-like parties.)

None of this has helped to encourage voter turnout. Not surprisingly, therefore, for the entire period 1948-1998, US voter turnout averaged just 48.3 percent as a share of VAP, and ranked 114th in the world. This was the lowest level among all OECD countries -- forty percent lower than the average turnouts recorded in First World countries like Germany, Italy, Sweden, and New Zealand. Even if we omit the 17 countries like Brazil with mandatory voting, it is hard to make this track record look like an achievement.

One can argue that relatively low turnout is precisely the point. Indeed, participation by ordinary Americans in their political system has always been a bit trifle unwelcome. For example, just 6 percent of all American citizens – 20 percent of whom were slaves -- participated in George Washington’s election in 1789. This was mainly because most state legislatures at the time had decreed that voters had to be white, propertied, male, Protestant and at least 21 years old. Studies of 19th century voter turnout in the South also show that turnout, which once exceeded 60 percent in the 1880s, plummeted sharply in the next 30 years under the impact of tougher registration laws that targeted black voters. To this day, the Neo-Republican South still boasts the lowest turnout rates and highest black population shares in the country.

Some cynics argue that low US turnout rates are just a sign of how deeply “satisfied” American voters are with the way things are. However, these turnout rates have declined sharply over the last three decades, at a time when it is hard to believe that Americans have become more and more satisfied with their political system.

In 1968, for example, 73.2 million Americans voted, a 61 percent turnout level. Thirty years later, in 1998, the number of Americans who voted was still just 73 million -- despite the fact that US population had increased by 40 percent.

Beyond voting, as of 2002, one US citizen in three (33.6 percent) did not even bother to register to vote. And that proportion was higher than it was in 1993, when Congress passed the National Voter Registration Act, which was intended to facilitate voter registration.

Evidently a majority of American voters have now become so “satisfied” that they no longer choose to participate in it at all. According to this bogus "apathy" theory of non-registration, the most “satisfied” groups of all must be blacks, other minorities, youth, the poor, and residents of Southern states, whose turnout rates are all miserably low.

In 2002, in four states (Texas, West Virginia, Indiana, and Virginia), less than 40 percent of all eligible citizens of voting age voted. Of 24 million Americans between the ages of 18 and 24, 38 percent registered, and 4.7 million, or 19.3 percent, voted. Just 27 percent of unemployed citizens, 30 percent of Hispanic citizens, 30 percent of Asian American citizens, 30 percent of the 35 million disabled Americans, 35 percent of all women ages 18 to 44, 37 percent of high school graduates, and 42 percent of all black citizens voted.

In fact, as we’ll examine later, there are very important structural reasons that help to explain why these groups fail to register or vote.

In the case of black males, for example, prisoner and ex-felon disenfranchisement may account for a substantial fraction of their relatively low participation rates. And 70 percent of those who registered and didn’t bother to vote in 2002 blamed logistical problems – transportation, schedule conflicts, absence from home, registration problems, homelessness (2.3-3.5 million adult Americans, depending on the year), the failure to get an absentee ballot on time, inconvenient polling places, or illness (including 44% of non-voting registrants age 65 or older).

All these obstacles affect poorer, less educated, older voters more than others. Most of them might easily be addressed with improved voting technology, if this country’s leaders, despite their putative concern for democratization around the world, were really serious about implementing democracy at home.

Meanwhile, in 1998, some 83 million Brazilians voted – 5 million more than in the entire US, which has about 100 million more citizens. Brazil’s voter turnout increased dramatically since the 1960s, from 37 percent of VAP in 1962 to an average of more than 80 percent in 1994-2002. In 2002, while 88 million Americans were proudly exercised their right to vote, so were 91 million Brazilians – for an 81 percent turnout. On the “satisfaction” theory, all these Brazilians must be nostalgic for the dictatorship.

After the 2002 Congressional elections, some US political pundits were impressed because voter turnout had increased slightly, from 41.2 percent in 1998 to 42.3 percent (46.1 percent of all citizens).

From an international perspective, however, that merely put the US on a par with Haiti and Pakistan –- just half of Brazil’s level.

Overall, the US trends described here are hardly indicative of “voter satisfaction.” Rather, they are a very disturbing sign that there are deep structural impediments to voting in America. Furthermore, the grass roots organizing power that has always been essential for getting out the vote in this country, much of it supplied by parties and unions, may have been waning.

From this angle, it will be very interesting to see whether this November’s contest, and the elaborate new organizing drives that have been mounted to increase US voter turnout and registration, will reverse these trends. No doubt turnout will be higher than it was in the dismal 2002 off-year election, but that's not saying very much. A more telling indicator will be to see whether turnout surpasses the (relatively modest) 59 percent median VAP turnout rate that the US recorded in nine Presidential elections over the whole period 1968-2000. We would love to see it happen, but since that would amount to a 10 percent improvement over the turnouts recorded in 1996 and 2000, we doubt it will happen.



Gld_box2. Voting Rights for Prisoners and Ex-Felons

Brazil. Disenfranchising prisoners and ex-felons is unfortunately a longstanding, widespread departure from “one person, one vote” -- a legacy of the age-old practice of ex-communicating social outcasts. Worldwide, there is a growing trend toward discarding this medieval practice, with 32 countries now allowing all prisoners to vote and 23 more that allow certain classes of them to do so.
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Brazil is one of 54 countries that prohibit prisoners from voting while they are in jail, but it permits them to vote after they are released, or are on parole or probation.

The US. The American approach to prisoner voting is much more restrictive than Brazil's. All but 2 (Vermont and Maine) of the 50 states disenfranchise all incarcerated prisoners, including those awaiting trial. Thirty-four states disenfranchise all felons on parole, while thirty disenfranchise those on probation.

Furthermore, the US is one of only 8 countries where ex-felons are temporarily or permanently disenfranchised even after they have completed their sentences, unless they successfully petition the authorities to have their voting rights restored. In 7 US states, felons are disenfranchised for several years after serving their sentences – for example, 5 years in Delaware, or 3 years in Maryland. In 3 states – Arizona, Maryland, and Nevada -- recidivists are permanently disenfranchised. And in 7 other states – Alabama, Nebraska, Kentucky, Mississippi, and the “battleground states” of Iowa, Florida, and Virginia – all ex-felons are permanently disenfranchised.
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Many of these rules date back to the Ante-Bellum period of the 1880s, when they were enacted by Southern and border states to maintain control over the newly-freed blacks -- contrary to the spirit of the 15th Amendment.

The impact of prisoner and ex-felon disenfranchisement on electoral outcomes is much greater in the US than Brazil, because of the electoral college system and the size, composition and location of the US convict population. Indeed, while Brazil's prison system is horribly overcrowded, its entire prison population is just 285,000 inmates -- .2% of Brazil’s voting-age population.

The US, in contrast, now has the world’s highest proportion of its population in prisons, jail, on probation or parole, or under correctional supervision, outside jail. As of August 2004, this “correctional population” totaled 7.2 million adults, 3.3% of the US VAP. Relative to population, as well as in absolute terms, this is the largest US prison population ever. It is also by far the largest prison population in the world, well ahead of the US’ closest competitors, China and Russia.

There are also another 3.2 million American citizens – 1.4% of the US VAP -- who have served time in state or federal prison for felonies and are no longer in correctional programs. Depending on their states of residence, they may be subject to the voting restrictions imposed on former felons in the US.

Both these totals have soared since 1980 because of stiffer drug laws and sentencing laws -- the “correctional” population as share of VAP has almost tripled, from 1.17% to 3.3%. (See Figure 3A-1.) (See Figure 3A-1.)
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Furthermore, compared with 1980, when a majority of state and federal prison inmates were serving time for violent crimes, a majority are now either awaiting trial because they cannot afford bail, or are serving time for non-violent offenses, more than a quarter of which were relatively minor drug-related offenses.

Drug Offenses and Disenfranchisement. As other analysts have recently noted, such drug offenses rarely involve “victims,” and there is a high degree of prosecutorial discretion. This makes them especially vulnerable to racially-discriminatory arrest practices. For example, recent studies of drug arrest rates show that black arrest and conviction rates for drug-related offenses are way out of proportion to drug use in the black community, and that the disparity between black and white arrest rates for drug use has been soaring because of policing practices, not because of greater underlying criminality.
Prisons
The resulting steep rise in the US prison population since the 1980s provides a strong contrast with European countries and leading developing countries, where per capita prison populations have been stable or even declining. Not surprisingly, the disparity is also consistent with the fact that Europe’s drug laws are much less punitive.

Unemployment Impacts.The increase in the US correctional population as a share of the population since 1980 has not only reduced the ranks of poorer voters. It has also reduced the size of the “observed” civilian labor force and the official US unemployment rate by 18-20 percent. In other words, the US unemployment rate in July 2004, for example, would have been 6.43 percent, not the official 5.43 percent reported by the Bureau of Labor Statistics. So without this swollen prison population, there would now be more than 10 million unemployed in the US – at least 2.2 million more than the official statistics show, and more than enough to swamp any alleged “job growth” in the last year.

So US penal policies have not only removed a huge number of prisoners from the ranks of potential voters. They have also helped to disguise the seriousness of the US economy’s rather tepid recovery.

And some of us thought the point of the US’ punitive drug laws was to reduce drug trafficking! (Note to reader: US real retail cocaine prices have plummeted since the 1980s. See Figure 3A-2.)

While it is not easy to measure the impact that US prisoner disenfranchisement has had on recent elections, it may have been substantial, as several analysts have recently noted. For example, one recent study estimated that in 2000, more than 3.0 million prisoners, parolees, and probationers, plus 1.5- 1.7 million ex-felons, were formally disenfranchised – 2.1% of the US voting age population. Another recent study of prisoner disenfranchisement in the state of Georgia found that 13% of adult black males were disenfranchised by this policy, and that it explained nearly half the voter registration gap between black males and non-black males.

There were also another 358,000 who had been jailed awaiting trial, and 218,000 more who had been jailed on misdemeanor charges. All these people were also effectively disenfranchised.

All told, during the 2000 Presidential race, the total number of potential American citizen/voters who were disenfranchised because of the US penal system and its archaic laws was about 5 million. Since the numbers have continued to grow since then, by now they have reached 5.5 – 5.8 million.

As other commentators have noted, this policy is also practically unique -- no other putative “democracy” comes anywhere close to this kind of systematic vote deprivation.

No doubt there are some determined ex-felons, parolees, and probationers who manage to slip through and vote even in states that prohibit them from doing so. Many others would not vote even if given the chance. However, even apart from the question of whether such harsh treatment encourages better behavior, this disenfranchisement policy is far from politically neutral:


  • About 45 percent of the 4.9 million convicts on probation and parole, and 67 percent of the current US prison population, are black or Hispanic, and more than ninety percent are from poor families. So the impact of these prisoner voting rules falls disproportionately upon groups whose real “crime” is to be black, Hispanic, or poor. These laws currently disenfranchise at least 13 to 18 percent of all adult black males and 4-6 percent of all adult Hispanic males in the US.
  • These disenfranchisements are the modern equivalent of white supremacist Jim Crow laws.Their impacts are concentrated in a handful of mainly Southern states – including half the “battleground states” -- that have an unusual combination of large black or Hispanic populations, relatively punitive criminal justice and penal systems, a long history of racist practices, and disproportionate influence on the US electoral college.
  • While US incarceration rates have increased dramatically in almost all states since the 1980s, the 15 original Southern “slave states,” for example, have consistently maintained rates of incarceration at least 25 to 98 percent higher than the US median, and 45 percent higher than those in the original 18 “Union” States.

Texas alone has at least 500,000 ex-felons and more than 200,000 prisoners and other inmates who have been disenfranchised, the overwhelming majority of whom are black or Hispanic.

Of Florida’s 13.4 million people of voting age, at least 600,000 to 850,000 prisoners, parolee/probationers, and ex-felons, have been disenfranchised by such voter registration laws, including at least one-fifth of all adult black males who reside there. Other battleground states, including New Mexico, Virginia, Iowa and Washington, have also used such laws to disenfranchise 15-25 of their adult black male populations.

All told, the top 15 battleground states account for at least 1.4 to 1.6 million excluded potential prison/ ex-felon votes this year. Combined with US’ knife-edged “winner take all” electoral system, this is clearly a very important policy choice.

Furthermore, in states like Florida, Texas, Mississippi, and Virginia, the opportunity to purge thousands of minority voter from the polls in the search for “ex-felons” has opened the doors to many other abuses.

For example, in 2000, there was the notorious purge by Florida’s Republican Secretary of State of 94,000 supposed “felons.” It later turned out that this number included more than 50,000 blacks and Hispanics, but just 3,000 actual ex-felons.

One might have hoped that one such flagrant anti-democratic maneuver would have been enough. But that was followed attempts by Florida’s Republican state administration to do the very same thing again in 2002 and again this year, when Florida tried to use another “bogus felons” list with another 40,000 names.

From this angle, all of the many arguments over Nader’s candidacy, “hanging chads,” and the narrow 537 vote margin by which Bush carried that state in 2000, were side-shows.

We are reminded of the Reconstruction period from 1867 to 1877, when Florida and 8 other Southern states had to be put under military occupation by the US Government, to prevent the white elites’ systematic attempts to deprive freed slaves of their voting and other civil rights. By the late 1870s, Northern passions toward the South had cooled, the Union troops left, and white-supremacist governments reacquired power. Unfortunately, unlike the 1860s, the “Radical Republicans” in Congress now side with the closet supremacists.

Counting Prisoners for Apportionment.The punitive US policy toward current and former prisoners appears even more bizarre, once we take into account the fact that for purposes of redistricting, the US Census – unlike Brazil – counts prison and jail inmates as residents of the counties where the prisoners are incarcerated, rather than the inmates’ home towns.

In general, this approach to counting prisoners for districting purposes tilts strongly in favor of rural Southern and Western states – areas that also now happen to vote Republican. (See Figure 3A-3), It has an important impact on the apportionment of Congressional seats and seats in state legislatures, the allocation of federal funds to Congressional districts, and the total number of electoral college votes that each state receives. It also creates a huge, influential, coalition of interests -- construction companies, prison administrators and guards, and politicians -- that mounts to a “politician-prison-industrial complex,” with powerful selfish motives to support tough sentencing laws and the construction of new prisons and jails.

The resulting combination of disenfranchisement and malapportionment recalls the “three-fifths compromise” that was built into the US Constitution in 1787, to accommodate the original six Southern slave states, where slaves constituted more than forty percent of the population. Under this provision, even though slaves could not vote, they were counted as three-fifths of a person, for purposes of determining each state’s Congressmen and Presidential electors.
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Given this provision, it was no accident that 7 of the first 8 US Presidents were Virginian slave owners. This exaggerated Southern political power, entrenched by the anti-democratic electoral college, had disastrous consequences – it made resolving the problem of slavery without a regional civil war almost impossible. (Contrast Brazil’s relatively peaceful abolition of slavery.) From this perspective, the electoral college and prisoner disenfranchisement are both just throwbacks to America’s “peculiar institution,” slavery. As John Adams wrote in 1775,

All our misfortune arise(s) from a single source, the reluctance of the Southern colonies to republican government….The difficulties lie in forming constitutions for particular colonies and a continental constitution for the whole…This can only be done on popular principles and maxims which are so abhorrent to the inclinations of the barons of the South and the proprietary interests of the middle colonies…..

In a sense, the modern analog is even worse: prisoners can’t vote either, but they count as one whole person in the districts where they are imprisoned, for purposes of redistricting. In general, this approach to counting prisoners for districting purposes tilts strongly in favor of rural Southern and Western states – areas which also now happen to vote Republican.

Surprisingly, illegal immigrants are also included in the US Census count for redistricting purposes. Depending on where immigrants locate, this may reinforce the prisoner effect in some key states. The US illegal immigrant population has also been growing rapidly, with a Census-estimated 7.7 - 8.9 million illegals in the US by 2000, compared with about 3.5 million in 1990. According to the INS, two-thirds are concentrated in just five states – California, Texas, New York, Illinois, and Florida. However, unlike prisoners, estimating where illegal immigrants are located is much more uncertain. So the US policy of including non-voting illegals in the Census for purposes of drawing voting districts is also very peculiar.



Gld_box3.Teen Voting

Brazil. To encourage young people to get involved in politics, Brazil gives those who are 16 or 17 the right (but not the duty) to vote. This measure increases Brazil’s VAP by abou 6 percent. Brazil argues that a relatively low voting age is consistent with the spirit of the UN’s Convention on the Rights of the Child. It also argue that this youth vote acknowledges the basic fact that a majority of 16-17 year olds (in both Brazil and the US) pay taxes and can marry, drive, and be tried as adults, so they ought to be able to vote. So far Brazil has only been joined in this experiment by a handful of other countries, including Indonesia (age 17), Cuba (16), Iran (15), and Nicaragua (16). But the UK is now also seriously considering teen voting.
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The US. The minimum voting age in the US has been 18 since 1971, when the 26th Amendment was adopted. A few states (Maine, California) have recently considered reducing the voting age below 18, but so far voting rights for 16-17 year-olds, much less the more radical proposal to let children of all ages vote, has not taken off. Obviously this cause has not been strengthened by abysmal voter turnout levels by 18-24 year old Americans in recent elections.

***
(Next: Democracy in American and Elsewhere, Part IIIB: Campaigns, Voting, and Representation)
©James S. Henry and Caleb Kleppner, SubmergingMarkets™, 2004

September 22, 2004 at 02:50 PM | Permalink | Comments (1) | TrackBack

Sunday, June 27, 2004

"Letters from the New World:"
Fighting Corruption at Eye Level in Nigeria

About Denis Beckett

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Whenever we talk Nigeria, we talk corruption. The two go together. Finland, ice and cellphones. Israel, strife. Australia, complacency and kangeroos. When you talk Nigeria, corruption is the first thing that comes up.
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Try it. Tell people “I’m going to Nigeria.” Four out of five responses will give you detail, usually second-hand, about the necessity of spreading your dollars through different pockets in different denominations. From there they’ll go into horror-stories about corruption.

I found my first trip to Nigeria challenging. Scary, too, but that was a different thing. When the captain said: “We’re commencing the descent” I clutched my wallet. The scare starts fading once reality replaces rumour, but the challenge doesn’t fade at all.

Corruption is one of the main reasons why Africa spent its first half-century of liberation heading, on statistical averages, backwards. Another major one is Indigenisation, Transformation, or whatever the name is for shoving wrong people into wrong roles. Indigenisation is tricky to deal with, and the real answer still awaits.
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Corruption is not tricky at all. The simple answer is: don’t do it. To me that’s the sole answer. It’s ingrained. I can’t pay a bribe, any more than I can kill an animal or fling a bottle. The neurons are just programmed another way. Which poses a certain fluttering of the pulse when one is landing in Lagos, stocked high with dire warnings. But I remind myself that visitors to Johannesburg, too, are warned direly about our corruption, whilst I who live in Johannesburg remain a virgin after all these years – apart from sandwiches and cold-drinks.

Initially a little teeth-gritting is required, to take the same approach to Lagos, but it settles. By the time the first guy outright demanded a bribe (“because I am the one who is in charge of your baggage, heh, heh, heh…”) I was emboldened. All he got from me was two short traditional words.

I recognise that it’s hollow to sound holy when all you’re risking is a suitcase of used clothes, or the R500 fine for phoning while you drive. I admit I have no bosses to sack me if I fail to secure the contract,
no shareholders to re-deploy me as Deputy Manager of the Jammerdrif depot.

Still, the principle is not much different: Most times that you give the bribe-seeker short words he backs down. The times he doesn’t, it’s better to suffer the consequences than to hammer another nail into the coffin of your continent’s aspirations. In which light, the way that the going-into-Africa discussion usually plays out can be depressing.

It starts well, invariably. “We’re all Africans now, isn’t it wonderful. And you should see how much good we’re doing!”

They are, too. And it is spectacular, often. On Monday the housewives of Ndola are buying scrawny ox-shank, little more than bone with hair, chowed on for a week by 10,000 flies. They’re buying baked beans in rusted tins, a year after sell-by. They’re paying three times the price that their privileged southern sisters pay for first-class merchandise at our fancy Cresta or Cavendish supermarkets.
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On Tuesday the new South African supermarket opens its doors. By Friday, Ndola is dancing to a new tune. The city is galvanised. Everybody has to give service, give value, wake up. On a March visit to a provincial capital, the dinner options are a suspicious unnameable stew on a sweltering dusty roadside, or a two-star menu at a five-star hotel with the seven-star tariff designed for the expense accounts of the aid brigade (who keep the aircon on frigid to remind them of home). In April a South African chain introduces middle-class eating at middle class prices. By July the city is holding its head higher.

Similar processes occur in every industry from brick machines to water meters. Good is being done, no two ways. But then the question the question comes up: “and, er, ahem, how do you handle the matter of adaptation to local mores?” There is a common answer to that question: “Oh, no, no, no. No corruption for us. We know that corruption causes ruin and destruction. We have no part in it, except of course when absolutely necessary.”

There is also the increasingly fashionable answer: “You know, we do have to grow into African ways. The time for arrogance is over now. We must mature into an acceptance that our sectional traditions are not universal.”

Then there is the answer that nobody gives unless he’s absolutely certain you are never going to quote him: “Why should I worry? That country is a total stuff-up anyway. If I can give some guy a million rand and make ten million in return, what do you think?”

Finally there is the still small voice that says: “No, on no account do we do it.” You hear that voice not often, and believe it less often. When you do believe it, perhaps because you know the people concerned especially well and repose in them a special faith, it is jolting indeed to find that the rumour factory is thick with alleged inside tales that place your faith under constant question.

The net result is disappointing, especially at the times that I am revelling in the magnificent welcome that tropical Africa addresses to Seffricans of the paler kind. Tropical Africa addresses magnificent welcomes to most people in most circumstances, but they have an added knack of making the whiteys from “South” as they call it, feel like a long lost brother.

You’re taken as a member of the family – a fairly pushy member, perhaps, rich in annoying habits, but in some way one of us, something more than solely a buccaneer on the profit trail. You’re a curiosity factor as well, and you’re assumed to be – potentially, at least – a handily systematic sort of character, the long lost brother who maintained the household inventory and made sure the insurance premiums were paid.

It’s a delightful combination. Not for nothing does every second SA expat go on and on about being wanted, being needed, being befriended, being loved (in the intervals between going on and on about not being robbed).
corruption

The prospects are wonderful, moving, emotional. A continent actually moving upward, after fifty years of empty talk about moving upward; moving upward and forward and with us, us, the once untouchable white South Africans, in there and part of it, in the engine room, the galley, the bridge, the lot.

Unfortunately that vista gets harder to glimpse as time goes by. Reality intrudes. I look at the heavy hands that RSA brings into the rescue of this or that failing African mine or plant or factory. I look at the hubris “stand aside, mere locals; we’re very friendly, as you see, calling us Jack and Joe and not ‘Bwana’ any more, but we’re in charge again so keep out of our way.” I look at the sickening crass insensitivity; the pulling of rank, sometimes unwitting; the disinterest in learning the barest syllable of even French or Portuguese, let alone Swahili or Hausa; the fervour to adopt every management fad emanating from New York or LA.

The pioneers carrying business to the tropics could and should be our heroes, our champions. Too often they become embarrassments. The many lesser embarrassments could usefully be discussed.

The one big embarrassment is not susceptible to much discussion. A culture of corruption means a pathetic nation; that is no more arguable than that the sun comes up in the east, and a critical mass of pathetic nations means a continued pathetic continent.

There’s sabotage in there.

Some foreign companies that have recently tried to enter Nigeria, like Shell and Halliburton, have apparently been following this well-trodden road to perdition. But there are signs of hope. A few others, like Vodafone, have recently been told by their shareholders to refuse to play at all unless they can play it straight.
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Ironically, behind the closed doors of our cynical business community, it is Vodafone that gets the most ridicule. Indeed, almost wheresoever two or three businesspersons gather together in South Africa these days, one hears: “Look at these wussies, getting their asses whupped in Nigeria; buncha sissies calling themselves an African company, squealing ‘good governance’ because they’ve come short. What business did they have leaving just because they couldn’t play it straight? ”
Vodafone

Somebody’s got this upside-down. The real question we should be asking of is of those who stayed: “Precisely how did you manage to stay on and keep playing it straight?”

***

© Denis Beckett, SubmergingMarkets™, 2004

June 27, 2004 at 10:20 PM | Permalink | Comments (0) | TrackBack

Tuesday, June 22, 2004

"Farmingville"
A New Film About Agro-Business, Globalization, and Poor Mexican Farmers

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This week marks the television premier of Farmingville, an outstanding documentary on the devastating impact that a really quite lethal combination of globalization plus First World farm subsidies is having on developing countries like Mexico.

Produced and directed by fellow Long Islanders Carlos Sandoval (Amagansett, NY) and Catherine Tambini (Hampton Bays, NY), Farmingville won this year’s “Special Award for Documentary” at the Sundance Festival, and it has also received many other prestigious awards. (For those of you in Long Island, it will also be shown on Thursday June 24 on Ch. 21, accompanied by a discussion with Sandoval and several of the film’s participants, moderated by OLA’s outstanding local leader, Isabel Spevedula de Scanlon.)

The social crisis described by Farmingville is a striking example of one of neoliberalism’s more disturbing patterns – the combination of “socialism for the rich” with “free trade for the poor.” Each year the US government provides more than $10 billion in subsidies to American corn farmers in politically-influential states like Iowa, Minnesota, Nebraska, and Kansas. From a political standpoint, these subsidies are usually justified in the name of preserving the “American family farm.” In fact the vast bulk of the subsidies goes to a handful of incredibly rich US agro-conglomerates, such as Cargill and Archer Daniels, Midlands (“ADM”).Together, these corporate giants now account for more than 70 percent of domestic US corn production.

These subsidies have not saved America’s family farmers, who continue to disappear at a rapid rate. But the $10 billion a year in subsidies has the giants to overproduce, resulting in surpluses that have been dumped onto world markets at artificially-low prices.

As documented in Farmingville, combined with the “free trade” policies adopted by the US and Mexico in the last decade, these surpluses have devastated family farmers throughout Mexico.

Of course Mexican farmers were the original source of “corn” – they’ve been growing it for at least 10,000 years. Until recently, corn accounted for at least half of the acreage they planted. In fact corn is not just a product in Mexico; it is also at the core of a whole cuisine and culture.

Since the adoption of the North American Free Trade Treaty (NAFTA) in 1993, however, the real price of corn has dropped more than 70% in Mexico. even as domestic non-labor production costs have risen dramatically.

Most of the price declines are due to escalating US corn imports. Recent estimates by an Oxfam study of “The Mexican Corn Crisis,” for example, show that US corn is dumped in Mexico at between $105m to $145m a year less than the cost of US production.

As a result, many campesinos are being forced out of business -- the country has lost the majority of its corn farmers in just the last 10 years. This has caused havoc in the entire rural economy, produced mass unemployment and forcing a mass migration to Mexico’s already overstuffed cities. And that, in turn, has accelerated emigration, with thousands of desperate, hungry people trying to leave Mexico every day, and dozens of them literally dying in the desert wastelands along the border, trying to get to
“El Norte.”

Indeed, according to the latest statistics from the US Bureau of Immigration and Naturalization, illegal immigration along the Mexican border is now at an all-time high.

Meanwhile, US agricultural conglomerates like ADM and Cargill have become more profitable than ever. They are using their fat profits to extend their dominance abroad. For example, Cargill now owns 30 percent of Maseca, the giant Mexican food distributor that dominates the Mexican tortilla market.

As Oxfam’s recent report on this neoliberal debacle concludes,


"The Mexican corn crisis is yet another example of world trade rules that are rigged to help the rich and powerful, while destroying the livelihood of millions of poor people.”

Indeed, the story that Farmingville relates is an especially graphic example of the perverse consequences that neoliberal policies can have once powerful interests get hold of them -- when US corporate giants are able to have their way with free trade, wide-open capital markets, lavish government subsidies, political leaders on both sides of the border, and poor farmers all at once.

Obviously this is tough time for leading US politicians to take on the powerful farm lobby, much less propose policies that might trim US exports at a time of massive trade deficits. But are there no US or Mexican political leaders with longer-term vision, willing to tackle this grossly-inequitable, morally-reprehensible situation?

***

© James S. Henry, Michael O'Neill, SubmergingMarkets™, 2004


June 22, 2004 at 02:05 PM | Permalink | Comments (0) | TrackBack

Thursday, June 17, 2004

The "Reagan Revolution," Part Two:
The View from Developing Countries

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"Man wants to forget the bad stuff and believe in the made-up good stuff. Its easier that way."
--Rashomon, Kurosawa
"He (Reagan) may have forgotten us. But we have not forgotten him."
-- Angolan refugee and landmine victim
"Folly is a more dangerous enemy to the good than evil. One can protest against evil; it can be unmasked and, if need be, prevented by force....Against folly we have no defense. Neither protests nor force can touch it; reasoning is no use; acts that contradict personal prejudices can simply be disbelieved. Indeed, the fool can counter by criticizing them, and if they are undeniable, they can just be pushed aside.... So the fool, as distinct from the scoundrel, is completely self-satisfied. In fact, he can easily become dangerous, as it does not take much to make him aggressive...."
--Dietrich Bonhoeffer

Following last week's prolonged national memorial to President Reagan, the most elaborate in US history, most Americans have turned their attention back to the troubled present. But we cannot resist continuing down the revisionist path that we started on in Part One of this series.

Contrary to Henry Ford, history is not "bunk," nor is it "just one damn thing after another." In fact, it is one of our most valuable possessions. But unless we take the time to learn from it, it can easily come back to haunt us -- as it is doing right now. At the very least this exercise will prepare us to evaluate President Clinton's new autobiography, which is due out next week.

As noted in Part One, most recent discussions of Ronald Reagan's foreign policy legacy have focused almost entirely on the Cold War. Even there, as we argued, his legacy is decidedly mixed. While he may have helped to pressure the Soviets to reform, he also took incredible risks with the balance of nuclear forces, including some risks that we are still living with to this day.

When we turn from superpower relations to Reagan's impact on developing countries, the legacy is even starker. In The Blood Bankers, we've detailed how the Reagan Administration's lax policies toward country lending and bank regulation exacerbated the 1982-83 Third World debt crisis. And then the administration did very little to help developing countries fundamentally restructure their debt burdens and recover. By the end of the 1980s, most country debt burdens were higher than ever.

Here we will focus on another long-term legacy of Reagan's relations with the developing world -- the consequences of his support for a plethora of reactionary dictatorships and contra armies all over the globe.

Most Americans are probably not aware of it, but this bloody-minded policy fostered several nasty wars in developing countries that have cost literally millions of lives -- and are still producing fatalities every day, by way of wounds, continuing conflicts, unexploded ordnance, and landmines.

Furthermore, as described below, the Reagan Administration was also responsible for several of the clearest examples in history of state-sponsored terrorism.

Unfortunately, it turns out that very little of this was really necessary, either from the standpoint of defeating the Soviets, pushing the world toward democracy and free markets, or enhancing US security.

Indeed, in the long run, Reagan's policies basically destabilized a long list of developing countries and increased their antagonism towards the US. Combined with the policies of "benign neglect," stop-go intervention, and ineffective neoliberal reforms that characterized the Clinton Administration's policies toward developing countries, and the neoconservative policies pursued by both Bushes, it is no accident that America's reputation in the developing world is now at a record low.

Unfortunately, like some of the risks that Reagan's policies introduced into the nuclear balance, these effects may have a very long half-life. Surely they will be with us long after Ronald Reagan has met his Maker. We just hope for the Gipper's sake that his Maker does not read this article before pronouncing judgment upon him.

THE INDICTMENT

There is an abundance of examples of the Reagan Administration's strong negative impacts on developing countries. To cite just a few:

fig. 2.1. Ferdinand and Imelda

In the case of the Philippines, the Reagan Administration was a staunch ally of Ferdinand and Imelda Marcos right up to their last helicopter ride to Hawaii in February 1986. Vice President George H.W. Bush visited Manila in March 1981, soon after Reagan was elected, to thank him for his generous support. He toasted Marcos in glowing terms: "We love your adherence to democratic principles and democratic process....." The thousands of political opponents who were tortured, imprisoned, or died fighting this corrupt conjugal dictatorship and the millions of Filipinos who have spent the last twenty-five years servicing the couples' unproductive foreign and domestic debts would probably disagree.

fig. 8.15. Donald Rumsfeld and Saddam Hussein, 1983
fig. 8.14. Iran-Iraq War scene, early 1980s

In the case of Iran and Iraq, Reagan helped arm and finance Saddam Hussein throughout the 1980s, encouraged the Saudis and Kuwaitis to finance his invasion of Iran when it bogged down, helped to equip him with chemical and biological weapons, sent Donald Rumsfeld to Baghdad to assure close relations and propose a new pipeline to Saddam to help him export his oil, and even provided a team of 60 Pentagon analysts who sat in Baghdad, using US satellite imagery to target Saddam's chemical weapons against the Iranians.

At the same time, as the Iran-Contra arms scandal later disclosed, Reagan also helped Iran buy spare parts and advanced weapons for use against Iraq. He also looked the other way when Saddam decided to turn his US-supplied Bell Helicopters and French-supplied Mirage jets and chemical weapons on the defenseless Kurds at Halabja. Of course, the fact that the UN, under strong US pressure, did nothing at the time to condemn Saddam for this behavior did not exactly discourage further aggression.

This bipolar policy contributed to prolonging the 1980-88 Iran-Iraq War, one of the largest and bloodiest land wars since World War II. It cost 500,000 to 1 million lives and 1-2 million wounded, and created more than 2.5 million refugees. It also caused a huge amount of damage to both countries' economies, and left Iraq, in particular, broke and heavily indebted. As we've argued in The Blood Bankers, that destabilization, in turn, contributed significantly to Saddam's 1991 decision to invade Kuwait in 1991 -- and ultimately, our current Iraq fiasco.

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In the case of South Africa, the Reagan Administration steadfastly opposed any US or UN sanctions on international trade and investment. Indeed, it continued to work closely with the apartheid regime on many different fronts, including the civil wars in Angola (see below), Namibia, and Mozambique.

It also now appears that both Carter and Reagan turned a blind eye to South Africa's development of nuclear weapons and ballistic missiles, in collaboration with Israel, which purchased its uranium from the Pretoria regime. Fortunately, no thanks to Reagan, Bush I, or for that matter, Bill Clinton, apartheid came to an end in the early 1990s, and South Africa became the first nuclear power ever to dismantle its nuclear weapons.

fig. 1.26. Gen Jose Efrain Rios Montt

Rios Montt

In the case of Guatemala, Reagan gave a warm embrace to the brutal dictatorship of General Efrain Rios Montt in the early 1980s. Rios Montt, a graduate of Fort Benning's School for the Americas, was also an ordained "born-again" minister in California-based Gospel Outreach's Guatemala Verbo evangelical church. Evidently that combination endeared him to the Reagan Administration -- US Assistant Secretary of State Thomas Enders praised him for his "effective counter-insurgency," and President Reagan called him "a man of great personal integrity," "totally dedicated to democracy," someone who Amnesty International had given "a bum rap."

This cleared the way for hundreds of $millions in World Bank loans and US aid that helped to make Rios Montt and his generals rich. Meanwhile, the junta implemented a genocide that a UN-backed Truth Commission later found was responsible for the deaths of 200,000 Guatemalan peasants, mainly Mayan Indians.

fig. 6.3. Jeane Kirkpatrick

fig. 6.2.General Leopoldo Galtieri

General Galtieri

In the case of Argentina, Reagan turned a blind eye to the "dirty war" waged by the military junta against its opponents, at a cost of 30,000 lives and many more destroyed families.

When this junta launched the April 1982 invasion of the Falkland Islands to deflect public attention from its political and economic woes, Reagan and Secretary of State Al Haig ultimately decided to side with the UK's Margaret Thatcher, a fellow neoconservative. However, key Reagan aids Jeane Kirkpatrick and Michael Deaver worked behind the scenes to support the fascist junta, encouraging it to believe that the US might stay neutral. The very evening that the invasion was launched, Kirkpatrick was the guest of honor at an elaborate Washington D.C. banquet that was sponsored by the junta.

In the case of Panama, Reagan's CIA subsidized and promoted the rise of General Manual Noriega, another graduate of the notorious US School of the Americas. The US made extensive use of Noriega's intelligence gathering capabilities during the contra war with Nicaragua (see below).
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This encouraged Noriega to believe that he could get away with anything. For a while he did: in the early 1980s, he became one of the most important cocaine wholesalers in the region, shipping a ton of coke per month to Miami on INAIR, a Panama airline that he co-owned, literally under the US Customs' nose. By 1989, even George H.W. Bush was embarrassed, and he had the dictator forcibly removed -- at a cost of the lives of 23 US troops, 314 Panamanian Defense Forces, and several hundred Panamanian civilians.
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In the case of tiny Honduras, the poorest country in Central America, the Reagan administration turned another of its many blind eyes to the rise of death squads in the early 1980s. John Negroponte, the former US Ambassador to the UN and our new "proconsul" in Iraq, served as Ambassador to Honduras from 1981 to 1985. As this author knows from first-hand experience, reports of human rights abuses in Honduras were rampant during this period. It is hard to believe that Negroponte, who cultivated close relations with the Honduran military, was simply unaware of all these reports.

One of the key offenders was Battalion 3-16, the CIA-trained and funded Honduran military unit that was responsible for hundreds of disappearances and torture cases, including several that involved Americans.

One US embassy official later reported that in 1982, Negroponte had ordered any mention of such abuses removed from his annual Human Rights reports to Congress. Negroponte has denied any knowledge of this, and has skated through several confirmation hearings to arrive at the very top of the US diplomatic corps, where he will soon be running the world's largest US embassy. vert.un.negroponte.ap

In the case of El Salvador, the Reagan Administration also sharply increased economic and military support to a brutal oligarchical regime that was also deeply involved in death squads. President Carter had also provided military aid to the regime -- indeed, Archbishop Oscar Romero's condemnation of that aid was one key factor in his assassination in March 1980. After Reagan's November 1980 election, the Salvadoran military felt it had a "green light" to become even more aggressive with its opponents in the Church and unions, as well as the FMLN rebels.

One immediate byproduct of the "green light" was the murder of four US Maryknoll nuns in December 1980. Reagan's first Secretary of State, Al Haig, later suggested that the nuns might have been killed in a "crossfire" when they "ran a roadblock. " But their murders were later attributed to five Salvador National Guard members, who, in turn, appear to have acted on orders from senior members of the Salvador military.

A law suit was eventually brought on behalf of the nuns against the commanders to whom these guardsmen ultimately reported -- Jose Guillermo Garcia, El Salvador's Minister of Defense from 1979-1983, and Carlos Eugenio Vides Casanova, the former head of the National Guard. These were the Reagan Administration's key Salvadoran allies in the early 1980s, and they'd been rewarded with retirement in Florida.

In 2000 a jury ruled that even though they had given the orders, they did not have "effective control" over their subordinates, given the instability in the country. However, in July 2002, another jury in West Palm Beach found the duo liable for torture and other human rights abuses against three other victims, and ordered them to pay $54.6 million in damages.

Meanwhile, their paymasters and other collaborators in the Reagan Administration have gotten off scot free. Reagan's insistence on a military solution to the conflict in El Salvador helped to perpetuate the civil war throughout the 1980s, at a cost of more than 75,000 lives. Ultimately, under Bush I and Clinton, the long-delayed negotiated solution was achieved.
Romero
As for Archbishop Romero's assassin, he has never been found. There are credible reports, however, that the actual triggerman now lives -- naturally enough -- in Honduras.

In the case of Lebanon, Reagan was responsible for a broken promise to the Palestinians that ultimately contributed to the 1982 massacres at the Sabra/ Shatila refugee camps. To get the PLO to withdraw from Beirut, Reagan promised to protect Palestinian non-combatant refugees in those camps. Indeed, the PLO fighters left on August 24, 1982, and US Marines landed on August 25. But they were withdrawn just three weeks later, on September 10, after the PLO fighters left. Ariel Sharon,Israel's Defense Minister at the time, promptly ordered the Israeli Defense Forces to surround the camps. They refused to let anyone leave, and then permitted his Lebanese allies, the rightist Christian Phalangists, to move in.

arielsharon
The result was the slaughter of at least 900 to 3000 unarmed Palestinians, including many women and children, on September 16-18, 1982. As former Secretary of State George Schultze later commented, "The brutal fact is, we are partially responsible." Israeli's own Kahan Commission later found Sharon "indirectly responsible" for the massacre, but imposed no penalties, other than forcing him to resign as Defense Minister.

In the case of Angola, Reagan, in cooperation with South Africa's apartheid regime and Zaire's dictator Mobutu, helped to sponsor UNITA, Joseph Savimbi's rebel band, against the left-leaning MPLA, which also happened to have far stronger support from the Angolan people. Reagan hailed the power-hungry Savimbi as a "freedom fighter," and enlisted wealthy arch-conservatives like beer merchant Joseph Coors and Rite-Aid owner Lewis E.Lehrman to organize assistance and lobby Congress for millions in aid.
Lehrman
03-17-coors

In fact Savimbi turned out to be one of the world's most lethal terrorists. Even after UNITA lost UN-supervised elections in September 1992, he continued the war, financing his operations by trafficking in "blood diamonds."

The resulting guerilla war cost the Angolan people up to 1 million dead, turned a quarter of Angola's 12 million people into refugees, and devastated health and education programs and the domestic economy. It also left an estimated 6 to 20,000,000 land mines scattered all across the country, one of the world's most heavily mined countries, with more than 80,000 amputees as a byproduct. Only with Savimbi was finally killed in May 2002 was the country finally restored to peace.
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Savimbi

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In the case of Afghanistan, Reagan considerably expanded aid to the Afghan rebels in the early 1980s, providing them more than $1 billion in arms and sophisticated weapons like Stinger missiles to fight the Soviets. The resulting battle ultimately cost the Soviets 15,000 lives. But the price to Afghanistan was much higher -- the Afghan people lost more than 1 million dead and wounded, plus millions of refugees. Furthermore, after the Soviets finally left in the 1989, the country became a stomping ground for opium-dealing warlords, religious fanatics like the Taliban, and al-Qaeda's global terrorists.
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Furthermore, we now know that Gorbachev had offered to pull Soviet troops out of Afghanistan in 1987, in exchange for reduced US arm shipments to the rebels. However, he was rebuffed by the Reagan Administration, which wanted to prolong the Soviets' agony. This not only cost a great many more Afghan (and Soviet) lives, but also helped turn Osama Bin Laden from a nobody into a folk hero. All this helped to pave the way to 9/11, the continuing war in Afghanistan, and the even more dangerous global terrorist war.

All told, then, the Reagan Administration clearly has a lot to answer for with respect to the developing world. And this is even apart from one of the most perfidious examples of Reagan's brutilitarian policies, that of Nicaragua -- as the following excerpt from The Blood Bankers makes clear.

NICARAGUA'S COUNTERREVOLUTION

By the end of 1980, with Nicaragua's civil war concluded, General Anastasio Somoza deBayle dead in Paraguay, and the country''s debt settlement with its foreign banks concluded, many Nicaraguans were looking forward to rebuilding their economy and finally achieving a more peaceful society. Alas, it was not to be.

Undoubtedly the Sandinistas deserve some of the blame for the way things turned out, though, as we will see, the odds were clearly stacked against them. As the strongest faction in the winning coalition, and “the boys with the guns,” at first they commanded overwhelming popular support for having rid the country of the world’s oldest family dictatorship outside of Saudi Arabia and Paraguay. However, like Venezuela’s Hugo Chavez in the 1990s, they were torn between leading a social revolution and building a multi-party democracy.

Their hero, Augusto “Cesar” Sandino, “the general of free men,” had fought the US military and the Nicaraguan army for six years to a standstill, before he was betrayed and murdered by General Anastasio Somoza Garcia in 1934. After a decade of insurgency in the 1970s, the Sandinistas’ most important experiences to prepare them for the job of running the country were limited to armed struggle, clandestine organizing, and some very rough times in Somoza’s jails. Unhappily, one of their most accomplished political leaders, Carlos Fonseca, had been murdered by the National Guard in 1976.
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Sandino

On the other hand, as South Africa demonstrates, it is not impossible for committed revolutionaries to lead a fairly peaceful transition to a multi-party democracy. After all, the ANC had waged just as long a struggle against a state that was no less repressive as Somoza’s. Many of the ANC’s supporters were also just as radical as the Sandinistas, and it also sourced most of its weapons and advisors from radical watering holes like the Soviet Union, East Germany and Libya.

However, ironically, South Africa was not as easy for the US to push around as Nicaragua. South Africa accounted for two-thirds of sub-Saharan Africa’s economy and most of the world’s gold, diamonds, platinum, and vanadium. By 1982, with some help from the UK and Israel, it had acquired nuclear weapons. Compared with Nicaragua, South Africa’s economy was actually in pretty good shape when the ANC came to power. While there had been a protracted low-intensity war against apartheid, South Africa managed to avoid the full-blown civil war that Nicaragua was forced to undertake in the 1970s to rid itself of the Somoza dictatorship.
fig. 5.5. Managua July 1979

Nicaragua was also objectively a far less strategically important target. To Washington’s national security planners, however, that made it an ideal opportunity for a relatively low-cost “demonstration." Its population was the same as Iowa’s. Its entire economy was smaller than Des Moines’s. It had few distinctive natural resources. Its only “weapons of mass destruction” were volcanoes, earthquakes, and hurricanes. It was surrounded by other countries that were also of modest strategic value – except for whatever symbolic value was associated with repeatedly crushing the aspirations of impoverished peasants into the dirt.

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During the late 19th century, Nicaragua had been selected several times over by US Canal Commissions for a canal across Central America, until Teddy Roosevelt finally opted to create Panama and build a canal across it in 1902, for reasons that had more to do with Wall Street than engineering. After that, Nicaragua’s canal plans went nowhere, especially after the US Marines landed in 1910 to collect debts owed to British and US banks and to depose a nationalist leader who, among other things, made the fatal mistake of seeking European funding for an alternative to the Panama canal.

The ANC also had one other weapon that the Sandinistas clearly lacked. This was the extraordinary wisdom and good fortune of 72-year old Nelson Mandela, who had earned everyone’s respect during his 27 years in prison. He had also learned survival skills like patience, diplomacy, and the capacity for making adroit compromises with bitter enemies. Under his influence, the ANC set out to build a mass party. It agreed to hold new elections within two years of his release. It went out of its way to commit itself publicly to multi-party democracy, a market economy, civil liberties, and peaceful reconciliation.

Most of the Sandinistas’ top leaders – the so-called cupola -- were not really interested in building a mass party, much less a multi-party democracy, at least not initially. They saw themselves as a vanguard party, leading the masses toward a social revolution. As Sergio Ramirez, a leading FSLN member who served as Nicaragua’s Vice President under Daniel Ortega from 1984 to 1990, wrote in his 1999 book, Adios Muchachos,

The FSLN was not prepared...to assume its role of party of opposition inside a democratic system, because it had never been designed for this. Its vertical structure was the inspiration of Leninist manuals, of the impositions of the war and of caudillismo, our oldest cultural heritage.

To be fair, the FSLN leadership also believed that the first priority was to attack the country’s dire health, literacy, land ownership, and education problems, and to build “direct democracy” through civic organizations, not through party politics and national elections. Given the country’s emergency and the need to recover from the civil war, this was entirely understandable. But it did provide cheap shots for the FSLN’s opponents and the mainstream US media, which basically wrote Nicaragua off very early as a reprise of Castro’s Cuba.
fig. 5.7. Daniel Ortega Saavedra
The Sandinistas were also widely criticized for lacking the soft touch when it came to domestic politics. Among their many ham-handed moves was their May 1980 decision to expand the Council of State to include “mass organizations,” the August 1980 decision to postpone elections until 1984, the rough way they dealt with the Miskito Indians, the 1986 decision to shut down the (by then, CIA-subsidized) La Prensa, and Daniel Ortega’s various high-visibility trips to Havana, Moscow, Libya and Gucci’s eyeglass counter in New York They were also criticized for implementing a compulsory draft, detaining alleged contra sympathizers without trial after the contra war heated up, permitting the FSLN’s National Directorate (Daniel Ortega, Tomas Borge, Victor Tirado, Henry Ruiz, and Bayardo Arce) to remain an unelected (all-male) body until 1991, and seizing a huge amount of property from ex-Somocistas, even middle-class ones, for their own use during the “pinata” period after Ortega lost the 1990 election -- including more than a few beach houses.

At the same time, they were not given much credit for preserving a mixed economy, reforming the health and education systems, pursuing aid from numerous non-Communist countries in Latin America and Europe, implementing a badly-needed land reform, tolerating the virulent La Prensa, which supported the contras and called for their overthrow, until they finally reached the limit and shut it down in 1986, ultimately holding free elections in November 1984 and February 1990, and respecting the outcome of those elections even when, as in 1990 (...and 1996, and 2001..) they lost.

The basic reality is that from at least 1981 on, Nicaragua’s new government was operating in an increasingly hostile international environment, where the Western media and the USG, as well as the Miami-based Somocistas, were predisposed to seize upon the slightest departures from Roberts’ Rules of Orders to consign them to hell – and if no such departures were readily at hand, to invent them out of whole cloth. These hostile attitudes had much less to do with the FSLN’s behavior than with the USG’s new aggressive stance with respect to the Soviet Union – actually dating back at least to President Carter’s initiation of a contra-like war against the Soviet-backed government in Afghanistan in July 1979.

STATE-FUNDED TERRORISM - REAGAN STYLE

So, despite all the FSLN’s undeniable missteps, it would probably have taken divine intervention to save Nicaragua from the wrath of Ronald Reagan, who decided almost immediately upon taking office to single tiny Nicaragua out for a replay of the Carter/ Brzezinski strategy in Afghanistan.

As former CIA analyst David MacMichael testified at the International Court of the Hague’s hearings on a lawsuit brought by Nicaragua against the US in 1986, from early 1981 on, the US Government set out to create a “proxy army” that would “provoke cross-border attacks by Nicaraguan forces and demonstrate Nicaragua’s aggressive nature,” forcing the Sandinistas to “clamp down on civil liberties.....arresting its opposition, (and) demonstrate its allegedly inherent totalitarian nature.”

In other words, if they were not totalitarian enough to begin with, we would see to it that they became totalitarian – and then blame them for making the switch.

President Reagan offered several different justifications for this ultimately rather bloody-minded policy. In March 1983, in a speech to Congress, he presented his subversion theory, Congress, warning that the Sandinistas had already “imposed a new dictatorship…supported by weapons and military resources provided by the Communist bloc, (that) represses its own people, refuses to make peace, and sponsors a guerrilla war against El Salvador. (emphasis added).”

At other times, he emphasized the beachhead theory, according to which the Sandinistas provided a “Soviet beachhead… only two hours flying time away from our borders…with thousands of Cuban advisors…camped on our own doorstep…close to vital sea-lanes.” He offered similar characterizations of the threat posed by left-wing guerillas in El Salvador, Honduras, and Guatemala. In 1982, Jeane Kirkpatrick, Reagan's hawkish UN Ambassador, also promoted this beachhead theory with her own profound geographical analysis:

I believe this area is colossally important to the US national interest. I think we are dealing here not...with some sort of remote problem in some far-flung part of the world. We are dealing with our own border when we talk about the Caribbean and Central America and we are dealing with our own vital national interest.

Other elements were also sometimes thrown into the mix. On November 6, 1984, just two days after the Sandinistas won a decisive 67-percent victory in the country’s freest elections in history, there was a huge media flap in the US press over their alleged attempt – later proved false – to buy Soviet MiGs for air defense. This story later turned out to be a wholesale concoction of the State Department’s “Office of Public Diplomacy,” and of Oliver North, Otto Reich, and Robert McFarlane in particular, just one of many US propaganda efforts that were designed to distract attention from the FSLN’s victory in those elections.
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Together, the subversion theory and the beachhead theory added up to a revival of the time-worn domino theory, transposed from Southeast Asia to Central America. Apparently, the notion was that since Nicaragua bordered on Honduras and El Salvador, which bordered on Guatemala and Belize, which bordered on Mexico, the Red Army might soon be drinking margaritas on the banks of the Rio Grande. Or the Reds might just jet in to El Paso in their MiGs from Managua, “only two hours away.” The fact that “they” were already 90 miles away in Havana, armed with brand new MiG 23 Flogger bombers and MiG 29s, did not get much mention from the Gipper. After all, Cuba had already demonstrated that it could stand up to a US invasion, and the Bay of Pigs was not a happy memory.

This rather strained analysis of Nicaragua’s purported threat to US national security was later endorsed, with only slight variations, by the January 1984 Bipartisan National Commission on Central America chaired by Dr. Henry Kissinger. One might have expected Kissinger to reach a different conclusion, given his long personal experience with Vietnam, Laos, Cambodia, and China, whose leftist regimes spent most of the 1970s fighting with each other, demonstrating conclusively the power of nationalism over solidarity. But he was performing the assignment to ingratiate himself with the Republican Party’s conservative wing. And unlike the National Commission on Terrorist Attacks, which he resigned from in December 2002, it did not require him to identify his consulting firms’ private clients.

In any case, well into the 1990s, long after there were peace settlements in Nicaragua, El Salvador, and Guatemala, and long after the Sandinistas had handed over political power to their opponents, hawkish Republicans like Senators John McCain and Jesse Helms were still seeing ghosts in Nicaragua, trying to make hay out of the Sandinistas’ potential subversive threat. Indeed, as we’ll see, these charges even played a role in Daniel Ortega’s defeat in Nicaragua’s Presidential elections in 2001, even when his running mate was Violeta Chamorro’s son-in-law!
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AUC paramilitary

Eventually, in fact, all the stockpiles of AK47s, landmines, rocket launchers, and surface-to-air missiles acquired by the Sandinistas to defend Nicaragua against the contras did end up posing a security threat to the US. But it was not precisely the one that that the Sandinistas' right-wing critics had predicted. In November 2001, Colombia’s 11,000-strong nasty, right-wing, drug-dealing paramilitary group, the AUC, procured 3,500 AK47’s from Nicaragua’s military stockpiles, by way of Israeli arms merchants based in Panama and Guatemala. The arms were part of a five-shipment package that included 13,000 assault rifles, millions of bullets, grenade and rocket launchers, machine guns, and explosives. The AUC, which was on the G.W. Bush’s administration’s official list of terrorist groups, was supported by landlords who wanted to combat Colombia’s leftist guerillas, the ELN and the FARC. The AUC was also supposedly fighting Colombia’s Army. From 2000 to 2003, Colombia received $2.5 billion of US military aid, plus more than 400 Special Forces troops, making it the world’s third largest recipient of US aid. The AUC also reportedly purchased arms from army stockpiles in El Salvador and Guatemala. In 2002, a OAS study also revealed that a Lebanese arms broker with al Qaeda links had tried to purchase 20 SA-7 missiles from Nicaragua’s stockpiles. The US starting pressuring Nicaragua’s President Bolanõs, a neoliberal businessman, to reduce these stockpiles – but hopefully not by selling more of them to the AUC.

In the long run, therefore, by forcing the comparatively-harmless Sandinistas to stockpile all these weapons to defend themselves, and by also arming the right-wing militaries of El Salvador and Guatemala to the teeth, the US had set a trap for itself.
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In reality, of course, Nicaragua’s leftists, even if they had been so inclined, were neither necessary nor sufficient to “subvert” their neighbors. Those neighbors with the most serious liberation movements, like El Salvador, Guatemala, and Colombia, had long since done a perfectly good job of subverting themselves. Their rebel movements developed over many decades from within, on the basis of incredibly-unbalanced social structures. For example, El Salvador’s catorce, its top 14 families, controlled 90-95 percent of that country’s land and finance capital, while in Guatemala, just 2 percent of the population controlled more than 70 percent of arable land. These situations were only a slightly more anonymous version of Nicaragua, where the Somoza family alone had laid claim to a quarter of the country’s arable land. And the resulting social conflicts were similar -- in the 1980s, El Salvador’s class war claimed more than 80,000 lives, while Guatemala’s claimed 200,000, with the vast majority due to their own brutal armed forces and paramilitaries.

On the other hand, Costa Rica, Nicaragua’s good neighbor to the south, had long since inoculated itself against revolution by developing an old-fashioned middle-class democracy, with lots of small farms and more teachers than police, having completely abolished its military in 1948.

Furthermore, while the Reagan Administration asserted over and over again in the early 1980s that the Sandinistas had shipped arms to leftist guerillas in El Salvador, two decades later, these allegations have been shown to be as spurious as the MiG purchases. In fact, the Sandinistas’ aid to El Salvador’s rebels, the FLMN, was miniscule, and it was terminated in 1981, as the World Court concluded in 1986. The claim that El Salvador’s FLMN had acquired several hundred tons of weapons from the East Bloc, Arafat and Libya (!), had also been pulled out of thin air. In fact, the rebel armies in El Salvador and Guatemala were poorly armed, except for Galil rifles and rocket launchers they managed to steal or purchase from corrupt army officers. Leading Sandinistas like Tomas Borge also explicitly rejected the notion of “exporting revolution,” except by way of the FSLN’s own example. After all, the FSLN had not needed Soviet or Cuban backing for their own revolution. They also had their hands full rebuilding Nicaragua. The last thing they needed was another war with El Salvador or Guatemala, in addition to the contra war.

Finally, while the Sandinistas were not liberal democrats, and, as noted, committed many political blunders, they were scarcely in a position to run a “dictatorship,” even within Managua’s city limits. To their credit, they had greatly increased the amount of popular involvement in the country’s governance. In November 1984, they held national elections that most international observers, including Latin American scholars and Western European parliaments, agreed were reasonably clean, despite the Reagan Administration’s provision of $17 million to opposition candidates, its systematic efforts to discredit the elections, and the fact that by then Nicaragua was already under steady assault from US-backed contras. Certainly by comparison with the Somozas’ rigged elections, other countries in post-war situations, and El Salvador and Guatemala in particular, Nicaragua’s degree of political freedom was tolerable, if not beyond reproach.

Yet when 75 percent of registered voters turned out for the November 1984 elections, and the FSLN received a commanding 67 percent of the vote, capturing the Presidency and 61 of 96 seats in the new National Assembly, Nicaragua was again accused by the Reaganites of being a “dictatorship.” As former New York Times Editor John Oakes remarked at the time, “The most fraudulent thing about the Nicaraguan election was the part the Reagan Administration played in it.”

The other troubling fact for Reagan’s Nicaraguan policy was that, objectively, the Soviet Union really did not have much interest in acquiring yet another dependent, state-socialist backwater like Vietnam, Afghanistan, or Cuba -- which by the early 1980s was already costing the USSR about $3 billion a year in aid. In hindsight, we now know that, far from being an expansionist Evil Empire, at this point, the USSR was really just hanging on for dear life -- a wounded giant, obsessed with its own serious economic problems, which were even forcing it to import grain from Argentina’s fascist junta! Internationally, it had its hands full just trying to stave off an embarrassing defeat in Afghanistan on its own southern border. It was also pressing existing client states in Eastern Europe and Southeast Asia hard to practice self-reliance.

Finally, in 1980-81, before the US made it absolutely clear that it was seeking “regime change” in Nicaragua, the Sandinistas tried to restore good economic relations, plus access to World Bank and IDB loans. But for the US intervention, this access would have been maintained. And that, in turn, would have significantly reduced Nicaragua’s dependence on East-Bloc aid. After all, as a senior World Bank official noted in 1982, “Project implementation has been extraordinarily successful in Nicaragua, perhaps better than anywhere else in the world.”

About that time, Nicaragua also sought aid from many non-Soviet countries, including Venezuela, Mexico, and France. It was most successful with Mexico, which resisted US pressure and became Nicaragua’s largest aid provider until 1985. Nor did Nicaragua turn immediately to the Soviet Bloc for aid. When it tried to buy $16 million of arms from France in early 1982, however, President Reagan got the French President, Francois Mitterand, to delay the sale “indefinitely.” Only then – under increasing attack from the contras -- did Nicaragua turn to the Soviet Union and Cuba for significant quantities of arms and advisors.

Of course, as noted, many Sandinistas were undoubtedly committed radicals, dedicated to policies like land reform, free health and education, and the seizure of Somocista-owned properties. But these policies were entirely defensible, given Nicaragua’s economic conditions and its need to play catch-up with basic social justice. These are, after all, policies that the US has itself supported, or at least tolerated, in other times and places, when they happened to serve its interests.

The Sandinistas may have been mulish and full of radical bravado, but they were far from anyone’s pawns. These characterizations were 1950-vintage hobgoblins, left over from the days when Ronnie ran the Commies out of the Actors Guild in LA. At best, they reflected a desire to show the Evil Empire who was boss, by making an example of some weak little pinko regime.

On this view, then, in the early 1980s, the USG basically succeeded in pushing tiny Nicaragua into relying heavily on Soviet and Cuban arms and economic aid for its own survival– as, indeed, the USG may have also done with Fidel’s Cuba back in 1959-60. The USG then used that reliance as an excuse to expand its own provocations into a full-scale war that ultimately claimed 30,000 lives. In the historical record books, this is surely one of the clearest examples of state-funded terrorism ever.

SAYING "UNCLE"?

All these inconvenient little details were brushed aside by the Reaganites when they took office in January 1981, raring, in President Reagan’s words, to make the Sandinistas “say uncle.” Say uncle they never did -- in fact, by 1988, they’d “whupped” Olly North’s contras pretty good. But that was not for want of US efforts.
fig. 5.9.Contras
In March 1981, President Reagan signed an Executive Order that mandated the CIA to undertake covert operations in Central America, to interdict arms shipments “by Marxist guerillas.” By November 1981, the US focus had shifted from arms interdiction to regime change. That month, the Administration provided an initial $19 million to mount a pretty transparent “covert” effort to destabilize Nicaragua. The strategy, implemented by the now-famous gang of Presidential pardonees, was the classic scissors tactic that had been employed by the US and its allies in many other 20th century counterrevolutionary interventions, notably Russia (1918), Guatemala (1954), Cuba (1959-60), and Chile(1973).

On the one hand, the USG tried to cut off Nicaragua’s cash flow, reducing access to new loans from the IMF, the World Bank, and the IDB, as well as all EXIM Bank funding and OPIC risk insurance. In September 1983, the US slashed Nicaragua’s sugar quota. In November 1985, it added a total embargo on all trade with the US, Nicaragua’s main trading partner and foreign investor up to then. Given the country’s dire economic straits, this had the practical effect of cutting off all US private investment and bank lending.

At the same time, the Reagan Administration was stubbornly opposing all efforts to embargo trade or investment with respect to South Africa’s racist apartheid regime. In September 1983, for example, the State Department approved a Westinghouse application to bid on a $50 million ten-year contract to maintain and supply South Africa's two nuclear power stations. The US also continued to support World Bank and IDB loans to the right-wing regimes in Guatemala and El Salvador throughout the 1980s.

The other half of the scissors strategy was the USG’s effort to create, finance, arm, and determine strategy and tactics for an 18,000-person contra army, financed with $300 million of taxpayer money, in-kind military assistance, another $100-$200 million raised from private donors like the Sultan of Brunei, and an untold amount of cocaine proceeds. The main faction, the Frente Democrático Nacional (FDN), consisted of 3,000 ex-Somocista National Guard members and another 12-13,000 assorted mercenaries, anti-Castro Cubans, Israeli trainers, Argentine interrogators, and cocaine traffickers of several different nationalities. The Reaganites knew they were not dealing with angels here. As the CIA’s Inspector General later admitted in 1998, the agency made sure to get a statement from the US Department of Justice in 1982, waiving the CIA’s duty to report drug trafficking by any contra contractors.

From 1982 to 1989, this murderous scalawag army stoked a war that ultimately took about 30,000 lives, including those of 3,346 children and more than 250 public school teachers. Another 30,000 people were wounded, and 11,000 were kidnapped, according to the National Commission for the Protection and Promotion of Human Rights. Another half million fled the country to avoid the chaos. With the help of Harvard Law School Professor Abram Chayes, Nicaragua later successfully sued the US for launching these and other terrorist attacks and causing all this damage. In November 1986, the International Court at the Hague found the US liable for several clear violations of international law – notably, for launching an unprovoked war that was not justified by any “right of self defense.” The Court suggested that appropriate damages for the resulting property damage were on the order of $17 billion. But the Reagan Administration declined to appear in court, and refused to recognize the judgment.

THE WORLD'S HEAVIEST DEBT BURDEN

The detailed history of Nicaragua’s contra war has been told elsewhere, at least those parts of it that are not still classified, like much of the record of US knowledge about the contras’ extensive cocaine trafficking activities, and President Reagan’s confidential discussions with his aides, kept off limits for an indefinite period by a Executive Order signed in 2001 by President G.W. Bush.

Our main interest here is in the war’s devastating impact on Nicaragua’s economy and its crushing foreign debt burden. Ultimately, the FSLN soundly defeated the contras with a combination of adroit military tactics – for example, heavily-mined “free-fire” zones along its northern border with Honduras – and a large standing army, raised by draft. To pay for all this, however, the FSLN had to boost military spending, from 5 percent of national income in 1980 to 18 percent in 1988, when the first in a series of armistices was finally signed. By then, more than half of Nicaragua’s government budget was devoted to paying for an army that numbered 119,000 regular soldiers and militia – 7 percent of all Nicaraguans between the ages of 18 and 65.

Early on, the Sandinistas had made a strong commitment to building new health clinics and schools in the county. These social programs, plus land reform, were among their most important accomplishments. Even in the midst of the war, with the help of 2500 Cuban doctors, they managed to increase spending on health and education, open hundreds of new medical clinics, and sharply reduce infant mortality, malnutrition, disease, and illiteracy. They also implemented a land reform that redistributed more than 49 percent of Nicaragua’s arable land to small farmers.

But the war made it very hard to sustain these undeniable social accomplishments Despite the FSLN’s military “victory,” Nicaragua’s regular economy took a direct hit. Trade and investment plummeted, unemployment soared to 25 percent, and inflation reached more than 36,000 percent by 1988-89. From 1980 to 1990, Nicaragua’s average real per capita income fell 35 percent, and the incidence of poverty rose to 44 percent. To deal with shortages in the face of soaring inflation, the FSLN had to implement a rationing system for food and other basic commodities. As the Nixon Administration had done to the Allende regime in Chile a decade earlier, so the Reaganites did to Nicaragua – they made the economy “scream.”

All told, by 1990, Nicaragua had displaced Honduras as the poorest country in Central America. It had also become the world’s most heavily indebted country. To fund the defense budget and their other commitments in the face of declining tax revenues, trade, investment, and multilateral funding, the FSLN partly relied on inflationary finance, by having the Central Bank just print more cordobas. But for vital foreign purchases, including oil and weapons, it required dollar loans from sympathetic countries, mainly the Soviet Union ($3.3 billion), Mexico ($1.1 billion), Costa Rica, Germany, Spain, Venezuela, Brazil, and Guatemala (!), plus more than $500 million from the Central American Bank for Economic Integration, one multilateral institution that the US did not control.

When the newly-elected government of Violeta Barrios de Chamorro took office in April 1990, the debt stood at $10.74 billion – more than 10 times its level in 1980, and nearly 11 times Nicaragua’s national income.

This was by far the highest foreign debt burden in the world, thirty times the average debt-income ratio for all developing countries. And it was not derived from “technical policy errors,” “economic accidents,” or “geographic misfortune. ” Part of it was the $1.5 billion of dirty debt left over from the Somoza years. The rest derived from the ruthless persecution by world’s most powerful country of a tiny, stubborn Central American nation that was determined to finally make its own history.

CONCLUSION - REAGAN'S IMPACT ON NICARAGUA

In the 1980s, against all odds, and woefully ignorant of economics, politics, business, and diplomacy, a handful of rather foolhardy Nicaraguans dared to challenge the Reagan Administration's attempt to prevent them from controlling their own destiny.

They made many mistakes, and they required much on-the-job training. But at least they tried to stand up.

When they did so, they were attacked, and when they defended themselves, they were portrayed as the aggressors. Ultimately they won a victory of sorts, but it left their country a shambles.

Then their successors, worshipers of the latest fashions in neoliberal economic theology, came to power promising reform and freedom, and ended up turning the country into a bantustan.

Perhaps Nicaragua will need another revolution.

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(c) James S. Henry, SubmergingMarkets.com(tm) 2004. Not for reproduction or other use without express consent from the author. All rights reserved.

June 17, 2004 at 08:05 PM | Permalink | Comments (2) | TrackBack

Monday, June 14, 2004

The "Reagan Revolution," Part One:
Did He Really Win the Cold War?

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INTRODUCTION

Former President Reagan’s $10 million taxpayer-funded bicoastal funeral extravaganza is finally over, so we may now be able to regain a little objectivity about the man’s true accomplishments. This really was an extraordinary Hollywood-scale production – one of Reagan’s best performances ever. Apparently the actor/President started planning it himself way back in 1981, shortly after he took office, at the age of 69. Evidently he never expected to live to be 94.

For over a week we have been inundated with neoconservative hagiography from adoring Reagan fans -- one is reminded of Chairman Leonid Brezhnev's funeral in 1982. Even the final event’s non-partisan appeal was slightly undercut by the fact that only die-hard conservatives like President George W. Bush, former President George H. W. Bush, Margaret Thatcher, and Canada’s Brian Mulroney were invited to give eulogies. But at least this saved Democrats the embarrassment of having to say nice things about their fiercest, most popular, and most regressive antagonist of the 20th Century.
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Some Bush campaign staff members reportedly recommended shipping the casket home from DC to California by train. Cynics suggested that this was intended to prolong the event and further distract voters from Bush’s serious political difficulties.

Thankfully Nancy Reagan spared us this agonizing spectacle. She probably recognized that it would only invite unfavorable comparisons with FDR, whose family eschewed the state funeral in favor of the more humble train ride. Furthermore, AMTRAK no longer serves most of the towns along the way, due in part to service cutbacks that really got started under President Reagan.

There has already been quite a bit of dissent from the many one-sided tributes to Reagan. Most of it has focused on domestic policy -- especially Reagan's very mixed track record on civil rights and the HIV/AIDs epidemic, his strong anti-union bias, the huge deficits created by his “supply-side” legerdemain, his deep cutbacks in welfare and education spending, and his weak leadership on conservation, the environment, consumer protection, and energy policy. Reagan’s hard-right bias on domestic policy certainly was underscored by the almost complete absence of blacks and other minorities among the ranks of ordinary Americans who lined up to mourn his passing.
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With respect to foreign policy, the “Iran-Contra” arms scandal and Reagan’s support for apartheid were recalled by some observers. But most of the attention was directed to Reagan's supposedly uniformly positive contributions to the demise of the Soviet Union and the end of the Cold War.

In this article, the first of two in this series, we'll examine Reagan's foreign policy contributions more closely. The analysis has important implications not only for our assessment of Reagan, but also the White House's current incumbent.

DID RONNIE REALLY “WIN THE COLD WAR?”

We can debate this alleged role endlessly. Of course, like John Kennedy (“Ich bin ein Berliner”), Reagan made one very forceful speech in Berlin (“Tear down this wall, Mr. Gorbachev.”) Especially during his first term, he also supported policies that tried to roll back the Soviet Empire’s frontiers in distant places like Afghanistan, Angola, Nicaragua, and Grenada. He also expanded the US defense budget, accelerated the deployment of theater-nuclear missiles in Europe that had already been started by President Carter, and financed the (largely-nonproductive) first round of the “Star Wars” anti-missile program. All these moves no doubt increased pressure on the Soviets, and probably encouraged them to negotiate and reform.

However, Reagan was hardly responsible for the fact that the “Soviet Empire” had been more or less successfully “contained” almost everywhere except Cuba, Vietnam, and Afghanistan from the 1950s to the 1980s, and that even these client states had become more of a burden to the USSR than a blessing.
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Nor was he responsible for the fact that President Carter had initiated anti-Soviet aid to the Poles and the Afghan rebels in the late 1970s; deployed the first long-range cruise and Pershing II missiles in Europe in December 1979, partly in response to the Soviets’ deployment of SS-20 missiles in Eastern Europe; suspended Senate consideration of the SALT II Treaty in January 1980; and issued Presidential Directive 59 in August 1980, adopting a new, much more aggressive “countervailing force” strategy for nuclear war.

Nor did Reagan have much to do with the fact that a whole new generation of Soviet leaders, including Mikhail Gorbachev, took power in 1984-85, or the fact that these new leaders chose the “glasnost/ big bang” route to reform rather than the more gradual and successful one that has kept the Chinese Communist Party in power to this day. This was also a matter largely of the Soviets' own choosing.

Nor was Reagan responsible for the fact that Gorbachev, who actually sought to preserve a stronger, reformed version of the Soviet Union rather than disband it, proved to be much less adept at Russian politics than Boris Yeltsin.

Even if we acknowledge that Reagan’s policies contributed to ending the Cold War, therefore, the historical record is very far from giving him “but for” credit for this happy ending.

In fact, even if "Cold War liberals" like Jimmie Carter and Fritz Mondale had presided over the US throughout the 1980s, the odds are that the very same key systemic and generational factors that helped to produce fundamental change in the Soviet system would have still applied – with very similar outcomes.

WHAT RISKS DID RON RUN?

In the literature on the economics of investment, it is well established that (at least in equilibrium, with competitive markets) there are no increased rewards without increased risk. When it comes to evaluating historical leaders, however, apparently this basic principle is often overlooked.

Reagan’s confrontational approach to the “Evil Empire” clearly was very distinctive. But this was hardly an unmixed blessing. Indeed, we now know that he took incredible risks in the early 1980s, and, as discussed below, that we are all extraordinarily lucky to have survived this period intact.

Furthermore, we are all still living with serious systemic risks that are a direct byproduct of Reagan’s high-risk strategies—even apart from the long-term legacy of his Afghan “freedom fighters” and latter-day terrorists.
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For example, only in the mid-1990s, after the USSR’s collapse, did we learn that the Soviet Politburo and top Soviet military planners really had become convinced in the early 1980s that Reagan had adopted a new pro-nuclear war-fighting strategy, changing from “mutually assured destruction” to the pursuit of an all-out victory.

Soviet leaders came to this conclusion partly because of several key developments in military technology and strategy.


  • By the early 1980s the US had acquired a growing advantage in submarine-based nuclear weapons (D-5 Trident missiles, with greater accuracy and short flight times) and anti-submarine warfare techniques, as well as space-based communications, surveillance, and hunter-killer satellite capabilities.
  • As noted, Carter and Reagan both started to deploy cruise and Pershing II missiles in Europe and on submarines. These were just 4-6 minutes from the Soviets’ command-and-control centers and many of their ICBM silos, which they counted on for up to two-thirds of their deterrent capability.
  • In the early 1980s the US also took several steps that were apparently intended to increase its chances of surviving a nuclear war. These not only included “Star Wars,” but also hardened telecommunications, new command-and-control systems and some “civil defense” measures, and revised policies for “continuity in government.”

On top of these structural changes, the Reagan Adminstration’s aggressive rhetoric and behavior also contributed to this new Soviet view of US intentions.

In early 1981, for example, Reagan ordered the military to mount a still-highly-classified series of “psyops” that probed USSR airspace and naval boundaries with US and NATO jet fighters and bombers, submarines, and surface ships. The US and NATO also conducted several large-scale exercises in 1982-84. The US also sharply increased its assistance to “freedom fighters” like the Nicaraguan contras, the Afghan rebels, and Jonas Savimbi’s bloodthirsty South-Africa-assisted renegades in Angola.

As we now know, all this belligerent US activity scared the living daylights out of old-line Soviet leaders like Yury Andropov. It reminded them of Hitler’s sudden blitzkrieg attack on the Soviet Union in 1941, a searing experience for which Stalin had been surprisingly unprepared. They came to believe that the US was actually planning the nuclear equivalent of this blitzkrieg -- a first strike that would decapitate Soviet command-and-control while minimizing the effects of retaliation on the US. Of course Europe would be probably destroyed in such a confrontation. But the Soviets assumed, perhaps correctly, that the US saw “Old Europe” as dispensable.

In response to this perceived US threat, the Soviets did not roll over and play dead. Rather, drawing on their 1941 experience, their first response was to assume the worst and try to prepare for it.

  • From May 1981 on, they ordered a worldwide intelligence alert, code-named “RYAN”, aimed at keeping the Politburo informed on a daily basis of US preparations for a first strike.
  • The Soviets shifted their nuclear posture decisively to “launch-on-warning.” For the first time they also provided the Politburo with the ability to sidestep the Soviet General Staff and launch all strategic missiles with a central command. To support this shift, they also deployed new ground-based radar and space-based early-warning systems.
  • Most striking of all, in the early 1980s the Soviets also implemented a full-scale nuclear “doomsday” system, code-named “Perimeter.” This system, first tested in November 1984, placed the power to unleash a devastating retaliatory strike against the US essentially on autopilot, whenever the system “sensed” that a nuclear strike against Moscow had either occurred, or was about to occur.


Together, all these shifts in Soviet defensive strategy cut the decision time available to their leaders, when deciding how to respond to a perceived US/ NATO attack, to as little as 3-4 minutes.

As Gorbachev later remarked,

“Never, perhaps, in the postwar decades was the situation in the world as explosive and hence, more difficult and unfavorable, as in the first half of the 1980s.”

THE LEGACY

To our great distress, despite the mutual de-targeting that was announced with so much fanfare by Presidents Clinton and Yeltsin in 1994, both these Cold War “hair trigger” responses to Reagan’s initiatives are still in place today, responsible for controlling at least the 5000+ strategic nuclear warheads that Russia still maintains.





Lt. Colonel Petrov had been forced to make a profound decision about world civilization in a matter of minutes, with alarms and red lights going off all around him.




These systems have already experienced several close calls. Among the incidents that we know about were those in September 1983, August 1984, and January 1995. In this last incident, President Yeltsin -- who was not always a picture of mental health and stability -- came within minutes of unleashing a full-scale nuclear retaliation in response to a false alarm set off by a Norwegian research missile that was sent aloft to study the Northern Lights. Apparently it bore a striking resemblance to an incoming Trident missile on Soviet radar until it crashed harmlessly in the sea.
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The September 1983 incident, at the height of Soviet tensions with the Reagan Administration, and just a few months after the huge anti-Soviet NATO exercise “Able Archer” in Western Europe, was even more scary. In 2000, Lt. Colonel Stanislov Petrov, the duty officer who had been in charge of an early-warning bunker south of Moscow at the time, told Western journalists what happened when the new early-warning computers at his facility suddenly reported a full-scale US attack:

"I felt as if I'd been punched in my nervous system. There was a huge map of the States with a US base lit up, showing that the missiles had been launched. I didn't want to make a mistake…..I made a decision and that was it. In principle, a nuclear war could have broken out. The whole world could have been destroyed. After it was over, I drank half a liter of vodka as if it were only a glass and slept for 28 hours."

Ultimately it turned out that the new Soviet early-warning system had malfunctioned. Lt. Colonel Petrov had been forced to make a profound decision about world civilization in a matter of minutes, with alarms and red lights going off all around him.

Fortunately for all of us, he decided to not to believe his own computers.

Unfortunately for all of us, a modified version of that same hair-trigger early warning system is still in place in both Russia and the US to this day, since neither side has ever reverted to the pre-Reagan “MAD” strategy -- and Lt. Colonel Petrov has long since retired to a humble Moscow flat.

SUMMARY

From this vantage point, President Reagan’s long-term legacy is a little more difficult to evaluate, even with respect to his impact on the Cold War.


  • Clearly he had a great deal of help from others, as well as from sheer fortuity.
  • We are still living with the heightened risks in the world system that were partly created by the aggressive nuclear strategy adopted by President Reagan, and to some extent by President Carter before him. If Russia’s early warning systems and doomsday systems – both of which are now reportedly starved for maintenance funds -- should ever fail, history may not be so kind to Ronald Reagan, assuming that there is anyone left to write it.
  • Much of Reagan’s vaunted “strength” was really based on a blithe combination of sheer ignorance, blind faith, and risk taking. Compared with President Nixon (who, like FDR, also eschewed a state funeral), Reagan knew almost nothing about world affairs other than what he read in The Readers Digest and (perhaps) The National Review.
  • On the other hand, compared with the insecure Nixon, who was constantly seeking reassurance from his advisors, Reagan certainly did have much more faith in his own convictions. With respect to the Soviet Union’s nuclear strategy, like a determined child, he may have never fully appreciated the fact that he was playing with…well, er.., much more than dynamite.

After the fact, of course, like any high-stakes gambler who bets it all on “black,” spins the wheel, and wins, Reagan looks like a hero, at least to many Americans.

However, whether or not ordinary citizens of the world should look back on this track record and cheer, much less encourage our present and future leaders to adopt similar blind-faith strategies, is very doubtful.

Indeed, today, most of the rest of the world seems to regard President Reagan -- rather more accurately than many Americans -- as the friendly, fearless, perhaps well-meaning, but really quite reckless “cowboy” that he truly was.

***

(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.


June 14, 2004 at 03:00 AM | Permalink | Comments (1) | TrackBack

Wednesday, June 09, 2004

The UN Security Council Resolution on Iraq:
Breakthrough?

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Yesterday the UN Security Council voted unanimously to approve a new resolution with regard to Iraq. This action is already being positioned by Bush, Blair, and some journalists as a legitimation of the 160,000 Coalition forces in Iraq, and a sea change in the international community's attitude toward the war.

We need to examine this closely, to see whether it really is a turning point. Does it represent an important concession by the hard-pressed Bush Administration to important UN demands -- not so much because of the June 30 deadline, but because of the real deadline, November 2? Or was it just another example of the UN's inability to accomplish very much on this core international issue other than to "follow the US or get out of the way?"

Doesn't the UN resolution really amount to a kind of "appeasement" of Bush and Blair, a bizarre reward for having launched this illegal war without explicit UN authorization? What do the Kurds think of the UN resolution, which completely ignores their demand for autonomy? And where does it leave the hapless John Kerry, who now finds that one of his few policy suggestions for Iraq, the notion of getting the UN more involved, has been encapsulated by the President?

SOVEREIGNTY?

To begin with, the resolution endorses President Bush's June 30th deadline for the transfer of "full responsibility and authority"to the "sovereign" Interim Government of Iraq.

The UN resolution also notes that on June 30, control over accumulated profits from oil sales and the UN's "oil for food" program will be transferred to the interim Iraqi government. Of course, given the high costs of security and recent constraints on production and exports, oil profits have been relatively modest. As for the UN oil for food program, it is almost extinct, with key former administrators under investigation for corruption. For the foreseeable future, therefore, the interim Iraqi Government is likely to remain heavily dependent on aid from the US Government, which is still sitting on more than $18 billion that was supposed to have been spent on infrastructure, and on relief from Iraq's $130 billion foreign debt.
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Furthermore, the new "sovereign" government is also instructed to "refrain from taking any actions affecting Iraq's destiny beyond its interim period of governance."

Presumably this rules out privatizing oil assets. One hopes that it doesn't also prevent the interim government from challenging US plans to build 14 new military bases all over the country, or from revising the extraordinary neoliberal provisions in the country's new laws on investment, trade, privatization, and taxes.

These were drafted by Paul Bremer's staff (including McKinsey veteran and Greenwich-based venture capitalist Tom Foley) and adopted by the Iraqi Governing Council and the CPA without any significant debate. They include some of the most extreme "free market" provisions in the developing world -- 2 percent import duties, wide open capital markets, and a maximum 15 percent income tax rate. Russia, which already tried an experiment with such measures in the early 1990s, should volunteer to give the new interim Iraqi government some free advice about the effects of such measures.

AN END TO OCCUPATION?

The UN resolution also declares the "end of the occupation" and the authority of the US-led Coalition Provisional Authority as of June 30th. On the other hand, it also recognizes the mandate of the "multinational force" (MNF) currently in Iraq at the request of the interim Government (sic)" to "take all necessary measures to contribute to the maintenance of security and stability."
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In exercising this broad mandate, the MNF is requested to "work in partnership" with the new "sovereign" Iraqi Government. The request from France and Spain that the MNF report to the Iraqis was turned down.

Nor is there any attempt to create a UN peacekeeping force, other than a "small" (4,000 person!) force to protect UN workers themselves. (How many UN workers will there be, exactly?) Apart from the US and the UK, none of the other Security Council members are yet prepared to commit their own troops to joining the MNF in this adventure -- despite their newfound enthusiasm for Bush's plans.

The UN promises to review this MNF mandate in one year. It also assures us that if the Iraqi Government wants the UN to terminate the MNF's mandate to be in Iraq, it only has to ask. Of course the US will then promptly withdraw all its troops from Iraq, because, after all, we only invaded the country with...uh..UN authorization?

That kind of request might conceivably occur under some hypothetical future Iraqi government. But the UN knows full well that at the moment, this "right to demand withdrawal" business is pure cosmetics -- the Tigris- Euphrates will freeze in summertime and all looters will leave Baghdad before such a request is made by the interim government of Prime Minister Iyad Allawi.

This rising star and secular Shiite was not a London brain surgeon for nothing. He is also a leading Chalabi rival, Iraqi National Accord leader, and early Baath Party member who was hand-picked by the now-defunct Iraqi Governing Council, with Paul Bremer's backing.

Allawi, who is reported to have spied for the Baathist Party in London before he turned against Saddam in the 1980s, has a long history of cooperation with US and UK intelligence agencies, as well as with disgruntled senior Iraqi Army officers. Allawi has become the agencies' preferred alternative to Chalabi -- a talented administrator who represents "the acceptable face" of Baathism, and has none of Chalabi's weird connections with the Iranians, busted Jordanian banks, or the insufferable Richard N. Perle.

It is far too early to say whether or not Allawi will be able to leverage his "transitional" role into a more permanent one, or even live to see the fall, but he and his numerous relatives -- some of whom are married to Chalabi's relatives -- are more likely to ask for increased MNF troops than to ask them to withdraw.

The UN resolution does recognize that Iraqi security forces will, at least technically, report to the Iraqi Government rather than to the MNF. This provision may help Allawi restore more control to his friends in the Iraqi Army. But since they will continue to derive most of their payroll, training, arms and ammunition from the Coalition for the foreseeable future, it is unclear how much practical difference this really makes.

Unless the MNF is booted out by a successor Iraqi Government, according to the UN resolution, its mandate is scheduled to expire "on completion of the political process outlined above." Optimists may read this to mean "by December 31, 2005." But that assumes that this "process" will stay on track. We have all seen in the last 14 months just how accurate such forecasts have been with respect to Iraqi politics -- for example, the abortive effort to "write a constitution by March 2004." Bearing this in mind, the UN resolution was careful not to specify an explicit date for MNF withdrawal.

THE ROAD TO DEMOCRACY?

The UN resolution also endorses a rather convoluted timetable for the creation of representative government in Iraq -- the broad contours of which can only be described as "Floridian," in terms of the efforts being made to control the exercise of democratic choice as much as possible, even while making loud noises in favor of it.

  • The process begins with a "national conference reflecting the diversity of Iraqi society." How a conference can do that without being democratically elected is a puzzle that evidently the UN has solved, since it will help to organize and convene this conference in July 2004.

    That conference, in turn, will select a "Consultative Council" of 100 members, which will "advise" the Interim Government and have "veto power over its orders." Precisely how this Council, which has just been added to the stew, will exercise this potentially very important power over Allawi and his team, is unclear -- remember, folks, we are making this up as we go along.

  • With the UN's help and the Consultative Council's "advice," the Interim Government will then hold "direct democratic" elections for a "Transitional National Assembly" by the end of 2004, or January 31, 2005 at the latest. This is the UN, remember; one-month variations in schedules fall like raindrops from the sky.


  • This Transitional National Assembly, in turn, will establish a "Transitional National Government," which would take charge of drafting a "permanent constitution."

    Presumably the Consultative Council will by then have faded away, along with the interim Iraqi government and the Iraqi Governing Council before it. Iraq may be setting something of a record here for prophylactic appointed governmental bodies, designed to sharply slow the rate of descent to that point where ordinary people actually get to vote. (The so-called "non-Florida point.")

  • Finally, on the basis of the yet-to-be drafted constitution, a "constitutionally-elected government" will finally be elected by the Iraqi people themselves by December 31, 2005. Or perhaps by January 31, 2006; who knows?

What are ordinary Iraqis likely to make of this "timetable?"

First, they've already had more than 14 months of "interim" rule by people who were basically appointed by foreigners, and many of them evidently have some very strong opinions about the results.

Now they are being told that they will basically continue to be governed by recycled ex-Baathist exiles and military men, also chosen by foreigners, for at least another seven months.

Furthermore, these appointees will also now be in charge of the Iraqi military. In a country where government is commonly viewed, with strong historical justification, as a private fiefdom that is populated by a gang of thieves, this is unlikely to encourage people to believe in the UN's roadmap.

Finally, they are also being told that even when they do finally get to vote for the first time, by say January 2005, they will only be electing yet another "transitional" government, on the way to a constitutional convention and yet another new government the following year.

In this regard, the Iraqi Kurds, in particular, have enormous reasons for concern. Their demands for a loose federation and a great deal of autonomy, which were recognized in the draft March 2004 constitution, were not mentioned at all by the UN. Apparently they face the prospect of having to start over from scratch, without nearly as much leverage and high level support as they had before. Already key Kurdish members of the interim Iraqi Government have threatened to resign over this issue.

In short, even if everything goes according to plan, this political timetable requires ordinary Iraqis -- many of whom are still unemployed, and most of whom are already incredibly angry at how the US has mismanaged Saddam's overthrow -- to have extraordinary patience and to suspend an extraordinary amount of disbelief.

But we've already seen how difficult it was to achieve agreement on an overall national constitution this year. My humble conjecture is that that difficulty was not due to a shortage of UN advice, consultative councils, or Security Council resolutions.

Rather, it reflects very real, deep-seated divisions of views, interests, ideology, and affiliations within Iraqi society.

These divisions may never be overcome, or they might be overcome by a bold experiment in de-occupation, liberation, local autonomy, and democratization. But they are unlikely to be overcome by the slow-motion, controlled kind of pseudo-democratization that the UN, in its wisdom, has just endorsed.
We should not really be surprised, therefore, if the roadmap just outlined produces even greater resistance and discord, rather than peace and quiet.

REWARDING AGGRESSION?

Beyond the impacts of the UN resolution within Iraq, the other key risk is that it constitutes appeasement. In effect, rather than being sanctioned by the UN for starting this preemptive war on false grounds in clear violation of international law, the US and the UK are now to some extent being let off the hook. And Bush and Blair, in particular, who are both fighting for their political lives, will undoubtedly be helped by the perception that their policy has at last been embraced by the UN.

Of course UN members can argue that they had little choice from the standpoint of helping the Iraqi people, and that the new resolution says nothing about the "original sin" that may have been committed.

This will be cold comfort to Bush opponents like John Kerry, who had made UN and Nato involvement in Iraq a key pillar of his approach to the war. At this point, armed with the UN's blessing, it is no longer clear how Kerry's position differs at all from the President's.

More important, by swallowing whole so much of the Bush/Blair program for Iraq, caving in on UN representative Brahimi's preferences for key appointments in the interim Iraqi government, and effectively sanctioning the continuation of the occupation until the country achieves political nirvana (or forever - whichever comes first), the UN may have reduced its own influence even further, and cleared the way for more such adventures.

SUMMARY

After more than a year of grossly mismanaging Iraq's transition to democracy, and more than eight decades of pushing the country toward autocracy, the reluctance of today's "Great Powers" to put an end to this custodial occupation and proceed more expeditiously with a bold experiment in "ASAP" local democracy is discouraging.

Between the lines, this measure has really sanctioned the continuation of an open-ended military occupation, alienated key constituents like the Kurds, undermined the opponents of the war, and rewarded serial violators of international law.
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Yet to our senior leaders, and, indeed, many journalists, victory, suitably redefined, is once more just around the corner.

Of course we never found those WMDs or the links to al-Qaeda, we were not welcomed as liberators, and a majority of Iraqis now want us to leave the way we came in --quickly. But the theory is that now, with the UN solidly in our corner, and more and more troops on the ground (perhaps including some from NATO), we really will be able to (1) stabilize the country; (2) hold more or less free elections; (3) make sure that the winners are friendly moderates; (4) hang on to our precious military bases; and of course (5) minimize US casualties.

Over the next few months, I fear that a great many more lives will be wasted as we wait once again to find out whether or not this latest untested neo-imperialist prophesy is true.

***

(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.

June 9, 2004 at 01:00 AM | Permalink | Comments (0) | TrackBack

Sunday, June 06, 2004

The Forgotten Members of the "Greatest Generation"

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This weekend President Bush was in Europe, celebrating the 60th anniversary of D-Day. He was joined by thousands of American, British, Canadian, and French veterans of World War II, members of the so-called “Greatest Generation,” as well as the Queen, the UK’s Tony Blair, France’s Jacque Chirac, Russia’s Vladimir Putin, and Germany’s Gerhard Schroeder, all of whom converged on Normandy for commemoration ceremonies. As Schroeder duly noted, the fact that all the leaders of these former allies and enemies could finally come together to celebrate D-Day for the first time means that “the post-war period is finally over.”

Many other US leaders, from Donald Rumsfeld and Dick Cheney to John McCain and John Kerry, have also recently tried to associate themselves with the valor and sacrifices of American veterans in our increasingly long list of foreign wars. Their tributes have been similar, whether the veterans in question fought in wars that were short or long, one-sided or evenly matched, just or unjust -- and whether or not the politicians in question have ever spent even a single minute on an actual battlefield.
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This year, such martial rhetoric is flying thicker than usual because of the coincidence of several events. In late April, the long-awaited $190 million memorial to America’s World War II veterans was finally unveiled in Washington DC. Its architectural reviews have been decidedly mixed, especially by comparison with the beautifully-understated Vietnam War memorial. But this certainly is a long-overdue tribute to the 16.4 million Americans who served in that objectively “good” war and the 405,000 who lost their lives in it.

We are also in the middle of an unusual US Presidential election race, which is proceeding while the country fights two wars at once – the war in Iraq and the less visible, potentially much more dangerous “war on terror.” Both key Presidential candidates are vying hard to be viewed as stalwart defenders of national security and close friends of the veterans community.

Indeed, the whole period from Memorial Day to July 4th has become a high season for veteran commemorations and martial romanticism. Those who happen to part of the majority of Americans who are neither veterans nor members of the “Greatest Generation” may feel a bit uncomfortable – sort of like non-Christians at Christmas.

I don’t happen to share this discomfort. To begin with, my family has done more than its share of fighting for the nation since it arrived in Virginia in the 1620s. We’ve volunteered for almost every single “good” American war in history, from the Revolutionary War and the War of 1812 to the Civil War, World War I, World War II, and the Korea War. As for the “Greatest Generation,” we also supplied several authentic members, including my father, a World War II veteran who served four years with the Navy in the South Pacific, and my uncle, one of General Patton’s tank commanders who helped to liberate the Buchenwald concentration camp.

It is also not the fault of subsequent generations that almost all the wars that the US has chosen to fight since the Korean War in the early 1950s have been one-sided affairs, undertaken against more or less defenseless Third World countries like Vietnam, Cuba, Nicaragua, Granada, Panama, Afghanistan, and Iraq. Except for Afghanistan, where the Taliban allowed al-Qaeda to build training camps, none of these countries ever attacked us or our allies, posed a serious direct threat to our national security, or even had air forces or navies, much less nuclear weapons.

These wars were basically neo-imperialist adventures in gunboat diplomacy. Not surprisingly, most of them proved to be vastly more lethal to the hapless natives than to US troops. For example, while the US lost 58,226 killed and 2300 missing in Vietnam, the Vietnamese lost an estimated 1 million combatants killed, 4 million killed and 200,000 missing in action, most of them to our relentless bombing campaigns.
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Furthermore, while those American veterans who have served in genuinely defensive wars certainly deserve to be honored, our political leaders do no service by oversimplifying their contributions. As the history of Germany indicates, excessive militarism and the idealization of martial values like “honor, duty, and blind obedience to one’s superiors” may help to encourage still more aggressive wars, which creates more veterans, which creates more glorification, which encourages still more wars…..

So, in the interests of reversing this venomous cycle, we offer the following critique of “Greatest Generation” mythology -- and also pay homage to other members of the Greatest Generation whose contributions have largely been forgotten.

REALITY CHECKS

The conventional image that most Americans seem to have of the US role in World War II is that we – or, at most, the US and the UK – basically won the war.

In this view, fed by sixty years of Hollywood films, poltical rhetoric, jingoistic reportage in the mass media, and bad history courses, the vast majority of the “Greatest Generation” supposedly volunteered courageously to fight against the Axis Powers. The US military supposedly played a decisive role in defeating not only Japan but also Nazi Germany and Italy, and the Normandy invasion was supposedly critical to the German defeat.

Unfortunately, it was not quite that simple.

>Draftee Predominance. To begin with, of the 16.4 million US veterans who served in World War II, only about a third were volunteers. The rest were drafted. Even in this “best of all possible wars,” therefore, where the lines between good and evil could not possibly have been any clearer, compulsion, not volunteerism, was the main motor force. In fact, volunteerism was even less in evidence during World War II than it was during the Vietnam War. Just a quarter of the 2.6 million Americans who served in the Vietnam War from 1965 to 1973 were draftees – notwithstanding the role that the draft played in stimulating opposition to that war.

>Casualties. On D-Day, June 6, 1944, the US suffered a grand total of 6603 casualties, including about 2000 killed in action or missing. Our other non-Soviet Allies added another 3646 casualties. All told, that first day, there were about 3000 killedamong all the Allies. For the entire Battle of Normandy, the US suffered 126,847 casualties, including about 30,000 killed, and the UK and other non-Soviet allies added 83,045 casualties.
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For World War II as a whole, as noted, the US suffered 405,000 American deaths. About 290,000 of these were due to combat, the rest to accidents and disease.

These were impressive losses by comparison with other American wars. Only the Civil War recorded a larger number of total fatalities, but those included a huge number who died from disease. World War II's combat fatalities was the largest for any US war.

Despite these records, the fact is that all these US and non-Soviet Allied casualty statistics pale by comparison with those suffered by our key Ally on the Eastern Front, the Soviet Union.
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All told, the USSR lost 8.7 million to 11 million troops killed in combat against Germany, Italy, Rumania, and the other Axis coalition members from 1941 to 1945. This included 500,000 troops killed at the Battle of Stalingrad alone from September 1942 – January 1943. There were also 440,000 Soviet troops killed at the Siege of Leningrad from 1941 to 1944, 250,000 at the decisive Battle of Kursk in June 1943, and 450,000 on the march to Berlin in 1945.

In addition, there were also another 12-18 million civilian casualties in the Soviet Union during World War II, compared with the 60,000 civilian casualties that the British lost to Germany air raids, and negligible US civilian casualties.

>Strategic Role – Germany. Most important, far from playing a decisive role in defeating Hitler, the fact is that the D-Day invasion came so late in the war that even if it had been turned back by Hitler, the chances are that this would have only delayed the Soviet advances into Berlin by six months to a year at most, without fundamentally affecting the outcome of the war.

The Soviets had been lobbying hard for a D-Day invasion from 1942 on, but were resisted by Churchill, in particular, who favored a "southern" strategy through Italy and the Balkans -- and had been a lifelong hardline anti-Communist.
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During the 1944 Normandy invasion and the Battle of France, the key battles involved, at most, about 15 Allied and 15 Germany divisions.

On the Eastern Front, by comparison, from 1941-44 more than 400 Germany and Soviet divisions battled each other along a 1000-mile front, and the Soviets succeeded in destroying more than 600 Germany divisions. (Overy, Why the Allies Won, 321).

Even as the Normandy Invasion was proceeding, the much larger Soviet Army was driving towards Berlin, destroying Germany’s main army group and costing the Axis powers nearly 4 million casualties.

Without this Soviet effort on the Eastern Front, therefore, the Normandy invasion could not have succeeded, and Hitler would probably have prevailed. Combined with the successful invasion of Normandy, by the time it came, the main effect was to shorten the war a bit in Europe.

Nor did the “Lend-Lease” aid provided to the Soviet Union by the US and the UK during the war prove decisive. Much more important was the fact that Soviet industry, relocated to the east, was able to out-produce Germany several times over in aircraft, tanks, and artillery pieces throughout the war.

Despite all this, the commemoration speeches given this weekend by Western leaders failed to even mention the Soviet contribution to the war effort. .

>Strategic Performance – Japan. As for the war with Japan, it has long been recognized by military historians that it was distinctly less important than the war with Germany. Without the victory over Germany, the victory over Japan would have been impossible; with it, given Japan’s relative weakness, V-J Day was basically just a matter of time. Consistent with this, the war with Japan only consumed about 15 percent of the total US war effort.

After Germany’s demise in April 1945, the US, with some belated help from the Soviet Union, turned its attention to Japan, and quickly swept it out of China and the Pacific. By August 1945, when the US dropped its two atomic bombs, the Japanese were already on the verge of surrender. As Gar Alperowitz, the leading historian of Truman’s decision to drop the bomb, has argued, that decision was largely undertaken to impress Stalin, not because of military necessity or to save American lives.

IMPLICATIONS

All this is not to say that American World War II veterans do not richly deserve the honors that have been bestowed on them. Millions of them fought valiantly, at D-Day and elsewhere.

However, especially in these times, when the US has given in to the temptation to launch an unprovoked war largely alone on its own, it is important to remember how much assistance the US needed from allies in its most important victory ever -- and how it achieved its best results when it was fighting a clearly justified defensive war.

This viewpoint offers a helpful perspective on several other popular myths about World War II. These include (1) the myth that British intelligence breakthroughs like “Ultra” – a program that broke German encryption codes -- were critical to the war’s outcome; (2) the myth that US economic capacity provided the decisive edge; and (3) the myth that the atomic bomb had to be used to force Japan’s surrender.

This analysis also provides an interesting perspective on the many critics who have deplored the “tragedy” of the Russian Revolution and the brutality of Stalin’s forced industrialization campaign during the 1930s.

The unpleasant reality is that Tsarist Russia had barely held its own against Germany during World War I. It t is very unlikely that a Tsarist regime or even a Kerensky-style liberal capitalist regime could have achieved anything like the rapid industrial development that Stalin accomplished during the 1920s and 1930s. however, in restrospect, there is little question that Stalin's crash industrialization program permitted the Soviet Union to acquire the industrial base that proved to be essential for the defeat of Nazi Germany.

So it is all very well for First World liberal democracies like the US and the UK to look down their long noses at Russia's developmental misfortunes. But perhaps we in the West should at least acknowledge our debt to the Russian Revolution, Stalin’s brutal industrialization program, his millions of victims, and especially the long-suffering Russian people. If they accomplished nothing else, at least they saved our liberal democracies from fascism. This is hardly an apology for Stalin. But if anyone deserves to be called “the Greatest Generation,” it was the generation of Russians that had to face down both Stalin and Hitler during the 1930s and 1940s.

This does not imply that the Normandy invasion was worthless. What it really may have accomplished was not so much the defeat of Hitler, per se, but a more balanced post-war political division of Europe. With the Soviet Army in control of Germany and perhaps even much of France and Italy after World War II, the post-war history of Europe might have been very different. In that sense, the value of D-Day was less a matter of defeating Hitler than of affecting the division of Europe with Stalin.

THE FORGOTTEN GREATEST GENERATION

In retrospect, there is one group of American veterans that unquestionably deserves to be included in the “greatest generation” -- although it is never mentioned in veteran tributes, and none of its members have ever qualified for US veteran benefits.

This is the all-volunteer group of 2800 Americans that journeyed to Spain at their own risk and expense in 1936-39 to serve as members of the Abraham Lincoln Battalion in the Spanish Civil War.

A ragtag army, mainly consisting of leftists, union members, and many American Jews, they joined forces with some 56,000 other international volunteers from more than 50 countries, and fought against overwhelming odds to defend the Spain’s democratically-elected Republic against General Franco’s army, which was openly supported by Hitler’s Germany and Mussolini’s Italy.
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Most of these volunteers were amateur fighters, without any military training. The arms embargo that was enforced by the future Allies -- the UK, France, and the US -- against the Spanish Republic – but not Germany or Italy – prevented the Lincolns and their comrades from having adequate arms and munitions. As a result, combat fatalities were very high. More than a third of the Lincolns died in battle, even higher than the 20-30 percent fatality rates recorded by US troops on D-Day.

Meanwhile, the US, the UK, France, and most other European countries (except the USSR), heavily influenced by conservative business elements and the Catholic Church, concocted the “non-intervention pact” that prevented arms and other aid from reaching the Spanish Republic. These Western countries also stood by and watched while Germany, Italy, and their allies aided Franco, seized Ethiopia, butchered China, and occupied Czechoslovakia. Throughout the 1930s, major US firms like GM, Texaco, Exxon, DuPont, Alcoa, and IBM, as well as Wall Street firms like JPMorgan, Brown Brothers Harriman, and Citibank, also continued to trade and invest, not only with Franco, but also with Hitler’s Germany and Mussolini’s Italy.

In the aftermath of the civil war, the Lincoln Battlion members continued to prove their heroism and commitment. After Franco won the civil war in 1939 and the Lincolns returned to the US, they were labeled as “premature anti-fascists” by the US government, prevented from holding government jobs or joining the military. To continue to fight the fascists, they had to enlist in foreign military services. In the 1950s, during the McCarthy era, many were blacklisted and otherwise persecuted. Despite such pressures, they continued to play a leading role in progressive causes throughout the last fifty years, right down to leading recent protests against the invasion of Iraq.
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Ultimately, in the late 1970s, Franco’s dictatorship – which was supported by the US Government after World War II for nearly twenty years – gave way to the return of democracy in Spain.

Finally, in 1996, as a tribute to the Lincolns’ sacrifices, the “Second Spanish Republic” celebrated the 60th anniversary of the Spanish Civil War by welcoming those American veterans who had managed to survive to a commemoration ceremony in Madrid -- a modest version of this weekend's ceremonies at Normandy. Spain, at least, recognized that these American veterans had been the forgotten members of the Greatest Generation, whose courageous efforts were never properly honored by their own country.

SUMMARY
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American veterans like my father and uncle certainly displayed extraordinary courage, sacrifice, and heroism during World War II. But, as they would have been the first to admit, in some ways they actually had a relatively easy time of it. This was not only because they had a great deal of help from allies like the Russians, the British, and the Chinese (against Japan). It was also because, as noted earlier, their war was perhaps the most clear-cut struggle ever fought between good and evil.

The veterans of all too many other American wars have had to face the fact that their wars were much less virtuous. Bearing that kind of understanding honestly certainly requires a special kind of courage and sacrifice. Perhaps that is why there is so much enthusiasm for the World War II festivities -- perhaps there is a hope that some of that war's glory will rub off on these other efforts. Those of us who have an opportunity to prevent our overly-adventurous leaders from launching such misconceived efforts, or to bring them to a halt as soon as possible, have every obligation to do so.

Finally, as we saw in the case of the Lincoln Battalion, still other American veterans have sometimes had to defy their own country’s policies of the day in order to fight for justice, and then pay a very heavy price for being “prematurely” right.

This year, as we honor those who helped to defeat global fascism, we should also honor those who were among the very first to take up arms against it.

***

(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.


June 6, 2004 at 09:47 PM | Permalink | Comments (0) | TrackBack

Wednesday, June 02, 2004

"Letters from the New World" (Ukraine):
#1.""Schwartzennation" - Microwave Democracy"

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(Editor's Note: The following is the first in a series of essays by Matthew Maly, a leading Russian-born American free-lance journalist and business consultant who is based in Kiev, Ukraine. He is the latest addition to Submerging Markets' growing list of Contributing Editors. In this essay, Matthew provides an interesting non-US perspective on the limits of America's technocratic approach to exerting influence on other countries around the world. Matthew's latest book is the highly-acclaimed How to Make Russia a Normal Country. (St Petersburg: Bulanin, 2002). An English language version, Russia As It Is: Transformation of a Lose-Lose Society, is available in the US from Booklocker.Com.)


"SCHWARTZZENATION" - MICROWAVE DEMOCRACY

From where I sit, here in Kiev, it seems that the United States of America has become a nation of super-people. At the cost of a very few lives it has defeated an army of hundreds of thousands in Iraq, and occupied a country of 25 million. Like the Spanish conquistadors facing the Incas, America appears to be an era ahead of the rest of the world. And just like the Incas facing the conquistadors, the world is ambiguous towards America, fascinated yet fearful, trying democracy and Wrigley's Spearmint Gum for the first time.

If an American soldier dies in Iraq, every inhabitant of our planet learns about his death almost instantly: a giant falls with a thud. When a crowd of Iraqis carried the helmet of a dead American soldier it seemed like it took fifty of them to carry it. Yet like every giant from a fairy tale, the American giant has a vulnerability that may prove its undoing.
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Historical eras are often distinguished from one another by technology, both industrial (how things are made) and social (how people interact). A key secret of America's economic and political advantages lies in its use of pioneering social technology, especially the concept of “win/win.”

There are countries where for every ten people who enable there are eight, ten, or twenty of those who destroy or impede. Per capita productivity in Russia is one tenth that of the US. Does this mean that a Russian can’t lift a five-pound sack of potatoes? No, it means that if a Russian wants to open a hot dog stand, a bandit and a tax collector immediately visit him. In America, one of your neighbors works to feed you and another to educate you. In Iraq, one neighbor spies on you and another teaches you hatred instead of arithmetic.

It is “win/win” social cooperation, supported by social values and a legal system that Americans often take for granted that opens the way for the introduction of new technology, not the reverse: industrial technology can be used only if your neighbors realize that your personal success will in turn help them advance their goals. America has long since accepted the basic premises of “win/win,” and this is what helps to make the American soldier grow a hundred feet tall.

But technology is a human attribute, not the essence of what a human being is all about. Technology, both social and scientific, has helped to make America successful, but America is in danger of neglecting human character, proposing solutions that are purely technical, and thus may well be inadequate.

This danger is nothing new. Paganism was a fascination with the technologies of nature: to be strong, people wore wolf's teeth or feather head-dresses. The Industrial Age worshiped the Machine Tool, a new God that produced everything, and people wanted to be like the Machine Tool's products: unanimous, marching in step, and wearing steel helmets. The Information Age proclaims: you are what you appear to be; ultimately it is all “bits and bytes.” If the celluloid Terminator can save the world, it follows that a human Arnold Schwarzenegger can save California. But is it really just a matter of technique and force?
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If we compare a McDonald's to a French restaurant, we are likely to conclude that the McDonald's is cheaper, cleaner, faster, and friendlier. It is a triumph of technology, research, and training. The French restaurant has only two things going for it: you will not remember a McDonald's meal for the rest of your life, and you cannot propose at McDonald's. McDonald's stands for a satisfying technologically-assured result, but the French restaurant stands for life, whatever it is. McDonald's has a very useful role to play, but when it proposes itself as a substitute for a sit-down meal, there is a problem.

Too often, America says to the world, "Accept our technology because it is really works." And indeed it does usually “work”, but the world does not want to accept it - it prefers to keep its old ways of life. People want to be, not just to appear. America wants the world to wear a mask of "nice" and “new,” but the world wants to keep its tastes and traditions, its blemishes, its uncertainties, and even its vices. It is not that the world wants to remain "bad": the world simply resists the notion that every problem has a technological solution. The world may not be ready for such “solutions,” or it may believe that there are problems that await spiritual rather than technological solutions. The technocratic side of America seems to be saying, "If your marriage is unhappy it could only mean that your marriage contract was not elaborate enough," but the world sees this as technocratic madness, the worship of a new false pagan god, even in the midst of America’s purported “spiritual revival.”

Of course democracy can be a reasonable goal, be it for Canadians or for Afghans or Iraqis. But when democracy is presented as a ready-made technological solution – three minutes in the microwave, with a pickle and a smile - then people will refuse to swallow this prepackaged sandwich. The world wants to slaughter the lamb, skin it, and eat it with their hands.

The world resists American idea that politics (and art) are no longer about people, but about the application of various technologies – a democratic system of government being one of them. The Terminator saves the world not because he has the largest heart, but because, at the right moment, his guns make the greatest holes. The world sees this exclusion of people, with their hot beating hearts and their imperfect histories, as a serious threat.

India invented quiet contemplation and has congested, noisy streets; Britain invented good manners and reads the stolen letters of royalty; Russia stood for the soul elevated by beautiful literature, and so Russian prostitutes are the best-read in the world. The world abandons its values, and American culture pours in and rules. But the world understands that the American version of good is not good, and the stronger America becomes, the more it tries to impose its will, the more it will be resisted.

America should be extending its "win/win" spirit, which has been so successful at home, to its (belated) efforts to spread democracy abroad. It should not be turning itself into a fearsome giant that pretends that technology has made love, identity, and history obsolete. Just like in every fairy tale, at the end a single human child will defeat it.

***
© Matthew Maly, SubmergingMarkets™, 2004

June 2, 2004 at 07:30 PM | Permalink | Comments (0) | TrackBack

Thursday, May 27, 2004

052704.Iraq - High Time to "Cut and Walk"
Defining Alternatives to"Stay and Die" and "Cut and Run"

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“A nation has prestige according to its merits. America's contribution to world civilization must be more than a continuous performance demonstration that we can police the planet."
Eugene McCarthy, The Limits of Power (1967)
“A nation should not send half a million military personnel to a distant continent or stake its international standing and domestic cohesion unless its leaders are in a position to describe victory. This implies a definition of attainable political goals and a realistic strategy to achieve them.”
Henry Kissinger, Ending the Vietnam War (2003)


Back in the days when fixed exchange rates were the order of the day, Citibank's former CEO, Walter Wriston, had a very simple rule for deciding when to short a country's currency -- whenever a Finance Minister reassured investors that under no circumstances whatsoever would the country’s currency ever be devalued.

One might have thought that a similar rule would apply to US military misadventures. Perhaps it does, but with a much longer time lag.

In the investment world, of course, the cardinal rule is to “cut one’s losses early."

Recently, however, a growing number of US politicians, senior officials and pundits on all sides of the political spectrum have counseled us to do precisely the opposite in Iraq.

Despite the many recent setbacks, and the evident lack of any clear strategy, they’ve repeatedly warned about the perils of “cutting and running."

This is as if a precipitate withdrawal were the only conceivable alternative to the open-ended military occupation that the Bush and Blair Administrations and the would-be Kerry Administration are all promising to maintain even after June 30.

Ironically, public opinion is far ahead of these timid political lemmings, and much more consistent with the “cut your losses” strategy. Right now, just 45 percent of US adults still believe that it was “worth going to war in Iraq,” down from 76 percent a year ago. A majority in the US and 66 percent in the UK now oppose sending any additional troops to Iraq, and fully 40 percent of US adults and 55 percent of UK adults now support a withdrawal of US and/or UK troops after the handover of power to the interim Iraqi Government on June 30.

This is comparable to the level of popular US opposition to the Vietnam War that prevailed immediately after the January 1968 Tet offensive. Of course the vast majority of the Iraqi people have favored the withdrawal of Coalition forces for some time.

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In fact there is a clear alternative to the current “prolonged occupation” strategy. As explained below, this “cut and walk” strategy has many advantages -- not the least of which are the many lives that it would save on all sides.

WHERE’S OUR BOBBY?

Despite these strong public sentiments, one searches in vain for any mainstream American political leaders, other than Dennis Kucinich and Ralph Nader, who are prepared to insist on a definite timetable for a withdrawal of US troops.

In other words, with respect to the Iraq War, we’re still missing our Robert Kennedy, our Eugene McCarthy, and our Martin Luther King. I'd hate to think that this leadership deficit reflects something fundamental about our ethical and cultural regression since the 1960s, but I fear that it may. (Where are, after all, the student protests in this period? Where are the Berrigan Brothers, the Sloane Coffins, the teach-ins, the Chicago 7s, and so forth?...Was all that just about the fear of being drafted?)

In the UK and Australia, a few daring military and political leaders are beginning to catch up to public opinion and advocate a more rapid exit. Even there, however, the alternative to the status quo is often described rather pejoratively and unimaginatively as “cut and run.”

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This “muy macho” lingo was used in early May by Australia’s Prime Minister John Howard, who vowed that Australia’s troops in Iraq would not “cut and run,” despite the unpopularity of this position. It was also used by the UK’s Tony Blair on May 17. Ignoring the mounting political crisis that he faces over the war, Blair repeated at least three times that under no circumstances would the UK “cut and run.”

President Bush, whose political fortunes are also flagging, has also recently issued a crescendo of assurances that he will not “cut and run” from Iraq. The first assurance was given last November, when Iraqi resistance started to take off, and it was repeated in March, April, and again on May 10. Every time the President repeated it, more and more people had doubts about whether he really meant it.

Some pro-war pundits have also become fond of the “cut and run” formulation. The Wall Street Journal’s arch-conservative Deputy Editor George Melloan warned in May that “those who counsel a “cut and run” solution to the problems of Iraq are kidding themselves.” This echoed a November WSJ Op-Ed Page piece entitled “Don’t Cut and Run,” and another one last July by Paul Gigot that proclaimed that “The Iraqis' greatest fear is that America will cut and run.”

Of course the truth, as indicated by Iraqi polls, is that most Iraqis would probably be delighted if they woke up one morning to find us gone.
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Many Democrats who support the war have also been using the "cut and run" formula as a convenient way to avoid serious discussion of alternatives. Among the leading practitioners on this side of the isle is John Kerry. As early as September 2003, with respect to Iraq, Kerry promised that “We're not going to cut and run and not do the job." In November he said, “I know we have to win. I don't want to cut and run.” In December, in an “attack from the right” speech before the Council on Foreign Relations, he warned that the Bush Administration itself might be on the verge of a “cut and run.” In April, annoyed by anti-war critics, Kerry insisted that “…The vast majority of the American people understand that it's important to not just cut and run. I don't believe in a cut-and-run philosophy (sic)." ("Muy macho, muy macho!")
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Similarly, Joe Biden, the ranking Democrat on the U.S. Senate Foreign Relations Committee, recently warned that “To succumb to political pressure and cut and run would be a catastrophe for U.S. interests.” Similarly, Joe Lieberman: “We simply cannot lose. We can't cut and run,” and again: “…America cannot cut and run from Iraq. Both parties and both Presidential candidates agree that we should send more troops….” Similarly, Indiana’s Evan Bayh, who’d love to be Kerry’s VP: “We can't cut and run…” New York's Chuck Schumer commented on the killing of a US citizen in Iraq: “If they think this is going to make us cut and run, they are dead wrong.”

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On the Republican side, John McCain is also fond of the phrase. On November 5 he told the Council on Foreign Relations, “Iraq is not Vietnam. There is no popular, anti- colonial insurgency…..I was heartened to here the President say there will be no cut and run.” On April 7 he cautioned, “Is it time to panic? To cut and run? Absolutely not.” On May 18, he warned, "If we fail, if we cut and run, the results can be disastrous.”

Variations on the same construction have been used by many other Republicans, including Virginia’s John Warner, Minnesota’s Norm Coleman ("It’s not to cut and run"), Missouri’s Chris Bond, and Alabama’s Richard Shelby. (May 12: “We've got a lot at stake. We cannot cut and run.”)

Other senior US officials also love this dismissive. Former Defense Secretary James Schlesinger, who actually presided over the tail end of the Nixon-Ford Adminstration’s “cut and run” strategy in Vietnam, told the US Senate with respect to Iraq on April 20 that “We going to be there for an extended period, unless we decide to cut and run, which I trust will not be the case.”

Last November, Secretary of State Colin Powell commended Italy for its decision to “… not cut and run.” On May 18 he echoed Blair: "We don't want to stay a day longer than we have to but we are not going to walk away. We are not going to cut and run."
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Powell, a Vietnam vet like Kerry and McCain, uses this construction a lot -- evidently that aspect of the war is still a sore point. But at least with respect to Powell’s warnings against “run cuts,” the “Walter Wriston contrarian” rule may apply. In 2001, for example, with respect to US troops in the Balkans, Powell remarked that “The U.S. would not "cut and run" from the region.” At the time this was viewed as an implied criticism of neoconservatives who were seeking to limit America’s ”imperial overstretch” and “open ended military commitments,” as Presidential candidate Bush actually pledged to do in 2000. Since then, the number of US troops in the Balkans has been reduced from 6900 to 4100, and the Administration is now reportedly looking for ways to eliminate this commitment completely.

Earlier, in September 1993, when Powell was Chairman of the Joint Chiefs, he responded to the deaths of 18 US soldiers in Somalia with the comment, “Because things get difficult, you don’t cut and run…You work the problem.” Within two weeks of this statement, President Clinton announced that the remaining 5000 US troops in Somalia would be withdrawn within six months.

In any case, the last time the “cut and run” phrase was used so heavily was over a decade ago, around the time of this Somalia decision. In October 1993, William Safire, the New York Times columnist, former Nixon speechwriter, and self-styled lexicologist, devoted an entire “On Words” column to the origins of “cut and run,” pointing out that it derives from an 18th century nautical term for putting out to sea quickly by cutting an anchor cable.

Given the phrase’s recent revival, in early May 2004 Safire was able to dust off his earlier column and recycle it.

He did not, however, bother to remind his readers that by far the most important occasion for its use was the unhappy experience of the Vietnam War, much of which was presided over by his former boss, who had made quite a point of refusing to "cut and run."

In 1967-68, as opposition to the Vietnam War mounted, President Johnson repeatedly deplored the “nervous Nellies” who wanted to “cut and run.” After the Democrats relinquished the White House and responsibility for the war, many leading Republicans, including future President Gerald Ford and Pennsylvania’s Senator Scott, disparaged those who wanted to “cut and run.” So did President Nixon, in his 1968 campaign against Hubert Humphrey as well as in his 1972 campaign against George McGovern. He repeatedly assured conservatives that the US would somehow achieve “peace with honor” – that we would never “cut and run.” At the same time, Nixon winked and nodded to the increasingly anti-war public that he had a “secret plan” to end the war. But this was turned out to be just one of his many lies, told to garner a few votes from gullible peaceniks.

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In fact recent historical research has showed that Nixon and Kissinger decided on a cynical “decent interval” approach to the US withdrawal from Vietnam as early as 1970, after having tried in vain to win the war with expanded bombing in 1969. The result was that the US spent another three years flailing around in Vietnam without a winning strategy, at the cost of 21,000 extra US lives and up to 1.5 million Vietnamese, Laotian, and Cambodian lives. After that, it really did cut and run. This cynical, slow-motion approach to making “peace” probably helped Nixon win reelection. But it did nothing for the Vietnamese people, US troops, or, in the end, American honor. Far better for us to have “cut and run” way back in 1968.

Indeed, it turns out that by 1968, the Pentagon had indeed developed a plan for a rapid US withdrawal from Vietnam. But Hubert Humphrey refused to consider it, despite the fact that it might actually have won him the election. Evidently he was loyal to President Johnson. And Hubert also didn’t want to be perceived as having “cut and run.”

IRAQ - THE CASE FOR “CUT AND WALK”

It may not be surprising that President Bush has forgotten these painful lessons. But the fact that Vietnam veterans like Kerry and McCain have forgotten them, and, indeed, are repeating the same misleading phrase that Nixon once used to describe all alternatives to “staying the course,” is disappointing.

Of course it is nonsense to suggest that the only alternative to an open-ended military occupation of Iraq is to “cut and run.”

One such alternative might be described as “cut and walk.”

In broad strokes, this would include a reasonable (say, six-nine month) deadline for the withdrawal of (almost) all US and UK forces from Iraq, combined with a greatly-accelerated timetable (say, 90 days) for “interim”/ “first-round” elections at the local and regional levels.

The case for such a “cut and walk” policy is very strong, especially when viewed side by side with the high costs and highly uncertain benefits of the current strategy.

First, it is now clear that the Coalition’s purely-defensive security interests in the continued occupation of Iraq are very limited at best.

While the Iraqi Army has been destroyed, we have not found any WMDs, WMD programs, or terrorist training facilities in Iraq.

Meanwhile, the entire region has become an al-Qaeda recruiter’s wet-dream.

Finally, if Iraq ever did become a clear and present danger to us, there’d be nothing to prevent our reoccupying the country – evidently, having done it twice, that is something that we are good at.

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Second, far from helping to insure peace and stability in Iraq, the absence of a clear deadline for the presence of Coalition Forces helps to (1) attract foreign terrorists; (2) legitimize terrorism and spread the resistance; (3) increase the power base of those who happen to have private armies at their disposal; (4) undermine Iraqi support for moderate leaders; and (5) militarize ethnic, religious and tribal conflicts.

In contrast, the existence of a firm near-term (say, six months) deadline, along with an accelerated (90 day) timetable for local and regional elections, would almost instantly cause the Iraqi resistance to quiet down.

That, in turn, would create several “virtuous cycles:” (1) It would permit the Iraqi people to turn their attention away from violence and toward the upcoming political elections. (2) It would discredit and undermine popular support for any leaders or foreign fighters who tried to perpetuate the resistance; (3) It would permit economic reconstruction, now largely on hold because of the security situation, to resume, permitting more and more ordinary Iraqis to feel that they are indeed better off than before Saddam’s demise.

Third, far from helping to promote positive relations with the US, other Western powers, and the UN, the Coalition’s continued military presence, including its construction of 14 military bases and its dominance over economic policy, (1) feeds suspicions about neo-imperialism; (2) helps to promote anti-Western ideology; and (3) provides an opportunity for a variety of outside forces – Iran, Syria, and perhaps al-Qaeda – to gain influence.

In contrast, the announcement of a firm withdrawal date would make it much clearer than it is now that the US/UK invasion of Iraq is “well-motivated,” in the sense that there are no grand designs on Iraqi oil, economic policy, or military bases.
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Fourth, far from encouraging democracy in the country, the continued occupation, combined a US- or even a UN-anointed, non-elected transitional regime, actually helps to undermine it, by (1) tainting the appointees with “guilt by association” with the occupying army, and (2) deferring popular elections, against the wishes of the vast majority of Iraqis.

For all their imperfections, moving directly to “snap elections” for local governments, regional assemblies, and, soon thereafter, an interim (say, two-year) national congress, would (1) help to satisfy the Iraqi peoples’ strong desire for representative government; (2) give “unstable” parts of the country an incentive to settle down so that they would be entitled to participate in the elections; and (3) perhaps most important, make the Iraqis feel responsible for their own destiny.

With a more representative body in place, it would of course be entitled to request foreign assistance for its police and military. In that event, forces under the auspices of the UN might even be asked back in. They would have much more legitimacy among ordinary Iraqis than the Coalition forces have now.

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From the standpoint of the US and the UK, that would also have the added attraction of sharing the astronomical costs of this expensive, misbegotten venture.

SUMMARY

Throughout its entire history, the US has almost never “cut and run” from any foreign military intervention that it has undertaken – even in the case of Vietnam, where the last US combat troops did not leave until March 1973, after nearly 14 years in the country.

In fact, an examination of more than fifty US military interventions since the 1880s reveals that the far greater risk has been for US troops to intervene repeatedly and stay too long, overstaying their welcome, especially in the case of relatively-weak developing countries – for example, China (1894-95, 1898-1900, 1911-40, 1948-49), Cuba (1898-1902, 1906-09, 1912, 1917-1933, 1961), the Dominican Republic (1903-4, 1914, 1916-24, 1965-66), Guatemala (1920, 1966-67) Haiti (1891, 1914-1934, 1994-96, 2004-), Honduras (1903, 1907, 1911-12, 1919, 1924-25), Mexico (1913, 1914-18), Nicaragua (1894,1896,1898-99,1907,1910,1912-1933), Panama (1895, 1901-1914, 1918-20, 1925, 1958, 1964, 1989-90, plus bases), the Philippines (1898-1910, plus continuing bases), Russia (1918-22), Vietnam (1959-73), and Korea (1894-96, 1904-5,1950-53, plus continuing bases.)

Despite this, American policymakers continue to fixate on the spurious risk that the US might be viewed as “cutting and running” from such engagements. Just like earlier fixations with Saddam’s WMDs and his purported links to al-Qaeda, this could prove to be very costly.


***

© James S. Henry, Submerging Markets™, 2004


May 27, 2004 at 06:16 AM | Permalink | Comments (1) | TrackBack

Tuesday, May 11, 2004

4510. Iraq: From a Strategic Standpoint, We've Already Lost
Strategic Anomalies, Denial, Redoubling, and the Case for Withdrawing Now

"Knee Deep in the Big Muddy, and the Big Fool Says to Push On!"



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In the wake of the recent upsurge in popular resistance in Iraq, and the evidence of soaring hostility among ordinary Iraqis and Iraqi elites of all persuasions toward the US-led occupation, a growing number of seasoned US military professionals are concluding that, from a strategic viewpoint, the US is either just now losing the "Iraq Peace," or may have already lost it, and should now focus its attention on accelerating the withdrawal of Coalition Forces.

This viewpoint, combined with harsh criticism of the "Bush/Cheney/Rumsfeld/ Wolfowitz/neocon clique," is becoming more and more widespread among senior Pentagon officers and planners, though most are still reluctant to go on the record.Of course the "usual suspects" on the American Left, like Nader, Chomsky, Jonathan Schell, and Howard Zinn, are ahead of the pack on this issue. But the interest in "withdrawal now" is also gaining ground among some conservative intellectuals, like the New York Times' David Brooks, who argued forcefully in an editorial just this week that the US needs "to lose in order to win" in Iraq. Support for withdrawal is also gaining ground with the American public at large, as noted below. But as in the case of the Vietnam War, the masses are way ahead of their "leaders."

Already, we've heard this revisionist view expressed in public by such Pentagon strategy heavyweights as former Reagan National Security Agency boss General William C. Odom, Army Major General Charles H. Swannack Jr., Commander of the 82nd Airborne Division, and Army Colonel Paul Hughes, who headed strategic planning for the Coalition Authority in Baghdad.

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Even before the War, some senior officers, like former Army Chief of Staff Eric Shinseki, had grave concerns about the feasibility of Rumsfeld's war plan. But those had to do mainly with resources and tactics -- whether the plan provided for enough troops and heavy armor, and so forth.

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In the last few months, however, the deepening concerns have shifted from tactics to strategy -- as in, do we really have one?

By this we mean:

  • Does the US have a clear "definition of victory" and a long-term strategy for accomplishing it? Are these the same goals that it has announced publicly, or are there others? Is it now just floundering reactively from crisis to crisis, wishfully hoping that things will somehow work out, while getting locked in to a vicious cycle of anti-Americanism and violence? Even worse, as in the case of Vietnam, are US leaders just staying the course and sacrificing lives mainly for domestic political reasons, or because the US fears appearing to have been "defeated?"
  • Are the initial or revised goals realistic, not only in terms of military might, but also political, economic, diplomatic, and moral capital? Has the US reached the point where -- as in Vietnam in 1967-68 -- these goals of the war are no longer feasible, either because, as in the case of WMDs, they based on misinformation, or, as in the case of "democratization," they may be inconsistent with continued US occupation, or have an unacceptable price tag?


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  • What are the real long-term costs of the current strategy likely to be, in terms of both "direct" and "opportunity" costs, and costs to credibility, image, and international relationships, as well as human and cash costs? How badly were these costs underestimated by the war's planners? Do we have any reason to believe that cost prediction has improved?
  • What impact is this war having on other fronts in the war on terrorism? Has it become a costly distraction? Is it actually helping the terrorist cause, by providing a rallying point, an enticing opportunity to strike at US troops and foster internal divisions in Iraq, and a new source of armaments? If the US withdraws now, would that strengthen or weaken global terrorism? Would it clear the way for other countries or the UN to become more involved?

  • Is a continued substantial US military presence in Iraq an obstacle to peace and security, and a source of increased religious and ethnic polarization in Iraq and the Middle East in general?

  • Rather than announce increased, prolonged US troop commitments, isn't this the time for the US to announce a specific schedule for a US troop withdrawal, perhaps contingent on a ceasefire.?

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As we'll see below, the overall answer is that a fundamental Iraq strategy rethink is overdue. We need to take into account the many "anomalies" that we've discovered in the last year, which have fundamentally undermined the original strategy behind the War.

When policymakers find their pet strategies challenged by such anomalies, however, their first response is usually to dig in.

In the case of the Vietnam War, for example, most top Democrats and many Republican leaders had already agreed by the end of 1968 -- in private, at least -- that no "strategic victory" was feasible at an acceptable price, and that a US withdrawal was indicated.

Shamefully, largely for reasons of cosmetics, the war was continued and even expanded during the next four years. At the time, both President Johnson and President Nixon were terribly concerned about "peace with honor" -- the country's appearing "weak" before the supposedly=unified global Communist menace.

That unity soon proved to be chimerical, with Vietham actually fighting China and Cambodia in the mid-1970s. But it took the US from 1968 until March 1973 to remove its last combat troops. And two more years of fighting were needed before the inevitable reunification of the artificial, largely US-inspired creations, "North" and "South" Vietnam. Today, of course, Vietnam remains united and "Communist," but it is known to us mainly as a worthy supplier of shrimp and coffee, and a hefty World Bank client.
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As Senator John Kerry of all people must remember, those four extra years cost an additional 21,000 American lives, plus over 1.5 million extra Vietnamese, Laotian, and Cambodian lives. For what? Indeed, as Henry Kissinger himself admitted in a 2001 interview with documentary filmmaker Stephen Talbot, when asked about what difference it would have made if Vietnam had gone Communist right after World War II,


"Wouldn't have mattered very much. If the Vietnam domino had fallen then, no great loss."

So, according to Kissinger, the architect of that war's misguided strategy for withdrawal (and numerous other policy blunders), 58,000 Americans and 3 million Vietnamese, Cambodians, and Laotians basically died for nothing. This precedent is worth thinking about, as we each decide individually whether to continue to sit and watch while yet another cockamamie "national security" strategy chews up thousands of innocent lives.
DENY AND REDOUBLE

Unfortunately, the first response to strategic anomalies is usually a denial (or reinterpretation) of the new evidence, followed by a redoubling of efforts to make the tired old strategies work.

Where, as here, senior politicians who are also running for office are in charge, these tendencies are reinforced, since they fear being branded by their opponents as "inconsistent." As in Vietnam, the result could easily be over-commitment to a pipedream, ending in an eventual forced withdrawal that is much more costly than it needed to be -- and yet another young generation of Americans that never quite views their country in the same way.

Despite all this, you wouldn't guess from our President or his Democratic challenger that the US is facing any strategic crisis whatsoever in Iraq.
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Both major parties' senior politicos and bosses are stuck like deer in the headlights, committed to the same pro-war strategies they all supported last year, as if nothing has been learned since then. Locked in a tight contest, both candidates are running toward the center of the field at full speed, and not paying much attention to the new hard facts on the ground.

Indeed, Senator Kerry, Bush, Senator Clinton, Senator Lieberman, Senator Biden, Senator Lugar, and almost all leading Democrats and Republicans appear to be in violent agreement about the Iraq War, except about picayune tactical details. Consistent with the "denial/redouble" pattern, all of these "leaders" are also now calling for a significant expansion of US troop commitments in Iraq. In Bush's estimates, this would require at least 135,000 to 160,000 US troops in Iraq at least through 2006. But there is no reason to expect that only two more years would be enough, if the current strategy is continued. Indeed, as discussed below, the Pentagon is already proceeding with a little-noticed plan to build 14 permanent US military bases in Iraq.

All these leaders, including Bush, also now give lip service to some kind of increased role for the UN in Iraq, without defining precisely what that would be. They all a bit too glib about how they expect the UN to reenter. Presumably this would be by way of a new UN resolution, but it is not at all clear how much "control" the US is willing to yield to its owl nemeses on the Security Council, France, Germany and Russia. Most important, if there is no fundamental improvement in the security situation, the UN is unlikely to want such a thankless job. But improving the security situation requires, as we'll argue, a new view of where the insecurity is coming from, and a US/ UK withdrawal timetable.

All this implies a substantial increase over the $175 billion that the US has already spent in Iraq -- Bush's latest $25 billion supplemental budget request is consistent with an annual "run rate" of at least $50-$60 billion a year. If recent casualty rates are any indication, this also implies at least another 1500-2000 US war dead through 2006, and probably 5-6 times that many US wounded, not to mention thousands more Iraqi dead and wounded, including many civilians.

In Senator Kerry's case, this lack of leadership is especially disappointing. As he said recently,


"Americans differ about whether and how we should have gone to war, but it would be unthinkable now for us to retreat in disarray and leave behind a society deep in strife and dominated by radicals."


One might have hoped that Senator Kerry would have learned something about the high costs and radicalizing effects of dead-end wars from his years in the Vietnam Veterans Against the War, if not from his four months on a gunboat in Vietnam.


PLUMMETING SUPPORT FOR THE WAR

According to the latest USA Today national poll, taken May 10, 2004, in the wake of the disgusting Abu Ghraib prison abuse scandal, for the first time since the initiation of the war in March 2003, over half of Americans -- 54 percent -- now believe that it was a "mistake" to send US troops to Iraq. This is a dramatic turnaround in less than six months -- and, interestingly, a much faster erosion of support for this war than occurred during the Vietnam period.

Fully 29 percent now believe that all US troops should be withdrawn now, up from just 16 percent in January, and another 18 percent believe that some troops should be withdrawn. At least 75 percent oppose expanding the number of US troops in Iraq.

Despite this, as noted earlier, this is still the official position of both President Bush and John Kerry, and almost all other leading Republicans and Democrats politicos. As in the case of the Vietnam War, the unwashed masses are far ahead of the "leaders."

At the moment, indeed, the only candidate who supports an immediate (six month) withdrawal from Iraq is the stubborn 70-year old Green Party candidate, Ralph Nader. Many Democrats still vehemently (and incorrectly) still believe that he was the "spoiler" for a Democratic victory in the 2000 Presidential election. Whatever we may think about his candidacy, the fact is that at the moment, he is our only Robert Kennedy. To his great credit, Ralph has opposed this "preemptive war on a defenseless country" since the start, and is now advocating a withdrawal of all US troops from Iraq within six months.
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As the most recent polls show, Nader's opposition to the Iraq War has given him a burst to 5 percent in the May 10th polls. Perhaps Kerry could take a few lessons from Ralph with respect to his position on the war. For the same poll that showed American support for the war plummeting, and Bush's approval dropping from 52 percent in mid-April and 49 percent in early May to just 46 percent this week, also found Kerry dropping two full points, and losing to President Bush, 47-45, among likely voters. Meanwhile, Ralph gained two points, to 5 percent among likely voters.

Of course this is just one national poll, but if Kerry really wants to win in November, he'd better think about the implications of his me-too position on the war -- the main source of public dissatisfaction with Bush. As one analyst has suggested, he might even consider cutting a deal with Nader, getting Ralph to appoint the same list of Presidential electors as Kerry, in exchange for permitting him to get on the ballot in 50 states. He might also consider adopting Ralph's more popular position on the war, as well that of the National Council of Churches proposal, which has also just recommended withdrawing and turning over control in Iraq to the UN.

Oddly enough, this situation also gives President Bush an incredible opportunity. If he really wanted to insure his victory over Kerry, the smooth move might be for President Bush to reverse course and announce plans for a definite US withdrawal. If the polls are any indication, this "win by losing" approach to fixing Iraq would very popular with the American people -- especially those who are wavering in the center. It would also be popular with many Bush supporters on the right, who fear that aggressive nation-building in Iraq may jeopardize other vital concerns on their agenda -- like gay marriage, abortion rights, more tax cuts, new Supreme Court judges.

However, Bush, like Kerry, also seems determined to dig himself in even deeper on Iraq. This is what he did just this week by unnecessarily backing Secretary Rumsfeld in the Abu Ghraib scandal, despite the many calls from right and left alike for the Secretary's resignation.
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STRATEGIC ANOMALIES - "REALITY CHECK, PLEASE!"

Meanwhile, as we've just learned in the towns of Falluja and Najaf, an aggressive US military presence may just lead to increased hostility. This is only one of many "strategy anomalies" that the war's architects -- Democrats, Republicans, and Blair's Laborites in the UK as well -- have encountered. There are many others. Most are already familiar to those who have followed recent events. But it is worth restating them, just to put the case in order.

1. Iraq's WMD Threat. Of course the first basic assumption, declared innumerable times in the fall of 2002 and early 2003 by US and UK officials during the run-up to the war, was that Saddam's Iraq posed a grave threat to the US and its allies. Either it already possessed WMDs and the means to deliver them, or was actively attempting to acquire them.

A key related assumption was that this threat could only be removed by an immediate US invasion, and the complete removal of Saddam from power. The UN weapons inspection program, according to the war's supporters, had been a failure.

In this regard, it is also important to note that the removal of Saddam's regime from power was never a goal of the invasion per se -- apart from the reduction of the WMD threat, reduced terrorism, and democratization. After all, the world is filled with lousy governments, and just replacing Saddam's nasty regime with another nasty regime could never have justified the invasion. So while the supporters of the war have often trumpeted Saddam's removal from power as a sign that we have already triumphed, in fact this depends on whether or not these other goals are achieved. And this is very much in doubt for all of them.

Reality Check, Please: Of course no WMD stockpiles or serious WMD programs have been found, after months of searching by thousands of highly-trained US and UK personnel.

It also now appears that the UN weapons inspection programs was in fact very successful at identifying whatever WMD programs Saddam had, and getting him to curtailing them. For all its imperfections, the UN approach worked.

Indeed, if, as France, Germany, and Russia proposed, weapons inspection had been permitted to continue, the war might have been avoided completely, or, at worst, eventually proceeded with better preparations and much broader multilateral support, as in the 1991 Gulf War.

That, in turn, would have meant less US influence over post-war Iraq (as in military bases and oil). But the costs to the US and Iraq would have been much lower, and the transition to peace and a new representative government much smoother and less violent.

2. Iraq's Role in Supporting Terrorism (Pre-War). The second key strategic premise for the war was that Saddam's Iraq was aiding al-Qaeda and other global "terrorist" groups.

Reality Check, Please: In fact one of the few bona fide pre-war "terrorists" who was living in Saddam's Iraq turned out to be the aging Abu Nidal,, who had been inactive since the mid-1980s. Abu Nidal was reportedly suffering from leukemia, but he died of multiple gunshot wounds in Baghdad in August 2002, long before the invasion -- perhaps the victim of an attempt by Saddam to head it off.

The only other "terrorist group" operating in Iraq before the war was Anwar al-Islam, which was located in northern Iraq in the "no-fly" zone, outside Saddam's control. Its headquarters could easily have been bombed at any time. But the US chose to wait until after the war started, so that it could say that it actually destroyed some terrorists.
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Beyond this, no definitive pre-war links between Saddam and al-Qaeda have ever been established. As former Bush Administration counter-terrorism czar Richard Clarke and many other experts have long argued, Saddam and al-Qaeda were, if anything, antagonists, and even if he had had WMDs, Saddam was not about to share control over WMDs with a radical like Bin Laden.

The US also made much of the alleged medical refuge that Saddam allowed a Jordanian sympathizer, Abu Musab al-Zarqawi. The US claimed that Zarqawi had links to al-Qaeda. But in fact it seems that his organization, al-Tawhid, was actually a rival to al-Qaeda before the war, focused on overthrowing Jordan's King Abdullah. Of course Zarqawi's influence in Iraq does appear to have been strengthened by the US invasion.

3. Iraq's Role in Supporting "Terrorism" (Post-War). Whatever the details of Saddam's links to global terrorism were before the War, it was assumed by the war's supporters that the invasion would reduce Iraq's role in global terrorism.

Reality Check, Please: In fact just the opposite has occurred. Since the invasion, Iraq has actually become a terrorist Mecca, with anti-US fighters from all over the Muslim world pouring into the country across its now-wide-open borders, eager to kill Americans. They have no need to bring automatic weapons, grenade launchers, mines, or explosives. Saddam's huge stockpiles of these ordinary weapons have been very poorly secured by the under-manned Coalition Army. And arms have also reportedly been for sale from the new Iraqi police force.

So, as Bin Laden's most recent recorded messages have made clear, far from being a "defeat for terrorism," the Iraq War has actually been something of a boon -- rather like the December 1979 Soviet invasion of Afghanistan ultimately proved to be. The Soviets, we recall, lasted nearly 10 years in Afghanistan, at a cost of more than 15,000 Soviet lives and hundreds of thousands of Afghanis. The US is of course vastly more powerful than the Soviet Union. And, unlike that situation, there is no foreign aid available to the Iraqi resistance. Still, as noted earlier, such aid may not be necessary here. And the US is already well on its way to keeping pace with the Soviet casualty count.
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Not only has the Iraq War provided opportunities for young radicals to secure weapons and attack Americans close at hand. It may have also distracted some resources from the hunt for other terrorist organizations. Most important, it has antagonized the whole Muslim world, providing the radical factions a wonderful opportunity to recruit new supporters.

4. Iraq's Warm Welcome for US "Liberators" The US also assumed that we would get a warm reception from Iraqis, as "liberators" of Saddam's Iraq.

The US war planners also assumed that Iraqi nationalism was weak, and that and resistance would disappear after Saddam and his "dead-ender" henchman were gone. They defined "victory" as the removal of Saddam and his Ba'athist regime. They also assumed that the Iraqi Shiite and Sunni communities were fundamentally at odds, and that there would be little opposition to the Coalition Forces outside the so-called "Sunni Triangle."

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Reality Check, Please: The US invasion created a wave of genuine nationalism that spans Sunni and Shiite community lines and helped to unite radical factions in each against the "occupiers," as they united in their 1920 revolt against the British. The sharpest fighting in Iraq has taken place in just the last month, long after Saddam and all but ten of the other 55 "most wanted" Ba'athist leaders were killed or captured.

Furthermore, just 17% of all Sunnis live in the so-called "Sunni Triangle" north of Baghdad -- Iraq's Sunni and Shiite communities have historically been much closer than in other Muslim countries. Indeed, one key challenge faced by "foreign fighters' like Zarqawi has been to try and divide them. In the wake of the continued US occupation, the US has experienced growing armed resistance from Shiites and Sunnis alike, as exemplified by the May 10 US strikes against the Shiite leader al-Sadr's headquarters in Baghdad. While the vast majority of Iraqis are still watching the battle from the sidelines, a majority also now supports an end to the US occupation, believe that Coalition Forces have conducted themselves badly, and believe that the Coalition will not withdraw until forced to do so.

In this situation, destroying the Ba'athist Party turns to have been insufficient for a return to peace and security. Nor, given the importance of "ordinary" former Ba'ath Party members in the educational system, the civil service, and the police, was it a necessary condition. It was, in fact, just a dumb move taken by Paul Bremer in the early days of the occupation, under pressure from Chalabi's INC, and recently reversed.

5. "Liberators" Vs. "Occupiers" The pro-war strategists also assumed that thousands of US and UK troops could be counted on to conduct themselves in Iraq as proper "liberators."

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Reality Check, Please: The grim reality is that the US and UK forces have hardly distinguished themselves as "liberators." Rather, they were rushed into duty without adequate training or acculturization, with few skills in Arabic. They had also been encouraged from the top of the Bush Administration on down to believe that Iraqis had something to do with 9/11. As a result, many of our troops have behaved very badly toward ordinary Iraqis -- like crude, rude barbarians. As the events at Abu Ghraib prison have dramatized, there have been widespread human rights violations, ethnic slurs, religious slights, and indignities to Iraqi women. The result has been yet another public relations debacle for the Coalition Forces.
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6. Iraq's Support for "Acceptable" Democracy. Yet another key strategic assumption was that in a relatively short time, the Coalition and its Iraqi allies would be able to lay the foundations for an "acceptable" democratic system.

In the US vision, this would be one that would be (a) reasonably representative, (b)able to avoid the kind of popular theocracy that has characterized Iran, (c) pro-US and at least neutral towards Israel, (d) able to maintain a unified federal system, including the Kurds, and, of course, (e) be willing to go along with other key 'imperial" requirements, like permission to build 14 long-term US military bases in the country, the use of oil revenue to defray the invasion's costs, and the opening of Iraq's oil resources to foreign investors like ExxonMobil and BP.

Saddam's Removal Alone Not a Victory.In this regard, it is important to note the simply removing Saddam and his associates was never a goal of th invasion for its own sake -- apart from the goal of removing the WMD threat, cutting his alleged support for terrorism, and ultimately installing democracy. In other words, the world is filled with nasty dictators -- there had to be some special reason for singling him out. And no one argued that simply replacing him with yet another nasty dictator would justify the war -- apart from achieving these other goals. So the fact that he and his regime have been removed only "justifies" the war if, in fact, we are able to achieve these other objectives. So far, as we've seen, the WMDs, reduced terrorism, and democratization have all proved elusive.

Reality Check, Please: In fact it has been impossible to square all these various requirements with each other. As of April 2004, after a year of occupation, while 82 percent of Iraqis still support "democracy" in the abstract, , outside Kurdistan, most Sunnis as well as Shiites are also opposed to a rigid separation between church and state. There is, at this late date, still no complete draft constitution that the various key interest groups in the Coalition-appointed Iraqi Governing Council Constitution have been able to agree on.

Ordinary Iraqis, it turns out, are also highly critical of the US, the UK and Israel. They are also highly critical of the Iraqi Governing Council created by the Coalition Forces, which is widely viewed as a puppet government. As the Shiite leader Sistani has said, "We want elections as soon as possible."

Finally, Kurdistan, the one part of the country that is now stable and enjoying economic recovery, also strongly favors complete independence, not federation. Since Kurdistan is one of Iraq's richest provinces -- the original source of much of its oil -- the rest of Iraq is determined to prevent this. As if we needed one, this issue provides another potential source of conflict. The whole country is a bubbling cauldron of such regional, ethnic, tribal, religious, and anti-foreigner feelings, and we have turned up the fire.

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7. Reestablishing Security/ Avoiding a Military Draft. Yet another key strategic assumption was that it would be relatively easy to reestablish security with a "politically acceptable" commitment of less than 150,000 Coalition troops. This force level was supposed to diminish over the year, complemented by a large number of private security contractors.

This was supposed to be feasible, despite Bremer's disbanding of the entire pre-existing Ba'athist police and military structure, the fact that Saddam had emptied his prisons of all criminals prior to the invasion, and the fact that Coalition troops had little training in policing, crowd control, or non-lethal weaponry.

One implication was that the US and UK troops expected to rotate home on regular schedules, without undue burdens on their families and morale.

Another was that a new Iraqi national police force would be able to provide an adequate substitute for the Coalition's policing activities.

A third was that military forces from other countries, or the UN, might also become available to back-stop US and UK troop commitments, as the security situation stabilized.

Reality Check, Please: All these assumptions about security have proved false. Almost incredibly, the US military repeated the same exact mistake that was made in Haiti during the 1990s. The complete disbanding of Iraq's military, with no adequate substitute, played a key role in the initial looting that occurred in Baghdad in April, 2003, and the general crime wave and insecurity, especially in Baghdad, that has continued ever since.

It also turned out to be much harder than expected to "train up" an Iraqi police force willing to stand and fight (for what? the unelected IGC?) As the Iraqi resistance became more violent, this problem escalated, to the point where, during the recent turmoil in Falluja, more than 50% of the new police force graduates defected or disappeared into the crowds.

The continuing security problem, in turn, scared many private contractors out of the country, and jeopardized the whole schedule for Iraqi reconstruction, which has basically ground to a halt. The exposed yet another dubious assumption by the war planners -- the decision to rely so heavily on private contractors for security services and reconstruction.

The security crisis has also prolonged service terms for US troops, and led many of them to be given assignments to "policing functions" for which they were never trained. That, in turn, led to even great frustration among US troops -- more than 40,000 of whom are members of the US Army Reserves or National Guard. This encouraged increased hostility among Americans and Iraqis, many of whom are now viewed as "criminals who hate us."

The resulting morale problems have caused US Army Reserve and National Guard enlistment and reenlistment rates, as well as regular military enlistment rates, to plummet to 30 year lows. Another byproduct of the continuing security nightmare is that it has been very difficult to get other countries, or the UN, to maintain, much less expand, their troop commitments.

If Iraq's security situation continues to demand increased Coalition troop commitments, and reenlistment/ enlistment rates don't improve, some observers have even speculated that the US might be forced to reintroduce a military draft. For the moment this appears unlikely, unless some new "front" opens up in Syria, Iran, or North Korea. But those of us with college-age children take no comfort from the fact that several members of Congress have already introduced the necessary legislation.

8. Modest, or At Least "Acceptable," Costs. The last key assumption was that this whole effort could be mounted at a relatively modest, or at least politically-acceptable cost, not only in terms of direct financial costs, but also human lives, and "opportunity costs" as well.

Evidently it was assumed by some planners -- Assistant Defense Secretary Wolfowitz, for example -- -- that Iraq's oil production would resume quickly enough to let it make a substantial contribution to funding the costs of the War. It was also assumed that, as indicated earlier, security would improve rapidly after Saddam's demise, and that the new Iraqi police force would be able to substitute for US troops, at a fraction of their cost. Finally, the super-optimists in the pro-war camp may have even assumed that part of the War's freight would be paid by other UN members, even though the Security Council was never permitted to rule on the final decision to go to war.

Reality Check, Please: The reality is that, just one year in, the Iraq War is a budget-buster, both in terms of cash and lives.

The Pentagon's cost accounting for this effort is inscrutable -- perhaps intentionally so, although it is never easy to know precisely what fraction of, say, a hospital in Frankfurt or "wear and tear" on a particular aircraft is properly assignable to a specific front. However, most estimates put the "sunk cost" to date of the Iraq venture at about $175-$180 billion, including the current interest on this spending, since all of it has to be deficit financed.

Going forward, there is now a continuing "run rate" of about $5 billion per month. In terms of real dollars, this is close to the peak $5.1 billion per month run rate for the Vietnam War. These numbers omit the costs incurred by the UK and other Coalition members, which have supplied about twenty percent of the troops.

Nor is Iraqi oil production anywhere close to covering these financial costs. Indeed, production has still not recovered to its pre-War levels, and the cost of securing Iraqi oil exports against increasing sabotage attempts is eating up almost all the profits.

Coalition casualties have also been much greater than expected. As of May 10, after 13 months of combat, the Coalition has sustained a total of 881 combat fatalities and approximately 4716 wounded, assuming that US "dead to wounded" ratios also apply to non-US Coalition Forces.

While these totals are well below those sustained during the peak years of the Vietnam War -- 1967-69 -- they are far greater than those sustained during the first three years of that War, 1961-64, and comparable to the losses sustained by the US in 1965, the first big year of the Vietnam War, allowing for improved survival rates because of improved body armor and "just-in-time" medicine.

As for the Iraqis, officially, our "new Pentagon" no longer keeps track of "enemy body counts" much less civilians -- one major way in which Vietnam was indeed different, at least for PR purposes.

However, efforts have been made by some observers to keep track of Iraqi civilian fatalities reported in the press. While these statistics are probably an understatement, they indicate at least 9,016 to 10,918 Iraqi civilian deaths through April 24, 2004.

In addition, of course, there have also been at least 4-5 times this number of civilians wounded. In a country with a population of 25 million, this is quite a blow. For the 80 percent that is Arab, and has suffered almost all the casualties, this would be comparable, in US terms, to a loss of 100,000 dead and 600,000 wounded. Assuming that the average Arab family in Iraq has four members, that each family member knows 10 people, and each of these 10 people also knows 10 people, the entire Arab population of Iraq is within "two degrees of separation" of experiencing these losses personally.

Is it any wonder that we have already lost the peace?

LONGER-TERM COSTS

But the real long-term costs of this war are even higher.

Far from striking a decisive blow for "democracy and liberation" in the Middle East, and setting an example for other Arab countries to follow, this war has become a lightning rod for anti-Americanism, and a text-book example of hegemony run amok.

Far from teaching the world to respect and admire America's newfound power, our global reputation has plummeted to an all-time low.

The citizens of other countries that have practiced imperialism against their neighbors or their own peoples know what it feels like to be despised and hated whenever they travel. Americans are not used to this treatment. As a direct result of this war, as well as our other policies in the Middle East and elsewhere, we are going to have to get used to it.

Far from providing the world an inspiring example of our truthfulness and honor, the way in which the case was made for this war, and the way it has been conducted, have severely damaged our nation's credibility.


THE CASE FOR WITHDRAWING NOW

Few Americans doubt that we will someday withdraw all US troops from Iraq, as we did from Vietnam.

Probably most of them are not aware that, unlike in Vietnam, the Pentagon's military engineers are already hard at work designing and constructing 14 enduring" military bases all over the country, in Baghdad, Mosul, Taji, Balad, Kirkuk, and near Nasiriyah, Tikrit, Fallujah, Irbil, and elsewhere.
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Apparently the objective is to provide a substitute for our bases in Saudi Arabia, both in terms of oil and military presence. Presumably this is being done in part to keep the Saudis happy, because they are afraid that the presence of US troops on their soil excites domestic resistance. The influential Saudi royal family no doubt prefers to have US troops and Iraqi leaders facing down resistance in Baghdad than in Riyadh.

But of course we are still telling the Iraqis that they will "eventually vote and govern" their own country, and that we have no intention to "occupy" it.

In any case, for those who oppose this war, as well as for the vast majority of Americans who have swallowed the brave new lies that our only long-term interest in Iraq was to "remove Saddam's tyranny," "rebuild Iraq's economy and democracy" and "withdraw," the key issue is -- when should withdrawal start?

In light of the recent crisis, the war's architects have not been able to get on with their agenda quite so easily as they once hoped. Faced with the acute security crisis noted above, they now tell us that if we only increase the number of troops in Iraq for two more years, and provide the extra $120 billion that this will require, we can all return to the original smooth transition plan.

On the other hand, they also claim that, unless the Coalition stays the course, Iraq will disintegrate into civil war, instability, and chaos -- even worse conditions, somehow, than already exist.

To this hokum we say, first, as noted above, the credibility of war's architects is not exactly unsullied.

And now they seem to be proposing yet another episode of "Who Do You Believe -- Me, Or Your Lying Eyes?" As Peter Gutmann once remarked,

We're standing there pounding a dead parrot on the counter, and the management response is to frantically swap in new counters to see if that fixes the problem.

The good news is that the war's architects and pamphleteers are actually very few in number. As the New York Times' Thomas Friedman said in an interview with Ha'aretz, the leading Israeli newspaper, in 2002,

This is a war the neoconservatives wanted.....(and) marketed. Those people had an idea to sell when September 11th came, and they sold it. Oh boy, how they sold it. This is not a war that the masses demanded. This is the war of an elite. I could give you the names of 25 people (all of whom sit within a 5-block radius of my Washington D.C. office, who, if you had exiled them to a desert island a year and a half ago, the Iraq War would not have happened.

So if this tiny band was able to wield so much influence in our erstwhile democracy, and a much larger number now realize that their assumptions were wrong, shouldn't it be possible to reverse course?

Or is it the case that we are now locked into sitting through this whole dreary play?

We say that it is actually the continued occupation that is the greatest threat to stabilization, democratization, the restoration of the Iraqi economy and oil exports, and the preservation of a unified Iraq.

Indeed, Iraqi hostility to the US/UK occupation has now reached the point where securing these goals is much more likely if the Coalition forces withdraw as soon as possible.

This is true for several reasons:

  • The announcement of a definite schedule for a US withdrawal will almost instantly cool the resistance, reduce the leverage of the radicals and the "foreign fighters," permit Iraq's beleaguered police force to focus on fighting crime, and allow the reconstruction of the economy to proceed.
  • Mainstream Iraqis know full well how to restore order in their own neighborhoods, once the US provocation is gone. Absent the occupation, the vast majority of Iraqis have will have little patience for foreign subversives like Zarqawi, and will throw the bastards out.

    Indeed, an astute US withdrawal from Iraq would surely be as sad a day for "terrorists" as the US invasion of Iraq was a happy one.

  • A clear withdrawal timetable would make it clear to the Iraqis that the US has no imperial intentions with respect to their oil wealth. It would permit them, indeed, to recover some of the pride that they must have lost, by having to rely on a foreign power to get rid of their dictator -- even if they did not oust Saddam, they could feel, at least they were able to oust the most powerful hegemon on the planet. That along could provide the ideological foundations for a vast rebirth of national pride.

  • Such a withdrawal would also permit us to remove the provocative presence of largely-Christian US troops in this overwhelmingly Muslim country. It would also clear the way for UN assistance and multilateral development aid, as well as debt relief, to flow more freely into the country.
  • Few Iraqis want a return to dictatorship -- the demand for democracy is overwhelming. It is indeed odd and un-American for the United States of America, in particular, to insist that Iraqi democracy can only be established at the point of a gun, under the guiding hand of a foreigner. I don't recall the Founding Fathers at Constitution Hall in Philadelphia requiring much help from Tony Blair's predecessors or the British monarchy.
  • As General Odom has argued, a clear timetable for a US withdrawal would actually help the UN, or perhaps other Muslim states, to send in peace-keeping forces of their own.
  • So long as the war in central and southern Iraq continues, the Kurds have every incentive to continue to move toward complete independence. Only the restoration of Iraq's central government, and the prospect of "win win" gains from interregional trade and development, can break down these regional ethnic barriers, and keep Kurdistan within Iraq.
  • A US/UK withdrawal, according to a pre-announced timetable that is brisk, yet responsible, and conditioned on the preservation of security, will give Iraqis an incentive to observe and enforce their own general ceasefire, so long as they clearly see progress being made. Unlike the situation in Israel, where the occupiers have been stalling for more than 30 years on "security" grounds, the US has no settler minority that is trying to hold on to Iraqi resources, unless it is Chalabi's band of thieves, thirsting after an oil privatization. But we don't have to be hostage to his demands; if he becomes a problem, we can simply approve Iraq's new extradition treaty with Jordan, cut off his $300,000 per month allowance, and dump him over the border in Jordan, so that he can finally stand trial for bank fraud.
  • If it did turn out that this little experiment with a pre-scheduled withdrawal failed, and the Iraqis themselves, perhaps with UN assistance, were unable to develop a peaceful government, there'd be nothing to prevent the UN or even the US from returning with a more rested, better trained peace-keeping force. After all, we're now pretty sure that the Iraqi Army is not about to fight us with WMDs!

  • fig. 8.15. Donald Rumsfeld and Saddam Hussein, 1983
  • In the event that a civil war erupted in Iraq, and the situation somehow managed to deteriorate from the abysmal state where it is right now -- which 58 percent of Iraqis believe is "the same or worse" than before Saddam's removal -- peacekeepers would probably be welcomed by the majority of Iraqis. This is unlike the current situation, where only a third of Iraqis believe the Coalition forces are doing more good than harm.

All told, the case for a US unilateral withdrawal from Iraq seems very compelling. If the case for it is made to the American people by a leading political figure, it could also be politically very successful. But, other than a marginal, if courageous and thoughtful, candidate like Ralph Nader, is willing to pick up this torch?

Where, indeed, is our Robert Kennedy? Where is the major US political figure who will stand up to this war?

Of course there are some self-styled "conservatives" in the audience -- people who have otherwise somehow found it possible to give a hearty "Sieg Heil" to one of the most radical, un-Constitutional, internationally illegal, risky, costly and irresponsible exertions of military power in US history -- who will no doubt argue, as they did in the case of Vietnam, that this abrupt policy reversal " might be risky."

After all, it might undermine US credibility! It might encourage the world's terrorists! It might make our own allies distrust us! It might jeopardize national security!
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These are the same folks whose tidy little war plan has just sullied America's image and credibility almost beyond repair. It has poured hundreds of billions of dollars and thousands of liters of human blood into the sands of the Iraqi desert. It has helped make Iraq more of a sanctuary for the world's worst terrorists than ever before. It has alienated the entire world, and succeeded in making many Iraqis actually long for the old regime.

As Bertrand Russell once remarked, "The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."

Or, as Peter Gutmann might have said, the war's supporters are still trying to swap in new counters and pound them with the same old dead parrots.

***

© James S. Henry, Submerging Markets ™, 2004






May 11, 2004 at 05:15 PM | Permalink | Comments (0) | TrackBack

Sunday, May 09, 2004

04509.US Brutilitarianism Comes to Iraq
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Part II: The Roots of Brutality

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"No country has better motives for all the damage that it does."
--Graham Greene, 1956
“There were three types of guards. First, there were tough but fair guards who followed prison rules. Second, there were "good guys" who did little favors for the prisoners and never punished them. And finally, about a third of the guards were hostile, arbitrary, and inventive in their forms of prisoner humiliation. These guards appeared to thoroughly enjoy the power they wielded, yet none of our preliminary personality tests were able to predict this behavior.”
--Stanford Prison Experiment, 1971
“We have been silent witnesses of evil deeds. ...We have learned the art of equivocation and pretense. Experience has made us suspicious of others And kept us from being truthful and open. Are we still of any use?”
-- Dietrich Bonhoeffer, German theologian and anti-fascist, 1937
“I tremble for my country when I reflect that God is just, and that his justice cannot sleep forever.”
-- Thomas Jefferson


In the midst of all the hoopla and finger-pointing over Secretary Rumsfeld’s apology for the Iraqi prisoner abuses at Abu Ghraib prison, we seem to have avoided getting to the bottom of the fundamental question begged by all those ugly photos: why did it happen?

In other words, how could young American soldiers, raised in a nominally democratic, civilized “Judeo-Christian” society, and members of the world's most advanced military, which has no business being in Iraq if not to “liberate” it from precisely this kind of oppression, come to act in this way?

From this angle, whether or not Rumsfeld or a few military commanders resign is beside the point – a juicy chance for Senator Kerry and his supporters to make political hay, perhaps, but largely irrelevant to our understanding of these disturbing events and the prevention of their recurrence.

This is especially true if, as we will argue here, they may have been part and parcel of the very nature of this ethnically-divisive dirty little urban guerilla war.

ALTERNATIVE EXPLANATIONS

At this point, the official US investigation, as well as press accounts, of the recent abuses at Abu Ghraib prison are incomplete. Already, however, there are several conflicting explanations.

“Exceptional Evil-Doers.” As noted in Part I of this series, the prevailing view of US officials is the “bad apple” theory -- in President Bush's words, "the wrongdoing of a few." This explanation -- which has deep roots in American culture, dating as least as far back as the Salem Witch trials, and is also at the heart of our conventional view of "terrorists" -- attributes the problem to brutal, distinctly “un-American” misbehavior by handful of “bad” people. In this view, this tiny group is clearly distinct from the vast majority of decent, Geneva Convention-abiding US military personnel. This explanation has been adopted by a wide variety of political and military leaders, from President Bush, Secretary Rumsfeld, and General Myers to Senators MeCain, Kerry, and Clinton. It also appears to be the predominant view in the mainstream press, perhaps because it lends itself to the kind of lengthy profiles of soldiers that, for example, the New York Times and the Washington Post have both front-paged several times this week. It is also necessarily more comforting to supporters of the Iraq War -- including all the leaders and newspapers just mentioned -- who view this scandal as an embarrassing, unhelpful distraction from the immediate task at hand, which is to get on with "stabilizing" the security situation in Iraq (e.g., crushing the resistance).

This kind of explanation is a standard one for individual criminal conduct in general. Typically it locates the roots of abusive behavior in the supposed predispositions of particular abusers to commit them. The contributing dispositive factors may vary -- pathological or "authoritarian" personalities, genetic defects, retributions for perceived injustices, inadequate schooling, too much TV, weak role models, or Salem witchery, for all we know. Whatever these underlying, the indicated prescription focuses on identifying and and handling these “bad seeds,” and in this case, any individual commanders who may have also “failed” to supervise them.

(to be continued....)

May 9, 2004 at 02:55 PM | Permalink | Comments (2) | TrackBack

Thursday, May 06, 2004

0505.US Brutilitarianism Comes to Iraq
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Part I: Rogue Behavior, Sheer Stupidity, or Something More?

Printable PDF Version

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"The United States is committed to the worldwide elimination of torture and we are leading this fight by example."
-- President George W. Bush, June 26, 2002
"The precise pain, in the precise place, in the precise amount, for the desired effect.''
-- Dan Mitrione, USAID/ CIA operative, Montevideo, 1970

Since all the claims about Saddam’s WMDs and other threats to global security are now in tatters, the goal of replacing his regime with a more humane one is one of the few justifications for the Iraq War that still has any credibility.

It is therefore deeply disturbing to learn that serious human rights violations, including several cases of torture and outright murder, may have been committed against scores of Iraqi prisoners by leading elements of the Coalition Forces, including the US Army Reserve Military Police, US Military Intelligence (INSCOM), the CIA, and private contractors like CACI International that have been providing so-called “intelligence collection” services to the Pentagon. Similar allegations have also surfaced about the British Army, although those charges may have been exaggerated by the Daily Mirror. This is of course in addition to the thousands of civilian deaths that our precision-guided military has produced all over the country with its "fire and forget" tactics.

A preliminary investigation of these charges by US Major General Antonio M. Taguba, disclosed last week by CBS News and the New Yorker, concluded in February that the alleged abuses included:

Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape; allowing a military police guard to stitch the wound of a detainee who was injured after being slammed against the wall in his cell; sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.

While this behavior pales by comparison with the sadism that was routinely practiced by Saddam’s minions on a massive scale, it has no place in a post-Saddam Iraq, and the US and UK certainly have no business encouraging it. Nor, despite the usual defences often heard in right-wing quarters for "selective torture" to deal with terrorism, is there any evidence that the interrogation methods employed here produced anything more than a public relations debacle for the US and its allies.

These charges may be new to American audiences, but this is far from the first time that they have been made. According Iraq’s former Human Rights Minister, Abdel Basset al-Turki, who resigned on May 4th in protest over these allegations, US Pro-Consul Paul Bremer was put on notice about this widespread mistreatment as early as November 2003, but did nothing. The International Red Cross also reports that if has been complaining for months to the Coalition of methods "far worse" than those depicted in the photos released by CBS, but to no avail.

This is consistent with the brush-off that Paul Bremer and Condi Rice reportedly both gave to the concerns that Amnesty International first raised about conditions in Iraqi prisons way back in July 2003.

The Pentagon also now says that it ordered a “high-level review” of the issue last fall, but this must have had little impact on the ground, since the abuses noted above took place in December 2003.

Now that President Bush himself has finally pronounced these abuses “abhorrent” on two Arab television stations, the military may find more time to focus on the results of the "30 investigations” of these and related charges that it claims to have conducted over the past 16 months. In the wake of Donald Rumsfeld's passive "know-nothing" response to the escalating scandal, calls for his resignation are mounting, and the heads of more than just a few mid-tier officers may also have to roll before justice is done here. Certainly Rumsfeld has a lot of questions to answer, including why he said nothing to Congress about the investigation; why so many cases of brutality have been recorded; why nothing was done to change conditions at Abu Ghraib and elsewhere, despite numerous complaints over many months from Amnesty International and the International Red Cross; why private contractors were permitted to play such a large role in military intelligence; and, most important, why the rules of the Geneva Convention are not being enforced by US military and intelligence personnel.
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All told, this scandal is shaping up to be a touchstone for the whole Iraq enterprise. It is worth trying to understand how this happened – and why, in particular, American soldiers who were supposedly raised in a democratic, more or less civilized country and trained by our sophisticated, extraordinarily-expensive modern military, should have participated rather gleefully in such bizarre behavior -- and even photographed it, too!

THE RHETORIC - “TORTURE IS ILLEGAL”

To begin with, lest all the civil and military servants in the audience need to be reminded, this kind of behavior, if substantiated, constitutes a clear violation of one of the most fundamental, widely-shared principles of international and US law – the absolute prohibition against torture.

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This prohibition, which is as universal as the ones against slavery or piracy, extends to all prisoners of war, civilians, and all other war-time detainees. Indeed, while Iraqi insurgents may not be deemed to be part of the Iraqi armed forces, and therefore are not technically “prisoners of war” for purposes of the “combatant’s privilege – to fire on enemy troops without fear of prosecution - they are still entitled to the same basic rights so far as interrogation is concerned.

It is interesting to see just how many times this prohibition has recently been repeated in international law -- especially since so many countries still routinely engage in the practice.

  • The 1948 Universal Declaration of Human Rights, Article 5: “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.”
  • The 1949 Geneva Convention (4th Convention, Article 31): “No physical or moral coercion shall be exercised against protected persons, in particular to obtain information from them or from third parties.”
  • The 1966 International Covenant on Civil and Political Rights, Article 7: “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.”
  • The 1975 Declaration on the Protection of all Persons from Being Subjected to Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, unanimously adopted by the UN General Assembly: “No state may permit or tolerate torture or other cruel, inhuman or degrading treatment or punishment. Exceptional circumstances such as a state of war or a threat of war, internal political instability or any other public emergency may not be invoked as a justification of torture or other cruel, inhuman or degrading treatment or punishment.”
  • The 1987 UN Convention Against Torture, which focuses on official conduct, repeats the prohibitions noted above, and also provides that (Article 2): "An order from a superior officer or a public authority may not be invoked as a justification of torture."

All of these conventions have been signed and ratified by both the US and the UK -- although the Bush Administration has actually cooperated with countries like Syria, Libya, and Cuba to oppose efforts to give international inspection “teeth” to these anti-torture conventions.

Of course such prohibitions against torture, cruel and degrading treatment of prisoners prior to conviction, arbitrary detention, “cruel and unusual punishment,” and self-incrimination are also cornerstones of the American and British legal systems.

In the case of the US, they have at least a 200-year history, and are deeply embedded in the US Constitution especially the Fifth, Eighth, Thirteenth, and Fourteenth Amendments. They have also been recognized by numerous state and federal statutes, including the Uniform Code of Military Justice, the War Crimes Act (18 USC 2441), and the 1991 Torture Victims Prevention Act (28 USC 1350 App.)

More recently, the US also played a leading role in prosecuting war crimes at Nuremberg and Tokyo after World War II, and helped finance and organize the prosecution of the war crimes committed in the Balkans and Rwanda in the 1990s. Of course the Bush Administration has also recently taken pride in distinguishing itself from “Axis of Evil” regimes like Saddam’s, North Korea and Iran in this respect.

RELIEF?

So what relief will all this weighty legal doctrine actually provide for the individual Iraqis who were victimized in this case? The short answer is – not much, at least in case of the US.

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There appears to be probable cause to prosecute the officers and enlisted personnel involved, as well as any senior officials who knew or should have known about these activities, for war crimes in US or UK military courts, or, in the case of the UK, by the newly-created International Criminal Court (see below.) But while that might satisfy the victims’ needs for retribution, it won’t provide them with any compensation.

The Iraq Special Tribunal that we established in December 2003 to prosecute war crimes and crimes against humanity – mainly those committed by the Ba’athist regime – was carefully limited just to jurisdiction over Iraqi citizens and residents.

In the case of the private US contractors involved in this case, the Iraqi torture victims might at least be able to sue in a US federal district court for the damages inflicted against them under “color of law,” as provided by the Torture Prevention and Alien Tort Claims statutes. But this could be a hard case to prove, especially if the contractors involved were careful to let the military police do all their dirty work.

If the allegations of British misbehavior hold up, the Iraqis might also be able to bring war crimes charges against UK soldiers and their bosses at the new International Criminal Court -- since, unlike the US, Britain ratified the treaty establishing this court last year. This might make for an interesting complement to Saddam’s war crimes tribunal, scheduled to begin later this year. However, even apart from the practical obstacles to such prosecutions, Iraq’s “new government,” hand-picked by the Coalition, would probably readily grant the UK a waiver against such complaints. But British troops might still be subject to the UK's Human Rights Act, which might provide compensation to Iraqi victims for violations of the European Convention on Human Rights. Indeed, 14 Iraqi families have already commenced an action in the UK's High Court for what they consider unlawful killings of their civilian relatives in the last year by British troops.

DAMAGE CONTROL?

When all these revelations first appeared – reportedly after CBS News held the story for two weeks at the request of the US military, which feared the impact on Arab opinion ("duh") -- senior military officers in the US and the UK, as well as political leaders like Prime Minister Blair, President Bush, and even the rather cautious Senator Kerry, were all quick to condemn the obviously indefensible misbehavior. But they were also quick to claim, prior to any investigation, that this behavior must have been exceptional, engaged by at most a handful of “rogue elements” in the military and the CIA, who will now all be sternly dealt with.

However, as Amnesty International has noted, these were not just isolated incidents. Indeed, as we’ll argue below, they appear to be part of a disturbing trend toward the increasing use of “hard-core” interrogation techniques on Arab detainees by the US and its new allies in the “war on terror,” both abroad and at home.
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Moreover, the US and UK civilian and military intelligence services and their contractors and surrogates have a long history of intimate involvement with such interrogation methods.

In fact what’s really most unusual about these recent scandals is not the revelation that all these services routinely use such methods, but that in this case they got their hands dirty.

Usually they are smarter than that, outsourcing the "wet work" to Third Worlders in countries with fewer reporters, human rights observers, or young Army reservists.

Ironically, in the case of occupied Iraq, these intelligence services had no other country to "outsource" the work to. With thousands of Iraqi prisoners to deal with, and a growing insurgency, they also had little choice but to rely on at-hand Army Reservists, at least one of whom decided to turn in his comrades. If the military and the intelligence services had not gotten caught, one wonders how many of those "30 investigations" and 25+ deaths in detention we'd have ever heard about.

There is also evidence that, especially in the wake of 9/11, similar tactics may be spreading to domestic law enforcement back in the USA – reflecting a growing militarization of police work. Interestingly, such tough tactics may not actually produce any more solved crimes. But they do provide nice opportunities for frustrated investigators to blow off steam.

Tying all this together, the patterns revealed here really belie the conventional notion that the hard-core interrogation tactics recently seen in Iraq were simply rogue actions by a group of unprincipled individuals.

Nor were they, in Donald Rumsfeld’s words (after four days of silence on the subject), simply “unacceptable and un-American.”

It is more accurate to say that, under the license of our new post-9/11 crypto-culture, many military and civilian intelligence and law enforcement officials apparently feel entitled to violate fundamental civl rights – especially those of Arabs and other suspect minorities – in the interests of pursuing “bad guys.” This is a little taste of what it was like to have been a white cop in Macon, Georgia, or Jackson, Mississippi, in 1956.

So this kind of behavior has become, if anything, all too acceptable, all too American. To make sure that it diminishes, rather than continues to grow, we need to get to the bottom of the institutional failures , not just the individual errors in judgment, that foster it. Just as we (almost) once got to the bottom of the systemic problems in Macon and Jackson.

THE REALITY

The latest disclosures from the Pentagon, when added to other reports in the last two years, add up to some disturbing patterns:

Iraq. As the Pentagon only disclosed on May 4, since December 2002 it has launched investigations of at least 25 suspicious deaths of prisoners in custody in Iraq and Afghanistan, and 10 cases of assaults. In addition, in Iraq, three Army reservists –Army Reserve military police, like those accused in the most notorious incidents -- were discharged in January 2004 for abusing prisoners at Camp Bucca, south of Baghdad near Umm Qasr. In December 2003, two British soldiers were arrested but released after an Iraqi prisoner died in their custody. In November 2003, Major-General Abed Hamed Mowhoush, of Saddam’s Republican Guard, fell ill and died during “an interview with US forces." In August 2003, a US Army lieutenant colonel received a fine, but no court marshall, for firing a shot near a detainee’s head during an interrogation. There have been reports of similar abuses at “Camp Cropper” and “Camp Bucco,” near the Baghad International Airport. Furthermore, the US has been very slow to provide information on the whereabouts and conditions of up to 10,000 civilians who have been detained in Iraq, leaving many family members completely in the dark about them. And, according to Amnesty International, these detainees have been “routinely subjected to cruel, inhuman or degrading treatment during arrest and detention.”

Afghanistan. According to Amnesty International, detainees interrogated by the CIA at Bagram Air Base have allegedly been subjected to "stress and duress" techniques that include ”prolonged standing or kneeling, hooding, blindfolding with spray-painted goggles, being kept in painful or awkward positions, sleep deprivation, and 24-hour lighting.” In December 2002, two Bagram detainees died under suspicious circumstances. A 13-year old Afghan boy who was detained in Bagram for two months described it as

“...a very bad place. Whenever I started to fall asleep, they would kick on my door and yell at me to wake up. When they were trying to get me to confess, they made me stand partway, with my knees bent, for one or two hours. Sometimes I couldn't bear it anymore and I fell down, but they made me stand that way some more."

A December 2002 press report on standard practices at Bagram sounds like it is not all that different from what recently was discovered to be going on at Abu Ghraib prison in Iraq:

Captives are often "softened up" by MPs and U.S. Army Special Forces troops who beat them up and confine them in tiny rooms. The alleged terrorists are commonly blindfolded and thrown into walls, bound in painful positions, subjected to loud noises and deprived of sleep. The tone of intimidation and fear is the beginning, they said, of a process of piercing a prisoner's resistance. The take-down teams often "package" prisoners for transport, fitting them with hoods and gags, and binding them to stretchers with duct tape…..

The US military has also been accused of standing by and watching while its allies in the Northern Alliance slaughtered up to 4000 captured Taliban prisoners of war.

Other Secret Detention Centers. There have also been reports of serious psychological and physical abuse at Guantanamo’s Camp X-Ray and Camp Delta, and other off-limits detention centers, such as Diego Garcia in the Indian Ocean. Up to 3000 detainees are being held in such facilities, but US military officials have refused to disclose their precise names and numbers, and have only allowed intermittent visits from the International Red Cross. In Guantanamo alone, after two years, more than 660 inmates are currently in detention, including some children. All these detainees have been designated as “unlawful combatants” by the US military; we do not know their names or the charges against them, and none of them have received any judicial review, access to lawyers, or even contact with relatives. Indeed, even US citizens are being held in this indefinite “right-less” limbo status, the legality of which is now being challenged in the US Supreme Court. It seems likely that the prisoners’ right-less status has helped to encourage abuses against them.

“Refoulement.” The US has also apparently subjected hundreds of suspects – including, according to the CIA’s George Tenet, at least 70 before September 11th -- to “extraordinary renditions” to countries like Jordan, Egypt, Uzbekistan, Morocco, Saudi Arabia, Israel, and Syria where edgy interrogation methods are routine. According to one report, in the mid-1990s the CIA significantly expanded its efforts to snatch suspected Arab terrorists for purposes of such renditions, from which it shared in any resulting information, by way of a new secret Presidential “finding” that purportedly "authorizes" it -- in violation of all the international treaties noted earlier. According the US State Department’s own country reports, the interrogation methods employed by these US allies include:

  • Egypt: Suspension from a ceiling or doorframe; beatings with fists, whips, metal rods, and other objects; administration of electric shocks; being doused with cold water; sexual assault or threat with sexual assault
  • Israel: Violent shaking; smelly head-bag; painful positions; "truth serums;" torture of teenagers.
  • Jordan: Beatings on the soles of the feet; prolonged suspension in contorted positions; beatings
  • Morocco:Severe beatings
  • Pakistan: Beatings; burning with cigarettes; sexual assault; administration of electric shocks; being hung upside down; forced spreading of the legs with bar fetters
  • Saudi Arabia: Beatings; whippings; suspension from bards by handcuffs; drugging
  • Syria: Administration of electric shocks; pulling out fingernails; forcing objects into the rectum; beatings; bending detainees into the frame of a wheel and whipping exposed body parts.

Deeper Roots. While the “war on terrorism” has given hard-core interrogation techniques a new lease on life, in fact the Afghan and Iraqi situations are only the most recent examples of their development by both the US military and the CIA. They sponsored a great deal of primary research on the subject, drafted “how-to” manuals for use in torture/interrogation training, and provided a great deal of instruction and assistance to the global hard-core interrogation industry. Among the many recipients of this development assistance were the Shah’s Iran, Brazil and Uruguay in the 1960s (by way of Dan Mitrione and others), Vietnam (by way of the Phoenix Program’s “Provincial Interrogation Centers), Guatemala and El Salvador in the 1980s, and Honduras’ infamous Battalion 316 in the early 1980s -- where our new US Ambassador to Iraq, John Negroponte, also served in 1981-85.

Dubious Methods Back Home. There is also evidence that the same rough-trade interrogations tactics that US soldiers have recently employed offshore are also showing up more frequently in the US. For example, last December, a Department of Justice investigation disclosed the widespread use of mistreatment and abuse during the interrogation of dozens of Muslim detainees at the Metropolitan District Detention Center in Brooklyn, in the aftermath of September 2001.

More generally, there have also been a growing number of instances of gross brutality inflicted on prisoners in the US' own increasingly over-crowded prison system -- which currently houses more than 2.1 million inmates, the world's largest prison population. Some state systems -- like California's, with more than 160,000 inmates -- are on the verge of breakdown, with crowded conditions, "guard gangs" as well as prisoner gangs, budget shortages, and rampant violations of prisoner rights. Just this year, for example, an inmate on a dialysis machine at California's Corcoran State Prison bled to death while guards ignored his screaming, as they watched the Super Bowl. This is just one of many horror stories that occur on a daily basis in the US prison system. So it is perhaps no accident that at least two of the six US soldiers facing criminal charges in connection with the Abu Ghraib scandal in Iraq were prison guards back home, and one of them was employed at a Pennsylviania prison that is notorious for prisoner abuse.

In an episode that is in some ways even spookier, in February 2004, agents of the US Army’s Intelligence and Security Command (INSCOM) -- which also oversees the same military intelligence units that have been misbehaving in Iraq -- actually showed up undercover and uninvited at a University of Texas Law School Conference in Austin on “The Law of Islam” in civilian garb, and later demanded a list of all the attendees and questioned several students in an aggressive manner. The Army later apologized, and promised to institute new refresher courses on the proper limits of its domestic authority.

Indeed, the US Army might start by reviewing the fundamental federal law that has been on the books since 1879 – the "Posse Comitatus Act" (PCA) (18 USC 1385), which provides for fines and imprisonment for anyone who uses the US military for domestic law enforcement or surveillance, except in times of national emergency or under certain other limited exceptions, none of which applied here.

This growing militarization of US law enforcement -- complete with Predator drones, SWAT teams, US Marines shooting 18-year old goat-herders in the back on the Mexican border, and now the very latest fine refinements on interrogation techniques from Guantanamo and Abu Ghraib -- may be an inevitable byproduct of our brand new global wars on terrorism, drugs, anti-imperialism, and Islamic radicals whose faces we don't happen to like. But those of us who are back home, supposedly the beneficiaries of all this "national security," had better wake up and pay attention to the impact that this emerging "state of siege" mentality is having on our rights -- and those of the Iraqis people that we are supposed to be "liberating."

***

NEXT: PART II: THE ROOTS OF BRUTALITY.

© James S. Henry, Submerging Markets ™, 2004


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May 6, 2004 at 01:12 AM | Permalink | Comments (2) | TrackBack

Thursday, April 01, 2004

"The Worst April Fool's Joke Ever:"
Brazil's 1964 Coup
The Foundations of Regressive Development

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April 1, 2004 is not only April Fools Day in the US and Europe. It is also the fortieth anniversary of the worst April Fools’ joke ever,” as many Brazilians called it, the 1964 US-backed military coup in Brazil that overthrew the constitutional, democratically-mandated government of its populist President, João Goulart.

This coup led directly to 21 years of disastrous rule by Brazil’s military. During that period, the military cracked down sharply on all political opposition, independent trade unions, and critical media. It also piled up one of the world’s largest foreign debts, tried to develop nuclear weapons and intercontinental missiles, and pursued a national development strategy that favored the construction of huge, poorly-planned but highly lucrative hydro dams, Amazonian highways, and nuclear plants over investment in education and other basic human needs.

As described in more detail in the following excerpt from The Blood Bankers, all this proved to be very profitable for the officials, generals, and foreign and domestic bankers that catered to the regime’s needs.

But it also created a legacy of distorted development, poverty, concentrated land and media ownership, deforestation, environmental pollution, high-level corruption, and inequality, as well as a culture of violence and disregard for human rights.

Fortunately, Brazil, a country with 182 million people that accounts for more than two-thirds of South America's entire economy, returned to civilian rule in 1985. But it still struggles with most of these problems to this day.

As the following account makes clear, the US Government was deeply involved in encouraging the coup at the highest levels -- n.b. recently-declassified White House tapes and documents. Once in power, Brazil’s military also played a crucial role in the empowerment of right-wing regimes in several other Latin American countries, including Bolivia and Uruguay. Indeed, top US policymakers viewed Brazil’s military as a very useful agent, which could be used to impart a hard right spin to political development all over the Southern Hemisphere.

The standard apology for all this is that it was the price that had to be paid to contain the global Communist menace. When examined carefully in the bright light of day, this excuse turns out to be a canard. The fact is that Brazil never faced a serious revolutionary threat from the Left; that Goulart and his supporters were at worst populist, nationalistic land-reformers and union supporters; that the generals and their friends in Brazil's elite systematically exaggerated the leftist threat in order to justify their appetite for power, which gave many of them offshore bank accounts; that Presidents Kennedy, Johnson, and, later on, Nixon, were completely spooked by the Castro fiasco into overreacting to such populists all over the Third World; that the Brazilian coup completely undermined the rule of law, labor unions, human rights, and political freedoms for many years; and that it also led to decades of short-sighted economic policies that damaged millions of lives.

In short, if we really want to understand the roots of Latin America's comparative poverty, inequality, violent culture, and distorted development, as well as why many Latin Americans do not necessarily share the gringos' high esteem for their own role in history, the story of Brazil's 1964 military coup is a good place to start.

FOUNDATIONS

One long-time Brazilian banker recalled that at that time (the early 1960s) JPMorgan's position in Latin America was “essentially nowhere.” Years earlier, of course, it had been one of the first U.S. banks to do international banking. In the l880s, J.P. Morgan Sr. acquired Morgan et Cie in France and a third of London’s Morgan Grenfell, and in l908 the bank added Guaranty Trust Company, which had French, Belgian, and UK branches. From l890 to l930 Morgan floated more Latin American bonds than any other bank. But from the Depression until the l950s it had largely neglected Latin America. By l964, its entire Mexican exposure was only $15 million, and its Brazilian exposure just $50 million, and Morgan’s Latin American group was run by people who were ”not very aggressive....bright but not out-going.....(the head) would show up in Rio and wait at his hotel for clients to call on him.” Of the group’s five bankers, only Fred Vinton, the son of a long-time Citibank rep in Buenos Aires, had ever lived in Latin America. Citibank, Chase, and Bank of Boston all had local branches in Rio and São Paulo, but not Morgan.
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Kubitschek

Of course, at the time, Brazil was viewed as quite a risky place to do banking. Juscelino Kubitschek, the country's President from l955 to l961, had embarked on an ambitious ”Fifty Years in Five” program, promoting industrialization and huge projects like Brasilia, the new federal capital in the remote state of Goiás, that was aptly described as “the revenge of a Communist architect against bourgeois society.” Kubitschek’s program produced five years of 7 percent growth, unprecedented corruption, and the Third World's largest debt, $2.54 billion by l960. That may not sound like much now, but it consumed forty percent of Brazil’s export earnings. In l961, Janio da Silva Quadros, Kubitschek's successor condemned this debt in terms that later generations would fully understand:

All this money, spent with so much publicity, we must now raise bitterly, patiently, dollar by dollar and cruzeiro by cruzeiro. We have spent, drawing on our future to a greater extent than the imagination dares to contemplate.
Kubitschek’s excesses provoked a conservative reaction. In 1960, Quadros, a former Governor of São Paulo, ran for President on an anti-corruption platform with a broom as his symbol. He was elected, and took office in January 1961. His Finance Minister, a wealthy banker, quickly signed a tough IMF agreement that agreed to devalue the currency, slash subsidies, and repay the debt. quadros.jpg
Janio Quadros

But Janio Quadros soon proved to be one of Brazil’s weirdest leaders. He also tried to ban horse racing, boxing matches, and bikinis on the beach, and when the U.S. pressured him to embargo Castro, he defiantly journeyed to Havana and awarded Che Guevara the Ordem do Cruzeiro do Sul, Brazil's equivalent of the Legion d'Honeur. At one point early in his term he had been visited by Adolfe Berle, Jr., President Kennedy’s special assistant on Latin America. Kennedy was quietly seeking Quadros’ support for the upcoming Bay of Pigs invasion. According to John M. Cabot, the US Ambassador to Brazil at the time, Berle effectively offered “Brazil” a $300 million bribe in return for cooperation. But Quadros became “visibly irritated” after Berle ignored his third rejection, and sent Berle off to the airport unaccompanied. A few months later, in August 1961, Quadros resigned, complaining of being surrounded by ”terrible forces,” and blamed his downfall on a cabal that included “reactionaries” Berle, Cabot, and US Treasury Secretary C. Douglas Dillon.
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Goulart and Kennedy

This allowed the succession of João Goulart, Janio’s Vice President, a wealthy populist cattle farmer from Rio Grande do Sul. Goulart visited the US in April 1962, addressed a joint session of Congress, and received a ticker tape parade in New York City. But he immediately proceeded to alienate every key interest group at once, launching an aggressive land reform, boosting taxes on foreign investors, nationalizing utilities and oil refineries, and even encouraging enlisted men in the Army to organize a union. Inflation soared to the unheard-of level of 100 percent, exhausting four Finance Ministers in two years. All this was a splendid recipe for counterrevolution -- Brazil’s usually fractitious military leaders banded together and organized a coup, was supported by business, most of the “middle class,” and the U.S., which spent tens of millions of dollars on a covert ant-Goulart media campaign. In l963, Goulart's second Finance Minister visited Washington and asserted that the left-leaning regime’s social reforms had been inspired by President Kennedy’s so-called "Alliance for Progress" But he received a cold shoulder -- the US aid window closed down until April 1964, after the coup. As early as l962 U.S. intelligence had warned of coup preparations, and was more than sympathetic. As David Rockefeller, who was at that point the President of his family’s bank, Chase Manhattan, told a closed-door conference at West Point in the fall of l964, ”It was decided very early that Goulart was unacceptable....and would have to go.”

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Amb. Gordon

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Ball and Johnson

A newly-declassified audio tape, recorded by the White House taping system on March 31, 1964, just as the coup was just beginning to unfold, shows President Lyndon Johnson personally involved in reviewing US support for the coup, and monitoring the latest developments. In a phone conversation with Undersecretary of State George Ball, who was coordinating US activities, Johnson expressed support for aggressive action: "I think we ought to take every step that we can, be prepared to do everything that we need to do, just as we were in Panama if that is at all feasible. I’d put everybody who had any imagination or ingenuity in (Ambassador) Gordon’s outfit or (CIA Director) McCone’s or yours or (Secretary of Defense) McNamara’s. We just can’t take this one, and I’d get right on top of it and stick my neck out a little.” US Undersecretary of State George Ball: That’s our own feeling about it, and we’ve gotten it well organized.”

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The April 1, 1964, coup that followed -- ”the worst April Fool's joke ever” -- was led by General Humberto de Alencar Castello Branco, commander of the Fourth Army in Recife. During World War II, he had served with Brazil’s Expeditionary Force, which fought with the Allies in Italy. His “trench buddy” there was Colonel Vernon A. Walters, the U.S. “military attaché” from September 20, l962 to l967, who would later be promoted to Lt. General for his accomplishments in Brazil, and then move on to serve as senior CIA officer, the CIA’s Deputy Director from March 1972 to 1976, and Ronald Reagan’s UN Ambassador in the 1980s. Colonel Walters spoke fluent Portuguese and also very close to General Emílio Garrastazu Médici, head of Brazil’s Black Eagles military school during the 1964 coup, then military attaché to Washington (64-65), head of Brazil’s CIA, the “Serviço Nacional de Informaçoes (SNI)” from 1967 to 1969, and then Brazil’s President, courtesy of the junta.
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General Walters

During the coup, Castello kept both General Walters and U.S. Ambassador Lincoln Gordon “very well-informed of pre-coup deliberations,” a US Navy “fast” Carrier Task Group was standing by offshore, and six US Air Force C-135 transport plants with 110 tons of arms and ammunition were standing by, in case there was any resistance. Fortunately, the coup was almost bloodless, although there would be many disappearances, deaths, and cases of political torture during the 21 years that followed.

Castello Branco was supposed to step down after a short period of housecleaning, but Brazil’s military proved to be a better master than a maid -- it stayed in power from l964 to l985. At first, Castello turned the economy over to Octavio Bulhões, an academic-cum-Finance Minister, and Roberto Campos, a U.S.-educated ex-Jesuit and former head of Brazil’s powerful National Development Bank (BNDES), who became Planning Minister. Their reign from April l964 to March l967 was the first in a series of rather disappointing Latin American experiments with monetarism, the notion that controlling the money supply was the sine qua non of economic policy. To fight inflation, they reigned in credit, slashed spending (which they viewed as driving money growth, because the government was financing by selling bonds to the banking system) , and opened the door to imports. They also eased restrictions on foreign investment, eliminated taxes on foreign profits, and outlawed strikes. Dozens of labor leaders were jailed, and wages were frozen, although inflation was still raging at forty percent a year. But the regime was careful to protect investors against inflation by indexing bonds and bank deposits. A new capital markets law also created Brazil’s first investment banks and provided “the most sophisticated company law in Latin America.” In l965, in an attempt to control the money supply, Campos also created Brazil’s first Central Bank and a National Monetary Authority.

All these conservative measures went down rather well with bankers and the U.S. government. Regardless of who staged the coup, it soon became quite clear who would pay for it. From l964 to l970, Brazil got more than $2 billion of U.S. aid, which made it the third largest aid recipient in the world. About $900 million of this arrived in the first six months after the coup -- in l964, after the coup, the U.S. Treasury paid seventy percent of the interest due on Brazil's debt. In July 1964, Brazil also signed another IMF agreement, and in the next three years it got $214 million of IMF loans, which had been zero from l959 to l964. Brazil also suddenly became the World Bank’s largest customer, after getting no loans at all from 1950 to l965, as well as the largest borrower the IDB and from our old friends, the US EX-IM Bank. From l964 to 1970, direct investment by American companies increased fifty percent. In January l967, the IMF held its 22nd convention in Rio, presided over by General Artur Costa e Silva, a former War Minister and Castello Branco's successor.
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General Golbery

Unfortunately for the majority of Brazilians living in poverty, most of this aid went to pay for budget deficits, planning exercises, and capital-intensive projects -- original Alliance for Progress objectives like “eliminating illiteracy from Latin America by l970” and “income redistribution” got short shrift. The real value of the minimum wage dropped by one-fourth from l964 to l967, and malnutrition and infant mortality rose dramatically. Domestic industry was hit by foreign competition and a recession at once, even as multinationals were getting cheap finance and lower taxes. Many foreign investors also got ”sweetheart” deals -- Campos was especially generous to Amforp, an American-owned utility, and in l965 the American billionaire Donald Ludwig was allowed to buy an Amazon forest tract twenty percent larger than Connecticut for $3 million. General Artur Golbery Couto e Silva, the military’s “gray eminence,” later became President of Dow Chemical do Brasil and a representative of Dow’s Banco Cidade. A top professor at the Escola Superior de Guerra, Brazil’s version of the National War College, and the author of the seminal Geopolitica do Brasil, in the early 1960s Golbery had used CIA funding to launch the Institute for Research and Social Studies (Instituto de Pesquisas e Estudos Sociais--IPES), the SNI’s precursor. Over the next two decades, the SNI would employ more than 50,000 people to spy on and otherwise deal with “subversives” at home and abroad. Golbery later served as head of the Casa Civil, a key aid to President Ernesto Geisel. Not surprisingly, along the way, Dow Chemical got special permission for a new plant in Bahia.

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Roberto Campos

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Ernesto Geisel

Soon, even nationalist critics started attacking Roberto Campos' program as a ”pastoral plan” designed by Americans to eliminate domestic industry -- he became widely known as ”Bob Fields,” “a full-time entreguista.” In l964, a popular Rio bumper sticker said, “Enough of intermediaries! -- (U.S. Ambassador) Lincoln Gordon for President!” In l966, the U.S. Ambassador complained that American advisors were implicated in ”almost every unpopular decision concerning taxes, salaries and prices.”

In October 1965, in the last free elections until l982, the military’s candidates for state governorships in Rio de Janeiro and Minas Gerais were defeated. Workers, students, and church organizers turned radical, and several civilian leaders who had supported the coup, including Magalhães Pinto and Carlos Lacerda, also pressed for new elections. There was a sharp increase in capital flight -- in 1966 Brazilians sent more money abroad than all the new foreign investment and foreign aid brought in. The nationalists in the military also began to treat the “internationalist” segments of the upper classes harshly -- they unleashed a spy operation to catch wealthy Brazilians who had foreign accounts. In November 1966 the police, assisted by Brazil’s intelligence service, the SNI, under the command of General Fiuza de Castro, raided the offices of Bernie Cornfeld's Swiss-based I.O.S. flight capital operation in seven cities, arrested 13 salesmen, and seized files on 10,000 clients.
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Costa e Silva

All this set the stage for a hard-line backlash, led by members of the military who believed that the castellistas were selling out to foreigners and were not tough enough on subversivos. In late l966, Castello Branco gave way to the IMF’s favorite, General Costa e Silva. Political parties were consolidated into a ”majority” party, ARENA, and an official ”opposition” party, the PMB -- as they soon came to be known in the underground, the parties of ”yes” and ”yes sir.” Many opposition politicians, union leaders, and students were stripped of their civil rights. In December 1968, when a federal deputy asked Brazilian women to stop having sex with military officers until political repression ceased, the Army demanded that Congress lift the fellow’s immunity so he could be prosecuted for “insulting the Armed Forces.” When the Congress refused, Costa e Silva closed it, disbanded state assemblies and city councils, suspended habeas corpus, and imposed press censorship. Dictatorial niceties like arrests without warrant and torture now became common, while elections were reduced to ratifications of the military’s “bionic” candidates.

As for Roberto Campos, in March l967 he moved over to the private sector, giving way to a more dirigiste economic team. He never again exercised much power, although he served as Ambassador to England in the mid-1970s. His l982 diary reads like a “Who’s Who” of prominent Brazilians and Americans. Tony Gebauer was one of the friends listed there. But unlike some of his successors, apparently Roberto Campos didn’t do his private banking at Morgan -- the diary lists accounts at Geneva’s Pictet et Cie and Trade Development Bank, whose founder, Edmond Safra, also founded Republic Bank of New York and Safra Bank, and was an old Campos acquaintance.

So by 1967, Brazil was thus well on its way to becoming a marshal law state. With the support and guidance of the US government, a left-leaning, if democratically-elected, government had been vanquished, and a right-wing dictatorship put in its place. Especially after 1968, until the mid 1970s, the level of repression increased, and the number of political opponents who were murdered or “disappeared” reached into the low thousands. This was modest, compared with what went on in Argentina, Chile, and Paraguay, , but Brazil made up for the body count by sharing its early experiences with these countries. (See below.)

DICTATORSHIP OF THE IMAGINATION

While Brazil’s military deserved much of the credit for this new system, the US national security apparatus also played a key role. One of its crucial long-term influences was a variation on the “Mighty Wurlitzer” concept that it had pioneered with great success in France, Italy, Germany, and Japan in the 1940s and 1950s, and continues to use right up to the present in places like post-Soviet Eastern Europe, Southeast Asia, Lebanon, Pakistan, Iraq, and the Philippines.

This was to develop a nation-wide media network that could be used to shape public opinion. In 1964, an energetic, personable young Time-Life executive named Joe Wallach went to work with Roberto Marinho, a Brazilian businessman who at that point was running a newspaper and a local TV station in Rio. Wallach, didn’t speak any Portuguese at the time, but he had a background in TV production and accounting in California. Suddenly he became O Globo’s Executive Director. “Time-Life” also invested $4 million -$6 million in a joint venture with Globo, a great deal of money for that time, which helped Globo buy up concessions and steal a march on its competitors. “Time-Life” and its friends also encouraged multinationals to direct advertising to Globo, which soon came to run a kind of advertising cartel. Meanwhile, Globo also was careful to take a pro-government line in its reporting – cynics came to refer to it as “The Ministry of Information.”

All this, plus the special licenses for satellite broadcasting, radio, and local stations that it received again and again from the government, made Globo prosper. Over the next twenty-five years, under Wallach’s leadership, TV Globo became the world’s fourth largest TV network. The deal was rather simple – Globo provided favorable coverage to its political allies, and they helped it get the TV, satellite broadcasting, radio, and cable concessions that it needed to keep growing. In special cases, the politicians and their families also shared in the ownership of these “goodies,” as we’ll see below.

Over the next three decades, Globo became one of the most politically-influential media empires in the developing world – by 1990 it owned 78 stations in Brazil, with more than 50 million viewers in Brazil alone, ad revenue of $600 million a year, 8,000 employees, more than 30 subsidiaries in Italy, Portugal, Cuba, Japan, and other countries, and it was producing and exporting TV programming to 112 countries. Furthermore, even after Brazil returned to democracy in 1985, Globo continued to exert strong influence over political selection of many key political leaders, including several Presidents. All along, it was a consistent opponent of candidates that it perceived as threats to the system, often using blatant propaganda to influence elections, as in the hard-fought 1989 Presidential race between Lula and Fernando Collor.

Only in 2001-2002, long after Wallach had retired and Roberto Marinho had passed the empire on to his evidently less-able sons, would Globo’s disappointments in Internet and cable investments and crushing foreign debts finally bring it down to earth – not unlike the similar fate that befell its original partners at “Time-Life,” now part of the hapless AOL Time Warner conglomerate. The Marinho family’s estimated wealth on the Forbes’ annual billionaire survey peaked at $6.4 billion in 2000, with the Internet’s peak. By 2002 they were down to their last $1 billion, barely eligible for a mention on the Forbes list.

Even then, however, Globo still would try to use its political influence as currency. In the 2002 Presidential race, in a move that must have made its original partners turn circles in their graves, Globo for the first time threw its support to Lula, the left-wing candidate, who ended up finally winning on this fourth try for office. Evidently, having backed the “system” that, as we’ll soon see, ultimately made Brazil the world’s largest debtor, Globo was hoping for some government relief from its own crushing foreign debts.

BANKING ON THE STATE

In any case, in addition to military action and media support, the top-down development strategy adopted by Brazil’s military and its foreign allies in the 1960s also had a crucial economic component. At first glance – and indeed, at second – this strategy was a little hard to reconcile with free-market principles and democratic rule. But it cleared the way for bankers like Tony to earn huge fortunes. As Auden says, “When there was peace, he was for peace. When there was war, he went.” These bankers joined forces with a corrupt coalition of officials, industrialists, and agro-exporters to support a new debt-intensive strategy that was designed and implemented by a powerful new Minister also named Antonio, who became one of JPMorgan's Tony Gebauer’s closest friends of all.

Antonio Delfim Neto was an extremely fat academic-cum-bureaucrat from a middle-class Italian family in São Paulo. In the l950s, he wrote a brilliant Ph.D. dissertation on the coffee industry and taught macroeconomics at the University of São Paulo (U.S.P.). In the l960s he was a consultant to Ralph Rosenberg, whose Ultra Group was the largest private investor in Petrobras, as well as Antonio Carlos de Almeida Braga, the owner of Bradesco, Brazil's largest bank, and Pedro Conde, another bank owner. From 1963 to l967, Delfim, in his late thirties, advised São Paulo governors Carvalho Pinto and Lauro Natel, who was on leave from Bradesco. Then, from l967 to 1985, Delfim came to wield more influence over the economy than anyone before or since.

He was as quick-witted as Campos, but most of his success was due to a lack of ideology. As Delfim said in l969, “I am not going to sacrifice development only to pass into history as someone who defeated inflation at any cost.” He was the grand master of bureaucratic infighting, inserting his “Delfim boys,” mostly U.S.P.-trained economists, into key positions all over the government, where they operated a kind of Florentine patronage system, keeping a running tally of favors owed to important people. “I was in the office of (an important banker) when Delfim called. He needed $5 million right away,” one banker recalled. “The only argument was how to get it to him. We knew he'd make it up to us.” In a country where most ministers rotated quickly, this network of favors and influence earned Delfim unusual longetivity. He was Finance Minister in l969-74, Ambassador to France in l974-78, Minister of Agriculture in l979, Planning Minister in l979-85, and even after civilian rule returned in l985, an important behind-the-scenes leader in Congress, where he also enjoyed immunity from prosecution. Among those responsible for Brazil's massive debt burden in the 1980s, only Tony Gebauer enjoyed similar continuity.

In August 1969, General Costa e Silva died of a stroke, after learning that his wife had helped deliver Brasilia’s telephone exchange contract to Ericsson, a Swedish company that bribed its way all over Latin America. Vernon Walter’s friend, the even-more hawkish General Emilio Medici (1969-74), then took over, and some of Delfim’s critics seized the opportunity to accuse Delfim of corruption. But he was so popular with all his other “clients” that Delfim was soon reappointed. He promised Medici, echoing the grandiose Kubitschek in the 1950s, “Give me a year and I will give you a decade.”

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Meanwhile, from a national security standpoint, Medici was exactly what Brazil’s US allies were looking for – he visited Nixon, Henry Kissinger, and General Walters in December 1971. In the meeting just two weeks later with Secretary of State William Rogers, recorded in a transcript only just released by the National Archives in 2002, Nixon described Medici in glowing terms:

  • Rogers: “Yeah, I think this Médici thing is a good idea. I had a very good time with him at lunch and he…”
  • Nixon: “He’s quite a fellow, isn’t he?”
  • Rogers: “He is. God, I’m glad he’s on our side.”
  • Nixon: “Strong and, uh, you know…(laughs)…you know, I wish he were running the whole continent.”
  • Rogers: “I do, too. We got to help Bolivia. He’s concerned about that. We got to be sure to…”
  • Nixon: “Incidentally, the Uruguayan thing, apparently he helped a bit there…”

The “Uruguayan thing” was clarified in another transcript, recently released, of a Nixon conversation with Britain’s Prime Minister Edward Heath that same month. According to Nixon, “The Brazilians helped rig the Uruguayan election…Our position is supported by Brazil, which is after all the key to the future. ”(emphasis added.) He was referring to the November 28, 1971, elections, in which Uruguay’s Frente Amplio, a coalition of left-leaning political parties not unlike Allende’s Unidad Popular in Chile, had been defeated by the right-wing Colorado Party. The result was indeed unexpected, and evidently Medici had had a key role in it.

In March, 1972, the Colorado’s new right-wing President Bordaberry, gave Uruguay’s security forces a green light to go not only after the Tupamaros, Uruguay’s urban guerillas, but also against its labor unions, student associations, and political opponents. In June 1973 the military made Bordaberry a puppet, and in 1976 took complete power, following in Brazil’s footsteps. The result was a bloodbath that anticipated the thousands of political murders that later occurred in Chile, after Allende’s demise in September 1973, and in Argentina after its military seized power in 1976. By then, Uruguay, a country with just 3 million people that had once been known as “the Switzerland of Latin America,” had become its torture chamber, with more political prisoners per capita than any other country in the world. Like Brazil, once gone, civilian government did not return to Uruguay until 1985.

According to other newly-released documents, General Medici had also assisted with the right-wing in Bolivia in August 1971. More generally, it has recently become clear that Brazil’s military, with US support and coordination from the US, played a key role in training and guiding the repression that went on in Chile, Argentina, Paraguay, and Bolivia in the late 1960s and 1970s. As one scholar noted, “Brazil had a head-start on terror.” Even prominent journalists, like Waldimoro Herzog, who was murdered by the Brazilian regime in 1975, were not safe.
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Indeed, one of the victims may even have been former President João “Jango” Goulart himself, who died in 1976 of a curious “heart attack” at the age of 58, at his ranch in Parana. Goulart’s family had long suspected that he’d been murdered by the military. In 2000, Brazil’s Congress finally got around to starting an official investigation of the death. Of course Brazilian Presidents have a history of unfortunate endings – Juscelino Kubitschek, Quadros’ predecessor, also died in 1976, in a car accident, and Tancredo Neves, the first civilian President after military rule ended in 1985, died after three months in office.

In any case, whether or not the “domino theory” really ever applied to Communist revolutions, clearly it worked quite well with respect to these Latin American right-wing regimes. And their US patrons discovered that with only a little nudge, one big domino – “the key to the future” – could wield extraordinary influence.

***


© James S. Henry, SubmergingMarkets™, 2004

1 The above is an excerpt from James S. Henry, The Blood Bankers. Tales from the Global Underground Economy. (New York: Four Walls, Eight Windows, December 2003, 417 pp.)

April 1, 2004 at 02:30 AM | Permalink | Comments (2) | TrackBack

Tuesday, March 23, 2004

One Year Later
A Balance Sheet for the Iraq War

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"WAR IS PEACE!FREEDOM IS SLAVERY!" "Iraq Is Free! Al-Qaeda Is Defeated! No Child Is Left Behind!"" bush-dumb.jpg _39945693_chilaprotest220ap.jpg
More than a million people around the world marked the first anniversary of the US/UK invasion of Iraq this weekend with large street demonstrations. Compared with the huge protests before the war started, however, this was a much lower turnout. This is partly because mass protests obviously failed to prevent the invasion. It is also because many believe that even if war was wrong to begin with, the US and the UK now have an obligation to the long-suffering Iraqi people to see that some kind of decent social order is established before they withdraw.

However, this by no means relieves the instigators of this precipitous venture of responsibility for what, in retrospect, appears to have been an illegal, costly, poorly-managed, distracting, divisive, and entirely unnecessary engagement with the wrong enemy at the wrong time.

While it may be decades before the consequences of the Iraq Invasion are completely clear, enough time has already passed for us to begin to take stock.

The following is the first year's balance sheet.


CONSEQUENCES

1. We have now almost satisfied everyone's curiosity about Saddam’s WMDs. They have not existed for quite some time. The US-led coalition’s weapon inspectors have searched high and low. Ellos no encontraron nada. Of course the hawks still assure us that they will turn up eventually, and that we should now search for them in Syria....

2. For purposes of the next time around, what we do now know for sure is that the CIA, MI-6, and the Mossad, as well as many of the hawkish senior Bush and Blair Administration officials and media pundits who "sold" us the war, are unreliable, careless with the truth, and trigger-happy.

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On the other hand, the UN weapons inspectors, as well as “dovish” France, Russia, China, and Germany, were basically right all along.

This is an invaluable lesson. We should now proceed to apply it in the upcoming elections in the US and the UK, as Spain has already done.

3. We now know much more about where other countries got their WMDs. In the last year, while the Iraq War was proceeding, we identified the true sources of the last three decade’s WMD proliferations, thanks in part to Libya’s decision to turn in its WMDs.

One key source turns out to have been our ally Pakistan, in the case of North Korea, Iran, and Libya. In addition, as we've known for some time, the other key sources were our ally Israel, plus the US and West Germany, in the case of nuclear weapons for South Africa and India; and the US itself (plus Security Council members France, the UK, Germany, Russia, and China), in the case of Iraq’s chemical and biological weapons capabilities. Iran and Libya have reportedly agreed to cooperate with UN nuclear weapons inspectors. Israel and Pakistan, our close “non-Nato” allies, have refused to do so.

Libya’s concessions probably had little to do with the Iraq invasion per se, so we might well have learned all this without it. But at least we now know for sure that Saddam had nothing to do with WMD proliferation. The real culprit was our own behavior and that of our self-seeking “allies.”

Of course the other great irony here is that while we've been chasing phantom WMDs in Iraq, it appears to be Iran that is, next to Pakistan, the Islamic country with the most advanced nuclear weapons program. It is not obvious to many observers that the Iraq War has strengthened the US hand with respect to Iran -- indeed, with our hands so obviously full, and with Iraq's Shiites in such a strategic position, it may well have reduced our leverage on Iran.

4. We now know all about Saddam’s links with al-Qaeda and 9/11. They were non-existent. A majority of Americans apparently still believe that there were ties between Saddam and Al-Qaeda, and that Saddam was involved in 9/11, perhaps in part because the US President and Vice President persist in encouraging this poppycock. However, the best evidence – including the testimony just this week of President Bush’s own former top counterterrorism expert, Richard Clarke - suggests that these beliefs are completely without foundation. Apparently the warmongers in the Bush Administration decided to punish Iraq, on top of Afghanistan, because, as Secretary Rumsfeld reportedly put it, Iraq "had more targets to bomb."

Of course the warmongers have also argued that al-Qaeda might have links to many other countries, notably Iran, Syria, and Saudi Arabia. As we evaluate these claims, we should remember the expensive lesson that we’ve just learned about al-Qaeda’s purported links to Saddam.

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5. Saddam’s ruthless Ba’athists have finally been removed from power.

In this respect, at least, the war helps to make up for the fact that the US played a major role in bringing the Ba’athists to power back in the 1960s, the assistance that the US, Saudi Arabia, and Kuwait (as well as Russia, the UK, Germany, etc.) provided to Saddam throughout the 1980s, and the Allied coalition’s failure to remove him from power in 1991, at a cost of several hundred thousand Shi’ite lives.

In addition to Saddam's removal, some of the war's supporters have concluded that the Iraqi people have already been “liberated.” This is a huge overstatement -- as if, simply by Saddam’s demise, Iraq had already become a peace-loving constitutional democracy with Swiss-like cantons. One can almost smell the Alpine air.

Those Iraqis who have survived the war do now enjoy many new freedoms. Almost as many Iraqis are now employed, with access to electricity, running water, and health care, as before the invasion. They are free to look for work, to start companies, to open bank accounts, to read about their troubles in the media and the mail, and to shop. Except for the fact that more than a quarter of them are still unemployed, are finding it very hard to make ends meet from one day to the next, and fear for their lives because of the security situation, all this is wonderful.

By June 30, they will also presumably be allowed to vote for the “local councils” that the US is setting up all over the country, although these appear to have carefully-vetted candidates. Actual elections for national leaders is a long way off, and the fundamental question of the balance of power among this somewhat artificial “nation’s” Shiite, Sunni, and Kurdish communities remains unresolved.

Nor is it helpful that the US has permitted the return and empowerment of émigré parasites like “Iraqi National Congress” émigré leader Ahmed Chalabi, a well-spoken con artist who was convicted of bank fraud in Jordan in 1992, and sentenced to 22 years at hard labor, is reportedly wanted on similar charges in Lebanon, and whose well-armed minions now hold forth at the Baghdad Hunt Club. chalabi.jpg

Looking forward to the day when the 100,000-man US-led coalition army leaves, it is also a concern that, just as in Haiti, the US saw fit to completely abolish the Army. Let’s all hope that Iraq’s new US-trained Police Force does a better job defending democracy than the US-trained Police Force did in Haiti. Former Haitian President Aristide, now in Jamaica, may be available for consultations on this point, having just been overthrown by a tiny force of only two hundred armed irregulars while his "Police" took to the hills.

All this only leaves about a dozen or so other brutal regimes in the Middle East left to go. Unfortunately, their ranks include such leading US allies like Saudi Arabia, Egypt, Morocco, Kuwait, Dubai, Djibouti, and Pakistan, as well as Syria. They have all been watching the progress of our experiment with “democracy” closely, and they are reportedly not that impressed.

6. Whether or not Iraq was a haven for terrorists before the war, it has clearly become one now. The destruction of Iraq’s Army, its wide-open new borders, and the opportunity that it presents to hunt US and UK troops has attracted new “terrorists” by the hundreds.

Some argue, painting lipstick on the pig, that this is actually a good thing, since we now have all these enemies in one place. This view is rooted in the assumption that there are only a finite number of terrorists in the world, and that if they were not in Iraq, they would just be operating somewhere else. In fact, it is more likely that many of those who have come to Iraq are new recruits, appalled by the US occupation of an Arab country, and persuaded that we are there to fight Islam and seize Iraqi’s oil.

Of course some of the war’s proponents don’t really care which of these views of the "terrorists" is correct. They were primarily interested in seeing the US sucked in….errr, persuaded…to establish its own long-term military base in the center of the Middle East, take sides in the interminable battle against the evil Muslim/ Arab hoard…..err, “terrorists,” sorry, and contribute most of the fighting, dying, and finance.
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7. The Iraq War has not done much to halt terrorism outside Iraq, either. While the US has been fortunate enough to avoid another 9/11, the last year has seen a significant increase in global terrorism elsewhere, with countries like Spain, Turkey, Morocco, Indonesia, France, the UK, Germany, Pakistan, and Russia getting used to a whole new level of permanent insecurity – somewhere between “code amber” and “code red.”

Overall, the Iraq War appears to have indeed distracted attention and resources from the war on terrorism, inflamed world sentiment, and created armies of new recruits for terrorist organizations. This is having serious economic as well as political consequences, with the “terrorism risk premium” built into world stock markets now at its highest point since September 2001.

In short, from the standpoint of fighting terrorism, launching the Iraq War was really a pretty dumb thing to do. CATGBMRV.jpg

8. Afghanistan and Pakistan are increasingly bogged down with the terrorist struggle, and the Iraq War has certainly not helped. Al-Qaeda, the Taliban, the Karzai Government, and Pakistan’s President Musharraf appear to be locked in a stalemate. Of course, Bin Laden and al-Qaeda’s other top leaders are now “surrounded,” but this just means that they are somewhere within a tiny, narrow 20,000-square-mile region in Northwest Pakistan. Meanwhile, Pakistan’s General Musharraf and Afghanistan’s Hamid Karzai really are confined to about 100 square miles around Islamabad and Kabul, where they have each both narrowly survived two assassination attempts in the last six months.

Just this week, Karzai lost his second Minister of Aviation in a year to assassination, not by “terrorists,” but by a local warlord. His government will try to hold elections this summer, but it is only likely to include about 10-15 percent of the country’s potential registered voters. Elsewhere the warlords are too busy growing opium and producing heroin base to pay much attention to Karzai’s central government, which -- compared with Iraq -- has received relatively limited funding from its foreign allies and the UN. Afghanistan has reverted to its pre-Taliban levels of opium production, accounting for more than 90 percent of the world’s supply, with Karzai warning that the country is becoming a “narco-state.”

Meanwhile, after two years in hiding, the Taliban is also staging a comeback in several parts of the country. This is partly because the Bush Administration decided to use so few US troops in the first attacks on Afghanistan that many of the Taliban and al-Qaeda were able to escape over the border to Pakistan. It is also because the locals are tiring of the warlords.

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9. The “Middle East peace process” has, quite literally, run into a “Wall.” The Bush Administration, preoccupied with the War and an election, has paid scant attention to implementing its “road map,” and the Israeli-Palestinian relationship has basically defaulted to a perpetual state of war. Whether or not the World Court declares Sharon’s “Apartheid Wall” illegal, without US involvement, this situation is not likely to improve. Indeed, the tendency will be for the extremists on both sides to escalate the violence– as evidenced by today’s Israeli assassination of Hamas’ top leader. Without the Iraq War to distract US leaders from this root cause of global terrorism, this escalation might have been avoided.

10. Our friends and allies around the world have developed a much more hostile attitude toward the US. This bears a striking resemblance to the world’s attitude toward Israel, South Africa in the 1980s, and the UK and France during the 1956 Suez Crisis. Of course we are used to some disdain from the French. But only just last week, the new Prime Minister of Spain, a close Nato ally, was strikingly critical of the US, as were the South Koreans, another long-time US ally, and the Poles. We may be down to Britain’s Tony Blair, at least until summer’s UK elections. The next time around, in say Iran or Syria, the “coalition of the willing” would probably not have any NATO members in it. Of course we can always count on the Moroccans to lend us the 2000 mine-detecting monkeys that they provided for the Iraq invasion.

11. The Iraq War may at least have enhanced the UN’s credibility. Even though the UN proved powerless to prevent the US from launching this grossly illegal “preventive war,” in hindsight, the Security Council’s methodical approach to the elimination of Iraq’s WMDs has been vindicated. Indeed, the UN is now being begged by the US to come back to Iraq, pick up the pieces, and lend the US the credibility that it needs to get others to share the bill.

Beyond that, people are beginning to suggest that if only the US allies Pakistan and Israel would open their doors to UN weapons inspectors, the whole region might be made WMD-free some day soon.

12. Iraqi oil production has been restored to more than 2 million barrels per day. Of course “it was not about the oil.” But Iraq’s oil exports are now slightly higher than they were before the invasion, with another 1 million bpd not far off. This is important, given all the turbulence in Venezuela and recent terrorist events in Europe. Global oil prices are now much higher than they were before the war, and without Iraq’s additional expected production, they might go much higher.

Whether Saddam’s Iraq might have achieved these export levels without the war is doubtful, given the likelihood that sanctions against him would have remained in place. So at least we have one more definite entry in the war's "plus" column. Of course the war was also very lucrative for US oil service companies like Halliburton. But once again (“repeat after me”): it was not about the oil.

13. The price tag for all this has been high. In human terms, at least 5-6000 Iraqi soldiers and 9-10,000 Iraqi civilians have been killed so far, with hundreds more joining them every month, plus thousands more who have been severely wounded. Many of the country’s antiquities have also been liberated. As of March 20, 2004, there have also been 679 (687 by 3/23) combat fatalities and 3300 (3343 by 3/23) combat wounded for the US-led coalition, plus 7-8000 “non-combat injuries or sickness that required evacuation from Iraq.”Before we are able to withdraw, there will probably also be at least another thousand Allied war dead, 2-3000 more Allied casualties, and many thousands more Iraqi casualties, as “Iraqi-mization” shifts the body count to our local allies. (Of course we “no longer do body counts.”) While this is relatively small, compared with, say, the Vietnam War, it is almost certainly many more than the US military expected.

In financial terms, the Iraq War has cost about $165 billion so far. The expectation is that the price tag will probably be another $40-50 billon per year as 100,000 US troops are required – e.g., at least another 2 years. At this rate, the War’s total cost -- not counting the cost of addressing any terrorism outside Iraq that it might ignite -- will easily be at least ten times the entire First World foreign aid budget for all low-income developing countries. For those who might prefer to spend the money at home, it is also many times the sum that the US Government is now devoting to "homeland security."

Of course these are only rough estimates. By 2007 or so, when the US finally transfers responsibility to the New Iraqi Police Force/ Army, and brings its troops home from Saigon….err, Baghdad, all these costs will be much clearer, especially to the thousands of families all sides that have had to pay the ultimate price for the privilege of being on the front lines of this brave new experiment with preemption.

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© James S. Henry, SubmergingMarkets™, 2004. All rights reserved. Not for quotation or other use without express consent from the author.

March 23, 2004 at 01:00 AM | Permalink | Comments (1) | TrackBack

Friday, March 19, 2004

On the Trail of "Oil-Rush Development" in the Gulf of Guinea

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Eq. Guinea's Obiang"

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Several recent developments in West Africa’s Gulf of Guinea recall our attention to the new “Great Game” that is now taking shape in this region, driven to a great extent by new offshore oil discoveries and exploration fever. totalelf.01.jpg

This region now has the world’s fastest growth rate for new oil reserves, with $5-$10 billion a year being invested to develop its offshore resources. Oil industry experts speculate that by 2010, the seven top oil-producing “New Gulf States” – Equatorial Guinea (E.G.), Sao Tome & Principe, Gabon, Cameroon, Angola, and Congo, plus landlocked Chad -- may account for at least 10-15 percent of the world’s conventional oil and gas reserves, and an even larger share of US energy imports.
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This means that, collectively, these tiny African countries may soon play a much greater role in world energy supply than Nigeria, Mexico, Venezuela, or Iraq.

In addition to raw economics, this shift is also being driven by political factors. The US is eager to free itself from OPEC, especially from dependence on politically-sensitive countries like Venezuela and Saudi Arabia. And alternative sources of supply like the Caspian pipeline, Central Asia producers, and Siberian exports have been slow to materialize. So it is not surprising that the development of Gulf of Guinea energy has recently received high priority, not only in Houston and Dallas, but also in Washington, D.C. As the recent attempted coups against Equatorial Guinea's dictator and Sao Tome's President indicate, they are also receiving increased attention from the world's "oil mafia" and their attendant mercenaries.
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In principle, the region's new oil discoveries should also provide a gigantic windfall to the 41 million long-suffering inhabitants of these otherwise-impoverished West African countries. Their life expectancy now averages just 46 years, and more than half of them still survive on less than $1 per day. There is an unique opportunity for the Great Powers that are most active in the region – the US, France, the UK, China, and Spain, as well as multilateral institutions like the World Bank and the IMF -- to learn from the many previous negative experiences with the impact of oil wealth on development, and establish some “rules of the game” to insure that it really goes to support democratic development.
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Unfortunately, rather than seize this opportunity, these Great Powers appear to be defaulting to age-old imperial practices. They are permitting their corporations to define investment and development strategy for them. With few exceptions, the result is a “winner-take-all” race for the riches, with the region’s corrupt local dictators and tiny private elites dividing the spoils with transnational corporate allies, private bankers, private armies, and other intermediaries.
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There are already many “per-country” accounts of these developments in the Gulf of Guinea. But it is helpful for us to consider them collectively. Among the most important patterns:


  • Increased corruption, militarization, territorial conflict, and political instability, a direct byproduct of the region’s many wobbly dictatorships in the region, the influx of oil dollars, and the growing value that outsiders place on seizing control of the tiny “New Gulf Oil States;”

  • Deeper involvement among oil-hungry powers like the US and China, traditional colonial powers like France, the UK, and Spain, and regional powers like Nigeria and South Africa;

  • A new willingness on the part of the US and other leading trading partners to look the other way at electoral fraud, human rights abuses, and corruption perpetrated by the region’s oil-producing non-democratic regimes.

All told, these patterns do not bode well for the future of democratic development for the “New Gulf States” --- even as the US invests so heavily to bring representative government and stable government to 25 million Iraqis.

Eighty-five years ago, at the end of World War I, when a similar approach was taken by that period’s Great Powers to the division of oil wealth in the Middle East, they could at least plead that they had little experience with the negative consequences of an elitist, laissez-faire approach to oil-rush based development. Today's Great Powers have no such excuse.

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© James S. Henry, SubmergingMarkets™, 2004

March 19, 2004 at 07:25 PM | Permalink | Comments (3) | TrackBack

Wednesday, March 10, 2004

The Theft of Mexico: How the 1988 Mexican Presidential Election Was Rigged

"De la Madrid Finallly Confirms: "Salinas Stole the 1988 Election!"
US Media: "How Did We Miss This STORY?"
WSJ: "NAFTA! - Another Triumph for Electronic Voting!""
Al Gore Comments:"Not Another Stolen Election!""


De la Madrid
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Carlos Salinas
The following story is not one that leading US investigative media like The New York Times and The Wall Street Journal should be proud of, because for reasons that are unclear, they basically dropped the ball on covering it back in the 1980s. But it certainly still deserves their attention now. As former Mexican President Miguel de la Madrid has now confirmed in his autobiography, published this week in Mexico City, former Michoacán State Governor and Mexico City Mayor Cuauhtemoc Cardenas would have won Mexico's 1988 Presidential election, if not for the systematic fraud committed by the PRI, de la Madrid's party.

The following article examines this 1988 Mexican electoral fraud, one of the first "computer-assisted" electoral frauds that we know of, in detail. It considers how the fraud was perpetrated, the interests that it served, the corporate and government collaborators who knew about it at the time but kept still, and its far-reaching consequences for Mexico and the rest of Latin America.

Of course Mexico's electoral rigging was not unique. While this case had unusually far-reaching results, similar frauds have occurred in many other developing countries, as well as some "developed" ones. As the technology for organizing and conducting elections becomes more and more digital, some have hoped that we'd able to build in automatic checks and balances that would make traditional "paper ballot-stuffing" more difficult, if not impossible. As we've recently seen in the initial US experiments with electronic voting, however, and as this Mexican case also demonstrates, even sophisticated computer technology is not sufficient to avoid determined fraudsters -- especially high-level ones -- when the stakes are this high.

From the standpoint of First World foreign policy, this is yet another example of the fundamental ambivalence that First World powers like the US, France, and the UK continue to display toward popular movements and democratic choice in developing countries.

Where popular choice favors policies and interests that the First World supports -- as in Iran, Syria, Belarus, North Korea, and perhaps Iraq today -- the First World is all in favor of "democracy." Where popular choice favors policies and interests that it opposes, however -- as in this 1988 Mexican case, Chile in 1973, Venezuela in 2002, South Africa until the fall of apartheid, Nicaragua in 1984, China in 1989 and since, Indonesia until the fall of Suharto, the Philippines under Ferdinand Marcos, Mobutu's Congo, the West Bank/Gaza, Morocco, Haiti in 1991 and perhaps today, and Pakistan -- the First World has little compunction about supporting authoritarian regimes.

We might have hoped that this schizophrenia about authoritarianism was just a Cold War relic, which would have faded along with it. But it continues to this day, and seems to express a much more fundamental, unresolved tension between the First World's desire for "stable conditions and free markets" in these countries, and its desire to see them develop representative political systems.


THE "DEDAZO"

President Miguel De la Madrid’s anointed successor in 1988 was Carlos Salinas de Gortari, a fortyish Harvard technocrat. Like his mentor, Salinas was a member of the PRI’s quasi-hereditary revolutionary family. His grandfather was a prominent Monterrey businessman, and his father, Raul Salinas Lozano, also a Harvard graduate, had been a minister of commerce in the l960s. Salinas was not only wellborn, but also precocious: At age four, he had picked up a pistol and shot his maid dead. He finished his Harvard Ph.D. in political science in l978 (his dissertation was on the “impact of government spending on elections”), and by l982, he was already minister of planning—the youngest Cabinet member ever at thirty-five.

Like de la Madrid and many other U.S.-educated elite/technocrats in the PRI’s “reform” wing, Salinas believed that Mexico’s main problem was its own bloated government. He favored downsizing the state, deregulating the economy, and actually increasing the role of foreign banks and investors. Despite a complete dearth of new loans, he and de la Madrid continued to pay all of Mexico’s foreign interest bills on time, repeatedly restructured the debt, and experimented with almost every idea on the bankers’ wish list, including debt swaps, securitization, debt conversions, and privatization. Mexico’s debt emissaries spent a fortune on innumerable junkets to Paris, London, Washington, D.C., and New York. Meanwhile, the country staunchly refused to be drawn into a debtors’ coalition with Brazil, Argentina, and Peru.

By the end of de la Madrid’s term in l988, there was precious little to show for his deference to foreign bankers. The debt cost more to service than Mexico earned from oil exports—tantamount to Pemex being handed over lock, stock, and barrel to the banks. From 1982 to l988, Mexico paid over $40 billion in interest and got back only $14 billion in new loans, half of them from the IMF and the World Bank.The country transferred more than a third of its savings abroad each year. In fact, taking flight capital into account, Mexico was a net lender to the outside world—more than $50 billion throughout the l980s. By 1985, the market value of its flight assets already exceeded the value of its entire foreign debt. And most of these flight capital outflows were actually captured by its major “creditors.” One Citibank private banker—operating surreptitiously out of the fourteenth floor of Citi’s office tower in Mexico City—bragged,“We could easily repay our loans to Mexico with the flight capital that we’ve collected here—you know, there really are quite a few fabulously rich Mexicans!”

Given the banks’ unwillingness to provide Mexico’s government with any more loans, the skepticism that foreign investors had toward the country, and the government’s reluctance to get tougher with foreign banks and its own domestic elites, Mexico had little choice but to rely on its own resources to finance investment. Since Salinas and de la Madrid wanted to shrink public spending and budget deficits and were unwilling to tax the elite, they raised interest rates to stimulate private savings. That reduced growth and unemployment, which was anathema to workers, campesinos, and “protected” business sectors. But the de la Madrid-Salinas program was supported enthusiastically by Mexico’s top families, bankers, the bureaucratic elite, union bosses, oil workers, police chiefs, and Army officers. Given the one-party system, these were the only constituencies that really counted. The economic program turned out to be very unpopular, and Salinas’s detractors in the PRI worried that it might be a mistake to bet on an uncharismatic technocrat in a period of rising political ferment. But this argument carried little weight with de la Madrid, who’d once been an uncharismatic planning minister himself. So in September 1987, Salinas was nominated the PRI’s candidate for president.

Almost immediately, the regime’s policies began to misfire. The global stock crash that took place in October 1987 actually started in Mexico City when the Central Bank suddenly lifted restrictions on investments in debt instruments, causing the Mexican stock market to lose three-fourths of its value in one week. Capital flight resumed, the government missed its budget targets, the peso sank like a stone, and by year’s end, inflation was at fifteen percent a month and rising. De la Madrid was forced to implement yet another round of “belt tightening,” squeezing credit and freezing wages and prices. Since 1981, Mexico had experienced seven years of negative growth. Real incomes for everyone but the elite had fallen by a quarter, and there were incipient signs of social unrest all over the country.The country stagnated under the weight of its foreign debt, which totaled $101 billion by l988.

THE 1988 “ELECTION”
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Cuauhtemoc Cardenas

The July l988 presidential elections were the greatest challenge to the PRI’s hegemony in its history—at least until Vicente Fox won in 2000. In the party’s first deep split since 1929, Cuauhtemoc Cardenas, the PRI’s governor of Michoacan State and the son of President Lazaro Cardenas, who nationalized the oil industry in the l930s, joined forces with disenchanted leftists and nationalists to form the “National Democratic Front.” The Front’s radical rhetoric gave voice to widespread discontent. It also claimed to support democracy, but had a few strange bedfellows of its own, including Luis Echeverria Alvarez—Mexico’s president in the 1970s and one of Mexico’s wealth- iest men—and Hernandez Galicia, head of the powerful PEMEX oil workers' union. But at least it supported a popular job creation program, which it intended to pay for with a repudiation, or radical restructuring, of Mexico’s foreign debt.

Just a few weeks before the 1988 election, Cuauhtemoc Cardenas had been doing very well in the polls. Salinas, on the other hand, would have nothing to do with such irresponsible policies. The consummate planning bureaucrat-turned-free marketeer, he saw himself as continuing the tradition of authoritarian top-down reforms begun by Porfirio Diaz—the tough nineteenth- century dictator who ruled Mexico for thirty-five years with the support of the landowning elite—foreign bankers and investors, and his own well-heeled entourage.

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Evidently, many Mexicans did not share Salinas’s enthusiasm for Porfirio Diaz or for the neoliberal agenda.To them, he was still just another in a long series of little-known, remote members of the Priista (pertaining to the PRI party), priestlike technocracy who came down from the temple every six years and went through the motions of seeking their mandate. Despite massive advertising on his behalf by the PRI’s machine (with help from Hill and Knowlton, the renowned PR firm whose clients had also included Duvalier and BCCI), as of election eve, non-government polls found that he and Cardenas were still running neck and neck. Of course many voters viewed all Mexican elections with skepticism, because of the PRI’s long history of election fraud. But Salinas and his predecessor, Miguel de la Madrid, had sworn this time it would be different.

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Manuel Bartlett
On July 6, 1988, when the polls closed and the government started tallying the count at its central computing office in Mexico City, the country eagerly awaited the results. There was much disappointment when Manual Bartlett, the PRI’s interior minister in charge of administering the vote, announced the next morning that the Federal Election Commission’s computer system, supplied by UNISYS, had crashed and that the results would be delayed. When they finally emerged a week later, Salinas was declared the victor by a wide margin. Officially, the PRI received fifty-two percent of the vote, compared with the PRD’s thirty-one percent, and the business party PAN’s seventeen percent. Opposition leaders have claimed that the computer crash was contrived to buy time for rigging the vote once it became clear that Cardenas was winning. Despite widespread rumors, these claims were not easily confirmed. Many of those on the inside were too scared to talk, and, as noted above, Salinas’s foreign supporters, including leading newspapers like The Wall Street Journal (whose parent company, Dow Jones, added Salinas to its corporate board, and The New York Times did not investigate too deeply. Evidently a compliant, Harvard-educated, technically-competent neoliberal was expected to serve the mutual interests of Mexico and its trading partners better than Cardenas.

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In June 1994, before Mexico’s August 1994 Presidential election, Computing, a UK magazine that focuses on technology, became interested in the computer failure aspect of the 1988 elections. It tracked down several data entry operators who had worked on the election and obtained the following eyewitness account of what had actually happened:

We arrived at work on the morning of July 6, election day, at the central computer and statistic official.When we got there we discovered that the rooms were empty and our computers weren’t there. We were ordered into a minibus and taken to the Government House (in Mexico City), to a room with blacked-out windows. Our computers had been set up there, complete with the voter database.We started to enter the data. As the supervisors saw that Salinas was losing, they ordered us to leave aside votes for the PRI and only enter opposition votes. Then, at about 3 A.M. on July 7, the supervisor called a halt, and with tears in his eyes, he told us: ”If you care for your families, your jobs, and your lives, enter all votes from now on in favor of the PRI. I went back to work and did as I was told. I wanted to cry, but I had to do it. They kept us there until five or six in the evening the following day. When I’d finished my work, I called up the voting record for my uncle, and to my astonishment the computer record showed that he, an opposition supporter, had voted for Salinas.That was when I realized why we had been told only to enter opposition votes in the beginning. While we were away from the computers, they had reversed all the data from the first session of data capture so all those votes showed up as Salinas votes.

To the consternation of the Salinas government, these details were confirmed in July 1994 by a former director of Mexico’s Federal Electoral Institute. But when Computing tried to verify them with UNISYS, the U.S.multinational that had supplied the computers used in the election, it responded that the 1988 “fault reports” for its Mexico subsidiary had been destroyed and that Unisys had “not been involved in the electoral process.”

In December 1994, Adolfo Onofre, the courageous computer consultant who had cooperated with the investigation of the Unisys computer “failure,” was arrested and badly beaten by Mexico’s Federal Police when he returned to Mexico City from Britain, where he had sought political asylum.

THE CONSEQUENCES

In the first instance, the 1988 electoral fraud made de la Madrid's successor, Carlos Salinas de Gortari, the President of Mexico, and also made him a very wealthy man. It also supplied him with many honors, including a Wall Street Journal board seat (from the early 1990s until April 1997), a near-nomination by President Bill Clinton in 1995 to head the World Trade Organization, and numerous speaking engagements at leading US universities like Stanford and Harvard, his alma mater.

More important, as discussed in more detail in our new book The Blood Bankers, it also cleared the way for Mexico's neoliberal "reforms" of the early 1990s, which set the pace for the entire rest of Latin America. These measures included the North American Free Trade Agreement (NAFTA); the privatization of Telmex, Mexico's state-owned telephone monopoly, Mexico's entire banking sector, and many other state-owned companies; and the rapid opening and deregulation of Mexico's capital markets that ultimately led to the catastrophic 1995 "Tequila" debt crisis.

At the time, these measures delighted Mexico's elite, foreign banks, and leading multinationals, as well as multilateral financial institutions. Even before his “election,” Salinas was already the favorite son not only of Mexico’s oligarchs and party bosses, but also of leading multinational investors like GE, Allied Signal, Alcoa, and GM, commercial banks like Citibank and JP Morgan, investment banks like Goldman Sachs and Morgan Stanley, and, unofficially, the US Government and its financial acolytes, the IMF and the World Bank. In two years before the l988 elections, these two government institutions alone provided Mexico with $4 billion of new credits, while private banks had helped out by by rescheduling $43 billion of Mexico’s outstanding debt -- huge amounts at the time. Before and after the election, a parade of First World leaders, including George H.W. Bush (who was good friends with Salinas’ father, Raul Sr.), Paul Volcker, Citibank Chairman John Reed, newly-elected World Bank President Lewis B. Preston (formerly of JP Morgan), IMF Director Michel Camdessus, and many lesser officials and bankers descended on Mexico to encourage its new-found passion for free markets. They praised the quality of the PRI’s Ivy-League-trained economists and touted Mexico as a model of stability and growth -- much as they had done with Ferdinand Marcos in the Philippines two decades earlier.





Then, at about 3 A.M. on July 7, the supervisor
called a halt, and with tears in his eyes, he told us: ”If you care for your families,
your jobs, and your lives, enter all votes from now on in favor of the PRI.
I went back to work and did as I was told. I wanted to cry, but I had to do it.



Computer worker,
1988 Mexican elections


After the 1988 election, foreign investors also stepped forward to ratify Salinas’ agenda. From 1988 to l994, Mexico became the darling of the international investment community, attracting more foreign investment than any other developing country except China. It accounted for nearly half of the $175 billion of new foreign direct and portfolio investment that poured into Latin America in this period. In the wake of the debt crisis, “foreign” investors -- including members of the domestic elite who secretly repatriated flight capital to avoid taxes and conceal their investments -- replaced foreign bankers as the leading suppliers of finance to Mexico and other “emerging markets, ” providing more than three-fourths of Mexico’s entire capital budget.

Much of this capital was attracted by Salinas’ privatization program, one of the most aggressive in Latin America. This involved selling off public assets in key sectors like telecommunications, steel, airlines, and banking, including the re-privatization of all the banks that President Lopez Portillo had nationalized in the early 1980s, and using the proceeds to finance the budget. By l994 this firesale had raised $24 billion, more revenue than in any other Latin American country.

As discussed in our book, in late 1994-95, this balloon was punctured -- Mexico experienced a sharp currency devaluation and a foreign debt crisis, with rising unemployment, declining real wages, and growing inequality. By the year 2000, relative to US per capita income levels, Mexico had fallen below where it stood when Salinas took power in 1988. (World Bank data - 2004).

Neoliberal economists have tended to compartmentalize the analysis of these "reforms," and also consider them apart from their political and social effects, including increased corruption and greater regional tensions within Mexico. Even the World Bank now concedes that NAFTA was "not a substitute for a development strategy," that real wages declined, overall unemployment rose, and poverty and inequality remained huge during the 1990s, and that NAFTA's maximum benefit to Mexico was "a rather small one" of +4-5% of GDP over 10 years -- a rounding error, compared with the -6% impact of the Tequila Crisis in 1995-96 alone. Other analysts, such as Carnegie, are even less enthusiastic.
Azcarraga.gif"El Tigre"

Salinas' fraudulent election also helped to facilitate the growth of narco-trafficking and high-level political corruption. The connections included Carlos Salinas' own brother Raul, who is now serving 27.5 years for murder. All told, the concentration of wealth and power produced during Salinas' term from 1989 to 1994 amounted to one of the most regressive wealth transfers in Mexico's history. As Don Emilio Azcarraga ("El Tigre"), one of Salinas' wealthiest supporters, told an audience of the PRI's wealthiest backers at a 1994 fundraiser for Ernesto Zedillo, Salinas' own hand-picked successor,

I, and all of you, have earned so much money over the past six years that I think we have a big debt of gratitude to this government. I'm ready to more than double what has been pledged so far, and I hope that most in this room will join me. We owe it to the president, and to the country.

The Mexican magnates responded to this challenge -- that night the PRI reportedly collected $25 million from each of them for a grand total of $750 million. That established a world record for a single evening’s fund-raising. (President Bush, restrain your envy!) Zedillo, a Ph.D. economist who has subsequently returned to Yale as a professor of international economics and Director of the new “Yale Center for the Study of Globalization,” must have been grateful for this incredible act of selfless generosity.

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Padre Zedillo







In 1988, with the complicity of powerful interests at home and abroad, as well as many cheerleaders for the neoliberal orthodoxy in the US Government, multilateral financial institutions, and the Establishment Press alike, the Mexican people simply got robbed.




CONCLUSION

As we approach the US' own 2004 Presidential elections, with all the debate about "electronic voting," it is also interesting to note that computer fraud played a central role in Mexico's 1988 rigged election. UNISYS, the leading US company that supervised that election, has long refused to comment on what happened. But as we'll see below, its Mexico City employees apparently knew all about what was going on.

All told, the consequences of Mexico's 1988 stolen election have been very far-reaching indeed. Some will argue that the gains may have been "worth it" -- that, like Russia's neoliberal reforms in the 1990s, Mexico's ultimately left the country better off, even though they were very imperfect; furthermore, that Cardenas proved to be a disappointment in Mexico City, and if Salinas is to be believed, perhaps even a bit fallible himself.

But all this is really beside the basic point -- ordinary Mexicans were supposed to be allowed to make such judgments for themselves. In 1988, with the complicity of powerful interests at home and abroad, as well as many cheerleaders for the neoliberal orthodoxy in the US Government, multilateral financial institutions, and the Establishment Press alike, the Mexican people simply got robbed again. But perhaps that was such an old story that the US media did not consider it newsworthy.

***

(c) James S. Henry, Submerging Markets, 2004. All rights reserved. Not for quotation or other use without express consent.


March 10, 2004 at 03:05 AM | Permalink | Comments (1) | TrackBack

Saturday, March 06, 2004

Regime Change Comes to Haiti - Part II: French Hospitality

"Where's Jean-Bertrand? I Hear He's Locked Himself in his CAR!!!"
"France Exchanges Baby Doc for Titid!"
"Aristide Takes Lessons From Bongo, Bokassa, and Bozize in Bangui!"



Pres. for Life Bongo

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Pres. for Life Bozize

Prresident Aristide, ousted from power just a week ago on February 29, has been desperately seeking asylum from his friend Thabo Mbeki, South Africa's President, who probably wishes the whole issue would just go away, but will no doubt grant it -- at least after the upcoming national RSA elections, on April 14. Several other countries in the Caribbean, like Panama and Costa Rica, were also willing to offer asylum. That seems only fair. After all, in the mid-1990s, Panama provided refuge to former Haitian general Raoul Cedras, the instigator of the first coup against Aristide, with his ocean-front apartment paid for by the US Government. In Aristide's case, US asylum was never offered; after all, he had never served in the FRAPH.

Apparently, however, someone decided that it would be more convenient to park Aristide in West Africa, 6200 miles away, rather than in Panama, a country that has regularly scheduled airline flights and is just 800 miles from Port-au-Prince.

Pending South African asylum, then, Aristide was compelled to accept temporary quasi-house arrest in the Central African Republic ("CAR"), a pathetic little submerging market that is even poorer than Haiti. This first-class hospitality was arranged for him by Dominique de Villepin, France's Ministry of Foreign Affairs, and France's favorite West African dictator, Gabon’s Omar Bongo.

As we'll see here, France has a long history of making such "special arrangements" for friends and foes alike -- including, in Haiti's case, a safe haven for "Baby Doc" Duvalier, who ran Haiti from 1971 to 1986, and a nasty, ultimately fatal imprisonment for Toussaint L'Ouverture, Haitii's George Washington, at the hands of a disgruntled Napoleon, who evidently never quite forgave the Haitian for beating his vaunted Army several times over. As Aristide contemplates Bangui's lakes and gardens, at least he can be grateful that he is not freezing to death in a prison cell in the Jura Mountains.

FRENCH HOSPITALITY

One of those who reportedly helped with Aristide's hastily arranged accomodations in the CAR, Omar Bongo, 67, is Africa's second longest serving "President for Life," and one of France's oldest and closest allies in Francophone Africa. He has ruled his impoverished-though-oil-rich country with an iron hand since 1967, with the help of Moroccan body guards and French security experts. As described in SubmergingMarkets™’ recent article on the Elf scandal, in the process, he developed an incestuous, mutually-lucrative relationship with top officials at Elf-Aquitaine, (formerly France’s leading oil company and now part of Total SA), as well as with leading French politicians like Jacque “The Crook.” He also developed private banking relationshpis with leading French and US banks -- including Citibank-NY, where he has reportedly secreted more than $180 million. No sentimental democrat or populist, Bongo has also arranged his country's political system so that he can remain in power until at least 2012 -- assuming that he lives that long, and that the fickle French don't turn on him.

In Aristides' case, according to one report, Bongo was able to prevail on his good friend Francois Bozize, CAR’s former Army Chief and current dictator, to open the door at least temporarily. According to another report, French Foreign Minister Dominique de Villepin called Bozize directly, with just 20 minutes notice, when the plane was already close to landing in CAR, to tell him that Aristide was about to arrive! France and Bongo had helped Bozize seize power from CAR's previous (elected) leader, Ange-Félix Patassé, in a March 2003 coup. That was CAR’s ninth coup since it became “independent” of France in 1960. Bozize remains utterly dependent on French aid, and is undoubtedly very concerned about his own stability, so the CAR is probably one of the few countries in the world where the arrangements for such a "hot guest" could be made so quickly. He and Aristide may have much to talk about. Minding their masters' voice, however, Aristide’s new hosts in CAR have already cautioned Aristide to curb his criticisms of the US and France.

Between his own stints in power, the CAR’s General Bozize was permitted to take up refuge in France-proper. So was Zaire’s Mobutu Sese Seko. So, too, from 1983 to 1986, in Haudricourt, northwest of Paris, was Jean-Bedel Bokassa, CAR's "Emperor" from 1965 to 1979, who also seized power in a French-backed coup. Bokassa, a French Army veteran and the recipient of the Legion d'Honneur and the Croix de Guerre, was famous not only for his 17 wives, for crowning himself Emperor, and for presenting former French President Giscard d'Estaing frequent gifts of diamonds and hunting trips, but also for slaughtering at least 100 school children who had refused to wear the school uniforms that one of his companies had made for them. He then dined on their flesh. (He was later tried for cannibalism.) This proved too much even for France, which in a rare display of progressive interventionism, removed him from power in September 1979.

While in the CAR’s capital, Bangui, Aristide might ask to visit the prison where the slaughter of these children took place in May 1979, as well as Bokassa's huge refrigerator.
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Emperor Bokassa

France also welcomed former Haitian dictator Jean-Claude “Baby” Duvalier with open arms after his 1986 ouster. He and his father had ruled disastrously from 1957 on, helping themselves to a great deal of the country's wealth. So they clearly met France's rigorous admissions standards.

The warm welcome was also facilitated by the expensive villa Baby Doc purchased at Grasse, in the south of France, and the several hundred millions dollars that he diverted to leading French and Swiss banks. After Aristide’s sudden exit, Duvalier, 53, lost no time in voicing interest in returning to Haiti. This led some to suspect that he may have helped to finance the “Haitian contras.” But "Baby Doc" has also gone through an expensive divorce, and may be in poor health, so we will just have to see.

In any case, France has certainly made quite a distinctive contribution to Third World development over the years, by helping to make the world safe for dictators like the Bozizes, Bongos, Bokassas, Mobutus, and Duvaliers -- giving them refuge in continental France until they are ready to return home and, at least in several cases, establish new Life Presidencies. Aristide and his family may never qualify for the kind of hospitality that France reserves for dictators, however. If one is a relatively poor, democratically-elected, populist leader, with no bank accounts and no chateau, but with powerful enemies, one is not welcome in France. After all, what would be the profit in it?......

In Haiti’s case there is also another great French tradtion. This was established by Napoleon's memorable betrayal, seizure, imprisonment, and ultimate murder-by-neglect of Haiti’s national liberator Toussaint L’Ouverture in 1803, in violation of a promise of safe conduct. When questioned about this years later, when Napoleon himself had been imprisoned on St. Helena, he remarked, "What could the death of one wretched Negro mean to me?"

Even now, there is a faint whiff of similar French disdain toward Aristide, as expressed by Foreign Minister de Villepin's haughty criticisms last week. Few Haitians were even aware that France was still so interested in their affairs. We noted the opportunity that this situation affords to Paris for an inexpensive rapprochement with the US. In addition, however, one senses that to this day, there is a special French animus reserved for rebellious Haitian blacks -- the kind who dare to contort the French language beyond recognition, demand reparations for injustices that "Old Europe" can no longer can even remember, and once or twice even soundly trounced its greatest general's army!

Of course, we cannot forget that Colin Powell, Condoleeza Rice, and "Grand Master of the Order of the Sun" Roger Noriega, a Cuban-American, were also involved in these decisions. So there could not possibly be any question of racial prejudice here, at least on the part of the Americans....except perhaps for the mutual contempt that "house Negroes" and "field Negroes" often have for each other.

CONCLUSION

Aristide now claims that the US, which leased the 757 jet that took him to Africa, never informed him that he would be dropped off in the CAR. There are also reports that on his arrival in the CAR, he was accompanied by a detachment of 60 US Marines. This seems a little excessive for a "voluntary departure." Aristide also claims – like Hugo Chavez did after the attempted April 2002 coup in Venezuela -- that he never resigned voluntarily, but was pressured to flee – or even effectively “kidnapped” -- by US officials.
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ProConsul Powell

The US Government and Colin Powell were evidently quite embarrassed by these charges, and annoyed that Aristide's wardens in the CAR did not make it more difficult for him to procure an international phone line. They have dismissed these accusations as “complete nonsense,” and blamed Aristide for the entire crisis.

But Colin and the USG are having more than a few credibility problems these days. What do we expect them to say? Even an outside observer with no particular brief for Aristide may be forgiven for having a few doubts. CARICOM has called for an independent international inquiry to establish just what happened -- but don't hold your breath. However, it may not really matter. Even on the face of it, as we've seen, the US' unwlllingness to defend Aristide was more than pressure enough.

Did the US really have an obligation to save Aristide from the wolves around him? After all, Haiti is not the 51st US state, and many Americans no doubt believe that he got what he deserved, after years of antagonizing his opponents. From this angle, he should be grateful for the rescue and the free ride to to the CAR.

However, this perspective is far too narrow. It is not as if the US has been a neutral bystander with respect to Haiti's development. The US embargoed the country from 1804 to 1862, at first to placate France, and then Southern slave owners, who feared the successful example of an independent nation of blacks. The US intervened repeatedly in Haiti's affairs, including the continuous occupation from 1915 to 1934, when, among other things, Citibank actually exercised complete and very profitable control over Haiti's money supply, national bank and customs house. The US established and trained the Haitian Army, which subsequently caused the country so much grief. We tolerated and supported the Duvaliers during their 29 years in power, as well as the military juntas that held power after they left. As noted above, The CIA was deeply involved with the people who organized the 1991 coup and created the FRAPH.

Only at the end of all this, partly just to contain Haitian immigration but partly out of a justifiable sense of responsibility, did we intervene in 1994 and restore the duly-elected Aristide to the Presidency. Taking this one step toward democratization, however, was not enough to insure democracy's success. And just because we don't like the particular choices that Haitians have made for their leaders, does not justify our walking away from the duty -- in this specific situation -- to see those choices through.

Instead, it now appears that the Bush Administration has decided to put this annoying populist Aristide behind us once and for all. At the same time, it probably also hopes that a quick US intervention, followed up quickly by UN surrogates, will avoid yet another messy immigration crisis in the middle of a US election year. Many Bush I Adminstration veterans no doubt still have nightmares about those troubling days in 1991-92, when Pappy just wanted to win Florida and 40,000 determined Haitian boat people started showing up on Miami's beaches, fleeing the nasty Cedras dictatorship.

The new approach does present an opportunity for self-important-but-increasingly-insecure countries like France, Canada, and Chile, which just volunteered more tha 120 troops, to come skulking back to the “coalition of the willing." I also permit recipients of USAID, IDB and World Bank funding – a high fraction of which actually gets spent in the First World, or on locals who have above-average incomes – to tap these sources again. There will also be many other benefits to the business elites, security forces, local politicians on the "right," "free trade zone" sweat shop employers, and perhaps even M-16 salesmen.
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Indeed, the only beneficiaries who may be left out of this picture are ordinary Haitians – the seventy percent that still survives on less than $1 per day, and constitutes the core of Aristide’s supporters. Many of them have suffered directly from all the upheavals, and Aristide as well as his high-minded opponents share responsibility for their inability to settle their differences peaceably.

But it is also clear is that these millions of ordinary Haitians have just been disenfranchised again. However imperfect Aristide was, however discomforting to First World interests, he was their voice, a voice they've now lot. This is a form of political decapitalization that no amount of "economic assistance" can compensate for.

Did I remember to say that, for all its woes, Haiti is a remarkable place, with millions of people eking out a living on the very borders of existence, but also quite often managing to have a good time, creating the most wonderful art, music, humor, and community spirit? Unfortunately, for all its "independence," Haiti's fate has always been heavily influenced by outside forces.

Haitians of all political persuasians now eagerly await the next installment of neoimperialism's grand design for their tiny, impoverished, heart-breaking, "independent" republic.


***

© James S. Henry, Submerging Markets™2004. Not for quotation or attribution without express consent.


March 6, 2004 at 05:16 PM | Permalink | Comments (0) | TrackBack

Thursday, March 04, 2004

Regime Change Comes to Haiti - Part I: --- Criminal Contras and The Offers That You Can't Refuse

"130 Dead and Counting - Was It Worth It? "200 Years of Liberty! -- 33 Coups, 5 US Military Interventions, and the Worst Poverty in the Americas!""

Printable PDF Version

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Dye mon, gen mon. (Over the mountains, more mountains) Byen mal ne pas la mo. Very bad isn’t dead (“Things can get worse.”) --Haitian Proverbs A man who stands for nothing will fall for anything. -- Malcolm X
On January 1, 2004, Haitian President Jean-Bertrand Aristide welcomed South Africa’s Thabo Mbeki to Port-au-Prince, the only significant world leader who joined him to celebrate Haiti’s two hundred years of “independence” from France (as one of its formerly most lucrative colonies), and Haiti’s status as the world’s oldest surviving black republic – complete with 32 coup d’etats, 5 US military interventions, 10-15 percent of US-inbound cocaine traffic, and the lowest per capita income level, the most poverty, and the highest rate of HIV/AIDs infection in the Western Hemisphere. Thabo experienced the side-effects of such conditions first-hand; during a visit to the northern city of Gonaives, one of his helicopters was reportedly fired upon, and, even though he wasn't in it at the time, his security guards evacuated the area and cancelled further trips to that region. Just three months later, it was Aristide and his family that had to be evacuated. Escorted by US Marines and an indeterminate number of French troops, they were unceremoniously spirited out of Port-au-Prince in the wee hours of a Sunday morning, effectively deposed for the second time in thirteen years. Aristede now has the dubious distinction of having been removed from power under, and perhaps by, two different Bush Administrations – the first time in September 1991, by way of a Haitian military coup that is widely believed to have been CIA-supported, and this time, on February 29, 2004, by way of a “resign or die” safe conduct offer that was abetted by two prodigal US allies, France and Canada. Of course Aristide has many shortcomings, including his divisive leadership style, his dubious former associates, his appetite for bizarre proposals like the “French colonial reparations” scheme, his tolerance of armed thugs in the Lavalas Family party, and the “fundamentally flawed” May 2000 elections (according to the OAS and Human Rights Watch) that gave Lavalas temporary control of Haiti’s parliament, but also contributed significantly to the current crisis. Most important, over time, it has become less and less clear even to his followers what he actually stands for, beyond populist rhetoric. Regardless of what we may think of Aristide and his followers, however, the recent behavior of the US, France, Canada, and indeed, the UN, with respect to Haiti has been inexcusable, from the standpoint of strengthening Haitian democracy. As discussed below, rather than intervene quickly in early February with a limited show of force that would have easily deterred further violence, the US and its allies temporized. Ultimately this gave the Haitian “opposition,” whose own track record of support for democracy is very mixed, the power to dictate Aristide's resignation letter. That is a power that the opposition, even now, would almost certainly not command at the ballot box. The US and France also conditioned safe passage on Aristide's signing this letter, and then dumped him in central Africa, 6200 miles from home, in a destination he only learned of 20 minutes before landing. All told, as Jamaica Prime Minister P.J. Patterson, chairman of CARICOM (the Caribbean Community), said this week, all this has created a very “dangerous precedent” for all the other fledgling democracies. In Haiti's case, the next time around, we should expect Aristide's still-numerous followers to bring a few more heavy weapons of their own to the party. As if we needed one, this episode also provide yet another example of American (and French) neo-imperialism, as well as "first-the-US, then-the-UN" diplomacy."
ARISTIDE'S LEGITIMACY Aristide is not the only elected leader who is divisive, has an imperfect electoral past, or has a few corrupt friends and associates in his closet. There may even be a few in George W. Bush's America, Jacque ("the Crook") Chirac's France, and Paul Martin's Canada. But let’s be clear – for all his flaws, Aristide is undeniablythe most “democratically elected” President in modern Haitian history. For this reason alone, his non-democratic denouement should concern us.
  • The first time that Aristide was elected in December 1990, he won the country’s first free Presidential elections in history with 67.5 percent of the vote. The runner-up, who was supported by the US, was former World Bank Vice President and Duvalier finance minister Marc Bazin. He got 14.2 percent. Aristide only served 7 months of his first five-year term before the 1991 coup. When he was finally restored to power by the Clinton Administration in September 1994, not only were all the brutes in the Haitian military given amnesty, but he was only permitted to serve another 16 months before being sidelined for five more years.
  • The second time, in November 2000, Aristide was elected President with an even greater majority. True, turnout in that Presidential election was just 15-20 percent. Facing certain defeat, without a compelling candidate of its own, Haiti’s opposition cynically boycotted the contest entirely, citing irregularities in the May 2000 parliamentary election.
  • There were many irregularities in that parliamentary election, and, in retrospect, Aristide should have made amends sooner. But no one believes that would have changed the outcome of the Presidential election. There are also grave doubts that the US, the World Bank, and the IDB should have held up more than $500 million of aid to Haiti's people, because of these irregularities. But Aristide's long-standing foes in Washington and the EU leaped at these electoral infractions as an excuse for cutting off most foreign aid. (For the interested reader, the election irregularities are discussed here, here, and here.) Curiously, the OAS standards for that election were evidently altered after the May 2000 race was run. Suffice it to say that by OAS standards, Florida’s balloting in 2000 -- which did determine a Presidential election -- was even more “fundamentally flawed.”
BARGAINING IN GOOD FAITH – OR JUST BUYING TIME? The other key fact to understand is that Aristide had agreed by late January 2004 to accept the “"Kingston Accord" proposed by the 15 CARICOM countries, which called for power-sharing and new elections. This would have allowed him to serve just two more years in office, and could have produced new elections, perhaps even sooner than they will occur now. noriega.terrorismo_story.ap.jpg
The Other Noriega
Unfortunately, Haiti’s “peaceful” opposition was, in the words of one foreign policy analyst, “ out for the kill.” The Bush Administration, which is top-heavy with long-time Aristide detractors like Assistant Secretary of State Roger Noriega (a former Senate staffer to Senator Jesse Helms, and one of the people who popularized the bogus CIA "psychotic" analysis of Aristide in 1994), permitted the Haitian opposition to stone-wall these CARICOM proposals to death. The opposition knew full well that the armed rebels were on their way, and it received strong signals from its friends in Washington that it had nothing to fear from refusal.
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Commander Guy Philippe
The US, France, and Canada, as well as the UN, had plenty of advance warning about the few hundred well-armed anti-Aristide “Haitian contras” who started moving in from the Dominican Republic as early as March 2003. They were presided over by such notorious ex-Haitian Army convicted criminals and drug traffickers as Louis Jodel Chamblain, Jean Tatoune, and Guy Philippe. Even though they were few in number, they were surprisingly well-organized, financed, and equipped, dressed in new combat suits and brandishing new M-16s and M-60s. Meanwhile, the poorly-trained, ill-led, and under-equipped Haitian Police had for the most part skeedattled, leaving Aristide with only the “chimere,” his street militias, and a small group of bodyguards hired from the Steele Foundation, a San Francisco security firm. Unless the US or the UN were willing to defend Aristide against these “Haitian contras,” therefore, they must have realized that they were effectively giving the opposition the power to mandate Aristide's ouster. As we’ve seen, it has been relatively easy for the 1000 or so US troops that have landed to disarm the contras. The question is why this could not have been done before? The US claims that it didn’t want its troops to be seen supporting Aristide. But this begs the question – couldn't their role have been positioned as supporting power-sharing and a constitutional transition? Yet The US, France, and Canada failed to support the February 23rd Caribbean Community (CARICOM) proposal for an immediate UN peacekeeping force that would have disarmed all sides. The US also blocked Aristide’s last-minute attempts to import new bodyguards from the Steel Foundation. On the other hand, once Aristide had left, the UN moved with astonishing speed to establish a peace-keeping force, compared with other situations that happened to be less important to the US, like Rwanda, DR Congo, or Liberia. _38347769_jm_pj_bbc300.jpgPrime Minister P.J. Patterson In 2002, while maintaining the boycott on economic aid to Haiti, the US had also sanctioned the sale of 20,000 new M-16s to the Dominican Republic’s Army. Why the Dominican Republic’s Army, which has a horrific human rights and drug-trafficking record of its own, needs so many M-16s is not obvious. Perhaps, in addition to defending the DR elite against their own people, turning back starving Haitian immigrants, and arming the Haitian contras, it expected it might have to deal with a newly-reconstituted Haitian Army. Even earlier, the US and the Multilateral Interim Force that brought Aristide back to power in 1994 had also failed to adequately disarm the Haitian military and FRAPH paramilitary. That, in turn, only encouraged Aristide's followers to form militias of their own. Not surprisingly, some of them also turned to drug traffic, given the plummeting regular economy, the continuing US aid cutoff, the strong US demand for cocaine, and their own ideal location on the trade route. The US and the MIF also failed to provide adequate resources and training for the National Police. New York City, with a population comparable to Haiti’s 8 million people, has nearly 40,000 police; Haiti’s entire police force, only founded in July 1995, numbered 4,000 at its peak. (True, more than a million of Haiti's 8 million people may be working in the US, at any one time, but the point remains.) _231156_baby_doc_300.jpg
Former Pres-for-Life "Baby Doc" Duvalier
The US and the MIF also failed to bring any significant human rights violators to justice. As noted, several have recently turned up among the “Haitian contras.” Apparently the US and the Dominican Republic preferred to concentrate their prosecutorial resources on Haitian immigrants and drug smugglers. Indeed, while they refused to provide Aristide asylum themselves, the US and France, as well as the Dominican Republic, all provided refuge to top human rights violators like “Baby “Doc” Duvalier and Emmanuel “Toto” Constant, a CIA “grantee” and close associate of Chamblain’s who led the coup against Aristide in 1991, and helped to found the FRAPH, the right-wing death squad that was responsible for several thousand deaths in 1992-94. (The US refused to extradite him to be tried in Haiti, and he’s reportedly been living in Queens.) At least 15 other former top FRAPH leaders have also reportedly found refuge in the US. Philippe, one of the leaders of the "contras," was reportedly convicted in Haiti of several previous coup attempts, and has been living in the Dominican Republic. But the DR