Washington Post (September 28 2015)
Putin blames West for Middle East upheaval
Russia’s president blamed foreign intervention in North Africa and the Middle East for creating a terrorist-fueled “anarchy”.
Russian President Vladimir Putin addressed the UN General Assembly on Monday and said the West was making an “enormous mistake” by not cooperating with Syrian President Bashar al-Assad in the fight against the Islamic State militant group. Here is the full text of his remarks.
PUTIN (THROUGH INTERPRETER): Your excellency Mr President, your excellency Mr Secretary General, distinguished heads of state and government, ladies and gentlemen, the seventieth anniversary of the United Nations is a good occasion to both take stock of history and talk about our common future.
In 1945, the countries that defeated Nazism joined their efforts to lay solid foundations for the postwar world order.
But I remind you that the key decisions on the principles guiding the cooperation among states, as well as on the establishment of the United Nations, were made in our country, in Yalta, at the meeting of the anti-Hitler coalition leaders.
The Yalta system was actually born in travail. It was won at the cost of tens of millions of lives and two world wars.
This swept through the planet in the twentieth century.
Let us be fair. It helped humanity through turbulent, at times dramatic, events of the last seven decades. It saved the world from large-scale upheavals.
The United Nations is unique in its legitimacy, representation and universality. It is true that lately the UN has been widely criticized for supposedly not being efficient enough, and for the fact that the decision-making on fundamental issues stalls due to insurmountable differences, first of all, among the members of the Security Council.
However, I’d like to point out there have always been differences in the UN throughout all these seventy years of existence. The veto right has always been exercised by the United States, the United Kingdom, France, China, the Soviet Union and Russia later, alike. It is absolutely natural for so diverse and representative an organization.
When the UN was established, its founders did not in the least think that there would always be unanimity. The mission of the organization is to seek and reach compromises, and its strength comes from taking different views and opinions into consideration. Decisions debated within the UN are either taken as resolutions or not. As diplomats say, they either pass or do not pass.
Whatever actions any state might take bypassing this procedure are illegitimate. They run counter to the charter and defy international law. We all know that after the end of the Cold War – everyone is aware of that – a single center of domination emerged in the world, and then those who found themselves at the top of the pyramid were tempted to think that if they were strong and exceptional, they knew better and they did not have to reckon with the UN, which, instead of [acting to] automatically authorize and legitimize the necessary decisions, often creates obstacles or, in other words, stands in the way.
It has now become commonplace to see that in its original form, it has become obsolete and completed its historical mission. Of course, the world is changing and the UN must be consistent with this natural transformation. Russia stands ready to work together with its partners on the basis of full consensus, but we consider the attempts to undermine the legitimacy of the United Nations as extremely dangerous. They could lead to a collapse of the entire architecture of international organizations, and then indeed there would be no other rules left but the rule of force.
We would get a world dominated by selfishness rather than collective work, a world increasingly characterized by dictate rather than equality. There would be less of a chain of democracy and freedom, and that would be a world where true independent states would be replaced by an ever-growing number of de facto protectorates and externally controlled territories.
What is the state sovereignty, after all, that has been mentioned by our colleagues here? It is basically about freedom and the right to choose freely one’s own future for every person, nation and state. By the way, dear colleagues, the same holds true of the question of the so-called legitimacy of state authority. One should not play with or manipulate words.
Every term in international law and international affairs should be clear, transparent and have uniformly understood criteria. We are all different, and we should respect that. No one has to conform to a single development model that someone has once and for all recognized as the only right one. We should all remember what our past has taught us.
We also remember certain episodes from the history of the Soviet Union. Social experiments for export, attempts to push for changes within other countries based on ideological preferences, often led to tragic consequences and to degradation rather than progress.
It seemed, however, that far from learning from others’ mistakes, everyone just keeps repeating them, and so the export of revolutions, this time of so-called democratic ones, continues. It would suffice to look at the situation in the Middle East and North Africa, as has been mentioned by previous speakers. Certainly political and social problems in this region have been piling up for a long time, and people there wish for changes naturally.
But how did it actually turn out? Rather than bringing about reforms, an aggressive foreign interference has resulted in a brazen destruction of national institutions and the lifestyle itself. Instead of the triumph of democracy and progress, we got violence, poverty and social disaster. Nobody cares a bit about human rights, including the right to life.
I cannot help asking those who have caused the situation, do you realize now what you’ve done? But I am afraid no one is going to answer that. Indeed, policies based on self-conceit and belief in one’s exceptionality and impunity have never been abandoned.
It is now obvious that the power vacuum created in some countries of the Middle East and North Africa through the emergence of anarchy areas, which immediately started to be filled with extremists and terrorists.
Tens of thousands of militants are fighting under the banners of the so-called Islamic State. Its ranks include former Iraqi servicemen who were thrown out into the street after the invasion of Iraq in 2003. Many recruits also come from Libya, a country whose statehood was destroyed as a result of a gross violation of the UN Security Council Resolution 1973. And now, the ranks of radicals are being joined by the members of the so-called moderate Syrian opposition supported by the Western countries.
First, they are armed and trained and then they defect to the so-called Islamic State. Besides, the Islamic State itself did not just come from nowhere. It was also initially forged as a tool against undesirable secular regimes.
Having established a foothold in Iraq and Syria, the Islamic State has begun actively expanding to other regions. It is seeking dominance in the Islamic world. And not only there, and its plans go further than that. The situation is more than dangerous.
In these circumstances, it is hypocritical and irresponsible to make loud declarations about the threat of international terrorism while turning a blind eye to the channels of financing and supporting terrorists, including the process of trafficking and illicit trade in oil and arms. It would be equally irresponsible to try to manipulate extremist groups and place them at one’s service in order to achieve one’s own political goals in the hope of later dealing with them or, in other words, liquidating them.
To those who do so, I would like to say – dear sirs, no doubt you are dealing with rough and cruel people, but they’re in no way primitive or silly. They are just as clever as you are, and you never know who is manipulating whom. And the recent data on arms transferred to this most moderate opposition is the best proof of it.
We believe that any attempts to play games with terrorists, let alone to arm them, are not just short-sighted, but fire hazardous (ph). This may result in the global terrorist threat increasing dramatically and engulfing new regions, especially given that Islamic State camps train militants from many countries, including the European countries.
Unfortunately, dear colleagues, I have to put it frankly: Russia is not an exception. We cannot allow these criminals who already tasted blood to return back home and continue their evil doings. No one wants this to happen, does he?
Russia has always been consistently fighting against terrorism in all its forms. Today, we provide military and technical assistance both to Iraq and Syria and many other countries of the region who are fighting terrorist groups.
We think it is an enormous mistake to refuse to cooperate with the Syrian government and its armed forces, who are valiantly fighting terrorism face to face. We should finally acknowledge that no one but President Assad’s armed forces and Kurds (ph) militias are truly fighting the Islamic State and other terrorist organizations in Syria.
We know about all the problems and contradictions in the region, but which were (ph) based on the reality.
Dear colleagues, I must note that such an honest and frank approach of Russia has been recently used as a pretext to accuse it of its growing ambitions, as if those who say it have no ambitions at all.
However, it’s not about Russia’s ambitions, dear colleagues, but about the recognition of the fact that we can no longer tolerate the current state of affairs in the world. What we actually propose is to be guided by common values and common interests, rather than ambitions.
On the basis of international law, we must join efforts to address the problems that all of us are facing and create a genuinely broad international coalition against terrorism.
Similar to the anti-Hitler coalition, it could unite a broad range of forces that are resolutely resisting those who, just like the Nazis, sow evil and hatred of humankind. And, naturally, the Muslim countries are to play a key role in the coalition, even more so because the Islamic State does not only pose a direct threat to them, but also desecrates one of the greatest world religions by its bloody crimes.
The ideologists (ph) of militants make a mockery of Islam and pervert its true humanistic (ph) values. I would like to address Muslim spiritual leaders, as well. Your authority and your guidance are of great importance right now.
It is essential to prevent people recruited by militants from making hasty decisions and those who have already been deceived, and who, due to various circumstances found themselves among terrorists, need help in finding a way back to normal life, laying down arms, and putting an end to fratricide.
Russia will shortly convene, as the (ph) current president of the Security Council, a ministerial meeting to carry out a comprehensive analysis of threats in the Middle East.
First of all, we propose discussing whether it is possible to agree on a resolution aimed at coordinating the actions of all the forces that confront the Islamic State and other terrorist organizations. Once again, this coordination should be based on the principles of the UN Charter.
We hope that the international community will be able to develop a comprehensive strategy of political stabilization, as well as social and economic recovery, of the Middle East.
Then, dear friends, there would be no need for new refugee camps. Today, the flow of people who were forced to leave their homeland has literally engulfed first neighboring countries and then Europe itself. There were hundreds of thousands of them now, and there might be millions before long. In fact, it is a new great and tragic migration of peoples, and it is a harsh lesson for all of us, including Europe.
I would like to stress refugees undoubtedly need our compassion and support. However, the – on the way to solve this problem at a fundamental level is to restore their statehood where it has been destroyed, to strengthen the government institutions where they still exist or are being reestablished, to provide comprehensive assistance of military, economic and material nature to countries in a difficult situation. And certainly, to those people who, despite all the ordeals, will not abandon their homes. Literally, any assistance to sovereign states can and must be offered rather than imposed exclusively and solely in accordance with the UN Charter.
In other words, everything in this field that has been done or will be done pursuant to the norms of international law must be supported by our organization. Everything that contravenes the UN Charter must be rejected. Above all, I believe it is of the utmost importance to help restore government’s institutions in Libya, support the new government of Iraq and provide comprehensive assistance to the legitimate government of Syria.
Dear colleagues, ensuring peace and regional and global stability remains the key objective of the international community with the UN at its helm. We believe this means creating a space of equal and indivisible security, which is not for the select few but for everyone. Yet, it is a challenge and complicated and time-consuming task, but there is simply no other alternative. However, the bloc thinking of the times of the Cold War and the desire to explore new geopolitical areas is still present among some of our colleagues.
First, they continue their policy of expanding Nato. What for? If the Warsaw Bloc stopped its existence, the Soviet Union have collapsed (ph) and, nevertheless, the Nato continues expanding as well as its military infrastructure. Then they offered the poor Soviet countries a false choice: either to be with the West or with the East. Sooner or later, this logic of confrontation was bound to spark off a grave geopolitical crisis. This is exactly what happened in Ukraine, where the discontent of population with the current authorities was used and the military coup was orchestrated from outside – that triggered a civil war as a result.
We’re confident that only through full and faithful implementation of the Minsk agreements of February 12th 2015, can we put an end to the bloodshed and find a way out of the deadlock. Ukraine’s territorial integrity cannot be ensured by threat of force and force of arms. What is needed is a genuine consideration for the interests and rights of the people in the Donbas region and respect for their choice. There is a need to coordinate with them as provided for by the Minsk agreements, the key elements of the country’s political structure. These steps will guarantee that Ukraine will develop as a civilized society, as an essential link and building a common space of security and economic cooperation, both in Europe and in Eurasia.
Ladies and gentlemen, I have mentioned these common space of economic cooperation on purpose. Not long ago, it seemed that in the economic sphere, with its objective market loss, we would launch a leaf (ph) without dividing lines. We would build on transparent and jointly formulated rules, including the WTO principles, stipulating the freedom of trade, and investment and open competition.
Nevertheless, today, unilateral sanctions circumventing the UN Charter have become commonplace, in addition to pursuing political objectives. The sanctions serve as a means of eliminating competitors.
I would like to point out another sign of a growing economic selfishness. Some countries [have] chosen to create closed economic associations, with the establishment being negotiated behind the scenes, in secret from those countries’ own citizens, the general public, business community and from other countries.
Other states whose interests may be affected are not informed of anything, either. It seems that we are about to be faced with an accomplished fact that the rules of the game have been changed in favor of a narrow group of the privileged, with the WTO having no say. This could unbalance the trade system completely and disintegrate the global economic space.
These issues affect the interest of all states and influence the future of the world economy as a whole. That is why we propose discussing them within the UN WTO NGO (ph) ’20.
Contrary to the policy of exclusiveness, Russia proposes harmonizing original economic projects. I refer to the so-called integration of integrations based on universal and transparent rules of international trade. As an example, I would like to cite our plans to interconnect the Eurasian Economic Union, and China’s initiative of the Silk Road economic belt.
We still believe that harmonizing the integration processes within the Eurasian Economic Union and the European Union is highly promising.
Ladies and gentlemen, the issues that affect the future of all people include the challenge of global climate change. It is in our interest to make the UN Climate Change Conference to be held in December in Paris a success.
As part of our national contribution, we plan to reduce by 2030 the greenhouse emissions to 70, 75 percent of the 1990 level.
I suggest, however, we should take a wider view on this issue. Yes, we might defuse the problem for a while, by setting quotas on harmful emissions or by taking other measures that are nothing but tactical. But we will not solve it that way. We need a completely different approach.
We have to focus on introducing fundamental and new technologies inspired by nature, which would not damage the environment, but would be in harmony with it. Also, that would allow us to restore the balance upset by biosphere and technosphere (ph) upset by human activities.
It is indeed a challenge of planetary scope, but I’m confident that humankind has intellectual potential to address it. We need to join our efforts. I refer, first of all, to the states that have a solid research basis and have made significant advances in fundamental science.
We propose convening a special forum under the UN auspices for a comprehensive consideration of the issues related to the depletion of natural resources, destruction of habitat and climate change.
Russia would be ready to co-sponsor such a forum.
Ladies and gentlemen, colleagues, it was on the 10th of January, 1946, in London that the UN General Assembly gathered for its first session.
Mr Suleta (ph) (inaudible), a Colombian diplomat and the chairman of the Preparatory Commission, opened the session by giving, I believe, a concise definition of the basic principles that the UN should follow in its activities, which are free will, defiance of scheming and trickery and spirit of cooperation.
Today, his words sound as a guidance for all of us. Russia believes in the huge potential of the United Nations, which should help us avoid a new global confrontation and engage in strategic cooperation. Together with other countries, we will consistently work towards strengthening the central coordinating role of the UN. I’m confident that by working together, we will make the world stable and safe, as well as provide conditions for the development of all states and nations.
by Robert Reich
Truthdig (September 27 2015)
Conservatives and liberals interminably debate the merits of “the free market” versus “the government”. Which one you trust more delineates the main ideological divide in America.
In reality, they aren’t two separate things and there can’t be a market without government. Legislators, agency heads and judges decide the rules of the game. And, over time, they change the rules.
The important question, too rarely discussed, is who has the most influence over these decisions and in that way wins the game.
Two centuries ago slaves were among the nation’s most valuable assets, and a century ago, perhaps the most valuable asset was land. Then came another shift as factories, machines, railroads and oil transformed America. By the 1920s most Americans were employees, and the most contested property issue was their freedom to organize into unions.
In more recent years, information and ideas have become the most valuable forms of property. This property can’t be concretely weighed or measured, and most of the cost of producing it goes into discovering it or making the first copy. After that, the additional production cost is often zero.
Such “intellectual property” is the key building block of the new economy. Without government decisions over what it is, and who can own it and on what terms, the new economy could not exist.
But as has happened before with other forms of property, the most politically influential owners of the new property are doing their utmost to increase their profits by creating monopolies that must eventually be broken up.
The most valuable intellectual property are platforms so widely used that everyone else has to use them, too. Think of standard operating systems like Microsoft’s Windows or Google’s Android; Google’s search engine; Amazon’s shopping system; and Facebooks’ communication network.
Google runs two-thirds of all searches in the United States. Amazon sells more than forty percent of new books. Facebook has nearly 1.5 billion active monthly users worldwide. This is where the money is.
Despite an explosion in the number of websites over the last decade, page views are becoming more concentrated. While in 2001, the top ten websites accounted for 31 percent of all page views in America, by 2010 the top ten accounted for 75 percent.
Google and Facebook are now among the first stops for many Americans seeking news – while Internet traffic to national newspapers, network television and other news gathering agencies has fallen well below fifty percent of all traffic. Meanwhile, Amazon is now the first stop for almost a third of all American consumers seeking to buy anything. Talk about power.
Whenever markets become so concentrated, consumers end up paying more than they otherwise would, and innovations are squelched. Sure, big platforms let creators showcase and introduce new apps, songs, books, videos and other content. But most of the profits go to the platforms’ owners, who have all bargaining power. Which is why writers, musicians, visual artists, photographers, videographers, journalists and other content creators are receiving less and less for their work.
Contrary to the conventional view of an American economy bubbling with innovative small companies, the reality is quite different. Big Tech’s sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrants.
This is one reason the rate that new businesses have formed in the United States has slowed markedly. Between 1978 and 2011, as the new giants gained control, that rate was nearly halved.
The patent system is crucial to this slowing of innovation. The law gives twenty years of patent protection to inventions that are “new and useful”, as decided by the Patent and Trademark Office. But the winners are big enough to game the system. They make small improvements warranting new patents, effectively making their intellectual property permanent.
They also lay claim to whole terrains of potential innovation including ideas barely on drawing boards and flood the system with so many applications that lone inventors have to wait years. The White House intellectual property adviser, Colleen V Chien, noted in 2012 that Google and Apple were spending more money acquiring patents (not to mention litigating them) than on doing research and development.
Antitrust laws used to fight this sort of market power. In the 1990s, the federal government accused Microsoft of illegally bundling its popular Windows operating system with its Internet Explorer browser to create an industry standard that stifled competition. Microsoft settled the case by agreeing to share its programming interfaces with other companies. But since then Big Tech has been almost immune to antitrust, even though the largest tech companies have more market power than ever.
Maybe these tech companies have actually avoided wrongdoing as they accumulate unprecedented market share. Or maybe they’ve accumulated enough political power to keep antitrust regulators at bay.
In 2012, the staff of the Federal Trade Commission’s (“FTC”) Bureau of Competition submitted to the commissioners a 160-page analysis of Google’s dominance in the search and related advertising markets, and recommended suing Google for conduct that “has resulted – and will result – in real harm to consumers and to innovation”.
But the commissioners chose not to pursue a case. Investigators also found evidence that Google was pushing it’s own products ahead of competitors’ on search results, though they did not recommend a lawsuit on this point.
It’s unusual for commissioners not to accept staff recommendations, and they didn’t give a full explanation. The FTC noted a competing internal report that recommended against legal action, but another plausible reason has to do with Google’s political clout. Google is now among the largest corporate lobbyists in the United States. Around the time of the investigation the company poured money into influencing both the commissioners and the commission’s congressional overseers.
Google is heading into a major fight with antitrust officials in the European Union for some of the same reasons the FTC staff went after it. Not incidentally, Europe is also investigating Amazon for allegedly stifling competition in e-books, and Apple for doing the same in music. Many on this side of the Atlantic believe Europe is taking on these tech giants because they’re American. Another possible explanation is that Google, Amazon and Apple lack as much political clout in Europe as they have here.
Economic and political power can’t be separated because dominant corporations gain political influence over how markets are maintained and enforced, which enlarges their economic power further. One of the original goals of antitrust law was to prevent this.
“The enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power”, warned Edward G Ryan, the chief justice of Wisconsin’s Supreme Court, in 1873. Antitrust law was viewed as a means of breaking this link. “If we will not endure a king as a political power”, Senator John Sherman of Ohio thundered, “we should not endure a king over the production, transportation and sale” of what the nation produced.
Sherman’s Antitrust Act passed the Senate with just a single vote against, passed the House unanimously, and was signed into law by President Benjamin Harrison on July 2 1890. Twelve years later, President Teddy Roosevelt used it against Edward H Harriman’s giant Northern Securities Company, which dominated rail transportation in the Northwest. In 1911, President William Howard Taft broke up John D Rockefeller’s sprawling Standard Oil empire.
The underlying issue has little to do with whether one prefers the “free market” or government. The real question is how government organizes the market, and who has the most influence over its decisions.
We are now in a new gilded age similar to the first Gilded Age, when the nation’s antitrust laws were enacted. As then, those with great power and resources are making the “free market” function on their behalf. Big Tech – along with the Big Pharma, giant health insurance companies, Big Agriculture, and the largest banks on Wall Street – dominate our economy and our politics.
Yet as long as we remain obsessed by the debate over the relative merits of the “free market” and “government”, we have little hope of seeing what’s occurring and taking the action that’s needed to make our economy work for the many, not the few.
This originally appeared in the September 20 edition of the New York Times. It’s drawn from my forthcoming book “Saving Capitalism: For the Many, Not the Few”.
(c) 2015 Truthdig, LLC. All rights reserved.
by John Michael Greer
The Archdruid Report (September 23 2015)
This is the fourth installment of an exploration of some of the possible futures discussed on this blog, using the toolkit of narrative fiction. Our narrator, having arrived in the capital of the Lakeland Republic, discovers that things are even stranger there than he thought …
I’d already guessed that the hotel lobby probably wouldn’t look much like the ones I was used to seeing elsewhere, and so I wasn’t surprised. Instead of the glaring lights, security cameras, and automated check-in kiosks I was used to, it was a comfortable space with sofas and chairs around the edges, ornate chandeliers overhead, and a couple of desks staffed by actual human beings over to one side; off to the other side, glass doors framed in wood led into what looked like a full-service restaurant. A bellhop – was that the right word? – came trotting over to take my suitcase as soon as I came through the door, said something pleasant, and followed me over to the check-in desk.
“I’ve got a reservation”, I said to the clerk. “The name’s Peter Carr”.
I’d been wondering whether the hotel would turn out to use an old-fashioned computer system with a keyboard and screen, but apparently even that was too complex for local standards. Instead, the clerk pulled out a three-ring binder, opened it, and found my reservation in about as much time as it would have taken to input a name on a veepad and wait for a response to come out of the cloud. “Welcome to the Capitol Hotel, Mr Carr. We have you down for fourteen nights.”
“Looks like everything’s paid for in advance. If you’ll sign here.” She handed me a clipboard with a sheet of paper on it and an old-fashioned ballpoint pen. Fortunately I hadn’t quite forgotten how to produce a non-digital signature, and signed on the line at the bottom. “Anything you order in the restaurant here …” She motioned toward the doors on the far side of the room. “… or for room service can be billed to the room account. How many keys will you want?”
She opened a drawer, pulled out an honest-to-Pete metal key with a ring and a tag with the room number on it. “Here you go. Stairs are right down the hall; if you need the elevator it’s to the left. Is there anything else I can do for you? Enjoy your stay, Mr Carr.”
I thanked her and headed for the hall with the bellhop in tow. My room was on the third floor and the stairs didn’t look too challenging, so I asked him, “Do you mind if we take the stairs?”
“Not a bit”, he said. “Comes with the job”.
We started up the stairs. “Do you get a lot of people here from outside the Lakeland Republic?”
“All the time. Capitol’s just four blocks away, and Embassy Row’s between here and there. We had the foreign minister of Quebec here just last week.”
“No kidding”. There had been rumors for years that the Quebecois started tacitly ignoring the embargo even before Canada broke up; we had decent relations with Montreal these days, but that hadn’t always been the case, and so any news about what was going on between Quebec and the Lakeland Republic were worth my attention. “Big official visit, or what?”
“Pretty much, yeah”, said the bellhop. “Really nice lady. Had a bottle of champagne sent up to her room first thing every morning.”
I laughed. “Heck of a breakfast”.
“Nah, breakfast was a couple of hours later, with more champagne. Go figure.”
We got to the third floor, left the stair, and went down the hall to my room. “Just leave it inside the door”, I said, meaning the suitcase. “Thanks”.
I didn’t have any Lakeland money to tip him, but guessed the couple of Atlantic bills I had would do. Fortunately I was right; he grinned, thanked me, and headed back toward the stair.
The room was bigger than I’d expected, with a queen-sized bed on one side and a desk and dresser on the other. I knew there wouldn’t be a veebox, but thought there might be a screen or even an old-fashioned television in the room, but no dice. The only things even vaguely electronic were a telephone on the desk and a boxy thing on the dresser that had a loudspeaker and some dials on it – a radio, I guessed, and decided to leave turning it on for later. Curtained windows on the far wall let through diffuse light; I went over and pulled the curtains open.
The bellhop hadn’t been kidding. There was the Capitol dome, half-complete, rising up above a ragged roofline right in front of me. That would be convenient, I decided, and let the curtains fall again.
I got my things settled and then went to the desk and the big envelope of yellowish paper sitting on top of it. Inside was the notebook Melissa Berger had mentioned, a couple of pens, a packet of papers that had BANK OF TOLEDO printed across the top of each sheet, an identification card with my name and photo on it, a wallet that was pretty clearly meant to hold money and the ID card, and a letter on government stationery welcoming me to Toledo in the usual bland terms, over President Meeker’s signature. Then there were half a dozen pages of instructions on how to get by in the Lakeland Republic, which covered everything from customary tips (I’d overtipped the bellhop, though not extravagantly) to who to contact in this or that kind of emergency. I nodded; clearly the bellhop hadn’t been exaggerating when he mentioned plenty of foreign guests.
I dropped my veepad in a desk drawer and got the wallet and some of the papers settled into the empty pocket. First things first, I decided: visit the bank and get the money thing sorted out, then get some lunch and do a bit of wandering.
Down in the lobby, the concierge was behind his desk. “Can I help you?”
“Please. I need to know where to find the Bank …” All at once I couldn’t remember the name, and reached for the papers in my pocket.
“Out the door”, said the concierge, “hang a left, go a block and a half straight ahead, and you’ll be standing right in front of it”.
I considered him. “You don’t need to know which bank?”
“There’s only one in town”.
That startled me, though I managed not to show it. “Okay, thanks”.
“Have a great day”, he said.
I headed out the doors, turned left, started along the sidewalk. A cold damp wind was rushing past, pushing shreds of cloud across the sky, and it didn’t take me long to figure out why most of the other people on the sidewalk were wearing hats and long coats; they looked much warmer than I felt. Still, Philadelphia has plenty of cold weather, and I was used to the way the chill came through bioplastic business wear. What annoyed me a little, or more than a little, was the way that my clothing made me stick out like a sore thumb.
In retrospect, it was amusing. Everybody else on the sidewalk looked like extras from half a dozen random history vids, everything from fedoras and trench coats to the kind of thing that was last in style when Toledo was a frontier town, and there I was, the only person in town in modern clothing – and you can guess for yourself who was the conspicuous one. The adults gave me startled looks and then pretended that nothing was up, but the kids stared wide-eyed as though I had two extra heads or something. As I said, it was amusing in retrospect, but at the time it made me acutely uncomfortable, and I was glad to get to the bank.
That was a three-story brick building on a street corner. Fortunately it had BANK OF TOLEDO – CAPITOL BRANCH above the doors, or I’d probably have missed it, since it didn’t look anything like the banks I was used to. Inside was even weirder: no security cameras, no automated kiosks, no guards in helmets and flak jackets pacing the balcony waiting for trouble, just a lobby with a greeter inside the door and a short line of patrons waiting for tellers. The greeter met me with a cheery “Hi, how can we help you today?” I got out the bank papers, and a minute or two later got shown into one of three little office spaces off the main lobby.
On the other side of the desk was a middle-aged African-American man with a neatly trimmed beard. “I’m Larry Jones”, he said, getting up to shake my hand. “Pleased to meet you, Mr …”
“Carr”, I said. “Peter Carr”. We got the formalities out of the way and sat down; I handed him the papers; he checked them, we discussed some of the details, and he then unlocked a drawer in his desk and pulled out a big envelope.
“Okay”, he said. “Everything’s good. The only question I have at this point is whether you’ve ever used cash or checks before”.
“I’m guessing”, I said, “that you ask that question fairly often”.
“These days, yes”, he replied. “Bit of a change since before the Treaty”.
“I bet. The answer, though, is cash, yes; checks – well, I’ve seen a few of them”.
“Okay, fair enough”. He looked relieved, and I wondered how many people from the cashless countries he’d had to walk through the details of counting out coins. “Here’s your checkbook”, he said, pulling the thing out of the envelope, and then opened it and showed me how to write a check. “Up here”, he said, flipping open a notebookish thing in front, “is where you keep track of how much you’ve spent”. He must have caught my expression, because he broke into a broad smile and said, “Long time since you’ve done math with a pen, I bet”.
“Depends on how long it’s been since never”, I told him.
He laughed. “Gotcha. Glad to say we can help you out there, too”. He opened a different drawer in his desk, handed me a flat little shape of brass. “This is a mechanical calculator”, he said. “Adds and subtracts for you”.
I took the thing, gave it a baffled look. “I didn’t know you could do that without electronics”.
“I think we’re the only country on earth that still makes these”. He showed me how to use the stylus to slide the digits up and down. Once I had it figured out, I thanked him and tucked the calculator and checkbook into my pocket.
“Do you have a minute?” I asked then. “I’ve got a couple of questions about the way you do things here – about banking, mostly”.
“Sure thing”, he said. “Ask away”.
“The concierge at the hotel said there’s only one bank here in Toledo. Is that true everywhere in the Lakeland Republic?”
“Yes, if you’re talking about consumer banking”.
“Is it the same bank everywhere?”
“Good heavens, no. Each county and each city of any size has its own bank, like it has its own water and sewer district and so on”.
“That makes it sound like a public utility”, I said, baffled.
“That’s exactly what it is. Again, that’s just consumer banking. We’ve got privately owned commercial banks here, but those do investment banking only – they’re not allowed to offer savings and checking accounts, consumer loans, small business services, that sort of thing, just like we’re not allowed to do any kind of investment banking.”
I shook my head, baffled. “Why the restriction?”
“Well, that used to be law in the United States, from the 1930s to the 1980s or so, and it worked pretty well – it was after they changed the law that the economy really started running off the rails, you know. So our legislature changed the law back after Partition, and it’s worked pretty well for us, too.”
“I don’t think banks were public utilities back then”, I objected.
“No, that was mostly further back, and only some banks”, he agreed. “The thing is, the way we see it, there are some things that private industry does really well and some things that it doesn’t do well at all, and public utilities like water, sewer service, electricity, public transit, consumer banking, that sort of thing – those work better when you don’t let private interests milk them for profits. I know you do things different back home.”
“True enough. But isn’t it more efficient to leave those things to private industry?”
“That depends, Mr Carr, on what you mean by efficiency”.
That intrigued me. “Please go on”.
Unexpectedly, he laughed. “I give a talk on that every year at one of the homeschool associations here in town. Efficiency is always a ratio – more or less efficient at producing an output in terms of a given input. A chemical process is efficient if it turns out more product for the same amount of raw materials, or the ssme amount of energy, or what have you. We get people from outside all the time talking about how this or that would be more efficient than what we do, and you know what? None of them seem to be able to answer a simple question: efficient for what output, in terms of what input?”
I could see where this was going, and decided to head onto a different tack. “And having consumer banks as public utilities”, I said. “Is that more efficient for some output in terms of some input?”
“We don’t worry so much about that”, the banker said. “The question that matters to most people here is much simpler: does it work or doesn’t it?”
“How do you tell?”
“History, Mr Carr”, he said. He was smiling again. “History”.
John Michael Greer is the Grand Archdruid of the Ancient Order of Druids in America, http://www.aoda.org, and the author of more than thirty books on a wide range of subjects, including peak oil and the future of industrial society. He lives in Cumberland, Maryland, an old red brick mill town in the north central Appalachians, with his wife Sara.
… We Don’t Get a Butterfly
by Tom Lewis
The Daily Impact (September 23 2015)
In order to have an industrial economy you have to build industrial things – roads, ports, buildings, power stations and their grids, airports, houses and shopping centers – and you have to replace them when they wear out. Such building is the activity on which an industrial society rests, the primary source of jobs and all the consequent economic activity that flows from people with jobs. What every one of these building projects needs, in addition to capital and workers, is heavy machinery. That is why the health of Caterpillar, the world’s dominant manufacturer of heavy equipment, and to a lesser extent England’s JCB, are taken as precursors of the world’s financial health.
It’s bad enough the Caterpillar’s world sales were down eleven percent year-to-year in August, worse that they have declined by a similar amount every month this year. What is truly awful is that Caterpillar has a string of such sales declines – on average ten percent per month – going back almost three years. It’s the longest stretch of sales declines in the history of the company. To those who regard Caterpillar as a bellwether, and it has been reliable in the past, our future is going to be called the Second Great Depression.
The good news is, we’re not alone. In the UK, JCB has just announced it is cutting 400 jobs worldwide in the face of staggering declines in the economies of the countries in which it works. CEO Graeme Macdonald said in a press release,
In the first six months of the year, the market in Russia has dropped by seventy percent, Brazil by 36% and China by 47%. Parts of Europe are also struggling, with France down by 26%.
Both of these companies are global operators; both are engaged in creating and maintaining the foundations of the industrial age. Their decline and fall is the decline and fall of the age.
This bull isn’t a dozer, he’s a goner.
UPDATE (September 24 2015) – Caterpillar today reduced its sales forecast for 2015 by a billion dollars. and announced it will be firing up to 10,000 people in the next few years as part of a desperate cost-cutting program. It is facing, said its CEO, a “convergence of challenging marketplace conditions”.
by Administrator in Economy | Politics | Social Issues
The Burning Platform (September 25 2015)
Zero Hedge (September 25 2015)
The housing market peaked in 2005 and proceeded to crash over the next five years, with existing home sales falling fifty percent, new home sales falling 75%, and national home prices falling thirty percent. A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime mortgages to hyper-speed. The executives of these banks knew housing had peaked, but insatiable greed consumed them as they purposely doled out billions in no-doc [non-documented] liar loans as a necessary ingredient in their CDOs of mass destruction.
The millions in upfront fees, along with their lack of conscience in bribing Moody’s and S&P to get AAA ratings on toxic waste, while selling the derivatives to clients and shorting them at the same time, in order to enrich executives with multi-million dollar compensation packages, overrode any thoughts of risk management, consequences, or the impact on homeowners, investors, or taxpayers. The housing boom began as a natural reaction to the Federal Reserve (“Fed”) suppressing interest rates to, at the time, ridiculously low levels from 2001 through 2004 (child’s play compared to the last six years).
Greenspan created the atmosphere for the greatest mal-investment in world history. As he raised interest rates from 2004 through 2006, the titans of finance on Wall Street should have scaled back their risk taking and prepared for the inevitable bursting of the bubble. Instead, they were blinded by unadulterated greed, as the legitimate home buyer pool dried up, and they purposely peddled “exotic” mortgages to dupes who weren’t capable of making the first payment. This is what happens at the end of Fed induced bubbles. Irrationality, insanity, recklessness, delusion, and willful disregard for reason, common sense, historical data and truth lead to tremendous pain, suffering, and financial losses.
Once the Wall Street machine runs out of people with the financial means to purchase a home or buy a new vehicle, they turn their sights on peddling their debt products to financially illiterate dupes. There is a good reason people with credit scores below 620 are classified as sub-prime. Scores this low result from missing multiple payments on credit cards and loans, having multiple collection items or judgements and potentially having a very recent bankruptcy or foreclosure. They have low paying jobs or no job at all. They do not have the financial means to repay a large loan. Giving them a loan to purchase a $250,000 home or a $30,000 automobile will not improve their lives. They are being set up for a fall by the crooked bankers making these loans. Heads they win, tails the dupe gets kicked out of that nice house onto the street and has those nice wheels repossessed in the middle of the night.
The subprime debacle that blew up the world in 2008 was created by the Federal Reserve, working on behalf of their Wall Street owners. When interest rates are set by central planners well below levels which would be set by the free market, based on risk and return, it creates bubbles, mal-investment, and ultimately financial system disaster. Did the Fed, Wall Street, politicians, and people learn their lesson? No. Because we bailed them out with our tax dollars and have silently stood by while they have issued $10 trillion of additional debt to solve a debt problem. The deformation of our financial system accelerates by the day.
The $3.5 trillion of Quantitative Easing (“QE”), six years of zero percent interest rates for Wall Street (why are credit card interest rates still thirteen percent?), and $8 trillion of deficit spending by the Federal government have provided the outward appearance of economic recovery, as the standard of living for most Americans has declined significantly. With real median household income still 6.5% BELOW 2007 levels, 7.3% BELOW 2000 levels, and about equal to 1989 levels, the only way the ruling class could manufacture a fake recovery is by ramping up the printing presses and reigniting a housing bubble and an auto bubble. They even threw in a student loan bubble for good measure.
The entire engineered “housing recovery” has had a suspicious smell to it all along. The true bottom occurred in 2009 with an annual rate of four million existing home sales. An artificial bottom of 3.5 million occurred in 2010 after the expiration of the Keynesian first time home buyer credit that lured more dupes into the market. The current rate of 5.31 million is at 2007 crash levels and on par with 2001 recession levels. With mortgage rates at record low levels for five years, this is all we got?
What really smells is the number of actual mortgage originations that have supposedly driven this 35% increase in existing home sales. If existing home sales are at 2007 levels, how could mortgage purchase applications be 55% below 2007 levels? If existing home sales are up 35% from the 2009~2010 lows, how could mortgage purchase applications be flat since 2010?
New home sales are up eighty percent from the 2010 lows, but before you get as excited as a CNBC bimbo over the “surging” new home sales, understand that new home sales are still sixty percent BELOW the 2005 high and 25% below the 1990 through 2000 average. So, in total, there are 1.5 million more annual home sales today than at the bottom in 2010. But mortgage originations haven’t budged. That’s quite a conundrum.
As you can also see, the median price for a new home far exceeds the bubble highs of 2005. A critical thinking individual might wonder how new home sales could be down sixty percent from 2005, while home prices are fifteen percent higher than they were in 2005. Don’t the laws of supply and demand work anymore? The identical trend can be seen in the existing homes sales market. The median price for existing home sales of $228,700 is an all-time high, exceeding the 2005 bubble levels. Again, sales are down thirty percent since 2005. I wonder who is responsible for this warped chain of events?
You guessed it – the Federal Reserve. There is no doubt these Wall Street captured academics with their models, theories, formulas, and Keynesian beliefs have created another immense bubble that endangers a global financial system already teetering on the brink of collapse due to central bank shenanigans by EU, Japanese, and Chinese central bankers. QE and ZIRP have encouraged rampant gambling by amoral greed-driven financial institutions. John Hussman sums up the “solution” implemented by the serial bubble blowers at the Fed:
The main impact of suppressed interest rates is to encourage yield-seeking speculation, to give low quality creditors access to the capital markets, to misallocate scarce saving, to subsidize leveraged carry trades, to reduce the long-term accumulation of productive capital, and to foment serial bubbles and crashes.
The suppressed interest rates and Yellen Put have encouraged Wall Street hedge funds, banks, finance companies, and fly by night mortgage brokers to finance a buy and rent scheme, house flippers, and once again subprime borrowers. The withholding of foreclosures from the market and the hedge fund purchase of millions of homes drove home prices higher. The artificially low mortgage rates also allowed people to buy more house than they normally could buy, thereby driving home prices even higher. This market manipulation has now priced out all but the richest Americans from buying a home. As expected, the Wall Street machine has decided to try and steal home with two outs in the bottom of the ninth. They’ve decided loaning money to people who are incapable of repaying the loan will surely work this time.
Existing home sales fell in August by 4.8%, and the rate of increase has been decelerating over the last twelve months. Hedge funds stopped buying, first time buyers are few as they are saddled with student loan debt, and the middle class doesn’t have the financial wherewithal to trade up. The Wall Street debt machine is running out of financially able customers, so they’ve ramped up subprime lending at the worst possible time. While overall existing home sales were up 6.2% over last year, the number of subprime first mortgage originations was up 30.5%, subprime home equity loans was up 29.5%, and subprime home equity lines of credit rose 20.4%. The percentage of subprime mortgage loans is the highest since 2008. While prime lending declines, subprime lending accelerates. This will surely end well.
And this is being promoted by the government through the Federal Housing Authority (“FHA”) . Subprime mortgages are increasingly being underwritten by thinly capitalized non-banks and guaranteed by FHA. In 2012, when this data was first tracked, large banks represented 65.4% of FHA-backed loans. That number is now 29.6%. In their place, non-banks now represent 62.2% of the FHA lending. These fly by night outfits, who proliferated during the 2003 to 2008 subprime disaster, have little or no capital cushion and when these mortgages begin to default they will go bankrupt quickly, leaving the FHA (you the taxpayer) on the hook for the inevitable losses.
The FHA has been directed by their politician benefactors to pump up the housing market at any cost. You can get an FHA loan with a credit score as low as 500, so long as you have a ten percent down payment. And once you hit a 580 credit score, you only need a 3.5% down payment. The FHA is exempt from the qualified mortgage requirement of a 43% debt-to-income ratio. Many loans have a debt-to-income above 55%. The FHA only looks at mortgage payments in their calculation. The FHA is willing to accept a gift or inheritance as a down payment. You could have no savings, a 500 FICO, a fifty percent debt-to-income and an inheritance and that would be sufficient to get you a loan.
These fly by night mortgage companies are created by slimy get rich quick hucksters who are willing to take huge risks, because there is a big difference between the risk that faces the company, and the risk that faces the owner. He will take incredibly rich commissions on all loans he books. Wall Street is again packaging these subprime slime loans into high yielding mortgage backed securities and getting the rating agencies to stamp it with a AAA rating.
Foolish investors receiving a good yield and a guarantee from the US government, are as clueless as they were in 2008. The owner of the mortgage company doesn’t care about default risk, since some other sucker has assumed that risk. When the mortgage company goes bankrupt, the owner has no personal liability. When it all blows up again, an already bankrupt FHA will be on the hook, which really means the taxpayer will pay again. You are underwriting the new subprime crisis.
This exact same scenario is also playing out in the economically important auto market. It is clear the Fed, Treasury, Wall Street and the politicos in Washington DC decided they needed to re-inflate the housing and auto bubbles to provide the appearance of economic recovery so they could resume their looting and pillaging of the national wealth. They have succeeded in ramping up auto sales from the 10.4 million annual rate in 2009 to 17.5 million in 2015, if you can call these sales. Short-term rentals is a better description. Auto leasing now accounts for thirty percent of “sales” (up from 22% in 2012), while subprime auto “sales” accounted for another 23.5%. The vast majority of the other sales are done with seven-year zero-percent financing. Does that sound like a sound business formula?
And now they’ve run out of dupes. The seasonally adjusted annual rate of sales for August 2015 was 17.2 million, flat with August 2014 and down from 17.5 million in July 2015. As the auto sales have gone flat and are poised to fall, the Wall Street finance machine has ramped up subprime lending from eighteen percent of all loans in 2010 to 23.5% today. With overall sales flat with last year, subprime lending is up 9.6% in the last year. The pace of subprime auto loans has been more than double the pace of prime auto loans since 2010.
Over ten percent of subprime auto loans are delinquent within the first twelve months. Subprime auto loan delinquency rates are soaring by twenty percent at Ally Financial. Santander is a Lehman Brothers in the making as their total delinquency rate approaches twenty percent. A critical thinking person might wonder why automaker profits are in decline, while GM and Ford stock prices are well below 2011 levels, if the auto market is booming.
The table is set for the next financial crisis. The apologists for the warped ideology that has resulted in $10 trillion of additional debt being layered on the original unpayable $52 trillion, argue subprime lending is lower than the 2008 peak, so all is well. They fail to realize the system is far more fragile and will collapse once the next Lehman moment arrives. The country is already in, or headed into recession. All economic indicators are flashing red. The stock market has fallen over ten percent in the last month. Virtually every new car owner you see driving that fancy BMW, Lexus, or Volvo is underwater on their auto loan. Home price growth has stalled at record levels. Mortgage rates are poised to rise from record lows. We all know what happens next. Look out below.
Some people never learn. They follow the same path that destroyed their finances in the past. Wall Street is desperately packaging the increasing amounts of subprime slime in new derivatives of mass destruction and peddling them to clients, while shorting those same derivatives. It’s called the Goldman Sachs method. When home prices begin to tumble, these derivatives will self-destruct again. What is happening today is nothing more than rearranging the deck chairs on the Titanic. The iceberg has been struck, we’re taking on water, and this sucker is going to sink. Game Over.
Part of the reason the Fed found it so difficult last week to justify a move away from zero interest rates is that the Fed seems incapable of recognizing, much less admitting, the speculative risks it has created. The strongest reason to normalize monetary policy was to reduce those risks, but the proper time to have done that was years ago. At this point, obscene equity valuations are already baked in the cake on valuation measures that are reliably correlated with actual subsequent stock market returns. At this point, hundreds of billions of dollars of low-grade covenant-lite debt have already been issued at risk premiums that are next to nothing. The bursting of this bubble is no longer avoidable. If history is any guide, policy makers will manage the resulting disruption by the seat of their pants, since they seem incapable of learning from history itself.
– John Hussman
by Mike Whitney
CounterPunch (September 25 2015)
Imagine your doctor put you on a daily dose of oxycontin, phenobarbital and Quaaludes for six years straight. Then he suddenly cancelled your prescription.
Do you think your behavior might become a bit erratic?
This is what’s going on with the stock market. It’s trying to shake off six years of over-medication brought on by the US Federal Reserve’s (“Fed’s”) zero rates [of interest] and liquidity injections.
Let me explain: Until recently, stocks had been on a tear that pushed valuations into the stratosphere. Volatility stayed low because Bernanke’s easy money and Quantitative Easing (“QE”) made investors more placid, serene and mellow. They ventured further out on the risk curve and took more chances because they were convinced that the Fed “had their back” and that there was nothing to worry about.
Then things began to fall apart. The Fed ended its asset purchase program and started talking about “normalization”, an opaque term the Fed uses to avoid the harsher sounding [interest] “rate hikes”. This is what began to rouse investors from their drug-induced trance. The era of cheap money was coming to an end. The punch bowl was being taken away.
Then – just as the Fed’s surging liquidity had calmed the markets for six years – the absence of liquidity and high-frequency trading sent stocks gyrating wildly for months on end. The markets became unpredictable, convulsive, topsy-turvy. And while [interest] rates remained fixed at zero throughout, the mere anticipation of higher rates was enough to ignite a sustained period of extreme volatility unlike anything traders had ever seen before. By taking its foot off the gas pedal and trying to restore traditional market dynamics, the Fed had slammed the vehicle into reverse unleashing pandemonium across global markets.
Naturally, the pundits tried to blame the mayhem on China or emerging markets or droopy commodities prices or even deflation. But it’s all baloney. The source of the problem is the Fed’s easy money policies, that’s what created the disconnect between valuations and fundamentals, that’s what sent stock prices to the moon, and that’s what inflated this ginormous stock-and-bond bubble that is just now beginning to unwind. China might have been the trigger, but it’s certainly not the cause.
Last Thursday, the unthinkable finally happened: The FOMC issued a statement that the interest rates would not be raised after all, but that ultra-accommodative policies would remain in place for the foreseeable future. On similar occasions, the markets have always rallied in gratitude for more-of-the-same easing. But not this time. This time, the Dow Jones surged 100 points before cratering 299 into the next session.
“Ah, the Fed has lost its magic touch”, the analysts opined. The promise of zero rates was no longer enough to push stocks higher. What does this mean? If the Fed does not have supernatural powers, then who will keep the markets from plunging? Who will keep the bubble intact? Who will save us from a painful correction?
What we do know is that stocks are currently rising on the back of cheap credit that is being diverted into Mergers and Acquisitions (M&A) and stock buybacks. Corporate debt continues to grow even while earnings and revenues shrink. In other words, the Fed’s perverse incentives (zero interest rates) have seduced corporations into piling on record debt for financial engineering and asset stripping, while investment in building up their companies for future growth (capital expenditures) has fallen to post-war lows. That’s the kind of shenanigans that’s driving the markets.
Corporations have been riding the crest for the last three years, refinancing more than $1 trillion per year from 2012 to 2015. But tighter credit conditions and mounting debt servicing is expected to curb their appetite for more borrowing, dampening the prospects for higher stock prices. The same rule applies to stock buybacks. When equities prices flatten out or drift lower, and debt gets more pricey, share repurchases no longer make sense. So, you can see that – even if rates stay low – tighter credit and extra debt servicing is going to pull the rug out from under the market and put stocks into a deep freeze.
The point is, the Fed knows what’s going on but just looks the other way. They know their easy money isn’t building a strong, sustainable recovery. They know it’s being used to beef up leverage on risky bets so dodgy speculators can make a killing. They know it all, but they don’t give a rip. They just want to keep the game going a little bit longer, that’s all that matters to them. Heck, maybe Yellen has convinced herself that she can pull a rabbit out of her hat at the last minute and save us all from disaster? It’s possible, but I doubt it. I think she knows we’re goners. The economy is soft, the markets are zig-zagging wildly, and the whole bloody contraption looks like its ready to blow. She must know that the game is just about over.
… Avoid World War Three
US Provocation and Propaganda directed against China
by Tony Cartalucci
Global Research (September 27 2015)
Land Destroyer (September 27 2015)
An Asian state aggressively expanding its military, bullying its neighbors, illegally fortifying islands, and bent on regional, then global domination – sound familiar? Are you thinking it’s China 2015? No, it is Japan 1937~1944.
So shockingly similar is American propaganda regarding Japan during World War Two to the propaganda being leveled against Beijing today that it seems almost intentional. Or perhaps those on Wall Street and Washington think so little of the general public’s ability to discern fact from fiction, they see no reason to revise the script and are going ahead with a remake faithful to the original with only a few minor casting twists.
This US government production is titled “Why We Fight: A Series of Seven Information Films” with this particular part titled, “The Battle of China” released in 1944.
It describes Japan almost verbatim as how the US today describes China.
China is depicted as a righteous victim – but as the film elaborates – it is clear that any affinity shown toward the Chinese people is only due to the fact that the US held significant economic and geopolitical interests there. Admittedly, the US military was already occupying China after extorting through “gunboat diplomacy” concessions from China’s subjugated, servile government – not unlike US troops occupying Japan today, hosted by a capitulating government in Tokyo.
Japan in the film is depicted as a “blood crazed” race of barbarians, while the Chinese are depicted as noble resistors. Of course, this narrative shifted immediately as soon as US interests were ousted from China and US troops began occupying and shaping the destiny of conquered Japan after the war.
The Warnings Then are Warnings Now
US Marine Corps General Smedley Butler in his book War is a Racket (1935) would specifically warn about a military build up aimed at Japan for the jealous preservation of American conquests in Asia Pacific. Speaking specifically about these conquests, General Butler would say:
What does the “open door” policy to China mean to us? Our trade with China is about $90,000,000 a year. Or the Philippine Islands? We have spent about $600,000,000 in the Philippines in thirty-five years and we (our bankers and industrialists and speculators) have private investments there of less than $200,000,000.
Then, to save that China trade of about $90,000,000, or to protect these private investments of less than $200,000,000 in the Philippines, we would be all stirred up to hate Japan and go to war – a war that might well cost us tens of billions of dollars, hundreds of thousands of lives of Americans, and many more hundreds of thousands of physically maimed and mentally unbalanced men.
Of course, for this loss, there would be a compensating profit – fortunes would be made. Millions and billions of dollars would be piled up. By a few. Munitions makers. Bankers. Ship builders. Manufacturers. Meat packers. Speculators. They would fare well.
Yes, they are getting ready for another war. Why shouldn’t they? It pays high dividends.
Of provoking Japan, he would state specifically that:
At each session of Congress the question of further naval appropriations comes up. The swivel-chair admirals of Washington (and there are always a lot of them) are very adroit lobbyists. And they are smart. They don’t shout that “We need a lot of battleships to war on this nation or that nation”. Oh no. First of all, they let it be known that America is menaced by a great naval power. Almost any day, these admirals will tell you, the great fleet of this supposed enemy will strike suddenly and annihilate 125,000,000 people. Just like that. Then they begin to cry for a larger navy. For what? To fight the enemy? Oh my, no. Oh, no. For defense purposes only.
Then, incidentally, they announce maneuvers in the Pacific. For defense. Uh, huh.
The Pacific is a great big ocean. We have a tremendous coastline on the Pacific. Will the maneuvers be off the coast, two or three hundred miles? Oh, no. The maneuvers will be two thousand, yes, perhaps even thirty-five hundred miles, off the coast.
The Japanese, a proud people, of course will be pleased beyond expression to see the United States fleet so close to Nippon’s shores. Even as pleased as would be the residents of California were they to dimly discern through the morning mist, the Japanese fleet playing at war games off Los Angeles.
Incidentally, General Butler’s warning of provoking war to fulfill the ambitions of lobbyists in Washington and to protect America’s ill-gotten holding in Asia Pacific, would come to full and devastating fruition.
Today, a similar scenario plays out verbatim. The US seeks to expand its military in Asia Pacific to preserve what US policy makers call “US primacy over Asia”, and has been intentionally provoking China, by flying, sailing, and otherwise maneuvering just at the edge of Chinese territory.
In addition they have attempted to encircle China with military bases from South Korea and Japan to as far south as Darwin, Australia, and as far west as Afghanistan, all while attempting to carve off Chinese territory in the Xinjiang and Tibet regions, destabilize Hong Kong, and stitching together Southeast Asia into an supranational bloc with which to isolate and threaten China with economically and militarily. Political subversion underwritten by the US State Department is ongoing in Xinjiang through the use of Uyghur terrorists, Tibet via the Dali Lama, Myanmar via Aung San Suu Kyi and her “Saffron monks”, Thailand through the Shinawatra family and their ultra-violent “red shirt” mobs, Malaysia via Anwar Ibrahim and his Bersih street movement, and Hong Kong via the so-called “Umbrella revolution”.
Despite this effort, American designs are failing, and China has likely learned many lessons before, during, and after World War Two. Asian nations who seek regional peace and stability as well as cooperation with Beijing, have also learned much about the inner-working of US hegemony and how to confound it.
Beijing is unlikely to exhibit the hubris and impatience of the Japanese in World War Two, or allow themselves to be provoked into an unwinnable war. Beijing is also well aware that as impressive as America’s grand strategy of geopolitically and militarily encircling China may be, it is failing on all fronts.
China has learned these lessons of history, and by examining history ourselves, we can see how the US provoked, then framed the war with Japan during World War Two, and how it is using precisely the same tricks today against China.
Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article.
Copyright (c) Tony Cartalucci, Global Research (2015)