John Kerry

The Anti-Empire Report #143

fallujahgc2sm From the Keyboard of William Blum
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fallujah

Published originally in The Anti-Empire Report February 5, 2016

“If the Nuremberg laws were applied, then every post-war American president would have been hanged.”

-Noam Chomsky


Is Bernie Sanders a socialist?

“Self-described socialist” … How many times have we all read that term in regard to Vermont senator Bernie Sanders? But is he really a socialist? Or is he a “social democrat”, which is what he’d be called in Europe? Or is he a “democratic socialist”, which is the American party he has been a member of (DSA – Democratic Socialists of America)? And does it really matter which one he is? They’re all socialists, are they not?

Why does a person raised in a capitalist society become a socialist? It could be because of a parent or parents who are committed socialists and raise their children that way. But it’s usually because the person has seen capitalism up close for many years, is turned off by it, and is thus receptive to an alternative. All of us know what the ugly side of capitalism looks like. Here are but a few of the countless examples taken from real life:

  • Following an earthquake or other natural disaster, businesses raise their prices for basic necessities such as batteries, generators, water pumps, tree-removal services, etc.

  • In the face of widespread medical needs, drug and health-care prices soar, while new surgical and medical procedures are patented.

  • The cost of rent increases inexorably regardless of tenants’ income.

  • Ten thousand types of deception to part the citizens from their hard-earned wages.

What do these examples have in common? It’s their driving force – the profit motive; the desire to maximize profit. Any improvement in the system has to begin with a strong commitment to radically restraining, if not completely eliminating, the profit motive. Otherwise nothing of any significance will change in society, and the capitalists who own the society – and their liberal apologists – can mouth one progressive-sounding platitude after another as their chauffeur drives them to the bank.

But social democrats and democratic socialists have no desire to get rid of the profit motive. Last November, Sanders gave a speech at Georgetown University in Washington about his positive view of democratic socialism, including its place in the policies of presidents Franklin D. Roosevelt and Lyndon B. Johnson. In defining what democratic socialism means to him, Sanders said: “I don’t believe government should take over the grocery store down the street or own the means of production.” 

I personally could live with the neighborhood grocery store remaining in private hands, but larger institutions are always a threat; the larger and richer they are the more tempting and easier it is for them to put profit ahead of the public’s welfare, and to purchase politicians. The question of socialism is inseparable from the question of public ownership of the means of production.

The question thus facing “socialists” like Sanders is this: When all your idealistic visions for a more humane, more just, more equitable, and more rational society run head-first into the stone wall of the profit motive … which of the two gives way?

The most commonly proposed alternative to both government or private control is worker-owned cooperatives or publicly owned enterprises managed by workers and consumer representatives. Sanders has expressed his support for such systems and there is indeed much to be said about them. But the problem I find is that they will still operate within a capitalist society, which means competition, survival of the fittest; which means that if you can’t sell more than your competitors, if you can’t make a sufficient net profit on your sales, you will likely be forced to go out of business; and to prevent such a fate, at some point you may very well be forced to do illegal or immoral things against the public; which means back to the present.

Eliminating the profit motive in American society would run into a lot less opposition than one might expect. Consciously or unconsciously it’s already looked down upon to a great extent by numerous individuals and institutions of influence. For example, judges frequently impose lighter sentences upon lawbreakers if they haven’t actually profited monetarily from their acts. And they forbid others from making a profit from their crimes by selling book or film rights, or interviews. The California Senate enshrined this into law in 1994, one which directs that any such income of criminals convicted of serious crimes be placed into a trust fund for the benefit of the victims of their crimes. It must further be kept in mind that the great majority of Americans, like people everywhere, do not labor for profit, but for a salary.

The citizenry may have drifted even further away from the system than all this indicates, for American society seems to have more trust and respect for “non-profit” organizations than for the profit-seeking kind. Would the public be so generous with disaster relief if the Red Cross were a regular profit-making business? Would the Internal Revenue Service allow it to be tax-exempt? Why does the Post Office give cheaper rates to non-profits and lower rates for books and magazines which don’t contain advertising? For an AIDS test, do people feel more confident going to the Public Health Service or to a commercial laboratory? Why does “educational” or “public” television not have regular commercials? What would Americans think of peace-corps volunteers, elementary and high-school teachers, clergy, nurses, and social workers who demanded well in excess of $100 thousand per year? Would the public like to see churches competing with each other, complete with ad campaigns selling a New and Improved God?

Pervading all these attitudes, and frequently voiced, is a strong disapproval of greed and selfishness, in glaring contradiction to the reality that greed and selfishness form the official and ideological basis of our system. It’s almost as if no one remembers how the system is supposed to work any more, or they prefer not to dwell on it.

It would appear that, at least on a gut level, Americans have had it up to here with free enterprise. The great irony of it all is that the mass of the American people are not aware that their sundry attitudes constitute an anti-free-enterprise philosophy, and thus tend to go on believing the conventional wisdom that government is the problem, that big government is the biggest problem, and that their salvation cometh from the private sector, thereby feeding directly into pro-free-enterprise ideology.

Thus it is that those activists for social change who believe that American society is faced with problems so daunting that no corporation or entrepreneur is ever going to solve them at a profit carry the burden of convincing the American people that they don’t really believe what they think they believe; and that the public’s complementary mindset – that the government is no match for the private sector in efficiently getting large and important things done – is equally fallacious, for the government has built up an incredible military machine (ignoring for the moment what it’s used for), landed men on the moon, created great dams, marvelous national parks, an interstate highway system, the peace corps, social security, insurance for bank deposits, protection of pension funds against corporate misuse, the Environmental Protection Agency, the National Institutes of Health, the Smithsonian, the G.I. Bill, and much, much more. In short, the government has been quite good at doing what it wanted to do, or what labor and other movements have made it do, like establishing worker health and safety standards and requiring food manufacturers to list detailed information about ingredients.

Activists have to remind the American people of what they’ve already learned but seem to have forgotten: that they don’t want more government, or less government; they don’t want biggovernment, or small government; they want government on their side. Period.

Sanders has to clarify his views. What exactly does he mean by “socialism”? What exactly is the role the profit motive will play in his future society”?

Mark Brzezinski, son of Zbigniew, was a post-Cold War Fulbright Scholar in Warsaw: “I asked my students to define democracy. Expecting a discussion on individual liberties and authentically elected institutions, I was surprised to hear my students respond that to them, democracy means a government obligation to maintain a certain standard of living and to provide health care, education and housing for all. In other words, socialism.” 

We should never forget

The modern, educated, advanced nation of Iraq was reduced to a virtual failed state … the United States, beginning in 1991, bombed for much of the following 12 years, with one dubious excuse after another; then, in 2003, invaded, then occupied, overthrew the government, tortured without inhibition, killed wantonly … the people of that unhappy land lost everything – their homes, their schools, their electricity, their clean water, their environment, their neighborhoods, their mosques, their archaeology, their jobs, their careers, their professionals, their state-run enterprises, their physical health, their mental health, their health care, their welfare state, their women’s rights, their religious tolerance, their safety, their security, their children, their parents, their past, their present, their future, their lives … More than half the population either dead, wounded, traumatized, in prison, internally displaced, or in foreign exile … The air, soil, water, blood, and genes drenched with depleted uranium … the most awful birth defects … unexploded cluster bombs lying in wait for children to pick them up … a river of blood running alongside the Euphrates and Tigris … through a country that may never be put back together again … “It is a common refrain among war-weary Iraqis,” reported the Washington Post in 2007, that things were better before the U.S.-led invasion in 2003.” 

The United States has not paid any compensation to Iraq.

The United States has not made any apology to Iraq.

Foreign policy is even more sensitive a subject in the United States than slavery of the black people and genocide of the Native Americans. The US has apologized for these many times, but virtually never for the crimes of American foreign policy. 

In 2014, George W. Bush, the man most responsible for this holocaust, was living a quiet life in Texas, with a focus on his paintings. “I’m trying to leave something behind”, he said. 

Yes, he has certainly done that – mountains of rubble for one thing; rubble that once was cities and towns. His legacy also includes the charming Islamic State. Ah, but Georgie Boy is an artiste.

We need a trial to judge all those who bear significant responsibility for the past century – the most murderous and ecologically destructive in human history. We could call it the war, air and fiscal crimes tribunal and we could put politicians and CEOs and major media owners in the dock with earphones like Eichmann and make them listen to the evidence of how they killed millions of people and almost murdered the planet and made most of us far more miserable than we needed to be. Of course, we wouldn’t have time to go after them one by one. We’d have to lump Wall Street investment bankers in one trial, the Council on Foreign Relations in another, and any remaining Harvard Business School or Yale Law graduates in a third. We don’t need this for retribution, only for edification. So there would be no capital punishment, but rather banishment to an overseas Nike factory with a vow of perpetual silence. – Sam Smith 

On March 2, 2014 US Secretary of State John Kerry condemned Russia’s “incredible act of aggression” in Ukraine. “You just don’t in the 21st century behave in 19th century fashion by invading another country on completely trumped up pretext.”

Iraq 2003 was in the 21st century. The pretext was completely trumped up. Senator John Kerry voted for it. Nice moral authority you have there, John.

On the same occasion, concerning Ukraine, President Obama spoke of “the principle that no country has the right to send in troops to another country unprovoked”.  Do our leaders have no memory or do they think we’ve all lost ours?

Does Obama avoid prosecuting the Bush-Cheney gang because he wants to have the same rights to commit war crimes? The excuse he gives for his inaction is so lame that if George W. had used it people would not hesitate to laugh. On about five occasions, in reply to questions about why his administration has not prosecuted the like of Bush, Cheney, Rumsfeld, Wolfowitz, et al. for mass murder, torture and other war crimes, former law professor Obama has stated: “I prefer to look forward rather than backwards.” Picture a defendant before a judge asking to be found innocent on such grounds. It simply makes laws, law enforcement, crime, justice, and facts irrelevant. Picture Chelsea Manning and other whistleblowers using this argument. Picture the reaction to this by Barack Obama, who has become the leading persecutor of whistleblowers in American history.

Noam Chomsky has observed: “If the Nuremberg laws were applied, then every post-war American president would have been hanged.”

It appears that the German and Japanese people only relinquished their imperial culture and mindset when they were bombed back to the stone age during World War II. Something similar may be the only cure for the same pathology that is embedded into the very social fabric of the United States. The US is now a full-blown pathological society. There is no other wonder drug to deal with American-exceptionalism-itis.

Notes

  1. Senator Bernie Sanders on Democratic Socialism in the United States, November 19, 2015
  2. Los Angeles Times, September 2, 1994
  3. Washington Post, May 5, 2007
  4. William Blum, Rogue State: A Guide to the World’s Only Superpower, chapter 25
  5. New York Times, September 16, 2014
  6. Sam Smith of Maine, formerly of Washington, DC
  7. Reuters, March 3, 2014

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.


William Blum is an author, historian, and renowned critic of U.S. foreign policy. He is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II and Rogue State: A Guide to the World’s Only Superpower, among others.

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

 

Why the US is Finally Talking to Russia

Off the keyboard of Pepe Escobar
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Nulandistan

Originally published in Sputnik on May 19, 2015

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So a woman walks into a room… That’s how quite a few jokes usually start. In our case, self-appointed Queen of Nulandistan Victoria “F**k the EU” walks into a room in Moscow to talk to Russian deputy foreign ministers Sergei Ryabkov and Grigory Karasin.

A joke? Oh no; that really happened. Why?

Let’s start with the official reactions. Karasin qualified the talks as "fruitful", while stressing Moscow does not approve of Washington becoming part of the Normandy-style (Russia, Ukraine, Germany and France) negotiations on Ukraine. Not after the relentless demonization not only of the Kremlin but also of Russia as a whole since the Maidan coup.

Ryabkov, for his part, made it known the current state of the US-Russia relationship remains, well, corrosive.

It’s crucial to remember the Queen of Nulandistan went to Moscow only after meeting with certified Washington vassal President Poroshenko and her own, hand-picked Prime Minister, “Yats”; and that was before accompanying Secretary of State John Kerry on the full regalia State Department trip to Sochi on May 12.

The president of the Russian Federation Vladimir Putin (in the center) during procession of Regional patriotic public organization Immortal Regiment Moscow along the Red Square

The Minsk-2 agreement – the actual product of the Normandy-style negotiations – directly involved Berlin and Paris, who finally saw the realpolitik on the wall and were compelled to divert from Washington’s monomaniac antagonistic approach. 
 

 

Inside the EU, chaos remains on the key subject of sanctions. The Baltics and Poland toe the “Russians are coming!” Cold War 2.0 hysteria line, while the adults in Brussels are represented by Italy, Greece, Spain and Hungary.

So Germany and France are already in deep trouble keeping the messy EU house in order. At the same time Berlin and Paris know nothing the self-described “Don't Do Stupid Stuff” Obama administration pulls off will mollify Moscow to abandon its precise red lines.

Watch Those Red Lines

It’s crucial to notice that Crimea does not seem to be on the table anymore; it’s a fait accompli. But then there are those U.S. “military trainers” who have been deployed to western Ukraine only for a “six-month mission” (historical reminder; this is how the Vietnam war started). For Moscow, expansion of this “mission” is an absolute red line. 

And then there’s the ultimate red line; NATO expansion, which remains unabated in the Baltics, Poland, Romania and Bulgaria. That won’t stop; it’s part of NATO’s obsession in solidifying a new Iron Curtain from the Baltics to the Black Sea. 

Thus, beyond all the talking, the next step to watch is whether the Obama administration will really refrain from weaponizing Kiev.

Ukraine for all practical purposes is now a massively indebted failed state turned into an IMF colony. The EU does not want it – although NATO does. For Moscow, the – ghastly – show will only be over when Ukraine, with or without the people’s republics of Donetsk and Lugansk, is neutral, and not part of a NATO strategic threat.  

I have examined here the possibility that the Obama administration’s strategic shift towards talking instead of cursing/threatening may signify that the real Masters of the Universe have finally understood the emerging New (Silk) World Order is bound to leave them behind.

President Putin knew that he was heading towards a major confrontation with the US after the dismemberment of Yugoslavia, the Georgian adventure, and NATO’s ceaseless expansion violating all those empty promises to Gorbachev. 

The difference is that now – and the Pentagon knows it – Moscow has amassed up to 10,000 tactical nuclear weapons. In the – apocalyptic — event of a war between Russia with NATO, the wet dream of many a US neo-con, these tactical nuclear weapons would knock out every commercial and military airfield of every NATO country in twenty minutes. That would leave no airfield for NATO combined air operations.

And then there’s the S-500 missile defense system, which can protect Russia against any form of Pentagon/NATO nuclear missile retaliation. No US offensive weapon, including Stealth bombers, could get through the S-500 maze, and the Pentagon also knows it.  

Strategy? What Strategy?

The Dr. Zbig “Grand Chessboard” Brzezinski-style strategy has always been to lure Russia into another Afghanistan in Ukraine, leading to a collapse of the Russian economy with the Big Prize being a Western takeover of Russia’s oil and natural gas wealth, and by extension Central Asia’s. Ukrainians would be used as cannon fodder, as were Afghans since the 1980s Arab-Afghan jihad.

Yet the Obama administration overplayed its hand, and realpolitik now spells out the deepening of the Russia-China strategic partnership across the entire Eurasian land mass; Eurasia as a prospective, massive commercial emporium stretching from Beijing to Berlin, or from Shanghai to St. Petersburg and beyond towards Rotterdam and Duisburg.

Without the exceptionalist obsession of some key Beltway factions, none of the elements of Cold War 2.0 would be in play, as Russia is a natural ally of the US in many fronts. That in itself reveals the state of “strategic thinking” by the current US administration.

Moscow, anyway, won’t be caught off-guard by the current, barely disguised, charm offensive, because Russian intelligence knows that may well veil a “Grand Chessboard”-style tactic of two steps back to regroup for a massive advance later.

Moreover, nothing has basically changed other than the original, dissuasive Cold War era MAD – Mutually Assured Destruction – doctrine being over.

The US still retains PGS (Prompt Global Strike) capability. Ukraine is just a detail. The real game-changer will happen when Russia is able to seal its whole territory, via the S-500s, against PGS. That will happen sooner than anyone thinks. And that’s why the real Masters of the Universe – via their emissaries – feel compelled to talk.   

The views expressed in this article are solely those of the author and do not necessarily reflect the official position of Sputnik.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

U.S. wakes up to New (Silk) World Order

Off the keyboard of Pepe Escobar
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THE ROVING EYE

Marco Polo's Route On Silk Road To China

Originally published in Asia Times on May 15, 2015

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The real Masters of the Universe in the U.S. are no weathermen, but arguably they’re starting to feel which way the wind is blowing.

History may signal it all started with this week’s trip to Sochi, led by their paperboy, Secretary of State John Kerry, who met with Foreign Minister Lavrov and then with President Putin.

Arguably, a visual reminder clicked the bells for the real Masters of the Universe; the PLA marching in Red Square on Victory Day side by side with the Russian military. Even under the Stalin-Mao alliance Chinese troops did not march in Red Square.

As a screamer, that rivals the Russian S-500 missile systems. Adults in the Beltway may have done the math and concluded Moscow and Beijing may be on the verge of signing secret military protocols as in the Molotov-Ribbentrop pact. The new game of musical chairs is surely bound to leave Eurasian-obsessed Dr. Zbig “Grand Chessboard” Brzezinski apoplectic.

And suddenly, instead of relentless demonization and NATO spewing out “Russian aggression!” every ten seconds, we have Kerry saying that respecting Minsk-2 is the only way out in Ukraine, and that he would strongly caution vassal Poroshenko against his bragging on bombing Donetsk airport and environs back into Ukrainian “democracy”.

The ever level-headed Lavrov, for his part, described the meeting with Kerry as “wonderful,” and Kremlin spokesman Dmitry Peskov described the new U.S.-Russia entente as “extremely positive”.

So now the self-described “Don’t Do Stupid Stuff” Obama administration, at least apparently, seems to finally understand that this “isolating Russia” business is over – and that Moscow simply won’t back down from two red lines; no Ukraine in NATO, and no chance of popular republics of Donetsk and Lugansk being smashed, by Kiev, NATO or anybody else.

Thus what was really discussed – but not leaked – out of Sochi is how the Obama administration can get some sort of face-saving exit out of the Russian western borderland geopolitical mess it invited on itself in the first place.

About those missiles…

Ukraine is a failed state now fully converted into an IMF colony. The EU will never accept it as a member, or pay its astronomic bills. The real action, for both Washington and Moscow, is Iran. Not accidentally, the extremely dodgy Wendy Sherman — who has been the chief U.S. negotiator in the P5+1 nuclear talks — was part of Kerry’s entourage. A comprehensive deal with Iran cannot be clinched without Moscow’s essential collaboration on everything from the disposal of spent nuclear fuel to the swift end of UN sanctions.

Iran is a key node in the Chinese-led New Silk Road(s) project. So the real Masters of the Universe must have also — finally — seen this is all about Eurasia, which, inevitably, was the real star in the May 9 Victory Day parade. After his pregnant with meaning Moscow stop — where he signed 32 separate deals — Chinese President Xi Jinping went to do deals in Kazakhstan and Belarus.

So welcome to the New (Silk) World Order; from Beijing to Moscow on high-speed rail; from Shanghai to Almaty, Minsk and beyond; from Central Asia to Western Europe.

By now we all know how this high-speed trade/geopolitical journey is unstoppable — spanning the Beijing-led, Moscow-supported Asian Infrastructure Investment Bank (AIIB) and the BRICs Development Bank. Central Asia, Mongolia and Afghanistan — where NATO has just lost a war — are being inexorably pulled into this trade/geopolitical orbit covering all of central, northern, and eastern Eurasia.

What could be called Greater Asia is already shaping up — not only from Beijing to Moscow but also from business center Shanghai to gateway-to-Europe St. Petersburg. It’s the natural consequence of a complex process I have been examining for a while now — the marriage of the massive Beijing-led Silk Road Economic Belt with the Moscow-led Eurasia Economic Union (EEU). Putin described it as “a new level of partnership.”

The real Masters of the Universe may have also noted the very close discussions between Russian Defense Minister Sergei Shoigu and the deputy chairman of the Central Military Council of China, Gen. Fan Changlong. Russia and China will conduct naval exercises in the Mediterranean Sea and the Sea of Japan and will give top priority to their common position regarding U.S. global missile defense.

There’s the not-so-negligible matter of the Pentagon “discovering” China has up to 60 silo-based ICBMs – the CSS-4 – capable of targeting almost the whole U.S., except Florida.

And last but not least, there’s the Russian rollout of the ultra-sophisticated S-500 defensive missile system — which will conclusively protect Russia from a U.S. Prompt Global Strike (PGS). Each S-500 missile can intercept ten ICBMs at speeds up to 15,480 miles an hour, altitudes of 115 miles and horizontal range of 2,174 miles. Moscow insists the system will only be operational in 2017. If Russia is able to rollout 10,000 S-500 missiles, they can intercept 100,000 American ICBMs by the time the U.S. has a new White House tenant.

Once again, the real Masters of the Universe seem to have done the math. Can’t reduce Russia to ashes. Can’t win in the New (Silk) World Order. Might as well sit down and talk. But hold your (geopolitical) horses; they might still change their mind.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Attention Deficit

Off the keyboard of James Howard Kunstler

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FredaCoolaidCult
Originally Published on Clusterfuck Nation  March 31, 2014

   Apparently someone at the US State Department put out the fire in John Kerry’s magnificent head of hair, because he has stopped declaiming (for now) on the urgent need to start World War Three over Russia’s annexation of the Crimean peninsula. In my lifetime, there has never been a more pointless and unnecessary international crisis than the current rumble over Ukraine, and it’s pretty much all our doing.

     After all, we kicked it off by financing the overthrow of Ukraine’s elected government. How do you suppose the US would feel if Moscow engineered the overthrow of the Mexican government? Perhaps a little insecure? Perhaps even tempted to post some troops on the border?

     Since the end of the Cold War, the US has engaged in a nonstop projection of power around the world with grievous results in every case except in the breakup of Yugoslavia. The latest adventures in Iraq and Afghanistan, have been the most expensive — at least a trillion dollars — and mayhem still rules in both places. In fact, news reports out of Kabul on NPR this morning raised doubts that the scheduled elections could take place later this week. The country’s so-called Independent Election Commission has been under rocket attack for days, the most popular hotel for foreign journalists was the site of a massacre two weeks ago, and the Taliban remains active slaughtering civilians in the lawless territory outside of the Afghan capital.

     Of course, even those dreadful incidents raise the rather fundamental question as to why anything about Afghanistan really matters to the USA. How many years will it take for us to get over the fact that Osama bin Laden ran a training camp for jihadists there? Right now you can be sure that somewhere between Casablanca and East Timor there are training camps for religious maniacs and thousands more casual meet-ups among aggrieved young men with testosterone boiling in their brains and nothing else to occupy their time but playing with guns. Are we going to invade every land where this goes on?

      One part of our ever-evolving reality is that the global economy is in the process of cracking up. Despite the claims of one Tom Friedman at The New York Times, Globalism was not a permanent installation in the human condition. Rather, it was a set of transient economic relations brought about by special circumstances in a particular time of history — namely, a hundred years of cheap energy and about fifty years of relative peace between the larger nations. That’s all it was. And now it’s dissolving because energy is increasingly non-cheap and that is causing a lot of friction between nations utterly addicted to high flows of cheap oil and gas.

     The friction is manifesting especially in the realm of money and finance. The high energy addicted nations have been trying to offset the rising cost of their addiction, and the absence of conventional economic “growth,” by borrowing ever more money, that is, generating ever more debt. This ends up expressing itself in “money printing,” that range of computerized banking activities that pumps more and more “liquidity” into “advanced” economies. The result of all that is the mis-pricing of just about everything (including especially the cost of borrowing money), and an increasingly antagonistic climate of currency war as all players vie for the supposed advantages of devaluation — most particularly the ability to dissolve their own sovereign debts via inflation.

      The finer points of all that are debatable as to eventual consequences but we can easily draw some larger conclusions about the macro trends. The global orgy of cheap goods and bubble finance is ending. Nations and indeed regions within nations are going to have to find a new way of making a living on the smaller scale. This is sure to include new arrangements for governance. The breakup of nation states is well underway and is moving from the margins inward to the political center — from the hopeless scrublands of overpopulated nations that will never “develop” to the increasingly sclerotic giants.

     The USA is exhibiting pretty severe signs of that sclerosis in the demented behavior of its leaders in episodes such as the current unnecessary manufactured fiasco over Ukraine to the physical deterioration of our towns, roads, bridges, and all the plastic crap we managed to smear over the mutilated landscape to the comportment of our demoralized, mentally inert, drugged-up, tattoo-bedizened populace of twerking slobs.

     In short, it is self-evident that Russians have an abiding interest in the Crimea and we have none, while both the material and cultural life of the US is in a shambles and much more worthy of our own attention.

 

***

James Howard Kunstler is the author of many books including (non-fiction) The Geography of Nowhere, The City in Mind: Notes on the Urban Condition, Home from Nowhere, The Long Emergency, and Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation. His novels include World Made By Hand, The Witch of Hebron, Maggie Darling — A Modern Romance, The Halloween Ball, an Embarrassment of Riches, and many others. He has published three novellas with Water Street Press: Manhattan Gothic, A Christmas Orphan, and The Flight of Mehetabel.

 

The Fourteen Year Recession

Off the keyboard of Jim Quinn

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Published on The Burning Platform on March 24, 2014

recession-2

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“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”Napoleon Bonaparte

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“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men … [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”Woodrow Wilson

When you ponder the implications of allowing a small group of powerful wealthy unaccountable men to control the currency of a nation over the last one hundred years, you understand why our public education system sucks. You understand why the government created Common Core curriculum teaches children that 3 x 4 = 13, as long as you feel good about your answer. George Carlin was right. The owners of this country (bankers, billionaires, corporate titans, politicians) want more for themselves and less for everyone else. They want an educational system that creates ignorant, obedient, vacuous, obese dullards who question nothing, consume mass quantities of corporate processed fast food, gaze at iGadgets, are easily susceptible to media propaganda and compliant to government regulations and directives. They don’t want highly educated, critical thinking, civil minded, well informed, questioning citizens understanding how badly they have been screwed over the last century. I’m sorry to say, your owners are winning in a landslide.

The government controlled public education system has flourished beyond all expectations of your owners. We’ve become a nation of techno-narcissistic, math challenged, reality TV distracted, welfare entitled, materialistic, gluttonous, indebted consumers of Chinese slave labor produced crap. There are more Americans who know the name of Kanye West and Kim Kardashian’s bastard child (North West) than know the name of our Secretary of State (Ketchup Kerry). Americans can generate a text or tweet with blinding speed but couldn’t give you change from a dollar bill if their life depended upon it. They are whizzes at buying crap on Amazon or Ebay with a credit card, but have never balanced their checkbook or figured out the concept of deferred gratification and saving for the future. While the ignorant masses are worked into a frenzy by the media propaganda machine over gay marriage, diversity, abortion, climate change, and never ending wars on poverty, drugs and terror, our owners use their complete capture of the financial, regulatory, political, judicial and economic systems to pillage the remaining national wealth they haven’t already extracted.

The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation. The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system. The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country. Since most people are already trapped in the mental state of normalcy bias, it is easy for those in control to reinforce that normalcy bias by manipulating economic data to appear normal and using their media mouthpieces to perpetuate the false storyline of recovery and a return to normalcy.

This is how feckless politicians and government apparatchiks are able to add $2.8 billion per day to the national debt; a central bank owned by Too Big To Trust Wall Street banks has been able to create $3.3 trillion out of thin air and pump it into the veins of its owners; and government controlled agencies report a declining unemployment rate, no inflation and a growing economy, without creating an iota of dissent or skepticism from the public. Americans want to be lied to because it allows them to continue living lives of delusion, where spending more than you make, consuming rather than saving, and believing stock market speculation and home price appreciation will make them rich are viable life strategies. Even though 90% of the population owns virtually no stocks, they are convinced record stock market highs are somehow beneficial to their lives. They actually believe Bernanke/Yellen when they bloviate about the dangers of deflation. Who would want to pay less for gasoline, food, rent, or tuition?

Unless you are beholden to the oligarchs, that sense of stress, discomfort, feeling that all in not well, and disturbing everyday visual observations is part of the cognitive dissonance engulfing the nation. Anyone who opens their eyes and honestly assesses their own financial condition, along with the obvious deterioration of our suburban sprawl retail paradise infrastructure, is confronted with information that is inconsistent with what they hear from their bought off politician leaders, highly compensated Ivy League trained economists, and millionaire talking heads in the corporate legacy media. Most people resolve this inconsistency by ignoring the facts, rejecting the obvious and refusing to use their common sense. To acknowledge the truth would require confronting your own part in this Ponzi debt charade disguised as an economic system. It is easier to believe a big lie than think critically and face up to decades of irrational behavior and reckless conduct.

What’s In Your GDP                          

“The Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. Upward growth biases built into GDP modeling since the early 1980s, however, have rendered this important series nearly worthless as an indicator of economic activity.  The popularly followed number in each release is the seasonally adjusted, annualized quarterly growth rate of real (inflation-adjusted) GDP, where the current-dollar number is deflated by the BEA’s estimates of appropriate price changes. It is important to keep in mind that the lower the inflation rate used in the deflation process, the higher will be the resulting inflation-adjusted GDP growth.”John Williams – Shadowstats

GDP is the economic statistic bankers, politicians and media pundits use to convince the masses the economy is growing and their lives are improving. Therefore, it is the statistic most likely to be manipulated, twisted and engineered in order to portray the storyline required by the oligarchs. Two consecutive quarters of negative GDP growth usually marks a recession. Those in power do not like to report recessions, so data “massaging” has been required over the last few decades to generate the required result. Prior to 1991 the government reported the broader GNP, which includes the GDP plus the balance of international flows of interest and dividend payments. Once we became a debtor nation, with massive interest payments to foreigners, reporting GNP became inconvenient. It is not reported because it is approximately $900 billion lower than GDP. The creativity of our keepers knows no bounds. In July of 2013 the government decided they had found a more “accurate” method for measuring GDP and simply retroactively increased GDP by $500 billion out of thin air. It’s amazing how every “more accurate” accounting adjustment improves the reported data. The economic growth didn’t change, but GDP was boosted by 3%. These adjustments pale in comparison to the decades long under-reporting of inflation baked into the GDP calculation.

As John Williams pointed out, GDP is adjusted for inflation. The higher inflation factored into the calculation, the lower reported GDP. The deflator used by the BEA in their GDP calculation is even lower than the already bastardized CPI. According to the BEA, there has only been 32% inflation since the year 2000. They have only found 1.4% inflation in the last year and only 7.1% in the last five years. You’d have to be a zombie from the Walking Dead or an Ivy League economist to believe those lies. Anyone living in the real world knows their cost of living has risen at a far greater rate. According to the government, and unquestioningly reported by the compliant co-conspirators in the the corporate media, GDP has grown from $10 trillion in 2000 to $17 trillion today. Even using the ridiculously low inflation BEA adjustment yields an increase from $12.4 trillion to only $15.9 trillion in real terms. That pitiful 28% growth over the last fourteen years is dramatically overstated, as revealed in the graph below. Using a true rate of inflation exposes the grand fraud being committed by those in power. The country has been in a never ending recession since 2000.

Your normalcy bias is telling you this is impossible. Your government tells you we have only experienced a recession from the third quarter of 2008 through the third quarter of 2009. So despite experiencing two stock market crashes, the greatest housing crash in history, and a worldwide financial system implosion the authorities insist  we’ve had a growing economy 93% of the time over the last fourteen years. That mental anguish you are feeling is the cognitive dissonance of wanting to believe your government, but knowing they are lying. It is a known fact the government, in conspiracy with Greenspan, Congress and academia, have systematically reduced the reported CPI based upon hedonistic quality adjustments, geometric weighting alterations, substitution modifications, and the creation of incomprehensible owner’s equivalent rent calculations. Since the 1700s consumer inflation had been estimated by measuring price changes in a fixed-weight basket of goods, effectively measuring the cost of maintaining a constant standard of living. This began to change in the early 1980s with the Greenspan Commission to “save” Social Security and came to a head with the Boskin Commission in 1995.

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

If CPI was calculated exactly as it was computed prior to 1983, it would have averaged between 5% and 10% over the last fourteen years. Even computing it based on the 1990 calculation prior to the Boskin Commission adjustments, would have produced annual inflation of 4% to 7%. A glance at an inflation chart from 1872 through today reveals the complete and utter failure of the Federal Reserve in achieving their stated mandate of price stability. They have managed to reduce the purchasing power of your dollar by 95% over the last 100 years. You may also notice the net deflation from 1872 until 1913, when the American economy was growing rapidly. It is almost as if the Federal Reserve’s true mandate has been to create inflation, finance wars, perpetuate the proliferation of debt, artificially create booms and busts, enrich their Wall Street owners, and impoverish the masses. Happy Birthday Federal Reserve!!!

Click to View

When you connect the dots you realize the under-reporting of inflation benefits the corporate fascist surveillance state. If the government was reporting the true rate of inflation, mega-corporations would be forced to pay their workers higher wages, reducing profits, reducing corporate bonuses, and sticking a pin in their stock prices. The toady economists at the Federal Reserve would be unable to sustain their ludicrous ZIRP and absurd QEfinity stock market levitation policies. Reporting a true rate of inflation would force long-term interest rates higher. These higher rates, along with higher COLA increases to government entitlements, would blow a hole in the deficit and force our spineless politicians to address our unsustainable economic system. There would be no stock market or debt bubble. If the clueless dupes watching CNBC bimbos and shills on a daily basis were told the economy has been in fourteen year downturn, they might just wake up and demand accountability from their leaders and an overhaul of this corrupt system.

Mother Should I Trust the Government?

We know the BEA has deflated GDP by only 32% since 2000. We know the BLS reports the CPI has only risen by 37% since 2000. Should I trust the government or trust the facts and my own eyes? The data is available to see if the government figures pass the smell test. If you are reading this, you can remember your life in 2000. Americans know what it cost for food, energy, shelter, healthcare, transportation and entertainment in 2000, but they unquestioningly accept the falsified inflation figures produced by the propaganda machine known as our government. The chart below is a fairly comprehensive list of items most people might need to live in this world. A critical thinking individual might wonder how the government can proclaim inflation of 32% to 37% over the last fourteen years, when the true cost of living has grown by 50% to 100% for most daily living expenses. The huge increases in property taxes, sales taxes, government fees, tolls and income taxes aren’t even factored in the chart. It seems gold has smelled out the currency debasement and the lies of our leaders. This explains the concerted effort by the powers that be to suppress the price of gold by any means necessary.

 

Living Expense

Jan-00

Mar-14

% Increase

Gallon of gas

$1.27

$3.51

176.4%

Barrel of oil

$24.11

$100.00

314.8%

Fuel oil per gallon

$1.19

$4.07

242.0%

Electricity per Kwh

$0.084

$0.134

59.5%

Gas per therm

$0.712

$1.078

51.4%

Dozen eggs

$0.97

$2.00

106.2%

Coffee per lb

$3.40

$5.20

52.9%

Ground Beef per lb.

$1.90

$3.73

96.3%

Postage stamp

$0.33

$0.49

48.5%

Movie ticket

$5.25

$10.25

95.2%

New car

$20,300.00

$31,500.00

55.2%

Annual healthcare spending per capita

$4,550.00

$9,300.00

104.4%

Average private college tuition

$22,000.00

$37,000.00

68.2%

Avg home price (Case Shiller)

$161,000.00

$242,000.00

50.3%

Avg monthly rent (Case Shiller)

$635.00

$890.00

40.2%

Ounce of gold

$279.00

$1,334.00

378.1%

Mother, you should not trust the government. There is no doubt they have systematically under-reported inflation based on any impartial assessment of the facts. The reality that we remain stuck in a fourteen year recession is borne out by the continued decline in vehicle miles driven (at 1995 levels) due to declining commercial activity, the millions of shuttered small businesses, and the proliferation of Space Available signs in strip malls and office parks across the land. The fact there are only 8 million more people employed today than were employed in 2000, despite the working age population growing by 35 million, might be a clue that we remain in recession. If that isn’t enough proof for you, than maybe a glimpse at real median household income, retail sales and housing will put the final nail in the coffin of your cognitive dissonance.

The government and their media mouthpieces expect the ignorant masses to believe they have advanced their standard of living, with median household income growing from $40,800 to $52,500 since 2000. But, even using the badly flawed CPI to adjust these figures into real terms reveals real median household income to be 7.3% below the level of 2000. Using a true inflation figure would cause a CNBC talking head to have an epileptic seizure.

Click to View

The picture is even bleaker when broken down into the age of households, with younger households suffering devastating real declines in household income since 2000. I guess all those retail clerk, cashier, waitress, waiter, food prep, and housekeeper jobs created over the last few years aren’t cutting the mustard. Maybe that explains the 30 million increase (175% increase) in food stamp recipients since 2000, encompassing 19% of all households in the U.S. Luckily the banking oligarchs were able to convince the pliable masses to increase their credit card, auto and student loan debt from $1.5 trillion to $3.1 trillion over the fourteen year descent into delusion.

When you get your head around this unprecedented decline in household income over the last fourteen years, along with the 50% to 100% rise in costs to live in the real world, as opposed to the theoretical world of the Federal Reserve and BLS, you will understand the long term decline in retail sales reflected in the following chart. When you adjust monthly retail sales for gasoline (an additional tax), inflation (understated), and population growth, you understand why retailers are closing thousands of stores and hurdling towards inevitable bankruptcy. Retail sales are 6.9% below the June 2005 peak and 4% below levels reached in 2000. And this is with millions of retail square feet added over this time frame. We know the dramatic surge from the 2009 lows was not prompted by an increase in household income. So how did the 11% proliferation of spending happen?

Click to View

The up swell in retail spending began to accelerate in late 2010. Considering credit card debt outstanding is at exactly where it was in October 2010, it seems consumers playing with their own money turned off the spigot of speculation. It has been non-revolving debt that has skyrocketed from $1.63 trillion in February 2010 to $2.26 trillion today. This unprecedented 39% rise in four years has been engineered by the government, using your tax dollars and the tax dollars of unborn generations. The Federal government has complete control of the student loan market and with their 85% ownership of Ally Financial, the largest auto financing company, a dominant position in the auto loan market. The peddling of $400 billion of subprime student loan debt and $200 billion of subprime auto loan debt has created the illusion of a retail recovery. The student loan debt has been utilized by University of Phoenix MBA wannabes  to buy iGadgets, the latest PS3 version of Grand Theft Auto and the latest glazed donut breakfast sandwich on the market. It’s nothing but another debt financed bubble that will end in tears for the American taxpayer, as hundreds of billions will be written off.

The fake retail recovery pales in comparison to the wolves of Wall Street produced housing recovery sham. They deserve an Academy Award for best fantasy production. The Federal Reserve fed Wall Street hedge fund purchase of millions of foreclosed shanties across the nation has produced media proclaimed home price increases of 10% to 30% in cities across the country. Withholding foreclosures from the market and creating artificial demand with free money provided by the Federal Reserve has temporarily added $4 trillion of housing net worth and reduced the number of underwater mortgages on the books of the Too Big To Trust Wall Street banks. The percentage of investor purchases and cash purchases is at all-time highs, while the percentage of first time buyers is at all-time lows. Anyone with an ounce of common sense can look at the long-term chart of mortgage applications and realize we are still in a recession. Applications are 35% below levels at the depths of the 2008/2009 recession. Applications are 65% below levels at the housing market peak in 2005. They are even 35% below 2000 levels. There is no real housing recovery, despite the propaganda peddled by the NAR, CNBC, and Wall Street. It’s a fraud.

It is the pinnacle of arrogance and hubris that a few Ivy League educated economists sitting in the Marriner Eccles Building in the swamps of Washington D.C., who have never worked a day in their lives at a real job, think they can create wealth and pull the levers of money creation to control the American and global financial systems. All they have done is perfect the art of bubble finance in order to enrich their owners at the expense of the rest of us. Their policies have induced unwarranted hope and speculation on a grand scale. Greenspan and Bernanke have provoked multiple bouts of extreme speculation in stocks and housing over the last 15 years, with the subsequent inevitable collapses. Fed encouraged gambling does not create wealth it just redistributes it from the peasants to the aristocracy. The Fed has again produced an epic bubble in stock and bond valuations which will result in another collapse. Normalcy bias keeps the majority from seeing the cliff straight ahead. Federal Reserve monetary policies have distorted financial markets, created extreme imbalances, encouraged excessive risk taking, and ruined the lives of working class people. Take a long hard look at the chart below and answer one question. Was QE designed to benefit Main Street or Wall Street?

The average American has experienced a fourteen year recession caused by the monetary policies of the Federal Reserve. Our leaders could have learned the lesson of two Fed induced collapses in the space of eight years and voluntarily abandoned the policies of reckless credit expansion, instead embracing policies encouraging saving, capital investment and balanced budgets. They have chosen the same cure as the disease, which will lead to crisis, catastrophe and collapse.

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises

 

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