Lost in a Sandstorm

Both Tehran and Islamabad are striding undeterred down paths of foreign policy independence despite the obvious frustration of Washington decision-makers. Yet one is an “ally,” the other an “enemy,” and U.S. policy toward the two accordingly very different. That said, each seems adept at manipulating, not to mention resisting, Washington. Would the U.S. be better off changing course?

Among the various international challenges to Washington’s foreign policy goals, two loom large: the insistence of both Pakistan and Iran on following paths that place huge obstacles in Washington’s path. All sides can probably agree that the aggressively expansionist course desired by the Washington elite will, for better or worse, remain seriously impaired as long as these two independent-minded Islamic powers insist on doing what they want regardless of Washington’s desires. And while Washington’s power elite may be deeply in denial about the options it has, that it has a problem with both Iran and Pakistan it clearly recognizes and readily admits.

Resolving that problem, however, seems beyond Washington’s grasp, in part because it is already employing the two obvious alternative approaches – total hostility toward one and alliance with the other. Washington’s policy toward Tehran amounts to open economic warfare, winking at if not engaging in a campaign of covert terrorism, and the threat of an outright and unprovoked military attack. This long-standing policy is demonstrably failing. Tehran may or may not in the end offer some nuclear concession but shows no signs of playing by Washington rules. Pakistan, in contrast, gets billions in U.S. aid and a pass for its highly active nuclear weapons program, despite arguably doing fully as much to undermine Washington’s war in Afghanistan as Tehran ever did to undermine Washington’s war in Iraq.  Following Tehran’s playbook from beginning to end, Islamabad appears to be right on schedule to assert its dominance over Afghanistan at least as thoroughly as Tehran has asserted its dominance over Iraq. If both hostility and amity fail to induce real cooperation, is there a third alternative, or is Washington doomed to seeing two second-rate (to be polite) powers endlessly stymie its ambitions?

The U.S. remains today deep in the midst of what has already been a lost decade in economic terms. In strategic terms, the story is equally pathetic. Iraq went from being hostile but not dangerous under Saddam to moving very much into Iran’s orbit, courtesy of the neo-cons; Afghanistan is about to deliver another defeat to the U.S.; Somalia is at least as much of a problem for the U.S. as during “Black Hawk Down” days; Israel is proving to be an increasingly dangerous “ally,” with increasingly severe problems of its own and no thought more original than Indian reservations or apartheid as a solution to the Palestinian issue; Hezbollah is riding high in Lebanon; Egypt can hardly be considered an ally any longer; Turkey has moved from client to chastising and increasingly distant friend; and Iran, which cooperated with the Bush Administration to replace the Taliban regime in late 2001, is being washed toward ever greater nuclear capability by the current of American hostility. Globally, Russia and China seem confident and unworried by endless American self-defeating belligerence. The U.S. is both poorer and less effective than it was in the year 2000, while its “Muslim problem”—its inability to figure out a way of adjusting to rising Muslim demands for respect and fairness and understanding from the U.S.-centric global political system—has changed but hardly diminished at all.

But if the U.S. is treading water, the Islamic world certainly is not. The barbarism of al Qua’ida may not be over, but it seems passé, while the Arab Spring—which promotes many “American values”—may end up presenting a greater challenge to American domination. Iran, Pakistan, and Turkey are all moving to enhance their strategic positions at U.S. expense, and it would be surprising if Egypt were not fairly soon to follow their lead.

After a lost political and economic decade, the U.S. seems paranoid, confused, and bereft of any new ideas except for those that are patently idiotic. Clearly, Washington must get its act together. But if both utter hostility (toward Iran, not to mention Palestinians and Hezbollah) and cooperation (toward Pakistan, not to mention Egypt and Turkey) have failed, what can Washington do to devise an effective policy toward the Muslim world?

One clue to how to devise effective policy comes from looking for possible similarities between the strikingly divergent U.S. behavior toward its Iranian adversary and its Pakistani ally. Once the question is asked, the answer is obvious: both threats and actual force lie at the core of U.S. policy toward a Muslim adversary and a Muslim ally. The similarity is hardly subtle: U.S. drones violate Iranian national territory and bomb Pakistani villages. In addition, the U.S. has been busy constructing military bases in neighboring countries that both Iran and Pakistan consider important to their own national security. Danger Room reported in December, just after the CIA was kicked out of a Pakistani drone base for slaughtering Pakistani soldiers, that “Afghanistan is going to be the new major hub for the drone war.” The ironic fact that the Pakistani action followed by days Iran’s capture of a U.S. drone trespassing over Iran only underscores the similarity in U.S. treatment of the two states: not only are both states at the pointed end of the U.S. spear but the U.S. is aggressively expanding military installations designed for offensive action throughout the region in neighboring countries. Even as the U.S. military campaign inside Afghanistan winds down, the number of U.S. military bases there is exploding. From an already enormous 400 in 2010, it has now reached 450, according to a statement by an International Security Assistance Force representative. A U.S. Air Force officer has also stated that the key airbase at Bagram is being further developed in line with a “long-term” vision. Shindand Airbase, near Herat, is less than 75 miles from the Iranian border and is used for “surveillance missions over Iran.”

In sum, Washington relies heavily upon force to get what it wants both from Muslim adversaries and Muslim allies, despite—at least in the cases of Iran and Pakistan—failing to achieve its goals with either. This suggests at least two tactical insights: 1) force can easily be counterproductive regardless of how much power one has to defeat the enemy on the battlefield, and 2) one should move delicately and coordinate exhaustively with countries whose cooperation is sought when intruding militarily into third countries that border those countries. Every country will see military moves in the territory of its neighbors as affecting its own interests. From this, one can derive the following rules regarding the design of effective tactics for dealing with the Muslim world:

Rule 1. Cooperation is more effective than force.Rule 2. When moving into a new neighborhood, talk to your new neighbors.

Another clue to how Washington might devise a more effective policy toward the Muslim world can be detected by broadening the analysis from Iran and Pakistan to include other major problem states from Washington’s perspective—e.g., Iraq, Yemen, Somalia, and Lebanon. Peering beneath the variation in conditions and U.S. tactics toward each state, one broad similarity in fundamental U.S. approach is apparent: in every case, Washington set its sights singlemindedly on achieving its own goals, with little regard for the perceptions, needs, or legitimate concerns of the other state. In short, Washington viewed relations with all these states as a simple zero-sum game, essentially not even bothering to ask whether or not a positive-sum outcome might be possible. Of course, creating a bigger pie is likely to take longer than gobbling up the whole small pie that now exists, but the record of the past 15 years is that gobbling up the small Iraqi or Lebanese or Somali or Afghan pie will cause a very bad case of indigestion.

The result, after an extraordinarily dangerous and expensive decade-long disaster that shows no signs of ending, has been a series of defeats for the U.S., that add up to a significant weakening of U.S. national security. The details vary widely, of course: the invasion of Iraq was enormously profitable for a long list of war-profiteering U.S. corporations, and Lebanon is unique for the smooth manner in which Hezbollah has exploited U.S./Israeli hostility to transform itself from an anti-Israeli national liberation movement into the most powerful and modern political party in the national administration. That said, the primary impacts of U.S. policy toward each country to date appear to have been the destruction of the national society, the alienation of that society from the U.S., the defeat of Washington’s policies, and the provocation of on-going social conflict. Israel’s domination of the region has not been assured, Washington’s superpower status has not been solidified, terrorist groups have not been eliminated, Islamic activists have neither been persuaded to accept the U.S.-centric global political system nor eliminated from Mideast politics, and free access to the national economies for American corporations has not been obtained, stable middle classes have not been empowered, Mideast allies have not been convinced that “Washington knows best,” other world powers have not been kept out of the region, control over Mideast oil has not been achieved, and a solid foundation for a new American empire has certainly not been constructed. It is hard to think of a single goal of any major Washington faction over the past 15 years related to the Muslim world on which significant progress has been made.

It seems that Washington is pursuing goals that simply cannot be achieved, and this suggests that a wiser course would be to seek positive-sum steps forward, i.e., incremental agreements that benefit “us” without further antagonizing “them,” or, to put it in different words, to view the other side not as an adversary but as a partner. After all, even at the height of the Cold War, the Soviet Union was a partner in avoiding nuclear war. Even the Democrats and Republicans agree on some things (politicians from both parties drive on the right). Positive-sum policy is endlessly fungible: there is always room for a deal on one issue regardless of whether or not one insists on fighting over something else. This suggests a third rule, related not to tactics but fundamental strategy:

Rule 3. Seek benefit, not victory.

Numerous implications deserving careful meditation would follow from the adaptation of these three rules. Focusing just on the crucial third rule, potential steps come under two basic areas: coordination and  cooperation. In the realm of coordination, Washington should be quietly coordinating its aircraft carrier tours of the Persian Gulf with Tehran, explaining to them the reasons and what would persuade Washington to halt the provocative visits. Washington should also be informing all Afghanistan's neighbors of its military base plans and inviting both feedback and offers of a deal with any who take exception to make it clear that U.S. military moves were thoughtfully designed to induce limited behavioral shifts rather than as open-ended campaigns of aggression. 


More positively, Washington should not just explain its military initiatives but also seek opportunities for real cooperation. Working jointly with Iran to combat the illegal narcotics trade by the Taliban is one obvious positive-sum topic. A much more ambitious step would be the promotion of a Persian Gulf mutual security regime in which the U.S. would offer to oppose any offensive air attacks across the Persian Gulf in return for some package of Iranian steps toward nuclear transparency. Even more directly focusing on the core nuclear issue, the U.S. could promote technical nuclear talks designed to clarify the distinction between Iranian refinement of medical-grade and military-grade uranium, with teeth on the Iranian side and substantive military and political concessions on the U.S. side, including acknowledgement of Israeli responsibility for itself moving toward a policy of nuclear transparency. Regarding Pakistan, putting the safety of Pakistani civilians ahead of the killing of suspected enemy fighters by scandalously inaccurate drone bombers is another potential positive-sum stance: the U.S. could improve its public image and make a powerful argument that greater effort by Islamabad to arrest suspects (to be followed by U.S. pledges to respect its own standards of justice) would constitute the expected trade-off for a more carefully coordinated drone policy. The U.S. could thus simultaneously promote cooperation, seize the moral high ground, and strengthen respect for American values. The more such positive-sum steps Washington proposes, the stronger factions in Iran and Pakistan favoring cooperation with the U.S. will become.


Washington’s tactics and strategy for Mideast victory have failed to achieve the desired goals. Two tactical shifts—avoiding force and paying attention to the national security concerns of third parties—would make Washington’s policy toward the Muslim world less counterproductive, but for a real breakthrough in U.S. relations with the Muslim world, Washington must take the hard strategic step of replacing hubris with humility and must accept attainable benefit as a more rational goal than illusive victory.

Paranoid Superpower

In an era when U.S. national security has been visibly and painfully challenged by networked, non-state terrorist gangs and its own corrupt uber-rich, the revelation that every American is looking wild-eyed over his shoulder for the  “next enemy” should come as no surprise. Keeping one’s eyes open is good, but the panic seen in American eyes today is embarrassingly close to paranoia.

Is Putin Eyeing Pakistan?

Might Putin, looking to burnish his place in history, be tempted to seize an enticing opportunity to pull Pakistan into the Russian orbit?

Current Economic Indicators

Keep the following evidence in mind when calculating your financial future...

Pakistan to Support Iran if Israel Attacks

Islamabad has sent Washington a crystal clear warning that continuing to move in lockstep with Likudniks toward war on Iran could lead to an Iranian-Pakistan defensive alliance.

The Day After an Attack on Iran: An Oil Disaster Scenario

If the U.S. attacks Iran, it won't just be about Iran anymore. Here is just one very possible scenario for 'the day after.' Has Washington thought this through?

Israeli Politicians Vs. Israeli Military-Intelligence Officials

Israeli media are reporting widespread opposition to an Israeli attack on Iran from within the highest levels of the Israeli national security elite. Indeed, Netanyahu’s warmongering has been so damaged by Israeli military-intelligence opposition that he is now trying to muzzle his opposition within his own regime. Democracy in Israel, it seems, allows public calls by officials for war but not public calls by officials for peace.

Global War By the Rich: Afghan Chapter

Lies about the reasons for invading other countries that pose no direct or immediate threat to the U.S.; lies about your mortgage, which was sold to you on false pretenses after which the mortgage was sold, the paperwork was “lost,” and the new bank then defrauded you; lies about kissing up to a violence-prone, right-wing faction of expansionists in Israel and pretending they represent the interests of the Israeli people (much less of the American people); and now…according to a U.S. Army Colonel just back from Afghanistan, lies about the Afghan war. Say whatever you want; this is a free country: just don’t call this class warfare. Does anyone see a pattern here?

City on the Hill?

With the U.S. running the world, unfortunately, everyone else behaves just like us.

The Real Reasons Some Israeli Politicians Want War Against Iran

The real reasons why extremist politicians in Israel keep talking about launching an unprovoked attack on Iran are slowly coming out, and it's not what you thought.

Former Saudi Intel Chief Warns Against Iran War Scare 'Hyperbole'

Now a Saudi national security official joins Israeli and U.S. current and former policy-makers charged with defending their countries' security in warning against the current anti-Iran war hype. Everyone who thinks Riyadh wants an Israeli/U.S. war against Iran should pay careful attention to Turki al-Faisal's recent comments.

Emerging Economic War Vs. Iran: Worth the Effort?

Iranian legislators are considering an embargo on oil exports to West Europe, in response to the West European decision to embargo oil imports from Iran. Pardon me for failing to take this seriously as economic warfare: I predict the international oil market will turn out to be fungible (take a drop away here, get a drop from somewhere else). As diplomatic repartee, however, Iran scores!

Provoking an Oil War Is a Bad Bet for the U.S.

Perhaps Washington has a secret plan for defeating Tehran in a contest over oil, but Tehran has enormous tactical advantages, while the relevance of Washington's vast military superiority appears questionable. Has anyone in Washington actually thought this out?

Democracy Fans the Sparks of War

Much can be said about the U.S/Israeli conflict with Iran, and unfortunately much--way too much--is being said. The most important thing for the security of all of us right now is to take all the hot air with a grain of salt.

Children Playing With Nuclear Matches

Russian, American, and Israeli national security thinkers warn against launching a war on Iran: do the politicians care?

IDF: Nuclear Iran 'Could Deter' Israel

A senior IDF general has admitted that a nuclear Iran "could deter" Israel. Exactly.

Will Netanyahu's Provocations Backfire?

Netanyahu’s combined efforts to push the U.S. into a war on Iran as a smokescreen for his plan to absorb the West Bank and to manipulate the U.S. presidential election may open the door to an alliance of U.S. and Israeli national security officials who believe in security through peace and justice.

U.S. Policy on Iran Invites Third-Party Provocations

U.S. policy toward Iran is not just designed to fail but designed to hand the initiative to America's enemies.

U.S. Policy on Iran Is Designed to Fail

Intentionally or not, Washington's policy toward Tehran is flawed politically, historically, and psychologically. It is a policy designed to fail.

Never, ever say “please” if you can get away with spitting in someone’s face. That, in this highly civilized new century, has become the essence of American policy toward Iran. Many in Washington will surely defend this approach as “the only language they understand.” Maybe so. One thing is for sure: it is the only language in which they have heard us speak.

In defense of Washington policy makers, they of course do not know how Tehran might respond to a sincere and consistent policy of inviting Tehran policy makers to sit down and reason together. And they can be excused for seeing little likelihood of being able to convince Tehran of sudden American sincerity between now and the Presidential election.

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A Policy Designed to Succeed

A policy designed to persuade Tehran to forgo militarization of nuclear technology would contain at least three shifts in U.S. policy toward Iran and one fundamental shift in the regional context. The policy shifts toward Iran are obvious: respect, inclusion, and security. The regional shift is sufficient movement toward justice for Palestinians to make radical Iranian involvement in the Levant irrelevant. Amazingly, all these U.S. moves, which Washington seems to find so distasteful, are fully consistent with U.S. national security.

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Nevertheless, it is worth considering how Americans would feel if China or Russia  invaded Mexico, set up a string of huge military bases there, and sailed an offensive Armada into the Gulf of Mexico, while loudly discussing the “option” of attacking the U.S. (of course, with “pinpoint accuracy” to avoid civilian casualties…except for scientists working at the Pentagon), and demanded that the U.S. relinquish not just its most powerful weapons but its right even to conduct research toward some future emergency development of such weapons. How many American politicians would bend their knee and disarm in return for nothing more than the “privilege” of being invited to negotiations? How many who did bow down would win reelection?

Even the most reasoned high-level U.S. pronouncements about Iran come out wrong. Consider Defense Secretary Leon Panetta’s recent statement that Iran is only laying the groundwork for a possible future bomb. That would seem to settle the issue in a rational world. Countries have the right to lay the groundwork for future defense. But no…he then continued to point out that even though he admits Iran is not building nuclear arms, “the responsible thing to do right now is to keep putting diplomatic and economic pressure on them to force them to do the right thing.” Leon, you really understand human nature. As long as you can spit in their face, don’t ever say please.

But the mistake is more serious than just egregious American bullying that accomplishes nothing more than to irritate Tehran and make a serious global issue dangerously emotional. Even in rational terms, Panetta is singing off-key. Perhaps in Washington, it seems rational for all countries, even those threatened with aggression, to trust Washington. Elsewhere, "rational" would not be the word for such a naive attitude. On the contrary, given Washington's aggression against Palestine, Lebanon, Afghanistan, and Iraq, its threats against Iran can only be interpreted as making only one policy "rational" for Iranians: maximizing self-defense capabilities. That is not the lesson Washington should be teaching.

In this context of endless bullying without any inducement to compromise, an incident that will inflame passions is almost inevitable.

Whatever you may think of U.S. or Iranian foreign policy, the fact is that every time Tehran underscores its independence and right to self-defense, Washington becomes more aggressive. If this is war, it is a one-sided war. Yes, Iran is insulting, warning, lecturing, posing, and desperately trying both to strengthen itself and to give the appearance of strength: only an unemployed Republican presidential candidate could define that as “aggressive.” Washington, in contrast, is intensifying a crippling campaign of economic warfare within a context of a simultaneously tightening military encirclement.

If Washington is bluffing, it is a convincing bluff, plenty convincing enough to make someone in Tehran’s highly factionalized regime panic. Let us assume, for the purposes of conversation, that Washington’s Masters of the Universe have everything perfectly calibrated to force Tehran to beg for mercy without any risk of a disaster. Let us assume that the disasters of the Iraq invasion, the on-going mess in Afghanistan, and the endless elite-created recession are lessons learned, mistakes never to be repeated. Wiser now, the Masters of the Universe really do know how to run the world, we shall assume.

Still, from Tehran’s perspective, things are starting to look a little scary. What if someone or some faction panics? What if a third party (say, an ambitious Israeli politician or an al Qua’ida type) sets a trap? What if Iranian decision-makers simply decide that Washington needs a slap on the face to wake it up?

What if Tehran calculates that things are getting out of control, that Washington leaders are not “Masters of the Universe” but just provincial politicians wrapped up in their election campaign? What might Tehran do? And how would American politicians, not exactly known for their ability to appreciate how the world looks to Muslims, be likely to react? In the current emotional situation, anything is possible, and almost every conceivable scenario will be bad news for Americans.

People do not respond very well to rude and highly public ultimatums, even when they are persuasive. Any Iranian politician who did so would almost certainly face discharge, arrest, and probably a firing squad for betraying his country. Moreover, how could an Iranian policy maker even defend a proposal to kowtow to the U.S. before his peers? The U.S. over the last decade has fought wars, either itself or via proxies, in Iraq, Somalia, Gaza, Lebanon, and Afghanistan. How many victories did it win?

Psychology suggests Tehran will not accept an ultimatum. History suggests the U.S. will only make matters worse if it starts another war. Both the U.S. secretary of defense and the recently retired Israeli head of Mossad see an attack on Iran’s nuclear establishment as at best a very short-term palliative. The U.S. campaign of economic warfare against Iran is empowering Iranian hardliners, putting the initiative in the hands of Moscow and Beijing, and alienating U.S. allies from Turkey to Japan (both of which are demanding the right to continue buying Iranian oil).

Washington’s policy toward Iran is a policy designed to fail. Why?

Winners and Losers

When you think policy makes no sense, perhaps you just haven't figured out who benefits.

Yelling 'Fire!' in the Nuclear Theater

The issue of Iranian nukes is far too important to be treated with glib soundbites.Those who cannot bring themselves to speak responsibly about such critical issues only reveal their lack of qualifications for national leadership and provoke one to wonder what their real game is. 

Jobs!

Stop whining. There are plenty of jobs.

All you 20 million unemployed Americans should just stop whining. There are plenty of jobs, with far more to come. Everyone who wants to work can get ten offers tomorrow morning. First, that imperial embassy in Baghdad is so big it will never have enough support personnel and security guards. Second, all those Pakistani truck drivers for U.S. forces in Afghanistan need to be replaced. Third, the construction of democracy, in fact the construction of roads, in Afghanistan is literally an endless task, since those who don’t like having Americans in charge of their country destroy everything as fast as it is built…so we need to build faster. And then there is Iran. Once we trash that country, American workers will have a real bonanza. Iran is not Iraq. Iran is big. For unemployed Americans who can’t drive or mix cement or man a security post, well, there’s always a job on the Afghan-Pak border persuading goatherds that cooperation with America is the best way for them to build their personal futures. So instead of sitting suicidal in your basements, start studying Farsi and Dari and Urdu. Your government will take care of you.

Challenge to the War Party

American media are being flooded with calls for aggression against Iran, all replete with glib assumptions and careful avoidance of any deep analysis of what might go wrong. Here is what I want:

an argument for launching a war against Iran that is intellectually honest and profoundly self-critical, an argument that enumerates assumptions and questions them, an argument that searches for what could go wrong and lays out a precise plan for avoiding pitfalls, an argument that shows how war will lead us to a world we can honestly expect to be better than it would have been without war.

I predict that no one can make such an argument. I challenge the smooth-talking, "they will welcome us with flowers" set--those of you who think wars can be managed and long-term dangers avoided--to prove me wrong.

Transparency! Responsibility! Regulation!

America—American society and ruling elite—needs some good, old common sense New Year’s Resolutions. To me, three seem pretty much to sum it up: transparency, responsibility, and regulation.

It is only common sense that a democracy cannot function if officials are allowed to hide what they do from those who hired them; no powerful official can for long resist the temptation in a dark closet to do something he has good reason to hide: the solution is to turn on the lights. Taking responsibility for your behavior is understandable to any well-bred three-year-old. Again, this is common sense: who will consistently behave responsibly when told they do not have to? Finally, not only do most of us fall short of sainthood, there is always a truly evil person in every crowd. For him certainly, but also just to help guide the rest of us to stay on the straight and narrow, it is, once again, only logical that we need regulation.

Transparency by those in power allows democratic political oversight and trains the elite to behave responsibly, while regulation reinforces responsibility. A century ago Lenin won a revolution with the famous slogan “peace, bread, land.” That was a slogan capturing the essence of what Russians thought they should receive from their government. Today, in the U.S., the issue is not about what government should give people but about how the elite that runs both government and corporate power centers behaves. Put briefly, an elite that behaves transparently and accepts responsibility for its actions would revolutionize America but could continue to exist; such an elite would be compatible with democracy. Absent such a revolutionary change in behavior, either the elite or democracy must give way.

Transparency…

In Finance. Four years after the entirely man-made 2008 financial crisis, the carefully concealed government program that rescued both the financial system (justifiable) and the millionaire crooks who almost broke it (unjustifiable) is only now leaking out into the public realm. Someday, a politician must be put on public trial and ordered to explain why bailing out the rich with taxpayer funds should be hidden from the taxpayers.

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Lack of Financial Regulation

…thanks largely to the fact that credit default swaps existed in a totally unregulated area of the financial universe—this was the result of that 2000 law, the Commodity Futures Modernization Act, sponsored by then-senator Phil Gramm and supported by then-Treasury chief Larry Summers and his predecessor Bob Rubin—Cassano could sell as much credit protection as he wanted without having to post any real money at all. So he sold hundreds of billions of dollars’ worth of protection to all the big players on Wall Street, despite the fact that he didn’t have any money to cover those bets. [Matt Taibi, Griftopia, (Speigel and Grau Trade Paperbacks, 2011), 101.]

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Who led the fight to keep taxpayers in the dark? Naturally, it was the Fed, that so-called Federal regulator complicit in the creation of the financial crisis by its cosy (read: “corrupt,” as in, “don’t forget to give me a nice Wall Street management position after my years in the government, now, good buddy”) relationship with those it was assigned to regulate plus…the banks it was supposed to have been regulating. This is really not very hard to understand: if you were a billionaire who became a billionaire by cheating investors by persuading them to purchase what you knew to be bad investments and the government handed you free money from the pockets of American workers after you got in trouble, wouldn’t you want to keep it secret?!? To find out what Washington was doing with taxpayer money behind the backs of taxpayers, Bloomberg had to file Freedom of Information requests! What was the bottom line?

banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates

Either the Fed was so irresponsible and just plain stupid that it threw away $13B of taxpayer money or…this constitutes outright corruption.

…in Foreign Affairs. Two countries today are responsible for generating a decade-long crisis that could provoke a disastrous war, perhaps even a nuclear war, by their game-playing over the concept of nuclear transparency: Israel and Iran. Regional nuclear monopolist Israel plays the “don’t ask-don’t tell” charade, while Iran appears to be playing exactly the game that got Saddam killed: pretending for short-term status to have the ability to militarize nuclear technology overnight. Both Tel Aviv and Tehran need to grow up and support regional nuclear transparency as the first step toward the establishment of a shared security regime.

As for Washington, it should--as sole superpower--defend the interests of mankind and--as the elected government--defend U.S. national security: both obligations would be better served by promoted stability founded on mutual security than by getting into the middle of a squabble between foreign politicians playing games for personal advantage. Yes, moves to lower regional tensions would put the careers of Ahmadinejad and Netanyahu at risk. So what?

Responsibility…

…in Domestic Affairs.

When corporations are either 1) permitted by a society that provides them a business-friendly environment to enrich themselves or 2) are even assisted by corporate welfare to enrich themselves and their business behavior subsequently endangers the welfare of society, then that society must have a legal process for holding such corporations as entities and the managers of such corporations and their government friends personally responsible. Goldman Sachs executives, despite appearing to have engineered the collapse of AIG only to profit further from that disaster via a monstrous taxpayer bailout [Taibi, 118; Nouriel Roubini and Stephen Mihm, Crisis Economics (Penguin Books: 2010), 228-9], remain free and rich while the millions who have lost homes and jobs remain homeless and unemployed.

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Responsibility in Financial Affairs

Even though they weren’t really in danger of losing any money by holding on to [WM: AIG executive] Neuger’s securities, they were returning them anyway, just to force AIG into a crisis. [Taibi, 116] …In essence, the partners of Goldman Sachs held the thousands of AIG policyholders hostage, all in order to recover a few billion bucks they’d bet on [WM: AIG executive] Joe Cassano’s plainly crooked sweetheart CDS deals. [Taibi, 118.]

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…in Foreign Affairs. The war party infamous for the savaging of Iraq, Lebanon, Gaza, Somalia (using Ethiopian troops), Afghanistan, Pakistan should be held legally responsible in open court not only for what it did to foreigners but for the resultant American deaths and the harm to American principles. Were crimes committed (e.g., lying to the American people about the reasons for invading Iraq, illegal wiretapping, Abu Ghraib, war against civilian populations in such places as Fallujah)? Let the system of justice reach a decision. Throwing a rug of political denial over the rotten foundation of American democracy is not the way to prepare for the future.

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Responsibility in Foreign Affairs

At the height of what looked like success in Iraq and Afghanistan, American officials fretted endlessly about how, in the condescending phrase of the moment, to put an “Afghan face” or “Iraqi face” on America’s wars.  Now, at a nadir moment in the Greater Middle East, perhaps it’s finally time to put an American face on America’s wars, to see them clearly for the imperial debacles they have been -- and act accordingly.  [Tom Dispatch 1/3/12.]

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Regulation…

…in Domestic Affairs. In 2010 a meek and vague new financial regulatory bill was signed into law, leaving the crucial details to be determined by the very regulatory foxes (e.g., in the Fed) whose irresponsibility and collusion brought us the financial crisis in the first place. We are being conned.

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Regulation in Financial Affairs

We are now in the worst of all worlds, where many TBTF institutions have been bailed out and expect to be bailed out in any number of future crises. They have as yet faced no sustained regulatory scrutiny, and no system is in place to put them into insolvency should the need arise. Even worse, many of these institutions—starting with Goldman Sachs and JPMorgan Chase—are starting to engage once more in “proprietary trading strategies,”… [Roubini, 224].

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…in Foreign Affairs. Regulation is relevant to foreign policy in two ways: the establishment of international law, which U.S. presidents have shamefully made careers out of violating in recent years, and domestic efforts to hold politicians to account for the foreign policy they implement. Regarding the latter—the idea of holding senior officials personally responsible for their foreign policy actions--the most egregious trend is the rising ability of the President to make war without the consent of Congress. (Yes, there is something in the Constitution about this.)

What Could Obama Do? Everyone, conservative or liberal, is now aware that Obama has yet to respond to the hopes of Americans for a savior to rescue the country from the combination of the neo-con orgy of empire and government-facilitated financial crime. Yet he can yet become an above-average president in his first term, opening the door to greatness in his second. No, he does not have the power to pass significant new laws; any conversation he has with Republicans in 2012 will be doomed to failure; the stumbling gait of the elite-crippled American giant gives him little power to change the world. All this is sad but true.

Nevertheless, Obama is President. He has the power to defend the 99%. He can, for example, urge the Attorney General to start seriously investigating both corporate crime and corrupt politicians who were either on the take to corporations or exploiting their positions for private gain. There is plenty of time before Election Day to bring some of the obvious suspects--who wrote laws to facilitate bank fraud and then bailed their buddies out or who invaded other countries on false pretensions--to trial. That is just an example. It comes under the heading “Responsibility.”

One of the greatest failures of the Obama Administration was the absence of a clear, public denunciation of the recent practice of giving the finger to international law, a crucial shield defending democracy. Obama does not need an act of Congress to stand up before the American people and speak to us of the principles conducive not to the long-term security of the U.S. empire but of American democracy. Lying to the American people about the reasons for war, making nuclear threats against non-nuclear powers, advocating preventive war as a regular policy option, hiring mercenaries and pushing open-ended authorizations for unilateral presidential action to facilitate presidential wars without Congressional declarations of war are great ways to defend the militarist heart of an imperial garrison state; they are not so good for defending the security of a democratic society of free citizens. This is just a second example; it comes under the heading “Regulation.” A great President is one who will inform the naïve American people that he too must bow before the law; in a word, like those of us who elect the President, he too must be regulated, and a great President would wish to leave behind such a legacy.

The U.S. Government needs three New Year’s Resolutions: transparency, responsibility, regulation. If Obama wants to lead the U.S. proudly into the 21^st century, he can start now.

Reforms to Rebuild America

The absurdity of some ambitious politicians and the timidity of the rest makes me wonder if the U.S. may need revolutionary reform in order to survive, i.e., a legal, non-violent movement (imagine Occupy gone nationwide minus police brutality) so profound that it generates revolutionary restructuring of the political and financial system. OK, nice dream, right? But what might the policy goals be?

1. If corporations are "persons," arrest them. If you can't figure out how to arrest a criminal corporation, then obviously corporations are not persons, so let's get over this nonsense.

2. Ban unearned income. The super-rich got that way through government welfare in the form of what is literally called "unearned income." That means just what it says - you get something without working for it! Obviously, the money comes from somewhere, and since they did not earn it, one way or the other, it came out of the pockets of those who do work. Worse, having been spoiled by their government handout at your expense, the super-rich now want to avoid taxes on the unearned income. They get a huge gift free from the hard-working taxpayers and still are not satisfied! Why? Simple - the super-rich are not patriotic; they do not think they owe anything to the country that gave them the gift of unearned income. How selfish can you get??? Now of course we could deny them the right to be defended by the U.S. Armed Forces, and we could deny them the right to drive their Mercedes on the national highways, and we could deny them the right to drink from the public water supply, but it would be a lot simpler just to ban unearned income. If you don't earn it, you don't deserve it.

3. Ban mercenaries. Ever since Caesar Augustus used his private palace guard to destroy the Roman Republic and found the Roman Empire, the danger of mercenaries to the state that hires them has been clear. Today, the U.S. has a massive mercenary military force essentially free from Congressional oversight or judicial restraint. This highly dangerous way of subverting the will of the people and its elected representatives to fight foreign wars will eventually come back to haunt us. If a war is worth fighting, then uniformed U.S. soldiers should do the fighting.

4. Welfare for corporations in return for giving corporate profits to the people. If a great corporation encounters adversity, by all means give it welfare - call it a bailout, call it opening the Fed's discount window, or just call it socialism. Socialism means using government to help people, and the people working at great corporations of course deserve charity just as much as everyone else. But corporations are NOT PEOPLE! Corporations are abstract legal/financial entities, and they do not deserve anything. A corporation may be judged too big to fail because it is of value to society, but that is the only reason - we do not "owe" corporations anything any more than we "owe" kindness to the cement blocks their headquarters are resting on. So here's the bargain: if the members of a corporation desire Federal welfare, in return we the people desire their profits, and we will consider paying the CEO at a rate commensurate with that of all other employees.

5. One-Term Leaders. No one should be allowed to be president for more than one term: the temptation to start a war just to get reelected is just too strong. Similarly, Congressfolk should similarly be restricted to one term, with no post-term benefits. Of course, no one is in it for the money, but still the temptation to think about the money rather than about how to help the country is distracting. Anyone who wants a life in government can work his or her way up through the bureaucracy. Seriously - don't you know thousands of people who would make better legislators than the clowns we currently have?

Bottom line: real reform to sustain American democracy requires simultaneous reform of the political system, the economic system, and foreign policy to place all three on a consistent foundation of empowerment of the 99%, i.e., the weaker individuals, groups, and societies.
Additional reform proposals would be welcome.

Iraqi Lessons

The Washington elite decision to invade Iraq occurred for reasons that thinking Americans will bitterly debate for much of the rest of this century. Like it or not, the influence of that decision will be heavy on the shoulders of every person alive on earth for the rest of that person’s life. The question now centers on the lessons we all learn.

Lesson #1: War does not create democracy. If Washington invaded Iraq to defend freedom, the invasion was a disaster. The behavior of the U.S. toward occupied Iraq, the behavior of U.S.forces in Iraq, and the behavior of Iraqi politicians during the occupation have all tarnished the reputation of that ever out-of-reach ideal known as “democracy.”

Lessson #2: The American way of war destroys societies rather than saving them. If Washington invaded Iraq to save the Arab people, its destruction of the most advanced middle class society in the Arab world makes the failure of that goal crystal clear.

Lesson #3: A flashy war somewhere else will trick the American people every time. If Washington invaded Iraq to keep Bush-Cheney in office, the plan worked brilliantly, rescuing an apparently doomed administration. Perhaps the worst president in American history was able to preside over what was, in moral terms, perhaps the most immoral decade in American history, step nimbly over the thousands of dead civilians, ignore the tattered remnants of U.S. Constitutional guarantees of civil liberties, and announce with a grin that being president had been “fun.”

Lesson #4. Empires feast on war. If Washington invaded Iraq to build empire, the lesson to be derived from the perspective of the American people is quite different from the lesson that an empire-builder would derive. Despite being fought to a draw by “rag-tag extremists”—many of whom were in fact genuine nationalists and having its uniformed forces essentially kicked out, the empire-builders have much to savor: Iraq remains, sort of, in the U.S. orbit, with huge and dangerous U.S. mercenary forces evidently planning to remain. Then there’s that monster fortress embassy in the Green Zone. As for the ring of real fortresses, the U.S. military bases, just exactly what is happening to them? More significantly for empire-builders, the war facilitated the establishment of a larger ring of U.S. bases throughout the region, not just surrounding Iran but making clear that, for the moment, the U.S. is the winner of the Central Asian Great Game that Russia and Great Britain used to fight. Of course, the small matter of how to avoid a second embarrassing “victory”—in Afghanistan—remains to be worked out; some of our brilliant strategists are now suggesting the (to empire-builders) obvious solution: expand the failed Afghan adventure to Pakistan.

Lesson #5. Even winning a war can harm your security. OK, maybe the U.S. did not exactly “win” the Iraq war, but it certainly conquered the place and invented its current government. Yet who in the U.S. feels more secure? The war empowered bin Laden for years, multiplied anti-U.S. feeling worldwide, contributed greatly to a continuing U.S. economic mess, left the country profoundly divided, and left the U.S. embarrassingly irrelevant in the Arab world, as became obvious when the White House sat on the sidelines during the heady days of Tahrir Square. Meanwhile, Iran, which empire-builders and Likudniks so love to criticize, is manifestly more significant on the world stage than it was a decade ago. Much more seriously for real strategic thinkers, Russia and China are steadily moving forward with low-cost economic development projects to expand their global influence while being pushed more and more warmly into a strategic embrace by the squeeze the U.S. is putting on them.

Lesson #6. Aggression is complicated. If Washington invaded Iraq to get Iran, well, Washington transformed Iraq from Iran’s main enemy into, shall we say, a very friendly and submissive neighbor: dare we say “Iraq is Persian for Canada”? And now Washington is almost throwing Pakistan as well into Iran’s orbit. In the process, Washington also taught Iranians at least two lessons that will come back to haunt Americans. First, Iranian efforts to work with the Bush Administration were accepted briefly when desperately needed to construct a new Afghan regime, after which Bush immediately insulted Iran (remember “Axis of Evil”???). Second, tensions with Iran have greatly empowered Iran’s own militaristic, super-nationalistic “neo-cons.” Iranians have learned that hostility toward the U.S. pays a lot more than cooperation.

Lesson #7. War enriches the rich. This one is harder to contemplate; it's a real conspiracy theory and surely must impute more deviousness to certain factions than they deserve, but if some of those who supported the invasion of Iraq did so to blind the 99.9% to the accelerating shift of power and wealth into the hands of the 0.1%, they certainly achieved what they wanted. One one level, the shift of wealth to the uber-rich occurred directly through the enormous benefits handed to CEOs profitting from the war. On a second level, war tensions distracted Americans. Linking the levels together was an insidious dynamic of rising impoverishment of the 99%, facilitating the task of persuading some of them to sacrifice their lives on the battlefields of empire. That this in fact worked and did so on at least two crucial levels is pretty much beyond dispute; that it was planned from Day 1 is less clear. Nonetheless, now they own it all.

The American people (not the Occupiers; that courageous minority understands the need to defend democracy) are right: a self-satisfied if embarrassed grin followed by firm denial and a trip to the mall is the only way to deal with this mess. Face up to reality and we will all need psychiatrists.

Pakistani Academic Warns of U.S. Threat

Opinion and policy emerge not just from the politicians but also from informed society. If a recent Pakistani academic's assessment of the U.S. as a threat that Pakistan must counter by cooperation with Iran and Russia becomes representative of Pakistani public opinion, the U.S. is likely to face a significant diplomatic and strategic defeat.

Shooting Ourselves in the Foot

Human nature creates crises: the safer, smoother, more stable things are, the more risk people will take, sooner or later wrecking all that stability. Despite the outpouring of analyses of the 2008 Financial Crisis, it remains unlikely that society has internalized this lesson about the ever-present threat of human nature even as regards economic crises, however obvious the message may be. How much less likely is it that we are anywhere close to protecting ourselves from self-inflicted political crises?

We all are now aware that the shortsighted, selfish behavior of a few millionaires on Wall Street, a few politicians, some compliant regulators, and--truth be told--more than a few of the "other 99%" looking to cheat their neighbors for a quick buck can combine to generate a financial tsunami. It's not about foreigners. We are our own worst enemy. What most complacent and confused Americans fail to understand is the degree to which we make our own international political crises as well. From the American War in Vietnam to the Global War on Terror to the looming war against Iran (backed by Russia, China, and maybe Pakistan), the U.S. has the power to take the initiative and create these disasters but lacks the power to resolve them in a beneficial manner.

Note clearly that this discussion concerns “self-inflicted crises,” those resulting from the conscious choice to engage in unnecessarily greedy behavior. A crisis caused by an external force, human or natural, lies outside the discussion. Here the concern is on a class of crisis caused by perfectly avoidable human greed leading to obviously risky behavior (in effect, investing in a chain letter). To put it differently, the class of crises of interest here is a class for which one should expect the guilty to be named and punished (both by the judicial system for crime and by God for their sins).

Since everyone is now thinking about utterly unnecessary and egregiously man-made financial crises even as we are hit by repeated utterly unnecessary and egregiously man-made political crises, a question that seems timely and useful flows from the above paragraphs:

Can our recently learned lessons about financial crises help us to avoid political crises?

In The Black Swan, Taleb reports an alleged pattern of economic risk-taking:

The economist Hyman Minsky sees the cycles of risk taking in the economy as following a pattern: stability and absence of crises encourage risk taking, complacency, and lowered awareness of the possibility of problems. [78.]

Nouriel Roubini, the economics professor who predicted the 2008 Financial Crisis in brilliant detail, described the “vicious cycle” of economic crises as consisting of [once I delete the economic adjectives] the following steps [Nouriel Roubini and Stephen Mihm, Crisis Economics 18.]:

1. Worries drop;
2. Costs fall;
3. The bubble drives growth;
4. Increasingly risky ventures are undertaken.

Applying this abstract vicious cycle (to which I would simple add the obvious final step—collapse, i.e., the point at which the cycle ends...with a bang) derived from economics to international relations is suggestive. Whether in economics or politics, the dynamics of the bubble of greed are frequently equivalent. In the aftermath of 2008, the point as regards economics must be obvious to all, whether they have read Marx, Keynes, Minsky, and Roubini or not. Every poor, naïve, uneducated (or just greedy) homeowner who took out a mortgage that he or she obviously could not afford and has now lost that home is today an expert in bubble economics and the danger to us all posed by unregulated capitalism.

But international politics is harder to see clearly through the fog of greedy politicians who classify information to prevent the voters from learning the truth and who wave the bloody shirt of foreign “menace” to promote their careers. Language too helps to obfuscate. We do not talk of “imperialist bubbles.” But if one abstracts to clear away the clutter of detail, the dynamics of greed, willful denial, moral hazard, and willingness to risk—even promote—“collateral damage” in so-called Global War on Terror looks like nothing so much as the 2008 Financial Crisis. Leaders became increasingly confident that they could not be stopped, with their appetites for new victories, new wealth, and new power rising apace. As the new policy—be it the issuance of new securities based on sub-prime mortgages or military adventures in yet another Muslim society—proceeded without major defeat, each new venture seemed less and less costly. Every small gain was used to justify a larger gain, every small risk to justify a larger risk. Even when the risks were seen, they were dismissed; after all, it was the poor who would suffer from unemployment and foreclosure…or death on the battlefields of Iraq and Afghanistan, and in the case of the wars, most of those poor were foreigners. Moreover, like the Wall Street firms bailed out by politicians generous with taxpayer funds, the White House was “too big to fail.” Like Wall Street megabanks, the White House knew it and took advantage of it: moral hazard gone wild. Like big bank CEOs, presidents and vice presidents are almost never held criminally accountable in court for their sins. And then suddenly, the financial/imperial party was over, and the victims were left to clean up the mess.

In the abstract the pattern of failure is clear: failure of the people to carry out their democratic responsibility to monitor their leaders, arrogance, abuse of power, denial about the risks, corruption, lack of concern about collateral damage, and moral hazard.

As long as society trusts those in power, the powerful will abuse that trust for personal advantage, be it the selling of bad securities or the selling of bad wars. The more society is willing to countenance collateral damage to workers driven into unemployment and homeowners foreclosed, or Muslim wedding parties bombed and Muslim societies denied the right to civil liberties and national independence from the globalization avalanche, the more the rich and powerful will hold parties at the expense of everyone else. Bubbles are very good business for those who create them. “They” will never stop doing so until “we” put in place the moral strictures, legal regulations, and judicial holding to account necessary to stop them. But it is not that simple, for many of “us” were tempted to buy houses we judged we could flip into the hands of a more naïve neighbor to skim an unfair profit; many of “us” looked the other way while innocent Muslims across the globe were slaughtered in the name of global war to retain all the undeserved special privileges that make possible a rich life in a poor world. So in the end, the old saying is true: we get the government we deserve.