May 252016
 

By Eric Toussaint, CADTM, 99GetSmart

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Part Two of the series “Greece and debt: two centuries of interference from creditors”

This series of articles analyses Greece’s major debt crises by placing them in the international economic and political context, an approach that is systematically absent from the dominant narrative and very rarely present in critical analyses. Since 1826, a series of major debt crises have profoundly marked the lives of the Greek people. Each time, European Powers formed a coalition to impose new debts in order to repay the earlier ones. This coalition of Powers dictated policies to Greece that corresponded to their own interests and those of the few big private banks and large fortunes. Each time, those policies were aimed at extracting the tax resources necessary for repayment of the debt and entailed a reduction in social spending as well as decreased public investments. In a variety of ways, Greece and the Greek people were denied the exercise of their own sovereignty. With the complicity of the Greek ruling classes, this kept Greece in a subordinate, peripheral condition.

Recall of Part One, published 12 April 2016 http://cadtm.org/Newly-Independent-Greece-had-an: Newly Independent Greece had an Odious Debt round her Neck

Modern Greece was born shackled to debt from bond issues (in 1824, 1825 and 1833) which together amounted to 245% of her GDP. Three major European Powers (Britain, France and Russia) formed a coalition that amounted to the first Troika, imposed a monarchy, putting a Bavarian prince on the throne, and subjugated the country through debt. The Troika systematically defended the interests of the big banks in London and Paris, ensuring that they would extract maximum profit from the odious debt demanded of Greece. The Greek people, who had to foot the bill for a spendthrift, bellicose monarchy, rebelled on several occasions. While they succeeded in ousting the despot in 1862 and instituting a Constitution granting them certain civil and political rights, they were not able to free themselves of the burden of debt. The major Powers kept Greece in a position of subordination, denying the Greek people the exercise of their sovereignty. The monarchy and the local ruling classes systematically attempted to divert popular discontent towards nationalism and hostilities with the Ottoman Empire.

Introduction to Part Two

According to the dominant version of history, whether untruthful or simply mistaken, during the 1880s Greece was re-admitted onto the financial markets thanks to an 1878 agreement with the creditors who held their 1824-1825 |1| debts and to policies of radical public expenditure reduction. Greece then made heavy use of fresh borrowing and significantly increased its public spending. This, the story goes, was the cause of the 1893debt crisis and suspension of payments. Greece’s inability to manage its borrowing seriously is said to have led the big Powers to impose a financial control commission to oversee the Greek budget. This story is false!

The following translated extract from Le Monde dated 16 July 2015 is an example of what is widely said: “But, as today, the country was rife with clientelism and tax avoidance by the notables. Immediately after Greek independence, the King Otto, the first king of Greece, who was imposed by the European Powers, introduced costly major works projects. The civil service took on any warm body, the army was superbly equipped… It was all paid for by generous loans [sic] from western countries. The government lost control: in 1893, almost half of the country’s tax revenues were devoted to paying the interest on the debt”. |2|

Another example can be found in the 20 June 2015 issue of the Swiss financial magazine Bilan: “Thanks to the agreement that was ratified in 1878, Greece could once again, in 1879, borrow on the financial markets. Over the next fourteen years Greece borrowed the equivalent of almost 530 million French francs from Paris, London and Berlin creditors. Less than 25% of the sums were invested in infrastructures to develop the country. The rest went on military expenditure to finance Greece’s confrontations with its neighbours (with mixed military fortunes)”. |3|

The true part of the story is that the bankers again lent money to Greece. It is also true that the Monarchy spent a lot and waged expensive military campaigns against the Ottoman Empire. Most commentators, always ready to side with the creditors (like the Le Monde journalist who did not hesitate to mention ‘generous loans’, a real oxymoron) |4|, also point out that taxes were inefficiently collected.

Now let’s see what really happened: during the 1880s the bankers of the great Powers (British and French but also German, Belgian, Dutch, etc.) were favourable to lending to countries that were normalising their payments situations. They imposed one condition: the old outstanding debt must be restructured and repaid. Most of the countries who had had repayment defaults accepted these conditions that are very favourable to creditors who then opened their purses to lend money so that countries would have the means to repay old debts. Big capital, then experiencing a new phase of expansion in the dominant countries, was attracted to the new investments and lending possibilities offered by massive capital exports to peripheral countries. This was the beginning of the imperialist phase of world capitalism. |5|

Greek Bond - 1880

Greek Bond – 1880

Other debt restructuring of the same period

Debt restructuring that took place during the 1878-1890 period concerned Greece, Costa Rica, Paraguay, Peru and the Ottoman Empire.

The Greek debts from 1878 onwards. In 1878, the outstanding debts from 1824-1825 were restructured. The creditors obtained that Greece repay the equivalent of the amount she had received in 1824-1825. There was therefore no real debt reduction and Greece recommenced the payments of interest and capital. |6| Between 1879 and 1890 Greece entirely repaid the restructured debt. The debt had not been reduced because new debts were taken on in order to pay the old ones, which meant both series of debts were repaid during the 1880s.

The Costa Rican debt restructuring of 1885. In suspension of payment since 1874, Costa Rica agreed, in 1885, to a debt restructuring satisfactory to its creditors: along with £2 million they gained possession of a part of the railways and 568,000 acres of land.

The Paraguayan debt restructuring of 1885. Paraguay, which was also in suspension of payment since 1874, agreed to pay its creditors £800,000 and to concede to them 2.5 million acres of land.

The Peruvian debt restructuring of 1890. The Peruvian debt restructuring of 1890 was the biggest restructuring of debt for a Latin American country. The terms were very unfavourable for Peru: the creditors repossessed two million tons of guano (a natural fertiliser), gained possession of the whole public railway system, a shipping line on Lake Titicaca, the mines of Cerro de Pasco and, to top it all, a new loan was agreed to fund the repayment of the remainder of the debt in suspension of payment. Finally, it was in 1926 that Peru finished paying the restructuring of 1890 after the suspension of payments that started in 1876.

The restructuring of the Ottoman Empire’s debt. Following a payment default by the Ottoman Empire in 1875, the debt was partially restructured in 1881. The creditors demanded maximum repayment. To achieve this, a financial commission of experts appointed by the “great powers” was established. As Louise Abellard wrote: “An institution was created in 1881, by imperial decree, under the name of ‘The Ottoman Public Debt Administration’. This Administration gained absolute and irrevocable control over several Imperial revenues (customs and excise, taxes on alcoholic beverages, stamp duties, fishing rights, tax on silk, tobacco and salt monopolies, etc.). These revenues were to be allocated by the Administration to the payment of compensation to the creditors holding bonds issued before the default. The Administration was piloted by Europeans (British, Dutch, French, Germans and Italians) directly representing their nations’ creditors. Entirely independent of the Ottoman authorities, they were an instrument of absolute guarantee for the creditors who thus had the assurance that the old and the new investments would be reimbursed. Up to a point, the holders of the bonds, through the Administration, acted directly on Ottoman finances, in their own favour, until perceived prejudice was fully compensated (up to the end of the Empire). The Administration’s prerogatives were progressively extended to the role of guarantor for infrastructure contract payments (particularly railways)”. |7|

Debt restructuring permitted the imperialist countries to launch a new cycle of indebtedness and capital expansion

The debt restructuring that was carried out during the 1880-90s was the means by which the creditors embarked on a new phase of spreading the over-abundant capital available in the central countries (UK, France, Belgium Netherlands, Germany, etc.) all around the world. The granting of new loans was aimed at setting the repayment pump back into motion, since the countries in default needed fresh liquidities in order to repay their defaulted debts. Investments and loans were the vehicles used. In several cases, as we saw earlier with Latin American countries, restructuring took the form, partly, of property exchanged against outstanding loans. The principal criteria of the bankers, and other investors, was not at all the well-being of the debtor country and their ability to manage the funds they were loaned, or even to repay them, but the creation of maximum profitability. Their decisions were based on the necessity to invest all the funds at their disposal in making maximum profit as well as maintaining the country in a state of indebtedness and financial dependence. The creditors were assured that in case of non-payment their own country’s governments would intervene, by military means if necessary, to force the debtor country to keep up repayments and if necessary, colonize it.

In Tunisia, the Ottoman Empire and in Greece, international supervisory bodies with far-reaching authority were created by the creditor Powers (amongst whom France and Britain always occupied important or even highly privileged positions). Greece was in this position from the very beginning, as illustrated by the 1832 convention passed with Britain, France, Russia and the Kingdom of Bavaria, which created the Greek Monarchy and gave absolute priority to debt repayment. |8| An International Financial Control Commission was imposed on Tunisia in 1869 before it went under direct French control in 1881. In the Ottoman Empire the creditor Powers installed twenty local offices throughout the territory (from Yemen to Thessalonika), and employed 5,000 civil servants. Greece’s subordination to the creditor Powers – in fact written into its international “birth certificate” – has changed in form over time but still remains today: from the interference by the British, French and Russian ambassadors in the council of ministers in 1843, |9| to the creation of the International Finance Control Commission in 1898 (which functioned up to the Nazi invasion), not to forget the International Financial Enquiry Commission created in 1857 to watch over the repayment of the 1833 debt.

The impact of the international financial and economic crisis of 1890-1891 on Greece

In November 1890, the City of London was in a situation comparable to that which occurred again in the US in 2008 and which triggered off the failure of Lehman Bros., a credit crunch, an international banking crisis and a worldwide economic recession in 2009. On 8 November 1890 the London bankers held an emergency meeting to plan action, should Baring Bros. fail. On 10 November, the bankers met with the government, who established contacts with the other big Powers in order to coordinate reactions to the crisis. Baring Bros. (unlike Lehman Bros.) was saved, but the financial and economic crisis of 1891-1892 was profound. Among those who took part in saving Baring Bros. was the Rothschild bank (present in London, Paris and other European capitals and an important player in Greek debt), JP Morgan (already the biggest US bank) and JS Morgan (established in London and parent to JP Morgan, with whom they later merged). |10|

Nowhere in the articles on the 2015-2016 Greek debt crisis published by the chief organs of the international press are references to the 1893 Greek debt crisis to be found; nor any link to the international financial and economic situation and the suspension of payments decreed by the Greek Parliament at the time. The crisis that had its origins in London caused an economic recession, a fall in international trade, an international credit squeeze… Greece experienced a serious drop in its exportations and so was deprived of the foreign currency essential to funding its debt repayments. Exports of currants, which represented two thirds of Greek exports, fell by 50% between 1891 and 1893. There were two reasons for this sharp drop: 1. The international crisis and the reduction of demand in the richest countries; 2. The decisions taken in the UK, France and Russia to impose import duties on the currants entering their markets. This was in total contradiction of their own dogma professing free trade and the removal of all import-export duties. |11| The fall in revenue and blocked access to loans from British, French and German banks left Greece no option but to suspend payments. Fifty-six percent of Greece’s revenue was devoted to debt repayments. |12| Another contributing factor was a fall in the value of Greek currency against the pound sterling and other strong currencies. With a devalued currency, the real cost of the foreign debt became unsustainable.

The commentators who accuse Greece of being a country that goes easily into payment default should learn that in the 19th century, Spain suspended payment six times, the Austro-Hungarian Empire five times, Portugal three times, Prussia twice and Russia once. |13|

The military conflict against the Ottoman Empire and the restructuring that followed

The Greek monarchy and the local elite launched a disastrous military conflict against the Ottoman Empire in 1897. Evidently, the great Powers manoeuvred the two parties into war |14| in order to take advantage of their mutual weakening and increase their influence over them, particularly by using their debts. The conflict was costly and the great Powers imposed their will on Greece as much as on the Ottoman Empire. The peace treaty was signed in Constantinople (now Istanbul) on 4 December 1897 under the supervision of the UK, France and Russia (the Troika of the time, in place since 1830), the Austro-Hungarian Empire, Germany and Italy. |15| In 1898 another loan was made to Greece (see Box: The 1898 Bond Issue…) The Troika was again the guarantor of the loan. The loan was granted within the framework of the peace treaty and covered a big indemnity paid by Greece to the Ottoman Empire. The great Powers did good business; as they had control of the Ottoman Empire’s finances, they saw to it that the Ottoman Empire’s creditors were paid. Greece and the Ottoman Empire had the same creditors!

The 1898 Bond Issue and the subjection of Greece to International Financial Control

The Law of Control voted by the Hellenic Parliament on 26 February 1898 is identical to the draft bill drawn up by the International Financial Control Commission (IFC). Greece was obliged to accept all the creditors’ conditions. Under this Law, the IFC controlled all state revenue dedicated to servicing:
- the 1833 loan guaranteed by France, Great Britain and Russia;
- foreign loans incurred by the Greek State between 1881 and 1893;
- the new loan that Greece took on to repay the preceding ones and to pay war reparations to the Ottoman Empire.

The 1898 loan was composed of two parts:

1) A loan for war indemnity to Turkey covering 92 million French francs (4 million Turkish pounds) plus 2.3 million francs (100,000 Turkish pounds) that Greece had to pay for damage to private property.

2) A further loan to cover former debts and the deficit of the year 1897 to enable the debt to be repaid. This came to a total of 55 million francs distributed as follows:
- 26 million francs to cover the Greek State’s budget deficit for the year 1897;
- 2.5 million francs for payments owed by the Greek Government in 1898 to holders of the former foreign debt;
- 26.5 million francs to repay the floating debt or to convert it to gold.

The total new loan taken on by Greece thus came to 123.5 million francs (28.5 + 95), plus the 26.5 million francs of debt conversion. To this amount a further 20 million francs were to be added, in the form of loans as and when required, to cover the total deficit of the following years.

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Extract from the report of the International Finance Commission from 1898
Article 4 of the Law of Control drawn up by the IFC and meekly adopted by the Hellenic Parliament on 26 February 1898 stipulated that the Commission’s administrative costs, fixed at a maximum of 150,000 francs and including a sum of 60,000 francs to cover the fees of the six Delegates, should be deducted from the product of the revenues concerned. The six delegates represented Great Britain, France, Russia, the Austro-Hungarian Empire, Germany and Italy.The IFC obliged Greece to repay 39 million drachma per year while the average total income of the State (barring loans) came to approximately 90 million drachma. That meant that 43% of State revenue went directly to debt payments. Note that no part of the new loan was intended to strengthen the country’s economy, develop its infrastructure or improve public education. The new loan was intended exclusively to pay off former debts, indemnify Turkey (which in turn needed the indemnity to repay her creditors, who happened to be the same as Greece’s) and to pay off Greece’s current deficit.

The IFC members emphasized that on average the total budget of the Ministry of Education and Cults barely attained 3.5 million drachma, while the civil list (or emoluments of the sovereign) came to 1.3 million, the budget for the police 1.7 million and the Defence (war) budget 15 million. In the IFC’s reference budget there was no specific post for public health. The railway budget was a ridiculous 84,350 drachma (7.5% of the civil list). Note that the IFC forced an IOU of more than 4 million drachma upon Greece, for the heirs of King Otto who had been overthrown by the people in 1862. The annual charge that repaying this debt incurred came to 200,260 drachma, or 2.5 times the country’s railway budget!

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Extract from the report of the International Finance Commission from 1898 – administrative costs of Greece 1892 – 1896
The Commission made it quite clear that in the future, the Greek State budget would make no provision for major public works such as improvement of sea-ports and new railway lines. The Commission considered that any undertaking likely to significantly aggravate budget charges should be postponed until such time as the country’s finances had reached stable equilibrium. This is an explicit acknowledgement of the creditor Powers’ intention to maintain Greece in a permanent state of economic underdevelopment.In Article 11 of the Law, the IFC lays claim to the following for debt repayments:
- all revenue from stamp duty, about 10 million drachma;
- all revenue from import duties collected by the Piraeus Customs, i.e. about 10.7 million drachma;
- all revenue from duty on tobacco, i.e. about 6.6 million drachma;
- all revenue from duty from the monopolies on salt, oil, matches, playing cards and cigarette paper, to which were added all revenue from the emery mine at Naxos (an island in the Cyclades), i.e. about 12.3 million drachma in total.
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Extract from the report of the International Finance Commission from 1898
Who did the IFC entrust with the task of collecting revenue from the monopolies? The monopolies over salt, oil, matches, playing cards and Naxos emery were administered by a Greek-registered joint-stock company entitled Société de régie des revenus affectés au service de la dette publique hellénique or Company for the Control of Revenues Assigned to the Service of the Hellenic Public Debt (an ancestor of TAIPED |16|). The creditors obliged Greece to place this company under the direct supervision of the International Financial Commission and to make it a sort of instrument or organ of control. Furthermore, a designated member of the international Commission would be authorized to attend sessions of the Board of Administration and the General Assembly and the Commission would be able to veto any measure it judged illegal or damaging to the interests with which it had been entrusted. |17|Article 24 stated that all monies received by the Company designated in Article 14 should be entirely paid into the Régie’s accounts at least once a week. Should the revenues mentioned above prove insufficient, the IFC had the right to deduct revenue from the Customs at Laurium (whose gross product was estimated at 1.5 million drachma), Patras (2.4 million), Volo (1.7 million), and Corfu (1.6 million), in accordance with Article 12 of the Law.

IFC members could go in person to the various offices and establishments of all the services whose revenue was concerned, to check on the full implementation of the legal and regulatory measures. They were entitled to see on demand all books, accounts and accountancy documents (Article 36). Article 38 asserted that the Law of Control itself could only be modified with the agreement of the six Powers.

The conclusions of the International Financial Control Commission’s report provide a fine example of lies and hypocrisy: “In summary, the Commission was inspired in its work by the benevolent attitudes of the Powers where Greece is concerned. In satisfying the legitimate demands of the current creditors, it has taken fully into account the financial difficulties with which the country is faced. At the same time, while it has endeavoured to surround the collection and the use of the revenues set aside for the service of the debt with such guarantees as may afford every security to capitalists, it has been at pains to conserve, to the extent possible, the independence of the Hellene nation and of her Government. The future of Greece now depends on her own wisdom. If she applies herself to being industrious, calm and peacable, to improving her Administration, to developing her agricultural resources, encouraging her nascent industry and extending her trade relations, her financial situation will rapidly recover; her beneficent influence will gradually extend into the sphere of action which is reserved for her and, aided in this noble task by the sympathies of the Powers, she will succeed, through courageous and patient efforts, in conquering in Europe’s East the rank to which the glorious memories of her past entitle her.” |18|

This is typical of the discourse used by the European Commission and the governments of the creditor countries even now, in the 21st Century.

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Extract from the report of the International Finance Commission from 1898 – Conclusions
Sources:
- the diplomatic document (in French): Arrangement financier avec la Grèce, travaux de la Commission internationale chargée de la préparation du projet / French Ministry of Foreign Affairs – Paris, 1898, 223 pages,
http://gallica.bnf.fr/ark:/12148/bp… consulted on 1 May 2016;
- the text of the Greek law implementing the dictates of the international Financial Commission, consulted on 1 May 2016.

It is to be noted that from 1870 the German bankers and Germany were increasingly involved in the Balkans and the Ottoman Empire. The Greek defeat of 1897 was partly due to the military reinforcements and advice that the Ottomans had received from German officers (including generals) sent by Berlin. Bankers and diplomats were active in Athens and Constantinople. Among the countries keen to increase their influence in Athens after independence, Germany was omnipresent alongside the Troika. |19| No sooner had the peace treaty been signed and new loans granted to Greece, than the IFC imposed a new set of conditions on Greece. The Commission took up residence in Athens and took control of a large part of the Greek budget, which continued to be devoted to debt repayments. The Greek government had no authority to change the use of the income or modify taxation, without the agreement of the IFC. This bears a close resemblance to the present situation. The Commission remained in place up to the Nazi occupation of Greece in 1942! |20|

On top of the indemnity that Greece had to pay to the Ottoman Empire and that was diverted to the Great Powers, a large part of the new loan was to be used to continue repayments to the Troika countries for the 1833 loans. These repayments went on until the 1930s. According to calculations made by the economists Josefin Meyer, Carmen Reinhart and Christoph Trebesch (who are regularly associated with IMF research projects), only 25% of the sums borrowed by Greece between 1894 and 1914 were spent on regular projects (debt repayments apart) and investments. Forty percent went on debt repayments and banking commissions. The remaining 35% became military expenditure (the principal suppliers of armament were also the principal creditors and this situation persists today). |21| My own estimates show a much smaller portion of the borrowing being used for regular spending – no more than 10-15%.

Conclusions on the debt restructurings that took place in 1878 and 1898

These facts indicate that the debt resulting from the restructurings of 1878 and 1898 must be considered odious debt. The restructuring of 1878 required Greece to resume repayment of the debt contracted in 1824-1825, whereas that debt was illegal given that its terms were so overwhelmingly favourable to the creditors. This restructuring made repayment of the debt just as unsustainable and could only lead to a new crisis, which broke out in 1893. The restructuring of 1898 served to increase by several degrees the level of coercion exercised on the Greek government and its people, notably through the creation of the IFC. It enabled the six major Powers to grab a very large share of the government’s revenues while maintaining Greece in a situation of dependence toward its creditors.

An editorial comment published in the French daily Le Figaro in May 1898, describes the creditors’ strategy fairly clearly: “The maxim of the old policies was: Divide and Conquer. It has been partly replaced by the new rule: Lend them money to keep your foot on their necks. It would be interesting to make a study of it, for poor Greece, as we have had occasion to study it in Egypt, of that subtle invention of modern genius: the lender’s stranglehold on the borrower, substituted for brutal conquest using old-fashioned bayonets; judicial counsel imperceptibly becoming a counsel of wardship, of government, at first gentle and collective, then harsh and personal, for the benefit of the richest, the most tenacious, the most adroit members of the directory. We would like to observe, at its origin, the tying and the tightening of this noose of silver, the imperial instrument our century has made into its most effective weapon for political aggrandisement.” |22|

It is also important to conduct a study to determine what portion of foreign debt (debt issued in foreign currencies on the foreign financial markets, which must be distinguished from Greek loans in the local currency) was purchased by wealthy Greeks, whether residing in Greece or part of the wealthy Greek diaspora living in Istanbul, Alexandria, Smyrna and Paris. |23| It is certain that these powerful Greek elites had invested a significant part of their financial wealth in Greek securities. What that implies is that it was not in their interest to encourage their friends who succeeded one another in the Greek government to take a firm attitude with the creditors (see the Conclusions as well as the end of the inset with excerpts from Constantine Tsoucalas’s work).

Excerpt of a voucher issued by Greece in 1914, part of a loan of 500 million francs to repay previous loans

Excerpt of a voucher issued by Greece in 1914, part of a loan of 500 million francs to repay previous loans

A few keys to understanding the social and political evolution in Greece from just before the start of the First World War

Excerpts from the book by Constantine TsoucalasThe Greek Tragedy. |24| The selected excerpts give an idea of the development of social movements and the reforms won during the late emergence of a peripheral capitalist state.

“The successive tax increases on essential goods put the main burden on the workers and the middle classes, who had by now begun to organize in commercial guilds and unions. In March 1909 thousands of shopkeepers had violently demonstrated, in Athens and Piraeus, against the unequally distributed taxation. On 14 September a huge rally of over 50,000 (out of a population of under 200,000) shook Athens. While declaring their full confidence in the ‘revolution’, the Athenians went beyond the officers’ (that is, the new authorities who had just come to power [note by Eric Toussaint]) intentions. The demands for a system of progressive income taxation, the protection of production, the transformation of the civil service into a body of true public servants by the abolition of the spoils system rampant till then, an improvement in the workers’ standard of living, and a ban on usury as a criminal offence expressed the class antagonism that had been politically silent for so long. At the same time, the organization of the workers had been strengthened by the creation of numerous trade unions, and the discontent among the peasants had been growing since 1898, when the crisis in the currant trade, which had constituted a staple export, had reduced large strata of the agrarian population to misery. Unrest was especially strong in Thessaly, where the demand for agrarian reform of the large ‘estate-system’, inherited from the Turks, led to a series of violent peasant revolts, between 1905 and 1910, which had been bloodily repressed.”

(…)

“The elections of 1910 were a triumph for the new Liberal party. Venizelos formed his first cabinet, which consisted almost entirely of new men. A period of intense reconstruction and radical reform thus began.”

(…)

“The prerequisite for the reform programme of the Liberals was a constitutional reform. The constitution of 1864 was fully revised, individual liberties guaranteed, and the foundations of a ‘State of Law’ were laid. However, though some of the formal prerogatives of the monarchy were curtailed, the real powers of the King remained ambiguous, a fact which was to have explosive consequences.

On this institutional framework, Venizelos launched an impressive legislative programme. Land reform was the most urgent and difficult problem. A constitutional amendment (1911) was promulgated authorizing expropriation with compensation–though not without bitter opposition from the still powerful landowner class.”

(…) 

“Low wages were exempted from confiscation in cases of debt (1909), the trade union federations of Athens and Piraeus were recognized (1910), Sunday was made a compulsory rest day (1910), a new and rapid procedure was introduced for the adjudication of disputes between workers and management (1912), joint unions between workers and employers were forbidden (1914), and the newly established unions of workers were permitted to negotiate and sign collective labour contracts. Finally a compulsory general labour insurance scheme was introduced in 1914.”

“The fiscal system was also reorganized on a more equitable basis. Progressive taxation of income was introduced in 1911 and death duties were reorganized and greatly increased in 1914.”

Following the First World War at the end of the Ottoman Empire, Germany and Austria-Hungary were beaten, and the Greek monarchy and ruling classes thought that part of the Great Idea – Greece’s annexation of a part of Turkish Asia Minor – was about to be realised. This led to the disastrous military adventure of 1922, during which the Greek army attacked the Turkish army in its territory in Asia Minor. The result was a human and military disaster.

In 1922, “…the attempt to launch a general offensive against Kemal’s stronghold in Ankara ended in disaster. In August 1922, the Greek Army was smashed and fled in disorder before the Turks, who pursued its remnants into the sea, slaughtered thousands of Greeks, and finally set fire to Smyrna in the midst of indescribable chaos. Hundreds of thousands of Greeks were forced to flee to the neighbouring islands or the Greek mainland.”

(…)

“Ten years of war (1912-1922) had resulted in the creation of a country totally different from what it had been before. Greek territory doubled and the population grew even more spectacularly. The 1,500,000 refugees, whose social and economic integration was to constitute the greatest and most urgent problem of the country, changed the population structure completely. The urban population was greatly augmented, especially in the Athens district and the few large towns, where a numerous urban proletariat was created for the first time. Thus while in 1908 only 24 per cent of the population lived in towns of over 5,000 inhabitants, the percentage had risen to 27 per cent in 1920 and to 33 per cent by 1928. Greater Athens grew from 452,919 inhabitants in 1920 to 801,622 in 1928.”

(…)

“The urban scene had also changed drastically after the war. The long years of fighting, the influence of the Russian Revolution, and especially the tragic conditions of the urban refugees, led the working class to organize on a more radical basis. The General Confederation of Trade Unions was created in November 1918, and the Greek Socialist Party a week later. In 1922 it adhered to the Comintern, and two years later it became the Communist Party of Greece.”

(…)

“The total decay of the Ottoman Empire and the Egyptian Khedivate during the latter half of the nineteenth century enabled the Western powers to impose upon them a quasi-colonial status. It was the Greek merchants and bankers who were the major beneficiaries of this development, and between 1880 and 1910 colossal fortunes were made in the Mediterranean periphery. If the 1922 crisis eradicated the Greek element from Turkey and Bulgaria, their position remained unchallenged in Egypt and to a certain extent in Rumania, where the most influential Greek financiers continued to make their fortunes. Typically, many of the closest advisers of Venizelos in the economic and banking field belonged to this group. This undoubtedly helps to explain Venizelos’s automatic obedience to British and French diplomatic interests. It also provides a deeper understanding of the reluctance of Greek capital to centre its interests upon domestic development.”

Greece - 1832-1947

Greece – 1832-1947

8-5-1042f-1The debts from the 1920s to the Second World War
The defeat of Greece’s military adventure into Turkish territory in 1922 had dramatic effects on the civilian population. Approximately 1.5 million Greeks, the majority of whom had been living in Turkey, were forced to cross the Aegean under catastrophic conditions and return to Greece, which had lost the part of the Ottoman territory she had been granted after the First World War under the Treaty of Sèvres. |25| This massive influx of refugees led the Greek authorities to request aid from the League of Nations (the “ancestor” of the UN), which granted loans to Greece between 1924 and 1928 for a total amount equivalent to 20% of Greece’s GDP at the time. As guarantee, the League required that harsh austerity policies be applied. Both the League of Nations’ representation in Greece and that of the IFC, created in 1898, were dominated by the creditor powers, in particular Britain.

Repayment of the loans granted by the League of Nations was added to a series of other repayment obligations – the continuation of the repayment to Britain and France of the remainder of the debt of 1833 (Russia has received no repayments since the Bolshevik Revolution of 1917), repayment of the debt of 1898, and repayment of the war loans granted during the First World War by Britain, the USA, Canada and France (these war loans amounted it 55% of Greece’s GDP). |26| The total debts owed by Greece were more than 100% of her GDP, and the amount paid each year accounted for more than 30% of the revenues in the Greek budget and approximately 10% of GDP. That gives an idea of the effort imposed on the Greek people and on the country’s economy.

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For as long as the international economy was undergoing a phase of growth, as during the period 1898-1913 and the 1920s, Greece was able to post a primary budgetary surplus and cover its debt repayments (that is, under IFC constraints, it managed to generate revenue in excess of expenditures excluding debt service, which meant that it could use the surplus for repayments). Greece also received capital inflows, as during any period of growth of the world economy. The creditors granted Greece new loans so that she could repay the old ones.

Greek Bond - 1925

Greek Bond – 1925

The situation changed radically starting in 1930-1931 when the effects of the new international crisis that broke out on Wall Street in October 1929 began to be felt. Greece’s revenues from exports (mainly tobacco and currants) again collapsed, several Greek banks failed in 1931, and Greece’s currency was devalued by 50% following the British decision to suspend the exchange system based on the gold standard. |27| This devaluation automatically doubled the external debt as expressed in the local currency. The State was forced to double the amount of revenues set aside for repayment of the external debt in foreign currencies. As a result, in 1932, Greece had to partially suspend repayment of the debt.

Once again, if we focus on Greece while isolating her from the international context, we are likely to wrongly interpret what has taken place, just as a great many commentators have done. Yet it needs to be kept in mind that in 1932 the UK, France, Belgium, Italy and other countries also decided to suspend repayment of war debts between themselves and the USA. Germany suspended repayment of its debt to private creditors starting in February 1932 and, in May 1933, announced suspension of payments to all creditors. Hungary, Latvia, Romania and Yugoslavia were also in suspension of payment. Not to mention fourteen Latin American countries. What is systematically ignored by the dominant media is the fact that even after the moratorium decreed by Greece in 1932, she continued to make debt repayments under the tutelage of the IFC.

The International Financial Commission’s effects 

The daily Le Monde, cited earlier, says about the IFC’s actions: “In spite of everything, the result is far from being negative: It assisted a young Greece in taking control over its tax revenues and limiting the misappropriation of foreign capital by the local elite. It also contributed to the establishment of reforms that were indispensable for the country’s modernisation.” How is it possible for someone to write such a thing? The IFC exercised a true, permanent diktat over Greece’s finances for the benefit of the creditors, which prevented Greece from defining a development project and kept the country under the yoke of structural subordination.
According to Meyer, Reinhart and Trebesch, the actual yield obtained by the holders of Greek securities purchased abroad and denominated in foreign currencies and which were in suspension of payment at one time or another is between +1% and +5%. That’s a pretty high yield for the government bonds of a country that has the reputation of being a poor payer! How can this positive yield be explained? The actual interest rates were high, the debt stock was not reduced and, despite the repeated periods of suspension of payment, the country most often continued the repayments. As a matter of fact, even during the Great Depression of the 1930s, Greece, even though officially in partial suspension of payment, devoted a third of her revenues to debt repayment, which corresponds to 9% of Greece’s GDP, while during the same period Romania and Bulgaria were devoting, respectively, 2.3% and 3% of their GDP to debt service.

Conclusions

The analysis conducted in this article is not aimed at exonerating Greece’s governments and dominant class of their responsibilities. Quite to the contrary, the decision made by the successive Greek governments and by the dominant class to cave in to the requirements of the creditors and the major powers had terrible consequences for the Greek people. The Greek capitalist class, who were specialists in the realm of finance and international trade, constituted a bourgeoisie that was largely deterritorialised and never had either a true national project nor the will to promote development based on a real industrial fabric. Due to this very fact, its interests were inextricably linked to the interest of the country’s creditors. At times it even constituted a large percentage of the totality of those creditors, which explains its complicity with the representatives of the creditor powers. This is a constant fact from the 19th century up to today.

During the period we have examined here, Greece has constantly been dominated by foreign European powers. Foreign debt has been a permanent weapon used to exercise that domination. Yet as we see, that debt was clearly illegitimate, odious, illegal and unsustainable.

We’ve also seen that the successive debt crises are very closely linked to the international context and that many other peripheral countries have been subjected to the same treatment. The analysis must therefore be pursued in other areas of the world and justice must be done for all peoples subjected to debt.

Bibliography for Part Two: 
- Beloyannis, Nikos, Foreign Capital in Greecehttp://iskra.gr/index.php?option=co…
- Truth Committee on the Greek Public Debt, Preliminary Report of the Truth Committee on Public Debt, Athens, 2015 http://cadtm.org/Preliminary-Report-of-the-Truth
- Delorme, Olivier. 2013. La Grèce et les Balkans, du Ve siècle à nos jours, 3 volumes, Gallimard, Paris, 2013
- Driault, Edouard and Lhéritier, Michel. 1926. Histoire diplomatique de la Grèce de 1821 à nos jours, 5 volumes, Presses universitaires de France (PUF), Paris, 1926.
- Levandis, John A. 1944. The Greek Foreign Debt and the Great Powers, 1821-1898, New York: Columbia University Press.
- Luxemburg, Rosa. 1913. The Accumulation of Capital, London, Routledge and Kegan Paul Ltd, 1951
- Mandel, Ernest. 1972. Late Capitalism, New Left Books, London 1975
- Mandel, Ernest. 1978. Long Waves of Capitalist Development, The Marxist Interpreta­tion, Based on the Marshall Lectures given at the University of Cambridge, Cambridge University Press and Editions de la Maison des Sciences de l’Homme, Paris, 141 p.
- Marichal, Carlos. 1989. A Century of Debt Crises in Latin America, Prince­ton, Princeton University Press, 283 p.
- Marx-Engels, La crise, col. 10/18, Union générale d’éditions, 1978, 444 p
- French Ministry of Foreign Affairs. Arrangement financier avec la Grèce : travaux de la Commission internationale chargée de la préparation du projet, Paris, 1898, 223 pages. http://gallica.bnf.fr/ark:/12148/bp…
- Pantelakis Nikos, “Crédits et rapports franco-helléniques 1917-1928”, in Actes du colloque tenu en novembre 1989 à Thessalonique, Institut d’histoire des conflits contemporains, Paris 1992
- Reinhardt, Carmen and Rogoff, Kenneth, This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press, 2011.
- Reinhardt, Carmen M., and Sbrancia, M. Belen. 2015 “The Liquidation of Government Debt” Economic Policy, no. 82: 291-333
- Reinhardt, Carmen and Trebesch, Christoph. 2015. The Pitfalls of External Dependence: Greece, 1829-2015
- Sack, Alexander Nahum. 1927. Les effets des transformations des États sur leurs dettes publiques et autres obligations financières, Recueil Sirey, Paris.
- Tsoucalas, Constantine. 1969. The Greek Tragedy, Penguin Books Ltd, Harmondsworth.

Translated by Snake Arbusto, Mike Kolikowski and Vicki Briault Manus

Acknowledgements: The author’s thanks for review and suggestions go to: Thanos Contargyris, Olivier Delorme, Pierre Gottiniaux, Jean-Marie Harribey, Daphne Kioussis, Damien Millet, Nikos Pantelakis, Claude Quémar, Patrick Saurin, Yannis Thanassekos, Eleni Tsekeri.

The author accepts full responsibility for any errors that may occur in this work.

Footnotes

|1| See the first part of this series for an analysis of Greek debts and the 1878 agreements, http://cadtm.org/Newly-Independent-Greece-had-an

|2http://www.lemonde.fr/economie/arti… (in French)

|3http://www.bilan.ch/argent-finances… (in French)

|4| In rhetoric, an oxymoron, from the Greek ὀξύμωρος (oxúmōros – de ὀξύς, “sharp, spiritual, witty” and from μωρός, “silly, stupid”, to signify “clever stupid”) is a stylistic device that brings together two terms (a noun and an adjective) of opposing signification in an apparently contradictory form, such as: a bright obscurity or a murky transparency.

|5| Amongst the classical authors, see on imperialism: Rudolf Hilferding (Finance Capital, 1910), Rosa Luxemburg (The Accumulation of Capital, 1913), Vladimir Lenin (Imperialism, the Highest Stage of Capitalism, 1916), Nicolai Bukharin (Imperialism and World Economy, 1915), Ernest Mandel (Late Capitalism, 1972), Samir Amin (Unequal Development: An Essay on the Social Formations of Peripheral Capitalism) New York: Monthly Review Press.

|6| See Carmen M. Reinhart and Christoph Trebesch: The Pitfalls of External Dependence: Greece, 1829-2015, p. 24. Greece received £1.3 million in 1824-1825; in 1878, she agreed to repay £1.2 million plus interest.

|7| See Louise Abellard, “L’Empire Ottoman face à une ‘Troika’ franco-anglo-allemande : retour sur une relation de dépendance par l’endettement” (The Ottoman Empire and the British-French-German Troika: an enquiry into debt dependency), 17 October 2013, (trans. CADTM) http://cadtm.org/L-Empire-Ottoman-face-a-une-troika(in French)

|8| See: http://cadtm.org/Newly-Independent-Greece-had-an

|9| See: http://cadtm.org/Newly-Independent-Greece-had-an

|10| See Marichal, Carlos. 1989. A Century of Debt Crises in Latin America, Princeton, Princeton University Press, 283 p. Chapter 6.

|11| See Carmen M. Reinhart and Christoph Trebesch: The Pitfalls of External Dependence: Greece, 1829-2015, p. 25.

|12| See Edouard Driault and Michel Lhéritier, Histoire diplomatique de la Grèce de 1821 à nos jours (The Diplomatic History of Greece from 1821 to Today) (in French), Presses universitaires de France (PUF), 1926, 5 tomes. The 56% figure is taken from Tome IV, p. 296. The description of the Greek situation is very interesting.

|13| Idem, Tome IV, p. 301.

|14| This thesis is well-argued by Edouard Driault and Michel Lhéritier, in Tome IV, p. 385 and following. The two authors tell a very detailed version of the conflict and its outcome. cf. chapter VII.

|15| See the peace treaty and numerous annexes (all in French): http://gallica.bnf.fr/ark:/12148/bp…

|16| TAIPED is the Greek acronym of the Hellenic Republic Asset Development Fund created by the Troika in 2010 to organize privatization. The funds thus garnered are to be used entirely for debt repayment.

|17Arrangement financier avec la Grèce, travaux de la Commission internationale chargée de la préparation du projet / French Ministry of Foreign Affairs – Paris, 1898, p. 33. (in French only).

|18| Translation: CADTM

|19| From the end of the 1890s Germany was Greece’s principal export partner.

|20| See Carmen M. Reinhart and Christoph Trebesch, The Pitfalls of External Dependence: Greece, 1829-2015, p. 15.

|21| See Table 9 from Carmen M. Reinhart and Christoph Trebesch, The Pitfalls of External Dependence: Greece, 1829-2015, p. 14

|22| Eugène-Melchior de Vogüé, “Livres Jaunes” in Le Figaro, 2 May 1898

|23| According to Driault and Lhéritier, whose conclusions are based on other serious work, the Greek securities issued in France were purchased almost exclusively by Greeks residing in France and not by the French. See Edouard Driault and Michel Lhéritier, Histoire diplomatique de la Grèce de 1821 à nos jours, Presses universitaires de France (PUF), 1926, tome IV, p. 304, note 1.

|24| All passages in italics are taken from: Constantine Tsoucalas, The Greek Tragedy, Penguin Books Ltd, Harmondsworth, 1969.

|25| This question of what is known as the “Asia Minor catastrophe” is still the subject of intense debate today, both in the public sphere and among historians who have deconstructed the official narrative.

|26| There is not space enough here for a critical analysis of the debts demanded of Greece by the Allied powers following the First World War, but the author feels that a large share of these debts may be considered illegitimate. For an introduction to the problem, see Nikos Pantelakis, “Crédits et rapports franco-helléniques 1917-1928” in Actes du colloque tenu en novembre 1989 à Thessalonique, Institut d’histoire des conflits contemporains, Paris 1992 (in French).

|27| The Gold Standard is a monetary system in which the unit of account or monetary standard corresponds to a fixed quantity of gold. Advocates of the Gold Standard feel that it improves resistance to the expansion of credit and of debt. Unlike a fiat currency, a currency backed by gold cannot be issued arbitrarily by a government. Beginning in 1929 and the start of the Great Depression, British gold reserves were reduced to the point where the liabilities of the Bank of England were well in excess of its gold reserves. In September 1931, it decided to suspend the external convertibility of the pound and allow it it float freely. Germany, Austria and Norway followed shortly after the decision. The United States withdrew from the system in 1933.

Author

94895e0e28aa2fe25dfe55787b762569Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.

 

May 192016
 

By Mihalis Nevradakis, 99GetSmart

maxresdefault

Dear listeners and friends,

This week, Dialogos Radio returns after a brief hiatus! On our broadcast this week, the Dialogos Interview Series will feature a timely and relevant interview with Nikos Chatziandreou of the Acropolis of Athens online campaign, for the return of the Acropolis Sculptures from the British Museum in London, to Greece.

In this week’s interview, Chatziandreou will talk about the sculptures and their historic and cultural significance, about the efforts that are taking place to secure their return and the various legal and diplomatic issues that are involved, and about his online campaign and petition calling for the sculptures’ return to Greece.

In addition, we will feature our commentary of the week segment, plus some great Greek music! All this and more, this week exclusively on Dialogos Radio!

For more details, our full broadcast schedule, our podcasts and show archives, and our online radio station Dialogos Radio 24/7, visit http://dialogosmedia.org/?p=6288.

Best,

Dialogos Radio & Media

****************************

Αγαπητοί ακροατές και φίλοι,

Αυτή την εβδομάδα, ο «Διάλογος» επανέρχεται με νέες μεταδόσεις ύστερα από ένα μικρό διάλειμμα, παρουσιάζοντας μια ενδιαφέρουσα και επίκαιρη συνέντευξη με το Νίκο Χατζηανδρέου από την διαδικτυακή καμπάνια «Acropolis of Athens», που διεκδικεί την επιστροφή των γλυπτών της Ακρόπολης από το Βρετανικό Μουσείο του Λονδίνου, στην Ελλάδα.

Στην συνέντευξη μας, ο κ. Χατζηανδρέου θα μας μιλήσει για την καμπάνια που ξεκίνησε, για την πολιτισμική και αρχαιολογική σημασία των γλυπτών, για τις κινήσεις που γίνονται σήμερα σε νομικό και διπλωματικό επίπεδο, για τα επιχειρήματα της Ελληνικής πλευράς και των Βρετανών, και για το νομικό καθεστώς των γλυπτών και άλλων παρόμοιων υποθέσεων.

Επίσης αυτή την εβδομάδα θα παρουσιάσουμε τον σχολιασμό μας για την τρέχουσα επικαιρότητα. Όλα αυτά και πολλά άλλα, αυτή την εβδομάδα αποκλειστικά στο «Διάλογος»!

Για περισσότερες πληροφορίες, το πρόγραμμα μεταδόσεων μας, το αρχείο εκπομπών και συνεντεύξεων μας, και το διαδικτυακό ραδιόφωνο Διάλογος Radio 24/7, μπείτε στο http://dialogosmedia.org/?p=6278.

Φιλικά,

Διάλογος Radio & Media

May 182016
 

By James Petras, 99GetSmart

TrumpHillary

Introduction

Over half the US electorate views the two leading candidates for the 2016 Presidential elections with horror and disdain.

In contrast, the entire corporate mass media, here and abroad, repeat outrageous virtuous claims on behalf of Hillary Clinton and visceral denunciations of Donald Trump.

Media pundits, financial, academic and corporate elites describe the prospects of her presidency as one of responsibility, national security, business prosperity and political normalcy.

In contrast, they paint billionaire Republican candidate, Donald Trump as a grave threat, likely to destroy the global economic and military order, polarize US society and destined to lead an isolated and protectionist US into deep recession.

The super-charged rhetoric, flaunting the virtues of one candidate and vices of the other, ignores the momentous consequences of the election of either candidate. There is a strong chance that the election of ultra-militarist Hillary Clinton will drive the world into catastrophic global nuclear war.

On the other hand, Trump’s ascent to the US Presidency will likely provoke unprecedented global economic opposition from the corporate establishment, which will drive the US economy into a profound depression.

These are not idle claims: The destructive consequences of either candidate’s presidency can best be understood through a systematic analysis of Mme. Clinton’s past and present foreign policies and Trump’s belief that he his the ability to transform the US from an empire to a republic.

Clinton on the Road to Nuclear War

Over the past quarter century, Hillary Clinton has promoted the most savage and destructive wars of our times. Moreover, the more directly she has been engaged in imperial policymaking, the greater her responsibility in implementing  foreign policy, the closer we have come to nuclear war.

To identify Hillary Clinton’s path to global war it is necessary to identify three crucial moments. Hillary’s bloody history can be dated initially to her de facto ‘joint Presidency’ with husband Bill Clinton (1993 – 2001).

Stage One: The Conjugal Militarist Presidency (1993 – 2001)

During Hilary Clinton’s joint presidency with William Clinton (the Billary Regime) the First Lady actively promoted an aggressive militarized takeover of Eastern Europe, the Balkans, the Middle East and Eastern Africa – often under her favorite messianic doctrine of ‘humanitarian intervention and regime change’.

This justified the relentless bombing of Iraq, destroying its infrastructure and blockading its population into starvation while preparing to carve its territory into ethnic and religious divisions. Over 500,000 Iraqi children were murdered as proudly justified by then-Secretary of State Madeline Albright (1997 – 2001) and lauded by the Clintons.

In the same manner, Yugoslavia was bombed by the US humanitarian coalition air forces and cruise missiles over 1,000 times from March 24 to June 11, 2009 in the course of sub-dividing the country into five backward ‘ethnically cleansed’ mini-states. Thousands of factories, public buildings, bridges, passenger trains, radio stations, embassies, apartment complexes and hospitals were devastated; over a million victims became refugees while hundreds of thousands were wounded or killed.

The Conjugal Presidency successfully carried out the bloodiest war of aggression in Europe since the Nazi invasion during WWII, in order to subdivide an ethnically diverse and industrially advanced federation whose independent foreign policies had angered the Western corporate empire.

The Clintons launched the military invasion of Somalia (in East Africa) to impose a vassal regime, leading to the death of many thousands and a regional imperial war. Faced with desperate popular resistance from the Somalis, the Clintons were forced to withdraw US troops and bring in thousands of Sub-Saharan African and Ethiopian mercenaries – whose death would pass unnoticed among the US electorate.

From 1992 through 2001 the Clinton war machine helped set up the Yeltsin kleptocratic vassal state in Russia facilitating the greatest peace-time pillage of state resources in world history.

In the post-Soviet breakup era, over 1 trillion dollars of former public assets were seized especially by US and British-allied Zionist gangsters, Clinton-affiliated officials and ‘academics’ and Wall Street bankers.  Under Clinton’s vassalage the entire Soviet public health system was eliminated and Yeltsin’s Russia experienced a population decline of 4.3 million citizens, mostly due  to diseases, alcohol and drug toxicity, suicide, malnutrition, unemployment and loss of wages, pensions and and an unprecedented epidemic of tuberculosis and infectious diseases once thought wiped out, like syphilis and diphtheria.

Senator Hillary Clinton: War Crimes by Association- January 3, 2001 to January 21, 2009

During the George W. Bush dynastic regime, Mme. Senator Clinton supported the US war machine ‘sowing death and destruction to the four corners of the earth’ (to quote Bush Jr.), millions in Iraq and Afghanistan died or fled in terror. Bush had only deepened and expanded the mayhem that the Clinton Conjugal Presidency had begun a decade earlier.

Mme. Senator Clinton promoted the US direct and unprovoked invasion and occupation of Iraq and the war in Afghanistan. Mme. Senator Clinton embraced crippling economic sanctions against Iran and she blessed Israel’s military assault against Palestinians in the West Bank and Gaza and Israeli massacres in Lebanon.

Mme. Senator Clinton supported President Junior Bush’s aborted coup against Venezuelan President-elect Hugo Chavez (2002), a prelude to the coup attempts in Latin America that she directed later as US Secretary of State.

Hillary Clinton’s Senatorial term served as a transition linking her initial joint presidential period of wars of conquest onto the next period. As US Secretary of State under President Obama she aggressively promoted global military supremacy.

Secretary of State Hillary Clinton: Naked Militarism Unleashed (2009 – 2014)

Whatever restraints Mme. Clinton faced as Senator dissolved as she ran amok during her term as Secretary of State.  Across Europe, Africa, Latin America and the Middle East, Hillary Clinton bombed, massacred and dispossessed millions of families, shredding entire societies and dismantling the institutions of organized civil life for scores of millions. She never balked at the prospect of ethnocide and even joked that NATO might become ‘Al Queda’s Air Force’ as she pushed for a ‘no-fly zone’ over Syria.

A wild-eyed cackle echoed down the marbled corridors as the Foggy Bottom turned into a psycho-ward.

Mme. Secretary promoted the terror mercenary brigades invading Syria in a bid to ‘regime change’ the secular government of Al Assad, driving several million  Syrian refugees into flight. Entire ancient Syrian Christian communities were wiped out under her reign of ‘regime change’.

Mme. Secretary Clinton directed US air force bombers and missiles to buttress the despotic Saudi monarch’s drive to obliterate Yemen.

Clinton unleashed the most savage bombing against Libya destroying the country and leading to the ethnic cleansing of a million and a half of Sub-Sahara workers and Black Libyans of sub-Saharan descent.

Under the aegis of murderous jihadi warlords and tribal chiefs, Mme. Clinton joked over the torture death of the wounded captive President Gaddafi, whose nauseating, almost pornographic murder by anal impalement was documented as a kind of ‘regime-change’ snuff film. Less known is the earlier, almost Old Testament-type slaughter of several of Gadhafi’s non-political children and five small grandchildren by a deliberate US missile strike aimed at ‘teaching the dictator’ that even his smallest grandchild cannot be hidden.

Mme. Clinton, who bragged that her Biblical role-model is the ethnocidal Queen Ester, has declared unconditional support for Israel’s war crimes against Palestinians in Gaza, the West Bank and among the diaspora. Hillary endorsed and defended Israeli torture and prison camps for children, the elderly and the homeless.

Mme. Secretary sent her criminal sub-secretary Victoria Nuland (an unreconstructed Neo-Con holdover from the Bush Administration) to orchestrate the violent putsch in the Ukraine. Millions from Ukraine’s huge ethnic Russian population were dispossessed from the Donbas region. Mme. Clinton had sought to convert Russian strategic military assets in Crimea to US-NATO bases aimed at Moscow, causing the residents of Crimea to overwhelmingly reject the coup and vote to re-join Russia.

The forceful intervention  by Russian President Vladimir Putin prevented Mme. Clinton’s ethnic cleansing power grab in Crimea and the Donbas. The US retaliated by pushing for massive European Union economic sanctions against Russia.

Consistent with her pitiless Biblical role model, Mme. Clinton openly threatened to obliterate Iran with a nuclear war and incinerate 76 million Iranians to please her Uncle Netanyahu – a demented process that would poison a hundred million Arabs and perhaps a few million Israelis. Even the insane Israeli ‘Samson option’ was never dreamt of being ordered from Washington, DC!

During her tenure as Secretary of State, Mme. Clinton actively obstructed any diplomatic moves to achieve a US-Iran agreement on nuclear technology, parroting the Israeli militarist solution against regional rivals!

Mme. Clinton has remained an unrepentant enemy to the emerging independent Latin American governments. In search of vassal states, Clinton promoted successful military coups in Honduras and Paraguay, but was defeated in Venezuela. She proudly touts the death squad regime in Honduras among her foreign policy successes.

Mme. Hillary backed the death squad and narco-regimes in Colombia and Mexico, which killed over a hundred thousand civilians.

On the path to global war, Mme. Militarist has prepared to encircle Russia, stationing nuclear weapons in the Balkans and Poland. She promised that missiles would be placed in south central Europe and Ukraine.

Clinton raised the nuclear ante by hysterically claiming that the elected Russian President Vladimir Putin was ‘worse than ISIS’… ‘worse’ than Hitler.

Repeatedly threatening global war and actually making aggressive regional war should clearly have marked Mme. Hillary Clinton as unfit for the Presidency of the United States. She is politically, intellectually and emotionally unable to deal realistically with an independent Russia and any other independent power, including China and Iran. Her monomania is a course of violent ‘regime changes’, unable to evaluate any of the catastrophes her policymaking has in fact already produced.

Hillary Clinton was the proud author and director of the so-called US ‘pivot to Asia’. Clinton’s ‘pivot’ has led to a massive buildup of the US air and naval forces surrounding China’s maritime routes to its global markets and access to essential raw materials.

Clinton’s hyper-militarism expanded US war zones to cover Australia, Japan and the Philippines, greatly heightening tensions and increasing the possibility of a military provocation leading to nuclear war with China.

No US presidential contender, past or present, has engaged in more offensive wars, in a shorter time, uttering greater nuclear threats than Mme. Hillary Clinton. That she has not yet set off the nuclear holocaust is probably a result of the Administrative constraints imposed on the Mme. Secretary of State by the less blood-thirsty President Obama. These limitations will end if and when Mme. Hillary Clinton is ‘elected’ President of the United States in a process that the electorate increasingly knows is ‘rigged’ toward that outcome.

Donald Trump: the Peaceful Road to Recession

In sharp contrast to the militarist Mme. Clinton, Donald Trump, ‘the Businessman’, has adopted a relatively peaceful approach to international politics for an American presidential candidate in the current era.

Businessman’ Trump envisions productive negotiations with Russian President Putin. Employing his loudly trumpeted deal-making genius to benefit the United States, Trump predicts economic and diplomatic successes with Russia, China and other major powers.

Angered at US military allies enjoying decades of US Treasury largesse, a President Trump promises to withdraw US military bases from Asia and Europe and demanding that overseas allies ‘pony-up’ for their own defense.

What the war mongers in the mass media, academia and Washington bureaucracy, dismiss as ‘Trump’s isolationism’, The Businessman describes as rebuilding America by converting overseas military spending into domestic infrastructure projects and ‘real’ jobs in America.

Trump’s ‘America First’ policy, under his ‘Make America Great Again’ slogan, does not envision wars of conquest against Muslim countries, especially since they have already led to massive floods of Muslim refugees, threatening trade and stability, and Trump opposition to the entry of more Muslim refugees into the US.  Trump’s foreign policy of limited military goals and warfare is diametrically opposed to Clinton’s total war strategy. Trump, ridiculed by his rivals for ‘his small hands’, does not appear to have Hillary’s itchy trigger finger on the nuclear button!

Trump mouths contradictory economic statements, especially his proposals to “rebuild America”, while operating in the framework of an imperial system. As President of the United States, his protectionist policies will come into direct confrontation with US and global ‘finance and monopoly capitalism’ and will likely lead to systematic disinvestment and a disastrous economic collapse or, more likely, the Businessman-President’s capitulation to the status quo.

The problem is not Trump’s pledges to tax the rich (as he occasionally promises), or expand Social Security (as he claims), but his failure to admit that these policies would lead to massive flight by the capitalist elite to avoid taxes. The major threat is that, if Trump follows-up on his America-First policies, there will  be massive capital resistance and a Congressional revolt by both finance-dominated political parties, which will paralyze any hope for his economic agenda.

Without political independence to implement his domestic economic agenda, Trump will have to face a massive investment and lending revolt from capitalists and bankers who would be very willing to drive the fragile economy into a major recession – threatening a kind of ‘domestic economic sabotage’.

Trump’s Republican Party (and certainly the Democrats) will never support a program which will force multi-national capital to sacrifice its reliance on cheap overseas labor and double digit profits in order to create American jobs and employ American workers at living wages.

A President Trump would not even secure a handful of Congressional votes to increase taxes on plutocrats to fund his proposed large-scale public works, infrastructure and job creation projects.

The Businessman President would face the full fury of the powerful military-industrial-high tech complex if and when he attempted to retire US global military forces from Europe, Asia, the Middle East and Africa.

The non-politician Trump’s historic rise to national political prominence has its roots in the ideas and values of the majority of working people who have been marginalized to the fringes by the media moguls and Wall Street riffraff. Today Trump’s themes and ideas resonate with the mainstream of voters.

Several dominant ideas circulate in his speeches and interviews.

First, Trump rejects ‘globalization’ (the watered-down PR term for imperialism) and ‘free trade’ (a euphemism for the transfer of profits extracted from US workers to business investment abroad).

Trump’s narrative resonates with the recent anti-Wall Street ‘Occupy’ movements opposing the power of 0.1% super rich against the vast majority.

Secondly, Trump embraces economic nationalism in his slogan “Make American Great Again”. Too many American workers and their families resent having been exploited, maimed and slaughtered to serve multiple wars in the Middle East, Asia and Europe for the interests of US warlords, bankers, Zionists and other imperial royalties. Trump argues that the entire inflated security and corporate welfare system has led to an untenable debt payments spiral.

The third theme that draws millions is Trump’s notion that the US should reject the policy of serial ‘regime change’. We should not initiate and engage in perpetual overseas wars against Muslim countries as a way to avoid domestic attacks by individual terrorists. During an early foreign policy debate, Trump shocked the political establishment when he accused the Bush Administration of deliberately lying the country into the disastrous invasion of Iraq. This ‘truth-telling’ elicited wild applause from the mass Republican electorate.

Trump’s goal is to strengthen American civilization and avoid provoking more ‘clashes of civilizations’…

The fourth, and probably most attractive, message to most Americans is Trump’s powerful assault on Washington and Wall Street elites and their academic and media apologists.

Millions of Americans have been disgusted with the Bushes, Clintons and Obamas, as well as the Morgans, Goldman Sachs and Paulsons, whose policies have exacerbated class inequalities through multiple banking swindles and financial crashes, all ‘bailed out’ by the American tax payers.

Fifth, Trump’s loud, brash exposure of the mass media’s lies and propaganda has resonated with the same deep distrust felt by the American public. His talent for talking directly and bluntly to the public and on the internet has led to his enormous appeal. He does not engage in ‘conspiracy’ but acknowledges that the Edward Snowden revelations have unmasked the government’s deceptions and its program of espionage against the people, destroying the foundations for democratic discourse.

Trump might win the election based on his ‘five truths’ and his pledge to ‘make America great again’, but more likely he will lose because he has insulted the traditional establishment, the Latinos, Afro-Americans, feminists, trade union bureaucrats and their followers from both parties. Even if he succeeds at the ballot box, his political agenda with relying on Republican elites in Washington and Wall Street, the Pentagon and the ‘international security system’ will lead to a major economic crisis. For the elite, if blocking Trump’s domestic economic agenda requires a financial crash to defend ‘globalization’, serial wars and the 0.1%, then tighten your belts!

This November, the country will face the disagreeable choice between a proven nuclear warmonger and a captive of Wall Street. I will try to keep warm, roast chestnuts and avoid thinking about Mme. President’s Looming Mushroom Cloud.

May 172016
 

By James Petras, 99GetSmart

Amerique_latine-Empire-US

Post-colonial empires are complex organizations.  They are organized on a multi-tiered basis, ranging from relative autonomous national and regional allies to subservient vassal states, with variations in between.

In the contemporary period, the idea of empire does not operate as a stable global structure, though it may aspire and strive for such. While the US is the major imperial power, it does not dominate some leading global political-economic and military powers, like Russia and China.

Imperial powers, like the US, have well-established regional satellites but have also suffered setbacks and retreats from independent local economic and political challengers.

Empire is not a fixed structure rigidly embedded in military or economic institutions. It contains sets of competing forces and relations, which can change over time and circumstances. Moreover, imperial allies and clients do not operate through fixed patterns of submission. While there is submission to general agreements on ideology, military doctrine and economic policy identified with imperial rulers, there are cases of vassal states pursuing their own links with non-imperial markets, investors and exporters.

If the global world of imperial power is complex and indeterminate to some degree, so is the internal political, economic, administrative and military structure of the imperial state. The imperial political apparatus has become more heavily weighted on the side of security institutions, than diplomatic and representative bodies. Economic institutions are organized for overseas markets dominated by multi-national corporations against local markets and producers ‘Market economy’ is a misnomer.

Military-security institutions and budgets utilize most state functionaries and public resources, subordinating markets and diplomatic institutions to military priorities.

While imperial state operations function through their military and civilian administrative apparatus, there are competitive socio-political-class, ethnic and military configurations to consider.

In analyzing the effective or ‘real power’ of the principle institutions of the imperial state, one must distinguish between goals and results, purpose and actual performance. Often commentators make sweeping statements about ‘imperial power and dominance’, while in fact, some policies may have ended in costly losses and retreats due to specific national, local or regional alignments.

Hence it is crucial to look closely at the imperial interaction between its various tiers of allies and adversaries in order to understand the immediate and long-term structures and direction of imperial state policy.

This essay will first describe the leader-follower imperial relationships in four zones: US-Western Europe-Canada, Asia-Pacific, Middle East-Africa and Latin America and identify the terrain of struggles and conflict. This will be followed by an examination of the contemporary ‘map of empire’. We will then contrast the alignment of forces between Western imperial allies and their current adversaries. In the final section we will look at the sources of fragmentation between the imperial state and economic globalization as well as the fissures and fallout between imperial allies and followers.

Tiers of Imperial Allies in the West

Western imperialism is a complex pyramidal structure where the dominant United States interacts through a five-tier system. There is a vertical and horizontal configuration of leader and follower states that cannot be understood through simplistic ‘solar system’ metaphors of ‘centers, semi-peripheries and peripheries’.

Western imperial power extends and overlaps from the first tier to the second, that is, from the United States to France, England, Germany, Italy and Canada. The scope and depth of US military, bureaucratic, political and economic institutions form the framework within which the followers operate.

The second tier of empire ties the top tier to the bottom tiers by providing military support and economic linkages, while securing autonomous levers to enlarge its own geo-political spheres.

The third tier of imperialism in the West comprises Poland, Scandinavia, the Low Countries and Baltic States. These are geographically and economically within the sphere of Western Europe and militarily dependent on US-NATO military dominance. The third tier is a heterogeneous group, ranging from highly advanced and sophisticated welfare-states like Sweden, Norway, Denmark, Holland and Belgium to relatively backward Baltic dependencies like Latvia, Estonia and Lithuania and Poland. They exercise few independent power initiatives and depend on protection from the Tier 1 and 2 imperial centers.

Tier four’ states include countries like Greece, Spain, Portugal, Hungary, Czech Republic and Slovakia, Bulgaria and Romania.  These are essentially satellite nations, who follow the leader imperial countries, providing bases, troops and tourist resorts. In general, they have no independent voice or decision-making presence in regional or global conflicts. Despite their instability and the occasional outbursts of radical dissent, the lower tier countries have yet to break with the higher tiers controlled by the EU and NATO hierarchy.

The fifth-tier satellites include recently fabricated mini-states like Albania, Kosovo, Macedonia, Slovenia and Croatia, which act as military bases, tourist havens and economic dependencies. They are the outcome of the first-tier and second-tier policies of ‘regime change’ and state dismemberment through NATO-led wars designed to destroy any remnant of the multi-ethnic social welfare states and degrade Russian influence, especially in Yugoslavia.

Mapping the leader-follower structure of the Western empire depends on the distribution of military resources and their location along the Russian border. The US-EU Empire faces the problem of meeting rising economic demands from the multi-tiered empire, which has exceeded their capacity. This had led to shifting trade alliances and independent pressure to ‘go beyond’ the dictates of the imperial leaders.

Leader imperial states have tightened economic and political control over their followers – especially when the military consequences of empire have disrupted everyday life, security and the economy. An ongoing example is the flood of millions of desperate refugees entering Europe, as a result of US imperial war policies in the Middle East and North Africa. This mass influx threatens the political and social stability of Europe. Following the US putsch in the Ukraine and the inevitable response from Moscow, Washington ordered an economic blockade of Russia. The economic consequences of US-imposed sanctions against the giant Russian market has severely affected European exports, especially agriculture and heavy industry and caused instability in the energy market which was dominated by the now banned Russian petroleum and gas producers.

The Eastern Imperial Empire

The US imperial design in East Asia is vastly different in structure, allies and adversaries from that in the West. The leaders and followers are very heterogeneous in the East. The multi-tier US Empire in Asia is designed to undermine and eventually dominate North Korea and China.

Since the Second World War, the US has been the center of the Pacific empire. It also suffered serious military setbacks in Korea and Indo-China. With the aid of its multi-tiered auxiliaries, the US has recovered its influence in Indo-China and South Korea.

The US position, as the first-tier imperial power, is sustained by second-tier imperial allies, such as Australia, New Zealand, India and Japan.

These second-tier allies are diverse entities. For example, the Indian regime is a reticent latecomer to the US Empire and still retains a higher degree of autonomy in dealing with China. In contrast, while Australia and New Zealand retained their dependent military ties with the US, they are increasingly dependent on Chinese commodity markets and investments.

Japan, a powerful traditional economic ally of the US, remains a weak military satellite of the US-Asian Empire.

Third-tier countries include South Korea, Taiwan, Philippines, Malaysia, Thailand and Indonesia. South Korea is the US’s most important military dependency, despite which it has moved steadily closer to the Chinese market, as has the populous Indonesian Republic.

Taiwan, while a military dependency of the US, has stronger ethnic and economic links to China than the US.

The Philippines is a backward US military vassal-state and former colony, which retains its legacy as an imperial enclave against China. Thailand and Malaysia have remained as third-tier imperial auxiliaries, subject to occasional nationalist or democratic popular upsurges.

The fourth-tier countries within US East Asian Empire are the least reliable because they are relatively ‘new associates’. Vietnam, Cambodia, Laos and Myanmar have transformed from independent statist economies to US-Japanese and Chinese-centered markets, financial and military dependencies.

The US Empire has focus on confronting China through its military, controlling its South China trading routes and trying to form regional economic trade agreements, which exclude China. However, the imperial multi-tiered structure has been mostly limited to various US military harassment and joint ‘war games’ exercises with its clients and ‘allies’. This has had minimal economic input from even their closest allies. The US Eastern Empire has lost significant economic counterparts because of its confrontational approach to China. Its provocative trade-pacts have failed to undermine China’s dynamic economy and trade.

The US Eastern Empire may dominate its multi-tiered allies, vassals and recent converts through its military. It may succeed in provoking a serious military confrontation with China. But it has failed to re-establish a dominant structure within Asia to sustain US imperial superiority in the event of a war.

China drives the growth and dynamism of Asia and is the vital market for regional products as well as a crucial supplier of minerals, precious metals, industrial products, high tech and service activity throughout the region.

The US has occasionally turned to its  ‘fifth-tier’ allies among non-state entities in Tibet and Hong Kong and among ethno-Islamist terrorist-separatist groups in Western China, using ‘human rights’ propaganda, but these have had no significant impact in weakening China or undermining its regional influence.

The Eastern Empire can wield none of the economic leverage in China that the Western empire has with Russia. China has established more effective economic relations in Asia than Russia has with the West. However, Russia has greater military capability and a more committed political will to push back Western imperial military threats than China. In recent years, Beijing has adopted a policy of strengthening its high tech military and maritime capabilities. In the wake of the US putsch in the Ukraine and the West’s economic sanctions against Russia, Moscow has been forced to bolster strategic military-economic ties with China. Joint security exercises between Russia and China, as well as greater trade, pose formidable counter-weights to the multi-tiered alliances linking the US and EU to Japan, Australia and South Korea.

In other words, the diverse geographic multi-tiered US imperial structures in the East do not and cannot, dominate a strategic top-tiered alliance of Russia and China, despite their lack of other strong military allies and client states.

If we look beyond European and Asian spheres of Empire to the Middle East and Latin America, the US imperial presence is subject to rapidly evolving power relations. We cannot simply add or subtract from the US and Russian and Chinese rivalries, because these do not necessarily add up to a new ‘imperial’ or ‘autonomous’ center of power.

Imperial Power in the Middle East: The Multi-Tiered Empire in Retreat

The US imperial empire in the Middle East occupies a pivotal point between West and East; between the top and secondary tiers of empire; between Islamic and anti-Islamic alliances.

If we extend the ‘Middle East’ to include South Asia and North Africa we capture the dimensions of the Western imperial quest for supremacy.

The imperial empire in the Middle East reflects US and Western European tiers of power as they interact with local counterparts and satellite states.

The US-EU top tiers link their goals of encircling and undermining Russia and regional adversaries, like Iran, with the regional ambitions of their NATO ally, Turkey.

Imperial powers in the Middle East and North Africa operate through local allies, auxiliaries and satellites as they compete for territorial fragments and power bases following the US ‘wars for regime changes’.

With the US at the top, the European Union, Israel, Turkey and Saudi Arabia comprise the second-tier allies. Egypt, Tunisia, Iraq and Jordan, which are financial and political dependencies of the empire, rank as third-tier. The fourth-tier includes the Gulf states, the Kurd war lords, Lebanese and Yemeni local puppets of the Saudi Monarchy and Israel’s client Palestinian Bantustan in the West Bank.

Saudi and Western-funded regional terrorist groups aspire to fourth-tier membership following a successful ‘regime change’ and territorial fragmentation in Syria.

The terrorist enclaves are located in Syria, Iraq and Libya and play a ‘specific and multi-purpose’ role in undermining adversaries in order to restore imperial dominance.

The Middle East Empire is the least stable region and the most susceptible to internal rivalries.

Israel exercises a unique and unrivaled voice in securing US financial and military resources and political support for its brutal colonial control over Palestine and Syrian territories and captive populations. Saudi Arabia finances and arms autonomous Islamist terrorist groups as part of their policy of advancing the kingdom’s political- territorial designs in Pakistan, Yemen, Afghanistan, Iraq, Syria, Iran and the Gulf. Turkey has its own regional ambitions and terrorist mercenaries. Within this volatile context, the US Empire finds itself competing with its auxiliaries for control over the same Middle East clients.

The Middle East Empire is fraught with powerful adversaries at each point of contention. The huge, independent nation of Iran stands as a powerful obstacle to the West, Saudis, and Israel and competes for influence among satellites in the Gulf, Yemen, Iraq, Syria and Lebanon. Hezbollah, a powerful nationalist group within Lebanon, has played a crucial role defending Syria against dismemberment and is linked with Iran against Israeli intervention. Russia has military and trade relations with Syria and Iran in opposition to the Western imperial alliance. Meanwhile, the US imperial satellite states in Afghanistan, Iraq, Libya, and Egypt are rapidly disintegrating in the face of gross corruption, Islamist resurgence, policy incompetence and economic crises.

To speak formally of a ‘Western imperial empire’ in vast sections of the Middle East and North Africa is a misnomer for several reasons:

In Afghanistan, the Nationalist-Islamist Taliban and its allies control most of the country except for a few garrison cities.

Yemen, Libya and Iraq are battleground states, contested terrain with nothing remotely resembling a functioning imperial domain. Iraq is under siege from the North by Kurds, the center by ISIS, the South by nationalist Shi’a militias and mass organizations in contention with grossly corrupt US imperial-backed puppets in Baghdad.

The US-EU mercenaries in Syria have been defeated by Syrian-Russian-Hezbollah-Iranian forces aided by independent Kurds.

Israel behaves more like a militarist ‘settler’ predator usurping historical Palestine than a reliable imperial collaborator.

So far, the empire project in the Middle East and North Africa has been the costliest and least successful for Western imperialism. First and foremost, responsibility for the current Middle East imperial debacle falls directly on the top tier political and military leaders who have pursued policies and strategies (regime change and national dismemberment) incompatible with imperial precepts that normally guide empires.

The top tier of the US imperial-military elite follows Israeli military prerogatives, as dictated by the Zionist Power Configuration (ZPC) embedded within the US state apparatus. Their policy has been to destroy Islamic and Arab-nationalist structures and institutions of power – not conquer and reconfigure them to be absorbed into Western imperial institutions . . . as the US was able to do in Asia and Europe. This parrots the Israeli- settler policy of ‘erasure’ and has made the region totally unstable for imperial trade. The wanton dismemberment of the whole social-political-security institutional structure of Iraq is a prime example of the Israeli policy of ‘erasure’ promoted by US Zionist advisers on a grand scale. The same advisers remain within the top tier imperial decision-making apparatus despite 15 years of abject failure.

Western empire’s multi-tier structure, from the US and Western Europe at the top to Kosovo at the bottom, have followed imperial imperatives. In contrast Israeli imperatives direct US military power into perpetual war in the Middle East through the influential ZPC.

This divergent path and the inability to change course and rectify imperial policy has brought disastrous defeats, which have repercussions throughout the global empire, especially freeing up competitors and rivals in Asia and Latin America.

Tiers of Empire in Latin America

The US imperial empire expanded in Central America and the Caribbean during most of the 19th century and reigned supreme in the first half of the 20th century. The exceptions included the nationalist revolutions in Haiti in the early 19th century and Paraguay in the mid-19th century. After the US Civil War, the British Empire in Latin America was replaced by the US, which established a dominant position in the region, except during the successful Mexican Revolution.

Several major challenges have emerged to US imperial dominations in the middle of the 20th century.

The centerpiece of anti-imperialism was the Cuban Revolution in 1959, which provided political, ideological and material backing to a continent-wide challenge.  Earlier a socialist government emerged in Guyana in 1953 but was overthrown.

In 1965, the Dominican Revolution challenged a brutal US backed-dictator but was defeated by a direct US invasion.

In 1970-73 a democratic socialist government was elected in Chile and overthrown by a bloody CIA coup.

In 1971 a ‘workers and peasants’ coalition backed a nationalist military government in Bolivia only to be ousted by a US-backed military coup.

In Argentina (Peron), Brazil (Goulart) and Peru (Alvarez), nationalist-populist governments, opposed to US imperialism, were elected between the middle 1960’s to the mid 1970’s. Each were overthrown by US-military coups. Apart from the Cuban revolution, the US Empire successfully counter-attacked, relying on US and local business elites to back the military juntas in repressing anti-imperialist and nationalist political parties and movements.

The US Empire re-established its hegemony, based on a multi-tiered military and market directorate, headed at the top by the US. Argentina, Brazil and Chile comprised the second-tier, a group of military dictatorships engaged in large-scale state terror and death squad assassinations and forcing hundreds of thousands into exile and prison.

The third-tier was based on US surrogates, generals and oligarch-families in Colombia, Venezuela, Peru, Bolivia, Paraguay and Uruguay.

The fourth-tier of satellite regimes included Central-America, except Nicaragua, and all of the Caribbean, except Cuba and (briefly) Grenada.

The US Empire ruled through predator allies and satellite oligarchs and successfully imposed a uniform imperial structure based on neoliberal policies. US-centered regional trade, investment and military pacts ensured its imperial supremacy, through which they sought to blockade and overthrow the Cuban revolution. The US imperialist system reached its high point between the mid-1970’s to the late 1990’s – the Golden Age of Plunder. After the pillage of the 1990’s, the empire faced a massive wave of challenges from popular uprisings, electoral changes and the collapse of the corrupt auxiliary neo-liberal regimes.

The US imperial empire faced powerful challenges from popular-nationalist regimes from 1999 to 2006 in Venezuela, Argentina, Brazil, Bolivia and Ecuador. Dissident liberal-nationalist governments in Uruguay, Honduras and Paraguay posed their own challenges to imperial control.

The US empire was bogged down in multiple imperial wars in the Middle East (Iraq, Libya, Syria) Asia (Afghanistan) and Europe (Ukraine, Georgia, Yugoslavia), which undermined its capacity to intervene militarily in Latin America.

Cuba, the hemispheric center of the anti-imperialist politics, received economic aid from Venezuela and strengthened its diplomatic, trade and security alliances with the anti-interventionist center-left. This provided an impetus to the formation of independent regional trade organizations, which traded heavily with US imperial rivals, China, Iran and Russia during the ‘commodity boom’.

While the US imperial empire in Latin America was in retreat, it had not suffered a strategic defeat because it maintained its powerful business, political and state auxiliary structures, which were ready to regroup and counter-attack at the ‘right moment’ – the end of the ‘global commodity boom’.

By the end of the first decade of the 21st century, the US Empire counter-attacked, with their political-military clients taking power in the weakest links, Honduras and Paraguay. Since then, neo-liberal extremists have been elected to the presidency in Argentina; a corrupt oligarch-led congress has impeached the President of Brazil; and the ground is being prepared to seize control in Venezuela.

The US Empire re-emerged in Latin America after a decade-long hiatus with a new or re-invigorated multi-tier structure.

At the top-tier is the United States, dependent on enforcement of its control through satellite military and business elites among the second-tiercountries, Colombia, Argentina, Brazil and Mexico.

At the third-tier are Chile, Peru, Uruguay and the business-political elites in Venezuela, linked to the US and tier-two countries.

The fourth-tier is dominated by weak submissive regimes in Central America (Panama, Guatemala, Honduras and El Salvador), the Caribbean (especially Santa Domingo, Haiti and Jamaica) and Paraguay.

The US has re-assembled its imperial structure in Latin American rapidly, creating an assemblage which is extremely fragile, incoherent and subject to disintegration.

The new neo-liberal regime in Argentine, the centerpiece of the empire, immediately faces the triple threat of mass unrest, economic crisis and a weak regime under siege.

Brazil’s new US neo-liberal constellation of characters are all under indictment for corruption and facing trials, while economic recession and social polarization is undermining their ability to consolidate imperial control.

Venezuela’s rightwing auxiliaries lack the economic resources to escape the demise of the oil economy, hyperinflation and the virulent internecine conflicts within the Right.

The US imperial empire in Latin America could best operate through links with the Asian-Pacific trade pact. However, even with new Asian ties the Latin satellites exhibit none of their Asian counterparts’ stability. Moreover, China’s dominant economic role in both regions has limited US hegemony over the principal props of the empire.

The Myth of a US Global Empire

The ‘narrative’ of a US global empire is based on several profound misconceptions, which have distorted the capacity of the US to dominate world politics. The US regional empires operate in contested universes where powerful counter forces limit imperial dominance.

In Europe, Russia is a powerful counterforce, bolstered by its growing alliances in Asia (China), the Middle East (Iran) and, to a limited extent, by the BRIC countries.

Moreover, Washington’s multi-tiered allies in Europe have occasionally followed autonomous policies, which include Germany’s oil-gas independent agreements with Russia, eroding US efforts to undermine Moscow.

While it may appear that the ‘imperial military, banking, multi-national corporate structure’, at a high level of abstraction, operates within a common imperial enterprise, on issues of everyday policy-making, budgeting, war policies, trade agreements, diplomacy, subversion and the capitalist market-place there are multiple countervailing forces.

The empire’s multi-tiered allies have their own demands as well as sacrifices imposed on the US imperial center.

Internal members of the imperial structure define competing priorities via domestic power wielders.

The US Empire has extended its military operations to over 700 bases across the world but each operation has been subject to restraints and reversals.

US multi-nationals have multi-billion dollar operations but they are forced to adjust to the demands of counter-imperial powers (China). They evade almost a trillion dollars of US taxes while absorbing massive assets from the US Treasury in the form of subsidies, infrastructure and security arrangements.

In sum, while the sun may never set on the empire, the emperors have lost their sight.

May 072016
 

By James Petras, 99GetSmart

march-of-tyranny-far-left

Prologue

In 2004 I wrote Brazil and Lula: Year Zero (Edifurb:  Blumenau, Sao Paolo 2005), in which I presented my analysis of the Lula-Workers Party (PT) regime in Brazil undergoing a Grand Transformation with the first stage represented by the PT’s incorporation into a government apparatus led by of bankers and exporters (the agro-mineral elite). Two year earlier, my colleague, Henry Voltmeter, and I had published Cardoso’s Brazil: A Land for Sale (Rowman and Littlefield, Lanham MD 2003) where we described how President Cardoso had sold off the major public resources, banks, petroleum and iron resources to foreign capital for rock bottom prices. The 2002 election of President Lula DaSilva of the Workers’ Party did not reverse Cardoso’s sell-out. Indeed, Lula accepted his predecessor’s neoliberal policies – embellished them – and set about forging an alliance between the Workers’ Party and the economic elites, replacing Cardoso’s Party! For the next few years, we were attacked by the Left academic and pundit world for having dared to advance such a critique on their ‘worker president’! The consequences of what we had described as the PT’s pact with the Right are clear to everyone today: Brazil is enmeshed in swindles, scandals and coups.

Introduction

The nature of the multitude is to arrive rapidly and depart swiftly”.

For more than a decade, left-wing parties, accompanied by working class trade unions and landless rural social movements, dominated Brazil, the largest country in Latin America. Their political leaders were repeatedly elected; their trade union and rural social officials secured concessions from the state; the political process followed legal procedures adjudicating its agenda with the opposition business, banking and professional parties.

We were told the days of coups and revolutions were passed. Electoral processes, honest vote counts and mutual recognition of political legitimacy precluded any violent, dismissal and ouster of the established Left political leadership.

The Rise and Fall of the Political Left

The dominance of the Left is now only a memory! Its parties are in full retreat. Its leaders are scorned, insulted and prosecuted by their former political allies. The business allies of the past are now at their throats. Those politicians, who secured government positions in return for loyalty and votes, have fled clamoring for ‘impeachment’ and claiming deceit … while seeking new sources of patronage and plunder.

The great left political leaders, who had once bragged of 53 million voters, who were hailed in the international press for their command of a huge mass base while accommodating the interest of modern trade and business, are now condemned by the capitalist media as the cause of the current economic calamity.

The popular heroes of yesterday, who shared wealth and status with their rivals in the business elite, are now ostracized and facing show-trials for corruption.

The Trade Union and Rural Workers’ Leaders

Veteran trade union and rural leaders came to the Presidential Palace to celebrate the electoral successes of the ‘worker president’.

Once blushing with flattery, these mass leaders are now dismayed that the fiesta has ended and the music has stopped, while the workers and peasants are ordered to pay for the broken dishes and start the cleanup…

The mass popular organizations are now without allies in Congress; their voices are shut out of the bourgeois media; the domestic economy has been abandoned by the market; and the masses are in the streets clamoring for retribution against the politicians betrayal. Now trade union and peasant leaders appeal for resistance and a return to class struggle; but their followers are in retreat!

Toward an Understanding of a Historical Defeat

The rise and fall of the Left is a historical reversal, which requires a systematic analysis of a disastrous strategy. The left’s defeat cannot simply be dismissed as a betrayal by treacherous allies, corrupt party officials or plots concocted by billionaires and the US Embassy, leading up to a coup via a clearly phony impeachment process. The real question to ask is: Why did the Left allow such treachery and betrayal, culminating in a legislative ‘coup d’état’, to develop unopposed leading to reversal and rout of the Left? How could a huge multi-million-person voting machine, a vast and experienced trade union apparatus and a militant rural social movement fall defeated without even a struggle?

The Strategy of the Left

The Left parties deliberately adopted a short-term strategy of accommodation with the right, in part to avoid long-term, large-scale strategic confrontations with the defeated economic elite. For their part, the parties of the Right and their US advisors patiently chose to accept the Left’s compromises and offers of cooperation, in order to prepare for a strategic offensive when the Left’s mass of support had declined.

The Left parties embraced poorly thought-out ‘short-cuts’ to governance. They occupied government posts while cutting cozy deals with all the major power brokers of the Right.

The Left signed ‘austerity’ agreements with the IMF to restrain budgets and accept debt obligations. Members of notorious rightwing and opportunistic political parties were brought into the cabinet, assigned strategic congressional leadership positions and placed on senior presidential advisory panels in exchange for their votes to approve loans, credits and regional development projects.

The Left negotiated deals with business elites, offering them generous subsidies and high profits, while restraining workers’ demands for structural changes. They viewed this accommodation as an exchange for economic growth, wage increases and trade union recognition as a legitimate power sharer.

The Left dismissed the grassroots demands for social transformation and they opposed any popular campaign to prosecute the financial elites for money laundering and white-collar crimes. Instead, they favored incremental increases in wages, poverty funds, pensions and consumer credit.

The Left ignored the reality that such arrangements with the business elites were only a temporary truce rather than a permanent, strategic alliance.

The trade unions followed the lead of the Left political leadership. They directed their mass organizations to accept negotiations based on periodic wage increases, more funds for trade union education and subsidies for new union building complexes. The trade union leaders discouraged strikes, repressed demands for public ownership and prevented any investigation into mining, banking and agro-business corruption, tax evasions and bribery. Even the well-documented wave of assassinations of landless worker activists and the naked land grabs of ‘protected’ Indian territories went unpunished.

The business elite realized they faced a potential radical mass movement, which was under the control of an elected ‘Left’ government. They were ‘delighted’ that this Left government was so willing to accommodate capitalist demands. They cautiously decided that short-term rewards and well-placed bribes would help prepare the ground for their restoration to power and reversal of the left’s concessions.

The Left rural social movements retained their radical socialist rhetoric and mass membership, but their leadership followed the Left parties in government.

In exchange for subsidies to set-up and expand community-based rural organizations and training schools for farmworkers, the social movements mobilized their mass activists to ‘turn-out the vote’ for the Left parties’ President and Congress people.

The rural movement leaders justified their accommodation with the Left- business alliance describing the Left regime as a ‘field of contention’, where they could press for radical changes. After more than a dozen years of successful mass struggle, the radical rural movement chose to ally with the Left party apparatus! Only when the ‘Left President’ was impeached did the rural workers’ leader call for the return to class struggle!

The Left’s Short Term Gains and Long Term Losses 

The political leaders on the left, as well as trade union and rural movement leaders, all believed they had a winning strategy.  They claimed their mostly superficial ‘gains’ were ‘evidence’ of their success.  These included:

(1)  Their governance for over four administrations where they increased or maintained the left’s voting majority.

(2)  ‘Pragmatic’ political alliances with parties across the spectrum – won through various forms of bribery – as a formula for winning Congressional approval for major development contracts.

(3)  Their funding of opposition allies, which attracted ‘respectability’ and enriched both Left politicians and their electoral campaigns.

(4)  The decrease in social tension achieved by recruiting business opponents and gaining support among sectors of the capitalist class.

The Left political leaders’ strategy of accommodation depended on the economic success of the mineral-oil-agriculture export elites. This ignored the business sector’s fundamental policy of cutting social and productive investments whenever markets, profits and economic opportunities declined.

When the Left regime’s public subsidies for the export industry declined following the collapse of the global commodity market, the entire capitalist elite coalesced into a virulent Rightwing opposition.

When the previous political accommodation with capital, held together by corruption and questionable subsidies became the target, the Right launched their strategic offensive.

The fact that business, banking, media and agro-mineral elites were able to join forces so quickly and launch their attack on the Left shows how they had flourished for a decade during the commodity boom.

The entire façade of a ‘broad progressive coalition’ disappeared: The trade union and rural movement structures, linked to the Left political leaders, were incapable of mobilizing their mass base and countering the insurgent Right. For over ten years, the Left regime had cut all its political deals in Congress, in the corridors of elite power, while ignoring ‘class struggle’.

This was a ‘Left’ regime, wholly dependent on market conditions and business allies. It was unable to defend any strategic ground when the Right regained its power base.

The Left regime had retained an intact and fully functioning right administrative and judicial apparatus, composed of courts and judges, the prosecutors and investigators all aligned with the Right opposition. They were ready to undermine the regime’s congressional majority by opening ‘corruption’ investigations targeting the Left. Meanwhile, the business elite managed to intensify the consequences of the economic recession and insist that ‘recovery’ meant austerity against the poor.

The Right purchased its street crowds and mobilized its party allies, including the center, the fascists, the net-militarists, the agro-business elite and the imperial and local financial press. From Sao Paulo to New York to London they were poised to forcibly oust the elected Left President from power and jail its leaders.

Conclusion

The Left believed in the myth of democratic capitalism. They had faith that their negotiations with the business elites would increase social welfare. They operated on a platform of gradual accommodation of class interests leading to multi-class alliances and strategic conciliation between business and labor.

The historical lesson has proven otherwise – again. Business and the capitalist elite make clear, tactical short-term agreements in order to prepare a strategic counter-offensive. Their patient long-term strategy was to mobilize their class allies and overturn the electoral process – at the ripe moment.

The Left parties depended on achieving a series of ‘strategic understandings with the capitalist class’ where both would benefit at a time of peak global demand for Brazil’s commodities, instead of expanding their popular mandate by transforming the economy and domestic market.

The Left behaved as if favorable world market conditions would last forever. They lost their chance to use their 53 million-voter strength and radically change the organization and ownership of Brazil’s strategic economic sectors!

In this way, the Left imitated the Right, choosing to share its power bases through accommodation with their business-partners. These were amateurs at the bourgeois power game, who found themselves entrapped in corruption and crisis! How shocking!

It was so much easier for the Left politicians to get campaign funding through the usual practice of business payola than to campaign from door to door, factory to factory, village to village, fighting repression, elite media boycotts and armed vigilantes.

In the end, their ‘power base’ dissolved and their capitalist ‘partners’ and political ‘allies’ abandoned them: the Left President was impeached.

Victorious capital and empire neatly ended this charade of ‘market democracy’. The retreating Left parties begged for a reprieve via parliamentary vote and ended with a decisive defeat … bleating their last whimper as the door slammed shut …

Capitalists have never and will never recognize weak popular opposition. The capitalist political elite will always choose power and wealth over social democracy. The Left, in retreat, isolated and expelled from the corridors of power, now face retribution from the most corrupt and treacherous of their ‘former allies’.

They usher in a lost generation.

Apr 292016
 

By James Petras, 99GetSmart

obamawebcover.jpg

Introduction

President Obama is racing forward to establish his imperial legacy throughout Russia, Asia and Latin America.

In the last two years he has accelerated the buildup of his military nuclear arsenal on the frontiers of Russia. The Pentagon has designed a high tech anti-missile system to undermine Russian defenses.

In Latin America, Obama has shed his shallow pretense of tolerating the center-left electoral regimes. Instead he is has joined with rabid authoritarian net-liberals in Argentina; met with the judges and politicians engineering the overthrow of the current Brazilian government; and encouraged the emerging far-rightwing regimes in Peru under Keiko Fujimori and Colombia under President Santos.

In Asia, Obama has clearly escalated a military build-up threatening China’s principle waterways in the South China Sea. Obama encouraged aggressive and violent separatist groupings in Hong Kong, Tibet, Xinjiang and Taiwan. Obama invites Beijing billionaires to relocate a trillion dollars in assets to the ‘laundry machines’ of North America, Europe and Asia. Meanwhile he has actively blocked China’s long-planned commercial ‘silk route’ across Myanmar and west Asia.

In the Middle East, President Obama joined with Saudi Arabia as Riyadh escalated its brutal war and blockade in Yemen. He directed Kenya and other African predator states to attack Somalia. He has continued to back mercenary armies invading Syria while collaborating with the Turkish dictator, Erdogan, as Turkish troops bomb Kurdish, Syrian and Iraqi fighters who are engaged on the front lines against Islamist terrorism.

President Obama and his minions have consistently groveled before the Jewish State and its US Fifth Column, massively increasing US ‘tribute’ to Tel Aviv. Meanwhile, Israel continues to seize thousands of acres of Palestinian land murdering and arresting thousands of Palestinians, from young children to aged grandparents.

The Obama regime is desperate to overcome the consequences of his political, military and economic failures of the past six years and establish the US as the uncontested global economic and military power.

At this stage, Obama’s supreme goal is to leave an enduring legacy, where he will have (1) surrounded and weakened Russia and China; (2) re-converted Latin America into an authoritarian free-trade backyard for US plunder; (3) turned the Middle East and North Africa into a bloody playpen for Arab and Jewish dictators bent on brutalizing whole nations and turning millions into refugees to flood Europe and elsewhere.

Once this ‘legacy’ is established, our ‘Historic Black President’ can boast that he has dragged our ‘great nation’ into more wars for longer periods of time, costing more diverse human lives and creating more desperate refugees than any previous US President, all the while polarizing and impoverishing the great mass of working Americans. He will, indeed, set a ‘high bar’ for his incumbent replacement, Madame Hilary Clinton to leap over and even expand.

To examine the promise of an Obama legacy and avoid premature judgements, it is best to briefly recall the failures of his first 6 years and reflect on his current inspired quest for a ‘place in history’.

Fear, Loathing and Retreat

Obama’s shameless bailout of Wall Street contrasted sharply with the desires and sentiments of the vast majority of Americans who had elected him. This was a historic moment of great fear and loathing where scores of millions of Americans demanded the federal government reign in the financial criminals, stop the downward spiral of household bankruptcies and home foreclosures and recovery America’s working economy. After a brief honeymoon following his ‘historic election’, the ‘historic’ President Obama turned his back on the wishes of the people and transferred trillions of public money to ‘bailout’ the banks and financial centers on Wall Street.

Not satisfied with betraying the American workers and the beleaguered middle class, Obama reneged on his campaign promises to end the war(s) in the Middle East by increasing the US troop presence and expanding his drone-assassination warfare against Afghanistan, Iraq, Yemen, Libya, Somalia and Syria.

US troops re-invaded Afghanistan, fought and retreated in defeat. The Taliban advanced. The US expanded its training of the puppet Iraqi army, which collapsed on its first encounters with the Islamic State. Washington retreated again. Regime change in Libya, Egypt and Somalia created predator-mercenary states without any semblance of US control and dominance.

Obama had become both a master of military defeats and financial swindles.

In the Western Hemisphere, a continent of independent Latin American governments had emerged to challenge US supremacy. The ‘Historic President’ Obama was dismissed as a clueless hack of the US Empire who lacked any rapport with governments south of the Panama Canal. While trade and investment flourished between Latin America and Asia; Washington fell behind. Regional political and economic agreements expanded, but Obama was left without allies.

Obama’s clumsy attempts at US-backed ‘regime change’ were defeated in Venezuela and elsewhere. Only the small, corrupt narco-state of Honduras fell into Obama’s orbit with the Hillary Clinton-engineered overthrow of its elected populist-nationalist president.

China and Russia expanded and flourished as commodities boomed, wealth expanded and demand for Chinese manufacturers exploded.

By 2013 Obama had no legacy.

The Recovery:  Obama’s Lost Legacy

Obama began the road to establishing his ‘legacy’ with the US-financed coup in Ukraine, spearheaded by the first bona fide Nazi militia since WWII. After celebrating the violent ‘regime change’ against Ukraine’s elected government, Obama’s new oligarch-puppet regime and its ethno-nationalist army have been a disaster, losing control of the industrialized Donbas region to ethnic Russian rebels and completely losing the strategic Crimea when the population overwhelmingly voted to re-join Russia after 50 years. Meanwhile, the oligarch-‘president’ Poroshenko and his fellow puppets have pilfered several billion dollars in ‘aid’ from the EU . . . all in pursuit of the Obama legacy’.

Obama then slapped devastating economic sanctions against Russia for its role in the Crimean referendum and its support for the millions of Russian speakers in Donbas, and in the process forced the European Union to make major trade sacrifices. For their role in creating a real “American legacy” for Mr. Obama, the Germans, French and the other twenty-eight countries have sacrificed billions of Euros in trade and investments – alienating large sectors of their own agricultural and manufacturing economy.

The Obama regime placed nuclear weapons on the Polish border with Russia, pointed at the Russian heartland. Estonians, Lithuanians and Latvians joined Obama’s military exercises stationing US ships and attack aircraft in the Baltic Sea threatening Russia’s security.

Obama’s Legacy in Latin America

The Obama regime intensified its efforts to re-establish supremacy with the demise of the Center-Left regimes following elections in late 2013 to the present.

Obama’s ‘legacy in Latin America is based on the return to power of neoliberal elites in the region. Their successful elections were the result of several factors, including: (1) the rise of rightwing economic power in Latin America; (2) the decay and corruption of political power within the Left; 3) incapacity of the Left to develop its own independent mass media to challenge the media monopoly of the Right; and (4) the failure of Center-Left regimes to diversify their economy and develop growth outside the boundaries defined by the dominant capitalist sectors.

The Obama regime worked closely with the political-business elite, organizing the political campaigns and controlling key economic policies even during the Center-Left governments. The Left regimes had financed, subsidized and rewarded right-wing business interests in agro-mineral industries, banking, and the media as well as in manufacturing and imports.

As long as worldwide demand for primary materials was strong, the Center-Left governments had plenty of room to adjust their social spending for workers while accommodating business interests. When demand and prices fell, budget deficits forced the Center-Left to cut back on social spending for the masses as well as subsidies for the business elite. In response, the business sector organized a full-scale attack on the government – in defense of elite power. The Center-Left failed to counter the growing power and position of their business elite adversaries.

The business elite launched a full-scale propaganda war via its captive mass media – focusing on real or imagined corruption scandals discrediting Center-Left politicians.  The Left lacked its own effective mass media to answer the Right’s accusations, having failed to democratize the corporate media monopolies.

The Center-Left parties adopted the elite’s technique of financing political campaigns – namely, through bribes, contract concessions, patronage other deal making with billionaire private and state contractors. The Center-Left imagined it could compete with the free-market rightwing in financing campaigns and candidates via swindlers – and not through class struggle. This was a game they could never master.

The Right, however, mobilized their allies within police, judicial and public institutions to prosecute and disqualify the Center-Left for committing the same crimes the Right had evaded.

The Center-Left did not mobilize the workers and employees to establish even minimal controls over the elite and assume some managerial power. They thought they could compete with the Right on its own terms, through shady business and chicanery.

The Center-Left relied on financing its administration and policies through the commodity boom in demand for its natural resources – overlooking the fundamental instability and volatility of the global commodity market. While the Right openly condemned the ‘weakness of the Center-Left’ – in private, it pursued policies even more dependent on overseas speculators and narrow elites.

In Argentina, as the economy declined, the leadership of the rightwing, led by Mauricio Marci, launched a successful presidential campaign involving the mass media, banks, middle class voters and agro-mining elites. Immediately upon taking power, the Macri regime cut social services for workers and the lower middle class, slashing their living standards and lay off thousands of government employees. Obama saw Macri as his kind of legacy savior and viewed Argentina as the new center of US power in Latin America – with plans for more regime change in Brazil, Venezuela and throughout the region.

In Brazil, the Center-Left Workers’ Party (PT) faced a massive attack on its power base by the extreme rightwing parties. Corruption scandals rocked the entire spectrum of the political class, but the PT was most heavily implicated by massive fraud in Brazil’s huge national oil company, Petrobras. The PT regime’s troubles intensified as the country entered a recession with the drop in demand for its agro-mining exports. Growing fiscal deficits compounded the regime’s problems. The Brazilian hard Right mobilized its entire apparatus of elite power – the courts, judges, police and intelligence agencies – in a bid to overthrow the PT government and impose an authoritarian neo-liberal regime seizing all financial, business and productive assets

The Center-Left had never been very left, if at all. Under Presidents Lula and Rousseff  (2003-2016), the powerful mining and agricultural elites flourished; banking, investment and multi-national enterprises prospered. The Center-Left made some paternalistic concessions to the lowest income classes, and increased wages for labor and farm workers. But the PT relegated labor to the background while it signed business agreements and granted tax concessions to capital. It failed to engage Brazilian workers in class struggle.

The Right was never engaged in any struggle with a genuine leftist government pressing business for structural changes. Nevertheless, the Right sought to eliminates even the most superficial reforms. It would accept nothing short of total control, including: the privatization of the major national oil company, the reduction of wages, pensions and transport subsidies and a slashing of social programs. The Brazilian Rightwing coup – a fake impeachment organized by indicted crooks – is designed to vastly re-concentrate wealth, and re-establish the power of business, while plunging millions into poverty and repressing the principal organized mass movements. In Brazil, the elite-controlled media, courts and politicians act as judge, jury and jailers – against a Center-Left regime which had never taken control over the major institutions of elite power.

Obama and the Axis of his Legacy

Political rightists join police to control the multitudes and seize power, re-establishing deep ties among Brazil, Washington and Argentina. They will then move toward the neoliberal re-conquest of all Latin America. Against this new wave, it must be understood that Obama’s Latin American legacy is too recent, too hasty and too disjointed – the new Right exhibits the same or even worse features of the recently deceased Left.

Argentina’s Marci borrows $15 billion at 8% interest, when the economy is fracturing, employment is collapsing, exports and worldwide demand is declining. At the same time, President Mauricio Marci’s cabinet is plagued by major financial scandals ‘a la Panama Papers’. The entire political party-trade union-employed working class is profoundly disenchanted with Marci’s minority rule.

Argentina may not turn out to be Obama’s enduring Latin Legacy: While Macri may open the door for a brief Washington take-over, the results will be catastrophic and the future, given Argentina’s recent history of popular street uprisings, is uncertain.

Likewise in Brazil, the impeachment/coup will result in new and more numerous investigations with trials of post-impeachment politicians and a deepening economic crisis. Brazil’s Vice-President, who turned against Rouseff, now faces corruption charges, as do his supporters. The prolonged confrontation precludes any basic continuity. The rightwing regime’s policy of slashing wages, pensions and poverty ‘baskets’ will detonate large-scale confrontations with the polarized population. Obama’s ‘legacy’ will be a brief episode – celebrating the ouster of the Workers’ Party President followed by a long period of instability and disorder.

Rightist regimes in Venezuela, Colombia and Peru will be part of Obama’s ‘legacy’ but to what lasting end?

The Venezuelan rightwing congress – dubbed the MUD – seeks to overthrow the elected president. It demands the release of several right-wing assassins from prison, the privatization of the oil industry, and a deep cut in social programs (health and education). They would reduce employees’ wages and eliminate food subsidies. The MUD has no competent plan or capacity to grow the oil economy and overcome chronic food shortages. The MUD would merely replace the Left’s subsidized economy with massive price increases for basic commodities — reducing domestic consumption to a fraction of its current level. In other words, the right-wing offensive may defeat the Chavista left but it will not stabilize Venezuela or develop a viable neoliberal alternative. Any new rightwing regime will deteriorate rapidly and the chronic problem of criminal violence will exceed the current levels. The alliance between Washington and Venezuela’s far right will hardly support Obama’s claim to a historic legacy. More likely, it will serve as another example of a failed right wing state unable to replace a weakening left regime.

Similar circumstances can be found among other ‘emerging’ rightist regimes.

In Colombia, the current rightwing President Santos talks to the FARC guerrillas, but also accommodates the paramilitary death squads. His talks of peace settlements and social reform are linked to the genocidal right, led by the former President Uribe. Meanwhile, the economy stagnates with oil and metal prices collapsing on the world market. Colombian living standards have declined and the promise of a rightwing revival grows dim. The US-Colombian alliance may undercut the FARC but the rightwing does not offer any prospect for modernizing the economy or stabilizing the society.

Similarly in Peru, the rightwing wins votes and embraces free markets, but growth declines, investments and profits dry up and mass disenchantment grows among the poor, promising street conflicts.

The Obama ‘legacy’ in Latin America has followed a series of brutal victories, which have no capacity to re-impose a stable ‘new order’ of free markets and free elections. The initial wave of favorable investments and lucrative concessions will fail to revive and recalibrate a new growth dynamics.

More ominously, Obama relied on mass murder to replace an elected leftist-nationalist president in Honduras and imposed a regime of terror against the poor and indigenous population. Meanwhile, illicit offshore handouts reward speculators in Argentina.

Obama’s legacy in Latin America reflects an entire spectrum from illicit-rightwing coups to oust the elected governments in Brazil and Venezuela, to elected authoritarian presidents in Peru and Colombia with historic links to death squads and multi-million dollar overseas accounts.

Obama’s contemporary ‘Latin American legacy’ reeks of gross electoral manipulation preparing the ground for bloody class wars.

Obama’s Legacy in the Ukraine, Yemen and Syria

The Obama regime thought it could manage widespread conflicts, uprisings and wars to advance its global supremacy.

To that end, Obama spent billions of dollars in weapons and propaganda arming Neo-Nazi para-military troops to seize power in Ukraine. A grotesque, brutal gang of oligarchs (and disgraced, foreign fugitives – like the ousted Georgian leader, Mikhail Saakachvili) served Washington in the puppet Kiev regime. Critics, journalists, jurists and citizens are being assassinated. The economy has collapsed; prices skyrocket; incomes declined by half; unemployment tripled and millions have sought refuge abroad. Wars raged between Russian ethnic citizen armies in the Donbas and the puppet Kiev regime. The people of Crimea voted to rejoin Russia. Meanwhile, economic sanctions against trade with Russia have exacerbated shortages for the people of Ukraine.

Under Obama’s stewardship the Ukraine became a world-class . . . basket case: so much for his European legacy. He can rightly claim credit for imposing a thoroughly retrograde regime of Klepto-capitalism with no redeeming feature.

Obama embraced Saudi Arabia’s war against Yemen – destroying the life and cities of the poorest nation in the Middle East. Obama’s ‘legacy’ in Yemen stands for the systematic obliteration of a sovereign people: Obama performs his tricks for billionaire Saudi despots while savaging the innocent. To the Israelis in Palestine and the Saudis in Yemen, Obama pays homage to the criminals responsible for millions of shattered lives.

What of the Obama ‘legacy’ in Syria and Libya? How many million Africans and Arabs have been murdered or fled on rotten boats in destitution. Only the rankest gang of corrupt media pundits in the US media can pretend this gangster President should evade a war crimes tribunal.

Conclusion

The Obama regime has pursued wars of unremitting destruction. It has forged partnerships with terrorists and death squads as it seeks short-term imperial victories, which end in dismal failures.

The imperial legacy of this ‘historic’ president is a mirage of pillage, squalor and destruction. The effect of his political lies has even begun register here among the American public: Who trusts the US Congress and the President? And in Europe, who trusts Obama’s European partners as they eagerly pushed for wars in the Middle East and North Africa and now fear and loathe the millions of their victims—refugees fleeing to the cities of Europe, with the drowned corpses of uprooted communities spoiling their beaches?

Obama pushed for wars and the Europeans receive the victims – with fear and disgust.

Obama’s victories are temporary, blighted and reversed.

Obama bombed Afghanistan yesterday and now flees renewed resistance.

Obama’s allies are again plundering Latin America but face imminent ouster via popular uprisings.

Obama terrorized and fragmented Syria yesterday but lost elections the day after.

Obama threatens China’s economy while eagerly buying China’s products.

The Obama legacy began as a failed military and economic offensive accompanying a profound social crisis. During his final year in office, Obama tries to forge alliances with the dregs of the hard right to save his legacy. His brief advance into this sordid world of neo-liberals, neo-Nazis and Saudi despots is a prelude to more retreat and chaos.

Obama’s public celebration of the right turn in Asia, Latin America, Europe and the Middle East applauds the most retrograde alignment of forces in modern times: Saudis and Israelis; Egyptian generals and Libyan jihadis; neo-ottoman Turks with Ukrainian gangster-oligarchs. Regime changes in Argentina and Brazil encourage Obama to claim vindication of his imperial legacy.

His ‘moment’ of imperial truth is brief, all too brief. Everywhere, we witness the rapid rise of imperial success followed by a series of debacles.

Throughout Latin America capitalist profiteers plunge into wild financial adventures, theft and chaos. In the Middle East, the US stands on the crumbling palaces of a moribund Saudi regime. The much-proclaimed imperial advances are based on grand theft everywhere, from Egypt and Turkey to the Ukraine.

Simply stated: the US formula for a successful legacy is failing at the precise moment that it claims success! Obama and the Right have created a world of chaos and disintegration. Obama and his legions, the US and Europe have no future in peace or war, election or defeats.

There is no imperial legacy for the ‘historic’ President Obama!

Apr 202016
 

By Eric Toussaint, 99GetSmart

Belgian and French bank Dexia was bailed out in 2012

Belgian and French bank Dexia was bailed out in 2012

NINE YEARS after the outbreak of the financial crisis that continues to produce damaging social effects through the austerity policies imposed on victim populations, it’s time to take another look at the commitments that were made at that time by bankers, financiers, politicians and regulatory bodies. Those four players have failed fundamentally in the promises they made in the wake of the crisis–to moralize the banking system, separate commercial banks from investment banks, end exorbitant salaries and bonuses, and finally finance the real economy. We didn’t believe those promises at the time, and for good reason. Instead of a moralizing of the banking system, all we’ve had is a long list of misappropriations that have been brought to light by a series of bank failures, beginning with that of Lehman Brothers on September 15, 2008.

Since 2012 alone, the list of bailouts includes: Dexia in Belgium and in France (2012, the third bailout), Bankia in Spain (2012), Espírito Santo (2014) and Banif (2015) in Portugal, Laiki and Bank of Cyprus in Cyprus (2013), Monte dei PaschiBanca delle MarcheBanca Popolare dell’Etruria e del Lazio and Carife in Italy (2014-2015), NKBM in Slovenia (2012), SNS Reaal in Holland (2013) and Hypo Alpe Adria in Austria (2014-2015), and those are only a few examples. The most intolerable thing is that the public authorities have decided to pay ransom to these banks by having the citizens bear the consequences of the low dealings of their directors and shareholders. A separation or “ring-fencing” between commercial banks and investment banks remains no more than wishful thinking. The so-called banking reform undertaken in France in 2012 by Pierre Moscovici, the French Finance and Economy minister, turned out to be a sham. As for bankers’ remunerations, the ceiling on the variable compensation adopted by the European Parliament on 16 April, 2013, had as its immediate consequence…an increase in the fixed compensation and recourse to an exemption clause provided for in the law.

No measures designed to avoid further crises have been imposed on the private finance system. Governments and the various authorities meant to ensure that the regulations are respected and improved have either shelved or significantly attenuated the paltry measures announced in 2008-2009. The concentration of banks has remained unchanged, as have their high-risk activities. There have been more scandals implicating the 15 to 20 biggest private banks in Europe and the United States–involving toxic loans, fraudulent mortgage credits, manipulation of currency exchange markets, of interest rates (notably, the LIBOR) and of energy markets, massive tax evasion, money-laundering for organized crime, and so on. The scandal of the Panama papers shows how banks are using the tax heavens. The Financial Times reported that the British prime minister, David Cameron, had intervened personally to prevent offshore trusts from being dragged into an EU-wide crackdown on tax avoidance.

The authorities have merely imposed fines, usually negligible when compared to the crimes committed. These crimes have a negative impact not only on public finance but on the living conditions of millions of people all over the world. People in charge of regulatory bodies, such as Martin Wheatley, former director of the Financial Conduct Authority in London, have been sacked for trying to do their job properly and being too critical of the behavior of banks. George Osborne, the Chancellor of the Exchequer, dismissed Martin Wheatley in July 2015, nine months before the end of his five-year contract.

Although obviously to blame, no bank director in the United States or Europe (with the exception of Iceland) has been convicted, while traders, who are mere underlings, are prosecuted and sentenced to between five and 14 years behind bars.

As was the case for the Royal Bank of Scotland in 2015, banks that were nationalized at great public expense to protect the interests of major private shareholders have been sold back to the private sector for a fraction of their value. Salvaging the RBS cost £45 billion of public money, while its reprivatization will probably mean the loss of a further £14 billion.

Lastly, as to whether banks are now financing the real economy, the efforts deployed by the central banks have failed to spark, as yet, even the beginnings of a real recovery of the economy.

Because we feel, in particular in the light of Greece’s experience, that banks are an essential element of any project for social change, we propose that immediate measures be taken to attain the following six goals:

1. Restructure the banking sector

2. Eradicate speculation

3. End banking secrecy

4. Regulate the banking sector

5. Find an alternate means of financing public expenditures

6. Strengthen public banks

In a second part, we will develop our arguments in favor of socializing the banking sector.


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I. IMMEDIATE MEASURES

1. Restructure the banking sector


Radically reduce the size of banks
 in order to eliminate the “too big to fail” risk systemic banks [1] represent.

Separate commercial banks from investment banks
. Commercial banks will be the only financial institutions authorized to take in savers’ deposits and to receive public support (public underwriting of savings deposits and access to cash from the central bank). These commercial banks will be authorized to grant loans only to private individuals and local and national companies and public entities. They will be prohibited from conducting activities on the financial markets. What that means is that they will not be allowed to engage in securitization: loans will not be able to be turned into tradable securities and commercial banks must keep the loans they grant on their books until full repayment is made. The bank that has granted a loan must bear the risk for that loan.

Investment banks must not be entitled to public underwriting; in case of failure of a bank, all losses will be borne by the private sector, beginning with the shareholders (on the totality of their assets; see below).

Prohibit credit relations between commercial banks and investment banks
. Following Frédéric Lordon’s principle of imposing a real “apartheid” between commercial banks and investment banks, under no circumstances will a commercial bank be allowed to be involved in a credit relation with an investment bank. [2]

2. Eradicate speculation


Prohibit speculation
. As Paul Jorion proposes, speculation must be prohibited. “In France speculation was authorized in 1885, and in Belgium in 1867. As a matter of fact speculation was defined very clearly by the law aimed at ’prohibiting wagering on the upward or downward movement of financial securities.’ With such a prohibition, anyone who practices speculation would be guilty of an infraction; whether they’re in Bank X or Bank Y would make no difference.” [3] That could include sanctions on banks that speculate on their own account or on the behalf of their clients.

Acquisition of tangible property (raw materials, commodities, land, buildings, etc.) or securities (shares, bonds or any other security) by a bank or other financial institution with the intention of speculating on its price will be prohibited.

Prohibit derivatives
. This means that banks and other financial institutions who want to cover themselves against various types of risks (associated with exchange rates, interest rates, payment defaults, etc.) will have to go back to using traditional insurance contracts.

Require banks to request authorization before placing financial products on the market
. Investment banks will have to submit any new financial instrument to the oversight authorities (this does not apply to derivatives since they will have been outlawed) for authorization before they are placed on the market.

Separate consulting activities from market activities
. We are also in agreement with the Belgian economist Eric de Keuleneer, who proposes separating consulting activities from market activities: “It is not right for banks to take on risky debt whilst advising their customers about the quality of these debts, or that they are currently able to speculate on gold, whilst ‘selflessly’ advising their customers to purchase gold. ” For that, he proposes re-creating brokerage activities.

Prohibit high-frequency trading and shadow banking. Strictly limit what can be included in off-balance-sheet entries. [4] Prohibit short sales and naked shorting
.

3. End banking secrecy


Prohibit over-the-counter financial markets
. All transactions on financial markets must be recorded, traceable, regulated and controlled. Until now, the main financial markets have been over-the-counter–that is, they are subject to no oversight whatsoever. This is true of the FOREX market ($5,300 billion each day), [5] the derivatives market, the markets for raw materials and agricultural products, [6] etc.

End banking secrecy
. Banks must be required to communicate all information regarding their directors, their various entities, their customers, the activities they conduct and the transactions they carry out for their customers and on their own account. Similarly, banks’ accounting must also be legible and comprehensible. Lifting bank secrecy must become a basic democratic imperative for all countries. Concretely, that means that banks must make available to the tax authorities: a list of names of beneficiaries of interest, dividends, capital gains and other financial revenues; information on the opening, modification and closure of bank accounts in order to establish a national directory of bank accounts; all information on movements of capital into and out of the country, including in particular identification of the order giver.

Prohibit transactions with tax havens
. Banks must be prohibited from engaging in any transaction with a tax haven. Failure to comply with the prohibition must be subject to very heavy sanctions (including the possible revocation of the banking license) and heavy fines.

4. Regulate the banking sector


Require banks to radically increase the volume of their own funds (equity) in relation to their total assets
. [7] Whereas equity is generally less than 5 percent of a bank’s assets, we believe that the legal minimum should be raised to 20 percent.

Prohibit socialization of the losses
 of banks and other private financial institutions. This means prohibiting public authorities from guaranteeing private debt with public funds.

Restore unlimited liability of major shareholders in case of bank failure
. The cost of a failure must be recoverable from the total assets of the major shareholders (be they individuals or corporations).

In case of bank failure, the deposits of clients of the commercial bank must continue to be guaranteed by the State, up to the limit of a reasonable amount of savings for an upper-middle household (estimated today at 150,000 euros–and subject to democratic debate).

Tax banks heavily
. Banks’ profits must be strictly subject to legal provisions regarding taxation of companies. In fact, the rate banks currently pay is very significantly below the legal rate, which itself is far too low. Banking transactions involving currency [8] and financial securities must be taxed. Short-term bank debt must be taxed in order to promote long-term financing.

Systematically prosecute bank directors who are guilty
 of financial crimes and misdemeanors and revoke the banking licenses of institutions that do not comply with the prohibitions and are guilty of misappropriation.

Find another way to save banks
. In addition to the measures mentioned above–unlimited liability for major shareholders (covering all their assets), guarantees on deposits up to 150,000 euros and prohibition of guaranteeing private debt against public funds–a mechanism needs to be created for orderly failure of banks, consisting of two structures: A private bad bank (owned by private shareholders and incurring no cost for the public authorities) and a public bank to which deposits, as well as safe assets, are transferred. Certain recent experiments can serve as inspiration–in particular the measures taken in Iceland since 2008. [9]

5. Find other ways of financing public debt

Require private banks to hold a quota of public-debt securities.

The central banks should again grant loans at zero interest to public authorities. Unlike the current practice of the ECB as a result of the European treaties, the central bank would be able to provide zero-interest financing to the State and all public entities (towns, hospitals, social-housing entities, etc.) in order to conduct socially equitable policies in the context of the environmental transition.

6. Strengthen existing public banks
 and re-create them in countries where they have been privatized (they would of course be subject, like all other banks, to the concrete measures discussed above). In France, in 2012 a collective called “Pour un Pôle Public Financier au service des Droits!” (“Toward a public financial institution to protect our rights!” [10]) that supports the creation of a public banking structure. The serious disadvantage of this project is that it fails to get to the root of the problem in that alongside an insignificant public banking sector, private banks and a cooperative sector, which is cooperative in name only, would continue to exist. In Belgium, where the government privatized the last public banks in the 1990s, in 2011 the State bought back the bank “part” of Dexia, of which it is 100 percent owner. Dexia Bank has become Belfius and still has private status. Belfius needs to become a true public bank and the concrete measures formulated above need to be applied. The State paid 4 billion euros–an amount the European Commission itself considered quite unreasonable. What should have been done is this: Belfius should have been created at no cost to the public finances as a public banking institution funded by the deposits of the Dexia Bank’s customers and all the safe assets. The bank should have been placed under citizen control. The working conditions, jobs and income of the personnel should have been guaranteed while the remuneration paid to the directors should have been sharply reduced. The board members and directors should have been barred from holding a position in a private institution. Charges should have been pressed against the directors of Dexia by the ministry for the criminal wrongdoings they committed. Report No. 58 filed by the French Senate on the Société de financement local (SFIL) evaluates the cost of Dexia’s failure at approximately 20 billion euros (13 billion for France, including 6.6 billion earmarked for recapitalization, and the rest to cover part of the early repayment penalties on toxic loans; 6.9 billion euros for Belgium, corresponding to the nationalization of Dexia Bank Belgium and the recapitalization of Dexia) as of the date of the report. On 1 February, 2013, France created a 100 percent public structure (with the State owning 75 percent, the CDC 20 percent and the Banque Postale 5 percent) in order to acquire 100 percent of the Dexia Municipal Agency (a subsidiary of Dexia Crédit Local), which became the Caisse Française de Financement Local (CAFFIL).

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II. SOCIALIZE THE BANKING SECTOR

Putting the concrete measures we have mentioned above into practice would constitute progress in resolving the crisis in the banking sector, but the private sector would continue to occupy a dominant position.

Perennial long-term measures are also needed
.

If the experience of the last few years demonstrates anything, it’s that banks must not be left in the hands of capitalists. If, through popular mobilization, we can see to it that the measures discussed above
 (which are open to further discussion in order to improve and complement them) are applied, capital will do everything possible to recover part of the ground it will have lost, finding multiple ways of getting around the regulations, using its powerful financial resources to buy the support of lawmakers and government leaders in order to deregulate, once again, and increase profits to the maximum without regard for the interests of the majority of the population.

Socializing the banking sector under citizen control is necessary

Because capitalists have demonstrated just how far they are willing to go, taking risks (risks whose consequences they refuse to be held accountable for) and committing crimes for the sole purpose of increasing their profits, because their activities regularly result in heavy costs borne by society as a whole, because the society we want to build must be guided by the pursuit of the common good, social justice and the reconstitution of balanced relations between human beings and the other components of nature, the banking sector must be socialized. As Frédéric Lordon proposes, a “total deprivatizationof the banking sector” [11] needs to be carried out. Socialization of the banking sector in its entirety is recommended by the labor federation Sud BPCE in France. [12]

Socializing the banking sector means:

expropriation, without compensation (or compensated by one symbolic euro), of large shareholders (small shareholders will be fully compensated);

granting a monopoly of banking activities to the public sector, with one single exception: the existence of a small cooperative banking sector (subject to the same fundamental rules as the public sector).

creating a public service for savings, credit and investment, with a twofold structure: a network of small ‘high street’ branches, on the one hand, and on the other, specialized agencies in charge of funds management and financing of investments not handled by the ministries in charge public health, education, energy, public transport, retirement, the environmental transition, etc. These ministries will be provided with the budgets necessary to assure their investments and efficient functioning. The specialized agencies will intervene in areas and activities that are beyond the competence and spheres of action of the ministries in order to ensure that all needs are covered.

defining, with citizen participation, a charter covering the goals to be attained and the missions to be carried out and which places the public savings, credit and investment entities at the service of the priorities defined by a democratic planning process;

transparency in the financial statements, which must be shown to the public in understandable form.

The word “socialization” is used in preference to “nationalization” or “state ownership” to make clear the essential role of citizen oversight, with decision-making shared between directors, personnel representatives, clients, non-profit associations, local officials and representatives of the national and regional public banking entities. Therefore, how that active citizen oversight will be exercised will need to be defined by democratic means. Similarly, the exercise of oversight over the banks’ activities by workers in the banking sector and their active participation in the organization of the work must be encouraged. Bank directors must issue an annual public report on their stewardship. Preference must be given to local, quality service, breaking with the policies of externalization currently being pursued. The personnel of financial establishments must be encouraged to provide authentic counseling to the clientele and to break with current aggressive sales policies.

Socializing the banking sector and making it a public service will make it possible:

–for citizens and public authorities to escape the influence of the financial markets;

–to finance citizens’ and public authorities’ projects;

–to dedicate the activity of banking to the common good, with among its missions that of facilitating the transition from a capitalist, production intensive economy to a social and environmental economy.

Because savings, credit, security of deposits and the preservation of the integrity of payment systems are matters of general interest, we recommend that a public banking service be created by socializing the totality of the firms in the banking and insurance sectors.

Because banks are today an essential tool of the capitalist system and of a mode of production that is devastating our planet and grabbing its resources, creating wars and impoverishment, eroding, little by little, social rights and attacking democratic institutions and practices, it is essential to take control of them so that they become tools placed at the service of the greater number of people.

Socializing the banking sector cannot be conceived of as a mere slogan or demand, sufficient unto itself and which decision makers would put into practice because they understand why it makes sense. It must be seen as a political goal to be reached through a process driven by a movement of citizens. Not only is it necessary for existing organized social movements (including trade unions) to make it a priority of their agenda and for the different sectors (local governmental bodies, small and medium companies, consumer associations, etc.) to adopt the position, but also–and above all–for bank employees to be brought to an awareness of the role played by their profession and the fact that it would be in their interest for banks to be socialized; and for bank users to be informed at the point of use (for example, through occupations of bank branches everywhere on the same day) so that they can participate directly in defining exactly what a bank should be.

Only large-scale mobilization can guarantee that socialization of the banking sector can actually be achieved in practice, because it is a measure that strikes at the very heart of the capitalist system. If a government of the Left does not take such a measure, its action will not be able to truly bring about the radical change needed to break with the logic of the system and bring about a new process of emancipation.

Socializing the banking and insurance sector must be part of a much broader program of further measures which would trigger the adoption of a transition to a new, post-capitalist and post-productive model. Such a program, which needs to be European-wide but which may first be put into practice in one or several countries, would include abandonment of austerity policies, cancellation of illegitimate debt, implementation of an overall tax reform with heavy taxation of capital, an overall reduction in working hours with compensatory hiring and maintaining of wage levels, socialization of the energy sector, measures for ensuring gender parity, development of public services and social benefits and the implementation of a strongly determined environmental transition policy.

At this point in history, socialization of the entirety of the banking system is an urgent economic, social, political and democratic necessity.

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Authors

Gilbert Achcar, Professor of Development Studies, SOAS, University of London
Alan Freemaneconomist with the Greater London Authority from 2000 to 2011, ‎co-director, Geopolitical Economy Research Group, University of Manitoba, Canada
Giorgos Galanis, Lecturer, Goldsmiths, University of London.
Pete Green, co-convener of the Left Unity Economics Policy Commission.
David Harvey, Distinguished Professor at the Graduate Center of the City University of New York (CUNY)
Michael Hudson, Distinguished Research Professor University of Missouri-Kansas City and Professor, Peking University
Michel Husson, Economist, author of Le capitalisme en 10 leçons, La Découverte, Paris, 2012, France
Andy Kilmister, Senior Lecturer in Economics at Oxford Brookes University, and editor Journal of Contemporary Central and Eastern Europe.
Stathis Kouvelakis, Reader King’s College University of London, member of Popular Unity (Greece)
Costas Lapavitsas, Professor of Economics, SOAS, University of London
Francisco Louçã, Professor of Economics in Lisbon’s Instituto Superior de Economia e Gestão(“Higher Institute of Economics and Management”)
Philippe Marlière, Professor of Politics, University College London
Thomas Marois, Senior Lecturer, Development Studies, SOAS, University of London
Ozlem Onaran, Professor of Economics, director of Greenwich Political Economy Research Centre, University of Greenwich
Sabri Öncü, Economist, SoS Economics, Istanbul, Turkey
Susan Pashkoff, Economist, Left Unity, Economic Policy Commission, UK
Alfredo Saad Filho, Professor of Political Economy, SOAS, University of London
Patrick Saurin, Spokesperson for the bank employees’ labour federation Sud Solidaires de la Banque Populaire–Caisse d’Epargne (BPCE) -France.
Benjamin Selwyn, Senior Lecturer in International Development, University of Sussex, UK
Pritam Singh, Professor of Economics, Faculty of Business, Oxford Brookes University
Stavros Tombazos, Professor of political economy at the University of Cyprus.
Eric Toussaint, Spokesperson of the CADTM, author of Bancocracy, Resistance Books/IIRE/CADTM, 2015
John Weeks, Professor Emeritus, SOAS, University of London

- – - – - – - – - – - – - – - -

Notes

1. Philippe Lamberts, the Green MEP, proposes a maximum of $100 billion in assets. “By way of comparison, the total assets* of BNP Paribas and Deutsche Bank, respectively, in 2011 were 2,164 billion euros and 1,965 billion euros.” http://www.philippelamberts.eu/les-7-peches-capitaux-des-banques/ We feel that the maximum size should be significantly smaller, in particular in smaller countries. 100 billion euros is a multiple of Cyprus’s GDP, and it’s more than a quarter of Belgium’s.
2. http://blog.mondediplo.net/2013-02-18-La-regulation-bancaire-au-pistolet-a-bouchon (in French)
3. Paul Jorion in Financité, November 2013 (in French).
4. For example, limit off-balance-sheet items to guarantees and signed commitments. Discussion is needed.
5. See Eric Toussaint, “Comment les grandes banques manipulent le marché des devises” (“How the major banks manipulate the currency market”), published on LeMonde.fr on 13 March 2014 and available in English as Chapter 18 of Bankocracy (available in .pdf form; also available in paper from CADTM)
6. Eric Toussaint, “Banks Speculate on Raw Materials and Food,” 10 February 2014
7. This would mean abandoning the system of weighting assets for risk, which is particularly unreliable since the weighting is left up to the banks themselves. Here’s an explanation of the system of asset weighting based on risk.
8. Eric Toussaint, “Il faut imposer une véritable taxe Tobin au lobby bancaire” (“A real Tobin Tax must be levied on the banking lobby”), an op-ed published by the daily L’Humanité on 25 February 2014 and also at http://cadtm.org/Il-faut-imposer-une-veritable-taxe (in French)
9. Interview with Eva Joly by Renaud Vivien, “Iceland refuses its accused bankers ‘Out of Court’ settlements.”
10. See their site (in French). The public banking entity promoted by the collective would include public financial institutions (the Banque de France, the Caisse des Dépôts and its financial subsidiaries, OSEO, the Société des participations de l’État, the Banque Postale, UbiFrance, the Agence française de développement, the Institut d’émission des départements d’Outre-Mer, CNP Assurance) or ones whose activities constitute a public service (the Crédit foncier, Coface). Any bank or insurance firm in which the State acquires a majority share or which may be assigned public-service missions would be part of it. In Belgium, a site created by the PTB is dedicated to promoting the need for a public bank (in French or Flemish).
11. Frédéric Lordon, “L’effarante passivité de la ‘re-régulation financière’” (“The frightening passivity of ‘financial re-regulation’”), in Changer d’économie, les économistes atterrés, Les liens qui libèrent, 2011, p. 242 (in French).
12. See in particular these links (in French): http://www.sudbpce.com/files/2013/01/2012-projet-bancaire-alternatif-definitif.pdfhttp://cadtm.org/IMG/pdf/PLAQUETTE_BANQUES_SUD_BPCE.pdf;http://cadtm.org/Socialiser-le-systeme-bancaire

Translated by Snake Arbusto and Mike Krolikowski. First published at the web site of the Committee for the Abolition of Third World Debt.

Apr 142016
 

By Mihalis Nevradakis, 99GetSmart

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Dear listeners and friends,
Dimitris Kazakis

Dimitris Kazakis

This week on Dialogos Radio, the Dialogos Interview Series will feature an interview with the economist and General Secretary of Greece’s United Popular Front (EPAM) Dimitris Kazakis, who will speak to us about the latest economic and political developments in Greece, EPAM’s proposals for a Eurozone and EU departure for Greece, and about the ongoing refugee and migrant crisis. 

Also this week, we will feature our commentary of the week segment, discussing current events in Greece and the apathy of much of the Greek population.
 
Tune in for all this and more, this week on Dialogos Radio. For our full weekly broadcast schedule, more information about this week’s broadcast, plus our podcast, on-demand program archive, articles and written work, and our online radio station Dialogos Radio 24/7, visit http://dialogosmedia.org/?p=6191.
 
Best,
Dialogos Radio & Media

************************

 
Αγαπητοί ακροατές και φίλοι,
 
Αυτή την εβδομάδα στο «Διάλογος», παρουσιάζουμε συνέντευξη με τον οικονομολόγο και Γενικό Γραμματέα του Ενιαίου Παλλαϊκού Μετώπου (Ε.ΠΑ.Μ.) Δημήτρη Καζάκη, ο οποίος θα μας μιλήσει για τα τρέχουσα οικονομικά και πολιτικά δρώμενα της χώρας, την πρόταση του Ε.ΠΑ.Μ. για έξοδο από την Ευρωζώνη και την Ευρωπαϊκή Ένωση, και για το προσφυγικό-μεταναστευτικό ζήτημα. 
 
Επίσης θα παρουσιάσουμε τον καθιερωμένο μας σχολιασμό, όπου θα μιλήσουμε για την τρέχουσα επικαιρότητα στην Ελλάδα και την αδράνεια του Ελληνικού πληθυσμού.
 
Για το πλήρες πρόγραμμα μεταδόσεων της εκπομπής και για περισσότερες πληροφορίες, αλλά και για το αρχείο εκπομπών και συνεντεύξεων μας, την αρθρογραφία μας, και το διαδικτυακό μας ραδιόφωνο Διάλογος Radio 24/7, μπείτε στο http://dialogosmedia.org/?p=6189.
 
Φιλικά,
Διάλογος Radio & Media
Apr 132016
 

By James Petras, 99GetSmart

1-Hillary-Clinton-warmonger-3

Introduction

From left to right a raucous chorus has emerged to denounce Republican Presidential primary frontrunner Donald Trump as a ‘fascist’. They cite his campaign promises to build an Israeli-style wall along the US border; his threats to expel eleven million undocumented immigrants; and to restrict foreign Muslims from entering the US, as well as the way his pugnacious face and arm resemble those of Benito Mussolini (‘he juts out his chin, he raises his arm’). They decry his extreme nationalism as ‘resembling Hitler’s policy’, by which they mean his opposition to detrimental free trade agreements and his slogan to “Make America Great.. Again.”

In this article I will critically address the current cartoonish image of fascism with fascism’s historical reality, and then proceed to analyze the so-called “lesser evil” politics behind the re-invention of an American fascist in the guise of billionaire Donald Trump.

Fascism: Fact and Fiction

Historically, fascist politics involved organized mass movements, armed militia and paramilitary groups who assaulted political opponents and violently censored critical speech and suppressed the right to assemble. Fascists scapegoated minorities, especially gypsies and Jews, and burned trade unions and leftist headquarters, assassinating their leaders and beating their members. Programmatically, they attacked pacifists and defended overseas wars and empires in the name of ‘living space’. Evoking a past imperial glory, they were not ‘isolationists’.

Candidate Trump has not organized anything resembling a mass movement, let alone an armed militia. There are no ‘TrumpetingBrown Shirts’. At most, the police and a handful of his (often elderly) white supporters have punched a few KKK-dressed provocateurs who have physically disrupted and threatened Trump’s public meetings and his exercise of free speech. In fact, the ‘fascist’ disruption of democratic freedoms seems to be mostly organized and practiced by his political rivals.

Trump, far from scapegoating the powerful Jewish minority in this country, gave a shamelessly Israel-centric speech and received a standing ovation from nearly 18,000 mostly prominent Jews at the March 2016 meeting of the major pro-Israel lobby (AIPAC).

His rhetoric, concerning the expulsion of 11 million undocumented workers from Mexico and Central America and the building of a border wall, is a far cry from the practice of imprisoning and violently expelling over two million undocumented Latinos under the Clinton-Bush-Obama/Clinton regimes. At its worst, Trump promises to continue the existing federal policy on immigration and not create a ‘fascist’ rupture with past administrations. Is a ‘rhetorical cement wall’ worse than the real wall of armed border police, helicopters and armed carriers that have operated under the Presidencies of Clinton – Bush – Obama/Clinton with its hundreds of migrant deaths in the desert? Are declarations of a repressive immigration policy more ‘fascist’ coming from Trump’s loud mouth than the actual official practice of violently seizing undocumented workers from their homes and workplaces with long-term imprisonment and expulsion? Expelling  youth, raised and educated in this country, or violently splitting up productive, well-integrated families and imprisoning their main breadwinners for lack of documents … that’s the official policy of the current and past three administrations.

There is far less of the truly fascist embrace of pre-emptive war and invasion in Trump’s speeches than in the actual policies pursued by the Clinton-Bush-Obama/Clinton regimes. In fact, among Trump’s numerous critics, especially his Republican rivals and the Hillary Clinton camp, we hear the loudest denunciations of his non-interventionist foreign policy (isolationism), which is “out of line” with the interventionist, overseas wars of current and past Republican and Democratic administrations. Trump’s critics and media pundits are ‘horror-struck’ at his apparent willingness to co-operate with Russian President Putin against common enemies, such as ISIS. Is his pragmatic regard of Russia more or less fascist than his rivals’ support for the Ukrainian putsch, orchestrated by the Obama regime in alliance with bona fide armed anti-Semitic Ukrainian fascists? His calls to dump NATO as an expensive drain on US treasure and manpower have the elite howling in outrage!

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The propagandists, who paint Trump as a modern American fascist, cite his crude sexist remarks as ‘examples of a misogynist totalitarian’ while pointing favorably to Democratic candidate Hillary Clinton as potentially the ‘first feminist President’. In regard to his alleged misogyny, ‘the Donald’ pointed to Madame First Lady, Senator and Secretary Clinton’s promotion and critical role in US wars against Libya, Iraq and Syria where well over one million women have been rendered refugees, raped, injured or killed. Which is worse, one may ask: Crude locker room jokes or millions of orphaned boys and girls denied parents, homes, education and any future in the Middle East and North Africa? That is the world Midwife Hillary Clinton had helped to deliver.

Misogyny is the in the eye of the deceiver.

Are Trump’s verbal attacks on the practice of US multi-nationals relocating abroad to avoid US taxes and Wall Street financial houses hiding billions of the US elites’ obscene wealth in offshore tax shelters, more detrimental to ‘American values’ (as charged) than Hillary Clinton’s pandering to Wall Street while pocketing over $300,000 for each 45 minute sycophantic performance (marketed as her ‘policy lectures’), or her decades of actively promoting  globalization – including the US job-destroying NAFTA?

Clearly Trump currently lacks program, organization and practice that define a fascist politician. At the very worst, he parrots the general line of attack against immigrants and Muslims. So far he would just bar them from the US but not bomb them ‘to the stone-age’. This should be contrasted with the actual policies carried out by the war-criminals Clinton/Bush/Obama-Clinton. It would be hard for Donald to ‘trump’ Hillary when she threatened to ‘obliterate Iran’ and its scores of millions of citizens because of Iran’s fictitious ‘nuclear program’.

On the other hand, Trump’s own meetings and rallies have been the victim of repeated disruption by organized groups acting like fascist thugs. Role reversal in real life: Trump, the target of rabid sustained mass media attacks, is pronounced the fascist …

Bashing Trump: Backdoor Backing of Hillary the Militarist Psychopath

If the objective case for labeling Trump ‘a fascist’ is weak or non-existent, why do so many prestigious academics and journalists play this stupid game of name-calling?

The common sense explanation of their ruffled bluster is because they are setting up ‘Trump-the- Straw-Dragon’ in order to promote the poisonous Madame Secretary Hillary Clinton as the ‘lesser evil candidate’ for President of the United States.

No serious observer minimally aware of Clinton’s carnal embrace of multiple simultaneous disastrous and destructive wars in Ukraine, Iraq, Afghanistan, Yemen, Syria and Libya, could possibly support her – unless if they are convinced that a greater danger looms on the horizon and “we have to defeat fascist Trump at all cost”? No serious democrat or wage and salaried employee can ignore Madame Clinton’s role as Wall Street’s most shameless pimp unless they ‘believe’ that a loud-mouth New York ‘fascist is worse than Wall Street’.

The phony scaremongering about Trump’s “fascism” just serves to cover up Clinton’s most servile promotion of traitorous wars for the benefit of Israel. One should envision the thousands of desperate Syrian refugees clinging to decrepit boats in the Mediterranean when reading excerpts of Clinton’s private e-mails: According to  WikiLeaks, Hillary declared that “the best way to help Israel deal with Iran’s growing nuclear capability (sic) is to help (sic) the people of Syria overthrow the regime of Bashar Assad. … The fall of the House of Assad could well ignite a sectarian war between the Shiites and the majority Sunnis of the region drawing in Iran, which, in the view of Israeli commanders would not be a bad thing for Israel and its Western allies”. Not a bad thing for Israel – but a cruel and criminal policy against a sovereign nation and multi-ethnic society. Madame Clinton followed through with these demented pronouncements, which can only be viewed as genocidal! Clinton promoted the most violent proxy war, uprooting over half of the civilian population of Syria and killing hundreds of thousands, while shredding a sovereign nation. She thus pandered to her Israeli mentors and Pluto-Zionist funders.

To justify backing a serial war monger, a US Secretary of State who has served Israel’s interests, and a politician who has canalized her ‘feminist principles’ with Wall Street billionaires, Hillary Clinton’s smarmy supporters have had to invent an opponent who is even worse: Creating and then denouncing “Trump the Fascist” serves as a backdoor justification for supporting a proven political psychopath!

Apr 092016
 

By James Petras, 99GetSmart

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Introduction

The terror bombings in Paris and Brussels have raised a cacophony of voices, ranging from state officials, Prime Ministers and Presidents, to academics, journalists and media consultants. Tons of ink and print have focused on the psychology, networks and operations of the alleged perpetrators – radicalized young Muslim citizens of the EU.

Few have examined the long-term, large-scale policies of the EU, US and NATO, which have been associated with the development and growth of the worldwide terror networks. This essay will discuss the historical links between Islamist terrorists and the US-Saudi Arabian–Pakistan intervention in Afghanistan, as well as the consequences of the US invasion and occupation of Iraq. In Iraq, the US implemented a deliberate policy of destroying all secular state structures and promoting the Balkanization of the country via ethnic-religious and tribal wars – a policy it has followed in subsequent areas of intervention.

The last section will focus on the US-EU-Gulf Petrol-Monarchy proxy invasions and ‘regime change’ bombings of the secular republics of Libya and Syria with the further cultivation and growth of international Islamist terrorism.

Historical Origins of International Islamist Terrorism: Afghanistan

Carpet bombing of Tutukhan hill, northwest of Kabul, during 2nd phase of the U.S air war

Carpet bombing of Tutukhan hill, northwest of Kabul, during 2nd phase of the U.S air war

In 1979, President James Carter and his National Security Chief, Zbigniew Brzezinski, launched Operation Cyclone, a major Islamist uprising against the Soviet- aligned secular Afghan regime. The US coordinated it campaign with the rabidly anti-Soviet monarchy in Saudi Arabia, which provided the funding and mercenaries for ‘international jihad’ against secular governance. This brutal campaign ‘officially’ lasted 10 years until the Soviet withdrawal in 1989. It produced millions of casualties and decades ‘blow-back’ when the CIA-Pakistani-Saudi trained Arab mercenaries (the ‘Afghan-Arabs’) returned to their home countries and elsewhere. The US intelligence agencies, Special Forces Commands and military directorates (especially Pakistan’s ISI intelligence service) trained and armed terrorists with US-Saudi funding. The American covert financial contribution mushroomed over the years rising to over $670 million dollars a year by 1987. Tens of thousands of Islamist mercenaries and adventurers were recruited from the Middle East, North Africa, the Gulf States, the Soviet Union (Chechens), Yugoslavia (Bosnians and Kosovars), China (Uigurs) and Western Europe.

With the defeat of the secular regime of President Najibullah in 1992, the Islamists and tribal factions then fought among themselves, converting Afghanistan into the world’s best-equipped training ground for International Islamist terrorists. Eventually, the Pashtun-based Taliban faction (with Pakistani arms and support) prevailed and established an extreme Islamist regime. The Taliban, despite its rhetoric, settled down to consolidating their brand of ‘Islamism in one country’, (1995-2001), a largely nationalist project. In its quest for respectability, it successfully destroyed the opium poppy fields, earning the praise of US President GW Bush in spring 2001. It also hosted a variety of Saudi princes and warlords, eventually including the jihadi-internationalist Osama bin Laden, who had been driven from North Africa.

Following the terrorist attack on the US in September 2001, US and NATO invaded Afghanistan of October 2001 and overthrew the nation-centered Islamist Taliban regime. The subsequent chaos and guerrilla war opened up a huge new inflow and outflow of thousands of international extremists who came to Afghanistan, trained, fought and then departed, fully prepared to practice their terrorist skills in their countries of origin in Europe, North Africa and the Middle East.

The US interventions and invasion of Afghanistan provide some of the context for the subsequent bombings in Europe and the US. The Islamist ‘returnees’ to Europe and elsewhere had received funds from Saudi Arabia and training from the CIA and Pakistani intelligence. They began their work among a very ‘available’ constituency of potential recruits in the marginalized Muslim youth of the ghettos and prisons of Europe.

The Middle Period: The US-Zionist Invasion and Destruction of Iraq

Fallujah, Iraq

Fallujah, Iraq

The turning point in the growth and internationalization of Islamist terrorism was the US invasion, occupation and systematic reign of terror in Iraq. Largely under the guidance of key US Zionist policymakers (and Israeli advisers) in the Pentagon, State Department and the White House, the US dismantled the entire secular Iraqi army and police forces. They also purged the administrative, civil, educational, medical and scientific institutions of nationalistic secular professionals, opening the field to warring Islamist tribal factions. Hundreds of thousands of Iraqi civilians were killed and millions fled in a regime of ethnic cleansing – which Washington touted as a model for the rest of the Middle East. However, thousands of experienced, but jobless Iraqi military officers, who had survived the US-orchestrated purges, regrouped and eventually joined with tens of thousands of nationalist and internationalist Islamist extremists to form ISIS. Their motives were arguably less ethno-religious and more related to revenge for their displacement and the destruction of their own society.

The deliberate US (Zionist)-EU-Saudi strategy to divide and conquer Iraq initially involved working closely with Sunni feudal tribal leaders and other extremists to counter the rising power of pro-Iranian Shia. They promoted a policy of fragmenting the country with the Kurds dominating in the North, the Sunnis in the center and the Shia in the south (the so-called Joseph Biden-Leslie Gelb Plan of national dismemberment and ethnic cleansing). The rationale was to create a weak central authority completely under US-EU tutelage and loose group of fragmented subsistence fiefdoms in what had been the most advanced secular Arab republic.

Despite pouring billions of dollars in arms from the US to create a puppet-colonial Iraqi ‘national army’, the Saudis and Israelis pursued their own policy of financing sectors of the Kurds and violent Sunni opposition – with the latter forming the original mass base of ISIS.

As the US-client Shia regime in Baghdad focused on stealing billions while killing or exiling hundreds of thousands of educated Sunnis, Christians and other secular Iraqis from the capital, the morale of its US-puppet troops plummeted. With the entire experienced and nationalist Iraqi officer core purged (slaughtered or driven into hiding), the new puppet officers were cowardly, corrupt and incompetent – as openly acknowledged by their US ‘advisers’. ISIS, meanwhile had acquired hundreds of thousands of US weapons and was financed by the Shia-hating Saudi Royal Family and other Gulf Monarchs. Armed Sunnis soon launched major, lightning-quick offensives under the leadership of ex-Baathist army officers, supported by thousands of terrorists, suicide bombers and foreign mercenaries. US and European ‘military experts’ expressed ‘shock’ at their effectiveness.

ISIS routed the Baghdad-controlled army, their US advisers and Kurdish allies from northern Iraq, capturing major cities, including Mosul, thousands of productive oil wells and drove their forces to within a few dozen kilometers of Baghdad. Territorial conquest and military successes attracted thousands more Islamist volunteers from the Middle East, Europe, Afghanistan and even North America. ISIS provided the military training; Saudi Arabia paid their salaries; Turkey purchased their captured oil and antiquities and opened its borders to the transfer of jihadi troops and weapons. Israel, for its part, purchased captured ISIS petrol at a discount from corrupt Turkish traders. Each regional player had its snout in the bloody trough that had once been Iraq!

ISIS successes in Iraq, led it to expand its operations and ambitions across the border into Syria. This occurred just as the US and EU were bombing and destroying the secular government of Colonel Gaddafi in Libya, in another ‘wildly successful’ planned campaign of ‘regime change’ (According to US Secretary of State Clinton as she gleefully watched the captive wounded Gadhafi ‘snuff film’ by unspeakable torture – ‘WE came and HE died’.).

Smoke fills the sky over Tripoli

Smoke fills the sky over Tripoli

The chaos that ensued in Libya led to an exponential growth of extremist Islamist groups with tons of weapons of ‘liberated’ Libyan weapons! Islamist terrorists in Libya gained territory, took over oil wells and attracted ‘volunteers’ from the marginalized youth of neighboring Tunisia, Egypt, Mali and as far away as Somalia, Afghanistan, Iraq and Syria – flush with more guns, money and training. Many graduates went on to Syria and Iraq.

The Contemporary Period: EU-US-Turkey-Saudi-Israeli Sponsored War in Syria

Syrian government “barrel bombs”? No, U.S. “precision bombing” lays waste to Kobanê, 18 October 2014. Drive the imperialists out of the Middle East!  (Kai Pfaffenbac//Reuters

Syrian government “barrel bombs”? No, U.S. “precision bombing” lays waste to Kobanê, 18 October 2014. Drive the imperialists out of the Middle East! (Kai Pfaffenbac//Reuters

In 2011, as ISIS rolled across the Iraqi border into Syria and terrorist Islamist bands seized cities in Libya, the US-EU-Turkish-Saudi and Israeli regimes financed and armed Islamist (and the mythical ‘moderate’) forces in Syria to overthrow the nationalist-secular Syrian regime of Bashar al Assad.

Thousands of Islamist extremist volunteers heeded the call (and the fat paychecks) of the Saudi regime and its Salafist propagandists. These constituted the Saudi Royal Family’s own ‘Foreign Legion’. They were trained and armed and shipped into Syria by Turkish intelligence. The US armed and trained hundreds of its own so-called ‘moderate rebels’ whose fighters quickly defected to ISIS and other terrorist groups turning over tons of US arms, while the ‘moderate rebel leaders’ gave press conferences from London and Washington. ISIS seized swaths of Syrian territory, sweeping westward toward the Russian naval and air bases on the coast and upward from the south, encircling Damascus. Millions were uprooted and minority populations were enslaved or slaughtered.

The news of ISIS territorial gains with their plundered oil wealth from sales to Turkey and the flow of arms from Saudi Arabia, the EU and the US attracted over 30,000 ‘volunteer’ mercenaries from North America, Europe, North Africa, the Middle East and South Asia.

These new terrorists received military training, including bomb making and logistical planning in Syria. Many were citizens of the EU, Islamist extremists, numbering over five thousand. These young fighters trained and fought in Syria and then returned to France, Belgium, Germany and the rest of the EU. They had gone to Syria with the tacit support and/or tolerance of their own European governments who had used them, rather than NATO troops, in the US-EU campaign of ‘regime change’ against Damascus.

The European governments were sure they had ‘their’ Muslim recruits under control as they joined the US in a reckless policy of overthrowing independent secular governments in the Middle East and North Africa. They happily encouraged their marginalized young Muslim citizens to flock Syria and fight. They hoped they would remain in Syria (fighting on the ground or buried under the ground). Officially, EU leaders claimed to support ‘moderate rebels’ (the bland term Western media used to sanitize Islamist terrorists) fighting the Assad ‘dictatorship’. European regimes were not prepared to detain the battle hardened ‘returnees’, who had been trained in Iraq and Syria. These young European Muslims (children of immigrants or converts to Islam) had been heavily indoctrinated and incorporated into international terrorist networks. They easily melted back into their marginalized European urban ghettos – beyond the control of Europe’s bloated intelligence services.

In practice, the EU regimes saw the thousands of Europe’s Muslim youth flocking to Syria as an ‘EU Foreign Legion’, a glorified wastebasket for unemployed young thugs and ex-prisoners, who would advance NATO’s imperial goals while solving the domestic social problem of the marginalized children of North African migrants. Europe’s Muslim youth were viewed as convenient cannon fodder by NATO planners and the governments of France, Belgium and the UK. For public relations, it was better for these young men and women to die overthrowing the secular government in Syria than to send in European soldiers (white Christians) whose deaths would have domestic political repercussions.

The EU underestimated the depth of antagonism these ‘volunteers’ felt about US-EU intervention in the Middle East and North Africa, as well as their anger at Europe’s continued support for Israeli land grabs in Palestine. In its racist arrogance, EU leaders underestimated the capacity of ISIS to indoctrinate, train and organize these marginalized kids from Europe’s slums into effective international cells able to carry the war back to Europe.

The EU smugly overlooked the active roles of Turkey and Saudi Arabia who had their own independent, regional ambitions. Ankara and Riyadh trained and financed the ‘volunteers’, and facilitated their flow into Syria from camps in Turkey and Jordan. The wounded were treated in Turkey and sometimes even in Israel. Thousands, many EU citizens, would flow back into Europe or to their countries of origin in the Middle East and North Africa, as well as Russia.

The EU had slavishly and blindly followed Washington’s lead in all its Middle East wars. Now it is paying a big price:  Thousands of trained terrorists have returned; bombings and attacks on European civilians and civil structures have occurred, while the European government leaders trip over each other in a mad rush to dismantle civil and constitutional citizen rights and impose wide ranging police state measures (States of Emergency).

These new Saudi-funded terrorist recruits (Riyadh’s Legionnaires) are active in all the countries where the US and EU have launched proxy wars: Iraq, Syria, Libya, Yemen, Afghanistan. Turkey funds ISIS terrorists in Syria, Iraq and Kurdish territories to advance its own expansionist ambitions – oblivious to the clucking disapproval of EU leaders. Now Turkey receives over 6 billion Euro’s from the EU in what amounts to blackmail: In return, Turkey will ‘contain’ the flood of regional refugees in barely disguised concentration camps out of European sight.

Conclusion

            Ever since the US-EU policymakers decided to implement a war against Arab and West Asian secular nationalism in the Middle-East, Afghanistan, Iran and North Africa through serial ‘regime change’ campaigns they have relied on Islamist Salafist mercenaries and volunteers to do most of the killing on the ground, while the West operates from the air. Washington and its NATO allies operated on the assumption that they could use and then discard their recruits, mostly from marginalized urban youth and criminal gangs, once they had served imperial military purposes. A few with requisite talent and ruthlessness could be turned into puppet ‘leaders’ to unleash on the Russians and other ‘obstacles’ in future engagements.

The EU-US totally misunderstood the volunteers’ high level of independence, their organizational autonomy and their own understanding of the tactical nature of their alliance with Western imperialism. Islamist extremist leaders, like their Western counterparts, believe there are no permanent alliances – only permanent interests.

The EU and US have pursued a policy of overthrowing independent Muslim and secular Arab nations and returning them to the status of pre-independence semi-colonies. The rollback policy against secular nationalism (with its deep roots in the Dulles era) has extended from North Africa, through the Middle East to Southwest Asia. For its part, ISIS and its allies envision a return to a pre-colonial Islamic caliphate over the same lands and people to counter Western imperialism. Millions are caught in the middle.

ISIS views the Westernized secular elites in the Muslim countries as a fifth column for the spread of empire, while it has re-socialized and trained young Islamists from the EU to serve as networks of terrorists ‘behind enemy lines’ sowing mayhem in the West.

The political repercussions of this internationalized war are profound. Millions of civilians in the war zones have been and will be killed, uprooted and converted into desperate refugees flooding the EU. Police-state emergency rule, arbitrary searches, arrests and interrogations have become the norm in the highly militarized European airports, train and metro stations, as well as markets and cultural centers. The EU has increasingly undergone an ‘Israelization’ of its society, with its population polarized and resembling Israel- Palestinian . . . its Muslim community marginalized and confined into little Gaza’s.

In this charged atmosphere, Israeli high tech security companies and advisers flourish, mergers and acquisitions of police state technology multiply. Israeli Prime Minister Benny Netanyahu embraces the French Prime Minister Hollande in the club of electoral authoritarians.

Meanwhile the refugees and their children flow to and fro, the bombs come and go. We line up to place flowers on our latest dead and then pay our taxes for more wars in the Middle East. More young ‘volunteers’ will become cheap fodder to fight in our wars; some will return and plant more bombs, so we can mourn some more at patriotic vigils – protected by armed battalions…