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China Now Leads in Renewables

by Guillaume Pitron

CounterPunch (July 18 2017)

Donald Trump’s 1 June announcement of US withdrawal from the 2015 Paris climate agreement coincided with the 19th bilateral EU-China summit in Brussels, giving China’s prime minister, Li Keqiang, an opportunity to reaffirm China’s intention to implement the accord. The success of COP21 (the UN Climate Change Conference) owed much to China’s role in the negotiations.

The main hurdle in Paris was the major divergence between the group of developing countries … the G77 … and the developed countries over the funding of energy transition and the division of labor to contain climate change. China’s chief negotiator, Xie Zhenhua, used China’s hybrid status as both a developing nation and an economic power to position himself as the mediator who could win the trust of all participants. He won agreement that the North’s annual contribution of $100 billion to the Green Climate Fund for the South would no longer be obligatory from 2020.

But China also won acceptance for the idea of “common but differentiated responsibilities” from the 195 signatory nations. Under this principle of international environmental law, the efforts demanded of industrialized nations will be scaled according to their economic size and historical responsibility for global warming.

The signing of the Paris agreement was considered a diplomatic success for China: its leaders had been angry that the western media blamed them for the failure of COP15 in Copenhagen in 2009 … a minimal, nonbinding agreement considered a retreat from the 1997 Kyoto Protocol. In Paris, China demonstrated what environmental diplomacy might look like, and since then, it has rarely missed a chance to make clear the role it intends to play, highlighting the leadership void left by the US.

China’s stance is all the more necessary since its development model now looks unsustainable; since the 1980s it has been based on an economic policy that used social and environmental dumping to gain competitive advantage over western nations. China is now the world’s largest emitter of greenhouse gases (28% of global carbon dioxide emissions) and is producing alarming environmental data … ten percent of its arable land is contaminated with heavy metals; eighty percent of underground well-water is unfit to drink {1}, and fewer than one percent of the 500 largest cities have air quality that meets international standards. Air pollution causes up to a million deaths a year, according to the World Health Organisation.

“The state has grasped the urgency of the environmental problem and given a sincere undertaking to protect the environment”, says Chloé Froissart, director of the Franco-Chinese Centre at Beijing’s Tsinghua University. In 2013 President Xi Jinping declared that an “ecological civilization” … a hazy concept whose ultimate aim is nonetheless clear … was emerging to produce a sustainable development model that reconciles robust growth with a better quality of life. The thirteenth five-year plan, approved in 2016, projects reducing coal consumption as part of the energy mix from 64% in 2015 to 58% in 2020 and increasing the proportion of non-fossil fuels to fifteen percent. The government wants to reduce reliance on traditional heavy industries, which are major contributors to pollution, and strengthen its economic leadership in renewables.

This policy has already achieved notable successes. Despite China’s image as polluted and polluting, it is now the world leader in green energy production, photovoltaic equipment, hydroelectric power generation and investment in wind power. It is also the largest market for cars that run on clean energy. Though China’s economy grew by 6.7% in 2016, its carbon dioxide emissions fell by almost one percent, to 8.768 metric tons, a better performance than in Europe, where emissions remained the same while the economy grew by just 1.7% {2}. China’s ambitious green transition, besides easing tensions over the public’s environmental concerns, is a response to the challenge of modernizing its engines of growth and greening its international image.

Notes:

{1} See Chris Buckley and Vanessa Piao, “Rural water, not city smog, may be China’s pollution nightmare”, The New York Times, 11 April 2016.

{2} Provisional figures for 2016 from the International Energy Agency (“IEA”) in Paris.

This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.

https://www.counterpunch.org/2017/07/18/china-now-leads-in-renewables/

Categories: Uncategorized

A Tale of Two Nations

Russia vs USA Economic Prospects

by F William Engdahl

New Eastern Outlook (July 19 2017)

Taking the extraordinary USA and EU economic sanctions against Russia and low oil prices since 2014 into account, Russia’s economic outlook looks excellent going forward while that of Trump’s America looks bleak, to put it mildly. Paraphrasing the memorable 1992 Presidential candidates debate between a then-young William Jefferson Clinton and George H W Bush, “It’s the debt, stupid”.

In the past few years, too many US economists and analysts such as Moody’s Credit Rating have tried to dismiss the economy of the Russian Federation as a near-bankrupt Soviet-era oil and gas-dependent economy, devastated by the 2014 collapse in oil price. This is a grave mistake, especially so as military calculations of Nato in many cases depend on such poorly-informed and dated judgments. Here are just a few select examples of what is really going on in terms of cutting edge and even bleeding edge technology R&D and commercialization in Russia in the civilian sector. The West’s neo-colonial smug arrogance has no place.

Yes, the physical economy Russia has great problems. I’ve traveled throughout Russia many times since 1994. I have seen much beyond the breath-taking beauty of the Czar palaces of Saint Petersburg or the spectacular Moscow Kremlin fortress constructed in the 1480s. I’ve seen dilapidated infrastructure and streets with New York-style potholes in Russia’s smaller cities.

I grew up and for some time worked in proximity of slums and poverty in cities such as Boston, New York, Newark, or Dallas as a young man in the United States during the 1960s and 1970s and after. The differences with Russia’s economic deficits are enormous. The growing poverty in America since the beginning of the 1970s was as a deliberate economic policy consequence of Wall Street policies and notably so after the decision to abandon the Bretton Woods Gold Exchange Standard in 1971.

By contrast, the poverty in Russia today is a residue of the seventy years of Soviet conditions during the military necessities of the Cold War and the fatal flaws of its rigid central planning that suppressed individual initiative and creativity, or rather penalized it. That was aggravated in a devastating manner by the Gorbachev Perestroika monetary mistakes and the criminal CIA-backed looting of Russian state assets by the Yeltsin mafia in the decade of the 1990s.

In brief, the United States, when the falsified US Government economic data are stripped away, is falling deeper into debt and decay as money and Wall Street megabanks reign supreme like Gods of Money. Russia, in contrast, is growing slowly but definitely out of its economic and infrastructure deficit of the past decades, in fact of the past century since the Western-backed Lenin coup d’etat of 1917. While the United States over the past five decades has been tearing down its once prospering cities, infrastructure and industry, Russia is building up its national economy on an advanced technological basis with some of the most creative scientific and engineering minds on Earth. As Moody’s or S&P language might put it, “USA economy: Outlook Negative going forward; Russia economy: Outlook Positive going forward”.

A Debtors’ Prison

The difference between the present economic prospects of the United States and that of the Russian Federation is fundamental. To begin with we need to examine the relative debt structures of the West versus the East. In the United States debts are soaring and the slums and homelessness are spreading, hidden behind United States’ Potemkin Village ultra-wealthy gentrified urban areas like Manhattan in New York City or Washington DC and its wealthy suburbs.

Household debt in the USA, almost nine years after the financial collapse of September 2008, and after more than eight years of near-zero Federal Reserve (“Fed”) interest rates, is alarmingly high, higher than almost any time in the postwar period at almost eighty percent of GDP.

Of that household private debt, student loan debt for college education is more than $1.3 trillion, or an average debt of $48,000 a student. Astonishingly, students’ indebtedness for higher education has passed Americans’ legendary credit card debt in dollar terms. In early 2017 according to Federal Reserve and other data more than 44 million Americans held a total of some $1.3 trillion in debts for higher education. In 1997, only twenty years ago, total student debt was less than $30 billion, hardly a drain.

One reason for the explosion of debt is that total costs of a higher education in America today are soaring, notably at state-supported colleges. Costs rose 41% from 2002 to 2012. At the same time, the incomes of the families of the households sending their children to college have stagnated and after 2008 declined in real terms.

For most of the immediate postwar period until the great economic crises of the 1970s, higher education in the United States had a tradition – most especially at state universities – that tuition costs were minimal or state subsidized so that higher education could be open to anyone “with brains” as Harvard President Charles W Eliot once charmingly put it. Higher education was seen by states and communities as an investment in the nation’s future. Those were the days before globalization and the great labor outsourcing. Now Federal government monies to support low-cost state college tuition have been severely cut, and state budgets across the country are still bleeding from the 2007~2008 financial crisis.

Total private household debt in the United States today is over $12 trillion for combined home mortgage debt, college loans, car debt, credit card debt. That’s a huge burden weighing on the growth potential of the US economy.

Add to this the exponential growth of the US national debt, now just under $20 trillion, and it becomes clear that the campaign rhetoric of the Trump Presidency to “make America Great Again” requires emergency economic measures and effective and well-thought-through Chapter 9 type bankruptcy-reorganization of the nation’s debt in order to allow the United States to again become a real manufacturing economy not merely a financial speculator in debt.

In 1980 at the start of the “debts don’t matter” irresponsibility of the Reagan-Bush era, the level of Federal debt was a very manageable thirty percent of GDP. By the end of Bush Senior’s term in January 1993, it stood at more than double or 63% of GDP. It was beginning to “matter”, but Wall Street and bond traders loved it. When George W Bush, took office in 2001 it had fallen back to 54% through no fault of Bush but rather to Baby-boomer demographics. From there US national debt took off like a ballistic missile, doubling by March 2017 to more than 104% of GDP today, just a whisker below a staggering $20 trillion.

This debt in the USA, private and public, is the true reason the Fed, more than eight years after the worst financial crisis in world history, still fears to bring interest rates much beyond the historically low 1.25% at present for fear of triggering a domino debt default collapse of the entire economy. Russia faces nothing remotely comparable in terms of such a debt prison.

The situation for the EU countries is only slightly better. The Eurozone countries have an average of ninety percent debt to GDP, far beyond the sixty percent ceiling of the Maastricht Treaty. In Greece it stands at 179%, followed by Italy at 133%, Portugal at 130%, Cyprus at 107% and Belgium at 106%.

Russia Looks Quite Healthy

By contrast, Russia’s state debt is almost minuscule at thirteen percent of GDP in 2016, the US dollar equivalent at present exchange rates of $190 billion. Inflation is currently measured between four to five percent. The Ruble is stable since the sanctions crisis and oil shock of 2014. And foreign investment is coming back into Russia’s economy. Moreover, despite the collapse of world oil prices after September 2014, Russian oil exports have held firm or grown and gas exports via new pipelines to China and elsewhere in eastern Eurasia are about to give added revenue to state-owned Gazprom and other Russian oil companies. Russian domestic production costs for oil and gas are priced in Rubles and sold for dollars so the impact of a significant Ruble fall versus the dollar after 2014 was hardly severe as US Treasury financial warfare jockeys might have hoped.

Russia’s Central bank reserves today are more than healthy. In addition to a major restocking of its gold reserves, the total reserves today stand at $406 billion, higher than in 2014 when it stood at $385 billion. In addition, the Finance Ministry’s Sovereign Wealth Funds total another $90 billion at current exchange rates. Moody’s and S&P, tell me where is the “risk” of sovereign debt default that you still insist rating Russian state bonds as “junk”?

Political Bias Against Russia?

A note here is in order about the political nature of select sovereign credit risk ratings by the dominant US credit rating agencies Moody’s and S&P. During the depth of the ruble crisis in 2014 when plunging oil prices and US and EU sanctions forced Russian companies to repay foreign dollar or euro loans, as the West was threatening cutoff of SWIFT interbank lines to Russia, capital outflow reached $151 billion for the crisis year 2014, most in the last quarter.

In 2016 capital outflows out of Russia totaled a mere $15 billion, most to Russian companies overseas and the ruble remained stable. Despite the absence of any hint of a possible Russian sovereign debt default as in the Soros-linked ruble default crisis of August 1998 under the chaotic Yeltsin era, both Moody’s and S&P still keep Russian government debt rated at “below investment grade”, or “junk” grade, meaning that international pension funds and other major investors are prohibited by their own regulators from holding Russian state debt despite very attractive interest rates compared with the EU or USA or Japan.

Critics of the political bias of certain Moody’s and S&P sovereign debt ratings see the giant Wall Street rating companies who hold a de facto monopoly on world credit ratings, as too often operating with political bias. They cite the example of the spectacular bankruptcy of Enron in 2001 and the fact the two US rating companies continued to give Enron top ratings until the eve of bankruptcy. Enron’s CEO Kenneth Lay happened to be a close friend of the Bush family which some believe played a role in the rating blindness. Similarly, Moody’s and S&P did not warn of the largest financial collapse, that triggered by the meltdown in the bond-rated Mortgage Backed Securities market in so-called subprime real estate loans in the USA beginning in March 2007. They should have. They rated the Mortgage Backed bonds behind the crisis.

In effect, it would appear that Moody’s and S&P (less so Fitch the smallest US rater of the three) act as an integrated adjuvant of the US Treasury economic warfare sanctions unit, using a blackmail of lowered credit rating to pressure Russia into destructive liberal economic reforms it does not at all need.

Let’s look briefly at some positive industrial areas of the Russian real economy instead of the virtual reality of Western rating games. Here it looks anything but bankrupt or junk.

Civilian Sector to Gain from Military

The very advanced military technology that Russia’s intervention into the Syria war has demonstrated to the world confirms that Russian science and technology are world-class, and often far more.

In a speech July 9 at the opening ceremony in Yekaterinburg in central Russia of the International Industrial Trade Fair INNOPROM-2017, Russia’s President Vladimir Putin stated,

Another key issue is to boost volumes of hi-tech production for the civil purposes by the defense industry complex. The Ministry of Industry and Trade is actively engaged in this issue now.

This represents a sea change in Russian attitude towards its military technology sector. During the Cold War, a heritage of Stalin-era obsession with security, the military industry was completely sealed from any possible interaction with the civilian economy, resulting in huge imbalances in technology spread into the domestic economy to the present.

Civilian Advanced Aircraft

An instance of the kind of innovation and technology potential of this policy of supporting high-tech manufacture drawing on Russia’s extraordinary military aircraft experience is the rollout this May of the first test flight of Russia’s Irkut MC-21 narrow-body commercial jet. The development reportedly sent shock waves through the boardrooms of Boeing and Airbus.

The Irkut MC-21 has the widest fuselage of any narrow-body jet in the market giving more passenger comfort compared with the “sardines-in-a-can” passenger space on comparable Boeing 737 and Airbus A320 models. More attractive, especially for many developing markets in the Middle East and Asia, is the fact its price is some fifteen percent below the A320. More interesting is the technology in the construction. The MC-21 has Russian-developed unique carbon fiber wings, giving the plane a thirty percent composite content. The wings were developed using a revolutionary new resin transfer infusion process created by AeroComposit in Ulyanovsk, Russia. Boeing 737 Max and Airbus A320 use metal wings.

Notably, the Irkut manufacturer is part of a new state aircraft group United Aircraft Corporation or UAC. It was during his first Presidency that Vladimir Putin merged the former military aircraft makers from Ilyushin, Irkut, Sukhoi, Tupolev, and Yakovlev to form a single aircraft group, UAC, which is eighty percent state-owned.

In addition to the MC-21 narrow-body passenger medium-range jet, UAC has developed the regional Superjet-100 aircraft, certified for international routes in 2012. UAC subsidiary company, Sukhoi, claims direct operating costs to be six to eight percent lower than its key competitor, the Brazilian Embraer 190/195 and can accommodate 22 more passengers. I can personally attest the aircraft is very comfortable.

Russia’s entry into the strategic civilian passenger jet market has recently taken on another new dimension in terms of creation of a Russian-Chinese joint venture. In June 2016, the UAC and the China state aircraft corporation Comac created China-Russia Aircraft International Company, Ltd (“CRAIC”), based in Shanghai. CRAIC is responsible for product and technology development, manufacturing, marketing, sales and customer service, consulting, program management. The two companies are creating a new generation of long-range wide-body commercial aircraft to compete with Airbus A380 and Boeing 787. The Sino-Russian jet will have a range of up to 12,000 kilometers (7,500 miles) and seat 280 passengers with operating costs ten to fifteen percent less than its rivals. UAC expects the new joint jet will take ten percent of a market dominated by the Boeing 787 and Airbus A350.

Advanced Railway Equipment

Another sector of infrastructure manufacturing excellence from Russia is the extraordinary development of Russia’s United Wagon Company. Russia’s Putin, then-Prime Minister, attended the opening of the highly sophisticated new cutting-edge rail car factory of United Wagon’s Tikhvin Railway Car Building Plant in 2012 at a cost of almost $1 billion. Since then United Wagon has grown to be a major world-class builder of advanced specialized rail wagons and is larger than any European freight wagon producer with 22,000 wagons a year.

The company took best practice experiences from the automotive, aerospace and rail industry around the world in the design of the factory. It combines foundry production and vehicle assembly on a single site giving it flexibility and productivity rates “several times” in excess of established Russian wagon plants. TVSZ can produce a wheelset every 4.5 minutes and complete a wagon every 24 minutes. The factory outside Saint Petersburg features the most advanced automated equipment and robots similar to equipment used by BMW and Airbus. The only comparable casting machinery is used by Daimler in Germany. TVSZ rail wagons are fifty percent cheaper to maintain than established Russian designs, and more track friendly.

During their recent talks before the Hamburg G20 meeting, Russian President Putin and China President Xi Jinping discussed incorporating Russian rail car manufacturing capacities in the development of the vast high-speed rail infrastructure that is being built across Eurasia today including Russia and the Eurasian Economic Union. Clearly, United Wagon was uppermost in Putin’s mind.

Unlike the United States which to the present day has managed to not build one single mile or kilometer of high-speed rail track capable of speeds above 140 mph, Russia is expanding its high-speed rail, now officially in coordination with China’s vast One Belt, One Road (“OBOR”) Eurasian infrastructure project. Russia and China are jointly developing the priority project of a new high-speed rail link from Russia’s Kazan to Moscow, ultimately to be a key link in the OBOR Beijing to Moscow line. The Moscow-Kazan high-speed rail link will be 770 kilometers long, with trains moving up to 400 kilometers per hour and stops every fifty to seventy kilometers. The high-speed journey from Moscow to Kazan will take 3.5 hours compared to the current fourteen hours, revolutionizing economic relations all along the line.

With an eye to its growing trade relations with her East, Russia announced last year that it will build a new railway corridor in the Russian Far East for a faster connection between the Trans-Siberian railway and the Pacific Ocean via a new port on the Sea of Japan to be completed by 2025. The new transport corridor will be able to serve most of the ports of the Russian Far East, as well as Japan, China and Korea, and cuts the distance to the Trans-Siberian railway by 550 kilometers, allowing much faster transportation of cargo to the European part of Russia.

Truly prospects for a dynamic, economically growing Russian real economy today is more positive than at any time in the past two centuries or more. I can’t help but feel it would do our world far more in terms of the good to end with the silly losing wars everywhere and return to building up our nations and civilization. The energy of war is a no-brainer. Building up is exciting as China and increasingly Russia realize.

_____

F William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine New Eastern Outlook.

https://journal-neo.org/2017/07/19/a-tale-of-two-nations-russia-vs-usa-economic-prospects/

Categories: Uncategorized

Pentagon Study Declares American Empire is “Collapsing”

Report demands massive expansion of military-industrial complex to maintain global ‘access to resources’

by Nafeez Ahmed

Insurge Intelligence (July 17 2017)

In the first of a series, we report on stunning new evidence that the US Department of Defense (“DoD”) is waking up to the collapse of American primacy, and the rapid unraveling of the international order created by US power after the Second World War.

But the Pentagon’s emerging vision of what comes next hardly inspires confidence. We break down both the insights and cognitive flaws in this vision. In future pieces we will ask the questions: What is really driving the end of the American empire? And based on that more accurate diagnosis of the problem, what is the real solution?

An extraordinary new Pentagon study {1} has concluded that the US-backed international order established after World War Two is “fraying” and may even be “collapsing”, leading the United States to lose its position of “primacy” in world affairs.

The solution proposed to protect US power in this new “post-primacy” environment is, however, more of the same: more surveillance, more propaganda (“strategic manipulation of perceptions”) and more military expansionism.

The document concludes that the world has entered a fundamentally new phase of transformation in which US power is in decline, international order is unravelling, and the authority of governments everywhere is crumbling.

Having lost its past status of “pre-eminence”, the US now inhabits a dangerous, unpredictable “post-primacy” world, whose defining feature is “resistance to authority”.

Danger comes not just from great power rivals like Russia and China, both portrayed as rapidly growing threats to American interests, but also from the increasing risk of “Arab Spring”-style events. These will erupt not just in the Middle East, but all over the world, potentially undermining trust in incumbent governments for the foreseeable future.

The report, based on a year-long intensive research process involving consultation with key agencies across the Department of Defense and US Army, calls for the US government to invest in more surveillance, better propaganda through “strategic manipulation” of public opinion, and a “wider and more flexible” US military.

The report was published in June by the US Army War College’s Strategic Studies Institute to evaluate the DoD’s approach to risk assessment at all levels of Pentagon policy planning. The study was supported and sponsored by the US Army’s Strategic Plans and Policy Directorate; the Joint Staff, J5 (Strategy and Policy Branch); the Office of the Deputy Secretary of Defense for Strategy and Force Develop-ment; and the Army Study Program Management Office.

Collapse

“While the United States remains a global political, economic, and military giant, it no longer enjoys an unassailable position versus state competitors”, the report laments.

“In brief, the sta-tus quo that was hatched and nurtured by US strategists after World War II and has for decades been the principal ‘beat’ for DoD is not merely fraying but may, in fact, be collapsing”.

The study describes the essentially imperial nature of this order as being underpinned by American dominance, with the US and its allies literally “dictating” its terms to further their own interests:

The order and its constituent parts, first emerged from World War Two, were transformed to a unipolar system with the collapse of the Soviet Union, and have by-and-large been dominated by the United States and its major Western and Asian allies since. Status quo forces collectively are comfortable with their dominant role in dictating the terms of international security outcomes and resist the emergence of rival centers of power and authority.

 

But this era when the US and its allies could simply get their way is over. Observing that US officials “naturally feel an obligation to preserve the US global position within a favorable international order”, the report concludes that this “rules-based global order that the United States built and sustained for seven decades is under enormous stress”.

The report provides a detailed breakdown of how the DoD perceives this order to be rapidly unravelling, with the Pentagon being increasingly outpaced by world events. Warning that “global events will happen faster than DoD is currently equipped to handle”, the study concludes that the US “can no longer count on the unassailable position of dominance, supremacy, or pre-eminence it enjoyed for the twenty-plus years after the fall of the Soviet Union”.

So weakened is US power, that it can no longer even “automatically generate consistent and sustained local military superiority at range”.

It’s not just US power that is in decline. The US Army War College study concludes that:

All states and traditional political authority structures are under increasing pressure from endogenous and exogenous forces … The fracturing of the post-Cold War global system is accompanied by the in-ternal fraying in the political, social, and economic fabric of practically all states.

 

But, the document says, this should not be seen as defeatism, but rather a “wakeup call”. If nothing is done to adapt to this “post-primacy” environment, the complexity and speed of world events will “increasingly defy [DoD’s] current strategy, planning, and risk assessment conventions and biases”.

Defending the “Status Quo”

Top on the list of forces that have knocked the US off its position of global “pre-eminence”, says the report, are the role of competing powers – major rivals like Russia and China, as well as smaller players like Iran and North Korea.

The document is particularly candid in setting out why the US sees these countries as threats – not so much because of tangible military or security issues, but mainly because their pursuit of their own legitimate national interests is, in itself, seen as undermining American dominance.

Russia and China are described as “revisionist forces” who benefit from the US-dominated international order, but who dare to “seek a new distribution of power and authority commensurate with their emergence as legitimate rivals to US dominance”. Russia and China, the analysts say, “are engaged in a deliberate program to demonstrate the limits of US authority, will, reach, influence, and impact”.

The premise of this conclusion is that the US-backed “status quo” international order is fundamentally “favorable” for the interests of the US and its allies. Any effort to make global order also work “favorably” for anyone else is automatically seen as a threat to US power and interests.

Thus, Russia and China “seek to reorder their position in the existing status quo in ways that – at a minimum – create more favorable circumstances for pursuit of their core objectives”. At first glance there seems nothing particularly wrong about this. So the analysts emphasize that “a more maximalist perspective sees them pursuing advantage at the direct expense of the United States and its principal Western and Asian allies”.

Most conspicuous of all, there is little substantiation in the document of how Russia and China pose a meaningful threat to American national security.

The chief challenge is that they “are bent on revising the contemporary status quo” through the use of “gray zone” techniques, involving “means and methods falling far short of unambiguous or open provocation and conflict”.

Such “murkier, less obvious forms of state-based aggression”, despite falling short of actual violence, are condemned – but then, losing any sense of moral high-ground, the Pentagon study advocates that the US itself should “go gray or go home” to ensure US influence.

The document also sets out the real reasons that the US is hostile to “revolutionary forces” like Iran and North Korea: they pose fundamental obstacles to US imperial influence in those regions. They are:

… neither the products of, nor are they satisfied with, the contemporary order … At a minimum, they intend to destroy the reach of the US-led order into what they perceive to be their legitimate sphere of influence. They are also resolved to replace that order locally with a new rule set dictated by them.

 

Far from insisting, as the US government does officially, that Iran and North Korea pose as nuclear threats, the document instead insists they are considered problematic for the expansion of the “US-led order”.

Losing the Propaganda War

Amidst the challenge posed by these competing powers, the Pentagon study emphasizes the threat from non-state forces undermining the “US-led order” in different ways, primarily through information. The “hyper-connectivity and weaponization of information, disinformation, and dis-affection”, the study team observes, is leading to the uncontrolled spread of information. The upshot is that the Pentagon faces the “inevitable elimination of secrecy and operational security”.

Wide uncontrolled access to technology that most now take for granted is rapidly undermining prior advantages of discrete, secret, or covert intentions, actions, or operations … In the end, senior defense leaders should assume that all defense-related activity from minor tactical movements to major military operations would occur completely in the open from this point forward.

 

This information revolution, in turn, is leading to the “generalized disintegra-tion of traditional authority structures … fueled, and/or accelerated by hyperconnectivity and the obvious decay and potential failure of the post-Cold War status quo“.

Civil Unrest

Highlighting the threat posed by groups like ISIS and al-Qaeda, the study also points to “leaderless instability (for example, Arab Spring)” as a major driver of “a generalized erosion or dissolution of traditional authority structures”.

The document hints that such populist civil unrest is likely to become prominent in Western homelands, including inside the United States.

To date, US strategists have been fixated on this trend in the greater Middle East. However, the same forces at work there are similarly eroding the reach and authority of governments worldwide … it would be unwise not to recognize that they will mutate, metastasize, and manifest differently over time.

 

The US homeland is flagged-up as being especially vulnerable to the breakdown of “traditional authority structures”:

The United States and its population are increasingly exposed to substantial harm and an erosion of security from individuals and small groups of motivated actors, leveraging the conflu-ence of hyperconnectivity, fear, and increased vulner-ability to sow disorder and uncertainty. This intensely disorienting and dislocating form of resistance to author-ity arrives via physical, virtual, and psychological vio-lence and can create effects that appear substantially out of proportion to the origin and physical size or scale of the proximate hazard or threat.

 

There is little reflection, however, on the role of the US government itself in fomenting such endemic distrust, through its own policies.

Bad Facts

Among the most dangerous drivers of this risk of civil unrest and mass destabilization, the document asserts, are different categories of fact. Apart from the obvious “fact-free”, defined as information that undermines “objective truth”, the other categories include actual truths that, however, are damaging to America’s global reputation.

“Fact-inconvenient” information consists of the exposure of “details that, by implication, un-dermine legitimate authority and erode the relationships between governments and the governed” – facts, for instance, that reveal how government policy is corrupt, incompetent or undemocratic.

“Fact-perilous” information refers basically to national security leaks from whistleblowers such as Edward Snowden or Chelsea Manning, “exposing highly clas-sified, sensitive, or proprietary information that can be used to accelerate a real loss of tactical, operational, or strategic advantage”.

“Fact-toxic” information pertains to actual truths which, the document complains, are “exposed in the absence of context”, and therefore poison “important political discourse”. Such information is seen as being most potent in triggering outbreaks of civil unrest, because it:

… fatally weakens foundational security at an international, regional, national, or personal level. Indeed, fact-toxic exposures are those likeliest to trigger viral or contagious insecurity across or within borders and between or among peoples.

 

In short, the US Army War College study team believe that the spread of ‘facts’ challenging the legitimacy of American empire is a major driver of its decline: not the actual behavior of the empire which such facts point to.

Mass Surveillance and Psychological Warfare

The Pentagon study therefore comes up with two solutions to the information threat.

The first is to make better use of US mass surveillance capabilities, which are described as “the largest and most sophisticated and inte-grated intelligence complex in world”. The US can “generate insight faster and more reliably than its competitors can, if it chooses to do so”. Combined with its “military forward presence and power projection”, the US is in “an enviable position of strength”.

Supposedly, though, the problem is that the US does not make full use of this potential strength:

That strength, however, is only as durable as the United States’ willingness to see and employ it to its advantage. To the extent that the United States and its defense enterprise are seen to lead, others will follow …

 

The document also criticizes US strategies for focusing too much on trying to defend against foreign efforts to penetrate or disrupt US intelligence, at the expense of “the purposeful exploitation of the same architecture for the strategic manipulation of perceptions and its attendant influence on political and security outcomes”.

Pentagon officials need to simply accept, therefore, that:

… the US homeland, individual American citizens, and US public opinion and perceptions will increasingly become battlefields.

 

Military Supremacy

Having mourned the loss of US primacy, the Pentagon report sees expanding the US military as the only option.

The bipartisan consensus on military supremacism, however, is not enough. The document demands a military force so powerful it can preserve “maximum freedom of action”, and allow the US to “dictate or hold significant sway over outcomes in international disputes”.

One would be hard-pressed to find a clearer statement of imperial intent in any US Army document:

While as a rule, US leaders of both political parties have consistently committed to the maintenance of US military superiority over all potential state rivals, the post-primacy reality demands a wider and more flexible military force that can generate ad-vantage and options across the broadest possible range of military demands. To US political leadership, maintenance of military advantage preserves maximum freedom of action … Finally, it allows US decision-makers the opportunity to dictate or hold significant sway over outcomes in international disputes in the shadow of significant US military capability and the implied promise of unac-ceptable consequences in the event that capability is unleashed.

 

Once again, military power is essentially depicted as a tool for the US to force, threaten and cajole other countries into submission to US demands.

The very concept of “defence” is thus re-framed as the capacity to use overwhelming military might to get one’s way – anything which undermines this capacity ends up automatically appearing as a threat that deserves to be attacked.

Empire of Capital

Accordingly, a core goal of this military expansionism is ensuring that the United States and its international partners have “unimpeded access to air, sea, space, cyberspace, and the electromagnetic spectrum in order to underwrite their security and prosperity”.

This also means that the US must retain the ability to physically access any region it wants, whenever it wants:

Failure of or limitations on the ability of the United States to enter and operate within key regions of the world, for example, undermine both US and partner security.

 

The US thus must try to minimize any “purposeful, malevolent, or incidental interruption of access to the commons, as well as critical regions, resources, and markets”.

Without ever referring directly to “capitalism”, the document eliminates any ambiguity about how the Pentagon sees this new era of “Persistent Conflict 2.0”:

… some are fighting globalization and globalization is also actively fighting back. Combined, all of these forces are rending at the fabric of security and stable governance that all states aspire to and rely on for survival.

 

This is a war, then, between US-led capitalist globalization, and anyone who resists it.

And to win it, the document puts forward a combination of strategies: consolidating the US intelligence complex and using it more ruthlessly; intensifying mass surveillance and propaganda to manipulate popular opinion; expanding US military clout to ensure access to “strategic regions, markets, and resources”.

Even so, the overarching goal is somewhat more modest – to prevent the US-led order from collapsing further:

… while the favorable US-dominated status quo is under significant internal and external pressure, adapted American power can help to forestall or even reverse outright failure in the most critical regions.

 

The hope is that the US will be able to fashion “a remodeled but nonetheless still favorable post-primacy international order”.

Narcissism

Like all US Army War College publications, the document states that it does not necessarily represent the official position of the US Army or DoD. While this caveat means that its findings cannot be taken to formally represent the US government, the document does also admit that it represents “the collective wisdom” of the numerous officials consulted.

In that sense, the document is a uniquely insightful window into the mind of the Pentagon, and how embarrassingly limited its cognitive scope really is.

And this in turn reveals not only why the Pentagon’s approach is bound to make things worse, but also what an alternative more productive approach might look like.

Launched in June 2016 and completed in April 2017, the US Army War College research project involved extensive consultation with officials across the Pentagon, including representatives of the joint and service staffs, the Office of the Secretary of Defense (“OSD”), US Central Command (“USCENTCOM”), US Pacific Command (“USPACOM”), US Northern Command (“USNORTHCOM”), US Special Operations Command (“USSOCOM”); US Forces, Japan (“USFJ”), the Defense Intelligence Agency (“DIA”), the National Intelligence Council, US Strategic Command (“USSTRATCOM”), and US Army Pacific (“US-ARPAC”) and Pacific Fleet (“PACFLT”).

The study team also consulted with a handful of American think tanks of a somewhat neoconservative persuasion: the American Enterprise Institute, the Center for Strategic and International Studies (“CSIS”), the RAND Corporation, and the Institute for the Study of War.

No wonder, then, that its findings are so myopic.

But what else would you expect from a research process so deeply narcissistic, that it involves little more than talking to yourself? Is it any wonder that the solutions offered represent an echo chamber calling to amplify precisely the same policies that have contributed to the destabilization of US power?

The research methodology manages to systematically ignore the most critical evidence surrounding the drivers undermining US primacy: such as:

* the biophysical processes of climate, energy, and food disruption {2} behind the Arab Spring;

* the confluence of military violence, fossil fuel interests, and geopolitical alliances {3} behind the rise of ISIS;

* or the fundamental grievances that have driven a breakdown in trust with governments since the 2008 financial collapse and the ensuing ongoing period of neoliberal economic failure {4}.

A large body of data demonstrates that the escalating risks to US power have come not from outside US power, but from the very manner in which US power has operated. The breakdown of the US-led international order, from this perspective, is happening as a direct consequence of deep-seated flaws in the structure, values, and vision of that order.

In this context, the study’s conclusions are less a reflection of the actual state of the world, than of the way the Pentagon sees itself and the world.

Indeed, most telling of all is the document’s utter inability to recognize the role of the Pentagon itself in systematically pursuing a wide range of policies over the last several decades which have contributed directly to the very instability it now wants to defend against.

The Pentagon frames itself as existing outside the Hobbesian turmoil that it conveniently projects onto the world – the result is a monumental and convenient rejection of any sense of responsibility for what happens in the world.

In this sense, the document is a powerful illustration of the self-limiting failure of conventional risk-assessment approaches. What is needed instead is a systems-oriented approach based on evaluating not just the Pentagon’s internal beliefs about the drivers of risk – but engaging with independent scientific evidence about those drivers to test the extent to which those beliefs withstand rigorous scrutiny.

Such an approach could open the door to a very different scenario to the one recommended by this document – one based on a willingness to actually look in the mirror. And that in turn might open up the opportunity for Pentagon officials to imagine alternative policies with a real chance of actually working, rather than reinforcing the same stale failed strategies of the past.

It is no surprise then that even the Pentagon’s apparent conviction in the inexorable decline of US power could well be overblown.

According to Dr Sean Starrs of MIT’s Center for International Studies, a true picture of US power cannot be determined solely from national accounts. We have to look at the accounts of transnational corporations. Starrs shows {5} that American transnational corporations are vastly more powerful than their competitors. His data suggests that American economic supremacism remains at an all-time high, and still unchallenged even by an economic powerhouse like China.

This does not necessarily discredit the Pentagon’s emerging recognition that US imperial power faces a new era of decline and unprecedented volatility.

But it does suggest that the Pentagon’s sense of US global pre-eminence is very much bound up with its capacity to project American capitalism globally.

As geopolitical rivals agitate against US economic reach, and as new movements emerge hoping to undermine American “unimpeded access” to global resources and markets, what’s clear is that DoD officials see anything which competes with or undermines American capitalism as a clear and present danger.

But nothing put forward in this document will actually contribute to slowing the decline of US power.

On the contrary, the Pentagon study’s recommendations call for an intensification of the very imperial policies that futurist Professor Johan Galtung, who accurately forecasted the demise of the USSR, predicts will accelerate {6} the “collapse of the US empire” by around 2020.

As we move deeper into the “post-primacy” era, the more meaningful question for people, governments, civil society and industry is this: as the empire falls, lashing out in its death throes, what comes after?

Links:

{1} https://ssi.armywarcollege.edu/pubs/display.cfm?pubID=1358

{2} http://www.springer.com/gp/book/9783319478142

{3} http://www.middleeasteye.net/columns/no-piers-morgan-how-destroy-islamic-state-1630388804

{4} http://observer.com/2017/01/brace-for-the-oil-food-and-financial-crash-of-2018/

{5} https://myweb.rollins.edu/tlairson/ipe/uspowerglobalized.pdf

{6} https://motherboard.vice.com/en_us/article/d7ykxx/us-power-will-decline-under-trump-says-futurist-who-predicted-soviet-collapse

_____

This INSURGE story was enabled by crowdfunding: Please support independent journalism for the global commons for as little as a $1/month via http://www.patreon.com/nafeez

Dr Nafeez Ahmed is an award-winning sixteen-year investigative journalist and creator of INSURGE intelligence, a crowdfunded public interest investigative journalism project. He is “System Shift” columnist at VICE’s Motherboard. His work has been published in The Guardian, VICE, Independent on Sunday, The Independent, The Scotsman, Sydney Morning Herald, The Age, Foreign Policy, The Atlantic, Quartz, New York Observer, The New Statesman, Prospect, Le Monde diplomatique, Raw Story, New Internationalist, Huffington Post UK, Al-Arabiya English, AlterNet, The Ecologist, and Asia Times, among other places.

Nafeez has twice been featured in the Evening Standard’s Top 1,000 list of most influential people in London.

His latest book, Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence (2017) is a scientific study of how climate, energy, food and economic crises are driving state failures around the world.

This article was amended on July 19 2017 to change the reference to whistleblower “Bradley Manning” to “Chelsea Manning”.

https://medium.com/insurge-intelligence/pentagon-study-declares-american-empire-is-collapsing-746754cdaebf

Categories: Uncategorized

The US Deep State:

Sabotaging Putin-Trump Ceasefire Agreement in Syria

by Federico Pieraccini

Strategic Culture Foundation (July 16 2017)

The meeting between Trump and Putin at the G20 in Hamburg injects new hope into the complicated relationship between the United States and Russia. Only time can confirm whether there is any basis for this hope.

The most eagerly anticipated meeting of the year, that between Putin and Trump, lasted far more than the scheduled twenty minutes, extending past two hours. This is not too much of a surprise given the points of friction that needed to be discussed, the many outstanding issues in international relations, and the fact that this was the first official meeting between the two world leaders. The results achieved exceeded initial ambitions, and the personal chemistry between Putin and Trump seems to have been sufficient to reach an important agreement in Syria as well as to conduct discussions surrounding cyber security. Trump even asked Putin about the alleged Russian hacking in the US presidential election as a way of appeasing detractors back home. The statements of both presidents following their meeting underlined their positive intentions. Putin called Trump a very different person from the one portrayed in the media, mentioning that he was reflective and very attentive to details. Trump, for his part, praised the meeting with Putin, stating the importance of dialogue between nuclear-armed superpowers.

The most important agreement concerned a ceasefire in southern Syria along the border with Israel and Jordan. This is a very active area of fighting, and so the ceasefire obviates the possibility of dangerous confrontations between the United States and Russia, as well as between Syria and Israel, which could escalate out of control as seen when the US Air Force shot down a Syrian Su-22 jet as well an Iranian drone. Israel, from its position in the occupied Golan Heights, has repeatedly struck the Syrian Arab Army (“SAA”), in a desperate effort to halt its gains against al Qaeda and Daesh terrorists.

In their first meeting, within less than two hours, Putin and Trump came to an agreement on potentially the most volatile situation in the region, saving hundreds of civilian lives in the process. The agreement on Syria now has to run the gauntlet of the deep state and all the other interests arrayed against Trump. Just four days following a similar agreement reached in 2016 between Obama and Putin, everything was upended by the US Air Force bombing and killing nearly a hundred soldiers of the Syrian Arab Army in Deir ez-Zor, shredding the ceasefire agreement that had just been reached.

Trump is dealing with the same occult forces that sabotaged Obama’s cease-fire agreement. It is impossible to know how much strategic support the US deep state has for the ceasefire decision. Ever since the SAA reached the Iraqi border north of al-Tanf, the space available for the US and her allies to maneuver has been dramatically diminished. With al-Tanf isolated, Washington’s ceasefire does not change or shift the already heavily altered balance of power in that area of Syria. For all these reasons, the ceasefire does not appear to be a concession by either party but merely a commonsense move to lessen the possibility of a direct confrontation between superpowers.

The military apparatus seems to be focused on the situation in northern Syria, with Raqqa and Syrian Democratic Forces (“SDF”) being the central pivot for the US to reach Deir ez-Zor and its associated oil fields. The US State Department, as well as the US military wing involved in Syria, hope to balkanize Syria, dismembering it in different regions and putting Raqqa under the control of a puppet authority in Damascus. However, such American hopes of imposing a Brennan-style governorate as in Iraq is forlorn, as Damascus is the only authority recognized on Syrian territory, and once Raqqa is filled with returning Syrian citizens, such American plans will fall apart. Moreover, the Baghdad authorities have already made clear on two occasions how reluctant they are to support Americans in their military operations. In the case of Mosul, they reiterated that the US deployment and involvement be minimal, while the Iraqi authorities have already announced that they want to place under their full control their border with Syria, in effect hobbling Washington’s plan to leave chaos and instability along the borders of the two countries. The US deep state finds in chaos the ideal way to channel conflict and foment instability. One of the most important objectives of the Syrian and Iraqi armies is therefore to isolate the borders and control the flow of human traffic from one country to the other, nixing in the process what has hitherto been a strategic advantage for Daesh and other terrorist organizations, where they have been free to cross borders with weapons and whatever else they please.

Trump and all the actors involved in this negotiation are finally able to make an agreement between Moscow and Washington stand. Unlike with previous agreements, the US in Syria is now in a worse situation than it was twelve months ago, having failed to achieve many of its strategic objectives. Cooperation with Turkey in northern Syria was wrecked following the liberation of Aleppo and the clear US support for the Kurds (“SDF”). Similarly, areas of deconfliction in Syria agreed to in Astana (between Iran, Russia, and Turkey) have stopped the gains of terrorists in many active areas of the conflict, leading to zero chances of occupying more towns. Such efforts have been important bargaining chips during the various peace negotiations.

The crux of this strategy seems to be a focus on the only possible solution that meets the interests of the deep state’s military wing, related to the original plan to dismantle Syria once the removal of Assad failed. From a certain point of view, it may make sense to focus on the situation in the north of the country in Raqqa, the only area where the US still has some influence. This may be the contorted vision drawn up by contending factions of American deep state. Certainly, from the point of view of Moscow, the strategy in Syria is a mix of diplomatic solutions, seeking to reach multiple ceasefire agreements with major players like Turkey and the United States, but never setting aside the war effort carried out by Russia, Iran, and Syria.

The agreement between Putin and Trump will firstly benefit Syrian civilians as well as widening the opportunity for the SAA to liberate more towns and villages from the grip of terrorism. It is a long-awaited agreement and solution that is now met by the predominant wing of the US deep state. In the event of a failure of the agreement, Trump will be obligated to point out to the world the subversion of the Washington establishment and its deep state, which works to frustrate his agenda and replace it with its own terrible policies.

Moscow’s confidence in deriving concrete benefits from this deal increases hour by hour, thanks to the truce continuing to hold. From the Russian point of view, any military sabotage would once again lay American intentions bare, regardless of Trump’s subsequent moves. However, one thing that is certain is that in the case of sabotage, Trump will be faced with having to make a definitive choice. Either he will surrender to the deep state, returning the situation back to a state of hyper-conflict with a nuclear superpower; or he will confront and overcome the deep state, thereby enabling him to implement his electoral promises.

_____

Republishing is welcomed with reference to Strategic Culture Foundation on-line journal http://www.strategic-culture.org.

https://www.strategic-culture.org/news/2017/07/16/us-deep-state-sabotaging-putin-trump-ceasefire-agreement-in-syria.html

Categories: Uncategorized

The Big Military Spending Boost …

… Threatens US Economy and Security

by Ron Paul

The Ron Paul Institute for Peace & Prosperity (July 17 2017)

Zero Hedge (July 17 2017)

On Friday the House overwhelmingly approved a massive increase in military spending, passing a $696 billion National Defense Authorization bill for 2018. President Trump’s request already included a huge fifty or so billion dollar spending increase, but the Republican-led House found even that to be far too small. They added another $30 billion to the bill for good measure. Even President Trump, in his official statement, expressed some concern over spending in the House-passed bill.

According to the already weak limitations on military spending increases in the 2011 “sequestration” law, the base military budget for 2018 would be $72 billion more than allowed.

Don’t worry, they’ll find a way to get around that!

The big explosion in military spending comes as the US is planning to dramatically increase its military actions overseas. The president is expected to send thousands more troops back to Afghanistan, the longest war in US history. After nearly sixteen years, the Taliban controls more territory than at any time since the initial US invasion and ISIS is seeping into the cracks created by constant US military action in the country.

The Pentagon and Defense Secretary James Mattis are already telling us that even when ISIS is finally defeated in Iraq, the US military doesn’t dare end its occupation of the country again. Look for a very expensive array of permanent US military bases throughout the country. So much for our 2003 invasion creating a stable democracy, as the neocons promised.

In Syria, the United States has currently established at least eight military bases even though it has no permission to do so from the Syrian government nor does it have a UN resolution authorizing the US military presence there. Pentagon officials have made it clear they will continue to occupy Syrian territory even after ISIS is defeated, to “stabilize” the region.

And let’s not forget that Washington is planning to send the US military back to Libya, another US intervention we were promised would be stabilizing but that turned out to be a disaster.

Also, the drone wars continue in Somalia and elsewhere, as does the US participation in Saudi Arabia’s horrific two-year war on impoverished Yemen.

President Trump often makes encouraging statements suggesting that he shares some of our non-interventionist views. For example, while Congress was shoveling billions into an already bloated military budget last week, President Trump said that he did not want to spend trillions of more dollars in the Middle East where we get “nothing” for our efforts. He’d rather fix roads here in the US, he said. The only reason we are there, he said, was to “get rid of terrorists”, after which we can focus on our problems at home.

Unfortunately, President Trump seems to be incapable of understanding that it is US intervention and occupation of foreign countries that creates instability and feeds terrorism.

Continuing to do the same thing for more than seventeen years … more US bombs to “stabilize” the Middle East … and expecting different results is hardly a sensible foreign policy. It is insanity. Until he realizes that our military empire is the source of rather than the solution to our problems, we will continue to wildly spend on our military empire until the dollar collapses and we are brought to our knees. Then what?

http://www.ronpaulinstitute.org/archives/featured-articles/2017/july/17/big-military-spending-boost-threatens-our-economy-and-security/

http://www.zerohedge.com/news/2017-07-17/ron-paul-warns-big-military-spending-boost-threatens-our-economy-and-security

Categories: Uncategorized

US Military Establishment Study …

… Admits the American Empire is “Collapsing”

by Darius Shatahmasebi

TheAntiMedia.org (July 19 2017)

Zero Hedge (July 19 2017)

A new study {1} conducted by members of the US military establishment has concluded that the US-led international global order established after World War Two is “fraying” and may even be “collapsing” as the US continues to lose its position of “primacy” in world affairs.

“In brief, the sta­tus quo that was hatched and nurtured by US strategists after World War Two and has for decades been the principal ‘beat’ for the Department of Defence (“DoD”) is not merely fraying but may, in fact, be collapsing”, the report states.

The report, published in June by the US Army War College’s Strategic Studies Institute, evaluated the DoD’s approach to risk assessment at all levels of Pentagon policy planning. The study was supported {2} and sponsored by the US Army’s Strategic Plans and Policy Directorate; the Joint Staff, J5 (Strategy and Policy Branch); the Office of the Deputy Secretary of Defense for Strategy and Force Develop­ment; and the Army Study Program Management Office.

Imperial Hubris

As explained {3} by Nathan Freier, the project director and principal author of the report, the US and its defense establishment “are stumbling through a period of hyper-competition”. From Freier’s point of view, the current era is marred with furious battles for positional advantage at a number of levels, whether national, transnational, or extra-national. Freier explains that America’s failure to cope is the result of “hubris”, which is reminiscent of Imperial Hubris (2007), a book by Michael Scheuer, the former head of the CIA’s bin Laden unit. Imperial Hubris also warned the US about the very controversial and hubristic reasons it was losing the war on terror (hubris means “exaggerated pride or self-confidence”, according to Merriam-Webster) {4}.

Technically, the report does not officially represent the Pentagon, though it does represent the “collective wisdom” of those consulted … including a number of Pentagon officials and prominent think tanks such as the American Enterprise Institute, the Center for Strategic and International Studies (“CSIS”), the RAND Corporation, and the Institute for the Study of War.

Nevertheless, the report involved consultation with key agencies across the DoD and the Armed Forces and encouraged the US government to invest more heavily in surveillance, better propaganda through “strategic manipulation” of public opinion, and a “wider and more flexible” US military. The report states:

While as a rule, US leaders of both political parties have consistently committed to the maintenance of US military superiority over all potential state rivals, the post-primacy reality demands a wider and more flexible military force that can generate ad­vantage and options across the broadest possible range of military demands. To US political leadership, maintenance of military advantage preserves maximum freedom of action … Finally, it allows US decision-makers the opportunity to dictate or hold significant sway over outcomes in international disputes in the shadow of significant US military capability and the implied promise of unac­ceptable consequences in the event that capability is unleashed.

 

The year-long study concluded that the DoD should discard its outdated risk conventions and change how it describes, identifies, assesses, and communicates strategic-level and risk-based choices. As investigative journalist Nafeez Ahmed observed {5}, these are the very strategies that have led to the US’ declining power in the first place. Further enacting these failed strategies will only exacerbate the problem and demonstrates America’s refusal to go down without a fight.

The Blame Lies with Resistant States

According to Freier and his team, the dangers currently challenging the US don’t just come from countries like Russia and China (and even North Korea and Iran), but also from the increasing risk of “Arab Spring”-style events that could potentially erupt all over the world. One might wonder, then, why the US decided to support a number of these events, even to the great benefit of known jihadist movements {6} that already existed within them.

Ahmed also astutely points out that the report doesn’t actually substantiate its claims that countries like Russia are a genuine threat to America’s national security, aside from the fact that these countries seek to pursue their own core interests … as most countries should be free to do (within reason).

According to the report, Iran and North Korea are

… neither the products of, nor are they satisfied with, the contemporary order … At a minimum, they intend to destroy the reach of the US-led order into what they perceive to be their legitimate sphere of influence. They are also resolved to replace that order locally with a new rule set dictated by them.

 

It is notable that the report does not list Iran and North Korea as nuclear threats – as traditional neoconservative propaganda {7} often asserts – but simply as perceived threats to the American-led world order.

The report also found that the international framework has been restructured in ways that are “inhospitable” and often “hostile” to US leadership. For example, “proliferation, diversification, and atomization of effective counter-US resistance”, as well as “resurgent but transformed great power competition” are seen to be at the heart of this new international restructuring. According to the report, the US is not prepared for these circumstances, and the report seeks to provide the US with guidance to deal with these emerging scenarios.

In all seriousness, hostility to the US military did not develop in a vacuum … it is quite clearly the sheer arrogance of America’s leadership and its incessant meddling in foreign affairs that have created a number of adversaries who are no longer willing {8} to bow to American interests.

Losing the Propaganda War

Renegade Inc’s Nafeez Ahmed also notes {9} that the “hyperconnectivity and weaponization of information, disinformation, and dis­affection”, the study team observes, is leading to the uncontrolled spread of information. The upshot is that the Pentagon faces the “inevitable elimination of secrecy and operational security”.

Wide uncontrolled access to technology that most now take for granted is rapidly undermining prior advantages of discrete, secret, or covert intentions, actions, or operations … In the end, senior defense leaders should assume that all defense-related activity from minor tactical movements to major military operations would occur completely in the open from this point forward.

 

This information revolution, in turn, is leading to the “generalized disintegra­tion of traditional authority structures … fueled, and/or accelerated by hyperconnectivity and the obvious decay and potential failure of the post-Cold War status quo“.

Bad Facts

Among the most dangerous drivers of the risk of civil unrest and mass destabilization, the document asserts, are different categories of fact. Apart from the obvious “fact-free”, defined as information that undermines “objective truth”, the other categories include actual truths that, however, are damaging to America’s global reputation.

“Fact-inconvenient” information consists of the exposure of “details that, by implication, un­dermine legitimate authority and erode the relationships between governments and the governed – facts, for instance, that reveal how government policy is corrupt, incompetent or undemocratic.

“Fact-perilous” information refers basically to national security leaks from whistleblowers such as Edward Snowden or Bradley Manning, “exposing highly clas­sified, sensitive, or proprietary information that can be used to accelerate a real loss of tactical, operational, or strategic advantage”.

“Fact-toxic” information pertains to actual truths which, the document complains, are “exposed in the absence of context”, and therefore poison “important political discourse”. Such information is seen as being most potent in triggering outbreaks of civil unrest because it:

… fatally weakens foundational security at an international, regional, national, or personal level. Indeed, fact-toxic exposures are those likeliest to trigger viral or contagious insecurity across or within borders and between or among peoples.

 

In short, the US Army War College study team believe that the spread of “facts” challenging the legitimacy of American empire is a major driver of its decline: not the actual behavior of the empire which such facts point to.

The “Wake Up Call”

Though the report throws the word “adapt” around often, the US is clearly not willing to adapt at all if the only way it can deal with its issues is to strengthen the very sources of said issues in the first place. If the only tool the US has is a hammer, every problem has to look like a nail. The more problems the US faces, the more nails it sees in need of quashing.

While some may laud a report in which advisors to the US have acknowledged America’s status as a dying power, the truth, as demonstrated in this recent analysis, is that the US will not give up its place in global affairs without a fight.

As the report states, the reality of this looming collapse should not be seen as defeatism, but rather, should be a “wake up call”.

Take the Syrian conflict, for example. The more places Assad’s military liberates, the more refugees {10} are returning home and the more concerts {11} are being held. Syria, Russia, and Iran have achieved these mounting successes even in the face of direct American intervention … and yet the US still refuses to leave the country. Irrespective of crimes committed {12} by the pro-Assad axis, if the ultimate objective has been to reduce the suffering in Syria and end the war, the US should admit defeat and move on – especially once ISIS’ caliphate collapses entirely. But the US won’t … and is reportedly considering greater involvement {13} in the war-torn country.

The US knows it is on the brink of collapse but refuses to go down peacefully. From the point of view of the powers-that-be, as long as every nail of resistance can be broken, the American hammer will continue to lead the world in international affairs. But even as this report indicates, it is precisely because of America’s hubris that it has found itself in this position in the first place. In this context, the report is somewhat contradictory and only further encourages the United States to provoke further hostility from aggrieved players on the world stage.

Carrying on these practices and exacerbating them is totally nonsensical, but doing so continues to be the go-to mantra of the US war machine.

Links:

{1} https://ssi.armywarcollege.edu/pubs/display.cfm?pubID=1358

{2} https://ssi.armywarcollege.edu/files/1358-summary.pdf

{3} http://www.defenseone.com/ideas/2017/06/how-adapt-military-risk-era-hypercompetition/139099/

{4} https://www.merriam-webster.com/dictionary/hubris

{5} https://medium.com/insurge-intelligence/pentagon-study-declares-american-empire-is-collapsing-746754cdaebf

{6} http://theantimedia.org/hillary-clinton-ally-al-qaeda/

{7} http://www.telegraph.co.uk/news/2017/04/14/rogue-states-like-iran-face-tougher-action-us-says-nuclear-attack/

{8} http://theantimedia.org/filipino-president-dares-cia/

{9} https://renegadeinc.com/pentagon-study-declares-american-empire-is-collapsing/

{10} http://www.bbc.com/news/world-middle-east-40460126

{11} http://www.reuters.com/video/2017/07/12/cathedral-in-war-torn-aleppo-reopens-wit?videoId=372081841

{12} https://www.hrw.org/news/2016/12/01/russia/syria-war-crimes-month-bombing-aleppo

{13} http://time.com/4732401/hr-mcmaster-donald-trump-syria/

http://theantimedia.org/military-american-empire-collapsing/

http://www.zerohedge.com/news/2017-07-19/us-military-establishment-study-admits-american-empire-collapsing

Categories: Uncategorized

Reading the News on America …

… Should Scare Everyone, Every Day … But it Doesn’t

by Raul Ilargi Meijer

The Automatic Earth blog (July 18 2017)

Zero Hedge (July 18 2017)

Reading the news on America should scare everyone and every day, but it doesn’t. We’re immune, largely. Take this morning. The US Republican party can’t get its healthcare plan through the Senate. And they apparently don’t want to be seen working with the Democrats on a plan either. Or is that the other way around? You’d think if these people realize they were elected to represent the interests of their voters, they could get together and hammer out a single payer plan that is cheaper than anything they’ve managed so far. But they’re all in the pockets of so many sponsors and lobbyists they can’t really move anymore, or risk growing a conscience. Or a pair.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. The reason we’re seeing it happen now is that although the narratives and memes emanating from both politics and the press point to economic recovery and a future full of hope and technological solutions to all our problems, people are not buying the memes anymore. And the people are right.

Tyler Durden ran a Credit Suisse graph overnight that should give everyone a heart attack, or something in that order. It shows that nobody’s buying stocks anymore, other than the companies who issue them. They use ultra-cheap leveraged loans to make it look like they’re doing fine. Instead of using the money/credit to invest in, well, anything, really. You can be a successful US/European company these days just by purchasing your own shares. How long for, you ask?

There Has Been Just One Buyer of Stocks Since the Financial Crisis {1}

As CS’ strategist Andrew Garthwaite writes, “one of the major features of the US equity market since the low in 2009 is that the US corporate sector has bought eighteen percent of market cap, while institutions have sold seven percent of market cap”. What this means is that since the financial crisis, there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history.

Why this rush by companies to buy back their own stock, and in the process artificially boost their Earning per Share? There is one very simple reason: as Reuters explained some time ago, “Stock buybacks enrich the bosses even when business sags”. And since bond investors are rushing over themselves to fund these buyback plans with “yielding” paper at a time when central banks have eliminated risk, who is to fault them.

More concerning than the unprecedented coordinated buybacks, however, is not only the relentless selling by institutions, but the persistent unwillingness by “households” to put any new money into the market which suggests that the financial crisis has left an entire generation of investors scarred with “crash” PTSD, and no matter what the market does, they will simply not put any further capital at risk.

In other words, the system doesn’t only keep zombies alive, making it impossible for anyone to see who’s healthy or not, no, the system itself has become a zombie. The article mentions Blackrock’s Larry Fink talking about “cash on the sidelines”, but please … Central banks have injected another $2 trillion into the zombie system this year alone, and that gives you that graph. Basically, no-one supposedly on the sideline has a penny left.

So that’s your stock markets. Let’s call it bubble number one. Another effect of ultra low rates has been the surge in housing bubbles across the western world and into China. But not everything looks as rosy as the voices claim who wish to insist there is no bubble in [inject favorite location] because of [inject rich Chinese]. You’d better get lots of those Chinese swimming in monopoly money over to your location because your own younger people will not be buying. Says none other than the New York Federal Reserve.

Student Debt Is a Major Reason Millennials Aren’t Buying Homes {2}

College tuition hikes and the resulting increase in student debt burdens in recent years have caused a significant drop in home ownership among young Americans, according to new research by the Federal Reserve Bank of New York. The study is the first to quantify the impact of the recent and significant rise in college-related borrowing – student debt has doubled since 2009 to more than $1.4 trillion – on the decline in home ownership among Americans ages 28 to thirty. The news has negative implications for local economies where debt loads have swelled and workers’ paychecks aren’t big enough to counter the impact. Home buying typically leads to additional spending – on furniture and gardening equipment, and repairs – so the drop is likely affecting the economy in other ways.

As much as 35% of the decline in young American home ownership from 2007 to 2015 is due to higher student debt loads, the researchers estimate. The study looked at all 28- to thirty-year-olds, regardless of whether they pursued higher education, suggesting that the fall in home ownership among college-goers is likely even greater (close to half of young Americans never attend college). Had tuition stayed at 2001 levels, the New York Fed paper suggests, about 360,000 additional young Americans would’ve owned a home in 2015, bringing the total to roughly 2.9 million 28- to thirty-year-old home owners. The estimate doesn’t include younger or older millennials, who presumably have also been affected by rising tuition and greater student debt levels.

Young Americans – and Brits, Dutch et al – get out of school with much higher debt levels than previous generations, but land in jobs that pay them much less. Ergo, at current price levels, they can’t afford anything other than perhaps a tiny house. Which is fine in and of itself, but who’s going to buy the existent McMansions? Nobody but the Chinese. How many of them would you like to move in? And that’s not all. Another fine report from Lance Roberts, with more excellent graphs, puts the finger where it hurts, and then twists it around in the wound a bit more:

People Buy Payments – Not Houses – and Why Rates Can’t Rise {3}

Over the last thirty years, a big driver of home prices has been the unabated decline of interest rates. When declining interest rates were combined with lax lending standards – home prices soared off the chart. No money down, ultra low-interest rates and easy qualification gave individuals the ability to buy much more home for their money. The problem, however, is shown below. There is a LIMIT to how much the monthly payment can consume of a families disposable personal income.

In 1968 the average American family maintained a mortgage payment, as a percent of real disposable personal income (“DPI”), of about seven percent. Back then, in order to buy a home, you were required to have skin in the game with a twenty percent down payment. Today, assuming that an individual puts down twenty percent for a house, their mortgage payment would consume more than 23% of real DPI. In reality, since many of the mortgages done over the last decade required little or no money down, that number is actually substantially higher. You get the point. With real disposable incomes stagnant, a rise in interest rates and inflation makes that 23% of the budget much harder to sustain.

In 1968 Americans paid seven percent of their disposable income for a house. Today that’s 23%. That’s as scary as that first graph above on the stock markets. It’s hard to say where the eventual peak will be, but it should be clear that it can’t be too far off. And Yellen and Draghi and Carney are talking about raising those rates.

What Lance is warning for, as should be obvious, is that if rates would go up at this particular point in time, even a lot fewer people could afford a home. If you ask me, that would not be so bad, since they grossly overpay right now, they pay full-throttle bubble prices, but the effect could be monstrous. Because not only would a lot of people be left with a lot of mortgage debt, and we’d go through the whole jingle mail circus again, yada yada, but the economy’s main source of “money” would come under great pressure.

Don’t let’s forget that by far most of our “money” is created when private banks issue loans to their customers with nothing but thin air and keyboard strokes. Mortgages are the largest of these loans. Sink the housing industry and what do you think will happen to the money supply? And since inflation is money velocity times money supply, what would become of central banks’ inflation targets? May I make a bold suggestion? Get someone a lot smarter than Janet Yellen into the Federal Reserve, on the double. Or, alternatively, audit and close the whole house of shame.

We’ve had bubbles one, two and three: Stocks, student debt, and housing. Which, it turns out, interact, and a lot.

An interaction that leads seamlessly to bubble four: subprime car loans. Mind you, don’t stare too much at the size of the bubbles, of course, stocks and housing are much bigger issues but focus instead on how they work together. As for the subprime car loans, and the subprime used car loans, it’s the similarity to the subprime housing that stands out. Like we learned nothing. Like the US has no regulators at all.

Fears Mount Over a New US Subprime Boom – Cars {4}

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the US housing market circa 2007. It’s the US auto industry circa 2017. A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis.

But since the Great Recession, business has exploded. In 2009, $2.5 billion of new subprime auto bonds were sold. In 2016, $26 billion were, topping average pre-crisis levels, according to Wells Fargo. Few things capture this phenomenon like the partnership between Fiat Chrysler and Banco Santander […] Santander recently vetted incomes on fewer than one out of every ten loans packaged into $1 billion of bonds, according to Moody’s.

If it’s alright with you, we’ll deal with the other main bubble, number five if you will, another time. Yeah, that would be bonds. Sovereign, corporate, junk, you name it.

The four bubbles we’ve seen so far are more than enough to create a huge crisis in America. Don’t want to scare you too much all at once. Just you read the news again tomorrow. There’ll be more. And the US Senate is not going to do a thing about it. They’re too busy not getting enough votes for other things.

Links:

{1} http://www.zerohedge.com/news/2017-07-17/there-has-been-just-one-buyer-stocks-financial-crisis

{2} https://www.bloomberg.com/news/articles/2017-07-17/student-debt-is-hurting-millennial-homeownership

{3} https://realinvestmentadvice.com/people-buy-payments-why-rates-cant-rise/

{4} https://www.bloomberg.com/news/articles/2017-07-17/new-u-s-subprime-boom-same-old-sins-auto-defaults-are-soaring

https://www.theautomaticearth.com/2017/07/i-read-the-news-today-oh-boy/

http://www.zerohedge.com/news/2017-07-18/reading-news-america-should-scare-everyone-every-day-it-doesnt

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