Posts filed under “War/Defense”
The Pentagon is paying contractors to claim that it was foreign financial terrorists – instead of fraud by American financial executives – which caused the 2008 financial crisis.
While a Pentagon contractor said, “This is the equivalent of box cutters on an airplane,” Paul Backen – a Yale University professor who has studied economic warfare – said he saw “no convincing evidence that ‘outside forces’ colluded to bring about the 2008 crisis.”
Indeed, the claim that terrorism caused the financial crisis is about as believable as Gaddafi trying to blame the Libyan protests on Osama Bin Laden, or al-Maliki blaming Al Qaeda for the Iraqi protests.
But it’s not an isolated incident. In fact, the government is trying in many ways to convince us that financial fraud is isolated, not systemic, and – most of all – not important to rein in.
For example, the U.S State Department’s website says (click on link entitled “economic”)”
Economic conspiracy theories are often based on the false, but popular, idea that powerful individuals are motivated overwhelmingly by their desire for wealth, rather than the wide variety of human motivations we all experience.
This one-dimensional, cartoonish view of human nature is at the heart of Marxist ideology, which once held hundreds of millions under its sway.)
If I didn’t know better, I would say that the State Department is implying that anyone that questions the intent behind even one particular powerful individual’s actions is a conspiracy theorist or a Marxist.
Similarly, Obama’s current head of the Office of Information and Regulatory Affairs – and a favored pick for the Supreme Court (Cass Sunstein) – previously:
Defined a conspiracy theory as “an effort to explain some event or practice by reference to the machinations of powerful people, who have also managed to conceal their role.”
William K. Black – professor of economics and law, and the senior regulator who put 1,000 top executives in jail during the S & L crisis – says that that the government’s entire strategy now – as during the S&L crisis – is to cover up how bad things are: “the entire strategy is to keep people from getting the facts”.
Similarly , 7 out of the 8 giant, money center banks went bankrupt in the 1980′s during the “Latin American Crisis”, and the government’s response was to cover up their insolvency.
So powerful people have conspired to try to downplay the severity of various economic crises.
And – as Matt Taibbi notes that the government is doing more to protect them than to prosecute them:
Federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice.
A veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who’s in office or which party’s in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country’s top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. “I think you’ve got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street,” he says.
A wild conspiracy theory?
Kansas City Fed President Thomas Hoenig doesn’t think so. He recommends Taibbi’s article.
Indeed, Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky, the Wall Street Journal and Bernie Madoff all say that the U.S. economy is a giant Ponzi scheme.
They Didn’t MEAN to Cause a Depression
Leading Indicators of Revolt in the Middle East and Northern Africa: Corruption, Unemployment and Percentage of Household Money Spent on Food
What determines which Middle Eastern or North African (MENA) countries will face revolt?
On February 3rd, the Economist came up with a list of “vulnerable” countries based upon the amount of democracy, corruption and press freedom:
But the Economist index doesn’t take unemployment into account unemployment.
As Alternet notes:
Arab Labour Organisation (ALO) figures show that Arab countries have among the highest unemployment rates in the world — an average of 14.5 percent in fiscal year 2007/08 compared with the international average of 5.7 percent. The rates may even be higher if one accepts unofficial estimates.
Global risk specialist Mi2g notes:
There are a lot of “orphans” and most are young – 65 percent of the population of the Arab League is under the age of 30. Youth unemployment rates are exorbitantly high – as high as 75 percent in some countries like Algeria. While the informal economy provides partial compensation, this does not provide security; the Jasmine Revolution was triggered by the self-immolation of a young man, Mohamed Bouazizi, unemployed after police confiscated his wheelbarrow, used to make ends meet by selling fruits and vegetables.
On February 2nd, Nomura published a report written by Steven Cook of the Council on Foreign Relations, arguing that youth unemployment and underemployment – along with a large proportion of youth – are primary factors driving revolt in the Middle East:
In both Tunisia and Egypt factors were at play which are also to be found in other economies in the region, notably:–An autocratic and corrupt regime [and] A significant―youth bulge and related unemployment and under-employment….
In other words, when there alot of young, unemployed (or under-employed) people, they might revolt.
Here are statistics from Nomura showing the percentage of youth under 15 years old and median age in years in the Middle East and Northern Africa:
|Country||Population Aged <15>||Median Age (2010)|
|Saudi Arabia||32.0 %||24.6%|
The index gives a 35% weighting for the share of the population that is under 25; 15% for the number of years the government has been in power; 15% for both corruption and lack of democracy as measured by existing indices; 10% for GDP per person; 5% for an index of censorship and 5% for the absolute number of people younger than 25:
Nowhere Near Over David R. Kotok February 23, 2011 www.cumber.com > This is nowhere near over. By “This”, we mean the regional contagion, spreading violence and rising geopolitical risk in the Middle East and North Africa. Reports say that Libya has stopped producing oil and that pipeline delivery to Europe (Italy) is interrupted. Libya seems…Read More
Gaddafi’s Rule Appears in Jeopardy
Libyan leader Muammar Gaddafi’s four-decade-old rule appeared in increasing jeopardy on Monday as anti-government protests reached the capital of Tripoli for the first time. Reuters’ Jon Decker reports.
2/21/2011 5:15:06 PM
Libya Crisis Makes Diplomatic Waves
U.N. chief Ban Ki-moon and the Libyan envoy to India react to reports of Libyan warplanes targeting civilians during mounting unrest. Video courtesy of Reuters.
2/22/2011 12:53:56 PM
Dictator Loses Grip in Desert
CHARLES LEVINSON in Tobruq, Libya, MARGARET COKER in Abu Dhabi and TAHANI KARRAR-LEWSLEY in Dubai
WSJ, FEBRUARY 23, 2011
click for updated futures > As prophesied on Sunday, my travel plans have once again caused a dislocation in the global balance of market forces. In other words, the futures are getting whacked, and it look like the day will start pretty ugly. SPX is down about 20; Dow off over 120. Oil rocket up…Read More
Source of the Iraqi WMD Claims Comes Clean … And Shows that the American and British Governments Willfully Manipulated the Evidence
As I’ve repeatedly pointed out, everyone knew that Iraq didn’t have WMDs.
The Guardian just interviewed the the infamous “Curveball” who provided false evidence about Iraq’s weapons of mass destruction. Curveball admitted that he knowingly lied about WMDs, in order to topple Saddam Hussein. The Guardian has a series notes in a series of articles out today on the issue which reinforce the conclusion that the American and British governments deliberately manipulated the evidence to justify the Iraqi invasion.
In one article, the Guardian notes :
The former head of the CIA in Europe … Tyler Drumheller, who says he warned the head of the US intelligence agency before the 2003 invasion of Iraq that Curveball might be a liar ….
“My impression was always that his reporting was done in January and February,” said Drumheller, adding that he had been warned well before 2003 by his counterparts in the German secret service (BND) that Curveball might not be reliable. “We didn’t know if it was true. We knew there were real problems with it and there were inconsistencies.”
He passed on this information to the head of the CIA, George Tenet, he said, and yet Curveball’s testimony still made it into Colin Powell’s famous February 2003 speech justifying an invasion. “Right up to the night of Powell’s speech, I said, don’t use that German reporting because there’s a problem with that,” said Drumheller.
He recalled a conversation he had with John McLaughlin, then the CIA’s deputy director. “The week before the speech, I talked to the Deputy McLaughlin, and someone says to him, ‘Tyler’s worried that Curveball might be a fabricator.
“And McLaughlin said, ‘Oh, I hope not, because this is really all we have.’ And I said, and I’ve got to be honest with you, I said: ‘You’ve got to be kidding? his is all we have!’”
In a second article, the Guardian reports:
A senior aide to Colin Powell at the time of his pivotal speech to the United Nations said on Tuesday that Curveball’s admission raised questions about the CIA’s role.
Lawrence Wilkerson, who was chief of staff to the then US secretary of state Powell in the build-up to the invasion, said the lies of Rafid Ahmed Alwan al-Janabi, also known by the codename Curveball, raised questions about how the CIA had briefed Powell ahead of his crucial speech to the UN security council presenting the case for war.
In particular, why did the CIA’s then director George Tenet and his deputy John McLaughlin believe the claim by Curveball, “and convey that to Powell even though the CIA’s own European chief Tyler Drumheller had already raised serious doubts.
“And why did Tenet and McLaughlin portray the presence of mobile biological labs in Iraq to the secretary of state with a degree of conviction bordering on passionate, soul-felt certainty?”
“This is very damning testimony and an indictment of the work the US put into the pre-war intelligence. The decision to go to war, to spend billions on sending hundreds of thousands of soldiers to the region, was in large part taken on the basis of an admitted liar,” said Ashwin Madia, head of an organisation of progressive US military veterans, VoteVets.
Judith Yaphe, a former CIA analyst on Iraq now at the National Defence University in Washington, said … “There were people at the time who doubted what Curveball was saying, but if the administration doesn’t want to believe it, it doesn’t make much difference.”
It is obvious that America has long supported dictators, instead of democracies, in developing countries.
Is it simply – as Noam Chomsky asserts – that America supports strong men who will ensure that their country acts as a “client state” to the U.S., and moves to crush countries which refuse to act as satellites to the U.S.?
But – as usual – faulty economic models are part of the problem.
Specifically, Morton Halperin, Joe Siegel and Michael Weinstein co-wrote a book called The Democracy Advantage: How Democracies Promote Prosperity and Peace, published by the Council on Foreign Relations in 2005, which provides insight into the economic model used to justify America’s historic support for dictators.
Halperin is no outsider, being a high-level adviser in the Clinton, Nixon and Johnson administrations and to the Council on Foreign Relations. In the Johnson Administration, he worked in the Department of Defense where he served as Deputy Assistant Secretary of Defense (International Security Affairs), responsible for political-military planning and arms control. During the first nine months of the Nixon administration, Halperin was a Senior Staff member of the National Security Council staff with responsibility for National Security Planning. In the Clinton administration, he served Director of the Policy Planning Staff at the Department of State, the Special Assistant to the President and Senior Director for Democracy at the National Security Council, and consultant to the Secretary of Defense and the Under Secretary of Defense for Policy. He was nominated by the President for the position of Assistant Secretary of Defense for Democracy and Peacekeeping.
Halperin, Siegel and Weinstein gave a speech at the Carnegie Foundation in 2005 explaining their research findings.
Successive American presidents have said, particularly since the end of the Cold War, that a major goal of American foreign policy was to spread or enlarge or enhance democracy, and that our foreign policy was geared to supporting those who were struggling to establish and maintain democratic regimes.
Yet if you look at development assistance from the United States, from the international financial institutions, and even from the Europeans and the European Community, you find that there is no democracy advantage. That is, democratic countries, in fact, receive less development assistance than do non-democratic countries. You also find in the rhetoric, and even the charters, of development agencies a belief that democracy is not their business. They increasingly talk about good governance as one aspect of development, but not about democracy. The people who run USAID believe that their job is to promote development, and not democracy. That permits them to consider good-governance issues, but not to ask the fundamental question: Is this a democratic society that we want to support?
Indeed, the international financial institutions have, with one exception, charters which require them not to take account of whether a country is a democracy, or as it is referred to in the charters, its political criteria.
Underlying this policy of governments and international financial institutions is a belief about how democracy relates to development. There is a widely held view that poor countries need to delay democracy until they develop. Back when I was in college, this was the Scandinavian view of democracy, that only Scandinavian countries were capable of being democratic, and that you needed to have a solid middle class before you could contemplate democracy. The argument went—as presented in the writings of Samuel Huntington and Seymour Martin Lipset —that if a poor country became democratic, because of the pressures in a democracy to respond to the interests of the people, they would borrow too much, they would spend the money in ways that did not advance development—arguments that the current president of Mexico is making about his possible successor. These poor decisions would mean that development would not occur; and because people would then be disappointed, they would return to a dictatorship.
Therefore, the prescription was, get yourself a benign dictator—it was never quite explained how you would make sure you had a dictator that spent the money to develop the country rather than ship it off to a Swiss bank account—wait until that produces development, which produces a middle class, and then, inevitably, the middle class will demand freedom, and you will have a democratic government.
That proposition was wrong.
Siegel picked up from there. Siegel is a Senior Research Scholar at the University of Maryland’s School of Public Policy, and an expert on the political economy of democratic transitions , who has contributed articles to leading policy journals and newspapers including Foreign Affairs , Harvard International Review , Georgetown Journal for International Affairs, Los Angeles Times, Financial Times, Newsweek International, Wall Street Journal, and The International Herald Tribune. Siegel was also a high-level researcher for the CFR.