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Softpanorama Media Skeptic Bulletin, 2010

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[Jul 30, 2010] WikiLeaks disclosures are a 'tragedy' By Michael V. Hayden

July 30, 2010 | CNN


Editor's note: Gen. Michael V. Hayden was appointed by President George W. Bush as CIA director in 2006 and served until February 2009. He also was director of the National Security Agency and held senior staff positions at the Pentagon.

(CNN) -- In a 1997 light-hearted comedy, "Excess Baggage," Benicio del Toro (an inadvertent kidnapper) asks Alicia Silverstone (the unintended kidnap victim), "How stupid do you think I am?" Silverstone classically deadpans her response, "How stupid is there?"

I thought of this scene often this past week as I watched WikiLeaks founder Julian Assange attempt to explain and then justify his dumping of some 75,000 classified U.S. intelligence documents into the public domain.

It was hard to suppress a laugh as he attempted to justify the release of documents based on their content when most of us in the actual business of secrets know that reports are more often classified because of their source, not their content.

Suppress a laugh. Except that this isn't a comedy. It's a tragedy. And innocents will die.

First of all, let's look at the "up" side of this release. These documents "prove" that war is grittier when viewed by an infantryman than by a policymaker; that Pakistan's intelligence service, the ISI, is a difficult partner; that in war innocent civilians sometimes die; and that the Taliban has been growing in strength over the past several years. Not quite "stop the presses" kind of revelations.

Video: WikiLeaks founder fights back

Video: White House responds to WikiLeaks

Now the downsides. According to multiple press accounts, despite WikiLeaks' claim that it had redacted source-identifying information from the military's intelligence reports, it apparently did a half-baked job and real names of real people are being exposed.

Beyond that, even when you effectively mask source-identifying data, the enemy knows who did or who did not know about the historic operation or meeting or rendezvous now being made public in a leaked American document.

I can already see the Taliban or al Qaeda dialogue: "Brother, in whose house did we hold that meeting in 2007?"

WikiLeaks, as part of its self-justification, contends that much of this information is dated, none of it more recent that seven months ago. Let me remind readers that we send young Americans in harm's way (and frequently are forced to kill our adversaries) in order to retrieve this kind of information on al Qaeda and the Taliban.

This data dump is the moral and cyber equivalent of capturing an al Qaeda hard drive, a treasure trove of historical knowledge that enlightens and informs current operations. With this release, the enemy now knows about us that which we struggle so hard to learn about him: What we do well and what we do less well, where our thinking is strong and where it is not, where our analysis is incisive and where we have blind spots.

I used to give the graduation address to CIA case officers as they completed their operational training. At every ceremony I would remind them that they would be taking the fate of their future sources into their hands, that in a powerful moral sense, they would be responsible for the well-being of their sources and, very often, their source's families. Without that implied "contract," why would anyone provide information to us?

This isn't a comedy. It's a tragedy. And innocents will die.
--Michael V. Hayden


What potential sources in Afghanistan will now believe that America can protect them?

Why would anyone in that troubled land bet his family's well-being and future on such a well-intentioned but obviously porous partner, whatever hope or vision for the future this potential source might harbor.

And we will never know who will now not come forward, who will not provide us with life-saving information, who will decide he cannot opt for a common effort against a common enemy. But we can be certain that the cost will be great.

And foreign intelligence services, with whom we have established productive and legitimate partnerships, will ask, "Can I trust the Americans to keep anything secret?"

On top of last summer's voluntary disclosure by the administration of CIA covert actions in America's previous interrogation program (over the objection of the current CIA director and seven of his predecessors), what liaison service in the world will now accept any assurances that we can protect their secrets? Or protect their identity? Or be consistent in our policy?

Finally, I can only imagine what adversary intelligence services worldwide are doing with these documents. If I were the chief of Russia's FSB or China's PLA-2, I would be gathering all of my English-speaking officers and directing them to read all 75,000 documents to learn where the Americans are strong, weak, vulnerable, formidable, to be avoided and to be challenged.

And all of this because of some corrupted view of the inherent evils of the modern state, a pseudo-romantic attachment to the absolute value of transparency, a casual indifference to inevitable consequences and a neurotic attachment to one individual's self importance. Rarely have we seen such a dangerous combination of arrogance and incompetence.

Perhaps we should ask heaven to help us, because our intelligence services will surely be less able to do so.

The opinions expressed in this commentary are solely those of Michael V. Hayden.




JUNE 16, 2010 medialens

An essential role of corporate journalism is to shore up public confidence in an unjust, crisis-riven financial and economic system. Although plenty of gloom and doom is permitted, especially in the face of obvious crisis, the legitimacy of the system is rarely questioned.

For example, a recent Sunday Times article cited approvingly the views of Jim O'Neill, chief economist at Goldman Sachs. In a note to clients, titled 'Why the World is Better Than You Think', O'Neill tried to allay fears that the collapse of financial markets had made the world seem a "scary place". It is not so bad; indeed, "global recovery" was underway.

The Sunday Times piece then quoted a hedge fund manager proclaiming "massively good profits in the US", and beaming that "emerging markets [in Brazil, India and elsewhere] are still booming." The article conceded "it could be a very nervous summer". But for whom? The journalists certainly weren't focusing on the pressing concerns of the general population - jobs, pensions, student loans. Instead, the principal "worry" was financial uncertainty "spooking the markets". But despite the modicum of caution, the article's message boiled down to "positive fundamentals for the global economy." (David Smith, Kate Walsh and Michael Woodhead, 'Merkel's stab in the dark', Sunday Times, May 23, 2010; business/economics/article7133865.ece)

In the Financial Times, chief political commentator Philip Stephens was candid enough to warn of "austerity" and even a "ferocious fiscal squeeze" that "will bear down more heavily on those lower down the income scale." (Philip Stephens, 'Say goodbye to the politics of golly-gosh', Financial Times, Published: May 24 2010 22:24 | Last updated: May 24 2010 22:59; But he took at face value political claims of moves towards "repairing the public finances", a key propaganda message throughout the corporate media.

In reality, politicians have misappropriated public money to prop up a corrupt and inherently unstable financial system. As George Monbiot reported last September, the most recent figures available from the Office for National Statistics showed that the government's interventions in the financial markets had already added £141 billion to public sector net debt. (George Monbiot, 'One financial meltdown is, it seems, just not enough for Gordon Brown',, September 7, 2009;

Stephens then made the absurd claim that "Mr Cameron has turned his party's failure to win the election to the nation's advantage." The coalition government "looks as sensible and stable as most people could have hoped". Cameron, we were told, was heroically "wrenching the Tories on to the centre ground." The centre ground, presumably, is the very same "level playing field" promoted by the previous New Labour administration that saw corporate interests and financial elites prosper at the expense of almost everyone else; along with inflicting irreparable damage on ecosystems, species and climate stability. Policies enacted on this "centre ground" are supposedly "to the nation's advantage".

Meanwhile, the famously "impartial" BBC is relaying news that the Office for Budget Responsibility, the new UK fiscal watchdog, predicts a lower growth rate for the economy in 2011 than had been estimated in Labour's last Budget:

"The lower figure will likely increase the impetus of the coalition government to cut public spending, as lower growth means fewer tax revenues." (BBC news online, 'Fiscal watchdog downgrades UK growth forecast', 14 June 2010 16:48 UK;

The warning is being delivered ahead of Chancellor George Osborne's "emergency budget" next Tuesday in which he has "pledged to cut public spending to reduce the deficit". In her "Stephanomics" blog, the BBC's economics editor Stephanie Flanders stayed on-message, pontificating with gravitas on percentage points, central forecasts, structural borrowing, trend growth and spare capacity. (BBC News blogs, 'OBR UK growth forecast downgraded', 14 June, 2011; thereporters/stephanieflanders/). The approach is technocratic, and seemingly blind to the very real suffering imposed by a crushing system of economics that rewards a small minority. 

These are but samples of media coverage on the economic crisis. The dominant theme is that, although markets are "uncertain" and thus "tough" economic decisions lie ahead, the system itself can and will be stabilised; always with the presumption of such measures being for the benefit of all. By contrast, those analysts who point to the systemic instability of capitalism, and the fundamental inequalities of corporate globalisation, constantly struggle to get their views across to the public.

Beyond Corporate Propaganda

In his latest excellent book, 'Beyond the Profits System', the British economist Harry Shutt observes that one of the most striking features of the financial crisis has been:

"... the uniformly superficial nature of the analysis of its causes presented by mainstream observers, whether government officials, academics or business representatives. Thus it is commonly stated that the crisis was caused by a combination of imprudent investment by bankers and others [...] and unduly lax official regulation and supervision of markets. Yet the obvious question begged by such explanations - of how or why such a dysfunctional climate came to be created - is never addressed in any serious fashion."

Shutt continues:

"The inescapable conclusion [...] is that the crisis was the product of a conscious process of facilitating ever greater risk of massive systemic failure." (Harry Shutt, 'Beyond the Profits System: Possibilities for a Post-Capitalist Era', Zed Books, London, 2010, p.6)

In several books and articles, David Harvey, a social theorist at the City University of New York, has cogently written of how capitalism has shaped western society, risking and even destroying nations, populations and ecosystems. Not only are periodic episodes of "meltdown" inevitable, but they are crucial to capitalism's very survival. The essence of capitalism is self-interest; and any talk of reforming it through regulation or by imposing morality - a kinder, gentler capitalism - is both irrational and deceitful.

The bankruptcy of investment bank Lehman Brothers in September 2008 triggered the latest crisis of capitalism. Drastic action was required to save the system. And so, observes Harvey, a few US Treasury officials and bankers including the Treasury Secretary himself, a past president of Goldman Sachs and the present Chief Executive of Goldman, "emerged from a conference room with a three-page document demanding a $700 billion bail-out of the banking system while threatening Armageddon in the markets."

Harvey continues:

"It seemed like Wall Street had launched a financial coup against the government and the people of the United States. A few weeks later, with caveats here and there and a lot of rhetoric, Congress and then President George Bush caved in and the money was sent flooding off, without any controls whatsoever, to all those financial institutions deemed 'too big to fail'." (David Harvey, 'The Enigma of Capital: And the Crises of Capitalism', Profile Books, London, 2010, p. 5)

Shutt translates "too big to fail", that over-used defence employed by capitalists and their cheerleaders, as meaning that a tiny super-wealthy clique recognised that they risked losing vast fortunes if the markets were allowed to take their course free of intervention from the state. Wholesale nationalisation of insolvent banks would have posed an existential threat to elite power; or even led to the collapse of the capitalist profits system in its entirety. Rather than accept such a fate, rich investors tried to ensure that their toxic assets be "largely transferred to the state, thereby adding unimaginable sums - officially estimated at $18 trillion world-wide - to already excessive public debt." (Shutt, op. cit., p. 36)

As ever, the public were made to pay the price for private greed. In simple terms: it's socialism for the rich, and capitalism for the rest of us.

Time To Grow Up. We're Not Students Anymore

On May 24, we wrote to David Smith, economics editor of the Sunday Times, and lead author of the gung-ho-capitalist article highlighted at the beginning of this alert:

"Thanks for your articles in the Sunday Times; but your perspective is too limited, too skewed. For instance, why give such prominence to the views of Jim O'Neill, chief economist at Goldman Sachs - a major architect of the recent financial collapse? How about taking on board some of the arguments made by, for example, David Harvey in 'The Enigma of Capital'?

"1. The endemic problems of instability arising from financialisation, leveraging and surplus liquidity.

"2. Repeating systemic cycles of crises.

"3. Capitalism feeding off wars and conflict.

"4. Inevitable victims: billions of the world's population, ecosystems and climate stability.

"Food for thought, and newspaper columns aplenty?" (Email, David Cromwell to David Smith, May 24, 2010)

Two days later, Smith wrote back, adroitly dodging the question:

"Jim O'Neill is a good economist, irrespective of whether you like the company he keeps. David Harvey is not alone in seeing periodic crises for capitalism. So do the Austrian School or any number of economists brought up in the Keynesian tradition. What was interesting, to me, was Harvey's rather despairing conclusion, which appeared to be a tribute to capitalism's great resilience. He wrote:

"'Capitalism will never fall on its own. It will have to be pushed. The accumulation of capital will never cease. It will have to be stopped. The capitalist class will never willingly surrender its power. It will have to be dispossessed.'" (David Smith, email, May 28, 2010)

But David Harvey is surely right. We might even recast the observation to make the same point about journalists in the profit-led media:

"The journalists of capitalism will never tell the truth on their own. They will have to be pushed."

And although the Sunday Times journalist's point about the resilience of capitalism is accurate, it is a red herring. We wrote back:

"But you've evaded my central question - why do you rarely, if ever, address the issues I put to you?"

His response was a lofty dismissal:

"Most of us get these things out of our system when we are students." (David Smith, email, May 28, 2010)

And so when students graduate, they are supposedly mature enough to ignore capitalism's victims and to be content with an appallingly unjust system of destruction and exploitation! This is the cold, heartless logic that seeps out from the symbiosis of capitalism and corporate journalism.


The goal of Media Lens is to promote rationality, compassion and respect for others. If you do write to journalists, we strongly urge you to maintain a polite, non-aggressive and non-abusive tone.

David Smith, Sunday Times economics editor

Philip Stephens, Financial Times chief political commentator

Stephanie Flanders, BBC economics editor

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Chris Hedges The US Government Is “Inverted Totalitarianism”


In his recent article, “Democracy in America is a Useful Fiction”, Hedges defines “inverted totalitarianism”:

“Inverted totalitarianism represents “the political coming of age of corporate power and the political demobilization of the citizenry [...]

Inverted totalitarianism differs from classical forms of totalitarianism, which revolve around a demagogue or charismatic leader, and finds its expression in the anonymity of the corporate state.

The corporate forces behind inverted totalitarianism do not, as classical totalitarian movements do, boast of replacing decaying structures with a new, revolutionary structure. They purport to honor electoral politics, freedom and the Constitution. But they so corrupt and manipulate the levers of power as to make democracy impossible.”

Gonzalo Lira Is the U.S. a Fascist Police-State

I lived in Chile during the Pinochet dictatorship—I can spot a fascist police-state when I see one.

The United States is a fascist police-state.

Harsh words—incendiary, even. And none too clever of me, to use such language: Time was, the crazies and reactionaries wearing tin-foil hats who flung around such a characterization of the United States were disqualified by sensible people as being hysterical nutters—rightfully so.

But with yesterday’s Holder v. Humanitarian Law Project decision (No. 08-1498, also 09-89) of the Supreme Court, coupled with last week’s Arar v. Ashcroft denial of certiorari (No. 09-923), the case for claiming that the U.S. is a fascist police-state just got a whole lot stronger.

First of all, what is a “fascist police-state”?

A police-state uses the law as a mechanism to control any challenges to its power by the citizenry, rather than as a mechanism to insure a civil society among the individuals. The state decides the laws, is the sole arbiter of the law, and can selectively (and capriciously) decide to enforce the law to the benefit or detriment of one individual or group or another.

In a police-state, the citizens are “free” only so long as their actions remain within the confines of the law as dictated by the state. If the individual’s claims of rights or freedoms conflict with the state, or if the individual acts in ways deemed detrimental to the state, then the state will repress the citizenry, by force if necessary. (And in the end, it’s always necessary.)

What’s key to the definition of a police-state is the lack of redress: If there is no justice system which can compel the state to cede to the citizenry, then there is a police-state. If there exists apro forma justice system, but which in practice is unavailable to the ordinary citizen because of systemic obstacles (for instance, cost or bureaucratic hindrance), or which against all logic or reason consistently finds in favor of the state—even in the most egregious and obviously contradictory cases—then that pro forma judiciary system is nothing but a sham: A tool of the state’s repression against its citizens. Consider the Soviet court system the classic example.

A police-state is not necessarily a dictatorship. On the contrary, it can even take the form of a representative democracy. A police-state is not defined by its leadership structure, but rather, by its self-protection against the individual.

A definition of “fascism” is tougher to come by—it’s almost as tough to come up with as a definition of “pornography”.

The sloppy definition is simply totalitarianism of the Right, “communism” being the sloppy definition of totalitarianism of the Left. But that doesn’t help much.

For our purposes, I think we should use the syndicalist-corporatist definition as practiced by Mussolini: Society as a collection of corporate and union interests, where the state is one more competing interest among many, albeit the most powerful of them all, and thus as a virtue of its size and power, taking precedence over all other factions. In other words, society is a “street-gang” model that I discussed before. The individual has power only as derived from his belonging to a particular faction or group—individuals do not have inherent worth, value or standing.

Now then! Having gotten that out of the way, where were we?

Holder v. Humanitarian Law Project: The Humanitarian Law Project was advising groups deemed “terrorists” on how to negotiate non-violently with various political agencies, including the UN. In this 6-3 decision by the U.S. Supreme Court, the Court ruled that that speech constituted “aiding and abetting” a terrorist organization, as the Court determined that speech was “material support”. Therefore, the Executive and/or Congress had the right to prohibit anyone from speaking to any terrorist organization if that speech embodied “material support” to the terrorist organization.

The decision is being noted by the New York Times as a Freedom of Speech issue; other commentators seem to be viewing it in those terms as well.

My own take is, Holder v. Humanitarian Law Project is not about limiting free speech—it's about the state expanding it power to repress. The decision limits free speech in passing, because what it is really doing is expanding the state’s power to repress whomever it unilaterally determines is a terrorist.

In the decision, the Court explicitly ruled that “Congress and the Executive are uniquely positioned to make principled distinctions between activities that will further terrorist conduct and undermine United States foreign policy, and those that will not.” In other words, the Court makes it clear that Congress and/or the Executive can solely and unilaterally determine who is a “terrorist threat”, and who is not—without recourse to judicial review of this decision. And if the Executive and/or Congress determines that this group here or that group there is a “terrorist organization”, then their free speech is curtailed—as is the free speech of anyone associating with them, no matter how demonstrably peaceful that speech or interaction is.

For example, if the Executive—in the form of the Secretary of State—decides that, say, WikiLeaks or Amnesty International is a terrorist organization, well then by golly, it is a terrorist organization. It no longer has any right to free speech—nor can anyone else speak to them or associate with them, for risk of being charged with providing “material support” to this heinous terrorist organization known as Amnesty International.

But furthermore, as per Holder v. Humanitarian Law Project, anyone associating with WikiLeaks—including, presumably, those who read it, and most certainly those who give it information about government abuses—would be guilty of aiding and abetting terrorism. In other words, giving WikiLeaks “material support” by providing primary evidence of government abuse would render one a terrorist.

This form of repression does seem to fit the above definition of a police-state. The state determines—unilaterally—who is detrimental to its interests. The state then represses that person or group.

By a 6-3 majority, the Supreme Court has explicitly stated that Congress and/or the Executive is “uniquely positioned” to determine who is a terrorist and who is not—and therefore has the right to silence not just the terrorist organization, but anyone trying to speak to them, or hear them.

And let's just say that, after jumping through years of judicial hoops, one finally manages to prove that one wasn’t then and isn’t now a terrorist, the Arar denial of certiorari makes it irrelevant. Even if it turns out that a person is definitely and unequivocally not a terrorist, he cannot get legal redress for this mistake by the state.

So! To sum up: The U.S. government can decide unilaterally who is a terrorist organization and who is not. Anyone speaking to such a designated terrorist group is “providing material support” to the terrorists—and is therefore subject to prosecution at the discretion of the U.S. government. And if, in the end, it turns out that one definitely was not involved in terrorist activities, there is no way to receive redress by the state.

Sounds like a fascist police-state to me.

The political genius of supply-side economics Martin Wolf's  

July 25, 2010  |Exchange

The future of fiscal policy was intensely debated in the FT last week. In this Exchange, I want to examine what is going on in the US and, in particular, what is going on inside the Republican party. This matters for the US and, because the US remains the world’s most important economy, it also matters greatly for the world.

My reading of contemporary Republican thinking is that there is no chance of any attempt to arrest adverse long-term fiscal trends should they return to power. Moreover, since the Republicans have no interest in doing anything sensible, the Democrats will gain nothing from trying to do much either. That is the lesson Democrats have to draw from the Clinton era’s successful frugality, which merely gave George W. Bush the opportunity to make massive (irresponsible and unsustainable) tax cuts. In practice, then, nothing will be done.

Indeed, nothing may be done even if a genuine fiscal crisis were to emerge. According to my friend, Bruce Bartlett, a highly informed, if jaundiced, observer, some “conservatives” (in truth, extreme radicals) think a federal default would be an effective way to bring public spending they detest under control. It should be noted, in passing, that a federal default would surely create the biggest financial crisis in world economic history.

To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: “supply-side economics”. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.

The political genius of this idea is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?

How did supply-side economics bring these benefits? First, it allowed conservatives to ignore deficits. They could argue that, whatever the impact of the tax cuts in the short run, they would bring the budget back into balance, in the longer run. Second, the theory gave an economic justification – the argument from incentives - for lowering taxes on politically important supporters. Finally, if deficits did not, in fact, disappear, conservatives could fall back on the “starve the beast” theory: deficits would create a fiscal crisis that would force the government to cut spending and even destroy the hated welfare state.

In this way, the Republicans were transformed from a balanced-budget party to a tax-cutting party. This innovative stance proved highly politically effective, consistently putting the Democrats at a political disadvantage. It also made the Republicans de facto Keynesians in a de facto Keynesian nation. Whatever the rhetoric, I have long considered the US the advanced world’s most Keynesian nation – the one in which government (including the Federal Reserve) is most expected to generate healthy demand at all times, largely because jobs are, in the US, the only safety net for those of working age.

True, the theory that cuts would pay for themselves has proved altogether wrong. That this might well be the case was evident: cutting tax rates from, say, 30 per cent to zero would unambiguously reduce revenue to zero. This is not to argue there were no incentive effects. But they were not large enough to offset the fiscal impact of the cuts (see, on this, Wikipedia and a nice chart from Paul Krugman).

Indeed, Greg Mankiw, no less, chairman of the Council of Economic Advisers under George W. Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows: “I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.” Indeed, he has referred to those who believe this as “charlatans and cranks”. Those are his words, not mine, though I agree. They apply, in force, to contemporary Republicans, alas,

Since the fiscal theory of supply-side economics did not work, the tax-cutting eras of Ronald Reagan and George H. Bush and again of George W. Bush saw very substantial rises in ratios of federal debt to gross domestic product. Under Reagan and the first Bush, the ratio of public debt to GDP went from 33 per cent to 64 per cent. It fell to 57 per cent under Bill Clinton. It then rose to 69 per cent under the second George Bush. Equally, tax cuts in the era of George W. Bush, wars and the economic crisis account for almost all the dire fiscal outlook for the next ten years (see the Center on Budget and Policy Priorities).

Today’s extremely high deficits are also an inheritance from Bush-era tax-and-spending policies and the financial crisis, also, of course, inherited by the present administration. Thus, according to the International Monetary Fund, the impact of discretionary stimulus on the US fiscal deficit amounts to a cumulative total of 4.7 per cent of GDP in 2009 and 2010, while the cumulative deficit over these years is forecast at 23.5 per cent of GDP. In any case, the stimulus was certainly too small, not too large.

The evidence shows, then, that contemporary conservatives (unlike those of old) simply do not think deficits matter, as former vice-president Richard Cheney is reported to have told former treasury secretary Paul O’Neill. But this is not because the supply-side theory of self-financing tax cuts, on which Reagan era tax cuts were justified, has worked, but despite the fact it has not. The faith has outlived its economic (though not its political) rationale.

So, when Republicans assail the deficits under President Obama, are they to be taken seriously? Yes and no. Yes, they are politically interested in blaming Mr Obama for deficits, since all is viewed fair in love and partisan politics. And yes, they are, indeed, rhetorically opposed to deficits created by extra spending (although that did not prevent them from enacting the unfunded prescription drug benefit, under President Bush). But no, it is not deficits themselves that worry Republicans, but rather how they are caused: deficits caused by tax cuts are fine; but spending increases brought in by Democrats are diabolical, unless on the military.

Indeed, this is precisely what John Kyl (Arizona), a senior Republican senator, has just said:

“[Y]ou should never raise taxes in order to cut taxes. Surely Congress has the authority, and it would be right to — if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that’s what Republicans object to. But you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans”

What conclusions should outsiders draw about the likely future of US fiscal policy?

First, if Republicans win the mid-terms in November, as seems likely, they are surely going to come up with huge tax cut proposals (probably well beyond extending the already unaffordable Bush-era tax cuts).

Second, the White House will probably veto these cuts, making itself even more politically unpopular.

Third, some additional fiscal stimulus is, in fact, what the US needs, in the short term, even though across-the-board tax cuts are an extremely inefficient way of providing it.

Fourth, the Republican proposals would not, alas, be short term, but dangerously long term, in their impact.

Finally, with one party indifferent to deficits, provided they are brought about by tax cuts, and the other party relatively fiscally responsible (well, everything is relative, after all), but opposed to spending cuts on core programmes, US fiscal policy is paralysed. I may think the policies of the UK government dangerously austere, but at least it can act.

This is extraordinarily dangerous. The danger does not arise from the fiscal deficits of today, but the attitudes to fiscal policy, over the long run, of one of the two main parties. Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US federal government may succeed. If so, that would be the end of the US era of global dominance. The destruction of fiscal credibility could be the outcome of the policies of the party that considers itself the most patriotic.

In sum, a great deal of trouble lies ahead, for the US and the world.

Where am I wrong, if at all?

July 25, 2010 4:18pm in Financial crisis, Supply-side economics | 10 comments



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  1. Report Martin Wolf | July 25 5:04pm | Permalink


    Bruce Bartlett writes "I think my friend Martin is a bit too hard on Reagan, who did try to cut spending and signed 11 major tax increases into law to bring down the deficit. And Bush 41 initiated a budget deal in 1990 that eventually led to budget surpluses. It was Bush 43 and his willing accomplices among the Republicans who controlled Congress that deserve the vast bulk of the blame."

    This is my response: "Fair comment. But, as you have often noted, his followers have repudiated president Reagan's willingness to raise taxes. Nor are they making any credible commitments to large-scale cuts in public spending. It is also the case that, despite a boom in the 1980s, the end of the Reagan and George H. Bush era saw much higher public debt ratios than the beginning. I think you have to recognise that today's Republicans are Reagan's children and, as is often the case, are more uncompromising than their parents."


  2. Report ralbin | July 25 6:59pm | Permalink


    Mr. Wolf - Your comment is entirely correct though perhaps incomplete. Implicit, and sometimes explicit, in the supply-side argument was that low taxes wouldn't involve any public sacrifices. The Republicans promised the benefits of the liberal state while arguing that the needed tax revenues wouldn't be needed. This is what made it and continues to make it a successful political strategy. This is an actual Big Lie.

    Its worth delineating the other Big Lie of Republican political strategy, the the USA is so powerful that it can do anything it wants on the international stage. Add in consistent appeals to racial and religious bigotry (from which the personally decent Mr. Reagan was not immune) and you have almost the whole Republican political strategy of the last 30 years. Very successful and almost all of it based on deception and appeals to the electorate's worst tendencies.


  3. Report Kent Willard | July 25 7:06pm | Permalink


    Running up the debt in order to default and cut spending is like having a heart attack in order to get serious about diet and exercise. It is crazy, but they will do it, and then blame it on someone else.

    Any bets on a gov't shutdown attempt next year?


  4. Report Dana Houle | July 25 7:09pm | Permalink


    I think you're assuming a lot about the results of the November elections that are far from certain. In fact, it's highly, highly unlikely that the Republicans will win the Senate, and not particularly likely they'll win the House. They will certainly pick up seats in the House, maybe a lot, but there are only a handful of Dem-held Senate seats that I would say today are pretty much lost for the Democrats (North Dakota, Arkansas), while there are also up to 8 Republican-held seats that could be in play. Democrats would have to lose 10 seats that they currently hold and not win any seats currently held by Republicans (even though 5 of those are open and Vitter in Louisiana is so scandal-plagued he may not survive). It's just about implausible the Democrats will lose a net of 10 or more seats.

    Even in the House, Democrats will have to lose almost all the contested seats, at a time when the most recent generic ballot from Gallup shows Democrats nationally with an 8 point advantage and most of the vulnerable Democratic incumbents have huge cash advantages over their Republican challengers.

    I agree with your interpretation of the political appeal of supply side economics, but I think you're greatly overestimating the ability of the Republicans to win enough seats in November to fully enact their fiscal will on the White House.


  5. Report toweypat | July 25 7:42pm | Permalink


    "Second, the White House will probably veto these cuts"

    I wish I could agree. Given what we have seem from President Obama this past year and a half, I think he is just as likely to go along with them as part of some nebulous plan to angle for concessions from the other side, or simply to burnish his bipartisan credentials.


  6. Report JoelS | July 25 8:24pm | Permalink


    Thanks for saying out loud what has been apparent: that Republicanism has become fundamentally destructive. I don't think there's any doubt that the empire is coming to an end, as all empires do, with the unwillingness of the populace to bear the costs and burdens. The tax revolt is, at its heart, a cancer destroying American power and prosperity.

    This is doubly unhealthy because the United States needs a healthy opposition. In its absence, the Democrats are also becoming corrupt. Their electoral appeal has increasingly become: "Vote for us. We're not insane." That's necessary, of course, but hardly sufficient. So we end up with a health care bill with no cost containment, a financial regulatory bill that does not address the speculation and institutional giantism that was at the heart of the collapse, and a stimulus bill half the size that it should have been and heavily tilted against hiring the unemployed in favor of tax cuts. The Republicans would have done worse, but that is small comfort.

    Where are you wrong? If anywhere, in having any doubts that we are on the path to destruction, will no reason to think that we will turn back.


  7. Report Till Schreiber | July 25 9:02pm | Permalink


    A wild card in the events you outline could be the report of the bipartisan commission on reducing the long-term budget deficit. Larry Summers mentioned it in his contribution to the austerity debate. If, and it's a big if, this report is substantive enough, it might provide cover for Republicans, Democrats, and the White House to tackle long-term deficits.

    In addition, I also feel you are a bit generous in labeling the Democrats relatively fiscally responsible. Certainly, the president's budget had rather high projected deficits over the next decade (and beyond).

    Ultimately, according to the CBO a lot comes down to health care costs, particularly Medicare. Reforming Medicare and controlling the explosion of costs currently projected for it is the key. Everything else is secondary.


  8. Report Edward Hatfield | July 25 9:22pm | Permalink


    At last you have it spot on. There will have to be a crisis because Weston democracies will not vote for wage cuts. May be it could be done if the elite took a big cut first but that will not happen as most of the elite do not see the problem as their fault.

    You recently replied to one of my emails about thestateBritainis in with the words

    “I also don't understand this masochism” Well you surely must now


  9. Report Barry Thompson | July 25 9:24pm | Permalink


    James Galbraith says you are wrong:

    "So long as U.S. banks are required to accept U.S. government checks — which is to say so long as the Republic exists — then the government can and does spend without borrowing, if it chooses to do so … Insolvency, bankruptcy, or even higher real interest rates are not among the actual risks to this system."

    The only real risk to the system is inflation. The need for any sovereign government that can issue its own currency to balance its budget is merely a useful fiction, of political importance but not a real economic constraint.

    Otherwise, keep up the great work!


  10. Report Richard W | July 25 9:25pm | Permalink


    ' Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US federal government may succeed. If so, that would be the end of the US era of global dominance. The destruction of fiscal credibility could be the outcome of the policies of the party that considers itself the most patriotic. '

    That prospect holds no fear for the majority of contemporary Republican thinking in the party and throughout the conservative base. Withdrawal from NATO, UN and the global stage is precisely the plan. The contemporary Republican party is now more than ever aligned with the populist, reactionary and isolationist sentiments of conservative small town America. It will take many years, but I suspect America is on a long slide to an ungovernable failed state and eventual break-up of the union.


In America most people have no conception that anything can really change radically

Interview with John Michael Greer Energy Bulletin

"In America most people have no conception that anything can really change radically" - Interview with John Michael Greer by Alexander Ac, Karel Dolejsi, Tomas Hyjanek

Alexander Ac: Do you think that peak oil is a turning point in the history of human development? And can we compare it to anything else?

John Michael Greer: I think so. One of the problems that I see that a lot of people tend to think that whatever is happening at the present moment is the most important thing in human history. The crisis in industrial society, of which peak oil is one of the symptoms, is larger in scale than any previous example but is not different in kind. Most civilizations in the past have outrun their resource base and gone through the process of decline and fall. Ours is simply doing it on a bigger scale than previous civilizations because we have more energy to throw around.

AA: In one of your recent posts you wrote that “peak oil goes mainstream”. Why do you think so, or what do you mean by mainstream?

JMG: For the first almost a decade after that start of being a peak oil scene, peak oil movement, it was a very, very fringe activity. There were very few people interested in it, they mostly talked to each other, nobody else wanted to hear about it. In the last couple of years we have started to see some very influential people and organizations taking it very seriously. You have, as a recent example, the German military, the Bundeswehr, doing a study and discovering it, saying: look, this is a serious national security issue. You have various nations starting to take it seriously, it is no longer being brushed up and dismissed, as it used to, that’s what I meant.

AA: I do not know, how deep you are in climate change, and this is also a controversial topic, the climate change. Do you thing, we might compare it to peak oil? There is a controversy among energy experts, in the climate change also, but I would say that in climate change there is something like a consensus, that it is a problem.

JMG: The problem is that climate change does not suffer from economists. Basically, the current economic orthodoxy, neoclassical economics, is incapable of dealing with resource issues. It specifically rules them out, it insists that resources can never be an economic problem. Of course, this is not true. But for whatever reason, they have backed themselves into this corner, as long as people listen to economists. All the predictions you get from the economists, you can be certain they are wrong. When an economist says, this policy will produce this result, he is always wrong. You just assume that. Still, people take them seriously. So we have a problem in the peak oil community, they do not have in climate change, because there is not an entire field of climatology that insists that carbon dioxide cannot possibly happen.

AA: So economists are part of the problem not of the solution.

JMG: Yes, economists are very much part of the problem.

AA: At least, most of them.

JMG: Yes, there are some economists that still have their brains.

AA: Maybe we should change the education of the system... I know you are the author or one of the authors of the catabolic collapse theory.

JMG: Yes, actually I am the creator.

AA: I know, it is difficult, but could you just explain, what is the main point?

JMG: Basically, the real short form of catabolic collapse is that society always depends on certain resources from nature, and it uses those resources to produce capital, by which I do not mean money, but built capital, buildings, educated people, all the different things that the society creates to do its work for it. When the resource basis runs short, basically the only source of resource that you still got is that built capital. So the society, when it pushes over into this state of collapse begins catabolising, begins feeding on its own capital. It begins tearing down buildings to get the raw material inside them, it disposes of its labor force, it cuts it down. In America, for example, our education system has gone down. That is basically stripping a piece of social capital, for temporary benefit. And that is how a society turns from a successful civilization with a lot of complex things, to 200 years later, when it is a bunch of ruins with trees growing out of it.

AA: Is the process self-inforcing?

JMG: Very much so. Once it gets under way, the only way you can break it is if you can reach a level, where the resource base, the resources that are coming in the society, are adequate to sustain the society at that level. Ancient China used to go through this all the time. They built up a mass of resources, they overran their resource base and they collapsed back down. But because the Chinese economy ran on a very stable system of agriculture, there was a floor, below which it would not collapse. Once the costs of maintaining the society dropped down to the level that could be supported by each year’s rice harvest, you were fine. We do not have that good fortune, because we do not depend on rice, we depend on crude oil and we are using it up, so we could go all the way down to zero.

AA: Do we have an alternative to growing society? And collapsing? Do we have stable alternative?

JMG: It is possible for a society to be stable… Basically there are societies that moderate the curve of rise and fall to the point that is very, very modest. Most of them are what we would call primitive societies, because they do not have heavy resource needs. Nobody has ever managed a civilization, an urban society, that does not rise and collapse. It may be possible to do that down the road but we are certainly not going about it the right way.

AA: Relating to collapse, there are 2 directions, 2 opinions about collapse. Are you in favor of , say, gradual decreasing of complexity or you are in favor of sudden collapse, sudden degradation or simplification of society like Nial Fergusson, for instance is the proponent?

JMG: My view is almost exactly half way between these two. What I think is most likely, is an extended period of uneven collapse in which you have a series of crises followed by periods of relative stabilizations… followed by new crises. It’s like the stairs. Instead of just falling straight from the second floor to first floor, we go through a process of sliding down, thump, thump, thump, through a series of crises. The reason why I hold this idea is that historically speaking, this is the way civilizations always go down.

AA: It can take a long time.

JMG: It can take a couple of centuries. It usually takes a couple of centuries, but it is not a steady process. You run into the whole bunch of crises and all kind of catastrophes, as the cities are devastated...

AA: And you can go up for a while.

JMG: Yeah, or you can stabilize, you can reach a steady state or even improve a little bit before the next round of crises hits... So you have that kind of thump thump thump regime.

AA: When there is the final bottom?

JMG: That depends. It is usually a couple of centuries down the road. And where it is, what level it is depends on the resource base you are talking about. Again, China is the example. When it hits the level of sustainability, it is actually not that far down. We are not in that kind of shape because we depend on the resources we are using up so it could go down a very long way.

AA: Thank you. To your writing: Are you writing for masses, for Americans, Europeans, Africans? How should these different people interpret your text? Is it for everybody?

JMG: It is a real challenge. Nobody can actually write for everybody, unless you have lived everywhere in the world. It so happens I only lived in the United States. So, to some extent, I am speaking to the American audience, because that is what I know. I do have readers overseas and I am glad for that, I hope they find it useful. But I really have no idea, how they will take that, with that really different historical experience. In America, one of the problems we face here is that most people have no conception that anything can really change radically. That there could have been a different government or different borders. In Europe it is kind of easy to remember because most people’s grandparents were living under different flag that they once they lived. Ultimately I can only write from what I know but I try to make it useful.

AA: As I came from Europe, do you have any idea why in America everything is bigger? Bigger cars, bigger buildings, everything is bigger...

JMG: Oh yeah, the reason is very simple. Because the United States has a global empire right now. We have garrisons of troops in one hundred forty countries right now. That maintains a state of affairs in which roughly 25 % of all the world’s energy and about 33 % of all of its industrial products come here. That does not happen because the people in other parts of the world do not want them, it happens because we have an empire and because we have slanted the economic playfield. One hundred years ago when Britain had the global empire, London was the place that had the gargantuan this and that.

AA: It was a centre.

JMG: Exactly. It just so happens that now it is America and hundred years from now it will be somewhere else.

AA: Maybe China?

JMG: Probably China. The Chinese are playing their cards very well. They have experience with empires. They have done the thing several times. And we are playing ours very badly.

AA: But They won’t have the energy that was accessible for us. Than you have to grow up on something else?

JMG: No, the thing is, it is worth remembering that Great Britain managed the largest empire in the history of the world on a small fraction of the energy per capita that Unites States has. And Spain had a very, very big empire before them where the most advanced technology they had was the wooden sailing ship and they had no fossil fuels at all. So you can actually have a fairly large global empire, think Genghis Khan with horses – with the really simple technologies. I do not think the Chinese will be all the way back to sailing ships but they could be like British Empire or even much below that, like the British empire in the 18th Century.

AA: Do you see a peaceful transition or it will be very, very rough? It is a very broad question...

JMG: In theory it could be a peaceful transition. It has never happened. Either of the two transitions we are facing here in America. We are facing the end of our empire. That never happens peacefully. The only case in the history when it did not involve the complete devastation of the imperial country was the end of the British empire, and that had those 2 little world wars which were about who was going to take over. And it turned out to be America. It could have been Russia, it could have been Germany. And the decline of the civilization in the broader picture, that always involves violence.

AA: They just do not let it quietly...

JMG: Nobody is just going to say: It was enough for us, we had a grand time, we will take our troops back home, we are going to decrease our standard of living by 40, 50 percent... no we are fine, really… It would be nice but it does not happen that way.

AA: I do not want to go too much into politics, but if you were a politician, and you know all what you know, would it be right to tell people, let's say you are like Obama or somebody, should they tell people how it is or should they try to solve it behind, without the knowledge of the people. How do you think the masses would react if you tell them: here is peak oil, here is all this...

JMG: You could probably tell the American people a very, very sanitized cleaned up overly positive version, but you could not tell them the truth.

AA: Is it not possible?

JMG: They would never believe it and you would be out of office so fast that it would not be funny. If you want to live to the next election, as long as elections are won by telling people what they want to hear, that is democracy in miniature, the most they could do is to say: we are facing an energy crisis and we are going to work really hard to solve it. To explain that it will never be solved, that it cannot be solved, this is the end of an age, and we are all going to be a lot poorer than we have been... nobody is going to hear that. Very very few people.

AA: It will be good for Nature that we are not going to put all that pollution.

JMG: Oh Yeah, very much so.

AA: A deceased Czech philosopher Milan Machovec, who also wrote the book Philosophy face to face of extinction, to a certain extent praised the original Celtic tradition as something, which has the distance from centrist social hierarchy and laid emphasis on family stability. He did not consider this tradition as the solution to current ecological crises. What do you as an archdruid think about the attempts to create the mystic Celtic origin of Czech and Moravian inhabitants, could it be beneficial?

JMG: That is a heck of a good question. I have not read Machovec, I do not know if his work has been translated into English... I should say first of all, the modern druid tradition is not directly descended from the traditions of ancient Celts, those were extinct. What we have in druidry has been pieced back together starting in the 18th Century. What the Celts did or did not teach is mostly guesswork at this point. I have heard about the idea that Czech people and so on have Celtic ancestors; I know there were Celts in that area... Would it be beneficial? I have not the least idea, I would have to spend a bunch of time in the Czech Republic, hang out with people to get an idea, would it be useful, would it be destructive... It is always risky to put a lot of energy into way back when, to spend your time thinking about what people used to be, what we are descended from... I mean in your particular area most people have reason to remember that it can go in very ugly directions... I would say rather it would be very beneficial if the people in the Czech Republic and Moravia and so on would look at where they are now and who they are now... To say, here is the environment we have, here is the country that we live in, how can we make it something that is a little more focused on nature that is a little more sustainable... I mean, small countries have some huge advantages in this situation, compared to big ones. You have got big possibilities here if you are going to accept diminished standard of living and not buying to sort of over the top.

AA: Great. Here is another long one. You belong to the minority of those who are afraid that massive political mobilization leaving to an exchange of politicial power elite could in reality worsen the situation in deindustrializing society after the peak oil. But people, at least in the traditional western cultural cycles, seem to always believe in salvation and new beginning. Sigmund Freud even concluded that unconscious knows not negative categories so people in fact believe in their own eternity. What is your opinion on this Freud version and why do you think that people in the peak oil community probably do not fall into this drawer.

JMG: I think, peak oil can be thought as something negative or as a positive existential, that s all right. I have no idea, whether Freud was right or not...

AA: People always want to hear something positive.

JMG: Yes, but I do not think that is the case that the unconscious mind cannot grasp negative categories. As Jung pointed out, one of the contents of the unconscious is the shadow projection of all your personal negative things and it definitely manifests when you are doing certain kinds of psychotherapy. So I do not think that Freud got that one right... In terms of the peak oil scene. Peak oil is an event, it is not an absence of something. It has various echoes in a lot of ways of thinking about the future.

AA: Some people in the Czech republic, in spite that they have a possibility to read the text, where you step away from the idea of Christian apocalypse, call you a doomer. What could be a reason and what would you respond?

JMG: My experience here has been totally fascinating. Because there are people who have bought into what I would consider a very inappropriately optimistic idea of the future, and they insist I am a doomer. People who are hard core doomers insist I am a blind optimist. Because we in Western civilization these days tend to be thinking in terms of two and only two categories. It is either total apocalypse or it is progress forever. The fact is I am exactly in between. I am arguing it is not apocalypse, it is not progress, it is ordinary decline, the kind of many civilization encountered before, it is nothing new, this is what happens and we just have to live with it. And that is how I would respond to that. If you are going to insist that anything other than utopia is doom, than you would probably think I am a doomer. But go ask some serious doomers what they think about me anyway...

AA: What do you think is the closest thinker to your ideas, who might be more appropriate for more people?

JMG: The author out there I agree mostly is James Howard Kunstler, author of the “Long emergency”. I have plenty of disagreements with him generally but I love his writing and his version of the future, his long emergency is as close to mine as anything out there.

AA: There is one note, where you express the reserved opinion of Fukuoka system of management. Do you mean application in gardening or in grocery? Some people really think that Fukuoka is one of few possibilities of how can extensive agriculture work without fossil fuels subsidies.

JMG: My opinion of Fukuoka’s work is that it was very, very specific to his ecosystem, to the place where he was working, the specific crops he was doing… It is not something that you can just pick up and put everywhere... He was very much into paying attention to what nature is doing right where you are. It is quite possible that somebody using that principle, rather than trying to copy his methods, could come up with something suitable for other locations. But the problem is most people I know who have read the One straw revolution and things like that simply tried to use his methods and if you do not happen to live in Japan and you are not trying to grow the same crops on same kind of soil, you might not get the same results, in fact you probably won’t.

AA: When you write stories about green wizardry, in spite of all sources and news you assert that it is still needed to carefully observe how does it work in the practice. What is actually the role of intuition in finding the solution to the problem?

JMG: The way I think is the best way to explain that is to remember that the scientific method is a way of testing. It is not a way of coming up with ideas, it is a way of testing them. Intuition generates the ideas. Once you finished using the intuition to come up with some great ideas, than you put the intuition on a shelf and you go and see how it actually works. Because if it does not work, I do not care how marvelous it sounds, it is still a waste of your time. So you need to have a kind of twofold approach, where on the one hand, you write with your intuition running, come up with all kind of ideas and then test them to see what kind of response do you get. Does it work? Does it flop? You will know.

AA: Do you think there are grand ideas ahead?

JMG: Yes, but I do not think there are the grand ideas we want. For example, I do think there are very good reasons to think that there is no better fuels source – everyone want some great fuel source to replace oil.

AA: I agree.

JMG: For reasons related to the laws of thermodynamic, I do not think that is going to happen. There might be some very great ideas how we can live with a lot less energy

AA: No artificial photosynthesis, it was terrible. I am a plant physiologist...

JMG: You are a plant physiologist, you know better. One thing we can know is that artificial photosynthesis that does not have 2 billion years of evolution perfecting it is going to be 2 billion years behind plants.

AA: We cannot even call it arrogance.

JMG: Yeah, I kept a straight face.

AA: There was in the last slide of (the presentation of) Dick Vodra that we should down scale and his next tip was to travel a lot. So I was confused...

JMG: In a way he is right because so much of the money we have now, so many of our resources are going to go away. If you have something you really want to do in life, that is going to involve a lot of money, do it now, when you still got it, because it might not be possible. If you want to sail around the world...

AA: Then you just contribute to the mess.

JMG: Now, that is true. Different people are going to draft their priorities in different way. I do not know that I would recommend flying to Hawaii, unless you really feel that at the end of your life you would feel that you really did not live the life you wanted because you did not get Hawaii.

AA: You have written many books. If you would recommend only one of them, which one would you?

JMG: That would depend on the audience. Because if were peak oil book, then The Long Descent. Because that is the introduction. If it were my writing in general, it would probably be an odd little book that I wrote called “A world full of gods”. Which is a discussion of philosophy of religion from a point of view of polytheist paganism. It is a point of view that received very little discussion last 2000 years and I think it is probably my best book although it hardly sells any at all.

AA: And what about Ecotechnic Future?

JMG: It is a book I think most people get to after The Long Descent, it is a development of the idea of The Long Descent. So I think Long Descent would be a place to start.

AA: The last one: Do you prepare somehow for different future? Or you are already prepared?

JMG: Well...

AA: You are never prepared.

JMG: Yeah, no one is ever prepared for the future. My wife and I moved from Oregon to a small town in the Appalachian mountains in western Maryland. We bought a house, a very inexpensive house with a nice backyard for organic garden which is now producing fruits and vegetables. Both me and my wife have a whole range of skills. We are in the process of improving the energy efficiency of the house. We have figured out we are going to live there for the rest of our lives. As both of us are in the late forties, that is going to be at most forty fifty years. Assume the future happens in anything like what I am expecting, we are not going to see the complete unfolding of the western civilization; that is going to take a couple of centuries. So what we need to do is to be in a position to take care of ourselves and help our friends and neighbors as needed, and also develop some other skills that we can share with other people and teach them. And all of this is the stuff that one way or another I have been doing since I was young... Is it the only thing? There is a range of projects. But yeah I take it very seriously and I am certainly engaged in preparations.

AA: So thank you very much.


John Michael Greer Note: As far as we know this is the historically first contribution of the Slovak and Czech peak oil community to the "maternal" server. John Michael Greer is well known to the Czech and Slovak audience interested in peak oil and related topics. His texts are regularly translated into the Czech language and have a comparable amount of readers as the originals. Meeting him at ASPO 2010 was a once-in-a-lifetime opportunity, as we approach peak travel, to interview him. Enjoy the result. - Alexander Ac, Frantisek Marcik

 American Corporatocracy    Information Clearing House -  ICH By Paul A. Moore

January 22, 2010 "Information Clearing House" --Schools teach that the United States of America is a democracy. The government was established as "of, by, and for the people" and later on, a President Abraham Lincoln called the nation's people to join and die in a civil war that such a thing might never perish from the earth. Aside from the extent the lesson was ever in accord with the truth, it has today become an outright absurdity. The Supreme Court has declared once and for all that the corporations will rule. The United States of America is now better described as a corporatocracy. The government is owned and dictated to by these capitalist creations whose God is Mammon.

Corporations are, of course, different from people. They are devoid of human emotion. They are constitutionally unable to generate empathy. They feel nothing if people suffer exploitation, if people live in misery, or if people die horribly. Union Carbide was unaffected by the thousands dead and dying in Bhopal. It registered only on the balance sheet, a $470-million loss taken for the sake of future corporate viability under a new name, Dow Chemical. The corporation will not be reasoned with, pleaded with, or shamed into changing course even when life on the planet hangs in the balance. McDonald's is in the process of teaching Starbucks that even the pretense of a social conscience is a losing marketing ploy.

The corporation recognizes and reacts only to threats to its air supply-profits. So in one sense corporations do share something with human beings. They have an instinct for self-preservation and if they are deprived of a life giving element they die. While human beings must have oxygen and water, the corporation's lifeblood is those quarterly profits. The corporation must make a profit and then ever greater profits into the future. Corporate profits must grow, forever! Irrational, impossible, unsustainable but that is in the nature of the beast-much as lemmings rush to the sea.

The parameters are the same in every corner of the globalized economy. The greatest possible profit is a product of the highest possible productivity and the lowest possible wage. US corporations have moved everything that isn't nailed down to lower wage countries. Nothing is made in today's de-industrialized United States. American consumer's service calls are answered in Ireland, India, the Philippines, and the Dominican Republic. Major League baseballs are made in Haiti and the recent deadly earthquake won't change that. AirJordans come out of Nike's sweatshops in Indonesia. Microsoft conducts 85% of its research in the US so Bill Gates fights to lift H-1B visa restrictions to bring the low wage high-tech workers here from India and Taiwan. Halliburton is now headquartered in Dubai and preparing to receive its old boss, Dick Cheney, in his retirement years.

To survive under their profit imperative corporations must undertake a never ending process of consolidation. There is consolidation by horizontal integration. For instance, numerous US corporations once dotted the auto making landscape. In the recent past it was down to the Big Three. Today Chrysler is doomed, Ford is on life support, and General Motors is on its knees. In the corporate world of the near future cars will be made in Japan, or China, or India. Ultimately, the industry will settle in one corporate entity.

There is consolidation by vertical integration and its champion is Wal-Mart, the world's largest corporation. Wal-Mart has made a partner of the Chinese government. Working together, the partners have turned China into a vast subsistence-wage labor camp. China supplies Wal-Mart so it has no need of domestic vendors like the now destroyed Rubbermaid. Armed with the lowest production costs, Wal-Mart's rise up on every other street corner selling every commodity imaginable and every service the corporation can get its hooks into. Wal-Mart lays waste to local economies and then picks up the pieces to become the only butcher, baker and candlestick maker in town. The corporation recently moved to provide banking services in its stores.

The US government has been hollowed out during the rise to absolute power of the corporations. Elections have become an elaborate "reality show" that plays out on corporate television for viewers entertainment. If you watch FOX, your reality is filtered through Rupert Murdoch's Newscorp, NBC is General Electric news, CNN is Time/Warner news, ABC brings you into Disney's world, and Viacom regularly checks the iconic CBS news department to make sure Edward R. Murrow is still dead. That is when Viacom is not preparing America's youth for slavery and death through MTV and B.E.T.

The actual counting of the American people's votes is done by the corporations. Little wonder giant defense contractor United Technologies recently moved to take the job off Diebold's hands. Corporate sentinels, the lobbyists, roam the halls of government enforcing discipline among their hired hands, allowing the most servile to feed longest at the public trough. So the Congress has not passed legislation and the Supreme Court has not decided a case, in which significant wealth was involved, in favor of the people in thirty years. Each and every decision of US government now transfers wealth from the people to the corporate masters.

The corporations now have in their sights the last remaining institutional pillars of American democracy. The Business Roundtable, the Gates Foundation and the Walton Family Foundation have been working mightily to crash the public schools. Wall Street is funding the effort to gain control of the Social Security trust fund for its investment bankers. And the whole corporate gang is intent on "starving the beast" or killing state and local governments. Their success in this effort is probably best expressed in Hawaii where the number of days children spend in school has been paired from 180 to 163, and in Detroit where teachers will give $500 a pay period back to the state, and in New Orleans where there are only a handful of public schools left, and in the states from California to New York to Florida where public school budgets have been slashed to the bone.

Then finally, there is the most ominous development of all. The corporations have begun forming their own Praetorian Guard. The massacre of Iraqi civilians and the patrolling of the hurricane ravaged streets of New Orleans have made Xe, formerly Blackwater Worldwide, formerly Blackwater USA, the most famous of the rising corporate armies. Contrary to any notion of cost effectiveness, mercenaries protect US State Department personnel in Iraq instead of the regular military. It seems not to make sense, unless the corporatocracy is looking ahead to a day when they can no longer trust the US military to carry out attacks on an American people's resistance.

Paul A. Moore
Public School Teacher


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Groupthink : Two Party System as Polyarchy : Corruption of Regulators : Bureaucracies : Understanding Micromanagers and Control Freaks : Toxic Managers :   Harvard Mafia : Diplomatic Communication : Surviving a Bad Performance Review : Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime : PseudoScience : Who Rules America : Neoliberalism  : The Iron Law of Oligarchy : Libertarian Philosophy


War and Peace : Skeptical Finance : John Kenneth Galbraith :Talleyrand : Oscar Wilde : Otto Von Bismarck : Keynes : George Carlin : Skeptics : Propaganda  : SE quotes : Language Design and Programming Quotes : Random IT-related quotesSomerset Maugham : Marcus Aurelius : Kurt Vonnegut : Eric Hoffer : Winston Churchill : Napoleon Bonaparte : Ambrose BierceBernard Shaw : Mark Twain Quotes


Vol 25, No.12 (December, 2013) Rational Fools vs. Efficient Crooks The efficient markets hypothesis : Political Skeptic Bulletin, 2013 : Unemployment Bulletin, 2010 :  Vol 23, No.10 (October, 2011) An observation about corporate security departments : Slightly Skeptical Euromaydan Chronicles, June 2014 : Greenspan legacy bulletin, 2008 : Vol 25, No.10 (October, 2013) Cryptolocker Trojan (Win32/Crilock.A) : Vol 25, No.08 (August, 2013) Cloud providers as intelligence collection hubs : Financial Humor Bulletin, 2010 : Inequality Bulletin, 2009 : Financial Humor Bulletin, 2008 : Copyleft Problems Bulletin, 2004 : Financial Humor Bulletin, 2011 : Energy Bulletin, 2010 : Malware Protection Bulletin, 2010 : Vol 26, No.1 (January, 2013) Object-Oriented Cult : Political Skeptic Bulletin, 2011 : Vol 23, No.11 (November, 2011) Softpanorama classification of sysadmin horror stories : Vol 25, No.05 (May, 2013) Corporate bullshit as a communication method  : Vol 25, No.06 (June, 2013) A Note on the Relationship of Brooks Law and Conway Law


Fifty glorious years (1950-2000): the triumph of the US computer engineering : Donald Knuth : TAoCP and its Influence of Computer Science : Richard Stallman : Linus Torvalds  : Larry Wall  : John K. Ousterhout : CTSS : Multix OS Unix History : Unix shell history : VI editor : History of pipes concept : Solaris : MS DOSProgramming Languages History : PL/1 : Simula 67 : C : History of GCC developmentScripting Languages : Perl history   : OS History : Mail : DNS : SSH : CPU Instruction Sets : SPARC systems 1987-2006 : Norton Commander : Norton Utilities : Norton Ghost : Frontpage history : Malware Defense History : GNU Screen : OSS early history

Classic books:

The Peter Principle : Parkinson Law : 1984 : The Mythical Man-MonthHow to Solve It by George Polya : The Art of Computer Programming : The Elements of Programming Style : The Unix Hater’s Handbook : The Jargon file : The True Believer : Programming Pearls : The Good Soldier Svejk : The Power Elite

Most popular humor pages:

Manifest of the Softpanorama IT Slacker Society : Ten Commandments of the IT Slackers Society : Computer Humor Collection : BSD Logo Story : The Cuckoo's Egg : IT Slang : C++ Humor : ARE YOU A BBS ADDICT? : The Perl Purity Test : Object oriented programmers of all nations : Financial Humor : Financial Humor Bulletin, 2008 : Financial Humor Bulletin, 2010 : The Most Comprehensive Collection of Editor-related Humor : Programming Language Humor : Goldman Sachs related humor : Greenspan humor : C Humor : Scripting Humor : Real Programmers Humor : Web Humor : GPL-related Humor : OFM Humor : Politically Incorrect Humor : IDS Humor : "Linux Sucks" Humor : Russian Musical Humor : Best Russian Programmer Humor : Microsoft plans to buy Catholic Church : Richard Stallman Related Humor : Admin Humor : Perl-related Humor : Linus Torvalds Related humor : PseudoScience Related Humor : Networking Humor : Shell Humor : Financial Humor Bulletin, 2011 : Financial Humor Bulletin, 2012 : Financial Humor Bulletin, 2013 : Java Humor : Software Engineering Humor : Sun Solaris Related Humor : Education Humor : IBM Humor : Assembler-related Humor : VIM Humor : Computer Viruses Humor : Bright tomorrow is rescheduled to a day after tomorrow : Classic Computer Humor

The Last but not Least

Copyright © 1996-2016 by Dr. Nikolai Bezroukov. was created as a service to the UN Sustainable Development Networking Programme (SDNP) in the author free time. This document is an industrial compilation designed and created exclusively for educational use and is distributed under the Softpanorama Content License.

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FAIR USE NOTICE This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to advance understanding of computer science, IT technology, economic, scientific, and social issues. We believe this constitutes a 'fair use' of any such copyrighted material as provided by section 107 of the US Copyright Law according to which such material can be distributed without profit exclusively for research and educational purposes.

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The statements, views and opinions presented on this web page are those of the author (or referenced source) and are not endorsed by, nor do they necessarily reflect, the opinions of the author present and former employers, SDNP or any other organization the author may be associated with. We do not warrant the correctness of the information provided or its fitness for any purpose.

Last modified: August, 29, 2014