Financial Follies: Pawn sacrifice for King….

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David Galland of Doug Casey Research on why in an election year cycle, the dollar (and dollar-saving schlepps) may be sacrificed to save King George….

“In a call with long-time friend Clyde Harrison, one of the most seasoned and sharpest players on the commodities scene (he invented the Rogers International Commodities Index Fund), he quipped to the effect of, “We’re in an election cycle and the foreign holders of U.S. dollars don’t vote. By contrast, the U.S. voting public is up to its neck in debt. When push comes to shove, the dollar will be sacrificed.”

We think he is right. And I would add one more observation. The only shred of fabric remaining somewhat intact in George Bush’s tattered legacy is the relative strength of the economy over his term. To now have the economy go down in flames on his watch is unacceptable to him and, more important, his political cronies. What moves are left to them at this point other than ramping up the money engines? None at all.

Oh, and choosing the path of inflation offers one more tangible benefit. The effect of a massive ramp-up in the supply of money, enough perhaps, to rescue the hundreds of billions otherwise destined for money heaven, is that the inevitable consequence — higher prices — won’t be fully felt until after the upcoming presidential elections. In other words, it won’t be crisis diverted, but rather crisis delayed.

There is a fly in the ointment, however. This particular fly won’t sit passively while its wealth is destroyed. I refer, of course, to the aforementioned foreign dollar holders. Looking under the hood as he is wont to do, our chief economist Bud Conrad has already found signs that they are starting to edge back from the weekly Treasury auction…”

War-mongering: Bush could really go into Iran

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“Yes, I was quite sceptical. Less so over the years. They’re desperate. Everything they touch is in ruins. They’re even in danger of losing control over Middle Eastern oil — to China, the topic that’s rarely discussed but is on every planner or corporation exec’s mind, if they’re sane. Iran already has observer status at the Shanghai Cooperation Organization — from which the US was pointedly excluded. Chinese trade with Saudi Arabia, even military sales, is growing fast. With the Bush administration in danger of losing Shiite Iraq, where most of the oil is (and most Saudi oil in regions with a harshly oppressed Shiite population), they may be in real trouble.Under these circumstances, they’re unpredictable. They might go for broke, and hope they can salvage something from the wreckage. If they do bomb, I suspect it will be accompanied by a ground assault in Khuzestan, near the Gulf, where the oil is (and an Arab population — there already is an Ahwazi liberation front, probably organized by the CIA, which the US can “defend” from the evil Persians), and then they can bomb the rest of the country to rubble. And show who’s boss….”

Noam Chomsky to Alexander Cockburn, in Counterpunch.

Meanwhile, Nawaz Sharif, former Pakistani PM and a determined opponent of the Musharraf government (our ever-so ambiguous partners in the War on Terror) has been arrested on corruption charges on his return from exile in, of all places, Saudi Arabia.

More at Bloomberg.

And if that is a non-sequitor, make what you will of it…..

Housing Bubble trouble: Countrywide, Fed rate cut, and Osama as chief policy advisor

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“Home loan colossus Countrywide Financial Corp. announced Friday that it would slash as many as 12,000 jobs, or nearly 20% of its workforce, saying the downturn in the housing market and the credit crunch related to sub-prime loans have created the worst conditions ever seen by the modern mortgage industry.

The announcement by Calabasas-based Countrywide came hours after a smaller rival in the mortgage business, Pasadena-based savings and loan IndyMac Bancorp Inc., warned that it probably would record its first loss since 1998 in the third quarter. IndyMac said it would cut 1,000 jobs, 10% of its total.

Countrywide, the No. 1 home lender, funded $284.2 billion in mortgages this year through July 31, up from $255.8 billion in the same period in 2006, but said it expected lending to decline 25% next year….”

More by E. Scott Reckard at the Los Angeles Times.

Is this just a subprime lender problem?

At Thoughts from the Frontline, John Mauldin doesn’t think so:

“Goldman Sachs suggests home values could drop as much as 20%. Gary Shilling has been saying 25%. We don’t have time and space this week to go into housing prices, but many of the mortgages sold in the past two years only made sense in a housing market that was rising by 10-15% a year. A market that is dropping 10-15% a year, as it may do in the next 12 months, is only marginally be helped by a Fed funds cut.

But that does not mean they should not cut. They should, simply because the economy is clearly slowing, and the risks are now to the downside.

I have maintained for a long time that the bursting of the housing bubble would cause a serious slowdown or a recession in the economy. My critics would counter that housing is only 5-7% of the economy and a housing recession would not be enough to drag the whole economy down.

They are wrong for the following reasons. First, rising home values have allowed homeowners to use their homes as an ATM through mortgage equity withdrawals, which have added almost 2% to GDP annually over the last five years. That is now evaporating.

Secondly, falling home construction and lower home sales means fewer jobs not just in the direct home building market, but in the parts of the economy related to the home building markets, like mortgage brokers, real estate agents, hardware and furniture, etc. As an example, Countrywide announced a planned 10-12,000 person lay-off, when just a few weeks ago they were thinking of expansion, as they now think new mortgages may drop 25% in 2008. Fewer jobs mean lower consumer spending.

Consumers are not going to spend as much due to the wealth effect. If you feel your house was going to be a major part of your retirement, and now the value is going down, you are going to be more cautious and actually think about saving. This has been a dangerous prediction for 50 years, but I think consumer spending, some 71% of the US economy, is due to slow down. Year over year growth could drop below inflation later this year.

Further, with all the additional homes coming onto the market due to foreclosures, hone values are going to drop even more, and new home construction, which peaked at an annual run rate of 2,000,000 homes per year, is likely to fall to less than 1,000,000. We are currently at a level of 1,400,000, so we are not yet close to the bottom.

Rising unemployment. A housing market looking at the deepest recession in values since the Great Depression. A consumer under siege. A visibly slowing economy……”

Rate cut or not?

Since he seems to be setting himself up as a foreign policy advisor, maybe we should ask Osama Bin Laden.
“Iraq and Afghanistan and their tragedies; and the reeling of many of you under the burden of interest-related debts, insane taxes and real estate mortgages; global warming and its woes; and the abject poverty and tragic hunger in Africa; all of this is but one side of the grim face of this global system,” he said….”

Rothbard on the old right

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“What Rothbard shows is that the cause of peace is our heritage, and that free markets has been united with the antiwar cause from the founding fathers through the Old Right and as late as the 1950s. There is so much in this book to appreciate but especially valuable are his comments on the Left in the 1960s. There might have seemed to be some hope for some type of collaboration. They were against war and for civil liberties at a time when the right was becoming increasingly imperialist and warmongering. Rothbard explains his attempt to educate the left on economics. Alas, there was no hope. He had to go it alone and forge a completely new movement called libertarianism.”

From The Betrayal of the American Right, a new book by Murray Rothbard, published posthumously.

Police State Chronicles: corporate liberalism and the expert class

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Is progressive legislation always good for “the people”? Or is it a statist fable? A detailed analysis of the rise of the technocratic managerial class as a function of the growth (rather than the constraint) of the corporate-state:

“The conventional understanding of government regulation was succinctly stated by Arthur Schlesinger, Jr., the foremost spokesman for corporate liberalism: “Liberalism in America has ordinarily been the movement on the part of the other sections of society to restrain the power of the business community.” Mainstream liberals and conservatives may disagree on who the “bad guy” is in this scenario, but they are largely in agreement on the anti-business motivation. For example, Theodore Levitt of the Harvard Business Review lamented in 1968: “Business has not really won or had its way in connection with even a single piece of proposed regulatory or social legislation in the last three-quarters of a century.”

The problem with these conventional assessments is that they are an almost exact reverse of the truth. The New Left has produced massive amounts of evidence to the contrary, virtually demolishing the official version of American history. (The problem, as in most cases of “paradigm shift,” is that the consensus reality doesn’t know it’s dead yet). Scholars like James Weinstein, Gabriel Kolko and William Appleman Williams, in their historical analyses of “corporate liberalism,” have demonstrated that the main forces behind both Progressive and New Deal “reforms” were powerful corporate interests. To the extent that big business protested the New Deal in fact, it was a case of Brer Rabbit’s plea not to fling him in the briar patch.

The following is intended only as a brief survey of the development of the corporate liberal regime, and an introduction to the New Left (and Austrian) analysis of it.

Despite Schlesinger’s aura of “idealism” surrounding the twentieth century welfare/regulatory state, it was in fact pioneered by the Junker Socialism of Prussia–the work of that renowned New Age tree-hugger, Bismarck. The mainline socialist movement at the turn of the century (i.e., the part still controlled by actual workers, and not coopted by Fabian intellectuals) denounced the tendency to equate such measures with socialism, instead calling it “state socialism.” The International Socialist Review in 1912, for example, warned workers not to be fooled into identifying social insurance or the nationalization of industry with “socialism.” Such state programs as workers’ compensation, old age and health insurance, were simply measures to strengthen and stabilize capitalism. And nationalization simply reflected the capitalist’s realization “that he can carry on certain portions of the production process more efficiently through his government than through private corporations….. Some muddleheads find that will be Socialism, but the capitalist knows better.” Friedrich Engels took this view of public ownership:

At a further stage of evolution this form [the joint-stock company] also becomes insufficient: the official representative of capitalist society–the state–will ultimately have to undertake the direction of production. This necessity for conversion into state property is felt first in the great institutions for intercourse and communication–the post office, the telegraphs, the railways. (7) The rise of “corporate liberalism” as an ideology at the turn of the twentieth century was brilliantly detailed in James Weinstein’s The Corporate Ideal in the Liberal State. It was reflected in the so-called “Progressive” movement in the U.S., and by Fabianism, the closest British parallel. The ideology was in many ways an expression of the world view of “New Class” apparatchiks, whose chief values were planning and the cult of “professionalism,” and who saw the lower orders as human raw material to be managed for their own good. This class is quite close to the social base for the Insoc movement that Orwell described in 1984: The new aristocracy was made up for the most part of bureaucrats, scientists, technicians, trade-union organizers, publicity experts, sociologists, teachers, journalists, and professional politicians. These people, whose origins lay in the salaried middle class and the upper grades of the working class, had been shaped and brought together by the barren world of monopoly industry and centralized government. The key to efficiency, for the New Class, was to remove as much of life as possible from the domain of “politics” (that is, interference by non-professionals) and to place it under the control of competent authorities. “Democracy” was recast as a periodic legitimation ritual, with the individual returning between elections to his proper role of sitting down and shutting up. In virtually every area of life, the average citizen was to be transformed from Jefferson’s self-sufficient and resourceful yeoman into a client of some bureaucracy or other. The educational system was designed to render him a passive and easily managed recipient of the “services” of one institution after another. In every area of life, as Ivan Illich wrote, the citizen/subject/resource was taught to “confuse process and substance.” Health, learning, dignity, independence, and creative endeavor are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question. As a corollary of this principle, the public was taught to “view doctoring oneself as irresponsible, learning on one’s own as unreliable, and community organization, when not paid for by those in authority, as a form of aggression or subversion.” For the full article, read Kevin Carson at the Mutualist.

Luciano Pavarotti on giving spirit to man….

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This, from legendary Italian tenor, Luciano Pavarotti, who died on Thursday, September 6 at the age of 71:

“I’m not a politician, I’m a musician,” he told the BBC Music Magazine in an April 1998 article about his efforts for Bosnia. “I care about giving people a place where they can go to enjoy themselves and to begin to live again. To the man you have to give the spirit, and when you give him the spirit, you have done everything.”

More at the New York Times.

Maryland Public Television is running a performance at the Metropolitan of one of the operas he was most famous for, Donizetti’s comic opera, “L’Elisir d’Amour” (The Elixir of Love) – a gorgeous example of the bel canto style (literally, “beautiful singing), and an infinitely better use of human breath and lung capacity than anything emanating from the halls of power.

Classical music, fortunately, never caught onto the doctrinaire and self-indulgent egalitarianism of our times. It takes completely unearned talent and relentless self-discipline and criticism; it glorifies individualism and self-actualization, disdains the slightest mediocrity and bestows its prizes only on an aristocracy. No amount of sweat, good intentions, or legislation will turn you into either Pavarotti or Donizetti.

Supremely unfair, but a lesson best learned early. As my piano teacher once told me crushingly: You can’t have something just because you want it.

And what people never seem to remember is that great talent usually goes hand in hand with torments beyond the ordinary — Donizetti, who composed 31 operas in about a dozen years, also lost his three children and his wife, suffered from syphilis and died after a bout of insanity at the age of 51. I wonder how that could be distributed equally to everyone.

Police State Chronicles: Cheney aide hoped for another attack….

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Glen Greenwald on Dick Cheney’s wishful thinking:

“Two revelations in particular are extraordinary and deserve (but are unlikely to receive) intense media coverage. First, it was Goldsmith who first argued that the administration’s secret, warrantless surveillance programs were illegal, and it was that conclusion which sparked the now famous refusal of Ashcroft/Comey in early 2004 to certify the program’s legality. Goldsmith argued continuously about his conclusion with Addington, and during the course of those arguments, this is what happened:

[Goldsmith] shared the White House’s concern that the Foreign Intelligence Surveillance Act might prevent wiretaps on international calls involving terrorists. But Goldsmith deplored the way the White House tried to fix the problem, which was highly contemptuous of Congress and the courts. “We’re one bomb away from getting rid of that obnoxious [FISA] court,” Goldsmith recalls Addington telling him in February 2004.

Their goal all along was to “get rid of the obnoxious FISA court” entirely, so that they could freely eavesdrop on whomever they wanted with no warrants or oversight of any kind. And here is Dick Cheney’s top aide, drooling with anticipation at the prospect of another terrorist attack so that they could seize this power without challenge. Addington views the Next Terrorist Attack as the golden opportunity to seize yet more power. Sitting around the White House dreaming of all the great new powers they will have once the new terrorist attack occurs — as Addington was doing — is nothing short of deranged. Contrary to the claims made by Bush and his followers ever since the NSA scandal arose, their real objective in secretly creating “The Terrorist Surveillance Program” was never to find a narrow means to circumvent FISA when, in those few cases, it impeded necessary eavesdropping. Rather, the goal was to get rid of FISA altogether and return the country to the days when our government could spy on us in total secrecy, with no oversight. Of course, until they could “get rid of” that law altogether — through the only tactic they know: exploitation of Terrorism — they simply decided to violate it at will….”

Tom Englehardt on the Empire of Stupidity

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Tom Englehardt in Tomdispatch:

Forty years after Vietnam ended, the Bush administration made sure that Americans would have déjà vu all over again at least one last time. In the bargain, the president, vice president, and their top officials ensured that “the greatest force… the world has ever seen” would be a hurricane not of liberation but of destruction, the geopolitical equivalent of Katrina.

As it happened, 40 years later, the planet had changed. American military power not only would fail (as in Vietnam) to conquer all before it, but the United States would no longer prove to be the preeminent force on the planet, just the last, lingering superpower in a contest that had ended in 1991.

When, finally – 2010, 2012? – we do pack up, head home from the Iraqi dead zone, and try to forget, it surely won’t be as easy as it was 40-plus years ago (and, as the inability of our rulers to eradicate the “Vietnam syndrome” from their own brains indicates, it wasn’t so easy even then). Whether or not, as the president claims, the crop of “terrorists” he’s helped to grow will “follow us home,” something will certainly follow us home. After all, when the troops return, if they do, they will return to a “superpower” that, in population life expectancy, has plunged from 11th to 42nd place in only two decades, and, in infant mortality terms, now ranks well below many far poorer countries.

Of course, by then, the president, vice president, and those true believers still left in his administration will undoubtedly have entered the true American Green Zone, the one where a lecture to an audience of admirers can net you 75,000-100,000 greenbacks; where your story, no matter who writes it for you, will be worth millions; where your “library” can be a gathering place for “scholars”; and the “institute” you sponsor, a legacy recreating locus. It’s a zone in which the accountant, not accountability, rules.

In the meantime, we live with all the pointless verbiage, the “debate” in Washington, the “progress reports,” and the numerology of death, while the Bush administration hangs in there, determined to hand its war off to a new president, while the leading Democratic candidates essentially duck the withdrawal issue and the bodies pile ever higher.

It’s important to remember, however, that there was once quite another tradition in America. Whatever our country was in my 1950s childhood, Americans were still generally raised to believe that empire was a dreadful, un-American thing. We were, of course, already garrisoning the globe, but there was that other hideous empire, the Soviet one, to point to. Perhaps the urge for a republic, not an empire still lies hidden somewhere in the American psyche.

Let’s hope so, because one great task ahead for the American people will be to deconstruct whatever is left of our empire of stupidity and of this strange, militarized version of America we live in. We can dream, at least, that someday we’ll live in a world where one Defense Department is plenty, where militarized corporations don’t have endless battlefields on which to test their next techo-toys, where armies are for the defense of country, not to traipse the world in a state of eternal war, and victory is not vested in imperial conflict on the imagined frontiers of the planet, but in “progress reports” concerned with making life everywhere better, saner, and more peaceable.

Tom Engelhardt, who runs the Nation Institute’s TomDispatch.com, is the co-founder of the American Empire Project. His book, The End of Victory Culture (University of Massachusetts Press), has just been thoroughly updated in a newly issued edition that deals with victory culture’s crash-and-burn sequel in Iraq.

[Note: Two recent essays which explore allied topics to those considered in this post are well worth checking out: “Destruction: American Foreign Policy at Point Zero” by Gabriel Kolko in which the historian wonders “why the U.S. makes the identical mistakes over and over again and never learns from its errors”; and “The Waning Power of the War Myth” by Salon.com’s fine essayist Gary Kamiya on Bush’s absolute “addiction” to American triumphalism. “[Bush] will go down,” concludes Kamiya, “certain that he was right, living the Myth to the end. And because of his addiction to unreality, many more real people will die.”]

Copyright 2007 Tom Engelhardt

Ian Henshall on revisiting 9-11

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7 September 2007

911 The New Evidence

A new book challenges many of the myths which have grown up around the 911 attacks. 911 The New Evidence, out now in the UK (Constable) and soon in the US (pub Carol and Graf), makes the case for a new fully independent investigation into the 911 attacks. Henshall is available for interview.

Henshall's call is supported by a Zogby poll out today (ref see below): 51% of Americans support a new congressional enquiry into Bush and Cheney's role before during and after the 911 attacks, 30% support the immediate impeachment of Bush and Cheney and 67% say the 911 Commission should have investigated the still unexplained collapse of Building 7 (which was announced to the media 30 minutes before it fell symmetrically to the ground at freefall speed). Previous polls have found that fewer than 20% of Americans believe they have been told the full story of the 911 attacks. Although some broadcasters have suggested otherwise, 911 victims groups are in the forefront of demands to reopen the enquiry. Many witnesses heard by the 911 Commission have denounced it as a whitewash, concuring with commissioner Max Cleland who resigned early on.

Ian Henshall, co-author with Rowland Morgan of the best seller 911 Revealed, described in the Sunday Times as exposing "vast gaps" in the official story. 911 Revealed became a non-fiction best seller. Henshall has now trailed through a wide range of Washington officials' memoirs, US government documents and mainstream press reports, concluding that the myths of the 911 attacks - the lack of warnings, the lucky 19 hijackers, the silent takeovers of the planes' cabins, the passengers' mobile phone calls - cannot be true.

Interviews and review copies

Henshall is available for interviews. He is in London on Monday 10 and Tuesday 11, but several slots are taken. To seek an interview on these days please email straight away and call 01273 326862 or 079469 39217.

For interviews on other dates and review copies of 911 The New Evidence please email the press contacts at the end of this message and copy a reply to this email.

Notes

In the run-up to the 911 anniversary Ian Henshall has been interviewed by a range of radio stations and the book has been featured in the Daily Express and the Sport with wider coverage pending in national and global media.

He has established that:

* The 2006 Moussaoui trial and Inspectors' reports have confirmed accusations from FBI officers in the field: in summer 2001 a network of senior CIA, Justice Department and FBI officials systematically obstructed the FBI field officers who suspected what was planned and could have foiled the attacks. The FBI was legally the lead agency. CIA officers at first falsely testified that they had informed the FBI of the threat posed by presumed hijackers Al Hazmi and Al Mihdhar and later told inspectors they "could not recall" why they did not.

* The "anti-hijack exercise" scheduled by the Pentagon at the time the "real" attack took place seems more than an extraordinary coincidence and a close reading of partially released air traffic control transcripts indicates that the exercise may have involved at least one of the planes used in the attacks.

* If video and flight recorder evidence released by the US government is correct, Flight 77 could not have hit the Pentagon. The government admitted at the Moussaoui trial that contrary to the official myth, reflected in a series of feature films and tv documentaries, only two mobile phone calls were made from Flight 93. One reported smoke and an explosion shortly prior to the crash.

* Condoleeza Rice falsely stated on oath to the 911 Commission that Bush's August 2001 CIA briefing, which warned him of the possibility of an attack within America and was still secret at the time she testified, did not mention any specific targets. In fact it mentioned New York and predicted a possible hostage taking. Intriguingly, the presumed hijackers apparently told passengers on two planes that this was their plan.

* The "Independent 911 Commission" misrepresented evidence from Pentagon officials, made false statements and failed to ask the right questions. The Commissioners, far from being independent, were trusted members of Washington's permanent government. Commissioner Hamilton the leading Democrat was a political ally of Cheney from when they worked together on the Iran-contra scandal in the late 1980's. Commissioner Cleland resigned in disgust.

* Early official reports into the collapse of the Twin Towers present clear evidence - vaporised and sulpfurised steel, seismic events preceding the plane impacts - suggesting that, as eyewitnesses reported at the time, the neat symmetrical collapse of the Twin Towers and Building 7 at near freefall speed was the result of explosions in the buildings.

* Ex UK foreign minister Robin Cook wrote in The Guardian that the original meaning of Al Qaeda was "the database", ie the list of Afghan arab freedom fighters closely linked to if not controlled by the CIA. Recent statements from officials, along with press reports at the time, make it clear that Al Qaeda had links with the CIA or the DIA well into the 1990's. Osama Bin laden's move from Sudan to Afghanistan was managed by Ali Mohamed, Washington's spy at the heart of Al Qaeda who trained Osama Bin laden's personal bodyguards. Alleged 911 ringleader Khaled Sheikh Mohammed lived in Pakistan for years while secretly indicted by the US Justice Department. He was probably an asset of Pakistan's ISI. US government documents show the ISI was working closely with George Tenet and the CIA on a secret project in the months before 911. Its boss General Ahmad was in secret Washington meetings with top officials and congressmen before during and after the 911 attacks. Reports from India, supported by the French media said that the terrorist money trail went back to Ahmad, who took early retirement shortly after the news came out. The claim by Washington journalist Gerald Posner that the ISI was colluding with Al Qaeda against the wishes of the CIA seems an unlikely explanation.

8. A close examination of the paper trail from 2000 and 2001 shows beyond doubt that the decision (and probably detailed planning) to invade Iraq was taken before, not after, the 911 attacks and CIA boss Tenet was involved in the plans. The record shows an unusual series of long meetings (denied by Tenet in evidence he gave on oath to the 911 Commission) with Bush in Texas in the weeks up to 911. One such meeting, still unacknowledged in Tenet's recent memoirs, lasted for a full day and included the chiefs of staff whose planes apparently failed to intercept any of four hijacked planes. The official account has left an unexplained and undocumented black hole of 20 minutes at the Pentagon situation room at the height of the crisis.

9. Cheney who championed plans to invade Iraq before 911 was in charge of the Pentagon on the morning of 9/11 and almost certainly in charge of the hijack exercise.

10. BBC News was recently embarrassed by video surfacing on the internet which showed an announcer stating the the "Saloman Brothers Building" (WTC7) had collapsed while in the background it still stood intact. WTC7 housed the largest Secret Servcice office in the US and was the repository of high level fraud investigations. Many of these records were lost in the collapse.

Henshall draws no firm conclusions but ends with a working hypothesis for investigators to follow up.

"9/11 THE NEW EVIDENCE"
pub Sept 2007 Constable (UK) ISBN 978-1-84529-514-1
http://www.amazon.co.uk/11-New-Evidence-Ian-Henshall/dp/1845295145/
publicity: "Sam Evans" <Sam@constablerobinson.com>