May 24, 2006

Iran deploys its war machine

By Iason Athanasiadis

TEHRAN - For Hossein Shariatzadeh, a veteran of the eight-year Iran-Iraq War in the 1980s, now navigating Tehran's traffic-choked streets as a taxi driver, the issue of whether the United States will strike Iraq is hardly a frightening prospect.

"This is Iran," he roared. "It is fire. It is a nuclear bomb. Don't look at my sitting behind the wheel of this car. I would get up in a second and head off to the front to fight."

During his 18 months of service at the front, Shariatzadeh claims to have fought in several flashpoint events. Before being evacuated to Tehran after taking a bullet in the stomach, he participated in the 18th Mah, Fath-ul Mubin and Fajrs 1, 2 and 4 offensives, some of the most horrific campaigns of a drawn-out war characterized by trench warfare and tens of thousands of dead in return for minuscule advances.

Despite Shariatzadeh's lust to head to the front and defend his homeland, Iran's strategic planners are acutely aware that a military confrontation with the technologically more advanced US Army would be as rapid and multi-fronted as the Iran-Iraq War was static and slow-paced. Quite simply, there would not be a single front.

Neither the US nor Israel has ruled out taking military action against nuclear-related targets in Iran if ongoing diplomatic efforts to freeze Tehran's nuclear program do not prove successful.

Accordingly, Iran has been quietly restructuring its military, while carrying out a series of military exercises testing its new military dogma. In December, more than 15,000 members of the regular armed forces participated in war games in northwestern Iran's strategically sensitive East Azerbaijan and West Azerbaijan border provinces that focused on irregular warfare carried out by highly mobile and speedy army units.

In another telling development, a second exercise was launched in the majority-Arab province of Khuzestan, reportedly aimed at quelling insurgencies in areas subject to ethnic unrest and prone to foreign influence. Involving 100,000 troops, the exercise provided a taste of how the Islamic Republic would respond to further disturbances in the strategic, oil-rich province.

The exercise came on the heels of news that the irregular Basij forces that led Iran's offensives against Iraq were being bolstered by so-called Ashura battalions with riot-control training.

It is all part of a fundamental transition that Iran's Revolutionary Guard (RG) is undergoing as it moves away from focusing on waging its defense of the country on the borders - unrealistic in view of the vast territory that requires securing and the gulf separating Iranian and US military capabilities - and toward drawing the enemy into the heartland and defeating it with asymmetrical tactics.

At the same time, the RG is moving away from a joint command with the ordinary army and taking a more prominent role in controlling Iran's often porous borders, even as it makes each of Iran's border provinces autonomous in the event of war. Iranian military planners know that the first step taken by an invading force would be to occupy oil-rich Khuzestan province, secure the sensitive Strait of Hormuz and cut off the Iranian military's oil supply, forcing it to depend on its limited stocks.

Foreign diplomats who monitor Iran's army make it clear that Iran's leadership has acknowledged it stands little chance of defeating the US Army with conventional military doctrine. The shift in focus to guerrilla warfare against an occupying army in the aftermath of a successful invasion mirrors developments in Iraq, where a triumphant US campaign has been followed by three years of slow hemorrhaging at the hands of insurgents.

Tehran argues that it is at a high level of preparedness and points to a number of war games carried out in recent months along its coastal zones, from Bandar Abbas and the Strait of Hormuz in January to the Persian Gulf theater in April and the Khorramshahr naval base and the northwestern parts of the Persian Gulf as of Sunday.

From several interviews with Iranian officials, researchers and foreign diplomats, it is clear that the Iranian army considers itself ready to repel a US land offensive and increasingly sees itself as the main regional power.

In line with the new feeling of invulnerability sweeping through Iran's military elite, RG commander-in-chief Yehya Rahim Safavi warned last month that "the Americans should accept Iran as a great regional power, and they should know that sanctions and military threats are not going to benefit them but are going to be against their interests and against the interests of some European countries".

Iran's new asymmetrical-warfare plan appears to be aimed at neutralizing possible US-led offensives across the Mandali-Ilam (central Iraq-central Iran) axis. The Iranian Zagros mountain range offers a natural first line of defense. It has been reported that the RG is constructing new bases at Khorramabad, Pessyan, Borujerd, Zagheh and Malayer in the province of Lorestan, which would assure the logistics of a quarter of a million troops and provide temporary shelter for half a million refugees from the border. These bases are supposedly complementing older ones further west at Sahneh and Kangavar.

"We know for a fact that no two Western wars are similar," said Hossein, a member of the RG, "and we know there are at least three possible scenarios of attacking these [nuclear] sites, including using their submarines in the Persian Gulf, commandos from the sea, or Mujahideen-e-Khalq trained in Israel and Azerbaijan to destroy the Bushehr nuclear power plant from the inside."

Even while Iran's military is choosing to go low-tech, the country's leadership is continuing to apply advanced technology to military uses. Tehran is continuing with development of its long-range missiles and is forging ahead on its indigenous satellite program that centers on Russian-supplied technology.

In addition, Tehran's aging air-defense system will be boosted by Russian-supplied land-to-air rockets. Also, Iran has aging Chinese missiles that it upgraded and could deploy on coastal batteries, fast attack boats or even warplanes. Finally, were Iran to possess the fearsome Russian-made 3M-82 Moskit anti-ship missiles, it could turn the Persian Gulf into a death trap for the US fleet.

"While Iranian air power is somewhat limited, it has much in terms of land-to-air weaponry and has improvised much as well," Abdurrahman Shayyal, a Saudi Middle East and North Africa analyst, told Asia Times Online. "Furthermore, Iran has proved rather hard to infiltrate, and its military installations and bases are very well protected."

With the confrontation between Washington and Tehran escalating, a new, US-inspired plan to establish an anti-Iranian security regime has further raised tension in the Persian Gulf region. Aside from running covert operations inside Iran's ethnically mixed border provinces, the US administration is marshaling an alliance of Iran's Arab neighbors in the intensifying face-off.

The US media reported last weekend that the United States was trying to create a regional missile-defense system for the Gulf that would be integrated with real-time intelligence using sophisticated US Navy Aegis cruisers.

"Any security regime for the Persian Gulf that doesn't include Iran will not succeed," said Muhammad Reza Saedabadi, an assistant professor at the Institute of North American and European Studies at the University of Tehran. "It's splitting the region. It's good for the arms race and for arms sales to Persian Gulf states, but not for regional security."

Meanwhile, US Secretary of State Condoleezza Rice continued ratcheting up the tension by refusing to offer Iran a guarantee that the United States would not attack it. "Iran is a troublemaker in the international system, a central banker of terrorism. Security assurances are not on the table," she said.

While seen as potentially threatening by several Gulf Arab governments, Iran commands significant popularity among indigenous Shi'ite Arab populations in Bahrain, Kuwait and Saudi Arabia. To a lesser extend, Sunni Arabs in the Gulf region and the wider Middle East applaud Iranian President Mahmud Ahmadinejad for his strident anti-Western rhetoric, which emphasizes his country's independence and echoes the anti-imperialist liberation ideology of 1960s pan-Arabism.

Reflecting this mood, the English-language Gulf News published an editorial on Tuesday titled "An American offer we must refuse". It said, "As if the region was not volatile enough, the US now wants to install an advanced missile system in GCC [Gulf Cooperation Council ] states.

"Gulf countries have enough problems trying to walk a narrow path between the various positions ... so there is no need to exacerbate things further by introducing into the region such controversial measures as heightened security controls and advanced missile systems," the newspaper said.

At a "consultative summit" in Riyadh on May 6, the GCC countries indicated that they did not want Iran to have a nuclear weapon, but were also opposed to the use of force against it. Their position with regard to Iran, so far, bears greater similarity with the stance taken by Russia and China than the one adopted by the US and its European allies.

The GCC is a regional organization comprising the six Persian Gulf Arab states. Created on May 25, 1981, the council's members are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

"The US is being completely ridiculous. While it wishes to police the region, it is dealing with a country that is significantly more powerful than Iraq, Afghanistan, Sudan, Vietnam, and every other country bar Germany that it has ever fought," said Abdurrahman Shayyal.

Iason Athanasiadis is an Iran-based correspondent.

May 21, 2006

Why the United States invaded Iraq, and now is thinking about invading Iran

19.05.2006Source: URL:

On April 28th, IAEA released its report on Iran. IAEA reported that: “the Agency cannot make a judgment about, or reach a conclusion on, future compliance or intentions.” The report came as no surprise to those who have been following the ongoing dispute between Iran, United States and the IAEA.

The United States, for quite some time now, has been accusing Iran of trying to develop Nuclear weapons and Iran has been insisting that its intentions are peaceful and that it is only interested in peaceful use of the Nuclear energy. Iran, to allay the international community’s fear, froze its enrichment program and started a series of negotiations with U.K., Germany, and France. However, without the United States these negotiations were not going to produce any results, since it was only the United States that could address the Iranian’s national security concerns. Iranian seeing themselves surrounded by American forces wanted a security guarantee that United States would not invade Iran, something that United States was not prepared to give. So the negotiations with the European three failed and Iran resumed its enrichment program. Iran was threatened with Security Council and even invasion without any effect. Now once again there is talk of Security Council resolution under article 7 and continuous threats of invasion. There have even been talks of tactical nuclear strike on suspected Iranian nuclear facilities.

All these events are reminiscent of the negotiations and threats preceding the invasion of Iraq. The unfolding events are so similar that makes one wonder if the Iraq scenario is not being used as a template for Iran. And with what has come to light since the Iraq invasion, we have to assume that like Iraq, the decision to invade Iran has already been taken, and that the E.U. Three negotiations and IAEA are being used to prepare the public for that event. There are already reports of increased U.S. provocations along Iranian borders such as flying unmanned surveillance flight over Iran, and insertion of commandos into Iran for intelligence gathering and other activities. The talk of invasion is also accompanied with war games. For example on April 14th, ‘USA Today’ reported that “Amid rising tensions between the United States and Iran over the future of Iran's nuclear program, the Pentagon is planning a war game in July so officials can explore options for a crisis involving Iran.”

But this war game is not the first of its kind. According to William M. Arkin of Washington Post, “In early 2003, even as U.S. forces were on the brink of war with Iraq, the Army had already begun conducting an analysis for a full-scale war with Iran. The analysis, called TIRANNT, for "theatre Iran near term," was coupled with a mock scenario for a Marine Corps invasion and a simulation of the Iranian missile force. U.S. and British planners conducted a Caspian Sea war game around the same time. And Bush directed the U.S. Strategic Command to draw up a global strike war plan for an attack against Iranian weapons of mass destruction. All of this will ultimately feed into a new war plan for "major combat operations" against Iran that military sources confirm now exists in draft form.”

But why did United States attack Iraq and why is she so keen on attacking Iran now? We now know that from the beginning, this administration was looking for any excuse to invade Iraq. Washington has, over time, given a number of different reasons for invading Iraq: starting with Iraq’s developing Nuclear weapons, to war on terror, to spreading democracy in the Middle East. All these reasons have proven to be false. Iraq did not possess any Weapons of Mass Destruction (WMD); and did not have any link to Al Qaeda. And instead of democracy, Iraqis have had to endure Abu Gharib, car bombs, shortage of basic services such as electricity, clean water, and health care. None of the ministries are functioning properly and in addition Iraq has to deal with half a million displaced people. There is also talk of partitioning of Iraq. On top of all this, the Iraqis now face a possible bloody civil war.

After spending over 320 Billion dollars for Iraq war (officially so far) and with no end in sight, why is this administration insisting in starting another catastrophic war in the Middle East?

There have been a number of theories put forward by various groups and individuals. These theories include: crusade against Islam, control of oil reserve, checking the resurgence of Russia and rise of China, and furthering the interests of Israel.

The answer probably contains some of all of the above. However two theories stand out as more plausible.

Fight for oil reserves

The profits of five oil companies combined (American: ExxonMobil, Chevron, and Conoco, British: Shell and British Petroleum) in 2005 was 111 billion dollars. And these profits are about to go through the roof. The reason? Production can not keep-up with demand, and even if it could, there isn’t enough oil to satisfy all, at present prices. Oil companies’ valuations are based on those companies’ access to oil reserves. Iraq and Iran combined have over 20% of the world’s total proven oil reserves. Imagine what having access to those reserves will do for the valuation of American oil companies, not to mention their profits.

There is also the matter of consumption. United States consumes fully 25 percent of the world oil supplies. China and India are growing rapidly and their economies consume more and more oil. China currently consumes 8.2 percent of the world’s oil production. Soon it will increase to 10 or even 14 percent. Where is that oil going to come from? Is United States willing to reduce its share for China? It is highly improbable.

Recently, President Bush held a television conference where he assured the public that Americans’ dependence on Oil soon would be over. He spoke of great new technologies and fuel sources that were just around the corner. What he forgot to mention was that there are 600 million cars in the world today that run on petrol, and it is estimated that if the present trend continues, by 2030, the number of cars in the world will reach 1.2 billion.

Just to change the engines of the existing 600 million cars will take years, not to mention all the petrol stations and the support facilities that have to be modified for this to work. There is also more in a barrel of oil than petrol for our cars. We need such oil derivatives as jet fuel, Kerosene, lubricants, feedstock, asphalt, etc., for our industries to function.

Currently over 60% of the world’s oil reserves are in Middle East. Four countries in the region, Saudi Arabia, Iran, Iraq and Kuwait, have over half of the world’s proven oil reserves.

If we keep the world’s oil consumption at its current level then the Middle East can theoretically supply the world with oil, at its current production rate, for another 80 years.

But the fact is that in 15 years the North American and Asia Pacific oil reserves will be depleted. This will represent a marked reduction in oil supplies world wide. In other words within 15 years if we do not increase oil production drastically in the Middle East and elsewhere, world will face tremendous oil shortages. Increasing oil production is not that easy either. Each Oil field has an optimum production rate. If one tries to go beyond that rate and tries to sustain high production rate, one damages the oil field and thereby substantially reducing the amount of recoverable oil. This problem is well documented by the oil industry.

But what about the new oil discoveries? Well there have been very little new discoveries; the future doesn’t seem that bright either. According to Energy Information Administration’s (EIA) analysis of the long term world oil supply we can expect to discover only 10% more oil in the future. Even this 10% is disputed. The Association for the Study of Peak Oil and Gas (ASPO) which closely follows the development in the oil industry, Foundation of Economic Sustainability (FEASTA), and others see an alarming trend in the future oil discovery and production.

If one looks at the amount of oil discovered in the years from 1930 to the present one sees a clear downward trend in new discoveries; this in spite of using more money and better technologies.

In March 2005, HIS energy (an international oil consultancy firm) did a comprehensive analysis of the world oil supply and demand and reached the following conclusion: that even if one includes Natural Gas production and all other liquid fuels in our total available supplies, there will be a shortage anytime from 2011 to 2020.


There is no doubt that Israel has a powerful lobby in the United States. There are currently over 50 Jewish organisations that directly or indirectly lobby for Israel. The Israeli influence is well known, but few are willing to openly talk about it, especially in the United States and Europe. The Israeli dimension is particularly difficult to mention, for if one dares to state the obvious, one is branded as anti-Semite or a terrorist sympathiser. The Jewish lobby also can make life very unpleasant for those who dare to mention the extent of its influence in U.S. and other countries. There are still a few brave soles such as John Mearsheimer (Professor of Political Science and the co-director of the Program on International Security Policy at the University of Chicago) and Stephen Walt (Belfer Professor of International Relations and Academic Dean of Harvard University) in the U.S. that are willing to speak-out. In March 2006, they wrote an article titled “the Israel Lobby” in which they question the United States policies in the Middle East. Here is a section of their article:

“Israel receives about $3 billion in direct assistance each year, roughly one-fifth of the foreign aid budget, and worth about $500 a year for every Israeli. This largesse is especially striking since Israel is now a wealthy industrial state with a per capita income roughly equal to that of South Korea or Spain.

Other recipients get their money in quarterly instalments, but Israel receives its entire appropriation at the beginning of each fiscal year and can thus earn interest on it. Most recipients of aid given for military purposes are required to spend all of it in the US, but Israel is allowed to use roughly 25 per cent of its allocation to subsidise its own defence industry. It is the only recipient that does not have to account for how the aid is spent, which makes it virtually impossible to prevent the money from being used for purposes the US opposes, such as building settlements on the West Bank. Moreover, the US has provided Israel with nearly $3 billion to develop weapons systems, and given it access to such top-drawer weaponry as Blackhawk helicopters and F-16 jets. Finally, the US gives Israel access to intelligence it denies to its Nato allies and has turned a blind eye to Israel’s acquisition of nuclear weapons.”

The Israel Connection

John Mearsheimer and Stephen Walt are not anti-Semites nor are they uninformed individuals. What they are saying is that United States’ Middle Eastern policy is in the interest of Israel and counterproductive for the United States.

We now know that as soon as the Bush administration came to power, it started looking for an excuse to invade Iraq. It used every possible propaganda tool under the sun to get the UN to sanction the invasion of Iraq, and when it didn’t succeed, it went ahead and invaded Iraq anyway. The people in U.S. pushing for an invasion, the so called Neo-Cons were at the forefront of disseminating misinformation in anyway they could. But to understand part of their agenda we have to go back to 1996.

In 1996 the newly elected prime minister of Israel Benjamin Netanyahu commissioned a study group called ”Study Group on a New Israeli Strategy Toward 2000" to craft a strategy for Israel in the coming decades. The Institute for Advanced Strategic and Political Studies’ which included Richard Perle, James Colbert, Charles Fairbanks, Douglas Feith, Robert Loewenberg, David Wurmser, and Meyrav Wurmser, created the Israel’s strategy paper titled: “A Clean Break: A New Strategy for Securing the Realm”.

The paper contains six pages of recommendations for Benjamin Netanyahu and some of the more relevant suggestions are presented bellow:

We have for four years pursued peace based on a New Middle East. We in Israel cannot play innocents abroad in a world that is not innocent. Peace depends on the character and behaviour of our foes. We live in a dangerous neighbourhood, with fragile states and bitter rivalries. Displaying moral ambivalence between the effort to build a Jewish state and the desire to annihilate it by trading "land for peace" will not secure "peace now." Our claim to the land - to which we have clung for hope for 2000 years--is legitimate and noble. It is not within our own power, no matter how much we concede, to make peace unilaterally. Only the unconditional acceptance by Arabs of our rights, especially in their territorial dimension, "peace for peace," is a solid basis for the future.

Syria challenges Israel on Lebanese soil. An effective approach, and one with which American can sympathize, would be if Israel seized the strategic initiative along its northern borders by engaging Hezbollah, Syria, and Iran, as the principal agents of aggression in Lebanon, including by:

- striking Syria’s drug-money and counterfeiting infrastructure in Lebanon, all of which focuses on Razi Qanan.

- paralleling Syria’s behaviour by establishing the precedent that Syrian territory is not immune to attacks emanating from Lebanon by Israeli proxy forces.

- striking Syrian military targets in Lebanon, and should that prove insufficient, striking at select targets in Syria proper.

Work closely with Turkey and Jordan to contain, destabilize, and roll-back some of its most dangerous threats. This implies clean break from the slogan, "comprehensive peace" to a traditional concept of strategy based on balance of power.

Change the nature of its relations with the Palestinians, including upholding the right of hot pursuit for self defence into all Palestinian areas and nurturing alternatives to Arafat’s exclusive grip on Palestinian society.

Given the nature of the regime in Damascus, it is both natural and moral that Israel abandon the slogan "comprehensive peace" and move to contain Syria, drawing attention to its weapons of mass destruction program, and rejecting "land for peace" deals on the Golan Heights.

Israel can shape its strategic environment, in cooperation with Turkey and Jordan, by weakening, containing, and even rolling back Syria. This effort can focus on removing Saddam Hussein from power in Iraq — an important Israeli strategic objective in its own right — as a means of foiling Syria’s regional ambitions. Jordan has challenged Syria's regional ambitions recently by suggesting the restoration of the Hashemites in Iraq. This has triggered a Jordanian-Syrian rivalry to which Asad has responded by stepping up efforts to destabilize the Hashemite Kingdom, including using infiltrations. Syria recently signalled that it and Iran might prefer a weak, but barely surviving Saddam, if only to undermine and humiliate Jordan in its efforts to remove Saddam.

It is interesting to note that many of the co-authors of this strategy paper are Jewish Americans and not Israelis. Below you will find a very short description of a few co-authors.

Richard Perle has served in important government posts under various administrations. He was Secretary of Defence under Reagan administration and Chairman of the Defence policy Advisory Committee (2001-2003) under Bush Administration. He is also the signatory of Project for the New American Century, a think-tank institute and one of the main organisations pushing for invasion of Iran. Perle is currently a resident fellow at the conservative think-tank American Enterprise Institute for Public Policy Research. He sits also on the board of advisors of Jewish Institute for National Security Affairs (JINSA).

Douglas Faith served at Defense Department as Undersecretary of Defense for Policy, under Donald Rumsfeld and Paul Wolfowitz. Feith had previously served in the Reagan administration, starting off as Middle East specialist at the National Security Council (1981-82) and then transferring to the Defense Department where he spent two years as staff lawyer for Assistant Defense Secretary Richard Perle. He is the director of Foundation for Jewish Studies, and former advisor to Jewish Institute for National Security Affairs (JINSA).

David Wurmser, Dick Cheney's Middle East adviser, was the Special Adviser to Under Secretary of State for Arms Control and International Security (2001-2003). He is also member of Board of Directors of U.S. Committee for a Free Lebanon.

One can produce a very long list of influential people in United States (e.g., Paul Wolfowitz -current World Bank President and Undersecretary of Defence for Policy from1989-93) that work very hard to safeguard Israel’s interests.

To be continued

Dr. Abbas Bakhtiar

Abbas Bakhtiar lives in Norway and is currently writing a book about the reasons behind the United  States involvement in Iraq and Iran. He's a former associate professor of Nordland University, Norway. He can be contacted at:

May 15, 2006

Iranian nukes not the real issue

By Gareth Porter

WASHINGTON - In pushing for a showdown over Iran's nuclear program in the United Nations Security Council, the administration of US President George W Bush has presented the issue as a matter of global security - an Iranian nuclear threat in defiance of the international community.

But the history of the conflict and the private strategic thinking of both sides reveal that the dispute is really about the Bush administration's drive for greater dominance in the Middle East and Iran's demand for recognition as a regional power.

It is now known that the Iranian leadership, which was convinced that Bush was planning to move against Iran after toppling Saddam Hussein in Iraq, proposed in April 2003 to negotiate with the United States on the very issues that the US administration had claimed were the basis for its hostile posture toward Tehran: its nuclear program, its support for Hezbollah and other anti-Israeli armed groups, and its hostility to Israel's existence.

Tehran offered concrete, substantive concessions on those issues. But on the advice of Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld, Bush refused to respond to the proposal for negotiation. Nuclear weapons were not, therefore, the primary US concern. In the hierarchy of the US administration's interests, the denial of legitimacy to the Islamic Republic trumped a deal that could have provided assurances against an Iranian nuclear weapon.

For insight into the real aims of the Bush administration in pushing the issue of Iranian access to nuclear technology to a crisis point, one can turn to Tom Donnelly of the American Enterprise Institute, a neo-conservative think-tank. Donnelly was the deputy executive director of the Project for the New American Century from 1999 to 2002, and was the main author of "Rebuilding America's Defenses".

That paper was written for Cheney and Rumsfeld during the transition following Bush's election and had the participation of four prominent figures who later took positions in the administration: Stephen Cambone, Lewis Libby, Paul Wolfowitz and John Bolton.

Donnelly's analysis of the issue of Iran and nuclear weapons, published last October in the book Getting Ready for a Nuclear-Ready Iran, makes it clear that the real objection to Iran's becoming a nuclear power is that it would impede the larger US ambitions in the Middle East - what Donnelly calls the Bush administration's "project of transforming the Middle East".

Contrary to the official line depicting Iran as a radical state threatening to plunge the region into war, Donnelly refers to Iran as "more the status quo power" in the region in relation to the United States. Iran, he explains, "stands directly athwart this project of regional transformation". Up to now, he observes, the Iranian regime has been "incapable of stemming the seeping US presence in the Persian Gulf and in the broader region". And the invasion of Iraq "completed the near-encirclement of Iran by US military forces".

Donnelly writes that a "nuclear Iran" is a problem not so much because Tehran would employ those weapons or pass them on to terrorist groups, but mainly because of "the constraining effect it threatens to impose upon US strategy for the greater Middle East".

The "greatest danger", according to Donnelly, is that the "realists" would "pursue a 'balance of power' approach with a nuclear Iran, undercutting the Bush 'liberation strategy'". Although Donnelly doesn't say so explicitly, it would undercut that strategy primarily by ruling out a US attack on Iran as part of a "regime change" strategy.

Instead, in Donnelly's scenario, a nuclear capability would incline those outside the neo-conservative priesthood to negotiate a "detente" with Iran, which would bring the plan for the extension of US political-military dominance in the Middle East to a halt.

What is really at stake in the confrontation with Iran from the Bush administration's perspective, according to this authority on neo-conservative strategy, is the opportunity to reorder the power hierarchy in the Middle East even further in favor of the United States by overthrowing the Islamic Republic of Iran.

Iran's position
Meanwhile, Iran has not acknowledged its real interest in pushing its position on nuclear-fuel enrichment to the point of confrontation with the United States, either. Instead, it has focused in public pronouncements on the enormously popular position that Iran will not give up its right to have civilian nuclear power.

According to observers familiar with their thinking, senior Iranian national-security officials have long been saying privately that Iran should try to reach an agreement with the United States that would normalize relations and acknowledge officially Iran's legitimate role in the security of the Persian Gulf.

Trita Parsi, a specialist on Iran's foreign policy at the Johns Hopkins School of Advanced International Studies, who conducted extensive interviews with senior Iranian national-security officials in 2004, said Iran "is now primarily trying to become rehabilitated in the political order of the region".

Najmeh Bozorgmehr, an Iranian journalist now at the Brookings Institution as a visiting scholar, agrees. Based on several years of covering Iran's national-security policy, she said, "Iran wants to bargain with the United States on Iran's regional role," as well as on removal of sanctions and assurances against US attack. Tehran has been looking for any source of leverage with which to bargain with the United States on those issues, she said, and "enrichment has become a big bargaining chip".

Bozorgmehr said the Iranians have become convinced that they have to do something to show the United States "we can give you a hard time" to induce the Bush administration to negotiate. And Parsi said the prevailing view among Iranian officials after the 2003 US rejection of diplomacy was that they had to have the capability to inflict some pain on the United States to get its attention.

According to Parsi, that rejection confirmed Iranian suspicions that the US problem is not with Iran's policies but with its power. That Iranian conclusion precisely parallels Donnelly's insider analysis of the Bush administration's aims.

But what the Iranians really want, according to these observers of Iranian national-security thinking, is not nuclear weapons but the recognition of Iran's status in the power hierarchy of the Persian Gulf region. The Iranian demand for regional status can only be achieved through a broad diplomatic agreement with the United States.

The Bush administration's insistence on extending its dominance in the Middle East even further can only be achieved, however, by the threat of force and, if that fails, war against Iran.

Gareth Porter is a historian and national-security policy analyst. His latest book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam, was published last June.

May 10, 2006

Text of Ahmadinejad's letter to Bush

Mr George Bush, President of the United States of America For sometime now I have been thinking, how one can justify the undeniable contradictions that exist in the international arena - which are being constantly debated, especially in political forums and amongst university students. Many questions remain unanswered. These have prompted me to discuss some of the contradictions and questions, in the hopes that it might bring about an opportunity to redress them. Can one be a follower of Jesus Christ (PBUH), the great Messenger of God, Feel obliged to respect human rights, Present liberalism as a civilisation model, Announce one's opposition to the proliferation of nuclear weapons and WMDs, Make "War and Terror" his slogan, And finally, Work towards the establishment of a unified international community - a community which Christ and the virtuous of the Earth will one day govern, But at the same time, Have countries attacked. The lives, reputations and possessions of people destroyed and on the slight chance of the presence of a few criminals in a village, city or convoy for example, the entire village, city or convoy set ablaze. Or because of the possibility of the existence of WMDs in one country, it is occupied, around one hundred thousand people killed, its water sources, agriculture and industry destroyed, close to 180,000 foreign troops put on the ground, sanctity of private homes of citizens broken, and the country pushed back perhaps fifty years. At what price? Hundreds of billions of dollars spent from the treasury of one country and certain other countries and tens of thousands of young men and women - as occupation troops - put in harms way, taken away from family and loved ones, their hands stained with the blood of others, subjected to so much psychological pressure that everyday some commit suicide and those returning home suffer depression, become sickly and grapple with all sorts of aliments; while some are killed and their bodies handed to their families. On the pretext of the existence of WMDs, this great tragedy came to engulf both the peoples of the occupied and the occupying country. Later it was revealed that no WMDs existed to begin with. Of course Saddam was a murderous dictator. But the war was not waged to topple him, the announced goal of the war was to find and destroy weapons of mass destruction. He was toppled along the way towards another goal; nevertheless the people of the region are happy about it. I point out that throughout the many years of the imposed war on Iran Saddam was supported by the West. Mr President, You might know that I am a teacher. My students ask me how can theses actions be reconciled with the values outlined at the beginning of this letter and duty to the tradition of Jesus Christ (PBUH), the Messenger of peace and forgiveness? There are prisoners in Guantanamo Bay that have not been tried, have no legal representation, their families cannot see them and are obviously kept in a strange land outside their own country. There is no international monitoring of their conditions and fate. No one knows whether they are prisoners, POWs, accused or criminals. European investigators have confirmed the existence of secret prisons in Europe too. I could not correlate the abduction of a person, and him or her being kept in secret prisons, with the provisions of any judicial system. For that matter, I fail to understand how such actions correspond to the values outlined in the beginning of this letter, i.e. the teachings of Jesus Christ (PBUH), human rights and liberal values. Young people, university students, and ordinary people have many questions about the phenomenon of Israel. I am sure you are familiar with some of them. Throughout history many countries have been occupied, but I think the establishment of a new country with a new people, is a new phenomenon that is exclusive to our times. Students are saying that sixty years ago such a country did not exist. They show old documents and globes and say try as we have, we have not been able to find a country named Israel. I tell them to study the history of WWI and II. One of my students told me that during WWII, which more than tens of millions of people perished in, news about the war, was quickly disseminated by the warring parties. Each touted their victories and the most recent battlefront defeat of the other party. After the war they claimed that six million Jews had been killed. Six million people that were surely related to at least two million families. Again let us assume that these events are true. Does that logically translate into the establishment of the state of Israel in the Middle East or support for such a state? How can this phenomenon be rationalized or explained? Mr President, I am sure you know how - and at what cost - Israel was established: * Many thousands were killed in the process. * Millions of indigenous people were made refugees. * Hundreds of thousands of hectares of farmland, olive plantations, towns and villages were destroyed. This tragedy is not exclusive to the time of establishment; unfortunately it has been ongoing for sixty years now. A regime has been established which does not show mercy even to kids, destroys houses while the occupants are still in them, announces beforehand its list and plans to assassinate Palestinian figures, and keeps thousands of Palestinians in prison. Such a phenomenon is unique - or at the very least extremely rare - in recent memory. Another big question asked by the people is "why is this regime being supported?" Is support for this regime in line with the teachings of Jesus Christ (PBUH) or Moses (PBUH) or liberal values? Or are we to understand that allowing the original inhabitants of these lands - inside and outside Palestine - whether they are Christian, Muslim or Jew, to determine their fate, runs contrary to principles of democracy, human rights and the teachings of prophets? If not, why is there so much opposition to a referendum? The newly elected Palestinian administration recently took office. All independent (observers) have confirmed that this government represents the electorate. Unbelievingly, they have put the elected government under pressure and have advised it to recognise the Israeli regime, abandon the struggle and follow the programs of the previous government. If the current Palestinian government had run on the above platform, would the Palestinian people have voted for it? Again, can such position taken in opposition to the Palestinian government be reconciled with the values outlined earlier? The people are also saying "why are all UNSC (UN Security Council) resolutions in condemnation of Israel vetoed?" Mr President, As you are well aware, I live amongst the people and am in constant contact with them - many people from around the Middle East manage to contact me as well. They do not have faith in these dubious policies either. There is evidence that the people of the region are becoming increasingly angry with such policies. It is not my intention to pose too many questions, but I need to refer to other points as well. Why is it that any technological and scientific achievement reached in the Middle East region is translated into and portrayed as a threat to the Zionist regime? Is not scientific R and D one of the basic rights of nations? You are familiar with history. Aside from the Middle Ages, in what other point in history has scientific and technical progress been a crime? Can the possibility of scientific achievements being utilized for military purposes be reason enough to oppose science and technology altogether? If such a supposition is true, then all scientific disciplines, including physics, chemistry, mathematics, medicine, engineering, etc. must be opposed. Lies were told in the Iraqi matter. What was the result? I have no doubt that telling lies is reprehensible in any culture, and you do not like to be lied to. Mr President, Don't Latin Americans have the right to ask why their elected governments are being opposed and coup leaders supported? Or, Why must they constantly be threatened and live in fear? The people of Africa are hardworking, creative and talented. They can play an important and valuable role in providing for the needs of humanity and contribute to its material and spiritual progress. Poverty and hardship in large parts of Africa are preventing this from happening. Don't they have the right to ask why their enormous wealth - including minerals - is being looted, despite the fact that they need it more than others? Again, do such actions correspond to the teachings of Christ and the tenets of human rights? The brave and faithful people of Iran too have many questions and grievances, including: the coup d'etat of 1953 and the subsequent toppling of the legal government of the day, opposition to the Islamic revolution, transformation of an Embassy into a headquarters supporting, the activities of those opposing the Islamic Republic (many thousands of pages of documents corroborate this claim), support for Saddam in the war waged against Iran, the shooting down of the Iranian passenger plane, freezing the assets of the Iranian nation, increasing threats, anger and displeasure vis-a-vis the scientific and nuclear progress of the Iranian nation (just when all Iranians are jubilant and celebrating their country's progress), and many other grievances that I will not refer to in this letter. Mr President, September Eleven was a horrendous incident. The killing of innocents is deplorable and appalling in any part of the world. Our government immediately declared its disgust with the perpetrators and offered its condolences to the bereaved and expressed its sympathies. All governments have a duty to protect the lives, property and good standing of their citizens. Reportedly your government employs extensive security, protection and intelligence systems - and even hunts its opponents abroad. September Eleven was not a simple operation. Could it be planned and executed without coordination with intelligence and security services - or their extensive infiltration? Of course this is just an educated guess. Why have the various aspects of the attacks been kept secret? Why are we not told who botched their responsibilities? And, why aren't those responsible and the guilty parties identified and put on trial? All governments have a duty to provide security and peace of mind for their citizens. For some years now, the people of your country and neighbours of world trouble spots do not have peace of mind. After 9/11, instead of healing and tending to the emotional wounds of the survivors and the American people - who had been immensely traumatised by the attacks - some Western media only intensified the climates of fear and insecurity - some constantly talked about the possibility of new terror attacks and kept the people in fear. Is that service to the American people? Is it possible to calculate the damages incurred from fear and panic? American citizens lived in constant fear of fresh attacks that could come at any moment and in any place. They felt insecure in the streets, in their place of work and at home. Who would be happy with this situation? Why was the media, instead of conveying a feeling of security and providing peace of mind, giving rise to a feeling of insecurity? Some believe that the hype paved the way - and was the justification - for an attack on Afghanistan. Again I need to refer to the role of media. In media charters, correct dissemination of information and honest reporting of a story are established tenets. I express my deep regret about the disregard shown by certain Western media for these principles. The main pretext for an attack on Iraq was the existence of WMDs. This was repeated incessantly - for the public to finally believe - and the ground set for an attack on Iraq. Will the truth not be lost in a contrived and deceptive climate? Again, if the truth is allowed to be lost, how can that be reconciled with the earlier mentioned values? Is the truth known to the Almighty lost as well? Mr President, In countries around the world, citizens provide for the expenses of governments so that their governments in turn are able to serve them. The question here is "what has the hundreds of billions of dollars, spent every year to pay for the Iraqi campaign, produced for the citizens?" As your Excellency is aware, in some states of your country, people are living in poverty. Many thousands are homeless and unemployment is a huge problem. Of course these problems exist - to a larger or lesser extent - in other countries as well. With these conditions in mind, can the gargantuan expenses of the campaign - paid from the public treasury - be explained and be consistent with the aforementioned principles? What has been said are some of the grievances of the people around the world, in our region and in your country. But my main contention - which I am hoping you will agree to some of it - is: Those in power have a specific time in office and do not rule indefinitely, but their names will be recorded in history and will be constantly judged in the immediate and distant futures. The people will scrutinise our presidencies. Did we (manage) to bring peace, security and prosperity for the people or insecurity and unemployment? Did we intend to establish justice or just supported (special) interest groups, and by forcing many people to live in poverty and hardship, made a few people rich and powerful - thus trading the approval of the people and the Almighty with theirs? Did we defend the rights of the underprivileged or ignore them? Did we defend the rights of all people around the world or imposed wars on them, interfered illegally in their affairs, established hellish prisons and incarcerated some of them? Did we bring the world peace and security or raised the spectre of intimidation and threats? Did we tell the truth to our nation and others around the world or presented an inverted version of it? Were we on the side of people or the occupiers and oppressors? Did our administrations set out to promote rational behaviour, logic, ethics, peace, fulfilling obligations, justice, service to the people, prosperity, progress and respect for human dignity or the force of guns, Intimidation, insecurity, disregard for the people, delaying the progress and excellence of other nations, and trample on people's rights? And finally, they will judge us on whether we remained true to our oath of office - to serve the people, which is our main task, and the traditions of the prophets - or not? Mr President, How much longer can the world tolerate this situation? Where will this trend lead the world to? How long must the people of the world pay for the incorrect decisions of some rulers? How much longer will the spectre of insecurity - raised from the stockpiles of weapons of mass destruction - hunt the people of the world? How much longer will the blood of the innocent men, women and children be spilled on the streets, and people's houses destroyed over their heads? Are you pleased with the current condition of the world? Do you think present policies can continue? If billions of dollars spent on security, military campaigns and troop movement were instead spent on investment and assistance for poor countries, promotion of health, combating different diseases, education and improvement of mental and physical fitness, assistance to the victims of natural disasters, creation of employment opportunities and production, development projects and poverty alleviation, establishment of peace, mediation between disputing states, and distinguishing the flames of racial, ethnic and other conflicts, (where) would the world be today? Would not your government and people be justifiably proud? Would not your administration's political and economic standing have been stronger? And I am most sorry to say, would there have been an ever increasing global hatred of the American government? Mr President, it is not my intention to distress anyone. If Prophet Abraham, Isaac, Jacob, Ishmael, Joseph, or Jesus Christ (PBUH) were with us today, how would they have judged such behavior? Will we be given a role to play in the promised world, where justice will become universal and Jesus Christ (PBUH) will be present? Will they even accept us? My basic question is this: Is there no better way to interact with the rest of the world? Today there are hundreds of millions of Christians, hundreds of millions of Moslems and millions of people who follow the teachings of Moses (PBUH). All divine religions share and respect one word and that is "monotheism" or belief in a single God and no other in the world. The Holy Quran stresses this common word and calls on all followers of divine religions and says: (3.64) Say: O followers of the Book! Come to an equitable proposition between us and you that we shall not serve any but Allah and (that) we shall not associate aught with Him and (that) some of us shall not take others for lords besides Allah; but if they turn back, then say: Bear witness that we are Muslims. (The Family of Imran) Mr President, According to divine verses, we have all been called upon to worship one God and follow the teachings of divine Prophets. "To worship a God which is above all powers in the world and can do all He pleases." "The Lord which knows that which is hidden and visible, the past and the future, knows what goes on in the Hearts of His servants and records their deeds." "The Lord who is the possessor of the heavens and the earth and all universe is His court" "Planning for the universe is done by His hands, and gives His servants the glad tidings of mercy and forgiveness of sins" "He is the companion of the oppressed and the enemy of oppressors" "He is the Compassionate, the Merciful" "He is the recourse of the faithful and guides them towards the light from darkness" "He is witness to the actions of His servants" "He calls on servants to be faithful and do good deeds, and asks them to stay on the path of righteousness and remain steadfast" "Calls on servants to heed His prophets and He is a witness to their deeds" "A bad ending belongs only to those who have chosen the life of this world and disobey Him and oppress His servants" and "A good end and eternal paradise belong to those servants who fear His majesty and do not follow their lascivious selves." We believe a return to the teachings of the divine prophets is the only road leading to salvation. I have been told that Your Excellency follows the teachings of Jesus (PBUH) and believes in the divine promise of the rule of the righteous on Earth. We also believe that Jesus Christ (PBUH) was one of the great prophets of the Almighty. He has been repeatedly praised in the Quran. Jesus (PBUH) has been quoted in Quran as well: (19.36) And surely Allah is my Lord and your Lord, therefore serve Him; this is the right path. (Mariam) Service to and obedience of the Almighty is the credo of all divine messengers. The God of all people in Europe, Asia, Africa, America, the Pacific and the rest of the world is one. He is the Almighty who wants to guide and give dignity to all His servants. He has given greatness to Humans. We again read in the Holy Book: "The Almighty God sent His prophets with miracles and clear signs to guide the people and show them divine signs and purify them from sins and pollutions. And He sent the Book and the balance so that the people display justice and avoid the rebellious." All of the above verses can be seen, one way or the other, in the Good Book as well. Divine prophets have promised: The day will come when all humans will congregate before the court of the Almighty, so that their deeds are examined. The good will be directed towards (Heaven) and evildoers will meet divine retribution. I trust both of us believe in such a day, but it will not be easy to calculate the actions of rulers, because we must be answerable to our nations and all others whose lives have been directly or indirectly affected by our actions. All prophets speak of peace and tranquillity for man - based on monotheism, justice and respect for human dignity. Do you not think that if all of us come to believe in and abide by these principles, that is, monotheism, worship of God, justice, respect for the dignity of man, belief in the Last Day, we can overcome the present problems of the world - that are the result of disobedience to the Almighty and the teachings of prophets - and improve our performance? Do you not think that belief in these principles promotes and guarantees peace, friendship and justice? Do you not think that the aforementioned written or unwritten principles are universally respected? Will you not accept this invitation? That is, a genuine return to the teachings of prophets, to monotheism and justice, to preserve human dignity and obedience to the Almighty and His prophets? Mr President, History tells us that repressive and cruel governments do not survive. God has entrusted the fate of men to them. The Almighty has not left the universe and humanity to their own devices. Many things have happened contrary to the wishes and plans of governments. These tell us that there is a higher power at work and all events are determined by Him. Can one deny the signs of change in the world today? Is the situation of the world today comparable to that of ten years ago? Changes happen fast and come at a furious pace. The people of the world are not happy with the status quo and pay little heed to the promises and comments made by a number of influential world leaders. Many people around the world feel insecure and oppose the spreading of insecurity and war and do not approve of and accept dubious policies. The people are protesting the increasing gap between the haves and the have-nots and the rich and poor countries. The people are disgusted with increasing corruption. The people of many countries are angry about the attacks on their cultural foundations and the disintegration of families. They are equally dismayed with the fading of care and compassion. The people of the world have no faith in international organisations, because their rights are not advocated by these organizations. Liberalism and Western style democracy have not been able to help realize the ideals of humanity. Today these two concepts have failed. Those with insight can already hear the sounds of the shattering and fall of the ideology and thoughts of the Liberal democratic systems. We increasingly see that people around the world are flocking towards a main focal point - that is the Almighty God. Undoubtedly through faith in God and the teachings of the prophets, the people will conquer their problems. My question for you is: "Do you not want to join them?" Mr President, Whether we like it or not, the world is gravitating towards faith in the Almighty and justice and the will of God will prevail over all things. Vasalam Ala Man Ataba'al hoda Mahmood Ahmadi-Nejad President of the Islamic Republic of Iran -- AFP

A Nation of Waitresses and Bartenders

The Bureau of Labor Statistics payroll jobs report released May 5 says the economy created 131,000 private sector jobs in April. Construction added 10,000 jobs, natural resources, mining and logging added 8,000 jobs, and manufacturing added 19,000. Despite this unusual gain, the economy has 10,000 fewer manufacturing jobs than a year ago.

Most of the April job gain --72%--is in domestic services, with education and health services (primarily health care and social assistance) and waitresses and bartenders accounting for 55,000 jobs or 42% of the total job gain. Financial activities added 26,000 jobs and professional and business services added 28,000. Retail trade lost 36,000 jobs.

During 2001 and 2002 the US economy lost 2,298,000 jobs. These lost jobs were not regained until early in February 2005. From February 2005 through April 2006, the economy has gained 2,584 jobs (mainly in domestic services).

The total job gain for the 64 month period from January 2001 through April 2006 is 7,000,000 jobs less than the 9,600,000 jobs necessary to stay even with population growth during that period. The unemployment rate is low because millions of discouraged workers have dropped out of the work force and are not counted as unemployed.

In 2005 the US had a current account deficit in excess of $800 billion. That means Americans consumed $800 billion more goods and services than they produced. A significant percentage of this figure is offshore production by US companies for American markets.

The US current account deficit as a percent of Gross Domestic Product is unprecedented. As more jobs and manufacturing are moved offshore, Americans become more dependent on foreign made goods. This year the deficit could reach $1 trillion.

The US pays its current account deficit by giving up ownership of its existing assets or wealth. Foreigners don't simply hold the $800 billion in cash. They use it to acquire US equities, real estate, bonds, and entire companies.

The federal budget is also in the red to the tune of about $400 billion. As Americans have ceased to save, the federal government is dependent on foreigners to lend it the money to operate and to wage war in the Middle East.

American consumers are heavily indebted. The growth of consumer debt is what has been fueling the economy. Social Security and Medicare are in financial trouble, as are many company pension plans. Decide for yourself--is this the economic picture of a superpower that can dictate to the world, or is it the picture of a second-rate country dependent on foreigners to finance its consumption and the operation of its government?

No-think economists make rhetorical arguments that the decline of US manufacturing employment reflects higher productivity from technological improvements and not a decline in US manufacturing per se. George Mason University economist Walter Williams recently ridiculed the claim that US manufacturing jobs are moving to China. Williams asks how the US could be losing manufacturing jobs to China when the Chinese are losing jobs faster than the US: "Since, 2000, China has lost 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S."

The 4.5 million figure comes from a Conference Board report that is misleading. The report that counts was written by Judith Banister under contract to the U.S. Department of Labor, Bureau of Labor Statistics, and published in November 2005 ( Banister's report was peer reviewed both within the BLS and externally by persons with expert knowledge of China.

Chinese manufacturing employment has been growing strongly since the 1980s except for a short period in the late 1990s when layoffs resulted from the restructuring and privatization of inefficient state owned and collective owned factories. To equate temporary layoffs from a massive restructuring within manufacturing with US long-term manufacturing job loss indicates extreme carelessness or incompetence.

Banister concludes: "In recent decades, China has become a manufacturing powerhouse. The country's official data showed 83 million manufacturing employees in 2002, but that figure is likely to be understated; the actual number was probably closer to 109 million. By contrast, in 2002, the Group of Seven (G7) major industrialized countries had a total of 53 million manufacturing workers."

The G7 is the US and Europe. In contrast to China's 109,000,000 manufacturing workers, the US has 14,000,000.

When I was Assistant Secretary of the Treasury in the Reagan administration, the US did not have a trade deficit in manufactured goods. Today the US has a $500 billion annual deficit in manufactured goods. If the US is doing as well in manufacturing as no-think economists claim, where did an annual trade deficit in manufactured goods of one-half trillion dollars come from?

If the US is the high-tech leader of the world, why does the US have a trade deficit in advanced technology products with China?

There was a time when American economists were empirical and paid attention to facts. Today American economists are merely the handmaidens of offshore producers. Apparently, they follow President Bush's lead and do not read newspapers--thus, their ignorance of countless stories of US manufacturers moving entire plants and many thousands of US engineering jobs to China.

Chinese firms, including state owned firms, have numerous reasons, tax and otherwise, to understate their employment. Banister's report gives the details.

Banister points out that the excess supply of labor in China is about five to six times the size of the total US work force. As a result, there is no shortage of workers in China, nor will there be in the foreseeable future.

The huge excess supply of labor means extremely low Chinese wages. The average Chinese wage is $0.57 per hour, a mere 3% of the average US manufacturing worker's wage. With first world technology, capital, and business knowhow crowding into China, virtually free Chinese labor is as productive as US labor. This should make it obvious to anyone who claims to be an economist that offshore production of goods and services is an example of capital seeking absolute advantage in lowest factor cost, not a case of free trade based on comparative advantage.

American economists have failed their country as badly as have the Republican and Democratic parties. The sad fact is that there is no leader in sight capable of reversing the rapid decline of the United States of America.

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


May 08, 2006

What Ails Americans

Does George Bush get you down?

Does your mind go numb when you read another story about another GOP-legislated atrocity?

Do you feel that you just can’t take any more of it? That you just are too tired to care?

You could be suffering from outrage fatigue. In which case, you are not alone.

The other day an editor here groaned, “Not another torture story.” A colleague snapped back, “That’s a win for them.”

The Web has been abuzz with discussions about “outrage fatigue” and its debilitating effects. Consider the following thoughts on the syndrome, gleaned from postings over the past couple years.

There is despair:

“I’m sorry guys, with so many things to be outraged about I’m worn down. It’s partly because it feels like nothing you do with the outrage has any effect,” writes Spocko.

“There has been so much to be outraged about from the Republicans the past six years and yet they have never been held to account. It is easy to just feel powerless and give up. It hurts too much to care about the state of the country,” writes Erik.

There is resignation:

“I just can’t get too outraged anymore since every day brings a new outrage. Law of diminishing returns and all that jazz I guess,” writes Cursed Pirate Monkey.

“It used to be I’d have opinions on the latest scary news of the government and all that shizzle, but over time, U.S. political shit has ended up provoking more a ‘meh’ reaction than anything else. … Just how mad can any single thing make a dude? The answer is that each drumbeat of the march in the wrong national direction reduces the capacity for outrage. Hence outrage muthafuckin’ fatigue, yo. My friend Bill is one of those lefty dudes who sends tons of e-mails like, ‘Man, can you believe this shit?’ Sorry Bill, but the muthafuckin’ truth hurts: I usually glance at your forward, think to myself, ‘Yes, that does kinda suck,’ then instantly trash the e-mail and go back to Fark,” writes Pat in Politics.

There is fear:

“The effect of outrage fatigue is actually scary—things that should be considered very damaging by the American voter just get slipped under the rug with very little notice. … The Bush White House has successfully recalibrated outrage meters so dramatically that we, and the American public, can hardly remember how we used to react to various kinds of events,” writes Frankly0.

There is backlash:

“As to outrage: What matters is getting Bush out of office. … The Bushies could care less how outraged you are. It’s the rope-a-dope defense. By November, all of our outrage reservoirs will be completely empty and we won’t even have the energy to vote,” writes Cleek.

“There’s this new chic meme out there in the blogosphere that people are calling ‘outrage fatigue.’ I dislike the term immensely. I actually think there’s this kind of spiritual battle between the concept of ‘standing up for what’s right’ and the concepts of cynicism, snarkiness and bitchy hopelessness. Referring to ‘outrage fatigue’ is just another way to make it okay to lose hope,” writes Curt. To which Cat, in despair mode, responds: “When you say ‘Outrage Fatigue,’ I interpret it as that awful feeling when you just have to stop reading the news for a while. When you fear that if you hear one more crappy thing, you’ll just crawl under your bed and die slowly.”

While Suzanne Marshall had this to say: “Even though I know how seriously messed-up the situation is in Iraq, I’ve became inured to all but the most extreme levels of wrongdoing. For months, no amount of civilian bombing could get me mad. Then those amazing photos of the tortured Iraqi prisoners hit the streets, and I got that old rush of overwhelming disgust with my government. Then more photos came out, and more officials were implicated, and now—I don’t know. It’s like a switch in my head turned off again.” Whoops, that last quote was from the Onion, playing off the zeitgeist.

Like its cousins—combat fatigue, donor fatigue, compassion fatigue, chronic fatigue, metal fatigue—outrage fatigue has yet to be recognized, or even noted, by the American Psychological Association. That could change as it begins to turn up in therapists’ caseloads. Jon Carroll reports in the San Francisco Chronicle, “A therapist I know says that more and more people are showing up at her door with a nonspecific anxiety disorder, which turns out to be shame and confusion about the state of the nation.”

So what’s the cure?

Outrage is a little bit like anger. Therapist Margaret Paul observes, “Anger that comes from an adult, rational place can be called outrage. Outrage is the feeling we have when confronted with injustice. Outrage mobilizes us to take appropriate action when harm is being done to ourselves, others and the planet.”

And like anger, when we don’t express our outrage, we repress it and turn that outrage in on ourselves.

That can have bad effects according to Ease@Work, a company that advises businesses on how to treat employees. “Repressed anger is unexpressed anger. Some people can internalize anger so that they fool others, and sometimes themselves, into believing they are not angry. The problem with repressed anger is that it is turned back inside the person, leading to health problems such as hypertension, stroke, and heart disease. … Bottling up this powerful emotion can make some people withdraw and lose interest in others and in activities, common signs of depression.”

In the case of a person grappling with outrage fatigue, the easiest solution is to protect yourself from bad news and learn not to care. Another solution is to do something about your outrage. Nurture it. Express it.

Bang a pot. In December 2001 in Argentina, pot bangers led a popular revolt against IMF-imposed economic austerity measures and toppled the government.

That has been tried here. As the Washington Times reported earlier this year, “Liberal activists—among them graying leftovers from the Vietnam-era antiwar movement—plan to gather near the Capitol tonight, banging pots and pans to drown out President Bush’s State of the Union address.” Maybe it didn’t work, but it no doubt felt good.

Managing Terror

While the American Psychological Association has not begun to address the needs of our brothers and sisters suffering outrage fatigue, it has worked closely with the White House in the war on terror. Heeding a call following 9/11 from Presidential Science Advisor John Marburger, the APA asked its members “for examples of research vignettes that might inform (directly or indirectly) strategies to deal with the aftermath of the nations terrorist attacks.”

One of the problems the APA addressed: “What can be done to help people cope with the ongoing threat of terrorism?”

What is known as Terror Management Theory (TMT) has the answer. According to the APA, “From the perspective of TMT, the recent terrorist attacks provided Americans with a massive reminder of death and the fragility of life, coupled with an attack on the psychological structures that normally protect us from fears of death and vulnerability.”

Indeed the public reaction to the attacks is very similar to what psychologists had previously discovered in more than 150 experiments on how people responded to reminders of death and threats to their cultural worldview. According to the APA, these responses include:

  • People respond more negatively to those who criticize one’s country and behaviorally distance themselves from such individuals.
  • People respond more positively to those who praise one’s country and behaviorally approach such persons.
  • People have increased attraction to heroes and greater reverence for cultural icons, such as American flags or crucifixes.
  • People have an increased desire for punishment of moral transgressors.
  • People experience a shift toward desires for security and away from desires for freedom.

No wonder we have outrage fatigue.


As I was writing this, I was also working with Kurt Vonnegut on something he is writing for In These Times. That is, until I received a fax from him that said: “Forget it. I don’t want to fight any more.”

I faxed back, “Do you think you are suffering from outrage fatigue?” Adding that, if he was, did he have any thoughts about the condition?

The next day I received this fax: “About Outrage Fatigue: I knew what it was like to lose a battle. Now I know what it was like to lose a war.”

Fatigued, perhaps. But I am not going to let that get me down. I prefer to ponder the last joke Kurt told me: “George Bush is so dumb it wouldn’t surprise me if he thought Peter Pan was a wash basin in a whorehouse.”

May 03, 2006

Make Way for the Monkeys...

Yeah, go Monkey Go!

April 30, 2006

Follies Video "Every Breath You Take" a Cult Hit with Financial Media

April 28, 2006

The cast and producers of the Follies’ video “Every Breath You Take” were featured on CNBC’s Power Lunch today, as appreciation of the small masterpiece continued to spread over the Internet and through the media.

In his starring role in the student revue as Dean Glenn Hubbard, student Michael O’Rorke lip-synched a creatively worded spoof version of The Police pop hit to Chairman Ben Bernanke of the Federal Reserve Board. Outgoing GBA president Cabe Franklin provided the vocals.

The video got its nationwide release on April 25 when it was featured on’s EyeOpener newsletter. It has also appeared in the Washington Post and on CNN.

April 28, 2006

To bring the dollar down a little, let Russia and Iran price oil in euros

From Russia, you might say, with love. This weekend, Alexei Kudrin,
Russia's finance minister, dropped a bombshell in Washington.

Attending the annual meetings of the World Bank and International
Monetary Fund, Kudrin caused his American hosts discomfort by openly
questioning the dollar's pre-eminence as the world's "absolute"
reserve currency.

The greenback's recent volatility and the yawning US trade
deficit, "are definitely causing concern with regard to its reserve
currency status," he said. "The international community can hardly
be satisfied with this instability."

Kudrin's intervention coincided with another meeting, also in
Washington, of finance ministers and central bankers from the Group
of Seven - which doesn't include Russia.

Top of the agenda: the effect of ever-rising oil prices on inflation
and interest rates.

G7 countries are worried the spiraling price of crude -- which
closed at $72.79 a barrel on Friday and which has now trebled in
three years -- could inflict real economic damage. The US Federal
Reserve, in particular, has been forced to take drastic action --
raising interest rates 15 times since June 2004 to keep inflation in

Given that fragility, it is significant that Kudrin is now wondering
aloud if the long-standing dollar hegemony can last. For him to do
so is to highlight that America is vulnerable should that status be
lost. That's because Russia, with its awesome oil and gas reserves,
could kick-start a challenge to the dollar's supremacy.

Most nations stockpile their foreign exchange holdings in dollars.
The US currency accounts for more than two thirds of all central
bank reserves worldwide.

This reserve status means that the dollar is constantly in demand,
whatever the underlying strength of the US economy.

And now, with massive trade and budget deficits to finance, America
is increasingly reliant on that status. The unprecedented weight of
US liabilities means a threat to the dollar's dominance could result
in a currency collapse, plunging the world's largest economy into

That won't happen immediately. The dollar has sat astride the globe
for some time now -- in fact, for most of the last century. But this
statement from Russia -- a country of growing financial and
strategic significance -- still caused the dollar to slide. It also
fuelled speculation that central banks could increasingly diversify
their holdings away from dollars.

Kudrin's statement followed news that Sweden has cut its dollar
holdings, from 37 per cent of central bank reserves to 20 per cent,
with the euro's share rising to 50 per cent. Central banks in some
Gulf states have also lately mooted a shift into the euro. Such
sentiments helped push the dollar to a seven-month low against the
single currency last week.

But Russia's intervention will have raised eyebrows in Washington
because the backbone of the dollar's reserve currency status -- the
main guarantee that status continues -- is the fact that oil is
traded in dollars. And that is something the likes of Kudrin can
directly affect.

For historic reasons, the dollar remains the
world's "petrocurrency" -- the only currency for the settlement of
oil contracts on world markets. That makes the EU and Russia
dependent on it. But with central banks switching to euros, the
logical next step would be for fuel-exporting countries to start
quoting oil prices in euros too.

The EU is Russia's main trading partner. More than two thirds of
Russia's oil and gas is exported to the EU. That makes Russia a
strong candidate to become the first major oil exporter to start
trading in euros. Such a scenario, in recent years, has become
theoretically possible. But now, with these latest comments, Kudrin
has thrust that possibility into the open.

The G7 meeting was dominated, of course, by concern over Iran's
nuclear programme. The threat of military action against Iran,
itself a major crude exporter, is one reason oil prices are now
testing record highs.

It is worth noting that Tehran has ongoing plans to set up an oil
trading exchange to compete with New York's NYMEX and with London's
International Petroleum Exchange. In the light of Kudrin's comments,
it is significant that the Iranians want to run their oil bourse in
euros, not dollars.

Were the Iranians to establish a Middle-East based euro-only oil
exchange, the dollar's unique petrocurrency status could unravel.
That, in turn, would threaten its broader dominance -- which, given
America's groaning twin deficit, could seriously hurt the US economy.

Some cite this as the real reason the US wants to attack Iran: to
protect the dollar's unique position. I wouldn't go that far, but
the prospect of a non-dollar oil exchange in Tehran is certainly an
aggravating factor.

The opening of Iran's new oil exchange has recently been delayed.
But having spoken with numerous officials in Tehran, and western
consultants who've been working with the Iranians for several years,
I think it will go ahead. The exchange entity has already been
legally incorporated in Iran and a site purchased to house
administrative and regulatory staff.

The reality is that as long as most of Opec's oil -- read Saudi
Arabia -- is priced in dollars, the US currency will retain its
hegemony. But the opening of an oil bourse in Tehran, which now
looks likely, will signal at least tacit Saudi consent for euro-
based oil trading. The US knows this, which is why it is nervous
about the dollar's status being questioned.

From the G7's fringe, Kudrin has now touched this raw nerve. This
weekend's meetings have been dominated by questions of global
financial imbalance - in particular, America's huge deficits.

Kudrin's missive comes as central bankers, and currency dealers,
start to conclude the only way to resolve the massive US external
deficit is a somewhat weaker US currency. As the IMF itself warned
yesterday, a "substantial" dollar decline may be needed.

One way to bring that about would be for the euro to enter the
global oil trading system. This is unlikely to happen soon. It might
not happen at all. But the idea is now not only realistic but firmly
on the table in Washington. Perhaps not with love, but it was placed
there by the Russians.

No, It's Not Anti-Semitic

By Richard Cohen
Tuesday, April 25, 2006; A23


During the Jim Crow era, many American communists fiercely fought racism. This is a fact. It is also a fact that segregationists and others often smeared civil rights activists by calling them communists. This technique is sometimes called guilt by association and sometimes "McCarthyism." If you think it's dead, you have not been following the controversy over a long essay about the so-called "Israel Lobby."

On April 5, for instance, The Post ran an op-ed, "Yes, It's Anti-Semitic," by Eliot A. Cohen, a professor at the John Hopkins School of Advanced International Studies and a respected defense intellectual. Cohen does not much like a paper on the Israel lobby that was written by John Mearsheimer of the University of Chicago and Stephen Walt of Harvard University. He found it anti-Semitic. I did not.

But I did find Cohen's piece to be offensive. It starts by noting that the paper, titled "The Israel Lobby and U.S. Foreign Policy," had been endorsed by David Duke, the former head of the Ku Klux Klan. It goes on to quote Duke, who, I am sure, has nodded his head in agreement over the years with an occasional piece of mine, as saying the paper is a "modern Declaration of American Independence." If you follow Cohen's reasoning, then you would have to conclude that David Duke and the Founding Fathers have something in common. I am not, as they say, willing to go there.

Unfortunately, Cohen's piece is not unique. The New York Sun reported on its front page of March 24 an allegation from Alan Dershowitz that some of the quotes from the Israel lobby paper "appear on hate sites." Maybe they do, but Mearsheimer and Walt took those quotes (about press coverage of Israel) from a book written by Max Frankel, a former editor of the New York Times. To associate Mearsheimer and Walt with hate groups is rank guilt by association and does not in any way rebut the argument made in their paper on the Israel lobby.

There is hardly a stronger, more odious, accusation than anti-Semitism. It comes freighted with more than a thousand years of tragic history, culminating in the Holocaust. The mere suggestion of it is enough for any sane person to hold his tongue. Yet this did not stop the respected German newspaper editor Josef Joffe from stating in the New Republic that the lobby paper "puts 'The Protocols of the Elders of Zion' to shame." He is referring to the most notorious anti-Semitic text of all time. My friend Joffe is in dire need of a cold compress.

My own reading of the Mearsheimer-Walt paper found it unremarkable, a bit sloppy and one-sided (nothing here about the Arab oil lobby), but nothing that even a casual newspaper reader does not know. Its basic point -- that Israel's American supporters have immense influence over U.S. foreign policy -- is inarguable. After all, President Bush has just recently given Israel NATO-like status without so much as a murmur from Congress. "I made it clear, I'll make it clear again, that we will use military might to protect our ally Israel," Bush said. This was the second or third time he's made this pledge, crossing a line that previous administrations would not -- in effect, promulgating a treaty seemingly on the spot. No other country gets this sort of treatment.

Israel's special place in U.S. foreign policy is deserved, in my view, and not entirely the product of lobbying. Israel has earned it, and isn't there something bracing about a special relationship that is not based on oil or markets or strategic location but on shared values? (A bit now like Britain.) But I can understand how foreign policy "realists" such as Mearsheimer and Walt might question its utility and not only think that a bit too much power is located in a specific lobby but that it is rarely even discussed. This may be wrong, but it is not (necessarily) anti-Semitic. In fact, after reading the Mearsheimer-Walt paper, the respected Israeli newspaper Haaretz not only failed to discern anti-Semitism but commended the paper to its readers. "The professors' article does not deserve condemnation," Haaretz stated in an editorial.

An abridged version of the Mearsheimer-Walt paper was published by the London Review of Books and is available online at . Read it and decide for yourself whether it is anti-Semitic. Whatever the case, their argument is hardly rebutted by purple denunciations and smear tactics. Rather than being persuasive, Mearsheimer and Walt's more hysterical critics suggest by their extreme reactions that the duo is on to something. These tactics by Israel's friends sully Israel's good name more than Mearsheimer and Walt ever could.

April 26, 2006

US federal spending

April 25, 2006

Tehran insider tells of US black ops

By an Asia Times Online Special Correspondent

TEHRAN - A former Iranian ambassador and Islamic Republic insider has provided intriguing details to Asia Times Online about US covert operations inside Iran aimed at destabilizing the country and toppling the regime - or preparing for an American attack.

"The Iranian government knows and is aware of such infiltration. It means that the Iranian government has identified them [the covert operatives] but for some reason does not want to show [this]," said the former diplomat on condition of anonymity.

Speaking in Tehran, the ex-Foreign Ministry official said the agents being used by the US "were originally Iranians and not Americans" possibly recruited in the United States or through US embassies in Dubai and Ankara. He also warned that such actions will engender "some reactions".

"Both sides will certainly do something," he said in a reference to Iran's capability to stir trouble up in neighboring Iraq and Afghanistan for the occupying US troops there.

Veteran US journalist Seymour Hersh wrote in a much-discussed recent article in The New Yorker magazine that the administration of President George W Bush has increased clandestine activities inside Iran and intensified planning for a possible major air attack as the crisis with Iran over its nuclear program escalates.

Hersh wrote that "teams of American combat troops have been ordered into Iran, under cover, to collect targeting data and to establish contact with anti-government ethnic-minority groups". The template seems identical to the period that preceded US air strikes against the Taliban regime in Afghanistan during which a covert Central Intelligence Agency (CIA) campaign distributed millions of dollars to tribal allies.

"The Iranian accusations are true," said Richard Sale, intelligence correspondent for United Press International, referring to charges that the US is using the Mujahideen-e Khalq (MEK) organization and other groups to carry out cross-border operations. "But it is being done on such a small scale - a series of pinpricks - it would seem to have no strategic value at all."

There has been a marked spike in unrest in Kurdistan, Khuzestan and Balochistan, three of Iran's provinces with a high concentration of ethnic Kurdish, Arab and Balochi minorities respectively. With the exception of the immediate post-revolutionary period, when the Kurds rebelled against the central government and were suppressed violently, ethnic minorities have received better treatment, more autonomy and less ethnic discrimination than under the shah.

"The president hasn't notified the Congress that American troops are operating inside Iran," said Sam Gardiner, a retired US Army colonel who specializes in war-game scenarios. "So it's a very serious question about the constitutional framework under which we are now conducting military operations in Iran."

Camp Warhorse is the major US military base in the strategic Iraqi province of Diyala that borders Iran. Last month, Asia Times Online asked the US official in charge of all overt and covert operations emanating from there whether the military and the MEK colluded on an operational level. He denied any such knowledge.

"They have a gated community up there," came the genial reply. "Not really guarded - it's more gated. They bake really good bread," he added, smiling.

But that is contrary to what Hersh was told by his sources, According to him, US combat troops are already inside Iran and, in the event of air strikes, would be in position to mark critical targets with laser beams to ensure bombing accuracy and excite sectarian tensions between the population and the central government. As of early winter, Hersh's source claims that the units were also working with minority groups in Iran, including the Azeris in the north, the Balochis in the southeast, and the Kurds in the northwest.

Last week, speaking on the sidelines of a Palestinian solidarity conference, Major-General Yehyia Rahim Safavi, the Iranian Revolutionary Guard Corps (IRGC) commander, sent a warning to the US and British intelligence services he accuses of using Iraq and Kuwait to infiltrate Iran. "I tell them that their agents can be our agents too, and they should not waste their money so casually."

On April 9, Iran claimed to have shot down an unmanned surveillance plane in the southwestern province of Khuzestan, according to a report in the semi-official Jumhuri Eslami newspaper. US media have also reported that the US military has been secretly flying surveillance drones over Iran since 2004, using radar, video, still photography and air filters to monitor Iranian military formations and track Iran's air-defense system. The US denied having lost a drone.

This new mission for the combat troops is a product of Defense Secretary Donald Rumsfeld's long-standing interest in expanding the role of the military in covert operations, which was made official policy in the Pentagon's Quadrennial Defense Review, published in February. Such activities, if conducted by CIA operatives, would need a Presidential Finding and would have to be reported to key members of Congress.

The confirmation that the US is carrying out covert activities inside Iran makes more sense out of a series of suspicious events that have occurred along Iran's borders this year. In early January, a military airplane belonging to Iran's elite Revolutionary Guards went down close to the Iraqi border. The plane was carrying 11 of the Guard's top commanders, including General Ahmad Kazemi, the commander of the IRGC's ground forces, and Brigadier-General Nabiollah Shahmoradi, who was deputy commander for intelligence.

Although a spokesman blamed bad weather and dilapidated engines for the crash, the private intelligence company Stratfor noted that there are several reasons to suspect foul play, not least of which was that any aircraft carrying so many of Iran's elite military luminaries would undergo "thorough tests for technical issues before flight". Later, Iran's defense minister accused Britain and the US of bringing the plane down through "electronic jamming".

"Given all intelligence information that we have gathered, we can say that agents of the United States, Britain and Israel are seeking to destabilize Iran through a coordinated plan," Minister of Interior Mustafa Pour-Mohammadi said. This sentiment was echoed on websites such as, where one reader commented, "We couldn't have made a better hit on the IRGC's leadership if planned ... sure it was just an accident?"

Then, in late January, a previously unknown Sunni Muslim group called Jundallah (Soldier of Allah) captured nine Iranian soldiers in the remote badlands of Sistan-Balochistan province that borders Afghanistan and Pakistan. And in mid-February, another airplane crashed just inside Iraq after taking off from Azerbaijan and transiting Iranian airspace. The Iranian Mehr news agency reported that the "passengers on board were possibly of Israeli origin". It added that US troops have restricted access to the site to Iraqi Kurdish officials and that Western media were reporting the passengers aboard as having been German.

The Iranian government has not sat idly by and just taken these breaches of sovereignty. Early this month, an unidentified source in the Interior Ministry was quoted by the hardline Kayhan newspaper as saying that the leader and 11 members of the Jundallah group had been killed by Iranian troops. Then last Friday, Iranian missile batteries shelled Iranian Kurdish rebel positions inside Iraqi territory. They were targeting a militant group called PJAK that seeks more autonomy for Iran's Kurdish population and has been operating out of Iraq since 1999.

The former Iranian ambassador argues that in the event that US pressure on Iran continues, "the end of the tunnel" for President Mahmud Ahmadinejad's administration is "weaponization of the [nuclear] technology ... and a military strike".

"The Americans are pushing Iran to become a nuclear state. Iran just wants to be a supplier of nuclear fuel. But [with their threats] they are pushing it further."

April 24, 2006

Statement by G-7 Finance Ministers and Central Bank Governors April 21, 2006


We, Ministers and Governors, met today and resolutely reaffirmed that openness and globalization are beneficial in promoting economic prosperity and reducing poverty. These benefits are most effectively realized with sound economic management and supportive policies for those whose welfare is adversely affected. We committed to: strengthen economic policies in our countries; work together to remove distortions to the global adjustment process; resist protectionism and promote liberalization of trade and investment including an ambitious outcome from the Doha Development Round; and modernize the international financial institutions.

The strong global economic expansion continues into its fourth year and the outlook remains favorable, supported by improved macroeconomic policies in many countries as well as benign financial market conditions. Inflation remains contained despite high oil prices and global trade growth is buoyant. Yet risks remain from oil market developments, global imbalances, and growing protectionism. We underscored that global economic adjustment is a shared responsibility.

We are strengthening the dialogue between oil producers and consumers to further improve market transparency through the release of more complete and timely data on production, consumption and inventories, and for clear reporting of oil reserves. We urge investment in exploration, production, energy infrastructure, and refinery capacity. Investment is crucial and oil producing countries should provide open and secure investment environments to enable market participants to meet pressing needs. We remain committed to greater energy efficiency, conservation, and diversification, which will improve the balance between supply and demand.

We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur.

We welcomed the IMF Managing Director's Strategic Review to equip the IMF to help countries meet the macroeconomic and financial policy challenges of globalization. We supported the strengthening of IMF surveillance, including through increased emphasis on the consistency of exchange rate policies with domestic policies and a market-based international monetary system and on the spillover effects of domestic policies on other countries. We support a new remit for bilateral and multilateral surveillance by the IMF. An ad hoc quota increase would help better to reflect members' international economic weight. We agreed on the need for comprehensive reform of the IMF, and called on the Managing Director to come forward with concrete proposals for the Annual Meetings in Singapore.

We reaffirmed the importance of implementing our commitments on development. In that context, we welcomed the decision by the IMF, World Bank, and African Development Bank to implement 100 percent debt cancellation for qualifying countries. We emphasized the importance of avoiding a fresh accumulation of unsustainable debt, of responsible lending by creditors, and of ensuring that recipient countries incur new debt in accordance with the debt sustainability framework. We stressed the need to bolster the fight against corruption so that development assistance effectively promotes growth, and call on the President of the World Bank and other MDB Heads to continue their focus on this issue, bringing forward a strategy in this critical area. Having endorsed the concept of a pilot Advance Market Commitments for vaccines, we call for the additional work necessary to make its launch possible in 2006.

We reiterated our commitments to combat money laundering and terrorist financing and call on the IMF and the World Bank to collaborate closely with the Financial Action Task Force.

Finally, we thank Roger Ferguson for his chairmanship of the Financial Stability Forum, and we have asked Mario Draghi to be his successor. ANNEX: GLOBAL IMBALANCES

We, Ministers and Governors, reviewed a strategy for addressing global imbalances. We recognized that global imbalances are the product of a wide array of macroeconomic and microeconomic forces throughout the world economy that affect public and private sector saving and investment decisions. We reaffirmed our view that the adjustment of global imbalances:

Is shared responsibility and requires participation by all regions in this global process;

Will importantly entail the medium-term evolution of private saving and investment across countries as well as counterpart shifts in global capital flows; and

Is best accomplished in a way that maximizes sustained growth, which requires strengthening policies and removing distortions to the adjustment process.

In this light, we reaffirmed our commitment to take vigorous action to address imbalances. We agreed that progress has been, and is being, made. The policies listed below not only would be helpful in addressing imbalances, but are more generally important to foster economic growth.

In the United States, further action is needed to boost national saving by continuing fiscal consolidation, addressing entitlement spending, and raising private saving.

In Europe, further action is needed to implement structural reforms for labor market, product, and services market flexibility, and to encourage domestic demand led growth.

In Japan, further action is needed to ensure the recovery with fiscal soundness and long-term growth through structural reforms.

Others will play a critical role as part of the multilateral adjustment process.

In emerging Asia, particularly China, greater flexibility in exchange rates is critical to allow necessary appreciations, as is strengthening domestic demand, lessening reliance on export-led growth strategies, and actions to strengthen financial sectors.

In oil-producing countries, accelerated investment in capacity, increased economic diversification, enhanced exchange rate flexibility in some cases.

Other current account surplus countries should encourage domestic consumption and investment, increase microeconomic flexibility and improve investment climates.

We recognized the important contribution that the IMF can make to multilateral surveillance.


by Bill Bonner

Economics has been called the "dismal science." But even that is merely fraud and flattery. Economics is dismal, but it isn't science. At its best it is merely voyeurism - peeping in people's windows as they go about their business and trying to figure out what they are doing. At worst, it is pompous theorizing about how to get the schmucks to do better.

We doubt that you are especially interested in economics, dear reader. We know we are not. But we can't resist a good comedy...or a good opportunity to point and giggle. We keep our eye on economists and politicians the way children watch clowns; we can't wait to see them get whacked in the head or trip over each other.

But what is amusing is also instructive. Are not clowns people too? Are they not part of human life...human organization...and human economy? Every one of them is driven by the same motors that power everyone else. They want But how do they get it? Can we not watch politicians and economists and learn something about ourselves?

One of the many conceits of politicians and economists are that they are somehow out of ordinary. They are godlike, or so they pretend, having no other ambition but to make the world a better place. Neither drink, nor meat, nor false witness cross their lips. They sweat for no material gain...and know no lust - save for the betterment of all mankind. They pass laws...they enact codes and regulations...they jiggle this lever and turn another - as if they were the masters of the whole human race, rather than mere parts of it themselves. Since they float above it all, they are not subject to the normal temptations. The rest of us spend our whole lives like animals - craving profits, mates, status, pride, love, and money like a raccoon searching for a garbage pail without a lid. Unless we are kept in tight cages, who knows what we will do?

That is why the tabloid press - especially in England - loves the stories of the government ministers having affairs with their secretaries or cheating on their income tax. Who doesn't like to see hypocrisy revealed in public? It is as if the King himself had been caught with his pants down; we gape...and see that he is human, just like the rest of us.

But thank God there are leaders! Thinkers! Theorists with their "isms" and their rat wire...ready not merely to keep us from hurting one another, but also to give us a sense of moral purpose. It is not enough that we should each seek happiness in our own private way, we must Free the Sudetenland! Abolish Poverty! Make the World Safe for Democracy! We must realize our manifest destiny...and provide liebensraum [living space] for the German people! Full employment! A minimum wage! No humbug left behind!

We bring this up only to laugh at it.

In the early 20th century, John Maynard Keynes came up with a new idea about economics. The politicians loved it; Keynes explained how they could meddle in private affairs on a grand scale - and, of course, make things better. Keynes argued that a government could take the edge off a business recession by making more credit available when money got tight...and by spending itself to make up for the lack of spending on the part of consumers and businessmen. Keynes suggested, whimsically, hiding bottles of cash all around town, where boys might find them, spend the money, and revive the economy.

The new idea caught on. Soon economists were advising all major governments about how to implement the new "ism." It did not seem to bother anyone that the new system was a fraud. Where would this new money come from? And what made anyone think that the economists' judgment of whether it made sense to spend or save was better than individuals? All the Keynesians had done was to substitute their own guesses for the private, personal, economic opinions of millions of ordinary citizens. They had resorted to what Franz Oppenheimer called "political means," instead of allowing normal "economic means" to take their own course.

The economists wanted what everyone else wants - power, prestige, women (except for Keynes himself, who preferred men). And there are only two ways to get what you want in life, dear reader. There are honest means, and dishonest ones. There are economic means, and there are political means. There is persuasion...and there is force. There are civilized ways...and barbaric ones. The economist is a harmless crank as long as he is just peeping through the window. That is what we do here at The Daily Reckoning. But when he undertakes to get people to do what he wants - either by offering them money that is not his defrauding them with artificially low interest rates...or by printing up money that is not backed by something of real value (such as gold)...he has crossed over the dark side. He has moved to political means to get what he wants. He has become a jackass.

Keynesian improvements were applied in the '20s - when Fed governor Ben Strong decided to give the economy a little "coup de whiskey" - and later in the '30s when the stockmarket was recovering from the hangover. The results were predictably disastrous. And along came other economists with their own bad ideas. Rare was the man, like Robert Lucas or Murray Rothbard, who pointed out that you could not really improve economic results with political means. If a national assembly could make people rich simply by passing laws, we would all be billionaires, because assemblies have passed a multitude of laws and seem capable of enacting any piece of legislation brought before them. If laws could make people wealthy, some assembly somewhere would have found the magic edicts - simply by chance.

But instead of making them richer, each law makes them a little poorer. Every time political means are used they interfere with the private, civilized economic arrangements that actually get people what they want. One man makes shoes. Another grows potatoes. The potato grower goes to the cobbler to buy a pair of shoes. He must exchange two sacks of potatoes for one pair of penny loafers. But then the meddlers show up and tell him he must charge three that he can pay one in "taxes," to the meddlers themselves. And then he needs to put in an alarm system in his shop, and buy a hardhat, and pay his helper minimum wage, and fill out forms for all manner of laudable purposes. When the potato farmer finally shows up at the cobbler's he is informed that the shoes will cost seven sacks of potatoes! That is just what he has to charge in order to end up with the same two sacks he needed to charge in the beginning. "No thanks," says the potato man, "At that price, I can't afford a pair of shoes."

What the potato grower needs, say the economists, is more money! The money supply has failed to keep pace, they add. That was why they urged the government to set up the Federal Reserve in the first place; they wanted a stooge currency that would be ready to go along with their plans. Gold is fine, they said, but it's anti-social. It resists new "isms" and drags its feet on financing new social programs. Why, it is positively recalcitrant! Clearly, when we face a war or a Great National Purpose we need money that is willing to stand up and sign on. Gold malingers. Gold hesitates. Gold is reluctant and reticent. Gold is fine as a private money. But what we need is a source of public funding...a flexible, expandable national currency...a political money that we can work with. We need a dollar that is not linked to gold.

In the many years since the creation of the Federal Reserve system as America's central bank, gold has remained as steadfast and immobile as ever. An ounce of it today buys about the same amount of goods and services as an ounce in 1913. But the dollar has gone along with every bit of political gimcrackery that has come along - the war in Europe, the New Deal, WWII, the Cold War, the Vietnam War, the war on poverty, the war on illiteracy, the New Frontier, the Great Society, Social Security, Medicare, Medicaid, the War in Iraq, the war on terror...the list is long and sordid. As a result, guess how much a dollar is worth today in comparison to one in 1913? Five cents.

Keynesianism is a fraud. Supply-siderism is a con. The dollar itself is a scam. All were developed by people with good intentions. But these good intentions not only paved the road to Hell, they greased it. There was no point putting on the brakes. Once underway, there was no stopping it.

Right now, the United States slides towards some sort of Hell. A half-century of deceit has produced a nation that is ready to believe anything...and go along with anything...provided it promises to make them rich. They will be very disappointed when they discover that all the political means they counted on - the phony money, the laws, the regulations, and the wars - have made them poorer. That is when we will really need cages...

"Nothing in nature is evil," said Marcus Aurelius. Keynes was human. Even Adolf Hitler was a man, a part of nature himself. And the "Evil Empire," was it not created by men too, men who - like economists and politicians - followed their own natural impulses? Adolf may have erred and strayed. But he did so with the best of intentions; he thought he was building a better world. And he had all the "reasons" you could ask for. He could argue all day; "proving" that his plan was the best way forward.

Not that there weren't arguments on the other side. What were smart people to do? People argued about Keynesianism for many years. Each side had good points. One was convincing; the other was persuasive. It was like a couple arguing in divorce court - the husband forgot to take out the trash and knocked over a vase; the wife ran him over with the family car. "He had it coming," she says.

What would an observer think? No amount of logic could help him. Both parties made good points. All the judge could do was to fall back on his own deep sense of right and wrong, of proportion...and good taste. "She shouldn't have run him down," he says solomaniacally.

"Love the man, hate the sin," say the Baptist preachers. They have a useful point. There's no point in hating Adolf, Josef, Ossama...or John Maynard...or any of the other thousands of clowns who entertain, annoy and murder us. They are God's creatures too, just like the rest of us. What they did wrong was what they always do wrong...they all resorted to political means, to get what they wanted.

We do not hate them; we just hope they get what they deserve.

Bill Bonner

The Daily Reckoning

April 23, 2006

New powers for IMF

WASHINGTON -- The International Monetary Fund won new powers to

police the world economy after its 184 member countries endorsed a

new framework to monitor how the economic policies of one country

affects others.

The countries, represented by finance ministers or central bank

governors, also agreed that some emerging economies needed more say

in IMF decision-making, and a proposal for ad hoc increases in their

voting shares could become a reality by the next IMF meetings in


"We resolve to make the IMF more fit for purpose in a global economy

and more able to address challenges that are quite different from

those of 1945, when the IMF was created," Chancellor Gordon Brown,

who also chairs the IMF's policy-setting committee, told a news


"The IMF should be more able to address global questions with

multilateral surveillance," Brown said.

The International Monetary and Financial Committee, or IMFC, said

IMF surveillance would focus on spillovers and links between

countries' economic policies and reaffirm their monetary, fiscal and

exchange rates frameworks.

IMF Managing Director Rodrigo Rato will have the authority to bring

nations together on an ad hoc basis to thrash out any economic

misalignments based on IMF analyses.

Officials said this would create a new forum that better reflected

the rise of Asia in the global economy and could possibly replace

bodies like the Group of Seven industrial countries, which some say

can no longer call all the shots.

One of the problems facing the G7 is that major economic players

like China are not part of the club.

Member countries welcomed enhanced IMF monitoring of exchange rates

that will be extended to include major emerging markets, but several

remarked they were hesitant about the IMF publishing analyses on

theoretical fair value currency rates because it was market


China, whose tightly managed currency is a concern to the G7, said

this did not mean the IMF should interfere in how countries manage

their exchange rates.

"Fund surveillance should comply with the objective of promoting

exchange and financial stability and respect the autonomy as to

exchange rate systems that is granted to all (IMF) members," China's

Governor Zhou Xiaochuan told the IMF committee.

Addressing reporters, the IMF's Rato said the committee gave him a

clear mandate to propose changes to the voting shares, or quotas, of

some countries by September.

"I have spoken several times about the need for increases in voting

power for some countries, including a number of emerging market

economies, to ensure they have a role in the fund's decision-making

process that accords with their increased importance in the world

economy," he said.

A proposal he submitted to the IMFC would give ad hoc increases to a

small number of countries like China, South Korea, Mexico and

Turkey. Other nations that could also possibly qualify include

Malaysia, Thailand and Singapore.

But tensions remain between industrial and developing countries over

how to reallocate voting power beyond initial increases in the

quotas for some emerging nations.

The Group of 24 finance ministers for developing countries from

Asia, Africa and Latin America on Friday called for a more

comprehensive package with timelines to greater representation,

fearing changes could stall after any initial increases.

They said it was "imperative" that a concrete proposal for changes

be worked out by the next IMF meeting in Singapore in September,

which should include a new formula to calculate quotas based on

purchasing power parity of a country and not gross domestic product

as is currently the case.

U.S. Treasury Secretary John Snow said on Saturday he would support

the ad hoc increase "if it is credibly linked as a down payment on

near-term fundamental reform," like those to increase the fund's

watchdog role on currency issues.

Although it is generally recognised that China's quotas do not

properly reflect its global economic weight, an increase in its

voting share may be controversial in light of proposed U.S.

legislation threatening a veto of such a move in the absence of

Chinese currency reforms.

German Finance Minister Peer Steinbrueck called for "equal

treatment," saying some European countries -- like Germany -- were

also underrepresented according to quota calculations.

According to calculations of the current quota system countries like

Britain, Ireland, Spain, the Netherlands, and Sweden are also



"As the issuer of the world's reserve currency, the U.S. economy has for decades enjoyed the capacity to inflate dollar denominated securities at will. Our competitive advantage in issuing top-rated and liquid securities has served us especially well over the past decade. It was a key facet of “reliquefications” and “reflations” during periods of economic weakness and/or fledgling financial crisis. The much trumpeted “resiliency” of the U.S. economy and banking system owes almost everything to the capacity for the U.S. government and financial sector to endlessly create debt instruments readily accumulated by domestic and foreign holders. And I believe a strong case can be made today that long-term yields would be significantly higher if it weren't for the perception that the Bernanke Fed will aggressively cut rates at the first indication that the U.S. economic Bubble and/or Global Asset Market Bubble are beginning to falter. The blundering Fed apparently not only believes that the U.S. economy is more resilient than in the past, it presumes it now has significant leeway to cut rates and “reflate” when necessary.

But the financial world is changing rapidly and radically. The dollar is methodically losing its status as a stable and reliable reserve currency. At the same time, currencies generally are losing favor to real assets as store of value. Understandably, market participants are questioning the will and capacity for central bankers and policymakers to stabilize the Unwieldy Global Credit system. It would at this point require a determined and concerted effort to instigate some serious financial and economic restraint, especially among American, Chinese and Japanese authorities. No one would dare hold their breath waiting for this outcome.

With faith in the prospects for the dollar and global currencies in retreat, the U.S. is in the process of losing its invaluable competitive advantage issuing top-rated liquid securities. This has huge ramifications come the next period of financial dislocation. The Fed's intent to aggressively cut rates and incite yet another bout of lending and leveraged speculation (Credit Inflation) will likely be obstructed by the unwillingness of foreigners to accumulate more dollar IOUs. In the meantime, I believe the changing global landscape will necessitate that that the U.S. now pays an ongoing significant yield differential. Rampant liquidity and speculative excesses demand that global rates rise across the board, while the stability of the dollar depends upon the Fed's willingness to maintain significant rate differentials. Our foreign creditors will demand higher rates and much tighter monetary conditions, and the Fed's dream of wrapping things up before it gets painful faces the reality that our creditors are increasingly tired of getting hurt.

This week, markets began to demonstrate many of the characteristics one would expect when approaching a key inflection point. There was heightened volatility, spectacular short-squeezes, and palpable euphoria. But there are also indications that the “smart money” is increasingly nervous and beginning to lighten up on some positions (including our currency). It is amazing how many have completely bought into The Notion of a Golden Age of Permanent Global Prosperity; that the omnipotent Fed has everything completely under control; and that surging energy and commodity prices are a sign of how wonderfully healthy the global economy is these day (ignoring that we are instead immersed in history's greatest Credit and Asset Bubbles). One should now be on guard for that exacting oscillation between “gee, things are just marvelously splendid” and the “oh my god, the end is near” – The Unpredictable Greed and Fear Seesaw – that will embroil global markets in an extraordinary period of uncertainty and volatility.

April 19, 2006

Condi in Oz to "Contain China"

Bringing Australia into this emerging anti-Chinese network has been a major priority of Condoleezza Rice, who spent several days there in mid-March. Although designed in part to bolster US-Australian ties (largely neglected by Washington over the past few years), the main purpose of her visit was to host a meeting of top officials from Australia, the US and Japan to develop a common strategy for curbing China's rising influence in Asia. No formal results were announced, but Steven Weisman of the New York Times reported on March 19 that Rice convened the meeting "to deepen a three-way regional alliance aimed in part at balancing the spreading presence of China".

An even bigger prize, in Washington's view, would be the integration of India into this emerging alliance system, a possibility first suggested in Rice's Foreign Affairs article. Such a move was long frustrated by congressional objections to India's nuclear-weapons program and its refusal to sign on to the nuclear Non-Proliferation Treaty (NPT).

Under US law, nations such as India that refuse to cooperate in non-proliferation measures can be excluded from various forms of aid and cooperation. To overcome this problem, Bush met with Indian officials in New Delhi last month and negotiated a nuclear accord that will open India's civilian reactors to International Atomic Energy Agency inspection, thus providing a thin gloss of non-proliferation cooperation to India's robust nuclear-weapons program. If the US Congress approves Bush's plan, the United States will be free to provide nuclear assistance to India and, in the process, significantly expand already growing military-to-military ties.

In signing the nuclear pact with India, Bush did not allude to the administration's anti-Chinese agenda, saying only that it would lay the foundation for a "durable defense relationship". But few have been fooled by this vague characterization. According to Weisman of the Times, most US lawmakers view the nuclear accord as an expression of the administration's desire to convert India into "a counterweight to China".

The Pacific build-up begins

Accompanying all these diplomatic initiatives has been a vigorous, if largely unheralded, effort by the Department of Defense (DoD) to bolster US military capabilities in the Asia-Pacific region.

The broad sweep of US strategy was first spelled out in the Pentagon's most recent policy assessment, the Quadrennial Defense Review (QDR), released on February 5. In discussing long-term threats to US security, the QDR begins with a reaffirmation of the overarching precept first articulated in the DPG of 1992: that the United States will not allow the rise of a competing superpower.

This country "will attempt to dissuade any military competitor from developing disruptive or other capabilities that could enable regional hegemony or hostile action against the United States", the document states. It then identifies China as the most likely and dangerous competitor of this sort. "Of the major and emerging powers, China has the greatest potential to compete militarily with the United States and field disruptive military technologies that could over time offset traditional US military advantages" - then adding the kicker - "absent US counter-strategies."

According to the Pentagon, the task of countering future Chinese military capabilities largely entails the development, and then procurement, of major weapons systems that would ensure US success in any full-scale military confrontation. "The United States will develop capabilities that would present any adversary with complex and multidimensional challenges and complicate its offensive planning efforts," the QDR explains. These include the steady enhancement of such "enduring US advantages" as "long-range strike, stealth, operational maneuver and sustainment of air, sea and ground forces at strategic distances, air dominance, and undersea warfare".

Preparing for war with China, in other words, is to be the future cash cow for the giant US weapons-making corporations in the military-industrial complex. It will, for instance, be the primary justification for the acquisition of costly new weapons systems such as the F-22A Raptor fighter, the multi-service Joint Strike Fighter, the DDX destroyer, the Virginia-class nuclear attack submarine, and a new intercontinental penetrating bomber - weapons that would just have utility in an all-out encounter with another great-power adversary of a sort that only China might someday become.

In addition to these weapons programs, the QDR also calls for a stiffening of present US combat forces in Asia and the Pacific, with a particular emphasis on the US Navy (the arm of the military least used in the ongoing occupation of and war in Iraq). "The fleet will have a greater presence in the Pacific Ocean," the document notes. To achieve this, "The navy plans to adjust its force posture and basing to provide at least six operationally available and sustainable [aircraft] carriers and 60% of its submarines in the Pacific to support engagement, presence and deterrence."

Since each of these carriers is, in fact, but the core of a large array of support ships and protective aircraft, this move is sure to entail a truly vast buildup of US naval capabilities in the Western Pacific and will certainly necessitate a substantial expansion of the US basing complex in the region - a requirement that is already receiving close attention from Admiral Fallon and his staff at PACOM. To assess the operational demands of this buildup, moreover, this summer the US Navy will conduct its most extensive military maneuvers in the Western Pacific since the end of the Vietnam War, with four aircraft-carrier battle groups and many support ships expected to participate.

Add all of this together, and the resulting strategy cannot be viewed as anything but a systematic campaign of containment. No high administration official may say this in so many words, but it is impossible to interpret the recent moves of Rice and Rumsfeld in any other manner. From Beijing's perspective, the reality must be unmistakable: a steady buildup of US military power along China's eastern, southern and western boundaries.

How will China respond to this threat? For now, it appears to be relying on charm and the conspicuous blandishment of economic benefits to loosen Australian, South Korean, and even Indian ties with the United States. To a certain extent, this strategy is meeting with success, as these countries seek to profit from the extraordinary economic boom now under way in China - fueled to a considerable extent by oil, gas, iron, timber, and other materials supplied by China's neighbors in Asia.

A version of this strategy is also being employed by President Hu Jintao during his current visit to the United States. As China's money is sprinkled liberally among such influential firms as Boeing and Microsoft, Hu is reminding the corporate wing of the Republican Party that there are vast economic benefits still to be had by pursuing a non-threatening stance toward China.

China, however, has always responded to perceived threats of encirclement in a vigorous and muscular fashion as well, and so we should assume that Beijing will balance all that charm with a military buildup of its own. Such a drive will not bring China to the brink of military equality with the United States - that is not a condition it can realistically aspire to over the next few decades. But it will provide further justification for those in the United States who seek to accelerate the containment of China, and so will produce a self-fulfilling loop of distrust, competition and crisis.

This will make the amicable long-term settlement of the Taiwan problem and of North Korea's nuclear program that much more difficult, and increase the risk of unintended escalation to full-scale war in Asia. There can be no victors from such a conflagration.

Prominent U.S. Physicists Send Letter to President Bush



Newswise — Thirteen of the nation’s most prominent physicists have written a letter to President Bush, calling U.S. plans to reportedly use nuclear weapons against Iran "gravely irresponsible" and warning that such action would have "disastrous consequences for the security of the United States and the world."

The physicists include five Nobel laureates, a recipient of the National Medal of Science and three past presidents of the American Physical Society, the nation’s preeminent professional society for physicists.

Their letter was prompted by recent articles in the Washington Post, New Yorker and other publications that one of the options being considered by Pentagon planners and the White House in a military confrontation with Iran includes the use of nuclear bunker busters against underground facilities. These reports were neither confirmed nor denied by White House and Pentagon officials.

The letter was initiated by Jorge Hirsch, a professor of physics at the University of California, San Diego, who last fall put together a petition signed by more than 1,800 physicists that repudiated new U.S. nuclear weapons policies that include preemptive use of nuclear weapons against non-nuclear adversaries ( Hirsch has also published 15 articles in recent months ( documenting the dangers associated with a potential U.S. nuclear strike on Iran.

"We are members of the profession that brought nuclear weapons into existence, and we feel strongly that it is our professional duty to contribute our efforts to prevent their misuse," says Hirsch. "Physicists know best about the devastating effects of the weapons they created, and these eminent physicists speak for thousands of our colleagues."

"The fact that the existence of this plan has not been denied by the Administration should be a cause of great alarm, even if it is only one of several plans being considered," he adds. "The public should join these eminent scientists in demanding that the Administration publicly renounces such a misbegotten option against a non-nuclear country like Iran."

The letter, which is available at, points out that "nuclear weapons are unique among weapons of mass destruction," and that nuclear weapons in today's arsenals have a total power of more than 200,000 times the explosive energy of the bomb that leveled Hiroshima, which caused the deaths of more than 100,000 people.

It notes that there are no sharp lines between small and large nuclear weapons, nor between nuclear weapons targeting facilities and those targeting armies or cities, and that the use by the United States of nuclear weapons after 60 years of non-use will make the use of nuclear weapons by others more likely.

"Once the U.S. uses a nuclear weapon again, it will heighten the probability that others will too," the physicists write. "In a world with many more nuclear nations and no longer a ‘taboo’ against the use of nuclear weapons, there will be a greatly enhanced risk that regional conflicts could expand into global nuclear war, with the potential to destroy our civilization."


The letter echoes the main objection of last fall’s physicists’ petition, stressing that the Nuclear Non-Proliferation Treaty will be irreversibly damaged by the use or even the threat of use of nuclear weapons by a nuclear nation against a non-nuclear one, with disastrous consequences for the security of the United States and the world.

"It is gravely irresponsible for the U.S. as the greatest superpower to consider courses of action that could eventually lead to the widespread destruction of life on the planet. We urge the administration to announce publicly that it is taking the nuclear option off the table in the case of all non-nuclear adversaries, present or future, and we urge the American people to make their voices heard on this matter."

The 13 physicists who coauthored the letter are: Philip Anderson, professor of physics at Princeton University and Nobel Laureate in Physics; Michael Fisher, professor of physics at the Institute for Physical Science and Technology, University of Maryland and Wolf Laureate in Physics; David Gross, professor of theoretical physics and director of the Kavli Institute of Physics at the University of California, Santa Barbara and Nobel Laureate in Physics; Jorge Hirsch, professor of physics at the University of California, San Diego; Leo Kadanoff, professor of physics and mathematics at the University of Chicago and recipient of the National Medal of Science; Joel Lebowitz, professor of mathematics and physics, Rutgers, The State University of New Jersey and Boltzmann Medalist; Anthony Leggett, professor of physics, University of Illinois at Urbana-Champaign and Nobel Laureate, Physics; Eugen Merzbacher, professor of physics, University of North Carolina at Chapel Hill and former president, American Physical Society; Douglas Osheroff, professor of physics and applied physics, Stanford University and Nobel Laureate, Physics; Andrew Sessler, former director of Lawrence Berkeley Laboratory and former president, American Physical Society; George Trilling, professor of physics, University of California, Berkeley, and former president, American Physical Society; Frank Wilczek, professor of physics, MIT and Nobel Laureate, Physics; Edward Witten, professor of physics, Institute for Advanced Study and Fields Medalist.

The physicists are sending copies of their letter to their elected representatives, requesting that the issue be urgently addressed in the U.S. Senate and House of Representatives.

April 18, 2006

China, Russia welcome Iran into the fold

By M K Bhadrakumar

The Shanghai Cooperation Organization (SCO), which maintained it had no plans for expansion, is now changing course. Mongolia, Iran, India and Pakistan, which previously had observer status, will become full members. SCO's decision to welcome Iran into its fold constitutes a political statement. Conceivably, SCO would now proceed to adopt a common position on the Iran nuclear issue at its summit meeting June 15.

Speaking in Beijing as recently as January 17, the organization's secretary general Zhang Deguang had been quoted by Xinhua news agency as saying: "Absorbing new member states needs a legal basis, yet the SCO has no rules concerning the issue. Therefore, there is no need for some Western countries to worry whether India, Iran or other countries would become new members."

The SCO, an Intergovernmental organization whose working languages are Chinese and Russian, was founded in Shanghai on June 15, 2001 by China, Russia, Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan. The SCO's change of heart appears set to involve the organization in Iran's nuclear battle and other ongoing regional issues with the United States.

Visiting Iranian Deputy Foreign Minister Manouchehr Mohammadi told Itar-TASS in Moscow that the membership expansion "could make the world more fair". And he spoke of building an Iran-Russia "gas-and-oil arc" by coordinating their activities as energy producing countries. Mohammadi also touched on Iran's intention to raise the issue of his country's nuclear program and its expectations of securing SCO support.

The timing of the SCO decision appears to be significant. By the end of April the director general of the International Atomic Energy Agency is expected to report to the United Nations Security Council in New York regarding Iran's compliance with the IAEA resolutions and the Security Council's presidential statement, which stresses the importance of Iran "reestablishing full, sustained suspension of uranium-enrichment activities".

The SCO membership is therefore a lifeline for Iran in political and economic terms. The SCO is not a military bloc but is nonetheless a security organization committed to countering terrorism, religious extremism and separatism. SCO membership would debunk the US propaganda about Iran being part of an "axis of evil".

The SCO secretary general's statement on expansion coincided with several Chinese and Russian commentaries last week voicing disquiet about the US attempts to impose UN sanctions against Iran. Comparison has been drawn with the Iraq War when the US seized on sanctions as a pretext for invading Iraq.

A People's Daily commentary on April 13 read: "The real intention behind the US fueling the Iran issue is to prompt the UN to impose sanctions against Iran, and to pave the way for a regime change in that country. The US's global strategy and its Iran policy emanate out of its decision to use various means, including military means, to change the Iranian regime. This is the US's set target and is at the root of the Iran nuclear issue."

The commentary suggested Washington seeks a regime change in Iran with a view to establishing American hegemony in the Middle East. Gennady Yefstafiyev, a former general in Russia's Foreign Intelligence Service, wrote: "The US's long term goals in Iran are obvious: to engineer the downfall of the current regime; to establish control over Iran's oil and gas; and to use its territory as the shortest route for the transportation of hydrocarbons under US control from the regions of Central Asia and the Caspian Sea bypassing Russia and China. This is not to mention Iran's intrinsic military and strategic significance."

Russian Foreign Minister Sergey Lavrov said: "I would not be in a hurry to draw conclusions, because passions are too often being whipped up around Iran's nuclear program ... I would also advise not to whip up passions."

Sergei Kiriyenko, head of Russia's nuclear power agency and a former prime minister, said Iran was simply not capable of enriching uranium on an industrial scale. "It has long since been known that Iran has a 'cascade' of only 164 centrifuges, and obtaining low-grade uranium from this 'cascade' was only a matter of time. This did not come as a surprise to us."

Yevgeniy Velikhov, president of Kurchatov Institute, Russia's nuclear research center, told Tier-TASS, "Launching experimental equipment of this type is something any university can do."

By virtue of SCO membership, Iran can partake of the various SCO projects, which in turn means access to technology, increased investment and trade, infrastructure development such as banking, communication, etc. It would also have implications for global energy security.

The SCO was expected to set up a working group of experts ahead of the summit in June with a view to evolving a common "energy strategy" and jointly undertaking pipeline projects, oil exploration and related activities.

A third aspect of the SCO decision to expand its membership involves regional integration processes. Sensing that the SCO was gaining traction, Washington had sought observer status at its summit meeting last June, but was turned down. This rebuff - along with SCO's timeline for a reduced American military presence in Central Asia, the specter of deepening Russia-China cooperation and the setbacks to US diplomacy in Central Asia as a whole - prompted a policy review in Washington.

Following a Central Asian tour in October by US Secretary of State Condoleezza Rice, Washington's new regional policy began surfacing. The re-organization of the US State Department's South Asia Bureau (created in August 1992) to include the Central Asian states, projection of US diplomacy in terms of "Greater Central Asia" and the push for observer status with the South Asian Association for Regional Cooperation (SAARC) should be seen in perspective.

US diplomacy is working toward getting Central Asian states to orientate toward South Asia - weaning them away from Russia and China. (Hamid Karzai's government in Kabul has also failed to respond to SCO's overtures but has instead sought full membership in SAARC.)

But US diplomacy is not making appreciable progress in Central Asia. Washington pins hopes on Astana (Kazakhstan) being its pivotal partner in Central Asia. The US seeks an expansion of its physical control over Kazakhstan's oil reserves and formalization of Kazakh oil transportation via Baku-Ceyhan pipeline, apart from carving out a US role in Caspian Sea security.

But Kazakhstan is playing hard to get. President Nurusultan Nazarbayev's visit to Moscow on April 3 reaffirmed his continued dependence on Russian oil pipelines.

Meanwhile, Washington's relations with Tashkent (Uzbekistan) remain in a state of deep chill. The US attempt to "isolate" President Islam Karimov is not working. (Indian Prime Minister Manmohan Singh is visiting Tashkent on April 25.) Again, Tajikistan relies heavily on Russia's support. In Kyrgyzstan, despite covert US attempts to create dissensions within the regime, President Burmanbek Bakiyev's alliance with Prime Minister Felix Kulov (which enjoys Russia's backing) is holding.

The Central Asians have also displayed a lack of interest in the idea of "Greater Central Asia". This became apparent during the conference sponsored by Washington recently in Kabul focusing on the theme.

The SCO's enlargement move, in this regional context, would frustrate the entire US strategy. Ironically, the SCO would be expanding into South Asia and the Gulf region, while "bypassing" Afghanistan.

This at a time when the North Atlantic Treaty Organization is stepping up its presence in Afghanistan. (General James L Jones, supreme allied commander Europe, said recently that NATO would assume control of Afghanistan by August.)

So far NATO has ignored SCO. But NATO contingents in Afghanistan would shortly be "surrounded" by SCO member countries. NATO would face a dilemma.

If it recognizes that SCO has a habitation and a name (in Central Asia, South Asia and the Gulf), then, what about NATO's claim as the sole viable global security arbiter in the 21st century? NATO would then be hard-pressed to explain the raison d'etre of its expansion into the territories of the former Soviet Union.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for more than 29 years, with postings including India's ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001).

April 15, 2006

George Soros, "The Bubble of American Supremacy"

Atlantic Monthy 2003

It is generally agreed that September 11, 2001, changed the course of history.  But we must ask ourselves why that should be so. How could a single event, even one involving 3,000 civilian
casualties, have such a far-reaching effect?  The answer lies not so much in the event itself as in the way the United States, under the leadership of President George W. Bush, responded to it.

Admittedly, the terrorist attack was historic in its own right. Hijacking fully fueled airliners and using them as suicide bombs was an audacious idea, and its execution could not have been more
spectacular. The destruction of the Twin Towers of the World Trade Center made a symbolic statement that reverberated around the world, and the fact that people could watch the event (live) on their television sets, endowed it with an emotional impact that no terrorist act had ever achieved
The aim of terrorism is to terrorize, and the attack of September 11 fully accomplished this objective.

Even so, September 11 could not have changed the course of history to the extent that it has if President Bush had not responded to it the way he did.  He declared war on terrorism, and under that guise implemented a radical foreign-policy agenda whose underlying principles predated
the tragedy.  Those principles can be summed up as follows:
International relations are relations of power, not law; power prevails and law legitimizes what prevails.  The United States is unquestionably the dominant power in the post-Cold War world; it is therefore in a position to impose its views, interests, and values. The world would benefit from adopting those values, because the American model has demonstrated its superiority.
The Clinton and first Bush Administrations failed to use the full potential of American power.  This must be corrected; the United States must find a way to assert its supremacy in the world.

This foreign policy is part of a comprehensive ideology customarily referred to as neoconservatism, though I prefer to describe it as a crude form of social Darwinism.  I call it crude because it ignores
the role of cooperation in the survival of the fittest, and puts all the emphasis on competition.  In economic matters the competition is between firms; in international relations it is between states.
In economic matters social Darwinism takes the form of market fundamentalism; in international relations it is now leading to the pursuit of American supremacy.

Not all the members of the Bush Administration subscribe to this ideology, but neoconservatives form an influential group within it. They publicly called for the invasion of Iraq as early as 1998.
Their ideas originated in the Cold War and were further elaborated in the post-Cold War era.  Before September 11 the ideologies were hindered in implementing their strategy by two considerations: George W. Bush did not have a clear mandate (he became President by virtue of a single vote in the Supreme Court), and America did not have a clearly defined enemy that would have justified a dramatic increase in military spending.

September 11 removed both obstacles.  President Bush declared war on terrorism, and the nation lined up behind its President. Then the Bush Administration proceeded to exploit the terrorist attack
for its own purposes.  It fostered the fear that has gripped the country in order to keep the nation united behind the President, and it used the war on terrorism to execute an agenda of American supremacy.
That is how September 11 changed the course of history.

Exploiting an event to further an agenda is not in itself reprehensible. It is the task of the President to provide leadership, and it is only natural for politicians to exploit or manipulate events so as to
promote their policies.  The cause for concern lies in the policies that Bush is promoting, and in the way he is going about imposing them on the United States and the world.  He is leading us in a very dangerous direction.

The supremacist ideology of the Bush Administration stands in opposition to the principles of an open society, which recognize that people have different views and that nobody is in possession of the ultimate truth. The supremacist ideology postulates that just because we are stronger than others, we know better and have right on our side.
The very first sentence of the September 2002 National Security Strategy (the President's annual laying out to Congress of the country's security objectives) reads, "The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the
forces of freedom and a single sustainable model for national success: freedom, democracy, and free enterprise."

The assumptions behind this statement are false on two counts. First, there is no single sustainable model for national success. Second, the American model, which has indeed been successful, is not
available to others, because our success depends greatly on our dominant position at the center of the global capitalist system, and we are not willing to yield it.

The Bush doctrine, first enunciated in a presidential speech at West Point in June of 2002, and incorporated into the National Security Strategy three months later, is built on two pillars: the United
States will do everything in its power to maintain its unquestioned military supremacy; and the United States arrogates the right to preemptive action.  In effect, the doctrine establishes two classes of sovereignty: the sovereignty of the United States, which takes precedence over
international treaties and obligations; and the sovereignty of all other states, which is subject to the will of the United States.
This is reminiscent of George Orwell's Animal Farm: all animals are equal, but some animals are more equal than others.

To be sure, the Bush doctrine is not stated so starkly; it is shrouded in doublespeak.  The doublespeak is needed because of the contradiction between the Bush Administration's concept of freedom and democracy and the actual principles and requirements of freedom and democracy.
Talk of spreading democracy looms large in the National Security Strategy.  But when President Bush says, as he does frequently, that freedom will prevail, he means that America will prevail.
In a free and open society, people are supposed to decide for themselves what they mean by freedom and democracy, and not simply follow America's lead.  The contradiction is especially apparent in the case of Iraq, and the occupation of Iraq has brought the issue home.
We came as liberators, bringing freedom and democracy, but that is not how we are perceived by a large part of the population.

It is ironic that the government of the most successful open society in the world should have fallen into the hands of people who ignore the first principles of (an) open society.
At home Attorney General John Ashcroft has used the war on terrorism to curtail civil liberties.  Abroad the United States is trying to impose its views and interests through the use of military force.  The invasion of Iraq was the first practical application of the Bush doctrine, and
it has turned out to be counterproductive. A chasm has opened between America and the rest of the world.

The size of the chasm is impressive.  On September 12, 2001, a special meeting of the North Atlantic Council invoked Article 5 of the NATO Treaty for the first time in the alliance's history, calling on all member states to treat the terrorist attack on the United States as an attack upon their own soil.  The United Nations promptly endorsed punitive U.S. action against al-Qaeda in Afghanistan.
A little more than a year later the United States could not secure a UN resolution to endorse the invasion of Iraq.  Gerhard Schroeder won re-election in Germany by refusing to cooperate with the United States.
In South Korea an underdog candidate was elected to the presidency because he was considered the least friendly to the United States; many South Koreans regard the United States as a greater danger to their security than North Korea.  A large majority throughout the world opposed the war on Iraq.

September 11 introduced a discontinuity into American foreign policy. Violations of American standards of behavior that would have been considered objectionable in ordinary times became accepted as appropriate to the circumstances.  The abnormal, the radical, and the extreme have been redefined as normal.  The advocates of continuity have been pursuing a rearguard action ever since.

To explain the significance of the transition, I should like to draw on my experience in the financial markets.  Stock markets often give rise to a boom-bust process, or bubble.  Bubbles do not grow out of thinair.
They have a basis in reality, but reality as distorted by a misconception.  Under normal conditions misconceptions are self-correcting, and the markets tend toward some kind of equilibrium.
Occasionally, a misconception is reinforced by a trend prevailing in reality, and that is when a boom-bust process gets under way. Eventually the gap between reality and its false interpretation
becomes unsustainable, and the bubble bursts.

Exactly when the boom-bust process enters far-from-equilibrium territory can be established only in retrospect.  During the self-reinforcing phase participants are under the spell of the prevailing bias.
Events seem to confirm their beliefs, strengthening their misconceptions.
This widens the gap and sets the stage for a moment of truth and an eventual reversal.  When that reversal comes, it is liable to have devastating consequences.  This course of events seems to have an inexorable quality, but a boom-bust process can be aborted at any stage,
and the adverse effects can be reduced or avoided altogether.
Few bubbles reach the extremes of the information-technology boom that ended in 2000.  The sooner the process is aborted, the better.

The quest for American supremacy qualifies as a bubble. The dominant position the United States occupies in the world is the element of reality that is being distorted.  The proposition that the
United States will be better off if it uses its position to impose its values and interests everywhere is the misconception.  It is exactly by not abusing its power that America attained its current position.

Where are we in this boom-bust process?  The deteriorating situation in Iraq is either the moment of truth or a test that, if it is successfully overcome, will only reinforce the trend.

Whatever the justification for removing Saddam Hussein, there can be no doubt that we invaded Iraq on false pretenses. Wittingly or unwittingly, President Bush deceived the American public
and Congress and rode roughshod over the opinions of our allies. The gap between the Administration's expectations and the actual state of affairs could not be wider.  It is difficult to think of a recent military operation that has gone so wrong.  Our soldiers have been forced to do police duty in combat gear, and they continue to be killed. We have put at risk not only our soldiers' lives but the combat effectiveness of our armed forces.  Their morale is impaired, and we
are no longer in a position to properly project our power. Yet there are more places than ever before where we might have legitimate need to project that power.  North Korea is openly building
nuclear weapons, and Iran is clandestinely doing so.  The Taliban is regrouping in Afghanistan.
The costs of occupation and the prospect of permanent war are weighing heavily on our economy, and we are failing to address many festering problems, domestic and global.  If we ever needed proof that the dream of American supremacy is misconceived, the occupation of Iraq has
provided it.  If we fail to heed the evidence, we will have to pay a heavier price in the future.

Meanwhile, largely as a result of our preoccupation with supremacy, something has gone fundamentally wrong with the war on terrorism. Indeed, war is a false metaphor in this context.  Terrorists do pose a threat to our national and personal security, and we must protect
ourselves.  Many of the measures we have taken are necessary and proper.
It can even be argued that not enough has been done to prevent future attacks.  But the war being waged has little to do with ending terrorism or enhancing homeland security; on the contrary, it endangers our security by engendering a vicious circle of escalating violence.

The terrorist attack on the United States could have been treated as a crime against humanity rather than an act of war.  Treating it as a crime would have been more appropriate.  Crimes require police work, not military action.  Protection against terrorism requires precautionary measures, awareness, and intelligence gathering, all of which ultimately depend on the support of the populations among which the terrorists operate.  Imagine for a moment that September 11
had been treated as a crime.  We would not have invaded Iraq, and we would not have our military struggling to perform police work and getting shot at.

Declaring war on terrorism better suited the purposes of the Bush Administration, because it invoked military might; but this is the wrong way to deal with the problem.  Military action requires an identifiable target, preferably a state.  As a result the war on terrorism has been directed primarily against states harboring terrorists.  Yet terrorists are by definition non-state actors, even if they are often sponsored by states.

The war on terrorism as pursued by the Bush Administration cannot be won.  On the contrary, it may bring about a permanent state of war. Terrorists will never disappear.  They will continue to provide a pretext for the pursuit of American supremacy.  That pursuit, in turn, will continue to generate resistance.  Further, by turning the hunt for terrorists into a war, we are bound to create innocent victims. The more innocent victims there are, the greater the resentment and the better the chances that some victims will turn into perpetrators.

The terrorist threat must be seen in proper perspective. Terrorism is not new.  It was an important factor in nineteenth- century Russia, and it had a great influence on the character of the czarist
regime, enhancing the importance of secret police and justifying authoritarianism.  More recently, several European countries such as Italy, Germany, Great Britain, had to contend with terrorist gangs, and it took those countries a decade or more to root them out. But those countries did not live under the spell of terrorism during all that time.  Granted, using hijacked planes for suicide attacks is something new, and so is the prospect of terrorists with weapons of mass destruction.  To come to terms with these threats will take some adjustment; but the threats cannot be allowed to dominate our existence. Exaggerating them will only make them worse. The most powerful country on earth cannot afford to be consumed by fear.
To make the war on terrorism the centerpiece of our national strategy is an abdication of our responsibility as the leading nation in the world.
Moreover, by allowing terrorism to become our principal preoccupation, we are playing into the terrorists' hands.  They are setting our priorities.

A recent Council on Foreign Relations publication sketches out three alternative national-security strategies. The first calls for the pursuit of American supremacy through the Bush doctrine of pre-emptive military action. It is advocated by neoconservatives. The second seeks the continuation of our earlier policy of deterrence and containment.  It is advocated by Colin Powell and other moderates,
who may be associated with either political party. The third would have the United States lead a cooperative effort to improve the world by engaging in preventive actions of a constructive
character.  It is not advocated by any group of significance, although President Bush pays lip service to it.  That is the policy I stand for.

The evidence shows the first option to be extremely dangerous, and I believe that the second is no longer practical.  The Bush Administration has done too much damage to our standing in the world to permit a return to the status quo.  Moreover, the policies pursued before September 11
were clearly inadequate for dealing with the problems of globalization.
Those problems require collective action.  The United States is uniquely positioned to lead the effort.  We cannot just do anything we want, as the Iraqi situation demonstrates, but nothing much can be done in the way of international cooperation without the leadership, or at least the participation of the United States.

Globalization has rendered the world increasingly interdependent,
but international politics is still based on the sovereignty of
What goes on within individual states can be of vital interest to the
rest of the world, but the principle of sovereignty militates against
interfering in their internal affairs.
How to deal with failed states and oppressive, corrupt, and inept
regimes?  How to get rid of the likes of Saddam?
There are too many such regimes to wage war against every one.
This is the great unresolved problem confronting us today.

I propose replacing the Bush doctrine of pre-emptive military action
with preventive action of a constructive and affirmative nature.
Increased foreign aid or better and fairer trade rules, for example,
would not violate the sovereignty of the recipients.  Military action
should remain a last resort.  The United States is currently
with issues of security, and rightly so.  But the framework within
to think about security is collective security.
Neither nuclear proliferation nor international terrorism can be
successfully addressed without international cooperation.
The world is looking to us for leadership.  We have provided it in the
past; the main reason why anti-American feelings are so strong in the
world today is that we are not providing it in the present.

April 12, 2006

Murtha says war is lost

Pa. congressman outlines failures
Saturday, April 08, 2006
Donna J. Miller
Plain Dealer Reporter

U.S. Rep. John Murtha's booming Marine colonel's voice filled the tight spaces between Greater Clevelanders packed into the City Club Friday to hear him protest President Bush's war on Iraq.

He repeated the message he began trumpeting in November: that American military efforts in Iraq are failing and will continue to fail, while costing taxpayers $450 billion by the year's end.

The 37-year decorated Marine and 32-year congressman from Pennsylvania said:

Iraqis with 80 percent of them wanting the U.S. out need time to solve their own civil war. "It took 100 years to get stability in our country, with its own civil war."

"We needed to win the hearts and minds of the Iraqi people." Instead, more than 40 percent of them say it is all right to kill Americans.

"We needed to be able to pick up the trash, restore power and get the people working again." Instead, oil production remains below prewar levels; electricity is available for just 10 hours a day in the sweltering desert climate; 30 percent of the population is without drinkable water; 60 percent are unemployed.

Troops are undermanned, underequipped and dying at rates higher than during World War II and the Vietnam War. "I visit the [veterans hospitals] every week. The troops don't know what their mission is any more." And 8,500 of them have returned with shattered bod ies or brains and the permanent "shadow on your soul" that fighting a war creates.

Murtha took questions from several luncheon attendees who worried that Bush may be planning to invade Iran. The ranking and longtime member of the Defense Appropriations Subcommittee nearly shouted, "we will not" be entering Iran.

He also said that the subcommittee would not approve funding the construction of permanent military bases in Iraq. The audience broke into applause.

Murtha criticized Bush for using fear of terrorism to maintain public support for the war, when real dangers exist here.

U.S. ports are not secure, but they could be in one month, if the money that has been spent on the civil war in Iraq was spent on ports, he said.

Asked to predict the next threat to America that might require military force, Murtha said he's concerned about China and its increasing need for oil.

"And if they think that we can't respond because we are overextended in Iraq. . ." He shook his head.

The Issing Link

TWO events in the past week highlight the huge divide in monetary policy thinking between Europe and America. On March 16th and 17th, a conference was held in Frankfurt to honour Otmar Issing, chief economist of the European Central Bank (ECB), who retires in May. Most participants agreed that central banks still need to watch the growth of the money supply. A week later, America's Federal Reserve stopped publishing M3, its broadest measure of money, claiming that it provided no useful information. Who is right?

Mr Issing was the architect of the ECB's monetary-policy strategy. He built it using a design taken from Germany's Bundesbank, where he was previously the chief economist. He holds two controversial beliefs that challenge prevailing monetary orthodoxy. First, he thinks that central banks must always keep a close eye on money-supply growth. Second, central banks sometimes need to lean against asset-price bubbles.

Consider the role of money first. Ask non-economists, "What is economics?" and they will often reply that it is "all about money". Yet the odd thing is that the standard academic models used by most economists ignore money altogether. Inflation instead depends simply on the amount of spare capacity in the economy.

Nor does the money supply play any role in monetary policy in most countries, notably America. Alan Greenspan's last ten speeches as chairman of the Federal Reserve contained not a single use of the word "money".

Yet Milton Friedman's dictum that "inflation is always and everywhere a monetary phenomenon" is still borne out by the facts. The chart plots the rate of inflation and broad money-supply growth in 40 economies over the past 30 years. In the long run, countries with faster monetary growth have experienced higher inflation. So why are central banks (except the ECB) paying so little attention to money?

The problem is that over short periods the link between the money supply and inflation is fickle, because the demand for money moves unpredictably. The Bank of England's early days provide a good example. Uncertainty over exactly when ships laden with valuable commodities would arrive in London could cause unexpected shifts in the demand for money and credit. The uncertainty was caused by many factors, notably changes in the direction and the speed of the wind as ships came up the river Thames. The bank's Court Room therefore had a weather vane (still there today) to provide a surprisingly accurate prediction of shifts in the demand for money. Sadly, no such gauge exists today. Financial liberalisation and innovation have also distorted measures of money, making monetary targeting-all the rage in the early 1980s-unworkable.

But it would be foolish to conclude that money does not matter. Throughout history, rapid money growth has almost always been followed by rising inflation or asset-price bubbles. This is why Mr Issing, virtually alone among central bankers, has continued to fly the monetarist flag.

The ECB's monetary-policy strategy has two pillars: an economic pillar, which uses a wide range of indicators to gauge short-term inflation risks, and a monetary pillar as a check on medium- to long-run risks. The monetary pillar has attracted much criticism from outside the ECB; it is often dismissed as redundant, if not confusing. It was originally intended to guard against medium-term inflation risks. More recently, Mr Issing has justified the pillar as a defence against asset bubbles, which are always accompanied by monetary excess.

Mr Issing's model is at last starting to win friends abroad. Julian Callow, an economist at Barclays Capital, sees strong parallels between the Bank of Japan's (BoJ) new monetary policy framework and that of the ECB. The BoJ has said that it will track the economy from two
perspectives: price stability and growth one to two years into the future; and a broader assessment of medium- and longer-term risks, which is likely to include the growth of asset prices and credit. In his time at the podium at last week's conference, Kazumasa Iwata, deputy governor of the BoJ, seemed to confirm that the bank's new framework owed much to Mr Issing's legacy.

Pick your monetary metaphor

Unlike some central bankers, Mr Issing loves to be challenged, so he invited Don Kohn, a governor of the Fed, to tackle the ECB view that a central bank should sometimes "lean against the wind" to prevent an asset bubble inflating, by tightening policy by more than inflation alone would require. Mr Kohn argued the usual Fed line: because of huge uncertainties, it is too risky to respond to bubbles and therefore it is safer to "mop up" by easing policy after a bubble bursts. He tried to present the Fed's approach to asset prices as the neutral one, ie, less activist than the ECB's. But that is misleading. There is no such thing as "doing nothing". Under the Fed's approach, unfettered liquidity sustains a bubble.

This link between money and asset prices is why the ECB'S twin-pillar framework may be one of the best ways for central banks to deal with asset prices. A growing body of academic evidence, most notably from economists at the Bank for International Settlements, suggests that monetary aggregates do contain useful information. Rapid growth in the money supply can often signal the build-up of unsustainable financial imbalances, as well as incipient inflation.

Charles Goodhart, a former member of the Bank of England's Monetary Policy Committee, mused in his speech to the conference that it would be deeply ironic if Mr Issing's departure coincided with a demonstration of the underlying worth of the monetary pillar. In other words, this may be precisely the wrong time to dismiss monetary aggregates: in these days of asset-price booms and imbalances, their informational content may be becoming more, not less, valuable. Will Mr Bernanke please take note?

April 04, 2006

Bill Bonner on Newspapers...

People feel the need to be "informed." They read the paper as if it were a kind of daily hygiene - like brushing their teeth or dumping out the ashtray. Good citizens must keep up with things, they tell themselves. In school, we remember being encouraged to watch the news on television so we'd be able to discuss current events. Our teachers were doing their jobs, indoctrinating another crop of world improvers.

Even the word "newspaper" is a conceit, if not a fraud. It pretends that the news industry is a clean pane of glass through which we look out at the spectacle of the world's events. But it is not a pane of glass at all; it is a microscope in which particular events are magnified and distorted. "News" that neither encourages journalistic prejudices nor inflates the journal's profits, is invisible.

The British press focuses on "events" that are tawdry and puerile. The press lords must think the typical reader is a lout - if not before he begins reading the newspapers, soon after.

The American press, alas, is more earnest. That is why hardly a day passes without a story about Israel on the front page of the International Herald Tribune, no matter how trivial or irrelevant. "Israelis fail to find strong center," was the International Herald Tribune's front-page news yesterday. We have no reason to think that events in Israel are always more important than those in Indonesia or Argentina. But, the paper seems to have a rule: Israel gets a cover story almost each and every day.

We are not so naïve as to fail to understand why: the New York Times, owner of the International Herald Tribune, knows its market. They are in showbiz, too. In their theatre, Israel plays a central role. Maybe what happens to Israel is important to New Yorkers, as say, what happens to Ireland might be important to Bostonians. We don't know, but news, like sausage, is not news until it is run through the grinder and is mixed with the media's magical herbs, preservatives, and special seasonings. Like sausages, you can only take the papers seriously when you don't know what is in them.

This story from the London Times was nowhere to be found in the International Herald Tribune: "Expose on Jewish role in US policy is disowned."

"After a furious outcry from prominent American Jews," the report tells us, Harvard has withdrawn its support from a study done by one of its own professors showing how Jews affect U.S. foreign policy. The poor man who wrote the report, Professor Stephen Walt, must feel like he's picked up a hand grenade. He was carefully examining the U.S. political scene to see how it worked, when the thing went off in his face. According to the Times report, he's been kicked off the job as academic dean of the John F. Kennedy School of Government as a result:

"No one disputes that the Jewish lobby is an influential force in U.S. politics and that the American Israel Public Affairs Committee (AIPAC) is one of the most powerful organizations in Washington. AIPAC is described in the report as 'a de factor agent of a foreign government [that] has a stranglehold on the U.S. Congress.'

"Pressure from Israel and the [Jewish] lobby," the report continues, "was not only a factor behind the decision to attack Iraq in March 2003, but it was critical...the war was motivated in good part by a desire to make Israel more secure."

At any given moment, people are committing murder, mayhem, and elections all over the globe, but it is the "news" from Israel that is the news that counts - in the New York Times and the International Herald Tribune at any rate. After a lifetime of reading about it, even non-Jews begin to care - which is fine by us. We only point it out to mock the "news" itself. It is not "news" that sells papers, but papers that sell news. Every headline is written by a hack with his own dog in the fight.

Sometimes the papers sell news that is so far removed from the actual events that even they are eventually embarrassed.

"Network of pedophiles: Searchers at Outreau look for the body of a little girl," was the headline in Le Monde. "The police began searching, Thursday, the 10th of January, in the gardens of the working class section of Outreau, near Boulogne-sur-Mer, for the body of a young victim of a Franco-Belgian pedophile network."

At least Le Monde was fairly reserved about it. The rest of the press was howling in all caps about the gruesome details. Not only was the poor little girl tortured, raped, and murdered, it seemed like half the town was in on it.

Sexual orgies...bizarre rituals...confessions...breakdowns...first there are a couple of adults charged and then, the papers and the local prosecutor got their blood up. Then, a taxi driver...a baker and his wife...a priest! Boy have we got a story now. Five, 10 - the list of pedophiles was beginning to look like the phonebook.

And why not? The child shrinks were on the case, too. They couldn't believe the kids didn't know or wouldn't say what was really going on. They encouraged the kids to rat out their parents, their neighbors, their priests, and their guardians. They cajoled them. They pressured them. They wanted them to remember - to think hard. "Is it possible that someone put his hand on you? Wouldn't you like to tell us something? No? Try harder..."

Finally, the kids played along.

"You say a 'grand'[tall] man did something to you?" Believe it or not, the investigators went to the phone book, found a man whose name was "LeGrand" and had him arrested.

The prosecutor was a fool. But behind him was such a strong, foul wind from the news media, he could barely keep his feet on the ground. Every day brought fresh gusts: "Pedophile Films Found in Belgium," "Pedophile Ring Arrested," "New Arrests of Leading Citizens." The headlines alone practically had the accused dangling from the gallows, even before any formal charges were filed.

The media wallowed on with new, dazzling details: "18 it is certain...have been the victims of sexual abuse, by their parents, by their neighbors, and by their friends...The children's testimony was sufficiently precise and detailed as to sweep away all doubt and eliminate any possibility of manipulation." Prominent figures were "recognized in the photos," averred the scribes confidently.

Over and over again, the press referred to the "pedophile ring" as if it were a fact as established as gravity. The pedophiles raped and murdered. Hadn't practically every paper in the country said so? Pretty soon, people began to believe that not only it was was ubiquitous. "Things like that, it happens all the time," said a lawyer to the TV cameras, gravely.

In fact, it never happened...even once.

That didn't stop the criminal justice system. Like Janet Reno, the prosecutor became a stooge for the press - and the mob. Someone - anyone

- had to go to jail for such a crime. In this case, 18 people did. Many of them served years in jail; three of them attempted succeeded.

And then, the entire Affaire Outreau imploded: the main accusers recanted. They admitted that they had made the whole thing up. There was no pedophile ring. There was no little girl who had been murdered. There was no orgy of rape and murder. It was all a lie. The accused were innocent.

The government opened the cells, apologized, and gave each of the wrongly accused inmates over $1 million in indemnity.

But the hacks? From them, hardly a word of contrition or regret was heard. As far as their own role was concerned, they seemed to have been afflicted suddenly with a case of collective amnesia. Instead, out came new

headlines: "Judicial Scandal," announced Le Monde. "Lives Ruined," pronounced another. And then, Le Monde deigned to bend its head: "A Media Tempest Turns into a Judicial Shipwreck," it noted.

The gusts keep coming...

Bill Bonner

The Daily Reckoning

April 03, 2006


The Government of Australia (hereinafter referred to as "Australia") and the Government of the People's Republic of China (hereinafter referred to as "China"), both hereinafter referred to as "the Parties";

Desiring to continue and expand their existing friendly relationship;

Reaffirming their commitment to ensure that the international development and use of nuclear energy for peaceful purposes furthers the objective of the non-proliferation of nuclear weapons;

Mindful that both Australia and China are Parties to the Treaty on the Non-Proliferation of Nuclear Weapons, done at London, Moscow and Washington on 1 July 1968 (hereinafter referred to as "the Treaty");

Recognizing that Australia, a non-nuclear-weapon State, has, under the Treaty, undertaken not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices, and that it concluded an agreement with the International Atomic Energy Agency (hereinafter referred to as "the Agency") on 10 July 1974 for the application of safeguards in connection with the Treaty;

Recognizing that China is a nuclear-weapon State as defined by the Treaty, and that it concluded a safeguards agreement with the Agency on 20 September 1988 for the application of safeguards in China;

Affirming their support for the objectives and provisions of the Treaty and their desire to promote universal adherence to the Treaty;

Affirming their support for the Agency safeguards system and their desire to work together to ensure its continued effectiveness;

Confirming the desire of the Parties to cooperate in the development and application of nuclear energy for peaceful purposes;

Desiring to establish conditions consistent with their commitment to non-proliferation under which nuclear material can be transferred between Australia and China for peaceful non-explosive purposes;

Have agreed as follows:


Within this Agreement:

(a) "military purpose" means, for the purposes of this Agreement only, direct military applications of nuclear energy or nuclear material such as nuclear weapons or military nuclear reactors, but does not include indirect uses such as power for a military base drawn from a civil power network, or production of radioisotopes to be used for diagnosis in a military hospital;

(b) "peaceful purposes" means all uses other than use for a military purpose;

(c) "nuclear material" means any "source material" or "special fissionable material" as those terms are defined in Article XX of the Statute of the Agency. Any determination by the Board of Governors of the Agency under Article XX of the Statute of the Agency which amends the list of material considered to be "source material" or "special fissionable material" shall only have effect under this Agreement when both Parties have informed each other in writing that they accept such amendment.


This Agreement shall be implemented between the Parties through the designated authorities nominated by them. For Australia, the designated authority will be the Australian Safeguards and Non-Proliferation Office. For China, the designated authority will be the China Atomic Energy Authority. A Party may from time to time notify the other Party in writing of a change to the designated authority.


This Agreement shall apply to:

(a) nuclear material transferred between Australia and China for peaceful non-explosive purposes, whether directly or through a third country;

(b) all forms of nuclear material prepared by chemical or physical processes or isotopic separation from nuclear material subject to the Agreement; if nuclear material subject to the Agreement is mixed with other nuclear material, the quantity of nuclear material so prepared which falls within the scope of this Agreement shall be an amount equivalent to the proportion which the nuclear material subject to this Agreement bears to the total quantity of nuclear material;

(c) all generations of nuclear material produced by neutron irradiation of nuclear material subject to the Agreement; if nuclear material subject to the Agreement is irradiated together with other nuclear material, the proportion of nuclear material so produced which falls within the scope of this Agreement shall be equal to the proportion of the nuclear material irradiated that is subject to this Agreement;

(d) nuclear material produced, processed or used in, or produced through the direct and major contribution of material, equipment, components or technology transferred between Australia and China, in accordance with the provisions of the Agreement between the Government of the People's Republic of China and the Government of Australia for Cooperation in the Peaceful Uses of Nuclear Energy (hereinafter referred to as "the Nuclear Cooperation Agreement").


1. Nuclear material referred to in Article III shall remain subject to the provisions of this Agreement until:

(a) it has been consumed or diluted in such a way thatit is no longer useable for any nuclear activity; or

(b) it is practicably irrecoverable for processing into a form in which it is useable for any nuclear activity; or

(c) it has been transferred beyond the territorial jurisdiction of Australia or beyond the territorial jurisdiction of China in accordance with paragraph 1 of Article IX of this Agreement; or

(d) the Parties otherwise agree.

2 . For the purpose of determining when nuclear material subject to this Agreement is no longer useable or is practicably irrecoverable for processing into a form in which it is useable for any nuclear activity, both Parties shall accept a determination made by the Agency. For the purpose of this Agreement such determination shall be made by the Agency in accordance with the provisions for the termination of safeguards of the relevant safeguards agreement between the Party concerned and the Agency.


Nuclear material subject to this Agreement shall not be used for, or diverted to, the manufacture of nuclear weapons or other nuclear explosive devices, research on or development of nuclear weapons or other nuclear explosive devices, or be used for any military purpose.


1. Where nuclear material subject to this Agreement is within the territory of Australia, compliance with Article V of this Agreement shall be ensured by a system of safeguards in accordance with the Safeguards Agreement concluded on 10 July 1974 between Australia and the Agency in connection with the Treaty.

2. Where nuclear material subject to this Agreement is within the territory of China, compliance with Article V of this Agreement shall be ensured by a system of safeguards in accordance with the Safeguards Agreement concluded on 20 September 1988 between China and the Agency for the application of safeguards in China.


If, notwithstanding the efforts of both Parties to support the Treaty and the Agency, the Agency, for whatever reason at any time, is not administering the safeguards referred to in Article VI of this Agreement in the territory of one or the other Party in which nuclear material subject to this Agreement is present, the Parties shall forthwith arrange for the application of safeguards satisfactory to both Parties which conform with Agency safeguards principles and procedures and which provide reassurance equivalent to that intended to be secured by the safeguards system they replace. The Parties shall consult and assist each other in the application of such a safeguards system.


1. Each Party shall ensure that adequate physical protection measures are applied to nuclear material subject to this Agreement. The responsibility of a Party for ensuring the nuclear material is adequately protected extends to the international transport thereof, until that responsibility is properly transferred to another state, as appropriate.

2. In addition to its obligations under the Convention on the Physical Protection of Nuclear Material, done at Vienna on 3 March 1980 and as amended from time to time, each Party shall apply, insofar as they are reasonable and practicable, the recommendations of Agency document INFCIRC/225/Rev.4 entitled, "The Physical Protection of Nuclear Material and Nuclear Facilities", as updated from time to time, or any subsequent document replacing INFCIRC/225/Rev.4. Any alteration to or replacement of document INFCIRC/225/Rev.4 shall have effect under this Agreement only when the Parties have informed each other in writing that they accept such alteration or replacement.



1. Nuclear material subject to this Agreement shall not be transferred beyond the territorial jurisdiction of the recipient Party without the prior written consent of the supplier Party, except in accordance with Annex A.

2. Nuclear material subject to this Agreement shall not be:

(a) enriched to 20% or greater in the isotope uranium 235; or

(b) reprocessed;

without the prior written consent of the supplier Party.

3. Nuclear material subject to this Agreement in China shall be subject to the safeguards referred to in paragraph 2 of Article VI and shall be processed or used:

(a) only within the Delineated Chinese Nuclear Fuel Cycle Program defined in accordance with Annex B; or

(b) in accordance with the procedures referred to in paragraph 1 of Annex B.

4. The supplier Party shall not withhold consent for the purpose of securing commercial advantage.


1. Each Party shall establish and maintain a system of accounting for and control of all nuclear material subject to this Agreement.

2. The designated authorities of both Parties shall establish an Administrative Arrangement to ensure the effective fulfilment of the obligations of this Agreement. The Administrative Arrangement established pursuant to this paragraph may be changed with the mutual consent in writing of the designated authorities of both Parties.

3. Nuclear material subject to this Agreement shall be transferred pursuant to this Agreement only to a natural or legal person identified by the recipient Party to the supplier Party as duly authorised to receive it.

4. If nuclear material subject to this Agreement is present in the territory of a Party, that Party shall, upon the request of the other Party, provide the other Party in writing with the overall conclusions which the Agency has drawn from its verification activities, insofar as they relate to nuclear material subject to this Agreement.

5. The Parties shall take adequate measures to ensure protection of any trade secrets acquired through the operation of this Agreement.


1. The Parties shall consult regularly, or at any time at the request of either Party, in order to ensure the effective implementation of this Agreement, or to review matters relating to the peaceful uses of nuclear energy.

2. The Parties may jointly invite the Agency to participate in such consultations.


1. The supplier Party has the right to suspend or cancel further transfers of nuclear material and to require the recipient Party to take corrective steps if the recipient Party:

(a) does not comply with any provisions of Article III to XI or Article XIII of this Agreement; or

(b) does not comply with, or rejects, Agency safeguards arrangements.

2. The supplier Party has the right to require the return of nuclear material subject to this Agreement if corrective steps are not taken by the recipient Party within a reasonable time.

3. Nothing in this Article shall preclude recourse to dispute settlement under Article XIII.


1. If any dispute between the Parties arises relating to the interpretation or application of this Agreement, the Parties shall in the first place settle the dispute by negotiation.

2. If the Parties fail to reach a settlement of the said dispute within twelve months, the Parties may settle such dispute through diplomatic channels or through arbitration.

3. Within a period of sixty days from the date of receipt by either Party from the other Party of a note through the diplomatic channel requesting arbitration of the dispute by a tribunal, each Party shall nominate an arbitrator. Within a period of sixty days from the nomination of the arbitrators, the two arbitrators shall appoint a president of the tribunal who shall be a national of a third state. If within sixty days after one of the Parties has nominated its arbitrator, the other Party has not nominated its own or, if within sixty days following the nomination of the second arbitrator, both arbitrators have not agreed on the appointment of the president, either Party may request the President of the International Court of Justice to appoint an arbitrator or arbitrators as the case requires.

4. Except as otherwise determined by the Parties or prescribed by the tribunal established pursuant to paragraph 3 of this Article, each Party shall submit a memorandum within forty-five days after the tribunal is fully constituted. Replies shall be due sixty days later. The tribunal shall hold a hearing at the request of either Party, or at its discretion, within thirty days after replies are due.

5. The tribunal shall attempt to give a written decision within thirty days after completion of the hearing, or, if no hearing is held, after the date both replies are submitted. The decision shall be taken by a majority vote.

6. The Parties may submit requests for clarification of the decision within fifteen days after it is received and such clarification shall be issued within fifteen days of such request.

7. The Parties undertake to comply with any arbitration decision given under this Article.

8. The expenses of arbitration under this Article shall be shared equally between the Parties.

9. If and for as long as either Party fails to comply with a decision under paragraph 5 of this Article, the other Party may limit, suspend or revoke any rights or privileges which it has granted by virtue of this Agreement to the Party in default.


The terms of this Agreement may be amended at any time by agreement between the Parties. Such amendment shall enter into force on the date on which the Parties have notified each other in writing that their respective internal procedures necessary for its entry into force have been completed.


1. This Agreement shall enter into force after each Party has notified the other in writing that all domestic requirements for entry into force for this Agreement and the Nuclear Cooperation Agreement have been completed. The date of entry into force of this Agreement shall be thirty days after the date of the last notification.

2. The Agreement shall remain in force for an initial period of thirty years. The Agreement shall terminate:

(a) if either Party notifies the other Party at least 180 days prior to the expiry of the initial thirty year period, or 180 days after notice of termination thereafter; or

(b) upon the termination of the Nuclear Cooperation Agreement;

whichever is the sooner.

3. Unless otherwise agreed in writing between the Parties, termination, suspension or expiration of this Agreement or any cooperation under it for any reason shall not release the Parties from obligations under this Agreement in respect of nuclear material transferred while the Agreement was in force.

4. The Annexes to this Agreement form an integral part of this Agreement.

IN WITNESS WHEREOF , the undersigned, being duly authorised thereto by their respective Governments have signed this Agreement.

Done, in duplicate in English and Chinese, both texts having equal validity, at Canberra on third day of April 2006




Both Parties agree that the provisions of paragraph 1 of Article IX of this Agreement will apply in accordance with the following conditions:

1. Transfers of nuclear material subject to this Agreement from China to third countries which have an Agreement in force with Australia concerning nuclear transfers, in relation to which Agreement Australia has not advised China that it has found it necessary to suspend, cancel or refrain from making nuclear transfers, can take place for conversion, enrichment below 20% in the isotope uranium 235, fuel fabrication and, where applicable, use in a reactor.

2. China shall promptly notify Australia, in accordance with procedures set out in the Administrative Arrangement pursuant to paragraph 2 of Article X of this Agreement, of such transfers.

3. Australia shall provide China with, and keep up to date, the list of countries to which transfers may be made in accordance with paragraph 1 above.




1. Uranium ore concentrates transferred to China under this Agreement shall be substituted by an equivalent quantity of converted natural uranium in the form of uranium hexafluoride in accordance with procedures set out in the Administrative Arrangement established pursuant to Article X of this Agreement.

2. Following conversion to uranium hexafluoride in accordance with paragraph 1 above, nuclear material subject to this Agreement in China shall be processed and used only in those facilities specified in the Delineated Chinese Nuclear Fuel Cycle Program.

3. The facilities specified in the Delineated Chinese Nuclear Fuel Cycle Program shall be determined by mutual decision of the designated authorities. These facilities shall be included in the List of facilities designated by China in accordance with the provisions of the safeguards agreement referred to in paragraph 2 of Article VI of this Agreement.

4. The facilities in the Delineated Chinese Nuclear Fuel Cycle Program shall be specified under the following headings:

Facilities for enrichment;
Facilities for conversion to UO2;
Facilities for fuel fabrication;
Development and demonstration projects;
Facilities may be added to or deleted from the Delineated Chinese Nuclear Fuel Cycle Program by mutual decision of the designated authorities.




Paragraph 2 of Article IX of this Agreement provides that nuclear material subject to the Agreement shall not be reprocessed without the prior written consent of the supplier Party.

The Parties acknowledge that the separation, storage, transportation and use of plutonium require particular measures to reduce the risk of nuclear proliferation.

Australia recognises the interest of China in reprocessing as part of its civil nuclear energy program in order to ensure efficient energy use and management of substances contained in spent fuel.

Australia also recognises the interest of China in predictable and practical implementation of consent rights under the Agreement, taking into account the shared non-proliferation objectives of the Parties and the long-term needs of China's nuclear fuel cycle program.

Australia shall provide consent on a long term basis to reprocessing under paragraph 2 of Article IX of this Agreement, on the following understandings:

(a) long term consent shall be given for reprocessing for exclusively peaceful purposes under Agency safeguards referred to in paragraph 2 of Article VI, in accordance with the Delineated Chinese Nuclear Fuel Cycle Program referred to in Annex B of this Agreement, amended as necessary by mutual decision of the designated authorities; and

(b) the separated plutonium shall be stored and used, under Agency safeguards referred to in paragraph 2 of Article VI, in accordance with the Delineated Chinese Nuclear Fuel Cycle Program.

Australia shall provide consent as outlined above at such time that China's plans for reprocessing are sufficiently advanced to nominate the facilities, reactors and other facilities concerned for inclusion in the Delineated Chinese Nuclear Fuel Cycle Program.



1. This Annex applies to ores or concentrates containing nuclear material, other than uranium ore concentrates, which are transferred from Australia to China directly or through a third country, and which transfer has been notified by the designated authority of Australia to the designated authority of China.

2. China agrees not to extract nuclear material for nuclear use from such ores or concentrates. If there is any change in China's intentions in this regard, nuclear material shall not be extracted until the Parties have consulted and agreed safeguards measures to apply to such nuclear material.

3. The Administrative Arrangement established pursuant to Article X of this Agreement shall include procedures for Australia to notify China of transfers of ores and ore concentrates pursuant to paragraph 1 of this Annex.



The following records the interpretation given by the Parties regarding the scope of the definition of the term "military purpose" contained in paragraph (a) of Article I of this Agreement. The Parties agree that nuclear material subject to this Agreement shall not be used: for the production of tritium for military purposes; for military nuclear propulsion; or for direct military non-nuclear applications, such as munitions, including depleted uranium munitions.

Deep Recession or Hyperinflation: Ben to decide soon

The US current account (a negative) plus capital inflows tells us how much money is entering the US economy. In 2003, the US current account deficit was $US 531 Billion, it actually got $US 747 Billion, so net inflows were 216 Billion. In 2004, the US current account deficit was 666 billion; it got 915 billion so net inflows were 249 Billion. In 2005, the deficit was $US 801 Billion - $US 1.025 TRILLION was received, net inflows were 224 billion.But from its high of $US 117.2 Billion in August 2005, the commerce department reports are showing a steady decline in inflows. The flow was down to $US 74 Billion in December and $US 78 Billion in January. When foreign funds no longer cover the current account deficit, the Fed will either have to keep raising rates to attract savings from overseas and watch housing crash or hold off on rate rises and watch the dollar plummet. The Feds choice is now between the long postponed recession or a dollar crash.

This is the reason why I expect gold to go to $US800.00 before the next serious correction.

April 01, 2006

Interview with America's auditor in chief, David Walker

The richest, most powerful nation on earth faces a fiscal "tsunami" which threatens to overwhelm Government and citizens alike. Who says so? America's auditor in chief, David Walker, whose job it is to oversee all Federal spending. He's pleading with US politicians and taxpayers to face up to the harsh economic realities that come with an ageing population and spiralling budget deficits.

(Check out the site for the feedback, which is so typical)

 Stephen Sackur talks to David Walker.

March 30, 2006

Prestowitz Urges Koizumi To Call for "Plaza Accord II" at G8

To Call for 'Plaza Accord II' at G-8

From Kyodo News Agency
Tuesday, March 28, 2006

Japanese Prime Minister Junichiro Koizumi should take the lead at a
Group of Eight meeting in calling for a "Plaza Accord II," former
U.S. trade negotiator Clyde Prestowitz said Tuesday.

"We all need to cooperate on diminishing the role of the dollar in
international trade," said Prestowitz, now the president of the
Economic Strategy Institute, which he founded, at a lecture at the
Foreign Correspondents' Club of Japan.

Even though Koizumi is going to step down from the premiership in
September, he is in a good position to suggest that G-8 leaders
adopt a new Plaza Accord to help reduce current global economic
imbalances similar to those seen in the mid-1980s, when the first
accord was struck, Prestowitz said.

The 1985 Plaza Accord was signed by the then Group of Five economic
powers to coordinate foreign exchange policies. Troubled by a large
trade deficit, particularly with Japan, the United States under the
administration of President Ronald Reagan aimed to bring down the
value of the U.S. dollar against other major currencies.

Since then the world economy has gone through a radical
transformation, with China and India emerging as major economic
powerhouses. The G-5 has now expanded to the G-8 grouping Britain,
Canada, France, Germany, Italy, Japan, the United States and Russia.

But the U.S. dollar is again in a situation in which many
economists, including Prestowitz, see it as overvalued and partly
responsible for increasing trade deficits in the United States.

The U.S. government recently said its current account deficit in
2005 totaled $804.95 billion, up 20.5 percent from the previous
year, to hit a record high for the fourth straight year due to a
bigger goods trade deficit on higher imports and oil prices.

"We are back (to a similar situation to the mid-1980s with a similar
global economic imbalance), except it's bigger and there are more
players," said Prestowitz, a trade negotiator in the Reagan

To help resolve this matter, he said the United States should raise
taxes and increase financial savings, while other countries should
stimulate consumption.

As a means of solving the problem, the world needs to begin pricing
oil "not in the dollar but in a basket of currencies," such as the
yen, dollar, euro, and yuan, he suggested.

March 24, 2006

Stop the war on Iran before it starts!  
It is with grave concern that we observe the growing threat of a new U.S. war--this time against the people of Iran. The media is filled with reports of an alleged nuclear threat posed by Iran and the assumed need for the U.S. to take military action. These reports recall the "Weapons of Mass Destruction" stories issued in the months leading up to the war on Iraq.

Ha Ha Ha America

From the Sundance film festival.

March 22, 2006

Can't beleive what I'm reading..

"One Bush adviser sees political promise for the President in a nuclear peril. ‘Certainly, there's going to be a serious showdown on Iran,’ he said. ‘He's very relevant on that, and that may help his numbers a little bit.’"

--Time Magazine, March 14, 2006

March 21, 2006

Discontinuance of M3

 What Tosh!
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

March 19, 2006

AMERICAN THEOCRACY Kevin Philips (Review)

The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century.
By Kevin Phillips.
462 pp. Viking. $26.95.

The American press in the first days of the Iraq war reported extensively on the Pentagon's failure to post American troops in front of the National Museum in Baghdad, which, as a result, was looted of many of its great archaeological treasures. Less widely reported, but to Phillips far more meaningful, was the immediate posting of troops around the Iraqi Oil Ministry, which held the maps and charts that were the key to effective oil production. Phillips fully supports an explanation of the Iraq war that the Bush administration dismisses as conspiracy theory that its principal purpose was to secure vast oil reserves that would enable the United States to control production and to lower prices. ("Think of Iraq as a military base with a very large oil reserve underneath," an oil analyst said a couple of years ago. "You can't ask for better than that.") Terrorism, weapons of mass destruction, tyranny, democracy and other public rationales were, Phillips says, simply ruses to disguise the real motivation for the invasion.

And while this argument may be somewhat too simplistic to explain the complicated mix of motives behind the war, it is hard to dismiss Phillips's larger argument: that the pursuit of oil has for at least 30 years been one of the defining elements of American policy in the world; and that the Bush administration unusually dominated by oilmen has taken what the president deplored recently as the nation's addiction to oil to new and terrifying levels. The United States has embraced a kind of "petro-imperialism," Phillips writes, "the key aspect of which is the U.S. military's transformation into a global oil-protection force," and which "puts up a democratic facade, emphasizes freedom of the seas (or pipeline routes) and seeks to secure, protect, drill and ship oil, not administer everyday affairs."

Phillips is especially passionate in his discussion of the second great force that he sees shaping contemporary American life radical Christianity and its growing intrusion into government and politics. The political rise of evangelical Christian groups is hardly a secret to most Americans after the 2004 election, but Phillips brings together an enormous range of information from scholars and journalists and presents a remarkably comprehensive and chilling picture of the goals and achievements of the religious right.

He points in particular to the Southern Baptist Convention, once a scorned seceding minority of the American Baptist Church but now so large that it dominates not just Baptism itself but American Protestantism generally. The Southern Baptist Convention does not speak with one voice, but almost all of its voices, Phillips argues, are to one degree or another highly conservative. On the far right is a still obscure but, Phillips says, rapidly growing group of "Christian Reconstructionists" who believe in a "Taliban-like" reversal of women's rights, who describe the separation of church and state as a "myth" and who call openly for a theocratic government shaped by Christian doctrine. A much larger group of Protestants, perhaps as many as a third of the population, claims to believe in the supposed biblical prophecies of an imminent "rapture" the return of Jesus to the world and the elevation of believers to heaven.

Prophetic Christians, Phillips writes, often shape their view of politics and the world around signs that charlatan biblical scholars have identified as predictors of the apocalypse among them a war in Iraq, the Jewish settlement of the whole of biblical Israel, even the rise of terrorism. He convincingly demonstrates that the Bush administration has calculatedly reached out to such believers and encouraged them to see the president's policies as a response to premillennialist thought. He also suggests that the president and other members of his administration may actually believe these things themselves, that religious belief is the basis of policy, not just a tactic for selling it to the public. Phillips's evidence for this disturbing claim is significant, but not conclusive.

THE third great impending crisis that Phillips identifies is also, perhaps, the best known the astonishing rise of debt as the precarious underpinning of the American economy. He is not, of course, the only observer who has noted the dangers of indebtedness. The New York Times columnist Paul Krugman, for example, frequently writes about the looming catastrophe. So do many more-conservative economists, who point especially to future debt particularly the enormous obligation, which Phillips estimates at between $30 trillion and $40 trillion, that Social Security and health care demands will create in the coming decades. The most familiar debt is that of the United States government, fueled by soaring federal budget deficits that have continued (with a brief pause in the late 1990's) for more than two decades. But the national debt currently over $8 trillion is only the tip of the iceberg. There has also been an explosion of corporate debt, state and local bonded debt, international debt through huge trade imbalances, and consumer debt (mostly in the form of credit-card balances and aggressively marketed home-mortgage packages). Taken together, this present and future debt may exceed $70 trillion.

The creation of a national-debt culture, Phillips argues, although exacerbated by the policies of the Bush administration, has been the work of many people over many decades among them Alan Greenspan, who, he acidly notes, blithely and irresponsibly ignored the rising debt to avoid pricking the stock-market bubble it helped produce. It is most of all a product of the "financialization" of the American economy the turn away from manufacturing and toward an economy based on moving and managing money, a trend encouraged, Phillips argues persuasively, by the preoccupation with oil and (somewhat less persuasively) with evangelical belief in the imminent rapture, which makes planning for the future unnecessary.

There is little in "American Theocracy" that is wholly original to Phillips, as he frankly admits by his frequent reference to the work of other writers and scholars. What makes this book powerful in spite of the familiarity of many of its arguments is his rare gift for looking broadly and structurally at social and political change. By describing a series of major transformations, by demonstrating the relationships among them and by discussing them with passionate restraint, Phillips has created a harrowing picture of national danger that no American reader will welcome, but that none should ignore.

The American Dream in reverse.

We are living the American Dream in reverse.

The minimum wage buys less today than it did when Wal-Mart founder Sam Walton opened his first Walton's 5 & 10 in Bentonville, Arkansas in 1951.

It would take more than $9 in 2006 to match the federal minimum wage peak reached in 1968, adjusting for inflation. At today's $5.15 an hour, it takes nearly two minimum wage workers to earn what one made 38 years ago.

The minimum wage sets the wage floor. When the minimum wage is stuck in quicksand, it drags down wages for workers up the pay scale as well. Hourly wages for average workers are 11 percent lower than they were in 1973, despite rising worker productivity.

It wasn't always like this. Between 1947 and 1973, worker productivity rose 104 percent while the minimum wage rose 101 percent, adjusting for inflation.

The United States has become a downwardly mobile society. The American Dream is the American Pipe Dream for more and more people.

The downward shift in wages is moving higher up the career ladder. The inflation-adjusted earnings of college-educated workers have fallen since 2000.

We are breaking records we don't want to break. Record numbers of people have no health insurance.

The share of national income going to wages and salaries is at the lowest level since 1929—the year that kicked off the Great Depression. The share going to after-tax corporate profits, which heavily benefit corporate executives and other wealthy Americans through increased dividends and capital gains, is at the highest level since 1929.

"In 2005, for the first time since the Great Depression, Americans borrowed more than they earned," Parade magazine reports in "What People Earn."

Fueled by obscene wage inequality and tax cuts, income and wealth are piling up at the very top. More and more jobs are keeping people in poverty instead of out of poverty. Middle-class households are a medical crisis, outsourced job or busted pension away from bankruptcy.

Contrary to myth, the United States is not becoming more competitive in the global economy by taking the low road. We are in record-breaking debt to other countries. We have a record trade deficit, hollowed-out manufacturing base and deteriorating research and development. The infrastructure built by earlier generations of taxpayers has eroded greatly, undermining the economy as well as health and safety.

Households have propped themselves up in the face of falling real wages by maxing out work hours, credit cards and home equity loans. This is not a sustainable course. The low road is like a "shortcut" that leads to a cliff.

We will not prosper in the 21st century global economy by relying on 1920s corporate greed, 1950s tax revenues, downwardly mobile wages and global-warming energy policies. We will not prosper relying on disinvestment in place of reinvestment. We can't succeed that way any more than farmers can "compete" by eating their seed corn.

As Business Week put it in a special issue on China and India, "China's competitive edge is shifting from low-cost workers to state-of-the-art manufacturing. India is creating world-class innovation hubs, and its companies are far better performers than China's."

The United States will not succeed by shifting increasingly from state-of-the art manufacturing and world-class innovation hubs to low-cost workers.

Contrary to myth, many European countries are better positioned for the future than the United States, with healthier economies and longer healthy life expectancies, greater math and science literacy, free or affordable education from preschool through college, universal health care, less poverty and inequality and more corporations combining social responsibility with world-class innovation.

Among the world's 100 largest corporations in 2005, just 33 were U.S. companies while 48 were European. In 2002, 38 were U.S. companies and 36 were European. CEO-worker pay gaps are much narrower at European companies than American. Americans work over 200 hours more a year on average than workers in other rich industrialized nations.

The United States dropped from number one to number five in the World Economic Forum's global information technology ranking. The top four spots are held by Singapore, Iceland, Finland and Denmark, with Sweden number six.

The U.S. trade deficit increased 17 percent in 2005. As the Economic Policy Institute reports, "U.S. trade deficits increased with every major area of the world, including China (34 percent), OPEC (18 percent), Africa (15 percent), Europe (15 percent), Mexico and Canada (13 percent combined), Latin America (12 percent), and all Asian countries bedsides China (5 percent)."

In the book How We Compete: What Companies Around the World Are Doing To Make It In Today's Global Economy, Suzanne Berger reports the findings of MIT's Industrial Performance Center study of more than 500 international companies. She observes, "Contrary to the widely held belief of many managers, we conclude that solutions that depend on driving down costs by reducing wages and social benefits—in advanced countries or in emerging economies—are always dead ends. . .

"Strategies based on exploiting low-wage labor end up in competitive jungles, where victories are vanishingly thin and each day brings a new competitor. . . As low-end firms that compete on price move from one overcrowded segment of the market to the next, there is virtually no chance of gaining any durable advantage. The activities that succeed over time are, in contrast, those that build on continuous learning and innovation."

Instead of pretending the problem is overpaid workers and accelerating offshoring, we need to shore up our economy from below and invest in smart, sustainable development. Raising the minimum wage is a vital step.

The high road is not only the better road, it is the only road for progress in the future. An America that doesn't work for working people is not an America that works.

March 18, 2006

George Bush Goes for Broke

A Bananna Republic is one of those places where 1 in 5 of the dollars spent by the government is borrowed, the trade deficit exceeds 6% of GNP and the President funds the state with a printing press in the basement.

What brings things to a head is usually a sudden loss of confidence; some big debtor doesn't get paid and the currency is suddenly dumped. Next; import prices skyrocket, inflation destroys the citizens savings, and finally, when no one can get gasoline and spares the ruler is overthrown.

The IMF is called in, a slighly more responsible leader is installed and a new currency introduced. Citizens slowly pick up the pieces, but they never trust their rulers again and henceforth keep money offshore or in Gold, buried in the backyard.

The US printed to fund the revolutionary war, hence the phrase, "Not worth a continental", but generally, throughout the years, the US has had a currency backed by gold and been the worlds biggest creditor. In fact, the dollar was trusted and the economy so strong that it became the worlds reserve currency, replacing the British Pound.

LBJ spent big on the War and his "Great Soceity" and so the French got so worried they asked for Gold instead. To stop the drain, Nixon ended Gold convertability and as the dollars multiplied, their individual value declined. Gold hit $850.

Volker, by targeting the money supply and paying 18% for dollar deposits, restored confidence.

In the 1980's, America slowly slipped from international credit to debit, and the debt went up, and up. The US had a lucky break when crisis in Russia and Asia and the internet boom sent money flowing in. During the Clinton administration it looked for a moment as if the US might not only stop adding to the Debt, but pay some off.

But George W Bush was elected and today the US fiscal position is vastly worse than it was in 1977.

The US just raised the debt limit to $8.2 trillion, that is, the total amount of dollars the US owes can owe holders of US government debt instruments. Well, 7.9 trillion is what the US owes Bond holders, but it has promised much to its citizens. US Comptroller General David Walker reports "the federal government's fiscal exposures now total more than $46 trillion, up from $20 trillion in 2000." So, amazingly,most of that debt was incurred by the current administration.

Federal revenue peaked at $2.03 trillion in 2000 and then fell. Expenditures were $2.47 trillion in 2005, an alarming 38.2% above the federal government's expenditures in 2000. Even in constant 2000-dollars this was a 21.8% increase over the five years from 2000 to 2005. The administration supported both massive outlays and tax cuts, both Guns and Butter.

As a consequence of this loss of revenue and uncontrolled spending, the US government relies on debt to cover the difference. In 2000, 1.1% of the US government's cash flow came from new debt, this grew to 20.4% in 2005.

For every $100 spent by the US government in 2005, $20.40 came from borrowed money, whereas in 2000, it was much less than 2%.

This new debt has been easy to service due to declining interest rates, the interest bill was $361.9 billion in 2000, but it fell to $352.3 billion in 2005.

Low interest rates also meant a boom in housing prices, a flood of re-fi's, and more spending allowing the US government to evade the political repercusions as the federal debt climbed 40.5% from $5.63 trillion to $7.91 trillion in the same period.

Now, as rates rise, the US will either have to massively cut spending so as to continue to meet its interest expense obligations, or just borrow more, creating a vicious circle where the government borrows more and more money to meet both current expenditures and the climbing interest bill.

Today, the United States is so broke the "structural adjustment team" would have long ago been called in, but for its privelge of being able to pay for imports with its own currency.

Over the last three years, all Federal Reserve Board members have either resigned or retired with replacments appointed by this administration, an unprecedented turnover. The Treasury stops reporting M3 this month and Ben Bernake, a chairman who beleived the great depression could have been avoided by monetary acomodation is in the chair.

And people wonder why the price of Gold is rising.



March 17, 2006

The Abu Ghraib files

279 photographs and 19 videos from the Army's internal investigation record a harrowing three months of detainee abuse inside the notorious prison -- and make clear that many of those responsible have yet to be held accountable.

March 14, 2006

Did John Howard actually give this speech


 Or has someone hacked the site. Opps, no wonder I can't beleive what I'm reading. Bad URL

During our recent celebrations of the Coalition's ten years in power, I have, as Prime Minister, been publicly reflecting on our Party's many great achievements, as was appropriate to do. But on this occasion, among old friends and senior colleagues, I wish to share some unsettling thoughts about the situation in Iraq.

Three years ago in Sydney, when I spoke to the men and women of the Australian Defence Force, who were gathered on the deck of HMAS Kanimbla, I felt that above all other Australians, they were entitled to know from me why it is that the Government had asked them to go to the Persian Gulf and face the armed forces of a dangerous dictator.

I said then that all the intelligence material collected over recent times, to which Australia had contributed, proved overwhelmingly that Saddam Hussein had maintained his stockpile of chemical and biological weapons and that he was on the brink of nuclear capability. This posed a real and unacceptable threat to the stability and security of our world. I said that unless Iraq was disarmed of its weapons of mass destruction ­ totally and permanently ­ then the Middle East would remain a powder keg, waiting for a match.

I sincerely believed that was true - on the best intelligence and advice that was available at that time. On February, 2003, I told Parliament, that disarming Iraq would bring enormous benefits to the Middle East and be widely welcomed throughout the world. Unfortunately, our expectations in this matter have not yet been realised. Even so, I have continued to hold firm to our commitment, despite the ups and downs of the occupation, because our alliance with the US is vital to the security of Australia.

On May 19, 2004, after my return from a visit to Baghdad, I told the Institute of Public Affairs in Melbourne that the situation in Iraq was rapidly improving. That the north of the country was relatively peaceful and most of the south was reasonably stable. I pointed out that Iraq was 'no longer ruled by a loathsome and homicidal dictator, and potentially hundreds of thousands of lives have been saved'. I sincerely believed that at the time.

There had been so many encouraging signs of progress. Let me re-iterate some of the signs I mentioned in 2004, and reflect on the situation from today's perspective, as we approach the third anniversary of the occupation.

I said then that electricity, water, telephone and sanitation were gradually being restored to pre-war levels or above. Sadly, this did not happen. As of February this year, 125 projects to provide electricity have been cancelled. Of the 136 projects that were originally pledged to improve Iraqi water and sanitation, only 49 will be ever finished.

I said then that six major water treatment plants had been rehabilitated. Perhaps I should have pointed out that these plants had previously been destroyed by British and US bombs during the 12 years of UN sanctions against the Hussein regime. Today, the water situation in Iraq is dire. Billions of dollars have been shifted from rebuilding vital infrastructure to guarding the borders of Iraq.

I said that all 240 hospitals as well as 1,200 health clinics were fully operational, which was the advice we had received from the then administrator, Mr Paul Bremer. Unfortunately, this turned out to be overly optimistic. On November 2004, at the start the coalition¹s pacification of the city of Falluja, the city's General Hospital was occupied by US troops and - I am sorry to say - that hospital staff were handcuffed and some patients were dragged from their beds; perhaps for good reasons. Snipers were posted on the roof of the building and ambulances were strafed. On November, 6, the BBC reported that US air strikes had reduced the newly built Nazzal Emergency Hospital to rubble.

One doctor reportedly told Reuters, and I quote: "There is not a single surgeon in Falluja. We had one ambulance hit by US fire and a doctor wounded. There are scores of injured civilians in their homes whom we can't move. A 13-year-old child just died in my hands." Now I do not wish to labour the point. But it should be conceded that an impartial examination actions of the Coalition of the Willing during operations in Falluja has raised uncomfortable issues for our Government. On the face of it, the Geneva Conventions and core articles of the UN Declaration on Human Rights have been ignored. During the siege of Falluja, many Iraqi women and children were caught in the line of fire and some civilians were shot as they tried to swim across the Tigris. It has even been reported that weapons of dubious legality were used in Falluja, such as cluster bombs, napalm, incendiary white-phosphorus and thermobaric, or "fuel-air" explosives, which can have the effect of a tactical nuclear weapon without residual radiation.

The International Red Cross estimates that at least 60% of those killed in the assault on the city were women, children and the elderly; a pattern of destruction that has persisted throughout the occupation of Iraq, and, as much as we would like to shut our eyes, this has served to boost the recruitment of insurgents and harden their resolve. In May last year, the city of al-Qaim near the Syrian border was the target of a major offensive known as Operation Matador, which resulted in hundreds of Iraqi casualties. This operation also displaced thousand of civilians, destroyed entire neighborhoods, polluted water supplies and put one hospital out of action. Six months later in al-Qaim, Operation Steel wiped out the General Hospital, other medical centers, some mosques and schools, even the electricity station.

These are the facts. There are many more examples. And they raise serious concerns for the future predicament which our Government and our party may find ourselves facing. We have been lucky up to this point, because the full extent of the mayhem resulting from our U.N sanctioned occupation has not been dwelt upon by the Australian media. You can draw your own conclusions why this is so. However, having been kept well briefed on the conflict by our intelligence agencies, and I can assure you that many unpleasant details are still to emerge.

Also, on a personal note, it would be inaccurate for me to maintain that the events unfolding during course of the occupation have left me unmoved. It has long been my habit to keep aquainted with opinions opposed to my own, and to canvas a wide range of views. If an edited version of this talk is made available, it may reference sources from the internet.

Under international law, all military forces owe a 'duty of care' to the civilians of an occupied city. And I am starting to ask myself if this is a commitment we have betrayed. In fact, I dare to wonder if we have betrayed the very ideals that I invoked in my support of the invasion.

In my 2004 speech to the Institute of Public Affairs in Melbourne, I said that, 'Iraq now has a growing and robust independent media, which is absolutely essential for the development and maintenance of a healthy democracy'. Well, I am afraid that was a little premature. Our US partners thought it necessary to suppress the more irresponsible organs of opinion. Several editors were arrested. And while I accepted assurances from our allies that the bombing of the Baghdad offices of Al Jazeera in 2003 was an accident, I must say, that in light of the recent unearthing of the Downing Street memo, the contents of which are available to my Government, I now hold grave doubts about the official story. All told, since the start of hostilities in Iraq, it appears that 82 media personnel have lost their lives.

I must say, that it came as a surprise to members of my Government when General George Casey recently re-asserted the right of the US military to plant paid-for stories in the Iraqi press. We believe this sets an unfortunate precedent, in that it may lead to suspicion among Iraqi citizens that that the West prefers a paid press to a free press.

I also noted in my 2004 speech that 'Australia had helped to re-establish the Iraqi Ministry of Agriculture, [and] set up a payments system for the 2003 harvest and used our experience to help Iraqi farmers bring in the bumper summer grains harvest'. Perhaps I should have been more forthright about that experience. For many years the Australian Wheat Board has been helping the Iraqi Government bring in bumper summer grains from Australia. We have achieved this by channelling millions of dollars of hidden commissions into the coffers of the man previously described as a loathsome and repellent dictator. To be frank, we had been privately funding a regime that we publicly claimed was a threat to the world, and I can see now that this might lead some people to question our probity.

All in all, since the war began I have consistently maintained that the situation in Iraq was measurably better than it was under Saddam Hussein.

I held to this belief even during the dark days of the Abu Ghraib abuses, which caused many in the region to question whether democracy would make the slightest difference. But I strongly argued at the time that the difference would be apparent for all to see, because the victims of abuse would not only able, but would be encouraged to speak out, to seek redress and to find justice.

Sadly, very few victims have been able to find justice. And those senior figures who issued the orders to turn up the heat on detainees, have not been properly investigated. In the matter of our own citizen, David Hicks, who remains to this day Guantanamo Bay, often in solitary isolation, it is becoming increasing difficult to distinguish his predicament from that which would have faced a prisoner of Saddam Hussein. I believe the Department of Foreign Affairs has been remiss in accepting the assurances of some US officials at face value.

I speak to you here openly, and with sadness. I have no intention of repeating or elaborating these remarks outside this room. For decades, many of you have stayed loyal the principles of our Party. However, it is not wise for any leader to mislead himself, and I have no wish to mislead you. Like our good friend Tony Blair, I too admit to episodes of anguish. I worry the situation is getting worse. Not only in Iraq, but elsewhere in the world. You will of course be making up your own minds as you watch the news in the coming weeks.

I note that the latest US Country Reports on Human Rights concedes that in Iraq, 'civic life and the social fabric remain under intense strain from the widespread violence'. The US ambassador to Baghdad, Zalmay Khalilzad, has said we have 'opened a Pandora¹s box in Iraq'. There is mounting evidence of arbitrary detention and torture committed by government forces, both police and military.

During my recent trip to India, also horribly touched with extremist violence, I was reminded by their soft spoken Prime Minister, Dr Manmohan Singh, that the British had seriously erred by clinging too long to their former colony. Despite widespread opposition to their presence, British politicians continued to insist that their departure would lead to chaos. Dr Singh said, 'But it would be our chaos, don¹t you see?' At that moment I understood what he was saying.

There is tremendous pressure from the US for our troops to remain in Iraq, and of course mutual loyalty is a vital component of the alliance. But the longer the Coalition of the Willing remains, the more we are detested, and the more blood is shed. The country is already tearing itself apart, so I am asking you, could our departure really make it any worse?

Perhaps it is time for Iraqis to regain control of their future, and for the coalition of the willing to be willing to leave the stage. When I say this, I speak as a troubled private citizen, and not as the Prime Minister of Australia.

Flying home from India, I started to ask myself what a leader like Mahatma Gandhi would do, but I feared I would not be able to live up to the answer, unless I have some wise advice form my longtime friends. Please look into your hearts and let me know what you find.


Thank you.

March 12, 2006

The Push for War

Anatol Lieven considered what the US Administration hoped to gain from invading Iraq. Its interesting to read in the light of the fact its all gone wrong...
The most surprising thing about the Bush Administration's plan to invade Iraq is not that it is destructive of international order; or wicked, when we consider the role the US (and Britain) have played, and continue to play, in the Middle East; or opposed by the great majority of the international community; or seemingly contrary to some of the basic needs of the war against terrorism. It is all of these things, but they are of no great concern to the hardline nationalists in the Administration. This group has suffered at least a temporary check as a result of the British insistence on UN involvement, and Saddam Hussein's agreement to weapons inspections. They are, however, still determined on war - and their power within the Administration and in the US security policy world means that they are very likely to get their way. Even the Washington Post has joined the radical rightist media in supporting war.

The most surprising thing about the push for war is that it is so profoundly reckless. If I had to put money on it, I'd say that the odds on quick success in destroying the Iraqi regime may be as high as 5/1 or more, given US military superiority, the vile nature of Saddam Hussein's rule, the unreliability of Baghdad's missiles, and the deep divisions in the Arab world. But at first sight, the longer-term gains for the US look pretty limited, whereas the consequences of failure would be catastrophic. A general Middle Eastern conflagration and the collapse of more pro-Western Arab states would lose us the war against terrorism, doom untold thousands of Western civilians to death in coming decades, and plunge the world economy into depression.

These risks are not only to American (and British) lives and interests, but to the political future of the Administration. If the war goes badly wrong, it will be more generally excoriated than any within living memory, and its members will be finished politically - finished for good. If no other fear moved these people, you'd have thought this one would.

This war plan is not like the intervention in Vietnam, which at the start was supported by a consensus of both political parties, the Pentagon, the security establishment and the media. It is true that today - for reasons to which I shall return - the Democrats are mostly sitting on the fence; but a large part of the old Republican security establishment has denounced the idea and the Pentagon has made its deep unhappiness very clear.

The Administration has therefore been warned of the dangers. And while a new attack by al-Qaida during the war would help consolidate anti-Muslim American nationalism, the Administration would also be widely accused of having neglected the hunt for the perpetrators of 11 September in order to pursue an irrelevant vendetta. As far as the Israeli lobby is concerned, a disaster in the Middle East might be the one thing that would at last bring a discussion of its calamitous role into the open in the US.

With the exception of Donald Rumsfeld, who conveniently did his military service in the gap between the Korean and Vietnam Wars, neither Bush nor any of the other prime movers of this war served in the military. Of course, General Colin Powell served in Vietnam, but he is well known to be extremely dubious about attacking Iraq. All the others did everything possible to avoid service. If the war goes wrong, the 'chicken hawk' charge will be used against them with devastating political effect.

Vietnam veterans, both Democrat and Republican, have already started to raise this issue, stirred up in part by the insulting language used by Richard Perle and his school about the caution of the professional military. As a recent letter to the Washington Post put it, 'the men described as chicken hawks avoided military service during the Vietnam War while supporting that war politically. They are not accused of lacking experience and judgment compared to military men. They are accused of hypocrisy and cowardice.' Given the political risks of failure - to themselves, above all - why are they doing this? And, more broadly, what has bred this reckless spirit?

To understand the Administration's motivation, it is necessary to appreciate the breathtaking scope of the domestic and global ambitions which the dominant neo-conservative nationalists hope to further by means of war, and which go way beyond their publicly stated goals. There are of course different groups within this camp: some are more favourable to Israel, others less hostile to China; not all would support the most radical aspects of the programme. However, the basic and generally agreed plan is unilateral world domination through absolute military superiority, and this has been consistently advocated and worked on by the group of intellectuals close to Dick Cheney and Richard Perle since the collapse of the Soviet Union in the early 1990s.

This basic goal is shared by Colin Powell and the rest of the security establishment. It was, after all, Powell who, as Chairman of the Joint Chiefs of Staff, declared in 1992 that the US requires sufficient power 'to deter any challenger from ever dreaming of challenging us on the world stage'. However, the idea of pre-emptive defence, now official doctrine, takes this a leap further, much further than Powell would wish to go. In principle, it can be used to justify the destruction of any other state if it even seems that that state might in future be able to challenge the US. When these ideas were first aired by Paul Wolfowitz and others after the end of the Cold War, they met with general criticism, even from conservatives. Today, thanks to the ascendancy of the radical nationalists in the Administration and the effect of the 11 September attacks on the American psyche, they have a major influence on US policy.

To understand the genesis of this extraordinary ambition, it is also necessary to grasp the moral, cultural and intellectual world of American nationalism in which it has taken shape. This nationalism existed long before last September, but it has been inflamed by those attacks and, equally dangerously, it has become even more entwined with the nationalism of the Israeli Right.

To take the geopolitical goals first. As with National Missile Defense, the publicly expressed motive for war with Iraq functions mainly as a tool to gain the necessary public support for an operation the real goals of which are far wider. The indifference of the US public to serious discussion of foreign or security affairs, and the negligence and ideological rigidity of the US media and policy community make searching debate on such issues extremely difficult, and allow such manipulation to succeed.

The immediate goal is indeed to eliminate Iraq's weapons of mass destruction. There is little real fear, however, that Saddam Hussein will give those weapons to terrorists to use against the United States - though a more genuine fear that he might conceivably do so in the case of Israel. Nor is there any serious prospect that he would use them himself in an unprovoked attack on the US or Israel, because immediate annihilation would follow. The banal propaganda portrayal of Saddam as a crazed and suicidal dictator plays well on the American street, but I don't believe that it is a view shared by the Administration. Rather, their intention is partly to retain an absolute certainty of being able to defend the Gulf against an Iraqi attack, but, more important, to retain for the US and Israel a free hand for intervention in the Middle East as a whole.

From the point of view of Israel, the Israeli lobby and their representatives in the Administration, the apparent benefits of such a free hand are clear enough. For the group around Cheney, the single most important consideration is guaranteed and unrestricted access to cheap oil, controlled as far as possible at its source. To destroy and occupy the existing Iraqi state and dominate the region militarily would remove even the present limited threat from Opec, greatly reduce the chance of a new oil shock, and eliminate the need to woo and invest in Russia as an alternative source of energy.

It would also critically undermine the steps already taken towards the development of alternative sources of energy. So far, these have been pitifully few. All the same, 11 September brought new strength to the security arguments for reducing dependence on imported oil, and as alternative technologies develop, they could become a real threat to the oil lobby - which, like the Israeli lobby, is deeply intertwined with the Bush Administration. War with Iraq can therefore be seen as a satisfactory outcome for both lobbies. Much more important for the future of mankind, it is also part of what is in essence a strategy to use American military force to permit the continued offloading onto the rest of the world of the ecological costs of the existing US economy - without the need for any short-term sacrifices on the part of US capitalism, the US political elite or US voters.

The same goes for the war against al-Qaida and its allies: the plan for the destruction of the existing Iraqi regime is related to this struggle, but not as it has been presented publicly. Links between Baghdad and al-Qaida are unproven and inherently improbable: what the Administration hopes is that by crushing another middle-sized state at minimal military cost, all the other states in the Muslim world will be terrified into full co-operation in tracking down and handing over suspected terrorists, and into forsaking the Palestinian cause. Iran for its part can either be frightened into abandoning both its nuclear programme and its support for the Palestinians, or see its nuclear facilities destroyed by bombardment.

The idea, in other words, is to scare these states not only into helping with the hunt for al-Qaida, but into capitulating to the US and, more important, Israeli agendas in the Middle East. This was brought out in the notorious paper on Saudi Arabia presented by Laurent Murawiec of the Rand Corporation to Richard Perle's Defense Policy Board. Murawiec advocated sending the Saudis an ultimatum demanding not only that their police force co-operate fully with US authorities, but also the suppression of public criticism of the US and Israel within Saudi Arabia - something that would be impossible for any Arab state. Despite this, the demand for the suppression of anti-Israeli publications, broadcasts and activities has been widely echoed in the US media.

'The road to Middle East peace lies through Baghdad' is a line that's peddled by the Bush Administration and the Israeli lobby. It is just possible that some members of the Administration really believe that by destroying Israel's most powerful remaining enemy they will gain such credit with Israelis and the Israeli lobby that they will be able to press compromises on Israel.

But this is certainly not what public statements by members of the Administration - let alone those of its Likud allies in Israel - suggest. Rumsfeld recently described the Jewish settlements as legitimate products of Israeli military victory; the Republican Majority Leader in the House, Dick Armey (a sceptic as regards war with Iraq), has advocated the ethnic cleansing ('transfer') of the Palestinians across the Jordan; and in 1996 Richard Perle and Douglas Feith (now a senior official at the Pentagon) advised Binyamin Netanyahu to abandon the Oslo Peace Process and return to military repression of the Palestinians.

It's far more probable, therefore, that most members of the Bush and Sharon Administrations hope that the crushing of Iraq will so demoralise the Palestinians, and so reduce wider Arab support for them, that it will be possible to force them to accept a Bantustan settlement bearing no resemblance to independent statehood and bringing with it no possibility of economic growth and prosperity.

How intelligent men can believe that this will work, given the history of the past fifty years, is astonishing. After all, the Israelis have defeated Arab states five times with no diminution of Palestinian nationalism or Arab sympathy for it. But the dominant groups in the present Administrations in both Washington and Jerusalem are 'realists' to the core, which, as so often, means that they take an extremely unreal view of the rest of the world, and are insensitive to the point of autism when it comes to the character and motivations of others. They are obsessed by power, by the division of the world into friends and enemies (and often, into their own country and the rest of the world) and by the belief that any demonstration of 'weakness' immediately leads to more radical approaches by the 'enemy'.

Sharon and his supporters don't doubt that it was the Israeli withdrawal from Lebanon - rather than the Israeli occupation of the Palestinian territories - which led to the latest Intifada. The 'offensive realists' in Washington are convinced that it was Reagan's harsh stance and acceleration of the arms race against the Soviet Union which brought about that state's collapse. And both are convinced that the continued existence of Saddam Hussein's regime of itself suggests dangerous US weakness and cowardice, thus emboldening enemies of the US and Israel across the Middle East and beyond.

From the point of view of the Arab-Israeli conflict, war with Iraq also has some of the character of a Flucht nach vorn - an 'escape forwards' - on the part of the US Administration. On the one hand, it has become clear that the conflict is integrally linked to everything else that happens in the Middle East, and therefore cannot simply be ignored, as the Bush Administration tried to do during its first year in office. On the other hand, even those members of the American political elite who have some understanding of the situation and a concern for justice are terrified of confronting Israel and the Israeli lobby in the ways which would be necessary to bring any chance of peace.

When the US demands 'democracy' in the Palestinian territories before it will re-engage in the peace process it is in part, and fairly cynically, trying to get out of this trap. However, when it comes to the new rhetoric of 'democratising' the Arab world as a whole, the agenda is much broader and more worrying; and because the rhetoric is attractive to many liberals we must examine this agenda very carefully.

Belief in the spread of democracy through American power isn't usually consciously insincere. On the contrary, it is inseparable from American national messianism and the wider 'American creed'. However, this same messianism has also proved immensely useful in destroying or crippling rivals of the United States, the Soviet Union being the outstanding example.

The planned war against Iraq is not after all intended only to remove Saddam Hussein, but to destroy the structure of the Sunni-dominated Arab nationalist Iraqi state as it has existed since that country's inception. The 'democracy' which replaces it will presumably resemble that of Afghanistan - a ramshackle coalition of ethnic groups and warlords, utterly dependent on US military power and utterly subservient to US (and Israeli) wishes.

Similarly, if after Saddam's regime is destroyed, Saudi Arabia fails to bow to US wishes and is attacked in its turn, then - to judge by the thoughts circulating in Washington think-tanks - the goal would be not just to remove the Saudi regime and eliminate Wahabism as a state ideology: it would be to destroy and partition the Saudi state. The Gulf oilfields would be put under US military occupation, and the region run by some client emir; Mecca and the Hejaz might well be returned to the Hashemite dynasty of Jordan, its rulers before the conquest by Ibn Saud in 1924; or, to put it differently, the British imperial programme of 1919 would be resurrected (though, if the Hashemites have any sense, they would reject what would without question be a long-term death sentence).

Beyond lies China. When the Bush Administration came to power, its major security focus was not the Middle East. There, its initial policy was benign neglect ('benign' at any rate in the case of Israel). The greatest fears of right-wing nationalist gurus such as Robert Kagan concerned the future emergence of China as a superpower rival - fears lent a certain credibility by China's sheer size and the growth of its economy. As declared in the famous strategy document drawn up by Paul Wolfowitz in the last year of the first Bush Administration - and effectively proclaimed official policy by Bush Jr in his West Point speech in June - the guiding purpose of US strategy after the end of the Cold War should be to prevent the emergence of any 'peer competitor'anywhere in the world.

What radical US nationalists have in mind is either to 'contain' China by overwhelming military force and the creation of a ring of American allies; or, in the case of the real radicals, to destroy the Chinese Communist state as the Soviet Union was destroyed. As with the Soviet Union, this would presumably involve breaking up China by 'liberating' Tibet and other areas, and under the guise of 'democracy', crippling the central Chinese Administration and its capacity to develop either its economy or its Army.

To judge by the right-wing nationalist media in the US, this hostility to China has survived 11 September, although in a mitigated form. If the US can demonstrate overwhelming military superiority in the Middle East, there will certainly be groups in the Republican Party who will be emboldened to push for a much tougher line on China. Above all, of course, they support formal independence for Taiwan.

Another US military victory will certainly help to persuade these groups that for the moment the US has nothing to fear from the Chinese Navy or Air Force, and that in the event of a Taiwanese declaration of independence, the island can be defended with relative impunity. Meanwhile, a drastic humiliation of China over Taiwan might well be seen as a key stepping-stone to the overthrow of Communism and the crippling of the Chinese state system.

At present these are only long-term ambitions - or dreams. They are certainly not shared even by a majority of the Administration, and are unlikely to be implemented in any systematic way. On the other hand, it's worth bearing in mind that the dominant groups in this Administration have now openly abandoned the underlying strategy and philosophy of the Clinton Administration, which was to integrate the other major states of the world in a rule-based liberal capitalist order, thereby reducing the threat of rivalry between them.

This tendency is not dead. In fact, it is strongly represented by Colin Powell, and by lesser figures such as Richard Haass. But their more powerful nationalist rivals are in the meantime publicly committed to preventing by every possible means the emergence of any serious rival or combination of rivals to the US, anywhere in the world, and to opposing not just any rival would-be world hegemon, but even the ability of other states to play the role of great power within their own regions.

Under the guise of National Missile Defense, the Administration - or elements within it - even dreams of extending US military hegemony beyond the bounds of the Earth itself (an ambition clearly indicated in the official paper on Defense Planning Guidance for the 2004-09 Fiscal Years, issued this year by Rumsfeld's office). And while this web of ambition is megalomaniac, it is not simply fantasy. Given America's overwhelming superiority, it might well work for decades until a mixture of terrorism and the unbearable social, political and environmental costs of US economic domination put paid to the present order of the world.

As things stand, the American people would never knowingly support such a programme - nor for that matter would the US military. Even after 11 September, this is not by historical standards a militarist country; and whatever the increasingly open imperialism of the nationalist think-tank class, neither the military nor the mass of the population wishes to see itself as imperialist. The fear of casualties and of long-term overseas military entanglements remains intense. And all opinion polls suggest that the majority of the American public, insofar as it considers these issues at all, is far more interested than this Administration in co-operation with allies.

Besides, if the US economy continues to stagnate or falls sharply, the Republicans will most probably not even be in power after 2004. As more companies collapse, the Administration's links to corrupt business oligarchies will become more and more controversial. Further economic decline combined with bloated military spending would sooner or later bring on the full consequences of the stripping of the public finances caused by this Administration's military spending and its tax cuts for the rich. At that point, the financial basis of Social Security would come into question, and the Republican vote among the 'middle classes' could shatter.

It is only to a minimal degree within the power of any US administration to stimulate economic growth. And even if growth resumes, the transformation of the economy is almost certain to continue. This will mean the incomes of the 'middle classes' (which in American terminology includes the working proletariat) will continue to decline and the gap between them and the plutocracy will continue to increase. High military spending can correct this trend to some extent, but because of the changed nature of weaponry, to a much lesser extent than was the case in the 19th and most of the 20th centuries. All other things being equal, this should result in a considerable shift of the electorate to the left.

But all other things are not equal. Two strategies in particular would give the Republicans the chance not only of winning in 2004, but of repeating Roosevelt's success for the Democrats in the 1930s and becoming the natural party of government for the foreseeable future. The first is the classic modern strategy of an endangered right-wing oligarchy, which is to divert mass discontent into nationalism. The second, which is specifically American, is to take the Jewish vote away from its traditional home in the Democratic Party, by demonstrating categorical Republican commitment not just to Israel's defence but to its regional ambitions.

This is connected both to the rightward shift in Israel, and to the increasingly close links between the Republicans and Likud, through figures like Perle and Feith. It marks a radical change from the old Republican Party of Eisenhower, Nixon and Bush père, which was far more independent of Israel than the Democrats. Of key importance here has been the growing alliance between the Christian Right - closely linked to the old White South - and the Israeli lobby, or at least its hardline Likud elements.

When this alliance began to take shape some years back, it seemed a most improbable combination. After all, the Christian Right and the White South were once havens of anti-semitic conspiracy theories. On the other hand, the Old Testament aspects of fundamentalist Christianity had created certain sympathies for Judaism and Israel from as far back as the US's 17th-century origins.

For Christian fundamentalists today the influence of millenarian thought is equally important in shaping support for Israel: the existence of the Israeli state is seen as a necessary prelude to the arrival of the Antichrist, the Apocalypse and the rule of Christ and His Saints. But above all, perhaps, this coming together of the fundamentalist Right and hardline Zionism is natural, because they share many hatreds. The Christian Right has always hated the United Nations, partly on straight nationalist grounds, but also because of bizarre fears of world government by the Antichrist. They have hated Europeans on religious grounds as decadent atheists, on class grounds as associates of the hated 'East Coast elites', and on nationalist grounds as critics of unconstrained American power. Both sides share an instinctive love of military force. Both see themselves as historical victims. This may seem strange in the case of the American Rightists, but it isn't if one considers both the White South's history of defeat, and the Christian Right's sense since the 1960s of defeat and embattlement by the forces of irreligion and cultural change.

Finally, and most dangerously, both are conditioned to see themselves as defenders of 'civilisation' against 'savages' - a distinction always perceived on the Christian Right as in the main racially defined. It is no longer possible in America to speak openly in these terms of American blacks, Asians and Latinos - but since 11 September at least, it has been entirely possible to do so about Arabs and Muslims.

Even in the 2000 elections, the Republicans were able to take a large part of the white working-class vote away from Gore by appealing to cultural populism - and especially to those opposed to gun control and environmental protection. Despite the real class identity and cultural interests of the Republican elite, they seem able to convince many workers that they are natural allies against the culturally alien and supercilious 'East Coast elites' represented as supporting Gore.

These populist values are closely linked to the traditional values of hardline nationalism. They are what the historian Walter Russell Mead and others have called 'Jacksonian' values, after President Andrew Jackson's populist nationalism of the 1830s. As Mead has indicated, 11 September has immensely increased the value of this line to Republicans.

If on top of this the Republicans can permanently woo the Jewish vote away from the Democrats - a process which purely class interests would suggest and which has been progressing slowly but steadily since Reagan's day - there is a good chance of their crippling the Democrats for a generation or more. Deprived of much of their financial support and their intellectual backbone, the Democrats could be reduced to a coalition of the declining unionised white working class, blacks and Latinos. And not only do these groups on the whole dislike and distrust each other, but the more the Democrats are seen as minority dominated, the more whites will tend to flee to the Republicans.

Already, the anti-semitism of some black leaders in the Democratic Party has contributed to driving many Jews towards the Republicans; and thanks to their allegiance to Israel, the liberal Jewish intelligentsia has moved a long way from their previous internationalism. This shift is highly visible in previously liberal and relatively internationalist journals such as the New Republic and Atlantic Monthly, and maybe even in the New Yorker. Indeed, it is no exaggeration to say that as a result the internationalist position in the Democratic Party and the US as a whole has been eviscerated.

The Democrats are well aware of this threat to their electorate. The Party as a whole has always been strongly committed to Israel. On Iraq and the war against terrorism, its approach seems to be to avoid at all costs seeming 'unpatriotic'. If they can avoid being hammered by the Republicans on the charge of 'weakness' and lack of patriotism, then they can still hope to win the 2004 elections on the basis of economic discontent. The consequence, however, is that the Party has become largely invisible in the debate about Iraq; the Democrats are merely increasing their reputation for passionless feebleness; whereas the Republican nationalists are full of passionate intensity - the passion which in November 2000 helped them pressure the courts over the Florida vote and in effect steal the election.

It is this passion which gives the nationalist Right so much of its strength; and in setting out the hopes and plans of the groupings which dominate the Bush Administration, I don't want to give the impression that everything is simply a matter of conscious and cynical manipulation in their own narrow interests. Schematic approaches of this kind have bedevilled all too much of the reporting of nationalism and national conflict. This is odd and depressing, because in recent decades the historiography of pre-1914 German nationalism - to take only one example - has seen an approach based on ideas of class manipulation give way to an infinitely more subtle analysis which emphasises the role of socio-economic and cultural change, unconscious identifications, and interpenetrating political influences from above and below.

To understand the radical nationalist Right in the US, and the dominant forces in the Bush Administration, it is necessary first of all to understand their absolute and absolutely sincere identification of themselves with the United States, to the point where the presence of any other group in government is seen as a usurpation, as profoundly and inherently illegitimate and 'un-American'. As far as the hardline elements of the US security establishment and military industrial complex are concerned, they are the product of the Cold War, and were shaped by that struggle and the paranoia and fanaticism it bred. In typical fashion for security elites, they also became conditioned over the decades to see themselves not just as tougher, braver, wiser and more knowledgeable than their ignorant, innocent compatriots, but as the only force standing between their country and destruction.

The Cold War led to the creation of governmental, economic and intellectual structures in the US which require for their survival a belief in the existence of powerful national enemies - not just terrorists, but enemy states. As a result, in their analyses and propaganda they instinctively generate the necessary image of an enemy. Once again, however, it would be unwise to see this as a conscious process. For the Cold War also continued, fostered and legitimised a very old discourse of nationalist hatred in the US, ostensibly directed against the Communists and their allies but usually with a very strong colouring of ethnic chauvinism.

On the other hand, the roots of the hysteria of the Right go far beyond nationalism and national security. Their pathological hatred for the Clinton Administration cannot adequately be explained in terms of national security or even in rational political or economic terms, for after a very brief period of semi-radicalism (almost entirely limited to the failed attempt at health reform), Clinton devoted himself in a Blairite way to adopting large parts of the Republican socio-economic agenda. Rather, Clinton, his wife, his personal style, his personal background and some of his closest followers were all seen as culturally and therefore nationally alien, mainly because associated with the counter-culture of the 1960s and 1970s.

The modern incarnation of this spirit can indeed be seen above all as a reaction to the double defeat of the Right in the Vietnam War - a defeat which, they may hope, victory in Iraq and a new wave of conservative nationalism at home could cancel out once and for all. In Vietnam, unprecedented military defeat coincided with the appearance of a modern culture which traditionalist Americans found alien, immoral and hateful beyond description. As was widely remarked at the time of Newt Gingrich's attempted 'Republican Revolution' of the mid-1990s, one way of looking at the hardline Republicans - especially from the Religious Right - is to see them as motivated by a classical nationalist desire for a return to a Golden Age, in their case the pre-Vietnam days of the 1950s.

None of these fantasies is characteristic of the American people as a whole. But the intense solipsism of that people, its general ignorance of the world beyond America's shores, coupled with the effects of 11 September, have left tremendous political spaces in which groups possessed by the fantasies and ambitions sketched out here can seek their objectives. Or to put it another way: the great majority of the American people are not nearly as militarist, imperialist or aggressive as their German equivalents in 1914; but most German people in 1914 would at least have been able to find France on a map.

The younger intelligentsia meanwhile has also been stripped of any real knowledge of the outside world by academic neglect of history and regional studies in favour of disciplines which are often no more than a crass projection of American assumptions and prejudices (Rational Choice Theory is the worst example). This has reduced still further their capacity for serious analysis of their own country and its actions. Together with the defection of its strongest internationalist elements, this leaves the intelligentsia vulnerable to the appeal of nationalist messianism dressed up in the supposedly benevolent clothing of 'democratisation'.

Twice now in the past decade, the overwhelming military and economic dominance of the US has given it the chance to lead the rest of the world by example and consensus. It could have adopted (and to a very limited degree under Clinton did adopt) a strategy in which this dominance would be softened and legitimised by economic and ecological generosity and responsibility, by geopolitical restraint, and by 'a decent respect to the opinion of mankind', as the US Declaration of Independence has it. The first occasion was the collapse of the Soviet superpower enemy and of Communism as an ideology. The second was the threat displayed by al-Qaida. Both chances have been lost - the first in part, the second it seems conclusively. What we see now is the tragedy of a great country, with noble impulses, successful institutions, magnificent historical achievements and immense energies, which has become a menace to itself and to mankind.

March 08, 2006

Party Hacks (from the Moscow Times)

By Chris Floyd
Published: March 3, 2006
Two weeks ago, an obscure, unelected, Republican-appointed official in California decided the future of the world. That future -- at least for the next several years -- will be an accelerating nightmare of war, corruption, repression, atrocity and terror. That's because the loyal apparatchik has, with the stroke of a pen, guaranteed the perpetuation of the Bush faction in power in 2008 and beyond.
One of the few certainties in modern U.S. politics is that no Democrat can win the presidency without carrying California. Thanks to the Electoral College system set up by the Founding Oligarchs to keep the low-born rabble from voting directly for president, the big haul of California's electoral votes is crucial for Democrats to offset the multitude of small, sparsely populated states that reliably vote Republican. Bagging California doesn't guarantee Democratic victory, but without it, the cliffhanger electoral counts in the goosed elections of 2000 and 2004 wouldn't even have been close. Thus, the sudden, hugger-mugger decision by California Secretary of State Bruce McPherson to override the objections of his own experts and certify the eminently hackable voting machines of the politically partisan firm, Diebold, for use throughout the state means, quite simply, that the fix is in for 2008. It doesn't matter who the Democrats run -- Hillary Clinton, Barack Obama, John Edwards, George Clooney or Jesus H. Christ in an Uncle Sam suit. It won't make a bit of difference. California is lost, the presidency is lost and the Bushists are in -- already. It's over.

After Diebold's machines failed miserably in a battery of tests last year, McPherson vowed to put their certification on hold until his own hand-picked panel of experts had fine-combed the system to a fare-thee-well, blogger Brad Friedman reports. The panel delivered their conclusions last month -- and the results were staggering, far beyond the worst fears of the most hard-core "conspiracy theorist." The panel found that Diebold's machines were riddled with curious built-in glitches that effectively "ceded complete control of the system" to hackers who could "change vote totals, modify reports, change the names of candidates and change the races being voted on."

What's more, "hackers wouldn't need to know passwords or cryptographic keys, or have access to any other part of the system to do their dirty work," the Los Angeles Times notes. "Voters, candidates and election monitors wouldn't necessarily know they'd been rooked." A more perfect vehicle for fixing an election can hardly be imagined. And it would require nothing more than a handful of high-tech zealots, not a vast conspiracy.

Naturally, after such a blistering condemnation, McPherson did what any official charged with guaranteeing the integrity and credibility of his state's elections would do: He approved the slipshod system by the dark of the moon, on a Friday before a holiday weekend, without any public hearings -- indeed, without waiting for the results of a pending federal review of Diebold's mole-infested code. Now, the Diebold contraptions, whose chronic "breakdowns" have featured in numerous contested elections and last-second "miracle" victories by Republican candidates across the country in recent years, will control California's pot of electoral gold.

A good example of how this control works can be found in Alaska. There, the state Democratic Party has long been seeking an audit of some of the 2004 Diebold-counted returns, which produced a series of strange anomalies -- including awarding President George W. Bush an extra 100,000 votes that turned out to be phantoms. First, state officials blocked the request because that information, the vote count of a public election, was a "company secret" that belonged exclusively to Diebold, Friedman reports. Then they decided that the returns could be examined -- but only on the condition that Diebold and the Republican officials be allowed to "manipulate the data" before it was released. In the end, even this tainted transparency was too much for the Bushist ballot crunchers; late last month, Alaska officials suddenly declared that examining the returns would pose a dire but unspecified "security risk" to the state.

America's votes are increasingly controlled by a small number of interrelated corporations: Diebold, ES&S and Sequoia, all of which have close political and financial ties to the Bush faction -- and to other dark forces as well. Diebold and ES&S were both bankrolled by tycoon Howard Ahmanson, who was also a major funder of the Christian "Reconstructionist" movement, which openly advocates a totalitarian theocracy in America, including the death penalty for homosexuals, slavery for debtors, stoning for sinners and stripping nonbelievers of citizenship. As journalist Max Blumenthal reports, these extremists have been welcomed as a key part of the Bushist base of politicized evangelicals, whose cadres have been quietly filling government posts for the past five years. Meanwhile, Sequoia -- whose machines racked up 100,000 "mistakes" in just one Florida county in 2004, according to a recent audit -- is owned by a business partner of the Carlyle Group, the investment firm whose insider deals and war profiteering have earned millions for the Bush family.

Thus, the 2008 election will be conducted largely on wide-open machines programmed by avowed partisans and paymasters of a ruthless gang that has already committed demonstrable vote fraud on a massive scale in engineering narrow "victories" in 2000 and 2004. So it doesn't matter who runs, who votes or how unpopular the Bush faction becomes through the murderous ruin of its radical agenda. The "consent of the governed" will be drowned in the blood money that has bought the nation's electoral process.

February 24, 2006

Nonie Darwish on the Cartoons...

We were brought up to hate - and we do
By Nonie Darwish
(Filed: 12/02/2006)

The controversy regarding the Danish cartoons of the Prophet Mohammed completely misses the point. Of course, the cartoons are offensive to Muslims, but newspaper cartoons do not warrant the burning of buildings and the killing of innocent people. The cartoons did not cause the disease of hate that we are seeing in the Muslim world on our television screens at night - they are only a symptom of a far greater disease.

I was born and raised as a Muslim in Cairo, Egypt and in the Gaza Strip. In the 1950s, my father was sent by Egypt's President, Gamal Abdel Nasser, to head the Egyptian military intelligence in Gaza and the Sinai where he founded the Palestinian Fedayeen, or "armed resistance". They made cross-border attacks into Israel, killing 400 Israelis and wounding more than 900 others.

My father was killed as a result of the Fedayeen operations when I was eight years old. He was hailed by Nasser as a national hero and was considered a shaheed, or martyr. In his speech announcing the nationalisation of the Suez Canal, Nasser vowed that all of Egypt would take revenge for my father's death. My siblings and I were asked by Nasser: "Which one of you will avenge your father's death by killing Jews?" We looked at each other speechless, unable to answer.

In school in Gaza, I learned hate, vengeance and retaliation. Peace was never an option, as it was considered a sign of defeat and weakness. At school we sang songs with verses calling Jews "dogs" (in Arab culture, dogs are considered unclean).

Criticism and questioning were forbidden. When I did either of these, I was told: "Muslims cannot love the enemies of God, and those who do will get no mercy in hell." As a young woman, I visited a Christian friend in Cairo during Friday prayers, and we both heard the verbal attacks on Christians and Jews from the loudspeakers outside the mosque. They said: "May God destroy the infidels and the Jews, the enemies of God. We are not to befriend them or make treaties with them." We heard worshippers respond "Amen".

My friend looked scared; I was ashamed. That was when I first realised that something was very wrong in the way my religion was taught and practised. Sadly, the way I was raised was not unique. Hundreds of millions of other Muslims also have been raised with the same hatred of the West and Israel as a way to distract from the failings of their leaders. Things have not changed since I was a little girl in the 1950s.

Palestinian television extols terrorists, and textbooks still deny the existence of Israel. More than 300 Palestinians schools are named after shaheeds, including my father. Roads in both Egypt and Gaza still bear his name - as they do of other "martyrs". What sort of message does that send about the role of terrorists? That they are heroes. Leaders who signed peace treaties, such as President Anwar Sadat, have been assassinated. Today, the Islamo-fascist president of Iran uses nuclear dreams, Holocaust denials and threats to "wipe Israel off the map" as a way to maintain control of his divided country.

Indeed, with Denmark set to assume the rotating presidency of the UN Security Council, the flames of the cartoon controversy have been fanned by Iran and Syria. This is critical since the International Atomic Energy Agency is expected to refer Iran to the Security Council and demand sanctions. At the same time, Syria is under scrutiny for its actions in Lebanon. Both Iran and Syria cynically want to embarrass the Danes to achieve their dangerous goals.

But the rallies and riots come from a public ripe with rage. From my childhood in Gaza until today, blaming Israel and the West has been an industry in the Muslim world. Whenever peace seemed attainable, Palestinian leaders found groups who would do everything to sabotage it. They allowed their people to be used as the front line of Arab jihad. Dictators in countries surrounding the Palestinians were only too happy to exploit the Palestinians as a diversion from problems in their own backyards. The only voice outside of government control in these areas has been the mosques, and these places of worship have been filled with talk of jihad.

Is it any surprise that after decades of indoctrination in a culture of hate, that people actually do hate? Arab society has created a system of relying on fear of a common enemy. It's a system that has brought them much-needed unity, cohesion and compliance in a region ravaged by tribal feuds, instability, violence, and selfish corruption. So Arab leaders blame Jews and Christians rather than provide good schools, roads, hospitals, housing, jobs, or hope to their people.

For 30 years I lived inside this war zone of oppressive dictatorships and police states. Citizens competed to appease and glorify their dictators, but they looked the other way when Muslims tortured and terrorised other Muslims. I witnessed honour killings of girls, oppression of women, female genital mutilation, polygamy and its devastating effect on family relations. All of this is destroying the Muslim faith from within.

It's time for Arabs and Muslims to stand up for their families. We must stop allowing our leaders to use the West and Israel as an excuse to distract from their own failed leadership and their citizens' lack of freedoms. It's time to stop allowing Arab leaders to complain about cartoons while turning a blind eye to people who defame Islam by holding Korans in one hand while murdering innocent people with the other.

Muslims need jobs - not jihad. Apologies about cartoons will not solve the problems. What is needed is hope and not hate. Unless we recognise that the culture of hate is the true root of the riots surrounding this cartoon controversy, this violent overreaction will only be the start of a clash of civilis-ations that the world cannot bear.

February 18, 2006

Conservatives Endorse the Fuhrer Principle

 Our leader über alles
by Paul Craig Roberts

Last week's annual Conservative Political Action Conference signaled the transformation of American conservatism into brownshirtism. A former Justice Department official named Viet Dinh got a standing ovation when he told the CPAC audience that the rule of law mustn't get in the way of President Bush protecting Americans from Osama bin Laden.

Former Republican congressman Bob Barr, who led the House impeachment of President Bill Clinton, reminded the CPAC audience that our first loyalty is to the U.S. Constitution, not to a leader. The question, Barr said, is not one of disloyalty to Bush, but whether America "will remain a nation subject to, and governed by, the rule of law or the whim of men."

The CPAC audience answered that they preferred to be governed by Bush. According to Dana Milbank, a member of the CPAC audience named Richard Sorcinelli loudly booed Barr, declaring: "I can't believe I'm in a conservative hall listening to him say Bush is off course trying to defend the United States." A woman in the audience told Barr that the Constitution placed Bush above the law and above non-elected federal judges.

These statements gallop beyond the merely partisan. They express the sentiments of brownshirtism. Our leader über alles.

Only a few years ago this same group saw Barr as a conservative hero for obtaining Clinton's impeachment in the House. Obviously, CPAC's praise for Barr did not derive from Barr's stand on conservative principle that a president must be held accountable if he violates the law. In Clinton's case, Barr's principles did not conflict with the blind emotions of the politically partisan conservatives demanding Clinton's impeachment.

In opposing Bush's illegal behavior, Barr is simply being consistent. But this time, Barr's principles are at odds with the emotions of the politically partisan CPAC audience. Rushing to the defense of Bush, the CPAC audience endorsed Viet Dinh's Fuhrer Principle over the rule of law.

Why do the media and the public allow partisan political hacks, like Viet Dinh, to define Bush's illegal actions as a national security issue? The purpose of the Foreign Intelligence Surveillance Act is to protect national security. FISA creates a secret court to which the president can apply for a warrant even after he has initiated spying. Complying with the law in no way handicaps spying for national security purposes. The only spying handicapped by the warrant requirement is spying for illegitimate purposes, such as spying on political opponents.

There are only two reasons for Bush to refuse to obey the law. One is that he is guilty of illegitimate spying for which no warrant would be issued by the FISA court. The other is that he is using "national security" to create unconstitutional powers for the executive.

Civil libertarian Harvey Silverglate writing in the Boston Phoenix says that Bush's grab for "sweeping, unchecked power in direct violation of a statute would open a Pandora's box of imperial possibilities." In short, it makes the president a dictator.

For years, the Republican Federalist Society has been agitating for concentrating more power in the executive. The members will say that they do not favor a dictator, just a check on the "imperial Congress" and "imperial judiciary." But they have not spelled out how the president can be higher than law and still be accountable, or, if he is only to be higher than some laws, but not other laws, and only in some circumstances, but not all circumstances, who draws the line through the law and defines the circumstances.

On Feb. 13, the American Bar Association passed a resolution belatedly asking President Bush to stop violating the law. "We cannot allow the U.S. Constitution and our rights to become a victim of terrorism," said bar association president Michael Grecco.

The siren call of "national security" is all the cover Bush needs to have the FISA law repealed, thus legally gaining the power to spy however he chooses, the protection of political opponents be damned. However, Bush and his Federalist Society Justice Department are not interested in having the law repealed. Their purpose has nothing to do with national security. The point on which the regime is insisting is that there are circumstances (undefined) in which the president does not have to obey laws. What those circumstances and laws are is for the regime to decide.

The Bush regime is asserting the Fuhrer Principle, and Americans are buying it, even as Bush declares that America is at war in order to bring democracy to the Middle East.

February 15, 2006

Murrow remembered...

If we confuse dissent with disloyalty — if we deny the right of the individual to be wrong, unpopular, eccentric or unorthodox — if we deny the essence of racial equality then hundreds of millions in Asia and Africa who are shopping about for a new allegiance will conclude that we are concerned to defend a myth and our present privileged status. Every act that denies or limits the freedom of the individual in this country costs us the ... confidence of men and women who aspire to that freedom and independence of which we speak and for which our ancestors fought."
– Ford Fiftieth Anniversary Show, CBS and NBC, June 1953, "Conclusion." Murrow: His Life and Times, A.M. Sperber, Freundlich Books, 1986