Sunday, August 26, 2007

Lifting the curtin on the Saudis

Check out this valuable site -

A Second Look at the Saudis

My comment there (in the guest book) -

Thank you for your valuable and intrepid reporting on this most important subject. The lies Cheney and co. are promulgating to start a war with Iraq must be fought with truth. Of course Bushco and the oilpatch friends want the public to see the Saudis as allies because they make so much money off their oil. Can you say "The Carlyle Group"?

Thursday, August 23, 2007

Read this, too.


From Afghanistan to Iraq: Connecting the Dots with Oil
By Richard W. Behan, AlterNet
Posted on February 5, 2007

In the Caspian Basin and beneath the deserts of Iraq, as many as 783 billion barrels of oil are waiting to be pumped. Anyone controlling that much oil stands a good chance of breaking OPEC's stranglehold overnight, and any nation seeking to dominate the world would have to go after it.

The long-held suspicions about George Bush's wars are well-placed. The wars in Afghanistan and Iraq were not prompted by the terrorist attacks in New York and Washington. They were not waged to spread democracy in the Middle East or enhance security at home. They were conceived and planned in secret long before September 11, 2001 and they were undertaken to control petroleum resources.

The "global war on terror" began as a fraud and a smokescreen and remains so today, a product of the Bush Administration's deliberate and successful distortion of public perception. The fragmented accounts in the mainstream media reflect this warping of reality, but another more accurate version of recent history is available in contemporary books and the vast information pool of the Internet. When told start to finish, the story becomes clear, the dots easier to connect.

Both appalling and masterful, the lies that led us into war and keep us there today show the people of the Bush Administration to be devious, dangerous and far from stupid.

The following is an in-depth look at the oil wars, the events leading up to them, and the players who made them possible.


The Project for a New American Century, a D.C.-based political think tank funded by archconservative philanthropies and founded in 1997, is the source of the Bush Administration's imperialistic urge for the U.S. to dominate the world. Our nation should seek to achieve a "...benevolent global hegemony," according to William Kristol, PNAC's chairman. The group advocates the novel and startling concept of "pre-emptive war" as a means of doing so.

On January 26, 1998, the PNAC, sent a letter to President William Clinton urging the military overthrow of Saddam Hussein in Iraq. The dictator, the letter alleged, was a destabilizing force in the Middle East, and posed a mortal threat to "...the safety of American troops in the region, of our friends and allies like Israel and the moderate Arab states, and a significant portion of the world's oil supply..." The subjugation of Iraq would be the first application of "pre-emptive war."

The unprovoked, full-scale invasion and occupation of another country, however, would be an unequivocal example of "the use of armed force by a state against the sovereignty, territorial integrity, or political independence of another state." That is the formal United Nations definition of military aggression, and a nation can choose to launch it only in self-defense. Otherwise it is an international crime.

President Clinton did not honor the PNAC's request.

But sixteen members of the Project for a New American Century would soon assume prominent positions in the Administration of George W. Bush, including Dick Cheney, Lewis "Scooter" Libby, Donald Rumsfeld, Paul Wolfowitz, Richard Armitage and John Bolton.

The "significant portion of the world's oil supply" was of immediate concern, because of the commanding influence of the oil industry in the Bush Administration. Beside the president and vice president, eight cabinet secretaries and the national security advisor had direct ties to the industry, and so did 32 others in the departments of Defense, State, Energy, Agriculture, Interior, and the Office of Management and Budget.

Within days of taking office, President Bush appointed Vice President Cheney to chair a National Energy Policy Development Group. Cheney's "Energy Task Force" was composed of the relevant federal officials and dozens of energy industry executives and lobbyists, and it operated in tight secrecy. (The full membership has never been revealed, but Enron's Kenneth Lay is known to have participated, and the Washington Post reported that Exxon-Mobil, Conoco, Shell, and BP America did, too.)

During his second week in office, President Bush convened the first meeting of his National Security Council. It was a triumph for the PNAC. In just one hour-long meeting, the new Bush Administration turned upside down the long-standing focus of U.S. foreign policy in the Middle East. Over Secretary of State Colin Powell's objections, the goal of reconciling the Israel-Palestine conflict was abandoned, and the overthrow of Saddam Hussein was set as the new priority. Ron Suskind's book, The Price of Loyalty, describes the meeting in detail.

The Energy Task Force wasted no time, either. Within three weeks of its creation, the group was poring over maps of the Iraqi oilfields, pipelines, tanker terminals, and oil exploration blocks. It studied an inventory of "Foreign Suitors for Iraqi Oilfield Contracts" -- dozens of oil companies from 30 different countries, in various stages of negotiations for exploring and developing Iraqi crude.

Not a single U.S. oil company was among the "suitors," and that was intolerable, given a foreign policy bent on global hegemony. The National Energy Policy document, released May 17, 2001 concluded this: "By any estimation, Middle East oil producers will remain central to world security. The Gulf will be a primary focus of U.S. international energy policy."

That rather innocuous statement can be clarified by a top-secret memo dated February 3, 2001 to the staff of the National Security Council. Cheney's group, the memo said, was "melding" two apparently unrelated areas of policy: "the review of operational policies toward rogue states," such as Iraq, and "actions regarding the capture of new and existing oil and gas fields." The memo directed the National Security Council staff to cooperate fully with the Energy Task Force as the "melding" continued. National security policy and international energy policy would be developed as a coordinated whole. This would prove convenient on September 11, 2001, still seven months in the future.

The Bush Administration was drawing a bead on Iraqi oil long before the "global war on terror" was invented. But how could the "capture of new and existing oil fields" be made to seem less aggressive, less arbitrary, less overt?

During April of 2002, almost a full year before the invasion, the State Department launched a policy-development initiative called "The Future of Iraq Project" to accomplish this. The "Oil and Energy Working Group" provided the disguise for "capturing" Iraqi oil. Iraq, it said in its final report, "should be opened to international oil companies as quickly as possible after the war ... the country should establish a conducive business environment to attract investment in oil and gas resources."

Capture would take the form of investment, and the vehicle for doing so would be the "production sharing agreement."

Under production sharing agreements, or PSAs, oil companies are granted ownership of a "share" of the oil produced, in exchange for investing in development costs, and the contracts are binding for up to 30 years. What would happen, though, if the companies' investments were only minimal, but their shares of the production were obscenely, disproportionately large?

This is hardwired. According to a UK Platform article titled "Crude Designs," production sharing agreements have now been drafted in Baghdad covering 75 percent of the undeveloped Iraqi fields, and the oil companies, waiting to sign the contracts, will earn as much 162 percent on their investments. And the "foreign suitors" are not quite so foreign now: The players on the inside tracks are Exxon-Mobil, Chevron, Conoco-Phillips, BP-Amoco and Royal Dutch-Shell.

The use of PSAs will cost the Iraqi people hundreds of billions of dollars in just the first few years of the "investment" program. They would be far better off keeping in place the structure Iraq has relied upon since 1972: a nationalized oil industry leasing pumping rights to the oil companies, who then pay royalties to the central government. That is how it is done today in Saudi Arabia and the other OPEC countries.

Production sharing agreements, heavily favored by the oil companies, were specified by George Bush's State Department. Paul Bremer's Coalition Provisional Authority drafted an oil law privatizing the oil sector, and American oil interests have lobbied in Baghdad ever since then for the PSAs. Apparently successfully: The Oil Committee headed by Deputy Prime Minister Barham Salih is said currently to be "leaning" toward them.

With the capture of Iraqi oil resources prospectively disguised, the Halliburton company was then hired, secretly, to design a fire suppression strategy for the Iraqi oil fields. If oil wells were to be torched during the upcoming war (as Saddam did in Kuwait in 1991), the Bush Administration would be prepared to extinguish them rapidly. The contract with Halliburton was signed in the fall of 2002. Congress had yet to authorize the use of force in Iraq.

So a line of dots begins to point at Iraq, though nothing illegal or unconstitutional has yet taken place. We are still in the policy-formulation stage, but two "seemingly unrelated areas of policy" -- national security policy and international energy policy -- have become indistinguishable.


The strategic location of Afghanistan can scarcely be overstated. The Caspian Basin contains up to $16 trillion worth of oil and gas resources, and the most direct pipeline route to the richest markets is through Afghanistan.

After the fall of the Soviet Union, the first western oil company to take action in the Basin was the Bridas Corporation of Argentina. It acquired production leases and exploration contracts in the region, and by November of 1996 had signed an agreement with General Dostum of the Northern Alliance and with the Taliban to build a pipeline across Afghanistan.

Not to be outdone, the American company Unocal (aided by an Arabian company, Delta Oil) fought Bridas at every turn. Unocal wanted exclusive control of the trans-Afghan pipeline and hired a number of consultants in its conflict with Bridas: Henry Kissinger, Richard Armitage (now Deputy Secretary of State in the Bush Administration), Zalmay Khalilzad (a signer of the PNAC letter to President Clinton) and Hamid Karzai.

Unocal wooed Taliban leaders at its headquarters in Texas, and hosted them in meetings with federal officials in Washington, D.C.

Unocal and the Clinton Administration hoped to have the Taliban cancel the Bridas contract, but were getting nowhere. Finally, Mr. John J. Maresca, a Unocal Vice President, testified to a House Committee of International Relations on February 12, 1998, asking politely to have the Taliban removed and a stable government inserted. His discomfort was well placed.

Six months later terrorists linked to Osama bin Laden bombed the U.S. embassies in Kenya and Tanzania, and two weeks after that President Clinton launched a cruise missile attack into Afghanistan. Clinton issued an executive order on July 4, 1999, freezing the Taliban's U.S.-held assets and prohibiting further trade transactions with the Taliban.

Mr. Maresca could count that as progress. More would follow.

Immediately upon taking office, the new Bush Administration actively took up negotiating with the Taliban once more, seeking still to have the Bridas contract vacated, in exchange for a tidy package of foreign aid. The parties met three times, in Washington, Berlin, and Islamablad, but the Taliban wouldn't budge.

Behind the negotiations, however, planning was underway to take military action if necessary. In the spring of 2001 the State Department sought and gained concurrence from both India and Pakistan to do so, and in July of 2001, American officials met with Pakistani and Russian intelligence agents to inform them of planned military strikes against Afghanistan the following October. A British newspaper told of the U.S. threatening both the Taliban and Osama bin Laden -- two months before 9/11 -- with military strikes.

According to an article in the UK Guardian, State Department official Christina Rocca told the Taliban at their last pipeline negotiation in August of 2001, just five weeks before 9/11, "Accept our offer of a carpet of gold, or we bury you under a carpet of bombs."

The Great Game and Its Players

The geostrategic imperative of reliable oil supplies has a long history, arguably beginning with the British Navy in World War I. First Lord of the Admiralty Winston Churchill repowered the British fleet -- from coal (abundant in the UK) to oil (absent in the UK), and thus began the Great Game: jockeying by the world powers for the strategic control of petroleum. (Churchill did this to replace with oil pumps the men needed to shovel coal -- a large share of the crew -- so they could man topside battle stations instead.) Iraq today is a British creation, formed almost a century ago to supply the British fleet with fuel, and it is still a focal point of the Game.

The players have changed as national supremacy has changed, as oil companies have morphed over time, and as powerful men have lived out their destinies.

Among the major players today are the Royal family of Saudi Arabia and the Bush family of the state of Maine (more recently of Texas). And they are closely and intimately related. The relationship goes back several generations, but it was particularly poignant in the first Gulf War in 1990-91, when the U.S. and British armed forces stopped Saddam Hussein in Kuwait, before his drive reached the Arabian oil fields. Prime Minister John Major of the UK, and President George H.W. Bush became the much esteemed champions of the Arabian monarchy, and James Baker, Bush's Secretary of State, was well regarded, too. (Years earlier, Mr. Baker and a friend of the royal family's had been business partners, in building a skyscraper bank building in Houston.)

The Carlyle Group: Where the Players Meet to Profit

After President Bush, Secretary Baker, and Prime Minister Major left office, they all became active participants and investors in the Carlyle Group, a global private equity investment firm comprised of dozens of former world leaders, international business executives (including the family of Osama bin Laden); former diplomats, and high-profile political operatives from four U.S. Administrations. For years, Carlyle would serve as the icon of the Bush/Saudi relationship.

Carlyle, with its headquarters just six blocks from the White House, invests heavily in all the industries involved in the Great Game: the defense, security, and energy industries, and it profits enormously from the Afghan and Iraqi wars.

In the late 1980s, Carlyle's personal networking brought together George W. Bush, the future 43rd U.S. president, and $50,000 of financial backing for his Texas oil company, Arbusto Energy. The investor was Salem bin Laden (half-brother of Osama bin Laden) who managed the Carlyle investments of the Saudi bin Laden Group. (After the tragedy of 9/11, by mutual consent, the bin Laden family and Carlyle terminated their business dealings.) George Bush left Carlyle in 1992 to run for governor of Texas.

Ex-President Bush, Ex-Prime Minister Major, and Ex Secretary Baker, in the 1990's, were Carlyle's advance team, scouring the world for profitable investments and investors. In Saudi Arabia they met with the royal family, and with the two wealthiest, non-royal families -- the bin Ladens and the bin Mahfouzes.

Khalid bin Mahfouz was prominent in Delta Oil, Unocal's associate in the Afghan pipeline conflict. He was later accused of financing al Qaeda, and named in a trillion dollar lawsuit brought by the families of 9/11 victims. (It was Mr. bin Mahfouz who had been Mr. Baker's business associate in Houston.)

Carlyle retained James Baker's Houston law firm, Baker-Botts, and Baker himself served as Carlyle Senior Counselor from 1993 until 2005. (Other clients of Baker-Botts: Exxon-Mobil, Chevron, Texaco, Shell, Amoco, Conoco-Phillips, Halliburton, and Enron.)

Mr. Baker has long been willing to put foremost the financial advantage of himself, his firm, and his friends, often at the expense of patriotism and public service. As President Reagan's Secretary of the Treasury, he presided over the savings-and-loan scandal, in which S&L executives like Charles Keating and the current President's brother Neil Bush handed the American taxpayers a bill to pay, over a 40-year period, of $1.2 trillion. His law firm willingly took on the defense of Prince Sultan bin Abdul Azis, the Saudi Defense Minister sued by the families of 9/11 victims for complicity in the attacks.

We will encounter Mr. Baker again soon.

September 11, 2001

In September of 2000, the Project for a New American Century published a report, "Rebuilding America's Defenses." It advocated pre-emptive war once again, but noted its acceptance would be difficult in the absence of "some catastrophic and catalyzing event, like a new Pearl Harbor."

President Bush formally established the PNAC's prescription for pre-emptive, premeditated war as U.S. policy when he signed a document entitled "The National Security Strategy of the United States of America" early in his first term.

Still nothing illegal or unconstitutional had been done.

But the rationale and the planning for attacking both Afghanistan and Iraq were in place. The preparations had all been done secretly, wholly within the executive branch. The Congress was not informed until the endgame, when President Bush, making his dishonest case for the "war on terror" asked for and was granted the discretion to use military force. The American people were equally uninformed and misled. Probably never before in our history was such a drastic and momentous action undertaken with so little public knowledge or Congressional oversight: the dispatch of America's armed forces into four years of violence, at horrendous costs in life and treasure.

Then a catastrophic event took place. A hijacked airliner probably en route to the White House crashes in Pennsylvania, the Pentagon was afire, and the Twin Towers of the World Trade Center were rubble.

In the first hours of frenetic response, fully aware of al Qaeda's culpability, both President Bush and Secretary Rumsfeld sought frantically to link Saddam Hussein to the attacks, as we know from Richard Clarke's book, Against All Enemies. They anxiously waited to proceed with their planned invasion of Iraq.

If the Bush Administration needed a reason to proceed with their invasions, they could not have been handed a more fortuitous and spectacular excuse, and they played their hand brilliantly.

9/11 was a shocking event of unprecedented scale, but it was simply not an invasion of national security. It was a localized criminal act of terrorism, and to compare it, as the Bush Administration immediately did, to Pearl Harbor was ludicrous: The hijacked airliners were not the vanguard of a formidable naval armada, an air force, and a standing army ready to engage in all out war, as the Japanese were prepared to do and did in 1941.

By equating a criminal act of terrorism with a military threat of invasion, the Bush Administration consciously adopted fear mongering as a mode of governance. It was an extreme violation of the public trust, but it served perfectly their need to justify warfare.

As not a few disinterested observers noted at the time, international criminal terrorism is best countered by international police action, which Israel and other nations have proven many times over to be effective. Military mobilization is irrelevant. It has proven to be counterproductive.

Why, then, was a "war" declared on "terrorists and states that harbor terrorists?"

The pre-planned attack on Afghanistan, as we have seen, was meant to nullify the contract between the Taliban and the Bridas Corporation. It was a matter of international energy policy. It had nothing to do, as designed, with apprehending Osama bin Laden -- a matter of security policy.

But the two "seemingly unrelated areas of policy" had been "melded," so here was an epic opportunity to bait-and-switch. Conjoining the terrorists and the states that harbored them made "war" plausible, and the Global War on Terror was born: It would be necessary to overthrow the Taliban as well as to bring Osama bin Laden to justice.

(In retrospect, the monumental fraud of the "war on terror" is crystal clear. In Afghanistan the Taliban was overthrown instead of bringing the terrorist Osama bin Laden to justice, and in Iraq there were no terrorists at all. But Afghanistan and Iraq are dotted today with permanent military bases guarding the seized petroleum assets.)

On October 7, 2001 the carpet of bombs is unleashed over Afghanistan. Hamid Karzai, the former Unocal consultant, is installed as head of an interim government. Subsequently he is elected President of Afghanistan, and welcomes the first U.S. envoy -- Mr. John J. Maresca, the Vice President of the Unocal Corporation who had implored Congress to have the Taliban overthrown. Mr. Maresca was succeeded by Mr. Zalmay Khalilzad -- also a former Unocal consultant. (Mr. Khalilzad has since become Ambassador to Iraq, and has now been nominated to replace John Bolton, his PNAC colleague, as the ambassador to the UN.)

With the Taliban banished and the Bridas contract moot, Presidents Karzai of Afghanistan and Musharraf of Pakistan meet on February 8, 2002, sign an agreement for a new pipeline, and the way forward is open for Unocal/Delta once more.

The Bridas contract was breached by U.S. military force, but behind the combat was Unocal. Bridas sued Unocal in the U.S. courts for contract interference and won, overcoming Richard Ben Veniste's law firm in 2004. That firm had multibillion-dollar interests in the Caspian Basin and shared an office in Uzbekistan with the Enron Corporation. In 2004, Mr. Ben Veniste was serving as a 9/11 Commissioner.

About a year after the Karzai/Musharraf agreement was signed, an article in the trade journal "Alexander's Gas and Oil Connections" described the readiness of three US federal agencies to finance the prospective pipeline: the U.S. Export/Import Bank, the Trade and Development Agency, and the Overseas Private Insurance Corporation. The article continued, "...some recent reports ... indicated ... the United States was willing to police the pipeline infrastructure through permanent stationing of its troops in the region." The article appeared on February 23, 2003.

The objective of the first premeditated war was now achieved. The Bush Administration stood ready with financing to build the pipeline across Afghanistan, and with a permanent military presence to protect it.

Within two months President Bush sent the armed might of America sweeping into Iraq.

Then came the smokescreen of carefully crafted deceptions. The staging of the Jessica Lynch rescue. The toppling of the statue in Baghdad. Mission accomplished. The orchestrated capture, kangaroo court trial, and hurried execution of Saddam Hussein. Nascent "democracy" in Iraq. All were scripted to burnish the image of George Bush's fraudulent war.

The smokescreen includes the cover-up of 9/11. Initially and fiercely resisting any inquiry at all, President Bush finally appoints a 10-person "9/11 Commission."

The breathtaking exemptions accorded President Bush and Vice President Cheney in the inquiry rendered the entire enterprise a farce: They were "interviewed" together, no transcription of the conversation was allowed, and they were not under oath. The Commission report finally places the blame on "faulty intelligence."

Many of the 10 commissioners, moreover, were burdened with stunning conflicts of interest -- Mr. Ben Veniste, for example -- mostly by their connections to the oil and defense industries. The Carlyle Group contributed to Commissioner Tim Roemer's political campaigns. Commission Chairman Thomas Kean was a Director of Amerada Hess, which had formed a partnership with Delta Oil, the Arabian company of Khalid bin Mahfouz, and that company was teamed with Unocal in the Afghan pipeline project. Vice-Chairman Lee Hamilton serves on the board of Stonebridge International consulting group, which is advising Gulfsands Petroleum and Devon Energy Corporation about Iraqi oil opportunities.

The apparent manipulation of pre-war intelligence is not addressed by the 9/11 Commission, the veracity of the Administration's lies and distortions is assumed without question, and the troubling incongruities of 9/11 are ignored: The theories of controlled demolition, the prior short-selling of airline stock, the whole cottage industry of skepticism.

The doubters and critics of 9/11 are often dismissed as conspiracy crazies, but you needn't claim conspiracy to be skeptical. Why did both President Bush and Vice President Cheney pressure Senate Majority Leader Tom Daschle to forego any investigation at all? Failing in that, why did the President then use "Executive Privilege" so often to withhold and censor documents? Why did the White House refuse to testify under oath? Why the insistence on the loopy and unrecorded Oval Office interview of Mr. Bush and Mr. Cheney simultaneously?

There is much we don't know about 9/11.

The Iraq Study Group

Viewing the carnage in Iraq, and seeking desperately to find a way out of it, the U.S. Congress appointed on March 15, 2006 the Iraq Study Group. It was also called the Baker-Hamilton Commission after its co-chairmen, the peripatetic problem-solvers James Baker and Lee Hamilton. It was charged with assessing the situation in Iraq and making policy recommendations.

The Commission assessed the situation as "grave and deteriorating" and recommended substantive changes in handling it: draw down the troop levels and negotiate with Syria and Iran. These recommendations were rejected out of hand by the Bush Administration, but those about the oil sector could hardly have been more pleasing.

The Commission's report urged Iraqi leaders to "... reorganize the national industry as a commercial enterprise." That sounds like code for privatizing the industry (which had been nationalized in 1972.) In case that wasn't clear enough, the Commission encouraged "...investment in Iraq's oil sector by the international energy companies." That sounds like code for Exxon/Mobil, Chevron/Texaco, Conoco/Phillips, BP/Amoco and Royal Dutch Shell. The Commission urged support for the World Bank's efforts to "ensure that best practices are used in contracting." And that sounds like code for Production Sharing Agreements.

Mr. Baker is a clever and relentless man. He will endorse pages and pages of changes in strategy and tactics -- but leave firmly in place the one inviolable purpose of the conflict in Iraq: capturing the oil.

A Colossus of Failure

The objectives of the oil wars may be non-negotiable, but that doesn't guarantee their successful achievement.

The evidence suggests the contrary.

As recently as January of 2005, the Associated Press expected construction of the Trans Afghan Pipeline to begin in 2006. So did News Central Asia. But by October of 2006, NCA was talking about construction "... as soon as there is stability in Afghanistan."

As the Taliban, the warlords, and the poppy growers reclaim control of the country, clearly there is no stability in Afghanistan, and none can be expected soon.

Unocal has been bought up by the Chevron Corporation. The Bridas Corporation is now part of BP/Amoco. Searching the companies' websites for "Afghanistan pipeline" yields, in both cases, zero results. Nothing is to be found on the sites of the prospective funding agencies. The pipeline project appears to be dead.

The Production Sharing Agreements for Iraq's oil fields cannot be signed until the country's oil policies are codified in statute. That was supposed to be done by December of 2006, but Iraq is in a state of chaotic violence. The "hydrocarbon law" is struggling along -- one report suggests it may be in place by March -- so the signing of the PSA's will be delayed at least that long.

The U.S. and British companies that stand to gain so much -- Exxon/Mobil, Chevron/Texaco, Concoco/Phillips, BP/Amoco and Royal Dutch Shell -- will stand a while longer. They may well have to stand down.

On October 31, 2006 the newspaper China Daily reported on the visit to China by Iraqi Oil Minister Hussein Shahristani. Mr. Shahristani, the story said, "welcomed Chinese oil companies to participate in the reconstruction of the Iraqi oil industry." That was alarming, but understated.

Stratfor, the American investment research service, was more directly to the point, in a report dated September 27, 2006 (a month before Minister Shahristani's visit, so it used the future tense). The Minister "... will talk to the Chinese about honoring contracts from the Saddam Hussein era. ... This announcement could change the face of energy development in the country and leave U.S. firms completely out in the cold."

The oil wars are abject failures. The Project for a New American Century wanted, in a fantasy of retrograde imperialism, to remove Saddam Hussein from power. President George Bush launched an overt act of military aggression to do so, at a cost of more than 3,000 American lives, hundreds of thousands of Iraqi lives, and half a trillion dollars. In the process he has exacerbated the threats from international terrorism, ravaged the Iraqi culture, ruined their economy and their public services, sent thousands of Iraqis fleeing their country as refugees, created a maelstrom of sectarian violence, dangerously destabilized the Middle East, demolished the global prestige of the United States, and defamed the American people.

Richard W. Behan lives and writes on Lopez Island, off the northwest coast of Washington state. He is working on a new book, To Provide Against Invasions: Corporate Dominion and America's Derelict Democracy. He can be reached at (This essay is deliberately not copyrighted: It may be reproduced without restriction.)
© 2007 Independent Media Institute. All rights reserved.
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For more on this, see the archives here (early posts).

Read This

From the book:

"Even in Mexico, Clinton's behavior seemed odd. Jorge Castaneda, who later became Mexico's foreign minister noted, "Clinton's voters were either indifferent or frankly hostile to NAFTA. Instead of a universal and accessible health care system, Clinton gave them the Mexican market, with the blessings of Henry Kissinger."

Tuesday, August 07, 2007

An interesting take on the Neo-Cons

An interesting description/analysis of the Straussian Neo-Cons (the gang that is in power now in the Executive branch) by someone on the libertarian Right -

"America's Jacobin Ideologues" by Thomas J. DiLorenzo

I've never looked at Lincoln this way, but there's no denying the truth in a lot of points he makes about the Neo-Con Gang.

Very educational.

This one speaks for itself....

....or, I should say, drools for (all over) itself -

Monday, August 06, 2007

Paul Krugman - A Test for Democrats

080307 -

It’s been a good Democrats, bad Democrats kind of week. The bill expanding children’s health insurance that just passed in the House makes you want to stand up and cheer. Reports that Senator Charles Schumer opposes plans to close the hedge fund tax loophole make you want to sit down and cry.

Let’s start with the good news: The House bill, which the Congressional Budget Office says would provide coverage to five million children who would otherwise be uninsured.

The bill is so good that it has Republicans spluttering. “The bill uses children as pawns,” declared Representative Pete Sessions of Texas. Yes, the Democrats are exploiting children — by providing them with health care.

The horror, the horror!

What’s especially encouraging is the way House Democrats were willing to take on the insurance companies. The bill pays for children’s health care in part by cutting subsidies to Medicare Advantage, a privatization scheme that yields big profits for insurers, but that the budget office estimates would cost taxpayers $54 billion in excess payments over the next five years.

Earlier this year I worried that many Democrats would be taken in by the insurance industry’s disinformation campaign in support of its subsidies, which included the pretense that Medicare Advantage offers big benefits to minority groups. In the end, however, House Democrats refused to be rolled.

All in all, the bill is both a fine piece of legislation and a demonstration that Democrats can stand up to special interests. Happy days are here again.

Or maybe not.

The hedge fund tax loophole is a crystal-clear example of unjustified privilege. Because of a quirk in the law, the people who run these funds don’t pay taxes like ordinary mortals.

For example, the salaries that pension fund employees receive for managing other peoples’ money are taxed as ordinary income, at rates up to 35 percent. But if that money is invested with a hedge fund — and 40 percent of the money in hedge funds comes from public, corporate and union pension plans — the fees the hedge fund manager receives for his services are mainly taxed as capital gains, with a maximum rate of 15 percent.

The arguments usually made on behalf of this unique privilege make no sense. We’re told that the tax rate on hedge fund managers has to be kept low to encourage risk-taking. But the managers aren’t risking their own money. The only risk they face is the uncertainty of their fees — and as any waitress who depends on tips or salesman who depends on commissions can tell you, most people with uncertain incomes don’t get any special tax breaks.

We’re also told that management fees would rise, reducing returns to investors, if the privileged status of fund managers is eliminated — as if someone with a $100-million-a-year hedge fund job would walk away if his take-home pay fell from $85 million to $65 million.

And we’re talking about a lot of lost revenue here. The Economic Policy Institute estimates that the hedge fund loophole costs the government $6.3 billion a year — the cost of providing health care to three million children. Of that total, almost $2 billion a year in unjustified tax breaks goes to just 25 individuals.

If being a Democrat means anything, it means opposing this kind of exorbitant privilege. Yet according to a report in The Times earlier this week, Mr. Schumer says that he opposes any increase in hedge fund taxes unless tax breaks for the energy and real estate industries are also eliminated, and pigs start flying. Seriously, his claim that he really would support closing the hedge fund loophole if other, deeply entrenched tax privileges were eliminated at the same time is a fig leaf that hides nothing.

Mr. Schumer, who heads the Democratic Senatorial Campaign Committee, insists that the large financial contributions that hedge funds make to his party aren’t influencing him. Well, I can’t read his mind, but from the outside his position looks remarkably like money-driven politics as usual. And that’s not acceptable.

Look, the worst thing that could happen to Democrats is for voters to conclude that there’s no real difference between the parties, that when you replace Republicans with Democrats, all you do is replace sweet deals for Halliburton with sweet deals for hedge funds. The hedge fund loophole is a test — and it’s one that Mr. Schumer is failing.

Paul Craig Roberts - The New Robber Barons

Return of the Robber Barons

By Paul Craig Roberts

As the Bush Regime outfits B-2 stealth bombers with 30,000 pound monster "bunker buster" bombs for its coming attack on Iran, the US economy continues its 21st century decline. While profits soar for the armaments industry, the American people continue to take it on the chin.

The latest report from the Bureau of Labor Statistics shows that the real wages and salaries of US civilian workers are below those of 5 years ago. It could not be otherwise with US corporations offshoring good jobs in order to reduce labor costs and, thereby, to convert wages once paid to Americans into multi-million dollar bonuses paid to CEOs and other top management.

Good jobs that still remain in the US are increasingly filled with foreign workers brought in on work visas. Corporate public relations departments have successfully spread the lie that there is a shortage of qualified US workers, necessitating the importation into the US of foreigners. The truth is that the US corporations force their American employees to train the lower paid foreigners who take their jobs. Otherwise, the discharged American gets no severance pay. [See, for example, BofA: Train your replacement, or no severance pay for you By David Lazarus, San Francisco Chronicle, 2006 ]

Law firms, such as Cohen & Grigsby, compete in marketing their services to US corporations on how to evade the law and to replace their American employees with lower paid foreigners. As Lawrence Lebowitz, vice president at Cohen & Grigsby, [send him mail] explained in the law firm’s marketing video, "our goal is clearly, not to find a qualified and interested US worker."

Meanwhile, US colleges and universities continue to graduate hundreds of thousands of qualified engineers, IT professionals, and other professionals who will never have the opportunity to work in the professions for which they have been trained. America today is like India of yesteryear, with engineers working as bartenders, taxi cab drivers, waitresses, and employed in menial work in dog kennels as the offshoring of US jobs dismantles the ladders of upward mobility for US citizens.

Over the last year (from June 2006 through June 2007) the US economy created 1.6 million net private sector jobs. As Charles McMillion of MBG Information Services reports each month, essentially all of the new jobs are in low-paid domestic services that do not require a college education.

The category, "Leisure and hospitality," accounts for 30% of the new jobs, of which 387,000 are bartenders and waitresses, 38,000 are workers in motels and hotels, and 50,000 are employed in entertainment and recreation.

The category, "Education and health services," accounts for 35% of the gain in employment, of which 100,000 are in educational services and 456,000 are in health care and social assistance, principally ambulatory health care services and hospitals.

"Professional and technical services" accounts for 268,000 of the new jobs. "Finance and insurance" added 93,000 new jobs, of which about one quarter are in real estate and about one half are in insurance. "Transportation and warehousing" added 65,000 jobs, and wholesale and retail trade added 185,000.

Over the entire year, the US economy created merely 51,000 jobs in architectural and engineering services, less than the 76,000 jobs created in management and technical consulting (essentially laid-off white collar professionals).

Except for a well-connected few graduates, who find their way into Wall Street investment banks, top law firms, and private medical practice, American universities today consist of detention centers to delay for four or five years the entry of American youth into unskilled domestic services.

Meanwhile the rich are getting much richer and luxuriating in the most fantastic conspicuous consumption since the Gilded Age. Robert Frank has dubbed the new American world of the super-rich "Richistan."

In Richistan there is a two-year waiting list for $50 million 200-foot yachts. In Richistan Rolex watches are considered Wal-Mart junk. Richistanians sport $736,000 Franck Muller timepieces, sign their names with $700,000 Mont Blanc jewel-encrusted pens. Their valets, butlers (with $100,000 salaries), and bodyguards carry the $42,000 Louis Vitton handbags of wives and mistresses.

Richistanians join clubs open only to those with $100 million, pay $650,000 for golf club memberships, eat $50 hamburgers and $1,000 omelettes, drink $90 a bottle Bling mineral water and down $10,000 "martinis on a rock" (gin or vodka poured over a diamond) at New York’s Algonquin Hotel.

Who are the Richistanians? They are CEOs who have moved their companies abroad and converted the wages they formerly paid Americans into $100 million compensation packages for themselves. They are investment bankers and hedge fund managers, who created the subprime mortgage derivatives that currently threaten to collapse the economy. One of them was paid $1.7 billion last year. The $575 million that each of 25 other top earners were paid is paltry by comparison, but unimaginable wealth to everyone else.

Some of the super rich, such as Warren Buffet and Bill Gates, have benefitted society along with themselves. Both Buffet and Gates are concerned about the rapidly rising income inequality in the US. They are aware that America is becoming a feudal society in which the super-rich compete in conspicuous consumption, while the serfs struggle merely to survive.

With the real wages and salaries of American civilian workers lower than 5 years ago, with their debts at all time highs, with the prices of their main asset--their homes--under pressure from overbuilding and fraudulent finance, and with scant opportunities to rise for the children they struggled to educate, Americans face a dim future.

Indeed, their plight is worse than the official statistics indicate. During the Clinton administration, the Boskin Commission rigged the inflation measures in order to hold down indexed Social Security payments to retirees.

Another deceit is the measure called "core inflation." This measure of inflation excludes food and energy, two large components of the average family’s budget. Wall Street and corporations and, therefore, the media emphasize core inflation, because it holds down cost of living increases and interest rates. In the second quarter of this year, the Consumer Price Index (CPI), a more complete measure of inflation, increased at an annual rate of 5.2% compared to 2.3% for core inflation.

An examination of how inflation is measured quickly reveals the games played to deceive the American people. Housing prices are not in the index. Instead, the rental rate of housing is used as a proxy for housing prices.

More games are played with the goods and services whose prices comprise the weighted market basket used to estimate inflation. If beef prices rise, for example, the index shifts toward lower priced chicken. Inflation is thus held down by substituting lower priced products for those whose prices are rising faster. As the weights of the goods in the basket change, the inflation measure does not reflect a constant pattern of expenditures. Some economists compare the substitution used to minimize the measured rate of inflation to substituting sweaters for fuel oil.

Other deceptions, not all intentional, abound in official US statistics. Business Week’s June 18 cover story [The Real Cost Of Offshoring, by Michael Mandel] used the recent important work by Susan N. Houseman to explain that much of the hyped gains in US productivity and GDP are "phantom gains" that are not really there.

Other phantom productivity gains are produced by corporations that shift business costs to consumers by, for example, having callers listen to advertisements while they wait for a customer service representative, and by pricing items in the inflation basket according to the low prices of stores that offer customers no service. The longer callers can be made to wait, the fewer the customer representatives the company needs to employ. The loss of service is not considered in the inflation measure. It shows up instead as a gain in productivity.

In American today the greatest rewards go to investment bankers, who collect fees for creating financing packages for debt. These packages include the tottering subprime mortgage derivatives. Recently, a top official of the Bank of France acknowledged that the real values of repackaged debt instruments are unknown to both buyers and sellers. Many of the derivatives have never been priced by the market.

Think of derivatives as a mutual fund of debt, a combination of good mortgages, subprime mortgages, credit card debt, auto loans, and who knows what. Not even institutional buyers know what they are buying or how to evaluate it. Arcane pricing models are used to produce values, and pay incentives bias the assigned values upward.

Richistan wealth may prove artificial and crash, bringing an end to the new Gilded Age. But the plight of the rich in distress will never compare to the decimation of America’s middle class. The offshoring of American jobs has destroyed opportunities for generations of Americans. Never before in our history has the elite had such control over the government. To run for national office requires many millions of dollars, the raising of which puts "our" elected representatives and "our" president himself at the beck and call of the few moneyed interests that financed the campaigns.

America as the land of opportunity has passed into history.


Paul Craig Roberts [email him] was Assistant Secretary of the Treasury in the Reagan Administration. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.

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Sunday, August 05, 2007

From David Bromwich's post at huffpo 080407 -

"Wanted: a Constitutional Democrat"


"In a recent talk with liberal journalists, Nancy Pelosi offered a second kind of prudential reservation: impeachment or censure, of either Cheney or Bush, would "divide the country." That is the same species of wisdom that prevailed with Al Gore when he withheld his support from the late petitions charging voter fraud in Florida in the election of 2000. He was choosing not to divide the country.

The trouble is that Cheney and Bush are happy to divide the country. They mean to play their terrible hand to the end; and they do not take no for an answer. Compromise with them, and you are the one who is compromised. The statement by Dick Cheney in January 2007, about the impact of the election on his plans for the Middle East, showed the curious streak of frankness that marks his political character. "It won't stop us," he said.

Now, in a constitutional democracy, there are two ways of stopping the claims of a leader out of control. One is by an appeal to the voters; the other is by an appeal to the laws. The vice president (and, therefore, the president) having declared his independence of the people, it would seem that the best remaining protection is the laws. If, on the other hand, the opposition are unwilling to resort to the laws--if, from a combination of timidity and tactical reasoning, they refuse to defend their own function as lawmakers--for what purpose do they exist?"

Thursday, August 02, 2007

The master of cinematic minimialist modern/postmodern enigma and spiritual malaise has left us

I found out from a friend that the Great Antonioni passed on the same day as Bergman. Strange, but fitting. Another of the six greatest filmmakers of the 20th century. "Il Deserto Rosso" is my favorite. Here is a clip from the ending of his "L'Eclisse" -

Free Markets are free of rational holism

John Derbyshire on the lunacy of faith-based "free marketers" (gratis

"Ron Paul is one of those “free market” zealots (a scary breed of faith-based politician) who honestly believe unregulated capitalism is the cure for all of society’s ills. We tried that in the late 1800’s and we ended up with the Gilded Age, steel monopolies, children working
in factories, Upton Sinclair’s The Jungle, etc. This “Invisible Hand” bullshit would lead us back to that awful time. Ron Paul’s rhetoric sounds good when you’re trying to get a crowd of people to pump their fists, but in terms of actually solving problems, it’s lunacy."

Amen. Nicely put.

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