Bulletin N° 372




17 October 2008
Grenoble, France

Dear Colleagues and Friends of CEIMSA,
Jean-Paul Sartre (21 June1905 - 15 Ap.1980) first published his phenomenological study of Jean Genet (19 Dec.1910 - 15 Ap.1986) --poet, thief, and homosexual-- in 1952, and it still stands as a monumental tribute to the power of understanding human behavior. My dog-eared, coffee-stained paperback copy of this book fell into my hands recently, as I was continuing my research on "the role of ethics and science/technology in class society". (Readers are invited to the Journée d'études which will be hosted by the Centre de Recherches anglophones (CREA) at the Université de Paris 10 à Nanterre on May 6, 2009, where there will be a series of reports concerning the researches on this topic.)

Sartre, in his classic study, Saint Genet, Actor and Martyr (1952; American trans. 1964), writes that Jean Genet "in himself" and Jean Genet "for himself"  was a living contradiction, constantly oscillating between various poles, like Evil and Good, Criminal and Saint, Object and Subject, the universal and the particular, town and country, etc., etc. . . .

[He] 'represents a compromise which cannot be achieved' . . . . [He]
'embodies an imaginary synthesis.' That is why he is one of us, that
is why he has 'something to say to us.' For we are all torn, like him,
between the exigencies of an ethic inherited from individual property
and a collectivistic ethic in the process of formation.

Sartre quotes Claude Lévi-Strauss: "every culture can be regarded as a body of symbolic systems in the forefront of which are language, marriage rules, economic relationships, art, science, religion . . . ."
Thus, in any society it is inevitable that a percentage --a variable one, be
it added-- of individuals find themselves placed, as it were, outside of any
system or between two or more irreducible systems. The group asks and
even requires that these individuals represent certain forms of compromise
which cannot be achieved on the collective level, that they simulate imaginary
transitions and embody incompatible syntheses.
On the social creation of Jean Genet, the illegitimate orphan child born in the 5th arrondissement of Paris in 1910 and made the ward of foster parents who were peasants living in the Morvan region of eastern France, Sartre writes:

they took a child and made a monster of him for reasons of social utility.
If we want to find the real culprits in this affair, let us turn to the decent
folk and ask them by what strange cruelty they made of a child their

In the 6 items below, CEIMSA readers will recognize some of the contradictions which we are now living and how these contradictions assert heavy influences over our lives. "The Cold War is won! Long live the War!" was the ruling class declaration at the end of the last century. The indispensable enemy was finally defeated. The communist state was dead. Capitalist China and Russia entered the world market as major players in the double game of national competition and class struggle. Only now this game was without rules, without referees, and chaos predictably ensued. The result to date : The capitalist system has collapsed, authoritarian state socialism has been discredited, and democratic socialism has not yet matured to the point of governing the economy. In many ways the present society has become a museum frozen in time, where reified people, express reified ideas, in an effort to reassure themselves that things are not changing in any fundamental way. Many are simply petrified with fear and are in need of learning new community skills and acquiring better information. It is our hope that the essays below will advance this endeavor.

Item A., sent to us by Z Magazine, is an article by Nobel-Prize winning economist (2001) Joseph Stiglitz explaining how capitalism can  be saved only after a long depression.

Item B., from American Studies graduate student Grace Kpohazounde, are two videos discussing recently documented finds of formal strategies to commit acts of genocide in Canada and in South Africa.

Item C. is a video film of Socialist Workers Party representative Sharon Smith, speaking on "Marxism and 'Identity Politics', " at Socialism 2008, a Socialist Workers Party conference held in Chicago on June 20, 2008.

Item D., sent to us by University of California Professor Fred Lonidier, is a article on the recently organized CultureWorks Collective in California.

Item E., sent to us by Dr. Jim O'Brien, member of the Steering Committee of Historians Against War (HAW), is an update on the activities and new contacts by this association of socially committed intellectuals.

Item F., from graduate student Moufid Boudaoud, are two articles on the geopolitical power shift and the great American decline, first published in the London Observer by former London School of Economics Professor, John Gray, and in U.S. Newsweek, by Johns Hobkins Professor of Political Economy, Francis Fukuyama.

And finally, we conclude this bulletin with one audio and two short video presentations of American political culture in transition:

1) Oliver Stone comments on his new film "W" in a New York Times interview, "Oliver Stone on 'W.' " :Throwing Incaution to the Wind, Stone Paints Bush,

2) A glance at a real conspiracy (in case you might have thought they never occur) :  "an amazing diplomatic coincidence" gluing U.S. allies tight together against self-determination in the Middle East : http://www.brasschecktv.com/page/439.html

and 3) the strange taste of voodoo politics, following in the wake of more than two decades of U.S. voodoo economics :
at Sarah Palin's church in Alaska = http://www.huffingtonpost.com/max-blumenthal/the-witch-hunter-anoints_b_128805.html

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

from Znet :
Date: 13 October 2008
Subject: The coming of another "Great Depression".
Vanity Fair

Reversal of Fortune
by Joseph Stiglitz

When the American economy enters a downturn, you often hear the experts debating whether it is likely to be V- shaped (short and sharp) or U-shaped (longer but milder). Today, the American economy may be entering a downturn that is best described as L-shaped. It is in a very low place indeed, and likely to remain there for some time to come.

Virtually all the indicators look grim. Inflation is running at an annual rate of nearly 6 percent, its highest level in 17 years. Unemployment stands at 6 percent; there has been no net job growth in the private sector for almost a year. Housing prices have fallen faster than at any time in memory-in Florida and California, by 30 percent or more. Banks are reporting record losses, only months after their executives walked off with record bonuses as their reward. President Bush inherited a $128 billion budget surplus from Bill Clinton; this year the federal government announced the second-largest budget deficit ever reported. During the eight years of the Bush administration, the national debt has increased by more than 65 percent, to nearly $10 trillion (to which the debts of Freddie Mac and Fannie Mae should now be added, according to the Congressional Budget Office). Meanwhile, we are saddled with the cost of two wars. The price tag for the one in Iraq alone will, by my estimate, ultimately exceed $3 trillion.

This tangled knot of problems will be difficult to unravel. Standard prescriptions call for raising interest rates when confronted with inflation, just as standard prescriptions call for lowering interest rates when confronted with an economic downturn. How do you do both at the same time? Not in the way that some politicians have proposed. With gasoline prices at all- time highs, John McCain has called for a rollback of gas taxes. But that would lead to more gas consumption, raise the price of gas further, increase our dependence on foreign oil, and expand our already massive trade deficit. The expanding deficit would in turn force the U.S. to continue borrowing gargantuan sums from abroad, making us even more indebted. At the same time, the higher imports of oil and petroleum-based products would lead to a weaker dollar, fueling inflationary pressures.

Millions of Americans are losing their homes. (Already, some 3.6 million have done so since the subprime- mortgage crisis began.) This social catastrophe has severe economic effects. The banks and other financial institutions that own these mortgages face stunning reverses; a few, such as Bear Stearns, have already gone belly-up. To prevent America's $5.2 trillion home financiers, Fannie Mae and Freddie Mac, from following suit, Congress authorized a blank check to cover their losses, but even that generosity failed to do the trick. Now the administration has taken over the two entities completely, a stunning feat for a supposedly market-oriented regime. These bailouts contribute to growing deficits in the short run, and to perverse incentives in the long run. Market economies work only when there is a system of accountability, but C.E.O.'s, investors, and creditors are walking away with billions, while American taxpayers are being asked to pick up the tab. (Freddie Mac's chairman, Richard Syron, earned $14.5 million in 2007. Fannie Mae's C.E.O., Daniel Mudd, earned $14.2 million that same year.) We're looking at a new form of public-private partnership, one in which the public shoulders all the risk, and the private sector gets all the profit. While the Bush administration preaches responsibility, the words are addressed only to the less well-off. The administration talks about the impact of 'moral hazard' on the poor 'speculator' who borrowed money and bought a house beyond his ability to pay. But moral hazard somehow isn't an issue when it comes to the high-stakes speculators in corporate boardrooms.

How Did We Get into This Mess?

A unique combination of ideology, special-interest pressure, populist politics, bad economics, and sheer incompetence has brought us to our present condition.

Ideology proclaimed that markets were always good and government always bad. While George W. Bush has done as much as he can to ensure that government lives up to that reputation-it is the one area where he has overperformed-the fact is that key problems facing our society cannot be addressed without an effective government, whether it's maintaining national security or protecting the environment. Our economy rests on public investments in technology, such as the Internet. While Bush's ideology led him to underestimate the importance of government, it also led him to underestimate the limitations of markets. We learned from the Depression that markets are not self- adjusting-at least, not in a time frame that matters to living people. Today everyone-even the president-accepts the need for macro-economic policy, for government to try to maintain the economy at near- full employment. But in a sleight of hand, free-market economists promoted the idea that, once the economy was restored to full employment, markets would always allocate resources efficiently. The best regulation, in their view, was no regulation at all, and if that didn't sell, then 'self-regulation' was almost as good.

The underlying idea was, on the face of it, absurd: that market failures come only in macro doses, in the form of the recessions and depressions that have periodically plagued capitalist economies for the past several hundred years. Isn't it more reasonable to assume that these failures are just the tip of the iceberg? That beneath the surface lie a myriad of smaller but harder-to-assess inefficiencies? Let me venture an analogy from biology: A patient arrives at a hospital in serious condition. Now, it may be that the patient has simply fallen victim to one of those debilitating ailments that go around from time to time and can be cured by a massive dose of antibiotics. In this case we have a macro problem with a macro solution. But it could instead be that the patient is suffering from a decade of serious abuse-smoking, drinking, overeating, lack of exercise, a fondness for crystal meth-and that it has not only taken a catastrophic toll but also left him open to opportunistic infections of every kind. In other words, a buildup of micro problems has led to a macro problem, and no cure is possible without addressing the underlying issues. The American economy today is a patient of the second kind.

We are in the midst of micro-economic failure on a grand scale. Financial markets receive generous compensation-in the form of more than 30 percent of all corporate profits-presumably for performing two critical tasks: allocating savings and managing risk. But the financial markets have failed laughably at both. Hundreds of billions of dollars were allocated to home loans beyond Americans' ability to pay. And rather than managing risk, the financial markets created more risk. The failure of our financial system to do what it is supposed to do matches in destructive grandeur the macro-economic failures of the Great Depression.

Economic theory-and historical experience-long ago proved the need for regulation of financial markets. But ever since the Reagan presidency, deregulation has been the prevailing religion. Never mind that the few times 'free banking' has been tried-most recently in Pinochet's Chile, under the influence of the doctrinaire free-market theorist Milton Friedman-the experiment has ended in disaster. Chile is still paying back the debts from its misadventure. With massive problems in 1987 (remember Black Friday, when stock markets plunged almost 25 percent), 1989 (the savings- and-loan debacle), 1997 (the East Asia financial crisis), 1998 (the bailout of Long Term Capital Management), and 2001-02 (the collapses of Enron and WorldCom), one might think there would be more skepticism about the wisdom of leaving markets to themselves.

The new populist rhetoric of the right-persuading taxpayers that ordinary people always know how to spend money better than the government does, and promising a new world without budget constraints, where every tax cut generates more revenue-hasn't helped matters. Special interests took advantage of this seductive mixture of populism and free-market ideology. They also bent the rules to suit themselves. Corporations and the wealthy argued that lowering their tax rates would lead to more savings; they got the tax breaks, but America's household savings rate not only didn't rise, it dropped to levels not seen in 75 years. The Bush administration extolled the power of the free market, but it was more than willing to provide generous subsidies to farmers and erect tariffs to protect steelmakers. Lately, as we have seen, it seems willing to write blank checks to bail out its friends on Wall Street. In each of these cases there are clear winners. And in each there are clear losers-including the country as a whole.

What Is to Be Done?

As America attempts to work its way out of the present crisis, the danger is that we will listen to the same people on Wall Street and in the economic establishment who got us into it. For them, our current predicament is another opportunity: if they can shape the government response appropriately, they stand to gain, or at least stand to lose less, and they may be willing to sacrifice the well-being of the economy for their own benefit-just as they did in the past.

There are a number of economic tools at the country's disposal. As noted, they can yield contradictory results. The sad truth is that we have reached the limits of monetary policy. Lowering interest rates will not stimulate the economy much-banks are not going to be willing to lend to strapped consumers, and consumers are not going to be willing to borrow as they see housing prices continue to fall. And raising interest rates, to combat inflation, won't have the desired impact either, because the prices that are the main sources of our inflation-for food and energy-are determined in international markets; the chief consequence will be distress for ordinary people. The quandaries that we face mean that careful balancing is required. There is no quick and easy fix. But if we take decisive action today, we can shorten the length of the downturn and reduce its magnitude. If at the same time we think about what would be good for the economy in the long run, we can build a durable foundation for economic health.

To go back to that patient in the emergency room: we need to address the underlying causes. Most of the treatment options entail painful choices, but there are a few easy ones. On energy: conservation and research into new technologies will make us less dependent on foreign oil, reduce our trade imbalance, and help the environment. Expanding drilling into environmentally fragile areas, as some propose, would have a negligible effect on the price we pay for oil. Moreover, a policy of 'drain America first' will make us more dependent on foreigners in the future. It is shortsighted in every dimension.

Our ethanol policy is also bad for the taxpayer, bad for the environment, bad for the world and our relations with other countries, and bad in terms of inflation. It is good only for the ethanol producers and American corn farmers. It should be scrapped. We currently subsidize corn-based ethanol by almost $1 a gallon, while imposing a 54-cent-a-gallon tariff on Brazilian sugar-based ethanol. It would be hard to invent a worse policy. The ethanol industry tries to sell itself as an infant, needing help to get on its feet, but it has been an infant for more than two decades, refusing to grow up. Our misguided biofuel policy is taking land used for food production and diverting it to energy production for cars; it is the single most important factor contributing to higher grain prices.

Our tax policies need to be changed. There is something deeply peculiar about having rich individuals who make their money speculating on real estate or stocks paying lower taxes than middle-class Americans, whose income is derived from wages and salaries; something peculiar and indeed offensive about having those whose income is derived from inherited stocks paying lower taxes than those who put in a 50-hour workweek. Skewing the tax rates in the other direction would provide better incentives where they count and would more effectively stimulate the economy, with more revenues and lower deficits.

We can have a financial system that is more stable-and even more dynamic-with stronger regulation. Self- regulation is an oxymoron. Financial markets produced loans and other products that were so complex and insidious that even their creators did not fully understand them; these products were so irresponsible that analysts called them 'toxic.' Yet financial markets failed to create products that would enable ordinary households to face the risks they confront and stay in their homes. We need a financial-products safety commission and a financial-systems stability commission. And they can't be run by Wall Street. The Federal Reserve Board shares too much of the mind-set of those it is supposed to regulate. It could and should have known that something was wrong. It had instruments at its disposal to let the air out of the bubble-or at least ensure that the bubble didn't over- expand. But it chose to do nothing.

Throwing the poor out of their homes because they can't pay their mortgages is not only tragic-it is pointless. All that happens is that the property deteriorates and the evicted people move somewhere else. The most coldhearted banker ought to understand the basic economics: banks lose money when they foreclose-the vacant homes typically sell for far less than they would if they were lived in and cared for. If banks won't renegotiate, we should have an expedited special bankruptcy procedure, akin to what we do for corporations in Chapter 11, allowing people to keep their homes and re-structure their finances.

if this sounds too much like coddling the irresponsible, remember that there are two sides to every mortgage-the lender and the borrower. Both enter freely into the deal. One might say that both are, accordingly, equally responsible. But one side-the lender-is supposed to be financially sophisticated. In contrast, the borrowers in the subprime market consist mainly of people who are financially unsophisticated. For many, their home is their only asset, and when they lose it, they lose their life savings. Remember, too, that we already give big homeowner subsidies, through the tax system, to affluent families. With tax deductions, the government is paying in some states almost half of all mortgage interest and real-estate taxes. But many lower-income people, whose deductions are meaningless because their tax bill is too small, get no help. It makes much more sense to convert these tax deductions into cashable tax credits, so that the fraction of housing costs borne by the government for the poor and the rich is the same.

About these matters there should be no debate-but there will be. Already, those on Wall Street are arguing that we have to be careful not to 'over-react.' Over- reaction, we are told, might stifle 'innovation.' Well, some innovations ought to be stifled. Those toxic mortgages were certainly innovative. Other innovations were simply devices to circumvent regulations-regulations intended to prevent the kinds of problems from which our economy now suffers. Some of the innovations were designed to tart up the bottom line, moving liabilities off the balance sheet-charades designed to blur the information available to investors and regulators. They succeeded: the full extent of the exposure was not clear, and still isn't. But there is a reason we need reliable accounting. Without good information it is hard to make good economic decisions. In short, some innovations come with very high price tags. Some can actually cause instability.

The free-market fundamentalists-who believe in the miracles of markets-have not been averse to accepting government bailouts. Indeed, they have demanded them, warning that unless they get what they want the whole system may crash. What politician wants to be blamed for the next Great Depression, simply because he stood on principle? I have been critical of weak anti-trust policies that allowed certain institutions to become so dominant that they are 'too big to fail.' The harsh reality is that, given how far we've come, we will see more bailouts in the days ahead. Now that Fannie Mae and Freddie Mac are in federal receivership, we must insist: not a dime of taxpayer money should be put at risk while shareholders and creditors, who failed to oversee management, are permitted to walk away with anything they please. To do otherwise would invite a recurrence. Moreover, while these institutions may be too big to fail, they're not too big to be reorganized. And we need to remember why we're bailing them out: in order to maintain a flow of money into mortgage markets. It's outrageous that these institutions are responding to their near-monopoly position by raising fees and increasing the costs of mortgages, which will only worsen the housing crisis. They, and the financial markets, have shown little interest in measures that could help millions of existing and potential homeowners out of the bind they're in.

The hardest puzzles will be in monetary policy (balancing the risks of inflation and the risk of a deeper downturn) and fiscal policy (balancing the risk of a deeper downturn and the risk of an exploding deficit). The standard analysis coming from financial markets these days is that inflation is the greatest threat, and therefore we need to raise interest rates and cut deficits, which will restore confidence and thereby restore the economy. This is the same bad economics that didn't work in East Asia in 1997 and didn't work in Russia and Brazil in 1998. Indeed, it is the same recipe prescribed by Herbert Hoover in 1929.

It is a recipe, moreover, that would be particularly hard on working people and the poor. Higher interest rates dampen inflation by cutting back so sharply on aggregate demand that the unemployment rate grows and wages fall. Eventually, prices fall, too. As noted, the cause of our inflation today is largely imported-it comes from global food and energy prices, which are hard to control. To curb inflation therefore means that the price of everything else needs to fall drastically to compensate, which means that unemployment would also have to rise drastically.

In addition, this is not the time to turn to the old- time fiscal religion. Confidence in the economy won't be restored as long as growth is low, and growth will be low if investment is anemic, consumption weak, and public spending on the wane. Under these circumstances, to mindlessly cut taxes or reduce government expenditures would be folly.

But there are ways of thoughtfully shaping policy that can walk a fine line and help us get out of our current predicament. Spending money on needed investments-infrastructure, education, technology-will yield double dividends. It will increase incomes today while laying the foundations for future employment and economic growth. Investments in energy efficiency will pay triple dividends-yielding environmental benefits in addition to the short- and long-run economic benefits.

The federal government needs to give a hand to states and localities-their tax revenues are plummeting, and without help they will face costly cutbacks in investment and in basic human services. The poor will suffer today, and growth will suffer tomorrow. The big advantage of a program to make up for the shortfall in the revenues of states and localities is that it would provide money in the amounts needed: if the economy recovers quickly, the shortfall will be small; if the downturn is long, as I fear will be the case, the shortfall will be large.

These measures are the opposite of what the administration-along with the Republican presidential nominee, John McCain-has been urging. It has always believed that tax cuts, especially for the rich, are the solution to the economy's ills. In fact, the tax cuts in 2001 and 2003 set the stage for the current crisis. They did virtually nothing to stimulate the economy, and they left the burden of keeping the economy on life support to monetary policy alone. America's problem today is not that households consume too little; on the contrary, with a savings rate barely above zero, it is clear we consume too much. But the administration hopes to encourage our spendthrift ways.

What has happened to the American economy was avoidable. It was not just that those who were entrusted to maintain the economy's safety and soundness failed to do their job. There were also many who benefited handsomely by ensuring that what needed to be done did not get done. Now we face a choice: whether to let our response to the nation's woes be shaped by those who got us here, or to seize the opportunity for fundamental reforms, striking a new balance between the market and government.
Joseph E. Stiglitz, a Nobel Prize-winning economist, is a professor at Columbia University.

from Grace Kpohazounde :
Date: 13 October 2008
Subject: Informative Videos.

Hello Sir,
I hope you're doing well. I came across two very informative videos that i wanted to share with you.
The first one is a documentary made by Kevin Annett and Louie Lawless on the Indian's Genocide in Canada.
The other one is about Dr Wouter Basson, a South African scientist. During the Apartheid regime he was working on a project financed by the SA Government, France, the US, Israel, Irak...whose aim was to find a weapon of mass destruction to annihilate the black population.



Have a nice day,

from Socialist Worker :
Datre: 15 October 2008
Subject: American Democratic Socialist critique of the U. S. Presidential Campaign & "Identity Politics".

Sharon Smith - Unite and Fight? Marxism and Identity Politics - Socialism
(19 août 2008)

38 mn

Haymarket Books - www.socialistworker.org

from Fred Lonidier :
Date: 8 October 2008
Subject: The CultureWorks Collective.

Greetings UALE Folks,

I'm writing to introduce you to a new arts and activism project, The CultureWorks Collective -- dedicated to integrating art and activism in ways that help unite and inspire people to achieve progressive change.  We honor the role of art as a source of inspiration, education, and motivation.  We advocate for the placement of a higher value on art and music as central elements in our fight for worker rights and social justice.  We teach and train on how to integrate art as a core element in campaigns and in our day to day work.

Please check us out at:  www.cultureworkscollective.com
We have a cool artist of the month feature, and be sure to check out the archives to see who we've honored!

We are proud to announce our new CultureWorks Collective Artist of the Month: Ricardo Levins-Morales!  Ricardo has used art as a part his of activism since he was young.  In 1979, he helped found the Northland Poster Collective, which provides artistic support for social justice organizing. Today Levins Morales works at Northland, which has become an artistic center for the United States labor movement and works with a variety of grassroots struggles, like environmental justice, worker rights, and peace.  His work includes art for organizing campaigns, education, historical story-telling and as an aspect of movement strategy.

I have purchased posters from Ricardo and Northland for everything from union halls to my son's dorm room, to my new baby girl's room, to my office and music studio!  With the holidays coming, the Northland Poster Collective is definitely worth checking out! 

This month we also feature on our home page the effort to get Pete Seeger nominated for a Nobel Peace Prize.  Throughout seven decades of using music as a way to inspire, motivate, and educate, Pete has been involved in every great social movement of the 20th century, and during the first decade of the 21rst century!

Peace & Solidarity,

Joe Uehlein
202-256-7848  cell

from Jim O'Brien :
Date 8 October 2008
Subject: HAW and Afghanistan

After much discussion, and helpful input from HAW members who responded to the initial tentative draft, the Steering Committee of Historians Against the War has adopted the following resolution regarding the US/NATO war in Afghanistan.  We encourage members to consider including the Afghanistan war in any teach-ins or forums that are involved in.  We will also post Afghanistan materials on our web site (suggestions are welcome at afghanistan@historiansagainstwar.org).

1.  Whatever views we hold on the initial US military intervention in Afghanistan in the wake of the September 11 attacks in the US, it is now clear that the US/NATO presence in this country has become an occupation, increasingly resented and opposed by large sections of the population.

2.  Despite the relief that met removal of the totalitarian Taliban government by US and NATO forces, the new government, chosen under the direction of the Bush administration, has distanced itself from the people, is rent with corruption, and barely governs anything.  Outside of Kabul, warlords and criminal elements operate with impunity, the opium trade grows, violence -- including violence by the occupation forces -- proliferates, and the Taliban is resurgent.

3.  The support for fundamentalist warlords and the corrupt Karzai regime demonstrate that the purpose of US policy in Afghanistan is not to support the self-determination of the Afghan people, but to extend the bankrupt global war against terror deeper into Central Asia, and to strengthen US geopolitical power in this region.  The US/NATO war on Afghanistan is not a "good war" in contrast to the "bad war" on Iraq.

4.  The current consensus in higher political circles, including both major party candidates for president, that the war in Afghanistan must be escalated will only deepen the regional crisis and suffering of the Afghan people.  The historical experience of other outside powers trying to control Afghanistan (most spectacularly, the Soviet Union from 1979 to 1989, invading from next door over a wide common border) suggests that even a greatly escalated US/NATO war effort will only multiply the deaths and the suffering.

5.  The US and NATO should immediately begin withdrawing their military and political assets from Afghanistan so that the Afghan people can have room to decide their own future.  Continued US/NATO action in the country is a large part of the problem and cannot be the solution.

6.  We call for regional agreement among Afghanistan's neighbors to guarantee Afghan stability, to preserve the ethnic and religious diversity of the country, to assure the full participation of women in social life, and to provide space for all of the people of Afghanistan to fully exercise their right to self-determination.

haw-info mailing list


This is a message from Carolyn "Rusti" Eisenberg, Beth McKillen, and Margaret Power on behalf of the Steering Committee of Historians Against the War.

Although temporarily eclipsed by the economic crisis, the wars in Iraq and Afghanistan and the possibility of an armed confrontation with Iran will loom large in the next administration. And while this is barely mentioned, the $612 billion in defense spending for FY 2009, just authorized by the House of Representative, could seriously constrain the ability of the US government to provide urgently needed domestic expenditures.

Across the country, students are paying unprecedented attention to this presidential election. This is a "teachable moment," when we can provide vitally needed education on the issues and on the role of office-holders.

Two suggestions:

*Many historians and social scientists around the country have scheduled on-campus forums to engage questions of war and peace. However, if such programs have not occurred we encourage historians to take the lead in creating pre-election educational events. These can be modest initiatives- a film showing, a panel discussion that draws on local expertise, a campus debate. Or you may wish to draw upon our list of outstanding scholars and peace activists who have agreed to speak on campuses and to waive an honorarium if the school lacks sufficient funds. (This would be a last minute invitation, but there are many flexible people on the list...who might agree to participate even on short notice.) HAW Speakers list: http://www.historiansagainstwar.org/teachin/speakers.htm

* While maintaining a non-partisan stance, we can provide information about the record of Congressional office-holders. Over the past two years, Congress has taken numerous votes on the Iraq war and all incumbents have made a clear record. Yet most constituents have no idea where their elected officials actually stand. You can obtain Congressional Report Cards for your district and state from United for Peace and Justice by clicking here. Please distribute widely and forward to friends.

And keep us posted on your campus events. power@iit.edu. For additional information, contact us at:
Carolyn Eisenberg hiscze@aol.com

Beth McKillen  Elizabeth.McKillen@umit.maine.edu

Margaret Power  power@iit.edu

haw-info mailing list

from Moufid Boudaoud :
Date: 8 October 2008
Subject: Two Views on the End of American Liberalism.

Hi Sir,
Enclosed are two articles documenting how the fall of the United States as a super power occurred following the recent financial crisis in Wall Street. The first one belongs to British philosopher John Gary in which he compares the collapse of American imperialism with that of the Soviet Union. On the other hand,  the neo-con Francis Fukuyama, though he admits the failure of Reagan policies in the last 20 years, speaks about how to  restore faith in the American system. Both articles appeared recently and swirled around the internet for the last couple of  weeks, for they have stirred a heated debate over the reality surrounding the decline and eventual fall of the Empire. I hope you will find them an interesting material to be published in your next newsletter.

A shattering moment in America's fall from power
John Gray
© The Observer,
Sunday September 28 2008

The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over.       

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future.

Which version of the bail out of American financial institutions cobbled up by Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke is finally adopted is less important than what the bail out means for America's position in the world. The populist rant about greedy banks that is being loudly ventilated in Congress is a distraction from the true causes of the crisis. The dire condition of America's financial markets is the result of American banks operating in a free-for-all environment that these same American legislators created. It is America's political class that, by embracing the dangerously simplistic ideology of deregulation, has responsibility for the present mess.

In present circumstances, an unprecedented expansion of government is the only means of averting a market catastrophe. The consequence, however, will be that America will be even more starkly dependent on the world's new rising powers. The federal government is racking up even larger borrowings, which its creditors may rightly fear will never be repaid. It may well be tempted to inflate these debts away in a surge of inflation that would leave foreign investors with hefty losses. In these circumstances, will the governments of countries that buy large quantities of American bonds, China, the Gulf States and Russia, for example, be ready to continue supporting the dollar's role as the world's reserve currency? Or will these countries see this as an opportunity to tilt the balance of economic power further in their favour? Either way, the control of events is no longer in American hands.

The fate of empires is very often sealed by the interaction of war and debt. That was true of the British Empire, whose finances deteriorated from the First World War onwards, and of the Soviet Union. Defeat in Afghanistan and the economic burden of trying to respond to Reagan's technically flawed but politically extremely effective Star Wars programme were vital factors in triggering the Soviet collapse. Despite its insistent exceptionalism, America is no different. The Iraq War and the credit bubble have fatally undermined America's economic primacy. The US will continue to be the world's largest economy for a while longer, but it will be the new rising powers that, once the crisis is over, buy up what remains intact in the wreckage of America's financial system.

There has been a good deal of talk in recent weeks about imminent economic Armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling that is going on in Washington marks the passing of only one type of capitalism - the peculiar and highly unstable variety that has existed in America over the last 20 years. This experiment in financial laissez-faire has imploded. While the impact of the collapse will be felt everywhere, the market economies that resisted American-style deregulation will best weather the storm. Britain, which has turned itself into a gigantic hedge fund, but of a kind that lacks the ability to profit from a downturn, is likely to be especially badly hit.

The irony of the post-Cold War period is that the fall of communism was followed by the rise of another utopian ideology. In American and Britain and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America's over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned.

Meltdowns on the scale we are seeing are not slow-motion events. They are swift and chaotic, with rapidly spreading side-effects. Consider Iraq. The success of the surge, which has been achieved by bribing the Sunnis, while acquiescing in ongoing ethnic cleansing, has produced a condition of relative peace in parts of the country. How long will this last, given that America's current level of expenditure on the war can no longer be sustained?

An American retreat from Iraq will leave Iran the regional victor. How will Saudi Arabia respond? Will military action to forestall Iran acquiring nuclear weapons be less or more likely? China's rulers have so far been silent during the unfolding crisis. Will America's weakness embolden them to assert China's power or will China continue its cautious policy of 'peaceful rise'? At present, none of these questions can be answered with any confidence. What is evident is that power is leaking from the US at an accelerating rate. Georgia showed Russia redrawing the geopolitical map, with America an impotent spectator.

Outside the US, most people have long accepted that the development of new economies that goes with globalisation will undermine America's central position in the world. They imagined that this would be a change in America's comparative standing, taking place incrementally over several decades or generations. Today, that looks an increasingly unrealistic assumption.

Having created the conditions that produced history's biggest bubble, America's political leaders appear unable to grasp the magnitude of the dangers the country now faces. Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape.

John Gray is the author of Black Mass: Apocalyptic Religion and the Death of Utopia (Allen Lane)


The Fall of America, Inc.
Francis Fukuyama
© Newsweek Oct. 13, 2008

Along with some of Wall Street's most storied firms, a certain vision of capitalism has collapsed. How we restore faith in our brand.

The implosion of America's most storied investment banks. The vanishing of more than a trillion dollars in stock-market wealth in a day. A $700 billion tab for U.S. taxpayers. The scale of the Wall Street crackup could scarcely be more gargantuan. Yet even as Americans ask why they're having to pay such mind-bending sums to prevent the economy from imploding, few are discussing a more intangible, yet potentially much greater cost to the United States­the damage that the financial meltdown is doing to America's "brand."

Ideas are one of our most important exports, and two fundamentally American ideas have dominated global thinking since the early 1980s, when Ronald Reagan was elected president. The first was a certain vision of capitalism­one that argued low taxes, light regulation and a pared-back government would be the engine for economic growth. Reaganism reversed a century-long trend toward ever-larger government. Deregulation became the order of the day not just in the United States but around the world.

The second big idea was America as a promoter of liberal democracy around the world, which was seen as the best path to a more prosperous and open international order. America's power and influence rested not just on our tanks and dollars, but on the fact that most people found the American form of self-government attractive and wanted to reshape their societies along the same lines­what political scientist Joseph Nye has labeled our "soft power."

It's hard to fathom just how badly these signature features of the American brand have been discredited. Between 2002 and 2007, while the world was enjoying an unprecedented period of growth, it was easy to ignore those European socialists and Latin American populists who denounced the U.S. economic model as "cowboy capitalism." But now the engine of that growth, the American economy, has gone off the rails and threatens to drag the rest of the world down with it. Worse, the culprit is the American model itself: under the mantra of less government, Washington failed to adequately regulate the financial sector and allowed it to do tremendous harm to the rest of the society.

Democracy was tarnished even earlier. Once Saddam was proved not to have WMD, the Bush administration sought to justify the Iraq War by linking it to a broader "freedom agenda"; suddenly the promotion of democracy was a chief weapon in the war against terrorism. To many people around the world, America's rhetoric about democracy sounds a lot like an excuse for furthering U.S. hegemony.

The choice we face now goes well beyond the bailout, or the presidential campaign. The American brand is being sorely tested at a time when other models­whether China's or Russia's­are looking more and more attractive. Restoring our good name and reviving the appeal of our brand is in many ways as great a challenge as stabilizing the financial sector. Barack Obama and John McCain would each bring different strengths to the task. But for either it will be an uphill, years-long struggle. And we cannot even begin until we clearly understand what went wrong­which aspects of the American model are sound, which were poorly implemented, and which need to be discarded altogether.

Many commentators have noted that the Wall Street meltdown marks the end of the Reagan era. In this they are doubtless right, even if McCain manages to get elected president in November. Big ideas are born in the context of a particular historical era. Few survive when the context changes dramatically, which is why politics tends to shift from left to right and back again in generation-long cycles.

Reaganism (or, in its British form, Thatcherism) was right for its time. Since Franklin Roosevelt's New Deal in the 1930s, governments all over the world had only grown bigger and bigger. By the 1970s large welfare states and economies choked by red tape were proving highly dysfunctional. Back then, telephones were expensive and hard to get, air travel was a luxury of the rich, and most people put their savings in bank accounts paying low, regulated rates of interest. Programs like Aid to Families With Dependent Children created disincentives for poor families to work and stay married, and families broke down. The Reagan-Thatcher revolution made it easier to hire and fire workers, causing a huge amount of pain as traditional industries shrank or shut down. But it also laid the groundwork for nearly three decades of growth and the emergence of new sectors like information technology and biotech.

Internationally, the Reagan revolution translated into the "Washington Consensus," under which Washington­and institutions under its influence, like the International Monetary Fund and the World Bank­pushed developing countries to open up their economies. While the Washington Consensus is routinely trashed by populists like Venezuela's Hugo Chávez, it successfully eased the pain of the Latin American debt crisis of the early 1980s, when hyperinflation plagued countries such as Argentina and Brazil. Similar market-friendly policies are what turned China and India into the economic powerhouses they are today.

And if anyone needed more proof, they could look at the world's most extreme examples of big government­the centrally planned economies of the former Soviet Union and other communist states. By the 1970s they were falling behind their capitalist rivals in virtually all respects. Their implosion after the fall of the Berlin Wall confirmed that such welfare states on steroids were an historical dead end.

Like all transformative movements, the Reagan revolution lost its way because for many followers it became an unimpeachable ideology, not a pragmatic response to the excesses of the welfare state. Two concepts were sacrosanct: first, that tax cuts would be self-financing, and second, that financial markets could be self-regulating.

Prior to the 1980s, conservatives were fiscally conservative­ that is, they were unwilling to spend more than they took in in taxes. But Reaganomics introduced the idea that virtually any tax cut would so stimulate growth that the government would end up taking in more revenue in the end (the so-called Laffer curve). In fact, the traditional view was correct: if you cut taxes without cutting spending, you end up with a damaging deficit. Thus the Reagan tax cuts of the 1980s produced a big deficit; the Clinton tax increases of the 1990s produced a surplus; and the Bush tax cuts of the early 21st century produced an even larger deficit. The fact that the American economy grew just as fast in the Clinton years as in the Reagan ones somehow didn't shake the conservative faith in tax cuts as the surefire key to growth.

More important, globalization masked the flaws in this reasoning for several decades. Foreigners seemed endlessly willing to hold American dollars, which allowed the U.S. government to run deficits while still enjoying high growth, something that no developing country could get away with. That's why Vice President Dick Cheney reportedly told President Bush early on that the lesson of the 1980s was that "deficits don't matter."

The second Reagan-era article of faith­financial deregulation­was pushed by an unholy alliance of true believers and Wall Street firms, and by the 1990s had been accepted as gospel by the Democrats as well. They argued that long-standing regulations like the Depression-era Glass-Steagall Act (which split up commercial and investment banking) were stifling innovation and undermining the competitiveness of U.S. financial institutions. They were right­only, deregulation produced a flood of innovative new products like collateralized debt obligations, which are at the core of the current crisis. Some Republicans still haven't come to grips with this, as evidenced by their proposed alternative to the bailout bill, which involved yet bigger tax cuts for hedge funds.

The problem is that Wall Street is very different from, say, Silicon Valley, where a light regulatory hand is genuinely beneficial. Financial institutions are based on trust, which can only flourish if governments ensure they are transparent and constrained in the risks they can take with other people's money. The sector is also different because the collapse of a financial institution harms not just its shareholders and employees, but a host of innocent bystanders as well (what economists soberly call "negative externalities").

Signs that the Reagan revolution had drifted dangerously have been clear over the past decade. An early warning was the Asian financial crisis of 1997-98. Countries like Thailand and South Korea, following American advice and pressure, liberalized their capital markets in the early 1990s. A lot of hot money started flowing into their economies, creating a speculative bubble, and then rushed out again at the first sign of trouble. Sound familiar? Meanwhile, countries like China and Malaysia that didn't follow American advice and kept their financial markets closed or strictly regulated found themselves much less vulnerable.

A second warning sign lay in America's accumulating structural deficits. China and a number of other countries began buying U.S. dollars after 1997 as part of a deliberate strategy to undervalue their currencies, keep their factories humming and protect themselves from financial shocks. This suited a post-9/11 America just fine; it meant that we could cut taxes, finance a consumption binge, pay for two expensive wars and run a fiscal deficit at the same time. The staggering and mounting trade deficits this produced­$700 billion a year by 2007­were clearly unsustainable; sooner or later the foreigners would decide that America wasn't such a great place to bank their money. The falling U.S. dollar indicates that we have arrived at that point. Clearly, and contrary to Cheney, deficits do matter.

Even at home, the downside of deregulation were clear well before the Wall Street collapse. In California, electricity prices spiraled out of control in 2000-2001 as a result of deregulation in the state energy market, which unscrupulous companies like Enron gamed to their advantage. Enron itself, along with a host of other firms, collapsed in 2004 because accounting standards had not been enforced adequately. Inequality in the United States rose throughout the past decade, because the gains from economic growth went disproportionately to wealthier and better-educated Americans, while the incomes of working-class people stagnated. And finally, the bungled occupation of Iraq and the response to Hurricane Katrina exposed the top-to-bottom weakness of the public sector, a result of decades of underfunding and the low prestige accorded civil servants from the Reagan years on.

All this suggests that the Reagan era should have ended some time ago. It didn't partly because the Democratic Party failed to come up with convincing candidates and arguments, but also because of a particular aspect of America that makes our country very different from Europe. There, less-educated, working-class citizens vote reliably for socialist, communist and other left-learning parties, based on their economic interests. In the United States, they can swing either left or right. They were part of Roosevelt's grand Democratic coalition during the New Deal, a coalition that held through Lyndon Johnson's Great Society in the 1960s. But they started voting Republican during the Nixon and Reagan years, swung to Clinton in the 1990s, and returned to the Republican fold under George W. Bush. When they vote Republican, it's because cultural issues like religion, patriotism, family values and gun ownership trump economic ones.

This group of voters will decide November's election, not least because of their concentration in a handful of swing states like Ohio and Pennsylvania. Will they tilt toward the more distant, Harvard-educated Obama, who more accurately reflects their economic interests? Or will they stick with people they can better identify with, like McCain and Sarah Palin? It took an economic crisis of massive proportions from 1929 to 1931 to bring a Democratic administration to power. Polls indicate we may have arrived again at that point in October 2008.

The other critical component of the American brand is democracy, and the willingness of the United States to support other democracies around the world. This idealistic streak in U.S. foreign policy has been constant over the past century, from Woodrow Wilson's League of Nations through Roosevelt's Four Freedoms to Reagan's call for Mikhail Gorbachev to "tear down this wall."

Promoting democracy­through diplomacy, aid to civil society groups, free media and the like­has never been controversial. The problem now is that by using democracy to justify the Iraq War, the Bush administration suggested to many that "democracy" was a code word for military intervention and regime change. (The chaos that ensued in Iraq didn't exactly help democracy's image either.) The Middle East in particular is a minefield for any U.S. administration, since America supports nondemocratic allies like the Saudis, and refuses to work with groups like Hamas and Hizbullah that came to power through elections. We don't have much credibility when we champion a "freedom agenda."

The American model has also been seriously tarnished by the Bush administration's use of torture. After 9/11 Americans proved distressingly ready to give up constitutional protections for the sake of security. Guantánamo Bay and the hooded prisoner at Abu Ghraib have since replaced the Statue of Liberty as symbols of America in the eyes of many non-Americans.

No matter who wins the presidency a month from now, the shift into a new cycle of American and world politics will have begun. The Democrats are likely to increase their majorities in the House and Senate. A huge amount of populist anger is brewing as the Wall Street meltdown spreads to Main Street. Already there is a growing consensus on the need to re-regulate many parts of the economy.

Globally the United States will not enjoy the hegemonic position it has occupied until now, something underscored by Russia's Aug. 7 invasion of Georgia. America's ability to shape the global economy through trade pacts and the IMF and World Bank will be diminished, as will our financial resources. And in many parts of the world, American ideas, advice and even aid will be less welcome than they are now.

Under such circumstances, which candidate is better positioned to rebrand America? Barack Obama obviously carries the least baggage from the recent past, and his postpartisan style seeks to move beyond today's political divisions. At heart he seems a pragmatist, not an ideologue. But his consensus-forming skills will be sorely tested when he has to make tough choices, bringing not just Republicans but unruly Democrats into the fold. McCain, for his part, has talked like Teddy Roosevelt in recent weeks, railing against Wall Street and calling for SEC chairman Chris Cox's head. He may be the only Republican who can bring his party, kicking and screaming, into a post-Reagan era. But one gets the sense that he hasn't fully made up his mind what kind of Republican he really is, or what principles should define the new America.

American influence can and will eventually be restored. Since the world as a whole is likely to suffer an economic downturn, it is not clear that the Chinese or Russian models will fare appreciably better than the American version. The United States has come back from serious setbacks during the 1930s and 1970s, due to the adaptability of our system and the resilience of our people.

Still, another comeback rests on our ability to make some fundamental changes. First, we must break out of the Reagan-era straitjacket concerning taxes and regulation. Tax cuts feel good but do not necessarily stimulate growth or pay for themselves; given our long-term fiscal situation Americans are going to have to be told honestly that they will have to pay their own way in the future. Deregulation, or the failure of regulators to keep up with fast-moving markets, can become unbelievably costly, as we have seen. The entire American public sector­underfunded, deprofessionalized and demoralized­needs to be rebuilt and be given a new sense of pride. There are certain jobs that only the government can fulfill.

As we undertake these changes, of course, there's a danger of overcorrecting. Financial institutions need strong supervision, but it isn't clear that other sectors of the economy do. Free trade remains a powerful motor for economic growth, as well as an instrument of U.S. diplomacy. We should provide better assistance to workers adjusting to changing global conditions, rather than defend their existing jobs. If tax cutting is not a path to automatic prosperity, neither is unconstrained social spending. The cost of the bailouts and the long-term weakness of the dollar mean that inflation will be a serious threat in the future. An irresponsible fiscal policy could easily add to the problem.

And while fewer non-Americans are likely to listen to our advice, many would still benefit from emulating certain aspects of the Reagan model. Not, certainly, financial-market deregulation. But in continental Europe, workers are still treated to long vacations, short working weeks, job guarantees and a host of other benefits that weaken their productivity and will not be financially sustainable.

The unedifying response to the Wall Street crisis shows that the biggest change we need to make is in our politics. The Reagan revolution broke the 50-year dominance of liberals and Democrats in American politics and opened up room for different approaches to the problems of the time. But as the years have passed, what were once fresh ideas have hardened into hoary dogmas. The quality of political debate has been coarsened by partisans who question not just the ideas but the motives of their opponents. All this makes it harder to adjust to the new and difficult reality we face. So the ultimate test for the American model will be its capacity to reinvent itself once again. Good branding is not, to quote a presidential candidate, a matter of putting lipstick on a pig. It's about having the right product to sell in the first place. American democracy has its work cut out for it.
Fukuyama is professor of International Political Economy at the Johns Hopkins School of Advanced International Studies.