Senator Mike Gravel https://mikegravel.com Mon, 02 Aug 2021 14:16:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 What Mike Gravel Meant https://mikegravel.com/what-mike-gravel-meant/ Mon, 28 Jun 2021 23:57:35 +0000 https://mikegravel.com/?p=1766 What I learned from Mike Gravel are lessons ignored, even mocked by the establishment, writes Joe Lauria.

I first met Sen. Mike Gravel in the lobby of the Waldorf Astoria hotel in New York in early 2006 after a mutual friend told me Gravel was contemplating running for president.

Our Waldorf breakfast lasted four hours. I was surprised that such an American politician existed. He seemed to lack the expected self-importance. More incredibly, I agreed with him on every point of public policy–foreign and domestic. Having been a reporter for decades–I was a correspondent for The Boston Globe at the time–I’d surpassed the average citizen’s cynicism about people in government.

But here was a former United States senator questioning the most fundamental and seemingly unshakeable myths that underpin a brutal status-quo. The central myth, affecting foreign and domestic policy, is that U.S. behavior abroad is driven by an altruistic need to spread democracy and that its vast military machine is defensive in nature. If Americans would be convinced that the opposite is true, the edifice of lies that supports an imperial house of cards could crumble.

Here was someone from the heart of the system vowing to undermine it by declaring–eventually on a debate stage with Hillary Clinton, Barack Obama and Joe Biden–that Americans’ motives abroad are avaricious and aggressive, its military offensive, and its consequence death and destruction, not democracy.

It is suicidal for a politician to tell American voters that America’s motives are impure, that they are not the “good guys” in the world, and that money that should be spent on them at home is wasted destroying innocent lives abroad.

But that is what Gravel was prepared to do. He told me of his plan to run for president. He knew he had no chance, but was convinced by others to use the run to promote direct democracy and to tear down the deceptions.

I agreed to cover his campaign to highlight the crucial issues that he was raising that the mainstream would denigrate or ignore.  I was at the National Press Club in Washington when he declared in April 2006, a full two and a half years before the election, and broke the story for the Drudge Report. In his announcement speech Gravel made his pitch for direct democracy. He said:

“Our country needs a renewal–renewal not just of particular policies, or of particular people, but of democracy itself…. Representative government is mired in a culture of lies and corruption. The corrupting influence of money has created a class of professional politicians raising huge sums to maintain their power. These politicians then legislate later in the interests of the corporations and interest groups that put up the money.

Are today’s politicians any more corrupt than those of earlier days? I don’t think so. Most men and women enter public service and begin with an attitude and a concern for the public good. It’s the power they hold that corrupts them. Throwing the rascals out–Democrats or Republicans, or for that matter any party may make us feel a little better, may give us some therapy, but reshuffling the deck won’t make any difference….

Equipping Americans with deliberative lawmaking tools will unleash civic creativity beyond imagination. A partnership of citizen-lawmakers makers with their elected legislators will in fact make representative government … more responsive to the needs of people.”

When an AP reporter asked him what was to stop the people from bankrupting the nation in their self-interest, Gravel told him that in the 100-year record of state initiatives that had never happened and the reason why was because it was the people’s money. Mike firmly believed that if Americans could vote on national policy the troops at the time would come home from Iraq and they’d only vote to send their sons and daughters to die if the U.S. were attacked at home.

I next saw Gravel at a dinner in June that year commemorating the 35th anniversary of his reading of the Pentagon Papers in Congress. The dinner was held at the Mayflower Hotel in Washington, where Gravel in June 1971 got a copy of the Papers indirectly from whistleblower Dan Ellsberg, who was at the dinner, disagreeing on minor details of how it all happened.

I soon found myself on the campaign trail with Mike, trudging up the steps of the state capitol in Des Moines, driving through a blizzard at Lake Tahoe after covering the first joint event with the other Democratic candidates and then sitting right behind Michelle Obama and to the right of Sen. Christopher Dodd’s sister at the first Democratic presidential debate in  Orangeburg, South Carolina on April 26, 2007.

Gravel was probably the most talked about candidate after that debate for the things he dared say, such as the war in Iraq “was lost the day George Bush invaded on a fraudulent basis.”

Gravel said some of the other candidates “frightened” him. “When you have mainline candidates who turn around and say there’s nothing off the table with respect to Iran, that’s code for using nukes. If I’m president of the United States there will be no pre-emptive wars with nuclear devices. It’s immoral and it’s been immoral for the past 50 years as part of American foreign policy.”

The other candidates laughed and mocked him. “I’m not planning on nuking anybody Mike,” Obama said. On a talk show later, when Obama was asked how tough campaigning is, he said it was very tough when you had to get up on a cold Iowa morning and had to listen to Mike Gravel.

When the debate moderator Brian Williams asked Gravel who exactly frightened him, Mike said:

“The top tier ones. Oh Joe [Biden] I’ll include you too. You have a certain arrogance too. You want to tell the Iraqis how to run their country. I gotta tell you we should just plain get out. It’s their country. They are asking us to leave and we insist on staying there.

You hear that the soldiers will have died in vain. The entire deaths of Vietnam died in vain and they are dying this very second. Do you know what’s worse than a soldier dying in vain? More soldiers dying in vain. That’s what’s worse.”

Later Williams asked him, “Other than Iraq, list the other important enemies to the United States.”

“We don’t have any important enemies,” Gravel said.

“What we need to do is deal with the rest of the world as equals. We don’t do that. We spend more as a nation on defense than all the rest of the world put together. Who are we afraid of? Who are you afraid of Brian? I’m not.

“Iraq has never been a threat to us. We invaded them. I mean it’s unbelievable. The military-industrial-complex not only controls our government lock, stock and barrel,” and here he looked over at the other candidates all in government at the time, “but they control our culture.”

That crystallized it for me. Like every other American I grew up under the sway of heavy propaganda that portrayed the U.S. as a victim of other nations’ aggression, rather than being the perpetrator of it. It was one of many, many things I learned from Mike Gravel, and that others would benefit learning too.

When the debate was over I joined Mike on the stage. All the candidates and their wives were glad-handing each other. Mike said he had no time for that so we retreated to the green room.  On the way I told him I hadn’t figured out Obama yet. But Mike told me, “He’s a fraud.” It turned out he was right about that too.

Growing Up

At some point during the campaign we decided to do a book together. I spent hours interviewing Mike and researching his history in the Senate. I traveled to Alaska and met his allies and enemies. I went to Philadelphia to see his sister. We then traveled together by car to Quebec to see the town where his father came from and visit his relatives there.

On the way up we stopped in New Haven, Connecticut to get something to eat. A bunch of Yale students recognized him and crowded around the table. Though we were running late he spent about two hours charming them.

In doing the book I learned about Mike growing up in Depression-era Springfield, Massachusetts, working in his father’s paint business, which gave him an appreciation of laborers, and his faith that ordinary people can run the nations’ affairs.

It was during Gravel’s time as an Army counter-intelligence officer in Germany during the 1950s that his life-long distrust of intelligence agencies was spawned. His job was to listen in to other people’s conversations, a job that he reviled. As he spoke only French at home as a child, he was sent to France to infiltrate communist rallies where he went undetected as long as his Quebecois accent wasn’t discovered.

When he returned home from Europe Gravel drove a cab in New York while he studied economics at Columbia. He kept a crowbar under his seat and once chased a would-be robber with it in a Manhattan intersection.

Having decided on a career in politics, Gravel staked out for Alaska, then still a territory, where he thought he had a shot. He arrived in Alaska on August 26, 1956 the day I was born. He first worked on a railroad clearing moose from the tracks.

When he was elected to the state house of representatives he took an interest in indigenous communities in remote areas and was instrumental in setting up high schools for them and when in the U.S. Senate helped settle their long-running land claims.

Even before he was sworn into the Senate he showed he was his own man, standing up to Ted Kennedy who wanted to make him part of the Kennedy clique. It was in the Senate during the Cold War that Gravel made his mark as an anti-militarist.  After traveling to a war zone in Vietnam he sponsored legislation to defund the war, then to normalize relations with China before Henry Kissinger’s secret trip to Beijing set up Richard Nixon’s opening and Gravel topped it off with being the only senator to take the Pentagon Papers from Ellsberg and read them into the record in a bid to end the war.

A Political Odyssey

I also learned that Mike was a crafty politician. In the book he admits to lying on several occasions, including that he supported the Vietnam War, when he really opposed it, in order to get elected to the Senate.

That craftiness was put to good use as Mike fought several battles with the publisher on my behalf. But he did not like my title and the publisher chewed me out for daring to suggest the cover to the right that was rejected.

While I was in Alaska Mike barked at me over the phone that the title would be A Political Odyssey. I added the subtitle: The Rise of American Militarism and One Man’s Fight to Stop It.

In the week that Mike died Consortium News has coincidentally been publishing excerpts from the book about Gravel’s reading of the Pentagon Papers in Congress, which happened 50 years ago to the day this Tuesday.

I was told by people close to me that I was getting too close to the subject I was writing about, complicated by the fact the book was in Gravel’s voice and would have his name on it.

After the book came out, when we were interviewed by Leonard Lopate on his WNYC radio show, Lopate directly asked me on air how I could be an objective journalist in a book like this.

My response was that I challenged Gravel on many things he told me and fact-checked the major parts of his story in addition to doing copious amounts of original research.  The truth was I agreed with Gravel on nearly every policy and was in no conflict writing about it, unlike in my work for major corporate media.

To the End

Gravel remained active on issues he cared about until the end. Just days before he died he was complaining about the evils of U.S. intelligence agencies.  He was ridiculed when a few years ago he said at a conference that the government had suppressed information about UFOs. Last week the Pentagon released a report about hundreds of UFO sightings.

Gravel played a critical role in releasing the classified 28-page chapter from the 2002 Joint Congressional Commission study of 9/11 that highlighted Saudi officials’ involvement. He met with sitting senators and congressman in 2016 to press them that they had the right to release any information they wanted based on the Speech and Debate clause of the constitution and the precedent Gravel set in releasing the Pentagon Papers and having the Supreme Court confirm that right.

Representative Steven Lynch, one of the leaders of the fight along with the late Rep. Walter Jones, raised the Gravel precedent at a Capitol Hill press conference, essentially telling reporters that the group of Representatives could “pull a Gravel” and make the content known to the public without fear of prosecution. That helped move Obama to release the critical pages.

I stayed in touch with Mike in the years since the campaign and he was always supportive. I wrote the foreword to his last book, The Failure of Representative Government and the Solution: A Legislature of the People. When I became editor of this site Mike agreed to join the board of directors. He also became a huge supporter of Julian Assange and of the work we have done covering his extradition ordeal.

Mike’s Pentagon Papers case, in which Gravel sued Nixon and it reached the Supreme Court, dealt with identical issues.  Gravel, his aide and Beacon Press, which published the Senator Gravel Edition of the Papers, all faced prosecution under the Espionage Act for publishing government secrets. Unlike Assange, Gravel escaped indictment.

At the time of the Pentagon Papers episode The New York Times ripped Gravel in an article entitled “Impetuous Senator.” A photo of Gravel appeared reading the Papers, with the caption, “A bundle of contradictions.”

The story, by Warren Weaver Jr., began: “The latest indoor sport on Capitol Hill is to try to guess what impelled Maurice Robert Gravel, a forty-one-year old Alaskan real estate developer, to attempt to read a part of the Pentagon papers into the public record, and ultimately to burst into uncontrollable tears.”

The Times then ridiculously went on to speculate that because he was born on May 13, 1930, under Taurus, the sign of the bull, that Gravel was “inclined to extremes and to impulsive actions.” He was contradictory, the Times said, because Gravel voted “with the liberals but against their leadership candidates and against their efforts to curb the filibuster. He loves the Senate but offends its elders. He is highly image-conscious but behaves in ways that mar his own reputation.”

The Times obituary Sunday on Gravel picked up where the newspaper left off exactly 50 years ago. It said he was “perhaps better known as an unabashed attention-getter, in one case reading the Pentagon Papers aloud at a hearing at a time when newspapers were barred from publishing.” It denigrated Mike’s courageous reading of the Papers as “grandstanding.”

To the end the establishment hated Mike Gravel. And Mike welcomed their hatred. He told the American people what they did not want them to hear.

Joe Lauria is editor-in-chief of Consortium News and a former correspondent for The Wall Street Journal, Boston GlobeSunday Times of London and numerous other newspapers. He began his professional career as a stringer for The New York Times.  He can be reached at joelauria@consortiumnews.com and followed on Twitter @unjoe .

SOURCE: https://consortiumnews.com/2021/06/27/what-mike-gravel-meant/

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Mike Gravel Was on the Right Side of History https://mikegravel.com/mike-gravel-was-on-the-right-side-of-history/ Mon, 28 Jun 2021 23:49:26 +0000 https://mikegravel.com/?p=1762 By Branko Marcetic

While Mike Gravel never earned the respect of the political establishment, he passed from this Earth with his conscience untormented by the ghosts of screaming civilians whose lives those in Washington regularly snuff out with their afternoon coffee.

Former Alaska senator Mike Gravel, who died yesterday at age ninety-one, spent much of his political career and public platform trampling institutional niceties, customs, and tradition for the sake of the principles he held dear. Naturally, it earned him hostility, mockery, and dismissal, which persisted even as core parts of his politics have been welcomed into the mainstream.

One need only look at the way two of the country’s most influential newspapers responded to the news of the former senator’s death. For the New York Times, he was “an unabashed attention-getter” prone to “grandstanding,” whose most notable achievement was the Trans-Alaska oil pipeline finished in 1977. For the Washington Post, he was a “gadfly” who achieved “brief renown” when he famously read thousands of pages of the top secret Pentagon Papers into the congressional record. Both stressed the failures of his 2008 and 2020 campaigns, with the Times in particular seeming to delight in telling readers about the infinitesimal votes he was able to muster that first run.

It’s familiar terrain for Gravel. Back in 2007, he was similarly dismissed, despite searing himself into political memory with his brutal assessment of his fellow candidates in that year’s first Democratic debate. Talking into a finely tailored wall of laughter and smiling condescension, Gravel delivered a rare moment of political truth-telling in televised politics:

It’s like going into the Senate. You know, the first time you get there, you’re all excited, and “My god, how did I ever get here?” Then about six months later, you say, “How the hell did the rest of them get here?” And I gotta tell you, after standing up with them, some of these people frighten me. They frighten me. When you have mainline candidates who turn around and say there’s nothing off the table with respect to Iran. That’s code for using nukes.

Gravel concluded by insisting “we should plain get out” of Iraq, that the United States had no right to tell Iraqis how to run their country, and that “the only thing worse than a soldier dying in vain is more soldiers dying in vain.” Later, after then-candidate Barack Obama insisted he’d reserve the right to wage a war on Iran to stop it from acquiring nuclear arms, Gravel pointed to the US government’s own nuclear expansion. “Barack, who do you want to nuke?” he asked. “I’m not planning to nuke anybody right now, Mike, I promise,” Obama replied to much laughter.

Gravel’s decision to forego the customary empty pageantry of the debates earned him instant scorn. “We Do Not Understand What the Hell Mike Gravel Is Talking About,” wrote New York magazine. The New Republic put it at the top of the list of its “most idiotic moments from the 2008 primary debates.”

Yet Gravel was right, as suggested by not only the uptick of thousands of views for his website and campaign videos the appearance garnered, but by the fact that, years later, it’s still the only thing anyone remembers or cares to recall about the entire insipid affair. Obama had said those words. They were code for the threat of nuclear war. And for all the mockery it earned, it was Gravel’s position — that the United States shouldn’t drop a nuke on a far weaker country it had spent decades brutalizing the population of — that was the sensible, moderate one, and Obama’s the extreme, unserious one.

You could almost go down the list of Gravel’s policy ideas that year and see the things that marked him as a kooky sideshow then — from backing marriage equality and immediate withdrawal from Iraq, to opposing the war on drugs and military adventures that sapped resources from the domestic sphere — having somewhere along the way morphed into fairly uncontroversial articles of faith for vast swaths of the US public and commentariat.

Here are a few things you might not have learned about Gravel yesterday because they don’t work as well as punchlines. For all the accusations of grandstanding, Gravel was genuinely morally anguished over Washington’s monstrous war in Vietnam (“We should all cry over it,” he once said), and he regularly flouted meaningless senatorial rules and customs to try and bring it to an end. To this day, no lawmakers have shown close to Gravel’s courage or principles in attempting to use their positions to stop the endless overseas death that emanates from the US Capitol. As one lawyer who had dealt with Gravel on the other side of an issue once put it:

I have found him at times to be an unconscionably bloody fighter, both on and off the Senate floor. But I have always regarded him as a salesman. He’s a fellow who likes to come up with a quick solution and sell it hard. It almost becomes a physical thing with him at times.

Among his actions were not just using his congressional immunity to publicly release the Pentagon Papers — at the time their publication in the newspapers had been halted by court order — but a host of other unprecedented moves that made him persona non grata in the clubby, decorum-obsessed Senate: working with antiwar activists, paralyzing the Senate with constant procedural delays, and trying incessantly to defund the Vietnam War. In one especially notable moment, he escorted a group of more than a hundred antiwar protesters into the Capitol and outside the Senate chamber to agitate for its end.

But as Gravel said decades later, he wasn’t too bothered about being shunned by the Washington cocktail circuit. When he had first arrived in the Senate, he had gone to one of the prayer breakfasts all his colleagues attended, until he “realized that all these people sitting at the table praying were essentially the warmongering hawks who perpetuated the Vietnam War.”

“And I couldn’t stomach it anymore,” he said.

If not for Mike Gravel, the military draft might never have ended. Gravel spent five months as a one-man wrecking ball trying to topple conscription for the war, and succeeded in filibustering the extension of the draft to death in 1971, partly by reading the Pentagon Papers. Though the draft was narrowly extended over the filibuster a few months later, with sixty-one votes, its earlier defeat at Gravel’s hands marked its days as numbered: with clearly dim prospects of extending it again two years later, Nixon moved in earnest to fulfill his campaign promise of transitioning to an all-volunteer army, and the government dramatically scaled back its draft numbers over the next two years, until the draft lapsed.

Gravel played an important role in establishing what became Alaska’s Permanent Fund Dividend program, a kind of universal basic income funded off of Alaska’s fossil-fuel exploitation. And he had earlier experienced a meteoric rise to the Alaskan state legislature speakership, where he presided over, among other things, the creation of a rural high school program that let Indigenous kids get local education instead of being shipped off sometimes thousands of miles to other parts of the country.

This doesn’t make him a saint, of course. Gravel was indeed a fierce fighter for fossil-fuel interests in the Senate in the 1970s, and was not immune to fundraising off them and all the sleazy pay-for-play shenanigans that came with that. Yet, ironically, his stubbornness on the matter unwittingly spurred one of the major executive actions of environmental protection in presidential history, and by 2007, he had shifted dramatically on the issue, running on what was then an aggressive climate platform to prevent what he later called “planetary suicide.”

Gravel’s curmudgeonly distaste for the pomp of presidential campaigns, his early virality on the internet, and his willingness to plainly tell the public what no one else had the guts to all doubtless helped clear the way for future dark horse left-wing candidates to not just try it themselves but be taken seriously while doing it. He lived long enough to see the reasonable and morally principled beliefs he once advocated to mockery earn widespread acceptance.

And while he never earned the respect of the political establishment, he passed from this Earth with his conscience untormented by the ghosts of screaming civilians whose lives those in Washington regularly snuff out with their afternoon coffee, as the current president likely just did the very day of Gravel’s passing. And that’s a luxury those who sniggered at him on the debate stage will not get to enjoy.

SOURCE: https://jacobinmag.com/2021/06/mike-gravel-obituary-alaska-senator-1930-2021/

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Sen. Whitehouse Gives Presentation On ‘Dark Money’ Influence On Supreme Court https://mikegravel.com/sen-whitehouse-gives-presentation-on-dark-money-influence-on-supreme-court/ Wed, 21 Oct 2020 22:07:31 +0000 https://mikegravel.com/?p=1756

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Trump’s COVID infection shows why it’s time to retire the nuclear football https://mikegravel.com/trumps-covid-infection-shows-why-its-time-to-retire-the-nuclear-football/ Fri, 09 Oct 2020 01:13:10 +0000 https://mikegravel.com/?p=1753 By Tom Z. Collina

President John Kennedy took powerful pain medications. President Richard Nixon was a heavy drinker. President Ronald Reagan had dementia. And now President Donald Trump has the coronavirus. These conditions can significantly impair one’s ability to think clearly. And yet, as president, each had—or, in Trump’s case, still has–the unilateral authority to launch US nuclear weapons within minutes.

President Trump is followed 24/7 by a military aide that carries the “football,” the briefcase that holds all he would need to order the immediate launch of up to 1,000 nuclear weapons, more than enough megatonnage to blow the world back into the stone age. He does not need the approval of Congress or the secretary of defense. Shockingly, there are no checks and balances on this ultimate executive power.

President Trump took the nuclear football with him to Walter Reed Medical Center, where he received treatment for COVID-19. According to Trump’s doctor, the president’s blood oxygen levels had dipped. And this, according to independent health experts, can impair decision-making ability. He is taking dexamethasone, which can cause mood swings and “frank psychotic manifestations.” Yet as far as we know, at no point did the president transfer his powers to the vice president, as allowed under the 25th Amendment.

To state the obvious, we should not entrust nuclear launch authority to someone who is not fully lucid. (Reagan transferred authority temporarily before planned surgery, as did President George W. Bush before a medical procedure that required his sedation.) A nuclear crisis can happen at any time, including at the worst possible time. If such a crisis takes place when a president’s thinking is compromised for any reason, the results could be catastrophic.

For example, imagine that the president is alerted to an incoming nuclear missile attack. He would have just minutes to decide what to do before the attack, if real, would land. Even in the best of circumstances there would be tremendous pressure to launch land-based ballistic missiles (which are highly vulnerable) immediately. He would need all of his wits about him to understand that he should not launch these weapons. Why? Because any alert of a nuclear attack is likely to be a false alarm, and once launched our missiles cannot be recalled. If the president orders an attack in response to a false alarm, he would have started nuclear war by mistake.

If the president or his advisors have reason to believe that Trump’s thinking may be compromised, nuclear launch authority should be transferred to the vice president, Mike Pence. If Pence also gets COVID, the football could then be passed to House Speaker Nancy Pelosi, President Pro Tempore of the Senate Chuck Grassley, and the secretaries of State, Treasury and Defense, in that order.

But kicking the football down the line does not solve the problem—and in fact shows why the system is broken. Does anyone really believe that the president pro tem of the Senate or the Treasury Secretary has spent much time preparing for nuclear war? And even if they had prepared, the central dilemma remains: All humans are imperfect, and we should not trust the fate of the world to any one person.

The whole concept of giving the president unilateral nuclear authority is built on the false assumption that Russia might launch a surprise first strike. In fact, Russia has never seriously considered a first strike against the United States for a simple reason: It would be national suicide. Both sides have to assume that an attack would provoke an unacceptable nuclear retaliation. Both nations, and much of the rest of the globe, would be obliterated. Starting such a war would be insanity.

Yet by facilitating a quick launch, we are making it more likely that the president will blunder into Armageddon. In a crisis, we should be seeking to give the president more decision time, not less. Maintaining an effective deterrent does not require us to rush into a nuclear war. We have hundreds of nuclear weapons deployed on submarines at sea that would survive any attack.

So rather than argue about who should have the football, let’s make the process safer and more democratic. The Constitution gives the power to declare war to Congress, not the president. Thus, a presidential decision to initiate the use of nuclear weapons—the ultimate war declaration—would be unconstitutional. The next president can rectify this situation by declaring that he would share the authority to start nuclear war with Congress. He could also state that the sole purpose of US nuclear weapons is to deter their use by others. Vice President Joe Biden has declared his support for such a “sole purpose” policy, which is essentially the same as a commitment to not use nuclear weapons first.

It is time to retire the nuclear football. The only thing standing between us and nuclear holocaust is one man with COVID on heavy meds. That is the plan? Ending sole authority is better than entrusting it to any individual. In a vibrant democracy, no one person should have the unchecked power to destroy the world.

SOURCE: https://thebulletin.org/2020/10/trumps-covid-infection-shows-why-its-time-to-retire-the-nuclear-football/

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Forget China, America is the biggest warmonger by far https://mikegravel.com/forget-china-america-is-the-biggest-warmonger-by-far/ Wed, 23 Sep 2020 21:17:59 +0000 https://mikegravel.com/?p=1747 by David Dodwell

Since 2001, the US ‘war on terror’ has killed, injured and displaced millions across 24 countries, while America’s defence spending is nearly 40 per cent of the global total. In contrast, China has waged one foreign war in the past 50 years

US President Donald Trump rallies the troops during a surprise Thanksgiving visit at Bagram Air Field in Afghanistan on November 28, 2019. Photo: AFP

Am I becoming paranoid, or is there an upswelling of war talk? The rediscovery of the Thucydides trap, and US Secretary of State Mike Pompeo’s Manichaean campaign to quash China as a modern-day evil empire has brought to centre-stage the idea that Beijing is set on military expansion – into the South China Sea, recovering Taiwan, and even crossing swords with India on its Himalayan border. Then remember in March how Donald Trump called himself a “wartime president” in fighting the pandemic? Remember how US military and intelligence communities have emerged from the shadows to describe Chinese national security threats emerging from every nook and cranny – whether it is Huawei and its 5G leadership or gay dating site Grindr supposedly tracking gays in the military susceptible to blackmail.

Thoughts about war converged last week with the publication of “The Costs of War”, a sobering study from Brown University’s Watson Institute for International and Public Affairs, led by Professor David Vine from the American University in Washington, and a taster for his forthcoming book The United States of War: A Global History of America’s Endless Conflicts, from Columbus to the Islamic State. The report calculates that the US “‘war on terror’” since the September 11 attacks has cost not only millions of lives and injuries, but also forcibly displaced at least 37 million people in Afghanistan, Iraq, Pakistan, Yemen, Somalia, the Philippines, Libya and Syria: “The US military has waged war continuously for almost two decades,” it said.

“US forces have fought in wars or participated in other combat operations in at least 24 countries. The destruction inflicted by warfare in these countries has been incalculable for civilians and combatants, for US military personnel and their family members, and for entire societies.”

Washington’s hardened position on Beijing’s claims in South China Sea heightens US-China tensions
Vine added: “US involvement in these countries has been horrifically catastrophic, horrifically damaging in ways that I don’t think that most people in the United States, in many ways myself included, have grappled with or reckoned with in even the slightest terms.” The report tracks appalling numbers in the worst-affected countries: 9.2 million from Iraq seeking asylum or internally displaced (37 per cent of its pre-war population); 7.1 million from Syria (also 37 per cent of the population); 5.3 million from Afghanistan (26 per cent of the population); 4.2 million from Somalia (46 per cent of the population); 4.4 million from Yemen (24 per cent of the population).

But Vine admits: “Numbers quickly can become numbing … Most people (ourselves included) have great difficulty comprehending the meaning and effects of displacement.” He talks of torn-apart neighbourhoods, communities and societies, and a “mosaic patchwork” of mixed communities destroyed and replaced by religiously homogeneous “ethno sectarian” enclaves.

But, most of all, the report is a story of the US – not China – as a serial warmonger. In contrast, China has in the past 50 years fought only one foreign war – in 1979 against Vietnam. Former president Jimmy Carter noted last year that the US was “the most warlike nation in the history of the world”, at peace for only 16 years of its history.

Vine calculates that US conflicts since 2001 have cost US$6.4 trillion, peaking in 2008 during the Iraq War, and in 2011 in Afghanistan. The Institute for Economics and Peace puts the global cost of war at US$14.76 trillion in 2017 – about 12.4 per cent of the global economy. Whatever Pompeo and his colleagues say about China’s warmongering ambitions, it is again the US that leads the world by far in defence spending. Of the global total of US$1.92 trillion last year, the US accounted for 38 per cent (about US$732 billion), with the next biggest spenders – China, India, Russia and Saudi Arabia – spending just US$459 billion combined.

Are Xi Jinping’s China and Donald Trump’s US destined for armed conflict?
Recall former presidential hopeful Elizabeth Warren in The Atlantic in January: “These conflicts have cost trillions of dollars needed for urgent priorities here at home, created a drag on our economy, contributed to the decay of our democratic culture and institutions, and paved the way for Trump’s ugly divisiveness.” Yet America’s unmatched role as a warmonger goes largely unnoticed at home mainly because the conflicts are being waged out of sight and mind, and because modern technologies enable US forces to wage war without putting huge numbers of US soldiers in the line of fire. The Pew Research Centre reports that, despite the international collapse in trust in Trump as a leader, the US is still largely respected as an ally, and not perceived as a threat – in contrast with China, which few countries regard as an ally, and many more as a threat. However, recent troubling developments may be undermining this apathy. Civil unrest linked with the Black Lives Matter movement across more than 2,000 US towns and cities in recent months has brought troops onto US streets on an unprecedented scale.

Unrest spreads across the US fuelled by outrage over police killing of George Floyd
They have also brought alarming numbers of conservative, armed vigilante groups onto the streets in defence of “law and order”. At one point in June, more than 17,000 National Guard had been called out in 23 states and in Washington. Equally alarming, the White House has talked of sending troops to prevent conflict at polling booths during the November presidential elections. There is even talk of calling out troops in case of a disputed result – either to protect Trump’s place in the White House or to escort him from the premises.

With such alarming conflict erupting inside the US, it seems bizarre to be pointing fingers at China and its so called ambition to unleash hegemonic power across Asia. The more hot-headed Sinophobes in Washington might learn from Commodore Oliver Perry at the Battle of Lake Erie in 1813, who said, “We have met the enemy, and they are ours.” This was later paraphrased in a 1972 syndicated comic strip Pogo by cartoonist Walt Kelly, who wrote: “We have met the enemy, and he is us”. Today, it is no joke. If hot war is indeed an existential threat, then there is likely to be only one source – and it is not China.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view

SOURCE: https://www.scmp.com/comment/opinion/article/3101981/forget-china-america-biggest-warmonger-far

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Global Expansion of NATO Is Not in Germany’s Interest! https://mikegravel.com/global-expansion-of-nato-is-not-in-germanys-interest/ Tue, 30 Jun 2020 00:43:26 +0000 https://mikegravel.com/?p=1731 by Helga Zepp-LaRouche

This article first appeared in the German-language weekly newspaper Neue Solidarität. It was translated by the EIR staff.

June 19—After weeks of rumors, President Trump made it official: The U.S. government plans to withdraw 9,500 U.S. troops from Ger-many and limit the total number of troops stationed here in Germany to 25,000. In addition to numerous expressions of outrage over the rude-ness expressed by the U.S. failure to coordinate this step with its “partner,” some of the other-wise suppressed facts were brought into the open about the reasons for the U.S. presence. The commotion was further heightened by the threat that U.S. sanctions against participation in Nord Stream 2 could affect not only German and European companies, but even government agencies and officials in the German Federal Republic, to which end U.S. war-hawk Ted Cruz even wants to introduce a bill in the Senate.

So it’s time to start thinking about German interests in a complex and rapidly changing world. In itself, the reduction in U.S. troops could be a welcome development, as any downgrading of military capacities can reduce tensions in Europe and as a whole series of military experts believe that a Russian attack on NATO can be virtually ruled out. It would be a different matter, however, if these troops were relocated to Poland and other Eastern European countries and therefore became part of a heightened policy of encircling Russia.

The German Ambassador to Washington, Emily Haber, said in a meeting of the Council on Foreign Relations that the U.S. troops were not in Germany to defend Germany but to project the military strength of the trans-Atlantic community into Africa and Asia. One can even be certain that as long as Trump’s promises to end the endless wars of the Bush and Obama administrations, and to withdraw troops from those conflict areas, are in practice ignored by the Pentagon, there will be no closure of the base at Ramstein and no withdrawal of U.S. nuclear weapons, as requested by the leader of the Social Democratic Party (SPD) in Parliament, Rolf Mützenich.

Far more important than the commotion over Trump’s style of dismissing his partners are the plans that NATO Secretary-General Jens Stoltenberg presented at the recent meeting of the NATO Defense Ministers for NATO’s expansion into the Asia-Pacific region. That’s because the entire trans-Atlantic war- hawk faction—including, for example, the Atlantic Council, the German Marshall Fund, Ian Brzezinski (the son of the disastrous Zbigniew Brzezinski), and various other think-tankers—are pushing for the globalization of NATO and the strengthening of relations with “global partners” such as Australia, Japan, South Korea, and New Zealand. Special efforts have been made to include India in the strategy of an “Indo-Pacific Partnership” to encircle China.

NATO in the Pacific?
Brzezinski wants to go so far as to establish a NATO headquarters in the Pacific region, from which NATO maneuvers would be coordinated and which would by no means be limited to purely military operations, saying that NATO’s entire range of diplomatic, economic, technological, social and military capabilities must be mobilized to demonstrate the “geopolitical power” of the West. The Economist commented that the real discussion in NATO, which is much more important than the “short-term spats” between Germany and the United States, is how will NATO counter China’s rise in the next ten years, and thus still have a purpose in 2030.

NATO Secretary-General Jens Stoltenberg professes to be “concerned” about China’s rise and Chinese investments in nuclear weapons and long-range missiles that could reach Europe. He is silent about the fact that China’s “rise” is because it has lifted 850 million of its citizens out of poverty, and relies to do so on the very scientific and technological progress that the EU is throwing out of the window with its economically insane “Green Deal.”

He also hides the fact that the surge in Chinese armaments investments is in response to the hysterical anti-China campaign currently being escalated by the British and war-hawks like top U.S. officials Mike Pompeo and Mark Esper. He also forgets to mention that China, according to the Swedish research institute SIPRI, has only about 5 percent as many nuclear weapons as the U.S. has.

To the extent that the pro-war trans-Atlantic faction is trying to escalate the military encirclement of Russia and China and is even intent on the complete economic decoupling of China, pressure is increasing for Europe to be fully integrated into the anti-China campaign. Probably the wildest propagandist in this regard is Steve Bannon, a representative of the extreme right in the U.S., who recently called for the immediate decoupling of the West from China in the German newspaper Die Welt, owned by the notorious Springer publishing house. Bannon asserts that this is not a cold, but rather a hot war, and if the EU wants to try to avoid this war, the European countries will end up as the “vassals” of China.

The same line is taken by the Green leader Reinhard Bütikofer, Co-President of the Inter-Parliamentary Alliance on China (IPAC), whose political similarity is not only to Bannon. IPAC includes war-hawks like U.S. Senators Marco Rubio and Bob Menendez, who obviously don’t mind doing political things together with Bütikofer, a former member of the Kommunistischer Bund Westdeutschlands (Communist Union of West Germany, KBW).

The KBW was one of the numerous so-called “K” groups at the time of the 68er youth uprisings and the SDS (Students for a Democratic Society), the preeminent U.S. new left organization, most of which groups were fully in line with the Chinese cultural revolution and the anti-technology Red Guards.

At the same time that China turned away from this ten-year plunge into what is considered to be one of the darkest periods in China’s history, and began a great change with the economic reforms of Deng Xiaoping, which started China’s rise, the various supporters of the SDS and the “K” groups embarked on the “Long March through the institutions.” More than a few of these radicals were collected by the Atlantic establishment and, as a result, made it to high positions, including to the rank of foreign minister. From then on, The Internationale was replaced by the old song, Whose bread I eat, his song I sing, and so they still sing today.

World War III?
Scott Ritter, the former UN weapons inspector, who has the merit of blowing the whistle on the lies upon which the Iraq war was based, recalls—in a commentary on Trump’s partial withdrawal of troops from Ger- many and the fears expressed by the U.S. think tank CSIS (Center for Strategic and International Studies) that NATO would not survive Trump’s second term— the old dictum that still circulates in NATO today. It was formulated by Lord Ismay, NATO’s first Secretary-General, that NATO’s purpose was “to keep the Russians out, the Americans in, and the Germans down.” Ritter underscored that the Russians would never have wanted to join NATO, but on the other hand, without the alleged threat from Russia, NATO has no justification for its existence.

Without discussing here the prehistory of how the Cold War and the formation of NATO came about, we can state now that NATO lost its purpose after the demise of the Soviet Union and the dissolution of the Warsaw Pact. It was not Russia that broke all the promises made during German reunification, but the same neocon and neoliberal agents of a unipolar world, who saw Trump’s election victory as an existential threat, who are now attempting a coup against him and who, after their demonization of President Vladimir Putin, are using the same mode of lies and fake news, to build an enemy image of China.

The aim of this policy in all three cases—against Trump, against Putin and against Xi Jin- ping—is regime change to create the “end of history” utopia announced by Francis Fukuyama after the collapse of the Soviet Union, in which all governments opposed to the “rules-based neo-liberal order” that guarantees the privileges of the establishment are simply eliminated.

The problem is that the idea of a global NATO is the stuff of which World War III will be made. The idea of contain- ing the rise of China, a nation of 1.4 billion people, pursuing a progress-oriented economic policy, cooperating with over 150 nations all participating in the economic progress generated by the New Silk Road, is as absurd as it is unrealistic. A political scientist at the Helmut Schmidt University of the Bundeswehr in Hamburg, Prof. Dr. Michael Staack, recently commented on the tensions between the United States and Germany, with the assessment that German and American interests today “diverge on all important issues.” He advised the government to “ask the planning staff” to work out independent answers.

This analysis seems plausible, but it is inaccurate. It ignores the axiomatics of the respective political groups. Just as right-wing Marco Rubio and the “former” Maoist Bütikofer get along, the supporters of the neoliberal paradigm on both sides of the Atlantic, who are united in their hostility toward Russia and China, agree. On the other hand, the real interests of the sovereign nation-states of America, Germany, Russia, China, and all other states are incompatible with the structures of a world government that only serves the interests of the oligarchy.

It is time for Germany to cancel the so-called Status of Forces Agreement and membership in NATO. A new security architecture that considers the interests of all states on this planet is long overdue.

SOURCE: https://larouchepub.com/eiw/public/2020/2020_20-29/2020-26/32-34_4726-hzl.pdf

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Marianne Williamson – Riots in America: Where to Now? https://mikegravel.com/marianne-williamson-riots-in-america-where-to-now/ Tue, 09 Jun 2020 10:53:30 +0000 https://mikegravel.com/?p=1726 Activist and author Marianne Williamson discusses riots in America and where we should go from here.

The post Marianne Williamson – Riots in America: Where to Now? first appeared on Senator Mike Gravel.]]>
Judgment Day for the National Security State https://mikegravel.com/judgment-day-for-the-national-security-state/ Tue, 31 Mar 2020 23:17:47 +0000 https://mikegravel.com/?p=1703 The Coronavirus and the Real Threats to American Safety and Freedom
By Andrew Bacevich

Americans are facing “A Spring Unlike Any Before.” So warned a front-page headline in the March 13th New York Times.

That headline, however hyperbolic, was all too apt. The coming of spring has always promised relief from the discomforts of winter. Yet, far too often, it also brings its own calamities and afflictions.

According to the poet T.S. Eliot, “April is the cruelest month.” Yet while April has certainly delivered its share of cataclysms, March and May haven’t lagged far behind. In fact, cruelty has seldom been a respecter of seasons. The infamous influenza epidemic of 1918, frequently cited as a possible analogue to our current crisis, began in the spring of that year, but lasted well into 1919.

That said, something about the coronavirus pandemic does seem to set this particular spring apart. At one level, that something is the collective panic now sweeping virtually the entire country. President Trump’s grotesque ineptitude and tone-deafness have only fed that panic. And in their eagerness to hold Trump himself responsible for the pandemic, as if he were the bat that first transmitted the disease to a human being, his critics magnify further a growing sense of events spinning out of control.

Yet to heap the blame for this crisis on Trump alone (though he certainly deserves plenty of blame) is to miss its deeper significance. Deferred for far too long, Judgment Day may at long last have arrived for the national security state.

Origins of a Colossus

That state within a state’s origins date from the early days of the Cold War. Its ostensible purpose has been to keep Americans safe and so, by extension, to guarantee our freedoms. From the 1950s through the 1980s, keeping us safe provided a seemingly adequate justification for maintaining a sprawling military establishment along with a panoply of “intelligence” agencies — the CIA, the DIA, the NRO, the NSA — all engaged in secret activities hidden from public view. From time to time, the scope, prerogatives, and actions of that conglomeration of agencies attracted brief critical attention — the Cuban Bay of Pigs fiasco in 1961, the Vietnam War of the 1960s and early 1970s, and the Iran-Contra affair during the presidency of Ronald Reagan being prime examples. Yet at no time did such failures come anywhere close to jeopardizing its existence.

Indeed, even when the implosion of the Soviet Union and the end of the Cold War removed the original justification for its creation, the entire apparatus persisted. With the Soviet Empire gone, Russia in a state of disarray, and communism having lost its appeal as an alternative to democratic capitalism, the managers of the national security state wasted no time in identifying new threats and new missions.

The new threats included autocrats like Panama’s Manuel Noriega and Iraq’s Saddam Hussein, once deemed valuable American assets, but now, their usefulness gone, classified as dangers to be eliminated. Prominent among the new missions was a sudden urge to repair broken places like the Balkans, Haiti, and Somalia, with American power deployed under the aegis of “humanitarian intervention” and pursuant to a “responsibility to protect.” In this way, in the first decade of the post-Cold War era, the national security state kept itself busy. While the results achieved, to put it politely, were mixed at best, the costs incurred appeared tolerable. In sum, the entire apparatus remained impervious to serious scrutiny.

During that decade, however, both the organs of national security and the American public began taking increased notice of what was called “anti-American terrorism” — and not without reason. In 1993, Islamic fundamentalists detonated a bomb in a parking garage of New York’s World Trade Center. In 1996, terrorists obliterated an apartment building used to house U.S. military personnel in Saudi Arabia. Two years later, the U.S. embassies in Kenya and Tanzania were blown up and, in 2000, suicide bombers nearly sank the USS Cole, a Navy destroyer making a port call in Aden at the tip of the Arabian peninsula. To each of these increasingly brazen attacks, all occurring during the administration of President Bill Clinton, the national security state responded ineffectually.

Then, of course, came September 11, 2001. Orchestrated by Osama bin Laden and carried out by 19 suicidal al-Qaeda operatives, this act of mass murder inflicted incalculable harm on the United States. In its wake, it became common to say that “9/11 changed everything.”

In fact, however, remarkably little changed. Despite its 17 intelligence agencies, the national security state failed utterly to anticipate and thwart that devastating attack on the nation’s political and financial capitals. Yet apart from minor adjustments — primarily expanding surveillance efforts at home and abroad — those outfits mostly kept doing what they had been doing, even as their leaders evaded accountability. After Pearl Harbor, at least, one admiral and one general were fired. After 9/11, no one lost his or her job. At the upper echelons of the national security state, the wagons were circled and a consensus quickly formed: no one had screwed up.

Once President George W. Bush identified an “Axis of Evil” (Iraq, Iran, and North Korea), three nations that had had nothing whatsoever to do with the 9/11 attacks, as the primary target for his administration’s “Global War on Terrorism,” it became clear that no wholesale reevaluation of national security policy was going to occur. The Pentagon and the Intelligence Community, along with their sprawling support network of profit-minded contractors, could breathe easy. All of them would get ever more money. That went without saying. Meanwhile, the underlying premise of U.S. policy since the immediate aftermath of World War II — that projecting hard power globally would keep Americans safe — remained sacrosanct.

Viewed from this perspective, the sequence of events that followed was probably overdetermined. In late 2001, U.S. forces invaded Afghanistan, overthrew the Taliban regime, and set out to install a political order more agreeable to Washington. In early 2003, with the mission in Afghanistan still anything but complete, U.S. forces set out to do the same in Iraq. Both of those undertakings have dragged on, in one fashion or another, without coming remotely close to success. Today, the military undertaking launched in 2001 continues, even if it no longer has a name or an agreed-upon purpose.

Nonetheless, at the upper echelons of the national security state, the consensus forged after 9/11 remains firmly in place: no one screws up. In Washington, the conviction that projecting hard power keeps Americans safe likewise remains sacrosanct.

In the nearly two decades since 9/11, willingness to challenge this paradigm has rarely extended beyond non-conforming publications like TomDispatch. Until Donald Trump came along, rare was the ambitious politician of either political party who dared say aloud what Trump himself has repeatedly said — that, as he calls them, the “ridiculous endless wars” launched in response to 9/11 represent the height of folly.

Astonishingly enough, within the political establishment that point has still not sunk in. So, in 2020, as in 2016, the likely Democratic nominee for president will be someone who vigorously supported the 2003 invasion of Iraq. Imagine, if you will, Democrats in 1880 nominating not a former union general (as they did) but a former confederate who, 20 years before, had advocated secession. Back then, some sins were unforgivable. Today, politicians of both parties practice self-absolution and get away with it.

The Real Threat

Note, however, the parallel narrative that has unfolded alongside those post-9/11 wars. Taken seriously, that narrative exposes the utter irrelevance of the national security state as currently constituted. The coronavirus pandemic will doubtless prove to be a significant learning experience. Here is one lesson that Americans cannot afford to overlook.

Presidents now routinely request and Congress routinely appropriates more than a trillion dollars annually to satisfy the national security state’s supposed needs. Even so, Americans today do not feel safe and, to a degree without precedent, they are being denied the exercise of basic everyday freedoms. Judged by this standard, the apparatus created to keep them safe and free has failed. In the face of a pandemic, nature’s version of an act of true terror, that failure, the consequences of which Americans will suffer through for months to come, should be seen as definitive.

But wait, some will object: Don’t we find ourselves in uncharted waters? Is this really the moment to rush to judgment? In fact, judgment is long overdue.

While the menace posed by the coronavirus may differ in scope, it does not differ substantively from the myriad other perils that Americans have endured since the national security state wandered off on its quixotic quest to pacify Afghanistan and Iraq and purge the planet of terrorists. Since 9/11, a partial roster of those perils would include: Hurricane Katrina (2005), Hurricane Sandy (2012), Hurricanes Harvey, Irma, and Maria (2017), and massive wildfires that have devastated vast stretches of the West Coast on virtually an annual basis. The cumulative cost of such events exceeds a half-trillion dollars. Together, they have taken the lives of several thousand more people than were lost in the 2001 attack on the World Trade Center and the Pentagon.

Earlier generations might have written all of these off as acts of God. Today, we know better.  As with blaming Trump, blaming God won’t do. Human activities, ranging from the hubristic reengineering of rivers like the Mississippi to the effects of climate change stemming from the use of fossil fuels, have substantially exacerbated such “natural” catastrophes.

And unlike faraway autocrats or terrorist organizations, such phenomena, from extreme-weather events to pandemics, directly and immediately threaten the safety and wellbeing of the American people. Don’t tell the Central Intelligence Agency or the Joint Chiefs of Staff but the principal threats to our collective wellbeing are right here where we live.

Apart from modest belated efforts at mitigation, the existing national security state is about as pertinent to addressing such threats as President Trump’s cheery expectations that the coronavirus will simply evaporate once warmer weather appears. Terror has indeed arrived on our shores and it has nothing to do with al-Qaeda or ISIS or Iranian-backed militias. Americans are terrorized because it has now become apparent that our government, whether out of negligence or stupidity, has left them exposed to dangers that truly put life and liberty at risk. As it happens, all these years in which the national security state has been preoccupied with projecting hard power abroad have left us naked and vulnerable right here at home.

Protecting Americans where they live ought to be the national security priority of our time. The existing national security state is incapable of fulfilling that imperative, while its leaders, fixated on waging distant wars, have yet to even accept that they have a responsibility to do so.

Worst of all, even in this election year, no one on the national political scene appears to recognize the danger now fully at hand.

Andrew Bacevich, a TomDispatch regular, is president of the Quincy Institute for Responsible Statecraft. His new book is The Age of Illusions: How America Squandered Its Cold War Victory.

Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Books, John Feffer’s new dystopian novel (the second in the Splinterlands series) Frostlands, Beverly Gologorsky’s novel Every Body Has a Story, and Tom Engelhardt’s A Nation Unmade by War, as well as Alfred McCoy’s In the Shadows of the American Century: The Rise and Decline of U.S. Global Power and John Dower’s The Violent American Century: War and Terror Since World War II.

Copyright 2020 Andrew Bacevich

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The Real Cover-Up https://mikegravel.com/the-real-cover-up/ Tue, 08 Oct 2019 23:48:30 +0000 https://mikegravel.com/?p=1650 Putting Donald Trump’s Impeachment in Context
By Andrew J. Bacevich

There is blood in the water and frenzied sharks are closing in for the kill. Or so they think.

From the time of Donald Trump’s election, American elites have hungered for this moment. At long last, they have the 45th president of the United States cornered. In typically ham-handed fashion, Trump has given his adversaries the very means to destroy him politically. They will not waste the opportunity. Impeachment now — finally, some will say — qualifies as a virtual certainty.

No doubt many surprises lie ahead. Yet the Democrats controlling the House of Representatives have passed the point of no return. The time for prudential judgments — the Republican-controlled Senate will never convict, so why bother? — is gone for good. To back down now would expose the president’s pursuers as spineless cowards. The New York Times, the Washington Post, CNN, and MSNBC would not soon forgive such craven behavior.

So, as President Woodrow Wilson, speaking in 1919 put it, “The stage is set, the destiny disclosed. It has come about by no plan of our conceiving, but by the hand of God.” Of course, the issue back then was a notably weighty one: whether to ratify the Versailles Treaty. That it now concerns a “Mafia-like shakedown” orchestrated by one of Wilson’s successors tells us something about the trajectory of American politics over the course of the last century and it has not been a story of ascent.

The effort to boot the president from office is certain to yield a memorable spectacle. The rancor and contempt that have clogged American politics like a backed-up sewer since the day of Donald Trump’s election will now find release. Watergate will pale by comparison. The uproar triggered by Bill Clinton’s “sexual relations” will be nothing by comparison. A de facto collaboration between Trump, those who despise him, and those who despise his critics all but guarantees that this story will dominate the news, undoubtedly for months to come.

As this process unspools, what politicians like to call “the people’s business” will go essentially unattended. So while Congress considers whether or not to remove Trump from office, gun-control legislation will languish, the deterioration of the nation’s infrastructure will proceed apace, needed healthcare reforms will be tabled, the military-industrial complex will waste yet more billions, and the national debt, already at $22 trillion — larger, that is, than the entire economy — will continue to surge. The looming threat posed by climate change, much talked about of late, will proceed all but unchecked. For those of us preoccupied with America’s role in the world, the obsolete assumptions and habits undergirding what’s still called “national security” will continue to evade examination. Our endless wars will remain endless and pointless.

By way of compensation, we might wonder what benefits impeachment is likely to yield. Answering that question requires examining four scenarios that describe the range of possibilities awaiting the nation.

The first and most to be desired (but least likely) is that Trump will tire of being a public piñata and just quit. With the thrill of flying in Air Force One having worn off, being president can’t be as much fun these days. Why put up with further grief? How much more entertaining for Trump to retire to the political sidelines where he can tweet up a storm and indulge his penchant for name-calling. And think of the “deals” an ex-president could make in countries like Israel, North Korea, Poland, and Saudi Arabia on which he’s bestowed favors. Cha-ching! As of yet, however, the president shows no signs of taking the easy (and lucrative) way out.

The second possible outcome sounds almost as good but is no less implausible: a sufficient number of Republican senators rediscover their moral compass and “do the right thing,” joining with Democrats to create the two-thirds majority needed to convict Trump and send him packing. In the Washington of that classic twentieth-century film director Frank Capra, with Jimmy Stewart holding forth on the Senate floor and a moist-eyed Jean Arthur cheering him on from the gallery, this might have happened. In the real Washington of “Moscow Mitch” McConnell, think again.

The third somewhat seamier outcome might seem a tad more likely. It postulates that McConnell and various GOP senators facing reelection in 2020 or 2022 will calculate that turning on Trump just might offer the best way of saving their own skins. The president’s loyalty to just about anyone, wives included, has always been highly contingent, the people streaming out of his administration routinely making the point. So why should senatorial loyalty to the president be any different? At the moment, however, indications that Trump loyalists out in the hinterlands will reward such turncoats are just about nonexistent. Unless that base were to flip, don’t expect Republican senators to do anything but flop.

That leaves outcome number four, easily the most probable: while the House will impeach, the Senate will decline to convict. Trump will therefore stay right where he is, with the matter of his fitness for office effectively deferred to the November 2020 elections. Except as a source of sadomasochistic diversion, the entire agonizing experience will, therefore, prove to be a colossal waste of time and blather.

Furthermore, Donald Trump might well emerge from this national ordeal with his reelection chances enhanced. Such a prospect is belatedly insinuating itself into public discourse. For that reason, certain anti-Trump pundits are already showing signs of going wobbly, suggesting, for instance, that censure rather than outright impeachment might suffice as punishment for the president’s various offenses. Yet censuring Trump while allowing him to stay in office would be the equivalent of letting Harvey Weinstein off with a good tongue-lashing so that he can get back to making movies. Censure is for wimps.

Besides, as Trump campaigns for a second term, he would almost surely wear censure like a badge of honor. Keep in mind that Congress’s approval ratings are considerably worse than his. To more than a few members of the public, a black mark awarded by Congress might look like a gold star.

Not Removal But Restoration

So if Trump finds himself backed into a corner, Democrats aren’t necessarily in a more favorable position. And that ain’t the half of it. Let me suggest that, while Trump is being pursued, it’s you, my fellow Americans, who are really being played. The unspoken purpose of impeachment is not removal, but restoration. The overarching aim is not to replace Trump with Mike Pence — the equivalent of exchanging Groucho for Harpo. No, the object of the exercise is to return power to those who created the conditions that enabled Trump to win the White House in the first place.

Just recently, for instance, Hillary Clinton declared Trump to be an “illegitimate president.” Implicit in her charge is the conviction — no doubt sincere — that people like Donald Trump are not supposed to be president. People like Hillary Clinton — people possessing credentials like hers and sharing her values — should be the chosen ones. Here we glimpse the true meaning of legitimacy in this context. Whatever the vote in the Electoral College, Trump doesn’t deserve to be president and never did.

For many of the main participants in this melodrama, the actual but unstated purpose of impeachment is to correct this great wrong and thereby restore history to its anointed path.

In a recent column in the Guardian, Professor Samuel Moyn makes the essential point: Removing from office a vulgar, dishonest, and utterly incompetent president comes nowhere close to capturing what’s going on here. To the elites most intent on ousting Trump, far more important than anything he may say or do is what he signifies. He is a walking, talking repudiation of everything they believe and, by extension, of a future they had come to see as foreordained.

Moyn styles these anti-Trump elites as “centrists,” members of the post-Cold War political mainstream that allowed ample room for nominally conservative Bushes and nominally liberal Clintons, while leaving just enough space for Barack Obama’s promise of hope-and-(not-too-much) change.

These centrists share a common worldview. They believe in the universality of freedom as defined and practiced within the United States. They believe in corporate capitalism operating on a planetary scale. They believe in American primacy, with the United States presiding over a global order as the sole superpower. They believe in “American global leadership,” which they define as primarily a military enterprise. And perhaps most of all, while collecting degrees from Georgetown, Harvard, Oxford, Wellesley, the University of Chicago, and Yale, they came to believe in a so-called meritocracy as the preferred mechanism for allocating wealth, power, and privilege. All of these together comprise the sacred scripture of contemporary American political elites. And if Donald Trump’s antagonists have their way, his removal will restore that sacred scripture to its proper place as the basis of policy.

“For all their appeals to enduring moral values,” Moyn writes, “the centrists are deploying a transparent strategy to return to power.” Destruction of the Trump presidency is a necessary precondition for achieving that goal. “Centrists simply want to return to the status quo interrupted by Trump, their reputations laundered by their courageous opposition to his mercurial reign, and their policies restored to credibility.” Precisely.

High Crimes and Misdemeanors

For such a scheme to succeed, however, laundering reputations alone will not suffice. Equally important will be to bury any recollection of the catastrophes that paved the way for an über-qualified centrist to lose to an indisputably unqualified and unprincipled political novice in 2016.

Holding promised security assistance hostage unless a foreign leader agrees to do you political favors is obviously and indisputably wrong. Trump’s antics regarding Ukraine may even meet some definition of criminal. Still, how does such misconduct compare to the calamities engineered by the “centrists” who preceded him? Consider, in particular, the George W. Bush administration’s decision to invade Iraq in 2003 (along with the spin-off wars that followed). Consider, too, the reckless economic policies that produced the Great Recession of 2007-2008. As measured by the harm inflicted on the American people (and others), the offenses for which Trump is being impeached qualify as mere misdemeanors.

Honest people may differ on whether to attribute the Iraq War to outright lies or monumental hubris. When it comes to tallying up the consequences, however, the intentions of those who sold the war don’t particularly matter. The results include thousands of Americans killed; tens of thousands wounded, many grievously, or left to struggle with the effects of PTSD; hundreds of thousands of non-Americans killed or injured; millions displaced; trillions of dollars expended; radical groups like ISIS empowered (and in its case even formed inside a U.S. prison in Iraq); and the Persian Gulf region plunged into turmoil from which it has yet to recover. How do Trump’s crimes stack up against these?

The Great Recession stemmed directly from economic policies implemented during the administration of President Bill Clinton and continued by his successor. Deregulating the banking sector was projected to produce a bonanza in which all would share. Yet, as a direct result of the ensuing chicanery, nearly nine million Americans lost their jobs, while overall unemployment shot up to 10%. Roughly four million Americans lost their homes to foreclosure. The stock market cratered and millions saw their life savings evaporate. Again, the question must be asked: How do these results compare to Trump’s dubious dealings with Ukraine?

Trump’s critics speak with one voice in demanding accountability. Yet virtually no one has been held accountable for the pain, suffering, and loss inflicted by the architects of the Iraq War and the Great Recession. Why is that? As another presidential election approaches, the question not only goes unanswered, but unasked.

To win reelection, Trump, a corrupt con man (who jumped ship on his own bankrupt casinos, money in hand, leaving others holding the bag) will cheat and lie. Yet, in the politics of the last half-century, these do not qualify as novelties. (Indeed, apart from being the son of a sitting U.S. vice president, what made Hunter Biden worth $50Gs per month to a gas company owned by a Ukrainian oligarch?  I’m curious.) That the president and his associates are engaging in a cover-up is doubtless the case. Yet another cover-up proceeds in broad daylight on a vastly larger scale. “Trump’s shambolic presidency somehow seems less unsavory,” Moyn writes, when considering the fact that his critics refuse “to admit how massively his election signified the failure of their policies, from endless war to economic inequality.” Just so.

What are the real crimes? Who are the real criminals? No matter what happens in the coming months, don’t expect the Trump impeachment proceedings to come within a country mile of addressing such questions.

Andrew Bacevich, a TomDispatch regular, is president and co-founder of the Quincy Institute for Responsible Statecraft. His new book, The Age of Illusions: How America Squandered Its Cold War Victory, will be published in January.

Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Books, John Feffer’s new dystopian novel (the second in the Splinterlands series) Frostlands, Beverly Gologorsky’s novel Every Body Has a Story, and Tom Engelhardt’s A Nation Unmade by War, as well as Alfred McCoy’s In the Shadows of the American Century: The Rise and Decline of U.S. Global Power and John Dower’s The Violent American Century: War and Terror Since World War II.

Copyright 2019 Andrew J. Bacevich

The post The Real Cover-Up first appeared on Senator Mike Gravel.]]>
Michael Hudson: De-Dollarizing the American Financial Empire https://mikegravel.com/michael-hudson-de-dollarizing-the-american-financial-empire/ Mon, 22 Jul 2019 19:08:05 +0000 https://mikegravel.com/?p=1628 Yves here. Another meaty Michael Hudson interview on Guns and Butter. However, I have to vehemently disagree with the claim made by Bonnie Faulkner at the top of the discussion. No one holds guns to other countries’ heads to make them hold dollars. The reason the dollar is the reserve currency is the US is willing to export jobs via running persistent trade deficits.  The US moved away from  having rising worker wages as the key metric of sound economic policy in the 1970s, when labor was blamed for stagflation (too powerful unions supposedly hobbling US manufactures, when the performance of Toyota at the famed NUMMI joint venture showed that to be false; formal or informal cost of living adjustments to pay credited with institutionalizing inflation). Recall also that the Democrats had started to abandon labor unions even before that.

Anyone who runs a trade surplus with the US winds up holding dollars. The idea that China holds a lot of dollars because US diplomats browbeat them is absurd. China can hold its dollars as cash, or it can put them in Treasuries and pick up some yield, or hold riskier dollar investments.  If it sells its dollars and buys other currencies, it will at the margin drive the dollar down and push its currency up, which would hurt its competitiveness in exports, which contradicts its imperative of keeping employment high and using trade surpluses to help achieve that end.

Most countries as a matter of policy actually do or aspire to running trade surpluses because they get the mirror image: they can achieve higher employment levels than they would if they relied only on domestic demand.

Smaller economies can and regularly do get themselves in trouble by borrowing in dollars because the borrowing rate at the time appeared to be lower than in their own currency. This pretty much always ends in tears because the home currency depreciates, greatly raising the cost of the formerly cheap dollar loan.

However, it is true that having established the dollar as the reserve currency (and further going to considerable lengths to make the world safe for US banks and investment banks), the US is now thuggish in how it uses its influence over the dollar payments system. No major financial institution can afford to be cut off from dollar clearing.

From Guns and Butter, produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango.  Visit them at gunsandbutter.org to listen to past programs, comment on shows, or join our email list to receive our newsletter that includes recent shows and updates.  Email  them at faulkner@gunsandbutter.org. and follow them on Twitter at gandbradio.

The audio of this interview with Michael Hudson is available on: https://soundcloud.com/guns-and-butter-1/de-dollarizing-the-american-financial-empire-dr-michael-hudson-408

I’m Bonnie Faulkner.  Today on Guns and Butter, Dr. Michael Hudson. Today’s show: De-Dollarizing the American Financial Empire. Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trend, a Wall Street Financial Analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. His most recent books include, And Forgive Them Their Debts … Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year; Killing the Host:  How Financial Parasites and Debt Destroy the Global Economy; and J Is for Junk Economics: A Guide to Reality in an Age of Deception. We return again today to a discussion of Dr. Hudson’s seminal 1972 book, Super Imperialism:  The Economic Strategy of American Empire, a critique of how the United States exploited foreign economies through the IMF and World Bank.  We discuss how the United States has dominated the world economically both as the world’s largest creditor, and then later as the world’s largest debtor, and take a look at the coming demise of dollar domination.

Bonnie Faulkner:  Michael Hudson, welcome back.

Michael Hudson:  It’s good to be back, Bonnie.

Bonnie Faulkner:  Why is President Trump insisting that the Federal Reserve lower interest rates? I thought they were already extremely low. And if they did go lower, what effect would this have?

Michael Hudson:  Interest rates are historically low, and they have been kept low in order to try to keep providing cheap money for speculators to buy stocks and bonds to make arbitrage gains. Speculators can borrow at a low rate of interest to buy a stock yielding dividends (and also making capital gains) at a higher rate of return, or by buying a bond such as corporate junk bonds that pay higher interest rates, and keep the difference. In short, low interest rates are a form of financial engineering.

Trump wants interest rates to be low in order to inflate the housing market and the stock market even more, as if that is an index of the real economy, not just the financial sector that is wrapped around the economy of production and consumption. Beyond this domestic concern, Trump imagines that if you keep interest rates lower than those of Europe, the dollar’s exchange rate will decline. He thinks that this will make U.S. exports more competitive with foreign products.

Trump is criticizing the Federal Reserve for not keeping interest rates even lower than those of Europe. He he thinks that if interest rates are low, there will be an outflow of capital from this country to buy foreign stocks and bonds that pay a higher interest rate. This financial outflow will lower the dollar’s exchange rate. He believes that this will increase the chance of rebuilding America’s manufacturing exports.

This is the great neoliberal miscalculation. It also is the basis for IMF models.

How low interest rates lower the dollar’s exchange rate, raising import prices

Trump’s guiding idea is that lowering the dollar’s value will lower the cost of labor to employers. That’s what happens when a currency is devalued. Depreciation doesn’t lower costs that have a common worldwide price. There’s a common price for oil in the world, a common price of raw materials, and pretty much a common price for capital and credit. So the main thing that’s devalued when you push a currency down is the price of labor and its working conditions.

Workers are squeezed when a currency’s exchange rate falls, because they have to pay more for goods they import. If the dollar goes down against the Chinese yen or European currency, Chinese imports are going to cost more in dollars. So will European imports. That is the logic behind “beggar my neighbor” devaluations.

How much more foreign imports will cost depends on how far the dollar goes down. But even if it plunges by 50 percent, even if the dollar were to become a junk currency like the Argentinian or other Latin American currencies, that cannot really increase American manufacturing exports, because not much American labor works in factories anymore. Workers drive cabs and work in the service industry or for medical insurance companies. Even if you give American workers in manufacturing companies all their clothing and food for nothing, they still can’t compete with foreign countries, because their housing costs are so high, their medical insurance is so high and their taxes are so high that they’re priced out of world markets. So it won’t help much if the dollar goes down by 1 percent, 10 percent or even 20 percent. If you don’t have factories going and if you don’t have a transportation system, a power supply, and if our public utilities and infrastructure are being run down, there’s nothing that currency manipulation can do to enable America to quickly rebuild its manufacturing export industries.

American parent companies have already moved their factories abroad. They have given up on America. As long as Trump or his successors refrain from changing that system – as long as he gives tax advantages for companies to move abroad – there’s nothing he can do that will restore industry here. But he’s picked up International Monetary Fund’s junk economics, the neoliberal patter talk that it’s given to Latin America pretending that if a country just lowers its exchange rate more, it will be able to lower its wages and living standards, paying labor less in hard-currency terms until at some point, when its poverty and austerity get deep enough, it will become more competitive.

That hasn’t worked for fifty years in Latin America. It hasn’t worked for other countries either, and it never worked in the United States. The 19th-century American School of Political Economy developed the Economy of High Wages doctrine. (I review this in my book on America’s Protectionist Takeoff: 1815-1914.) They recognized that if you pay labor more, it’s more productive, it can afford a better education and it works better. That’s why high-wage labor can undersell low-wage “pauper” labor. Trump is therefore a century behind the times in picking up the IMF austerity idea that you can just devalue the currency and reduce labor’s wages and living standards in international terms to make the economy more profitable and somehow “work your way out of debt.”

What currency depreciation does do when the dollar is devalued is to enable Wall Street firms to borrow 1% and to buy European currencies and bonds yielding 3 percent or 4 percent or 5 percent, or stocks yielding even more. The guiding idea is to do what Japan did in 1990: have very low interest rates to increase what’s called the carry trade.  The carry trade is borrowing at a low interest rate and buying bonds yielding a higher rate, making an arbitrage gain on the interest-rate differential. So Trump is creating an arbitrage opportunity for Wall Street investors. He pretends that this is pro-labor and can rebuild manufacturing. But it only helps hollow out the U.S. economy, sending money to other countries to build themup instead of investing in ourselves. So the effect of what Trump’s doing is the opposite of what he says he’s doing.

Bonnie Faulkner:  Exactly. What is the point of driving investment into foreign countries, away from the United States?

Michael Hudson:  If you’re an investor, you can make more money by dismantling the U.S. economy. You can borrow at 1 percent and buy a bond or a stock that yields 3 or 4 percent. That’s called arbitrage. It’s a financial free lunch. The effect of this free lunch, as you say, is to build up foreign economies or at least their financial markets while undercutting your own. Finance is cosmopolitan, not patriotic. It doesn’t really care where it makes money. Finance goes wherever the rate of return is highest. That’s the dynamic that has been de-industrializing the United States over the past forty years.

Bonnie Faulkner:  From what you’re saying, it sounds like Donald Trump’s policies are leading to doing to the United States what the IMF and World Bank have traditionally done to foreign economies.

Michael Hudson:  That’s what happens when you devalue. The financial sector will see that interest rates are going down, so the dollar’s exchange rate also will decline. Investors will move their money (or will borrow) into euros, gold or Japanese yen or Swiss francs whose exchange rate is expected to rise. So you’re offering a financial arbitrage and capital gain for investors who speculate in foreign currencies. You’re also hollowing out the economy here, and squeezing real wage levels and living standards. 

Why devaluation will not help re-industrialize the U.S. economy

Bonnie Faulkner:  Do you think that Donald Trump understands what he’s doing?

Michael Hudson:  I don’t think he understands. I think he has an oversimplified view of how the world works. He thinks that if we devalue the dollar, we can undersell China and Europe. But you can only undersell them if you have car-making factories available. If you don’t have a factory, you’re not going to be able to undersell foreign carmakers no matter how low the dollar goes. And if you don’t have a set of computer manufacturing factories and local suppliers already in the United States, you’re not going to have production capacity able to undersell China. Most of all, you need public infrastructure and affordable housing, education and health care. So Trump’s view is a fantasy. It’s like saying, “If we had some ham, we could have some ham and eggs, if we had some eggs.” It leaves the causes of America’s de-industrialization out of account.

If we had unemployed car makers, computer makers and other manufacturers here – factories that were idle in an economy that was pretty competitive – then devaluation might make some sense. But Americans are not just a bit uncompetitive. The housing costs in America are so high, the medical and health-insurance costs, the taxes and wage withholding on labor and prices for basic infrastructure that there’s no way that we can compete with foreign countries simply by currency manipulation.

Since 1980 the U.S. economy has been made very high-cost. Yet there also has been a huge squeeze on labor, by raising the prices it has to pay for basic needs. Even if wages go up, people can’t afford to live as well as they did thirty years ago. A radical restructuring is needed in order to restore a full-employment industrial economy. You need de-privatization, you have to break up monopolies, you need the kind of economy and economic reform that America had under Franklin Roosevelt in the 1930s. I don’t see that happening.

Bonnie Faulkner:  Do you think that Donald Trump was installed as U.S. president to oversee the bankruptcy of the United States and dismantling the U.S. Empire?

Michael Hudson:  Nobody installed him; he installed himself. I don’t think most people expected him to win. If you look at the odds that professional bookies and oddsmakers gave from the time he announced his candidacy, most people thought that sleepy Jeb Bush would get the nomination, and that Bush then would lose to Hillary. So there were indeed attempts an attempt to install Hillary or Bush. But nobody tried to install Trump. He made an end run around them, by straight talk, humor and celebrityhood.

He didn’t have advisors that he would listen to, because he’s always been a one-man show. And he doesn’t really know what he’s doing economically. He knows how to cheat people, victimize suppliers, and how to make money in real estate simply by not paying suppliers, and by borrowing from banks and not paying them. But he has no idea that you can’t run an economy this way. Being a real estate mafioso isn’t the same thing as running a whole economy. Trump has no idea and I don’t think anyone knows how to control him, except maybe Fox News.

Wall Street vs. the “real” economy: Which turns out to be more real?

Bonnie Faulkner:  What is going on with the ruling class in the United States? Does anybody in its ranks know how to run an economy?

Michael Hudson:  The problem is that running an economy to help the people and raise living standards, and even to lower the cost of living and doing business, means not running it to help Wall Street. If someone knows how to run an economy, the financial sector wants to keep them out of any public office. High finance is short-term, not long-term. It plays the hit-and-run game, not the much harder task of creating a framework for tangible economic growth.

You can do one of two things:  You can help labor or you can help Wall Street. If running the economy means helping labor and improving living standards by giving better medical care, this is going to be at the expense of the financial sector and short-term corporate profits. So the last thing you want to do is have somebody run the economy for its own prosperity instead of for Wall Street’s purpose.

At issue is who’s going to do the planning. Will it be elected public officials in the government, or Wall Street? Wall Street’s public relations office is the University of Chicago. It claims that a free market is one where rich Wall Street investors and the financial class run an economy. But if you let people vote and democratically elect governments to regulate, that’s called “interference” in a free market. This is the fight that Trump has against China.  He wants to tell it to let the banks run China and have a free market. He says that China has grown rich over the last fifty years by unfair means, with government help and public enterprise. In effect, he wants Chinese to be as threatened and insecure as American workers. They should get rid of their public transportation. They should get rid of their subsidies. They should let a lot of their companies go bankrupt so that Americans can buy them. They should have the same kind of free market that has wrecked the US economy.

China doesn’t want that kind of a free market, of course.  It does have a market economy. It is actually much like the United States was in its 19th-century industrial takeoff, with strong government subsidy.

U.S. changing monetary strategy, from payments-surplus to deficit status

Bonnie Faulkner:  In your seminal work from 1972, Super Imperialism:  The Economic Strategy of American Empire, you write: “Whereas US domination of the world economy stemmed from 1920 through 1960 from its creditor position, its control since the 1960s has stemmed from is debtor position. Not only have the tables been turned, but US diplomats have found that their leverage as the world’s major debtor economy is fully as strong as that which formerly had reflected its net creditor position.” This sounds counter-intuitive. Could you break it down? Let’s start with 1920 through 1960. How was the United States able to dominate the world economy from its creditor position?

Michael Hudson:  The U.S. creditor position really began after World War I, based on the money it lent to the Allies before it joined the war. When the war ended, U.S. diplomats told England and France to pay us for the arms they had bought early on. But in the past, for centuries, the victors usually forgave all the debts among each other once a war was over. For the first time, America insisted that the Allies pay for the military support it had sold them before joining them.

The European Allies were pretty devastated by the war, and they turned to Germany and insisted on reparations that quickly bankrupted Germany. German bankrupted its economy trying to pay England and France, which simply sent it on to pay the United States. Their balance of payments was in deficit, and their currencies weregoing down. American investors saw an opportunity to buy up their industry. Gold was the measure of power, the backing for domestic money and credit and hence capital investment.

America was much more productive, not having suffered war damage here. Between the end of World War II and 1950 when the Korean War broke out, America accumulated over 75 percent of the world’s monetary gold. The United States had heavy agricultural exports, growing industrial exports, and enough money to buy up the leading industries of Europe and Latin America and other countries.

But beginning in 1950 with the Korean War, the U.S. balance of payments moved into deficit for the first time. It got even worse when President Eisenhower decided that America had to support French colonialism in Southeast Asia, in French Indochina – Vietnam and Laos. By the time the Vietnam War escalated in the 1960s, the dollar was running large balance-of-payments deficits. Every week on Wall Street we would watch the gold supply go down, losing gold to countries that weren’t at war, like France and Germany. They were cashing in the excess dollars that were being spent by the U.S. military. By the 1960s it became clear that America was on a trajectory to run out of gold within a decade because of this overseas war spending.

It finally did, by August 1971when President Nixon stopped selling bold on the London exchange and the price was allowed to soar far above $35 an ounce. The U.S. balance-of-payments was still running a deep deficit because of the fighting in Southeast Asia and elsewhere, creating a permanent balance-of-payments deficit. The private sector was just in balance during the 1950s and 1960s. The entire deficit was military.

When America went off gold, people began to wonder what was going to happen. Many predicted an economic doomsday. It was losing its ability to rule the world through gold. But what I realized (and was the first to publish) was that if countries no longer could buy and hold gold in their international reserves, what werethey going to hold? There was only one asset that they could hold: U.S. Government securities, that is, Treasury bonds.

A Treasury bond is a loan to the US Treasury. When a foreign central bank buys a bond, it finances the domestic U.S. budget deficit. So the balance of payments deficit ends up financing the domestic budget deficit.

The result is a circular flow of military spending recycled by foreign central banks. After 1971 the United States continued to spend abroad militarily, and in 1974 the OPEC countries quadrupled the price of oil. At that time the United States told Saudi Arabia that it could charge whatever it wanted for its oil, but it had to recycle all its net dollar earnings. The Saudis were not to buy gold. The Saudis were told that it would be an act of war if they didn’t recycle into the American economy the dollars they received for their oil exports. They were encouraged to buy U.S. Treasury bonds but, could also buy other U.S. bonds and stocks to help push up the stock and bond markets here while supporting the dollar.

The United States kept its own gold stock, while wanting the rest of the world to hold its savings in the form of loans to the United States. So the dollar didn’t go down. Other countries that were receiving dollars simply recycled them to buy U.S. financial securities.

What would have happened if they wouldn’t have done this? Let’s say you’re Germany, France or Japan. If you don’t recycle your dollar receipts back to the U.S. economy, your currency is going to go up. Dollar inflows from export sales are being converted into your currency, increasing its exchange rate. But by buying U.S. bonds or stocks, bid the price of dollars back up against your own currency.

So, when the United States runs a balance-of-payments deficit under conditions where other countries keep their foreign reserves in dollars, the effect is for other countries to keep their currencies’ exchange rates stable – mainly by lending to the U.S. government. That gives the United States a free ride. It can encircle the world with military bases, and the dollars that this costs are returned to the United States.

Imagine writing IOUs when you go out to spend at a store or restaurant – but your IOUs are never going to be collected! The store might say, “We have an IOU from Bonnie Faulkner. Let’s keep it as our savings. Instead of putting it in the bank or asking for payment in real money, we’re just going to keep collecting these IOUs from Bonnie Faulkner.” Corporations call such IOUs and trade credit “receivables.” Now, suppose you went on a spending spree and gave the store a billion dollars’ worth of your IOUs. There’s no way that you could pay off this billion dollars. In that case the stores receiving these IOUs would say, “Well, we really don’t want to foreclose on Bonnie, because we know that she can’t pay. We’d lose the value of receivables on the asset side of our balance sheet – all these IOUs that we’ve been collecting.

That’s essentially what foreign countries are saying about their buildup of dollars. The U.S. position is, in effect, that we are not going to repay any foreign country the dollar debt we owe them. As Treasury Secretary John Connolly said, “It’s our dollars, but your problem.” Other countries have to pay us or else we’ll bomb them. The military dimension to this arrangement is the U.S. position that it would be an act of war if other countries don’t keep spending their export earnings on loans or U.S. stocks and bonds.

That’s what makes the United States the “exceptional country.” The value of our currency is based on other countries’ savings. The money they save has to be held in the form of dollars or securities that we’re never going to repay, even if we could.

This is a huge free ride. You’d think that Donald Trump would want to keep it going. But he claims that China is manipulating its currency by recycling its dollars into loans to the U.S. Treasury. What does he mean by that?  China is earning a lot of dollars by exports its goods to the United States. What does it do with these dollars? It tried to do what America did with Europe and South America: It tried to buy American companies. But the United States blocked it from doing this, on specious national security grounds. The government claims that our national security would be threatened if China would buy a chain of filling stations, as it wanted to do in California. The United States thus has a double standard, claiming that it is threatened if China buys any company, but insisting on its right to buy out the commanding heights of foreign economies with its electronic dollar credit.

That leaves China with only one option: It can buy U.S. Treasury bonds, lending its export earnings to the U.S. Treasury.

Trump is now driving other countries out of the dollar orbit

China now realizes that the U.S. Treasury isn’t going to repay. Even if it wanted to recycle its export earnings into Treasury bonds or U.S. stocks and bonds or real estate, Donald Trump now is saying that he doesn’t want China to support the dollar’s exchange rate (and keep its own exchange rate down) by buying U.S. assets. We’re telling China not to do what we’ve told other countries to do for the past forty years: to buy U.S. securities. Trump accuses countries of artificial currency manipulation if they keep their foreign reserves in dollars. So he’s telling them, and specifically China, to get rid of their dollar holdings, not to buy dollars with their export earnings anymore.

So China is buying gold. Russia also is buying gold and much of the world is now in the process of reverting to the gold-exchange standard (meaning that gold is used to settle international payments imbalances, but is not connected to domestic money creation). Countries realize that there’s a great advantage of the gold-exchange standard: There’s only a limited amount of gold in the world’s central banks. This means that any country that wages war is going to run such a large balance-of-payments deficit that it’s going to lose its gold reserves. So reviving the role of gold may prevent any country, including the United States, from going to war and suffering a military deficit.

 

The irony is that Trump is breaking up America’s financial free ride – its policy of monetary imperialism – by telling counties to stop recycling their dollar inflows. They’ve got to de-dollarize their economies.

The effect is to make these economies independent of the United States. Trump already has announced that we won’t hire Chinese in our IT sectors or let Chinese study subjects at university that might enable them to rival us. So our economies are going to separate.

In effect, Trump has said that if we can’t win in a trade deal, if we can’t make other countries lose and become more dependent on U.S. suppliers and monopoly pricing, then we’re not going to sign an agreement. This stance is driving not only China but Russia and even Europe and other countries all out of the U.S. orbit. The end result is going to be that the United States is going to be isolated, without being able to manufacture like it used to do. It’s dismantled its manufacturing. So how willit get by?

Some population figures were released a week ago showing the middle of America is emptying out. The population is moving from the Midwestern and mountain states to the East and the West coasts and the Gulf Coast. So Trump’s policies are accelerating the de-industrialization of the United States without doing anything to put new productive powers in place, and not even wanting other countries to invest here. The German car companies see Trump putting tariffs on the imported steel they need to build cars in the United States. It built them here to get around America’s tariff barriers against German and other automobiles. But now Trump is not even letting them import the parts that they need to assemble these cars in the non-unionized plants they’ve built in the South.

What can they do? Perhaps they’ll propose a trade with General Motors and Chrysler. The Europeans will get the factories that American companies own in Europe, and give them their American factories in exchange.

This kind of split is occurring without any attempt to make American labor more competitive by lowering its cost of housing, or the price of its health insurance and medical care, or its transportation costs or the infrastructure costs. So America is being left high and dry as a high-priced economy in a nationalistic world, while running a huge balance-of-payments deficit to support its military spending all over the globe.

Bonnie Faulkner:  So it sounds like when the United States went off the gold standard, the dollar basically replaced gold as the main asset in which foreign governments could hold their assets. Now you’re saying that when there was no more gold standard, if foreign economies didn’t buy U.S. Treasuries, the price of their currency would rise and make them uncompetitive.

Michael Hudson:  Yes. Imagine if Americans would have to pay more and more dollars to buy German cars. There’s going to be a larger demand for German currency, the euro, whose exchange rate would rise. That was happening throughout the 1960s and 1970s, before the euro. The only way that Germany could keep down the value of its mark was to buy something that cost dollars. It didn’t buy American exports, because America already was making and exporting less and less, except for food – and Germany can only eat so much wheat and soybeans. So the only thing that Germany could buy that was priced in dollars were U.S. Treasury bonds. That kept the German mark from rising even more rapidly, and kept the balance of payments in balance.

Japan had a similar problem. The Japanese tried to buy U.S. real estate, but they didn’t have any idea of what made real estate valuable here. They lost a reported billion dollars on buying Rockefeller Center, not realizing that the building was separate from the land value, and the land was owned by Columbia University. The building itself was running at a deficit. Most of the rental value paid was to the owner of the land’s groundrent. The Japanese had no idea of how American real estate worked.

The euro is only a satellite currency of the U.S. dollar

Some Americans worried that the euro might become a rival to the dollar. After all, Europe is not de-industrializing. It is moving forward and producing better cars, airplanes and other exports. So the United States persuaded foreign politicians to cripple the euro by making it an austerity currency, creating so few government bonds that there’s no euro vehicle large enough for foreign countries to keep their foreign reserves in. The United States can create more and more dollar debt by running a budget deficit. We can follow Keynesian policies by running a deficit to employ more labor. But the eurozone refuses to let countries run a budget deficit of more than 3 percent of its GDP. Now running more than 3 percent of their GDP. That level is very marginal compared to the United States. And if you’re trying not to run any deficit at all – and even if you keep it less than 3% – then you’re imposing austerity on your country, keeping your employment down. You’re stifling your internal market, cutting your throat by being unable to create a real rival to the dollar. That’s why Donald Rumsfeld called Europe a dead zone, and why the only alternatives for a rival currency are the Chinese yuan. They’re moving into a gold-based currency area along with Russia, Iran and other members of the Shanghai Cooperation Organization.

Bonnie Faulkner:  The European Union not allowing European countries within the eurozone to not run deficits more than 3 percent was basically cutting their own throat.  Why would they do such a thing?

Michael Hudson:  Because the heads of the Central Bank are fighting a class war. They look at themselves as financial generals in the economic fight against labor, to hurt the working class, lower wages and help their political constituency, the wealthy investing class. Europe always has had a more vicious class war than the United States does. It’s never really emerged from its aristocratic post-feudal system. Its central bankers and universities follow the University of Chicago free-market school, saying that the way to get rich is to make your labor poorer, and to create a government where labor doesn’t have a voice. That’s Europe’s economic philosophy, and it’s why Europe has not matched the growth that China and other countries are experiencing.

Bonnie Faulkner:  So it sounds like then the United States has been able to dominate the world economy since 1971 from a debtor position.

Michael Hudson:  When it was losing gold, from 1950 to 1971, that wasn’t dominating; that was losing America’s gold supply to France, Germany, Japan and other countries. Only when it stopped the gold-exchange standard and left countries with no alternative for their international savings but to buy U.S. Treasury bonds or other securities was it able to pay for its military spending without losing its power.

Since 1971, world diplomacy has essentially been backed by American military power. It’s not a free market. Military power keeps countries in a financial strait jacket in which the United States can run into debt without having to repay it. Other countries that run payments deficits are not allowed to expand their economies, either to rival the United States or even to improve living standards for their labor force. Only countries outside the U.S. orbit – China, and in principle Russia and some other countries in Asia – are able to increase their living standards and capital investment and technology by being free of this globalized financial class war.

Bonnie Faulkner:  In Super Imperialismyou write that, “Pressures to create a New International Economic Order collapsed by the end of the 1970s.” Are you saying that other countries simply gave up and acquiesced to American monetary imperialism? What happened?

Michael Hudson:  I’m told that there was wholesale bribery. Officials in the Reagan administration told me that they just paid off foreign officials to support the U.S. position, not a New International Economic Order. U.S. agencies maneuvered within the party politics of European and Near Eastern countries to promote pro-American officials and sideline those who did not agree to act as U.S. satellites. A lot of money was involved in this meddling.

So the United Stateshas corrupted democratic politics throughout Europe and the Near East, and much of Asia. That has succeeded in sterilizing foreign independence in the United States. Meanwhile, Thatcher’s and Reagan’s neoliberal ideas were promoted instead of the kind of mixed economy that Roosevelt and social democracy had been pressing for fifty years.

 

Who will plan economies: Financial managers, or democratic governments?

Bonnie Faulkner:  If there were pressures to create a New International Economic Order in the 1970s, what was this new order looking to achieve?

 

Michael Hudson:  Other countries wanted to do for their economies what the United States has long done for its own economy: to use their governments’ deficit spending to build up their infrastructure, raise living standards, create housing and promote progressive taxation that would prevent a rentierclass, a landlord and financial class from taking over economic management. In the financial field, they wanted governments to create their own money, to promote their own development, just like the United States does. The role of neoliberalism was the opposite: it was to promote the financial and real estate sector and monopolies to take economic management away from government.

 

So the real question from the 1980s on was about who would be the basic planning center of society. Would it be the financial sector – the banks and bondholders, whose interest is really the One Percent that own most of the banks’ bonds and stocks? Or, is it going to be governments trying to subsidize the economy to help the 99 Percent grow and prosper? That was the social democratic view opposed by Thatcherism and Reaganism.

 

The international drive to de-dollarize

Bonnie Faulkner:  Was this pressure that blocked a New International Economic Order brought on by the United States going off the gold-exchange standard?

Michael Hudson:  No. It was a reaction against the U.S. policy of siphoning off the commanding heights of foreign economies. The United States wants to control their raw-materials exports, especially their oil and gas. It wants to control their financial system, so that all of their economic gains will go to foreign investors, mainly U.S. investors. It wants to turn other economies into service economies to the United States, and to make them into a kind of super-NATO military alliance that will oppose any country that does not want to be part of the U.S.-centered unilateral global order.

Bonnie Faulkner:  How does today’s monetary imperialism – super imperialism – differ from the imperialism of the past?

Michael Hudson:  It’s a higher stage of imperialism. The old imperialism was colonialism. You would come in and use military power to install a client ruling class. But each country would have its own currency. What has made imperialism “super” is that America doesn’t have to colonize another country. It doesn’t have to invade a country or actually go to war with it. All it needs is to have the country invest its savings, its export earnings in loans to the United States Government. This enables the United States to keep its interest rates low and enable American investors to borrow from American banks at a low rate to buy up foreign industry and agriculture that’s yielding 10 percent, 15 percent or more. So American investors realize that despite the balance-of-payments deficit, they can borrow back these dollars at such a low rate from foreign countries – paying only 1 percent to 3 percent on the Treasury bonds they hold – while pumping dollars into foreign economies by buying up their industry and agriculture and infrastructure and public utilities, making large capital gains. The hope is that and soon, we’ll earn our way out of debt by this free ride arrangement.

 

Imperialism is getting something for nothing. It is a strategy to obtain other countries’ surplus without playing a productive role, but by creating an extractive rentiersystem. An imperialist power obliges other countries to pay tribute. Of course, America doesn’t come right out and tell other countries, “You have to pay us tribute,” like Roman emperors told the provinces they governed. U.S. diplomats simply insist that other countries invest their balance-of-payments inflows and official central-bank savings in US dollars, especially U.S. Treasury IOUs. This Treasury-bill standard turns the global monetary and financial system into a tributary system.

That is what pays the costs of U.S. military spending, including its 800 military bases throughout the world, and its foreign legion of Isis, Al Qaeda fighters and “color revolutions” to destabilize countries that don’t adhere to the dollar-centered global economic system.

Bonnie Faulkner:  You write: “Today it would be necessary for Europe and Asia to design an artificial, politically created alternative to the dollar as an international store of value. This promises to become the crux of international political tensions for the next generation.” How does the world break out of this double-standard dollar domination?

Michael Hudson:  It’s already coming about. And Trump is a great catalyst speeding departing guests. China and Russia are reducing their dollar holdings. They don’t want to hold American Treasury bonds, because if America goes to war with them, it will do to them what it did to Iran. It will just keep all the money, not pay back the investment China has kept in U.S. banks and the Treasury. So they’re getting rid of the dollars that they hold. They’re buying gold, and are moving as quickly as they can to be independent of any reliance on U.S. exports. They are building up their military, so that if the United States tries to threaten them, they can defend themselves. The world is fracturing.

Bonnie Faulkner:  What are foreign countries like China and Russia using to buy gold? Are they buying it with dollars?

Michael Hudson:  Yes. They earn dollars or euros from what they’re exporting. This money goes into the central bank of China, because Chinese exporters want domestic yuan to pay their own workers and suppliers. So they go to the Bank of China and they exchange their dollars for yuan. The Bank of China, the central bank, then decides what to do with this foreign currency. They may go into the open market and buy gold. Or, they may spend it in foreign countries, on the Belt and Road Initiative to build a railway and steamship infrastructure and port development to help China’s exporters integrate their economy with others and ultimately with Europe, replacing the United States as customer and supplier. They see the United States as a dying economy.

Bonnie Faulkner:  Can the Chinese build up their Belt and Road infrastructure projects with dollars?

Michael Hudson:  No, they are getting rid of dollars. They already are receiving such a large surplus each year that they only use the dollars to buy gold or some goods, such as Boeing airplanes, but mostly food and raw materials. When China buys iron from Australia, for instance, they sell dollars from their foreign-exchange reserves and buy Australian currency to pay Australians for the iron ore that they import. They use dollars to pay other countries that are still part of the dollar area and still willing to keep adding these dollars to their official monetary reserves instead of holding gold.

Bonnie Faulkner:  Well, it is kind of surprising, Michael, that countries haven’t started doing this a lot sooner.

Michael Hudson:  There has been political pressure not to withdraw from the dollar-debt system. If countries act independently, they risk being overthrown. It takes a strong government to resist American interference and dirty tricks to put its own country first instead of following the U.S. advisors and agents who pay them to serve the U.S. economy rather than their own, or to resist brainwashing by University of Chicago’s junk economics.

Bonnie Faulkner:  How far along is the dollar’s demise as the world’s reserve currency?

Michael Hudson:  It’s already slowing. Trump is doing everything he can to accelerate it, by threatening that if foreign countries continue to recycle their export earnings into dollars (raising the dollar’s exchange rate), we’ll accuse them of manipulating their currency. So he would like to end it all by the end of his second term in 2024.

Bonnie Faulkner: What would the United States look like if the dollar is no longer the world’s reserve currency?

Michael Hudson:  If it continues to let Wall Street do the economic planning, the economy will look like that of Argentina.

Bonnie Faulkner:  And what does Argentina look like?

Michael Hudson:  A narrow oligarchy at the top, keeping labor at the bottom, taking away labor’s rights to unionize – an economy whose financial and military sectors have won the class war.

Bonnie Faulkner:  China, with its Belt and Road infrastructure project, is now buying gold on the open market, as are a number of other countries. Has the Western banking system penetrated China? And if so, how would you characterize China’s banking system?

Michael Hudson:  There’s an attempt by the United States to penetrate China. In the recent trade agreements China did permit U.S. banks to create their own credit. I’m not sure that this is going to really take off, now that Trump is accelerating the trade war. But basically, in America you have private banks extending credit to corporations. In China you have the government banks extending the loans. That saves China from having a financial crisis in the way that the United States does.

About 12 percent of American companies are said to be zombie companies. They’re already insolvent, not able to make a profit after paying their heavy debt service. But banks are still giving them enough credit to stay in business, so they won’t have to go bankrupt and create a crisis. China doesn’t have that problem, because when Chinese industry and factories are not able to pay, the public Bank of China can simply forgive the debt. Its choice is clear: Either it can let companies go bankrupt and be sold at a low price to some buyer, mainly an American; or, it can wipe the bad debts off the books.

If China had been crazy enough to have student loans and leave its graduates impoverished instead of providing free universities, China’s central bank could simply write off the student loans. No investors would lose, because the banks are owned by the government. Its position is, “If you’re a factory, we don’t want you to have to close down and unemploy your labor. We’ll just write down the debt. And if your employees are having a really hard time, we’ll just write down their debts, so that they can spend their money on goods and services to help expand our internal market.”

 

America’s banks are owned by the stockholders and bondholders, who would never let Chase Manhattan or Citibank or Wells Fargo just forgive their various categories of loans. That’s why public banking is so much more efficient from an economy-wide level than private banks. It’s why banking should be a public utility, not privatized.

 

Bonnie Faulkner:  Can you explain further how writing down debts is good for the economy?

Michael Hudson:  Well, think of the alternative to writing down debts. If you don’t write down America’s student debts, the graduates are going to have to pay so much of the student debt service (now to the government) that they’re not going to have enough money to be able to buy a house, they won’t have enough money to get married, they won’t have enough money to buy goods and services. It means that most people who can buy houses are graduates with trust funds – students whose parents are rich enough that they didn’t have to take out a student loan to pay for their children’s education. These hereditary families are rich enough to buy them their own apartment.

 

That’s why the American economy is polarizing between people who inherit enough money to be able to have their own housing and budgets free of student loans and other debts, compared to families that are debt strapped and running deeper into debt and without much savings. This financial bifurcation is making us poorer. Yet neoliberal economic theory sees this as a competitive advantage. For them, and for employers, poverty is not a problem to be solved; it is the solution to their own aim of profitability.

Bonnie Faulkner:  So is this whole privatization scheme, particularly the privatization of the banking system and privatizing a lot of infrastructure what’s bankrupting the United States?

Michael Hudson:  Yes, just as it’s bankrupted England and other countries that followed Thatcherism or the neo-liberal philosophy since about 1980.

Bonnie Faulkner:  Michael Hudson, thank you again.

Michael Hudson:  It’s always a pleasure to have these discussions.

Bonnie Faulkner:  I’ve been speaking with Dr. Michael Hudson.  Today’s show has been:  De-Dollarizing the American Financial Empire.  Dr. Hudson is a financial economist and historian.  He is President of the Institute for the Study of Long-Term Economic Trend, a Wall Street Financial Analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City.  His 1972 book, Super Imperialism:  The Economic Strategy of American Empire, the subject of today’s broadcast, is posted in PDF format on his website at michael-hudson.com.  He is also author of Trade, Development and Foreign Debt, which is the academic sister volume to Super Imperialism.  Dr. Hudson acts as an economic advisor to governments worldwide on finance and tax law. Visit his website at michael-hudson.com.

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