Bulletin N°339


26 January 2008
Grenoble, France

Dear Colleagues and Friends of CEIMSA,
Contemporary demographers inform us that the world population in 1400 was slightly more than the size of the USA population today --roughly 350 million souls inhabited our planet six hundred years ago.

The early history of capitalist development is a fascinating story of accidents, inspirations, and repeated man-made disasters. If we look only at the rise of  western societies, we can see how a new merchant class gradually gained enough economic and political strength to challenge the feudal nobility and eventually monarchy. The Middle Ages was a period of military struggles between constantly warring feudal kings and lords, living in a political vacuum created by the implosion of imperial power. At the same time, political struggles within early church-state relations replaced the moral authority of the emperor.

Perhaps a more interesting aspect of early capitalist development, however, is the effect that ordinary people had on the political economy of their times. Such an examination can be instructive of our own influence on economic developments in the present era. The medieval Western cultures, University of California historian Leften Stavrianos tells us, "made more technological progress than did classical Greece and Rome during their entire histories." He offers three reasons for this: 1) the absence of slavery, an institution which is known to have inhibited innovative technological thinking; 2) "frontier conditions" (by which is meant the sparsely populated areas in Europe, due largely to periodic wars, pestilence, and famine.) that stimulated labor-saving devices and endowed manual labor with a status and respect lacking in slave societies; and 3) the "humanitarian ethic of Christianity" when monks in monasteries insisted that manual labor was an integral part of the spiritual life (or as they put it: "to work is to pray" --laborare est orare). These monks were the first intellectuals, Stavrianos tells us, "to get dirt under their fingernails, and in doing so, they aided technological advance."( L. S. Stavrianos, Global Rift, The Third World Comes of Age (New York, 1981), p.47)

But what relevance could this information have to our experiences today? In a "post-modern" world where a managerial revolution has given rise to a multitude of petty tyrants, political power is no longer constrained by national priorities or international public opinion. Similarities between the debacle of imperial Rome, which ushered in the so-called "Dark Ages," and our own era are not an original insight. The local autonomy of tribal chiefs and warlords was based on the political economies of western nations for centuries following the fall of the Roman Empire. What remains unclear is the precise role which the "slave mentality" played in perpetuating this economy. Faced with wrenching insecurities, popular culture turned to a new norm, and "voluntary servitude" was born. While not exactly slavery, this "free" serf labor system served to stabilize the growth of capital accumulation, which slowly led to the capitalist development of society and served to overcome many economic scarcities.

The forward-looking 19th-century steel tycoon, Andrew Carnegie, once boasted of the progress his capitalist activities engendered:

Two pounds of ironstone mined upon Lake Superior and transported
nine hundred miles to Pittsburgh; one pound and one-half of coal
mined and manufactured into coke, and transported to Pittsburgh; one
half pound of lime, mined and transported to Pittsburgh; a small amount
of manganese ore mined in Virginia and brought to Pittsburgh --and
these four pounds of materials manufactured into one pound of steel,
for which the consumer pays one cent.
[Cited by Stavrianos, pp.257-58.]

Monopoly capitalism ran its course, and today the political economies of the world are better described by terms such as "crony capitalism," "gangster capitalism, " "permanent war economy," and occasionally by the term, "neo-fascism," in which relative "advantage," in the abstract, is more important than absolute profitability. In other words, the rational production of necessary goods and services has been displaced by the production of scarcities and of new needs, chiefly through the use of advanced technology in industries such as the military/police and communication/information. The unreason of "word power" --the media hype & the fast talker-- creates new information and new desires every day out of nothing, while unnecessary human deprivations and massive destructions assure relative advantages for a few who are strategically positioned to profit from these manipulations. As the world becomes increasingly privatized and warlords replace civil authority, we are asked to wait patiently for the second coming of Consumer Society to appear, and this time on a global scale. Meanwhile, who could fail to notice that our managers are required increasingly to resort to threats of violence in order to maintain discipline, using the proverbial stick in the absence of any rewards which would be sufficient to motivate many of us. These are the conditions of "moderate" extremism, where meaningful social change is resisted at every turn.

As one colleague some time ago boasted, his cleaver device to reduce his work was to give a nonsense lecture at the beginning of each semester in his largest class, to confuse the students and to discourage them from returning, in order to have fewer papers to grade during the semester. While this clever manager despised the rest of us, who in good faith taught in our over-loaded classrooms and searched hopefully for new educable students to motivate, he passed himself off as the Department's moral conscience, adding insult to injury. Every few years we greeted his "much earned" sabbatical leave as a respite from tyranny.

The 7 items below speak to the conundrum of political freedom in a context of economic dependency, where "growth without development" gives rise to local tyrannies and the institutionalization of injustices. This paradigm, which exists at every level --from the nuclear family, to the corporate board room, to NATO and the United Nations-- invites investigation and ultimately political organizing for a democratic take over of the decision-making process (at an acceptable cost of increased "inefficiency"), where ends are no longer used to justify the means, and where institutional governance is finally, and in reality, "of the people, by the people, and for the people," instead a government of some of the people, for the owners of capital, by their carfully selected "political elite."

Item A., by Alexander Cockburn, is an important demystification of the rapport de force in capital investments which control our environment and thus govern our behavior.

Item B. is a Democracy Now! broadcast in which economic journalists Robert Kuttner, author of The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity, and Robert Weissman, co-director of the corporate accountability group Essential Action and editor of Multinational Monitor magazine, discuss the limits of "sustainable capitalist growth" and its impact on social and cultural development.

Item C. is an article by Professor Chalmers Johnson analyzing "why the debt crisis is now the greatest threat to the American Republic."

Item D. from the Council for the National Interest Foundation covers the grotesquely backward-looking Israeli policy of territorial expansion, which requires the continuing murder of innocent people by Israeli leaders who are orchestrating "The Siege of Gaza."

Item E. is an article by Bruce Dixon, managing editor of the Black Agenda Report on possible strategies to support "U.S. resource wars in Africa."

Item F. is two recordings of talks delivered by Noam Chomsky and Tariq Ali, on October 12, 2007, at the Rockefeller Chapel on the University of Chicago campus, where the real threats to Academic Freedom on U.S. campuses were discussed.

Item G. is from former Grenoble graduate student, Mike Arresta, on community organizing around electoral politics in the U.S.A., keeping in mind the contradictions that inform us all that "from little acorns great oak trees grow."

And finally, from the Z Network we offer readers the January 11 audio interview with Norman Soloman on "Media & War" :



Francis McCollum Feeley
Professor of American Studies/
Director of Research
Université Stendhal - Grenoble 3

from Alexander Cockburn :
Date: 17 January 2008
Subject: The dictatorship of capital.
The Nation magazine

Moody's: The Terrorist at Ground Zero
by Alexander Cockburn

Terrorism flourishes brazenly at Ground Zero in the new 7 World Trade Center building. Here can be found a secretive entity of fabulous wealth and power. Kingdoms and corporations alike tremble at its shadow and make haste to pay it tribute. I refer to Moody's Investor Services, wholly owned subsidiary of Moody's Corporation, which reported $2.03 billion in revenues in 2006.

On January 10 Moody's, in concert with the other main bond-rating firm, Standard and Poor's, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody's that the US government "reform" Social Security and Medicare: "In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government's AAA rating."

Steven Hess, Moody's top analyst for the US economy, spelled it out more explicitly to the London Financial Times: "If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A credit.... The US rating is the anchor of the world's financial system. If you have a downgrade, you have a problem." Thus does Moody's man calmly threaten to plant the financial equivalent of a thermonuclear device under the Statue of Liberty.

Moody's runs a protection game. It issues credit ratings (in 2007 covering no less than 39 percent of the global credit-rating market by revenue, according to Bloomberg) based on public data and private information made available by those clients that have "voluntarily" retained its services. The price of not volunteering can be high. As vividly reported in the Washington Post by Alec Klein in 2004, the giant German insurance corporation Hannover declined repeated Moody's offers to rate its credit. Moody's promptly issued an unsolicited and adverse rating, and then--just like a small-time mobster after hurling a brick through the window of a liquor store--went back to Hannover and reissued its invitation to offer protection-by-rating. Hannover's top man said he wouldn't surrender to blackmail, and so between 2001 and 2003 brick after brick went through the window as Moody's steadily reduced Hannover's rating all the way down to junk.

By contrast, Enron handled relations with Moody's with ermine gloves. Until days before Enron plunged into bankruptcy Moody's, like S&P, gallantly refused to lower the boom by demoting bonds issued by Enron to "below-investment grade." Banks with huge sums at stake allegedly pressured Moody's to keep quiet, even though Moody's had privileged access to Enron's internal financial operations.

Today, the world's credit system is strained to the bursting point by financial scams like collateralized debt obligations (CDOs)--bundles of debt instruments, ranging from junk bonds to subprime mortgages. Moody's and the other rating agencies have played a crucial role in putting the CDOs together.

Of course, the terrorists in Lower Manhattan want Wall Street to get its mitts on the pools of money held in the Social Security trust funds. But if Moody's is going to present itself as a major political player presuming to dictate national policy down the barrel of a financial gun, its executives and analysts should be hauled into the star chamber. Let's have a war on terror and a rendition of these Moody's executives before a special investigative committee of Congress with full subpoena power. Ask them to explain their own role in causing the financial upheavals afflicting the planet right now, due to the collapse of the housing bubble and its impact on the home mortgage market.

As Professor Robert Pollin of the University of Massachusetts remarked to me last week, "We could say the bubble and crisis occurred because outfits like Moody's rating agency always misread the buildup of bubbles. They assume the rise in asset prices represents something fundamentally different about the economy and then open the floodgates for financial speculation. Based on this we should rather be talking about stability of US and global financial markets coming under immediate pressure due to the fact that market analysts, like Moody's, don't have a clue as to what they are talking about."

The US deficit is now around $248 billion, 1.2 percent of the GDP, which is not large by recent historical measure and which presents no danger in itself to US financial soundness. But as Pollin adds, if Moody's analysts want to discuss causes of fiscal laxity, "why not look at the Iraq War? The defense budget for 2006 was $617 billion. That is 4.7 percent of a $13 trillion GDP. Before the Iraq War, the defense budget was about 3 percent of GDP. So Iraq is costing about $150 billion annually, about 1.1 percent of GDP. And what has it accomplished? Social Security and Medicare combined were about $900 billion in 2006. Why assume we first have to attack our minimal welfare state and leave the imperial budget intact?"

In fact, it's almost entirely Medicare, not Social Security, that accounts for the projected rising costs in our shriveled welfare state. The culprit here is not the swelling ranks of older people but the insurance and drug companies' grip on our health system. Conversion to single-payer would mean huge savings. The United States pays around 15 percent of its GDP for healthcare, about 70 percent more than the outlay of other advanced industrial countries. Shift to single-payer and quit shoving money--4.7 percent of the GDP--down the imperial sinkhole, and there's no fiscal crisis of any sort, short- or long-term, for Moody's or anyone else to fret about. And in the even shorter term, if Moody's sees fiscal crisis looming, why don't its overpaid executives for once put the national interest first and call for a tax hike on the rich? Pollin tells me that just going back to Clinton, as opposed to Bush 2, on taxes for those making more than $200,000 a year would generate $60 billion a year. Do this and end the war in Iraq and you wipe out the deficit at a stroke.

Let a real war on terror commence.

from Democracy Now ! :
Date: 23 January 2008
Subject: Newsbroadcast on the universal economic
crisis now underway.

Amid growing fears of a worldwide recession, the Federal Reserve slashed a key interest rate by three-quarters of a percentage point on Tuesday, the biggest single cut in nearly a quarter of a century. Meanwhile, President Bush and congressional leaders pledged to work together on a stimulus measure that would inject about $150 billion in additional money into the economy. But many economists are skeptical over whether any measures can turn around a severe slump in the housing market and the  subprime mortgage crisis, signs of growing unemployment and weakening consumer spending and the added blow of record high oil prices. We speak to veteran economics journalist Robert Kuttner and Robert Weissman, co-director of the corporate accountability group Essential Action and editor of Multinational Monitor magazine.

The Most Serious Financial Crisis Since the Great Depression
"This is the Result of Rightwing Ideology and the Political Power of Wall Street."


from ZNet :
24 January 2008

Going Bankrupt
Why the Dept Crisis is Now the Greatest Threat to the American Republic
by Chalmers Johnson

The military adventurers of the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room," the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.

 As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay -- or repudiate. This utter fiscal irresponsibility has been disguised through many manipulative financial schemes (such as causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.

There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on "defense" projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.

Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures -- so-called "military Keynesianism," which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.

 Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call "opportunity costs," things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world's number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs -- an infinitely more efficient use of scarce resources than arms manufacturing. Let me discuss each of these.
The Current Fiscal Disaster
 It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense's planned expenditures for fiscal year 2008 are larger than all other nations' military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history. The United States has become the largest single salesman of arms and munitions to other nations on Earth. Leaving out of account President Bush's two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.

Before we try to break down and analyze this gargantuan sum, there is one important caveat. Figures on defense spending are notoriously unreliable. The numbers released by the Congressional Reference Service and the Congressional Budget Office do not agree with each other. Robert Higgs, senior fellow for political economy at the Independent Institute, says: "A well-founded rule of thumb is to take the Pentagon's (always well publicized) basic budget total and double it." Even a cursory reading of newspaper articles about the Department of Defense will turn up major differences in statistics about its expenses. Some 30-40% of the defense budget is "black," meaning that these sections contain hidden expenditures for classified projects. There is no possible way to know what they include or whether their total amounts are accurate.

There are many reasons for this budgetary sleight-of-hand -- including a desire for secrecy on the part of the president, the secretary of defense, and the military-industrial complex -- but the chief one is that members of Congress, who profit enormously from defense jobs and pork-barrel projects in their districts, have a political interest in supporting the Department of Defense. In 1996, in an attempt to bring accounting standards within the executive branch somewhat closer to those of the civilian economy, Congress passed the Federal Financial Management Improvement Act. It required all federal agencies to hire outside auditors to review their books and release the results to the public. Neither the Department of Defense, nor the Department of Homeland Security has ever complied. Congress has complained, but not penalized either department for ignoring the law. The result is that all numbers released by the Pentagon should be regarded as suspect.

In discussing the fiscal 2008 defense budget, as released to the press on February 7, 2007, I have been guided by two experienced and reliable analysts: William D. Hartung of the New America Foundation's Arms and Security Initiative and Fred Kaplan, defense correspondent for Slate.org. They agree that the Department of Defense requested $481.4 billion for salaries, operations (except in Iraq and Afghanistan), and equipment. They also agree on a figure of $141.7 billion for the "supplemental" budget to fight the "global war on terrorism" -- that is, the two on-going wars that the general public may think are actually covered by the basic Pentagon budget. The Department of Defense also asked for an extra $93.4 billion to pay for hitherto unmentioned war costs in the remainder of 2007 and, most creatively, an additional "allowance" (a new term in defense budget documents) of $50 billion to be charged to fiscal year 2009. This comes to a total spending request by the Department of Defense of $766.5 billion.

But there is much more. In an attempt to disguise the true size of the American military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4 billion for the Department of Energy goes toward developing and maintaining nuclear warheads; and $25.3 billion in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside the official Department of Defense budget is now needed for recruitment and reenlistment incentives for the overstretched U.S. military itself, up from a mere $174 million in 2003, the year the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7 billion, 50% of which goes for the long-term care of the grievously injured among the at least 28,870 soldiers so far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4 billion goes to the Department of Homeland Security.

Missing as well from this compilation is $1.9 billion to the Department of Justice for the paramilitary activities of the FBI; $38.5 billion to the Department of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related activities of the National Aeronautics and Space Administration; and well over $200 billion in interest for past debt-financed defense outlays. This brings U.S. spending for its military establishment during the current fiscal year (2008), conservatively calculated, to at least $1.1 trillion.
Military Keynesianism
Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neoconservatives and poorly informed patriotic Americans believe that, even though our defense budget is huge, we can afford it because we are the richest country on Earth. Unfortunately, that statement is no longer true. The world's richest political entity, according to the CIA's "World Factbook," is the European Union. The EU's 2006 GDP (gross domestic product -- all goods and services produced domestically) was estimated to be slightly larger than that of the U.S. However, China's 2006 GDP was only slightly smaller than that of the U.S., and Japan was the world's fourth richest nation.

A more telling comparison that reveals just how much worse we're doing can be found among the "current accounts" of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. For example, in order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88 billion per year trade surplus with the United States and enjoys the world's second highest current account balance. (China is number one.) The United States, by contrast, is number 163 -- dead last on the list, worse than countries like Australia and the United Kingdom that also have large trade deficits. Its 2006 current account deficit was $811.5 billion; second worst was Spain at $106.4 billion. This is what is unsustainable.

It's not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On November 7, 2007, the U.S. Treasury announced that the national debt had breached $9 trillion for the first time ever. This was just five weeks after Congress raised the so-called debt ceiling to $9.815 trillion. If you begin in 1789, at the moment the Constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defense expenditures in comparison with the rest of the world.

The world's top 10 military spenders and the approximate amounts each country currently budgets for its military establishment are:

1.      United States (FY08 budget), $623 billion

2.      China (2004), $65 billion

3.      Russia, $50 billion

4.      France (2005), $45 billion

5.      Japan (2007), $41.75 billion

6.      Germany (2003), $35.1 billion

7.      Italy (2003), $28.2 billion

8.      South Korea (2003), $21.1 billion

9.      India (2005 est.), $19 billion

10.  Saudi Arabia (2005 est.), $18 billion
World total military expenditures (2004 est.), $1,100 billion

World total (minus the United States), $500 billion
Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration's policies. They have been going on for a very long time in accordance with a superficially plausible ideology and have now become entrenched in our democratic political system where they are starting to wreak havoc. This ideology I call "military Keynesianism" -- the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.

This ideology goes back to the first years of the Cold War. During the late 1940s, the U.S. was haunted by economic anxieties. The Great Depression of the 1930s had been overcome only by the war production boom of World War II. With peace and demobilization, there was a pervasive fear that the Depression would return. During 1949, alarmed by the Soviet Union's detonation of an atomic bomb, the looming communist victory in the Chinese civil war, a domestic recession, and the lowering of the Iron Curtain around the USSR's European satellites, the U.S. sought to draft basic strategy for the emerging cold war. The result was the militaristic National Security Council Report 68 (NSC-68) drafted under the supervision of Paul Nitze, then head of the Policy Planning Staff in the State Department. Dated April 14, 1950, and signed by President Harry S. Truman on September 30, 1950, it laid out the basic public economic policies that the United States pursues to the present day.

In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living."

With this understanding, American strategists began to build up a massive munitions industry, both to counter the military might of the Soviet Union (which they consistently overstated) and also to maintain full employment as well as ward off a possible return of the Depression. The result was that, under Pentagon leadership, entire new industries were created to manufacture large aircraft, nuclear-powered submarines, nuclear warheads, intercontinental ballistic missiles, and surveillance and communications satellites. This led to what President Eisenhower warned against in his farewell address of February 6, 1961: "The conjunction of an immense military establishment and a large arms industry is new in the American experience" -- that is, the military-industrial complex.

By 1990, the value of the weapons, equipment, and factories devoted to the Department of Defense was 83% of the value of all plants and equipment in American manufacturing. From 1947 to 1990, the combined U.S. military budgets amounted to $8.7 trillion. Even though the Soviet Union no longer exists, U.S. reliance on military Keynesianism has, if anything, ratcheted up, thanks to the massive vested interests that have become entrenched around the military establishment. Over time, a commitment to both guns and butter has proven an unstable configuration. Military industries crowd out the civilian economy and lead to severe economic weaknesses. Devotion to military Keynesianism is, in fact, a form of slow economic suicide.

On May 1, 2007, the Center for Economic and Policy Research of Washington, D.C., released a study prepared by the global forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. Needless to say, the U.S. economy has had to cope with growing defense spending for more than 60 years. He found that, after 10 years of higher defense spending, there would be 464,000 fewer jobs than in a baseline scenario that involved lower defense spending.

Baker concluded:

"It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment."

These are only some of the many deleterious effects of military Keynesianism.

Hollowing Out the American Economy
It was believed that the U.S. could afford both a massive military establishment and a high standard of living, and that it needed both to maintain full employment. But it did not work out that way. By the 1960s, it was becoming apparent that turning over the nation's largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E. Woods, Jr., observes that, during the 1950s and 1960s, between one-third and two-thirds of all American research talent was siphoned off into the military sector. It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.

 Nuclear weapons furnish a striking illustration of these anomalies. Between the 1940s and 1996, the United States spent at least $5.8 trillion on the development, testing, and construction of nuclear bombs. By 1967, the peak year of its nuclear stockpile, the United States possessed some 32,500 deliverable atomic and hydrogen bombs, none of which, thankfully, was ever used. They perfectly illustrate the Keynesian principle that the government can provide make-work jobs to keep people employed. Nuclear weapons were not just America's secret weapon, but also its secret economic weapon. As of 2006, we still had 9,960 of them. There is today no sane use for them, while the trillions spent on them could have been used to solve the problems of social security and health care, quality education and access to higher education for all, not to speak of the retention of highly skilled jobs within the American economy.

The pioneer in analyzing what has been lost as a result of military Keynesianism was the late Seymour Melman (1917-2004), a professor of industrial engineering and operations research at Columbia University. His 1970 book, Pentagon Capitalism: The Political Economy of War, was a prescient analysis of the unintended consequences of the American preoccupation with its armed forces and their weaponry since the onset of the Cold War. Melman wrote (pp. 2-3):

"From 1946 to 1969, the United States government spent over $1,000 billion on the military, more than half of this under the Kennedy and Johnson administrations -- the period during which the [Pentagon-dominated] state management was established as a formal institution. This sum of staggering size (try to visualize a billion of something) does not express the cost of the military establishment to the nation as a whole. The true cost is measured by what has been foregone, by the accumulated deterioration in many facets of life by the inability to alleviate human wretchedness of long duration."

In an important exegesis on Melman's relevance to the current American economic situation, Thomas Woods writes:

"According to the U.S. Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation's plant and equipment, and infrastructure, at just over $7.29 trillion. In other words, the amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock."

The fact that we did not modernize or replace our capital assets is one of the main reasons why, by the turn of the twenty-first century, our manufacturing base had all but evaporated. Machine tools -- an industry on which Melman was an authority -- are a particularly important symptom. In November 1968, a five-year inventory disclosed (p. 186) "that 64 percent of the metalworking machine tools used in U.S. industry were ten years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States' machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the Second World War. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry."

Nothing has been done in the period since 1968 to reverse these trends and it shows today in our massive imports of equipment -- from medical machines like proton accelerators for radiological therapy (made primarily in Belgium, Germany, and Japan) to cars and trucks.

Our short tenure as the world's "lone superpower" has come to an end. As Harvard economics professor Benjamin Friedman has written:

 "Again and again it has always been the world's leading lending country that has been the premier country in terms of political influence, diplomatic influence, and cultural influence. It's no accident that we took over the role from the British at the same time that we took over... the job of being the world's leading lending country. Today we are no longer the world's leading lending country. In fact we are now the world's biggest debtor country, and we are continuing to wield influence on the basis of military prowess alone."

Some of the damage done can never be rectified. There are, however, some steps that this country urgently needs to take. These include reversing Bush's 2001 and 2003 tax cuts for the wealthy, beginning to liquidate our global empire of over 800 military bases, cutting from the defense budget all projects that bear no relationship to the national security of the United States, and ceasing to use the defense budget as a Keynesian jobs program. If we do these things we have a chance of squeaking by. If we don't, we face probable national insolvency and a long depression.

Chalmers Johnson is the author of Nemesis: The Last Days of the American Republic, just published in paperback. It is the final volume of his Blowback Trilogy, which also includes Blowback (2000) and The Sorrows of Empire (2004).

[Note: For those interested, click here to view a clip from a new film, "Chalmers Johnson on American Hegemony," in Cinema Libre Studios' Speaking Freely series in which he discusses "military Keynesianism" and imperial bankruptcy. For sources on global military spending, please see: (1) Global Security Organization, "World Wide Military Expenditures" as well as Glenn Greenwald, "The bipartisan consensus on U.S. military spending"; (2) Stockholm International Peace Research Institute, "Report: China biggest Asian military spender."]

[This article first appeared on Tomdispatch.com, a weblog of the Nation Institute, which offers a steady flow of alternate sources, news, and opinion from Tom Engelhardt, long time editor in publishing, co-founder of the American Empire Project and author of The End of Victory Culture (University of Massachusetts Press), which has just been thoroughly updated in a newly issued edition that deals with victory culture's crash-and-burn sequel in Iraq.]

from Council for the National Interest Foundation :
Date: Wed, 23 Jan 2008
Subject: CNI Urges a Complete End to the Siege of Gaza.


CNI Urges a Complete End to the Political and Economic
Siege of Gaza

(January 23, 2008)
Action Alert

he situation in Gaza is bleak and awful.  John Ging, director of the United Nations Relief and Works Agency (UNRWA) in Gaza said two days ago the civilian population was living in "abject misery" and had been stripped of their human dignity (as reported in AKI).

"People here in Gaza have been living in abject misery and hardship now for a long time," Ging told the Arab TV network, Al-Jazeera. "On top of that they are living in darkness. You have to see how miserable the situation is. The civilian population is under occupation. It is collective punishment - they are victims."

In a photo-op of humanitarianism, Israel momentarily relented and allowed in tanks of diesel fuel so that the generating pumps could begin providing electricity to Gaza's 1.5 million inhabitants. But this was hardly enough to prevent thousands from massing at the Rafah Gate bordering Egypt in an attempt to get through. At first the Egyptian army stood them off, but today, tens of thousands - the Egyptians are reporting as many as 200,000 - stormed through the Rafah Gate, which had been blasted down by the Palestinians, to purchase food, fuel and other items made scarce by the six-month Israeli siege. 

President Mubarak said he permitted it because the Palestinians were starving, but he was also responding to Egyptian popular anger at the condition of Palestinians. Scores of protesters had already been arrested in Cairo and other cities for demonstrating against the siege, according to today's al-Jazeera, and the Gazans' desperate situation -- living without electricity, with shortages in food, water, and medical supplies -- was not being lost on the rest of the Arab world. The Arab League condemned the Israeli actions.  Secretary General Amr Moussa has called it a war crime. The European Union condemned the siege.

In contrast, the U.S. has said little other than they are "in touch" with the Israelis about the situation and "hope" that a humanitarian crisis will be avoided. The State Department under the Bush administration holds Hamas responsible for all violence in Gaza,

Amira Haas wrote in today's Haaretz that the Israelis have not learned that escalating the level of violence against Palestinians is not the answer to dealing with them.  It has the direct opposite effect. In Gaza they answer military violence with Qassam rockets aimed at Israeli civilians.  The cycle of violence cannot be broken by such tactics.

The humanitarian situation in Gaza needs to be addressed immediately by the United States. This is another instance in which Israel should not be allowed to set policy, as it did in Lebanon in 2006.  CNI urges it members to write their senators, congressional representatives, the Secretary of State, and leading presidential candidates to protest against the escalation of violence against the Gazans and ask for an end to the collective punishment of innocent people. 

We should not stop with temporary humanitarian aid. That is only a band-aid approach. The only way to stop the Qassam rockets and the Israeli retaliations - which only feeds more violence - is for Israel and the United States to negotiate, perhaps through international agencies or the EU, a complete ceasefire with Hamas. That means ending the political and economic siege.

President Bush email: comments@whitehouse.gov

Secretary of State email: secretary@state.gov

Barack Obama: comments@barackobama.com

John Edwards - send from his website,


Hillary Clinton: comments@hillaryclinton.com

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from ZMag :
Date: 24 January 2008
Subject: U.S. "Resource Wars".

Is Save Darfur a PR Scam to Justify U.S. Resource Wars in Africa?
by Bruce Dixon

T he star-studded hue and cry to Save Darfur and “stop the genocide” has gained enormous traction in U.S. media along with bipartisan support in Congress and the White House. But the Congo, with ten to twenty times as many African dead over the same period, is not called a “genocide” and passes almost unnoticed. Sudan sits atop lakes of oil. It has large supplies of uranium and other minerals, significant water resources, and a strategic location near still more African oil and resources. The unasked question is whether the nation’s Republican and Democratic foreign policy elite are using claims of genocide and appeals for “humanitarian intervention” to grease the way for the next oil and resource wars on the African continent.

The regular manufacture and the constant maintenance of false realities in the service of U.S. empire is a core function of the public relations profession and the corporate news media. Whether it’s fake news stories about wonder drugs and how toxic chemicals are good for you or Hollywood stars advocating military intervention to save African orphans, it pays to take a close look behind the facade. 

Among the latest false realities being pushed upon the American people are the simplistic pictures of Black vs. Arab genocide in Darfur and the proposed solution: a robust U.S.-backed or U.S.-led military intervention in Western Sudan. At long last, increasing scrutiny is being focused on the Save Darfur lobby and the Save Darfur Coalition­its founders, finances, methods and motivations, and truthfulness. Here are ten reasons to suspect that the Save Darfur campaign is a PR scam to justify U.S. intervention in Africa. 

1. It wouldn’t be the first Big Lie our government and media elite have sold us to justify a war.
Elders among us can recall the Tonkin Gulf incident, which the U.S. government deliberately provoked to justify initiation of the war in Vietnam. This rationale was quickly succeeded by the need to help the struggling infant “democracy” in South Vietnam and the still useful “fight ’em over there so we don’t have to fight ’em over here” nonsense. More recently the bombings, invasions, and occupations of Afghanistan and Iraq have been variously explained by people on the public payroll as necessary to “get Bin Laden” as revenge for 9-11, as measures to take “the world’s most dangerous weapons” from the hands of “the world’s most dangerous regimes,” as measures to enable the struggling Iraqi “democracy” to stand on its own two feet, and necessary because it’s still better to “fight them over there so we don’t have to fight them here.” 

2. It wouldn’t even be the first time the U.S. government and media elite used ”genocide prevention” as a rationale for military intervention in an oil-rich region. 
The 1995 U.S. and NATO military intervention in Kosovo was supposedly a “peacekeeping” operation to stop a genocide. The lasting result of that campaign is Camp Bondsteel, one of the largest military bases on the planet. The U.S. is practically the only country in the world that maintains military bases outside its own borders. At just under 1,000 acres, Camp Bondsteel offers the U.S. military the ability to pre-position large quantities of equipment and supplies within striking distance of Caspian oil fields, pipeline routes, and relevant sea lanes. 

3. If stopping genocide in Africa really was on the agenda, why the focus on Sudan with 200,000 to 400,000 dead, but not the Congo as well, with 5 million dead?
"The notion that a quarter million Darfuri dead are a genocide and five million dead Congolese are not is vicious and absurd,” according to Congolese activist Nita Evele. “What’s happened and what is still happening in the Congo is not a tribal conflict and it’s not a civil war. It is an invasion. It is a genocide with a death toll of five million, twenty times that of Darfur, conducted for the purpose of plundering Congolese mineral and natural resources.” 

More than anything else, the selective and cynical application of the term “genocide” reveals the depth of hypocrisy around the Save Darfur campaign. In the Congo where local gangsters, mercenaries, and warlords­along with invading armies from Uganda, Rwanda, Burundi, and Angola­engage in slaughter, mass rape, and regional depopulation on a scale that dwarfs anything happening in Sudan, all the players eagerly compete to guarantee the continued extraction of vital coltan for Western computers and cell phones, the export of uranium for Western reactors and nukes, along with diamonds, gold, copper, timber, and other Congolese resources.

Former UN Ambassador Andrew Young and George H.W. Bush both serve on the board of Barrick Gold, one of the largest and most active mining concerns in war-torn Congo. Evidently, with profits from the brutal extraction of Congolese wealth flowing to the West, there can be no Congolese “genocide” worth noting, much less interfering with. For their purposes, U.S. strategic planners may regard their Congolese model as the ideal means of capturing African wealth at minimal cost without the bother of official U.S. troops on the ground. 
4. It’s about Sudanese oil. 
Sudan, and the Darfur region in particular, sits atop a lake of oil. But Sudanese oil fields are not being developed and drilled by Exxon or Chevron or British Petroleum. Chinese banks, oil, and construction firms are making the loans, drilling the wells, and laying the pipelines to take Sudanese oil where they intend it to go, calling far too many shots for a 21st century in which the U.S. aspires to control the planet’s energy supplies. A U.S. and NATO military intervention will solve that problem for U.S. planners.  

5. It’s about Sudanese uranium, gum arabic, and other natural resources. 
Uranium is vital to the nuclear weapons industry and an essential fuel for nuclear reactors. Sudan possesses high quality deposits of uranium. Gum arabic is an essential ingredient in pharmaceuticals, candies and beverages like Coca-Cola and Pepsi. Sudanese exports of this commodity are 80 percent of the world’s supply. When U.S. sanctions against the Sudanese regime were being considered in 1997, industry lobbyists stepped up and secured an exemption in the sanctions bill to guarantee their supplies of gum arabic. But a U.S. and NATO military presence is a more secure guarantee that the extraction of Sudanese resources, like those of the Congo, flow westward to the U.S. and the European Union.

6. It’s about Sudan’s location.
Sudan sits opposite Saudi Arabia and the Gulf States where a large fraction of the world’s easily extracted oil will be for a few more years. Darfur also borders on Libya and Chad, each with its own vast oil resources, is within striking distance of West and Central Africa, and is a likely pipeline route. The Nile River flows through Sudan before reaching Egypt; Southern Sudan water resources have regional significance, too. With the creation of AFRICOM, the new Pentagon command for the African continent, the U.S. has made explicit its intention to plant a strategic footprint there. From permanent Sudanese bases, the U.S. military could influence the politics and ecocomies of Africa for generations to come. 

7. Many of the backers and founders of the Save Darfur movement are the well-connected and funded U.S. foreign policy elite.
According to a Washington Post story this summer, “The Save Darfur (Coalition) was created in 2005 by two groups concerned about genocide in the African country­the American Jewish World Service and the U.S. Holocaust Memorial Museum.... The coalition has a staff of 30 with expertise in policy and public relations. Its budget was about $15 million in the most recent fiscal year.... Save Darfur will not say exactly how much it has spent on its ads, which this week have attempted to shame China, host of the 2008 Olympics, into easing its support for Sudan. But a coalition spokeswoman said the amount is in the millions of dollars.” 

Though the Save Darfur PR campaign employs viral marketing techniques, reaching out to college students, even to black bloggers, it is not a grassroots affair, as was the movement against apartheid and in support of African liberation movements in South Africa, Namibia, Angola, and Mozambique. Top heavy with evangelical Christians who preach the coming war for the end of the world, and with elements known for their uncritical support of Israeli rejectionism in the Middle East, the Save Darfur movement is dominated/controlled by the establishment with a propaganda campaign that spends millions of dollars each month to manufacture consent for U.S. military intervention in Africa under the cloak of stopping or preventing genocide.  

8. None of the funds raised by the Save Darfur Coalition go to help needy Africans in Darfur.
According to stories in both the Washington Post and the New York Times, “None of the money collected by Save Darfur goes to help the victims and their families. Instead, the coalition pours its proceeds into advocacy efforts that are primarily designed to persuade governments to act.”

9. Most Save Darfur partisans in the U.S. are not interested in political negotiations to end the conflict.
President Bush has openly and repeatedly attempted to throw monkey wrenches at peace negotiations to end the war in Darfur. Even pro-intervention scholars and humanitarian organizations active on the ground have criticized the U.S. for endangering humanitarian relief workers and for effectively urging rebel parties in Darfur to refuse peace talks and hold out for U.S. and NATO intervention on their behalf. 

The PR campaign that depicts the conflict as strictly a racial affair, in which Arabs are exterminating the black population of Sudan, is slick, seamless, and attractive. It seems to leave no room for negotiation. In fact, many of Sudan’s “Arabs,” even the Janjiweed, are also black. In any case, they were armed and unleashed by a government that has the power to disarm them if it chooses. Refusing to talk to that government’s negotiators is a sure way to avoid any settlement. 

10. Blackwater and other U.S. mercenary contractors, the unofficial armed wings of the Republican party and the Pentagon, are eagerly pitching their services.
Chris Taylor, head of strategy for Blackwater, says his company has a database of thousands of former police and military officers for security assignments. He says Blackwater personnel could set up perimeters and guard Darfurian villages and refugee camps in support of the UN. Blackwater officials say it would not take many men to fend off the Janjiweed, a militia that is supported by the Sudanese government and attacks villages on camelback. 

Apparently Blackwater doesn’t need to go to the Congo where hunger and malnutrition, depopulation, mass rape, and the disappearance of schools, hospitals, and civil society into vast lawless zones ruled by an ever-changing cast of African proxies (like the son of the late and unlamented Idi Amin), operate under a veil of complicit media silence. 

Look for the adoption of the Congolese model across those wide areas of Africa that U.S. strategic planners call “ungoverned spaces.” Just don’t expect to see details on the evening news or hear about them from Oprah, George Clooney, or Angelina Jolie.

Bruce Dixon is managing editor of the Black Agenda Report. This article appears at www.blackagendareport.com.

from ZNet :
Date: 24 January 2008
Subject: The continuing capitalist crisis and the real threat to democracy.

12 October 2007 - In Defense of Academic Freedom at Rockefeller Chapel, University of Chicago :

Noam Chomsky on Academic Freedom


Tariq Ali on Academic Freedom

from Mike Arresta :
Date: 26 January 2008
Subject: "From little acorns great oak trees grow."

Hello Francis,
I just watched some amazing videos of the Obama campaign's organization in South Carolina. Check them out:

Note : 22 states are holding primaries and caucuses on February 5, and we need to organize all across the country just like we've done in South Carolina. Watch these videos and sign up to join our movement: