Nov 042016
 

By 99GetSmart

Originally published at MintPressNews:

Bystanders wait to be handed bags of oranges during a free distribution of fruit and vegetables as a protest by farmers and vendors over proposed pension reforms, in Athens on Wednesday, Jan. 27, 2016. Greece’s leftwing government is facing an escalating wave of protests over its proposed pension overhaul that has been demanded by bailout creditors. (AP Photo/Petros Giannakouris)

Bystanders wait to be handed bags of oranges during a free distribution of fruit and vegetables as a protest by farmers and vendors over proposed pension reforms, in Athens on Wednesday, Jan. 27, 2016. Greece’s leftwing government is facing an escalating wave of protests over its proposed pension overhaul that has been demanded by bailout creditors. (AP Photo/Petros Giannakouris)

ATHENS — This has been another eventful year in Greece. Almost one year after it turned its back on the July 2015 referendum result which rejected further austerity, the Syriza-led government has pushed forward a program of even harsher austerity, spending cuts, and privatizations.

Following the British vote to proceed with “Brexit,” or a departure from the European Union, fears that Greece might follow suit led Greece’s lenders to demand even more austerity measures from a country already mired in an economic depression.

In this interview, Dr. Jack Rasmus, a professor of economics and politics at St. Mary’s College of California, analyzes these issues and the many challenges facing the Greek and European economies today.

The author of such books as “Looting Greece” and “Systemic Fragility in the Global Economy,” Dr. Rasmus shares his insights into the consequences of austerity for Greece and other peripheral European economies, and presents his proposed solutions for an end to the crisis and austerity.

MintPress News (MPN): In September, Greek Prime Minister Alexis Tsipras gave his annual “state of the nation” address, where he boasted that the Greek economy has turned the corner, that unemployment is going down, that salaries will be increased, and that the country is returning to growth. Is this what Greece’s economic indicators actually show?

Protesters march to the Greek Parliament in Athens on Tuesday Nov. 6, 2012. Greece’s unions are holding their third general strike in six weeks to press dissenters in the country’s troubled coalition government not to back a major new austerity program that will doom Greeks to further hardship in a sixth year of recession. Two days of demonstrations are planned to start Tuesday, continuing until lawmakers vote late Wednesday on the bill to slash euro13.5 billion ($17.3 billion) from budget spending over two years. (AP Photo/Dimitri Messinis)

Protesters march to the Greek Parliament in Athens on Tuesday Nov. 6, 2012. Greece’s unions are holding their third general strike in six weeks to press dissenters in the country’s troubled coalition government not to back a major new austerity program that will doom Greeks to further hardship in a sixth year of recession. Two days of demonstrations are planned to start Tuesday, continuing until lawmakers vote late Wednesday on the bill to slash euro13.5 billion ($17.3 billion) from budget spending over two years. (AP Photo/Dimitri Messinis)

Dr. Jack Rasmus (JR): No, not quite. Greece’s debt is still the same as it was in 2011, roughly 180 percent of GDP. Unemployment has come down by only 3 to 4 percent, so instead of 27 percent, it’s about 23 to 24 percent. That’s depression-level unemployment. All the other indicators in the economy are flat or declining, so I don’t see anywhere that Greece is really “recovering,” and neither, really, is the entire eurozone economy. It’s been bouncing along the bottom.

As I said in my book “Systemic Fragility,” it’s a case of chronic stagnation. [The eurozone] might grow a little, 0.5 percent or 1 percent above GDP, mostly as a result of Germany’s growth, then it flattens out or goes below. Most of the periphery economies in Europe are stagnant or in a recession, as they have been for quite some time.

As far as raising wages, Greece cannot raise, at least in the public sector, any wages without the approval of the troika [Greece’s three major lenders: the European Commission, European Central Bank, and the International Monetary Fund]. It’s a real stretch to say that Greece is recovering. It’s kind of moving sideways, in the condition of still chronic economic depression.

MPN: One of the perceptions that has been prevalent in global public opinion with regard to the economic crisis in Greece is that the country has been “bailed out” with billions upon billions of euros in free money. Is this really the case, and where has the so-called “bailout” money to Greece actually gone?

JR: Countries don’t get bailed out. Governments, banks, businesses, and sometimes, though not so frequently, households get bailed out. So the question is, who got bailed out here, in the debt restructuring deals of 2010, 2012, 2015, and this past spring? The banks got bailed out several times. Foreign investors and speculators in Greek bonds and other securities clearly got bailed out in 2012. If you look at where the money has gone, there’s $400 billion in debt in Greece still, that they have to pay off, with an economy that is less than half that size, so it’s impossible.

Where has all this money gone? Recent studies by the European School of Management and Technology documenting the 2010 and 2012 bailouts indicate that 95 percent of all the loans to “bail out” the Greek government, which then bailed out the Greek banks — 95 percent of that went back to Northern Europe, mostly to the German and Northern European banks that had loaned so much money to Greece. [Bailout funds also went] to the troika, particularly the European Commission, that then distributed it to the banking system and investors in turn. The EC is the big player here, and to some extent the European Central Bank, and to a minor extent now the International Monetary Fund. So, 95 percent of all the money loaned to Greece went right back to [Europe] and less than 5 percent of that went back into the Greek economy. Greece has been subsidizing the financial system elsewhere in Europe.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

MPN: What do you believe needs to be done about the Greek debt?

JR: You might ask what needs to be done about debt throughout the eurozone, because it’s not just Greece. Greece is perhaps the most serious case, but other places in the periphery of Europe are still heavily indebted. You cannot sustain, with austerity measures designed to pay the interest and principal on debt, a $400-plus billion debt based on an economy that’s less than $200 billion. Even the IMF has come to that conclusion and is maneuvering with the other troika members on that particular point.

Is [the debt] legitimate? Well, you have to understand the origins of this debt. It was originally private sector debt that was created as a result of the formation of the eurozone in 1999, the ECB as part of that creation, and other elements of the eurozone agreements, particularly the Lisbon Strategy that Germany adopted. Germany and other Northern European businesses and bankers pumped money and capital into the periphery, including Greece, from 2005 onward. Germany had a strong competitive advantage in exports, so a lot of the money and capital was pumped into the periphery, including Greece, in order to purchase German and other exports. So the money went in and circulated around, leaving a pile of private sector debt in Greece, Italy, and other places.

Then we had the crash of 2008-2009 and the debt could not be repaid, and the troika stepped in to [offer] the governments of Greece and other countries money in order to continue to bail out the private sector and enable the repayment of the private debt. So it starts out as private debt, because of this great imbalance in exports within the eurozone, and then that gets converted to government debt, and then the big crash of 2008-2009 adds even more debt, and then you have the recession of 2011-2013 in the eurozone and the 2012 bailout, which piled on more debt in order to pay the old debt, and then in 2015 the same thing. So the troika’s piling more debt on Greece in order for Greece to pay the previous debt, and that’s totally unsustainable. They’re going to have to expunge some of that debt.

Of course, the Germans, Wolfgang Schauble [the German finance minister] and the coalition in the north, does not want to allow that. And they don’t really want to change the eurozone, because the eurozone, while very imbalanced for the periphery, has benefited Germany significantly. [The Germans] dominate the finance ministers’ council in the EC and they dominate the ECB, and they’re just keeping the situation the way it is because it’s profitable for them.

Demonstrators hold a poster against the austerity policy of Germany prior to a special session of the parliament Bundestag on negotiations with Greece for a new bailout in Berlin, Germany, Friday, July 17, 2015. (AP Photo/Markus Schreiber)

Demonstrators hold a poster against the austerity policy of Germany prior to a special session of the parliament Bundestag on negotiations with Greece for a new bailout in Berlin, Germany, Friday, July 17, 2015. (AP Photo/Markus Schreiber)

MPN: Why must Greek banks be nationalized, in your view?

JR: Look at the debt negotiations of 2010, 2012, and 2015. What happened was the ECB, which pretty much controls the Greek central bank — the ECB is just a council of central banks dominated by the Bundesbank [the German central bank] and its allies, so they have control — and what you saw in the negotiations is that in 2015, the ECB put the screws to the Greek economy, and Syriza collapsed and agreed each time the screws were tightened, bringing the economy to a halt. They couldn’t deal with the squeeze on the economy by the ECB. This brought the economy to a halt, squeezing it and of course not releasing loans that [the troika] had agreed to provide Greece under previous agreements. There was an economic squeeze that Syriza did not have a strategy to deal with, and eventually it capitulated.

You’ve got to nationalize, make the Greek central bank and the banking systems independent of the ECB. Gain control over your economy once again, and that is one of several key steps to prevent the squeeze every time you attempt to renegotiate the debt or restructure the debt. Without an independent, Greek, people-controlled banking system, the eurozone and the troika will squeeze and bring Greece to its knees every time. We’ve seen that three times. You’ve got to nationalize the banking system, including the central bank, or if you want to just leave the central bank as part of the ECB structure, go ahead, but create an independent central bank authority elsewhere in the Greek government.

In the U.S. during the Great Depression, the U.S. central bank had screwed up badly, and [President Franklin Delano] Roosevelt took over and had his Treasury Department take over and run the economy. Greece would have to set up a parallel central bank in its finance sector, and isolate and bypass the influence of the ECB through the Greek central bank. You would have to create a parallel currency as part of this and impose serious controls on bank withdrawals and capital flows outside the country, which Syriza did not really do, because the ECB and the troika opposed it. When you have all the capital, bank withdrawals and capital flight is another way of squeezing the country economically.

FILE – In this Sunday, Oct. 18, 2015 file photo, a man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras’ decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

FILE – In this Sunday, Oct. 18, 2015 file photo, a man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras’ decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

MPN: The current government in Greece has been continuing a policy of massive privatizations of Greek public assets, with profitable airports and harbors having been privatized in the past year, in addition to the recent selloff of the Greek national railroad for a total of €45 million ($49 million). What are the short- and long-term impacts of the privatization of such public assets?

JR: The short-term is that when you privatize them, under the aegis of the troika, if you sell below market prices, which a lot of these assets are being sold at, that’s profit on the sale for the investors who are buying up these assets. But once the assets are in private hands, where does the revenue go? Does it go back into Greece or does it go back into the pockets of the investors and the corporations and the banks outside Greece that are buying it up? Well, it goes out. It’s a form of capital flight. Money that is needed in Greece flows out of Greece.

This is a new form of financial imperialism, wealth extraction in other words, that is being structured and managed on a state-to-state basis. It’s not 19th century British imperialism where they set up a factory in India, paid them low wages, and brought the textiles back to London to re-sell at a higher price. It’s not that kind of production imperialism. This is financial imperialism imposed on Greece, and it’s a new form that’s emerging everywhere, where you indebt the country and then you force the country to engage in austerity in order to pay the principal and interest on the debt, and you extract the income from the country. Privatizations are another form of that.

You privatize public goods, you get them at fire-sale prices, and then the income flows from those assets flow back to the coffers of the private companies or the banks, outside of Greece.

The other consequence is when you privatize, they come in and they cut costs, which means they lay off people in mass numbers, they put a hold on wages, they get rid of benefits, and they do everything else to maximize their revenue.

Finally, longer term, it means that Greece has less control over its own economy if it can’t control its infrastructure and everything is owned by foreigners. Then you can’t influence it as much, and if you’re part of the eurozone, you’re legally prohibited from what you can do to make sure that these foreign-owned infrastructure companies are behaving in terms of the benefit for the public sector, for the rest of Greece.

MPN: You have argued in your book, “Systemic Fragility in the Global Economy,” that there are nine major trends which account for the economic troubles that are seen on a global scale. What are some of these trends?

JR: Everywhere, and particularly since 2008, we see central banks and monetary policy to be ascendant, and that means creating money, pumping it into the economy to bail out the financial systems, the financial institutions, the banks and the shadow banks, meaning speculators, hedge funds, private equity firms, asset management companies, and so forth. We’ve seen bailouts of tens of trillions of dollars since 2008. All of that liquidity injection into the economy has driven interest rates down to zero or even, in Europe and Japan and elsewhere, negative rates, and that fuels debt. With rates that cheap, corporations and businesses float new corporate bonds, and they use the money not to invest necessarily, they use it to buy back the stock and drive up the stock prices and pay out dividends, or they sit on it, they hoard it, or they send it to emerging markets. That’s a problem everywhere, and that’s the result of massive liquidity injections, which have really been escalating since the 1980s, when controls on international capital flows were eliminated everywhere.

After the 1970s, when the Bretton Woods system collapsed and central banks took over, the combination of those has led to the financialization of the global economy in the 21st century, where profits are far greater for investing and speculating in financial securities than they are in investing in real assets and real things that create real jobs and real income and real consumption. We’re becoming dependent on debt more and more. The economy is increasingly credit- and debt-driven, and that’s the result of this massive liquidity injection, and it also leads to a shift from real asset investment — investing in real things that create jobs that people need — toward financial asset investment. That means that real investment collapses over time and productivity collapses over time as well, and we see that happening everywhere.

That’s a major point that I argued about in my book, “Systemic Fragility,” this financialization of the global economy based on liquidity and debt and squeezing out. It’s diverting money and capital from real investment into financial speculation. What’s going on in Greece is a concrete expression of this, the reliance on financial means and financial manipulation. The periphery in the eurozone is at a great disadvantage to Germany and others, and they’re being manipulated financially. All the payments on interest and the debt flow back to the north. This is all flowing through the EC to the private sector, and it’s a nice constant money capital flow from interest payments and privatization and speculation on government bonds and securities and stocks in these countries as the volatility occurs.

It’s a reflection, in Greece, of what’s happening on a broader scale elsewhere in the global economy, and that’s why we haven’t seen much of a recovery in the global economy. Global trade is stagnant and real investment everywhere is drifting toward zero, productivity is negative almost everywhere, even in the U.S., and we’re seeing growth rates of barely 1 percent, 1.5 percent, at best, when it should be double that. We see these growing, non-performing bank loans, almost $2 trillion in Europe, the worst in Italy with about $400 billion. We see the same thing in Japan and in China. We’re becoming more systemically fragile financially because of this shift to financial speculation.

In this July 5, 2012 file photo President of the European Central Bank Mario Draghi speaks during a news conference in Frankfurt, central Germany. (AP Photo/dapd, Mario Vedder, File)

In this July 5, 2012 file photo President of the European Central Bank Mario Draghi speaks during a news conference in Frankfurt, central Germany. (AP Photo/dapd, Mario Vedder, File)

MintPress: What is your outlook for the eurozone economy and the difficulties that it is currently facing?

JR: The European banking system has never fully recovered from the 2008-2009 crash. The ECB is pumping money into the banking system in various ways, long-term refinancing options and all the bailout funds and qualitative easing and negative interest rates and so forth. They’re desperately pumping money into the banking system, but the banks aren’t really lending, at least to those businesses that would reinvest in real assets to create jobs. It’s far more profitable to make money now. Investors make more money from financial speculation than they do from investing long-term and expecting to get a return over 10 to 20 years for investment in a real company that creates real things.

We can see the strains now with the non-performing loans, in particular in Italy. Of course, we know the situation with the non-performing bank loans in Greece. Portugal is in bad shape as well in terms of non-performing loans, and now we see even institutions like [Germany’s] Deutsche Bank and others beginning to feel this strain, and the further impact on the European banking system of the “Brexit” [the departure of Great Britain from the European Union].

The problem is that the private banks are either hoarding the cash, they won’t invest in real growth, or they’re sending their money offshore to emerging markets, or they’re using it, as in the U.S., to buy back stock and pay out dividends and loaning money to companies to do just that. The global economy has changed dramatically in ways that make it much more fragile than ever before. A lot of debt has been building up everywhere: Over $50 trillion in additional debt has occurred since 2009, and when the next recession comes, how are they going to pay that debt?

When times are stable or growing, you can add debt without a great crisis emerging, but when you have a recession or a downturn that’s significant, where are you going to get the money capital to pay the principal and interest on the debt? Then you start seeing defaults and you start seeing financial asset price collapses going on, and now you’re back in 2008-2009. That’s the picture of the global economy.

A farmer tries to protect himself as he clashes with a riot policeman during an anti-government protest at central Syntagma square in Athens, Wednesday, Nov. 18, 2015. Greek farmers protesting over planned tax and pension reforms demanded by the country’s bailout creditors have clashed outside parliament with police, who used tear gas to disperse them. (AP Photo/Yorgos Karahalis)

A farmer tries to protect himself as he clashes with a riot policeman during an anti-government protest at central Syntagma square in Athens, Wednesday, Nov. 18, 2015. Greek farmers protesting over planned tax and pension reforms demanded by the country’s bailout creditors have clashed outside parliament with police, who used tear gas to disperse them. (AP Photo/Yorgos Karahalis)

MPN: What would be the steps for Greece to follow, in your view, in order to escape the spiral of economic depression and austerity?

JR: Syriza made it clear, when it came into power, that it was not in favor of “Grexit” [a Greek departure from the eurozone], and it has always maintained that position. An unprepared, “we’re leaving the eurozone and the euro” kind of decision would cause a collapse of values, particularly among those who have investments in some savings in Greece. To some extent, Syriza was caught between a rock and a hard place here. They couldn’t or didn’t want to advocate an exit, and at least those who had investments didn’t want it because of the potential effect on their investments. The broader Greek populace thinks, still, that to be European you have to be in the eurozone. That’s a big mistake.

I think what Greece and Syriza should have done is to create a parallel currency and to take over its banking system. In other words, make the banking system truly independent, including the Greek central bank, and if that was not possible, bypass the Greek central bank and set up a central banking function in the finance ministry, as the U.S. has done at different times. Create a parallel currency, and policies and programs to get people to convert their euros into the parallel currency. Maybe declare that henceforth all taxes to the Greek government will be paid with the parallel currency, and that means that people would then trade in their euros for the parallel currency to pay their taxes.

Then tell the troika [the EC, the ECB, and the IMF — collectively, Greece’s lenders] that we’re going to pay you in your euros, but if we run out of euros here as a result of the conversion, well, tough luck, we don’t have a way of paying you, let’s negotiate a final deal where you expunge some of it and we pay you off and we go our separate ways. Of course, you would have to create significant capital flow controls, which has always been a problem every time there’s been a crisis; the money flows out of Greece. Take the economy out of the control of the troika without a formal exit.

That could have been done, but for some reason Syriza and its finance advisers either didn’t want to do that or didn’t know how to do that.

MPN: Arguments that have been heard against a parallel currency include the claim that the existence of two currencies would create a situation where there would be “haves” and “have nots” — between those who would hold a stronger, hard currency, compared to those holding a weaker, devalued currency. How do you respond to this?

JR: There are policies and approaches you can take that entice and require people to convert their euros into the new currency. That would raise the demand and therefore the value, the price of the new currency. If you just had the currency and you didn’t have this forced trade-in, then of course you would have “haves” and “have nots,” the new currency would collapse, and pretty soon no one would want to use it. But, for example, saying that taxes could only be paid with the new currency, would force people who had corporations and businesses and so forth to purchase the new currency with the euro. It would undermine the value of the euro in Greece and it would raise the value of the new currency in Greece as well. That might set off a parallel elsewhere in the eurozone with other countries thinking the same thing, which would undermine the value of the euro and put the squeeze on the troika for once. Greece never put the squeeze on the troika, it was just the opposite in all of these negotiations that occurred, they never really hurt the troika in negotiations, and that’s the only way you prevail in negotiations. You’ve got to make it unpleasant for the opposition. Syriza never did that, they played along and made concession after concession.

Syriza thought that their example would strike a spark elsewhere in Europe of other social democratic forces and governments. They thought that they would get the rest of the social democracies behind them and together they would reform the eurozone. That was a fiction, a fantasy thought on the part of Alexis Tsipras and others, but that was the core of their whole strategy. European social democracy is a dying force, and that’s why you see the growth on the fringes, both to the right and the left.

Tsipras and [former Greek finance minister] Yanis Varoufakis’ problem was that they thought they could get all these elements behind them and that together they would have enough weight to force Schauble and other finance ministers to make concessions. Well, Schauble and the other ministers, the “German faction,” as I call it, within the finance ministers’ council in the EC, remained dominant. At every step along the way, whenever Syriza and its few allies tried to make a compromise where some concessions were made to them, the German faction squelched it. We saw that, for example, at the very end, when [Greece held] the referendum in July 2015. Greece held the vote, and the vote said “go back and negotiate a better deal for us,” and what did Tsipras do? He totally caved in to the Schauble faction, and then the Schauble faction said, “The offer we made last week is now off the table, you’re going to have to accept an even worse one.” So they put the screws to Syriza, and Syriza looked to its allies in the EC, and they totally caved in as well. Things just got worse and worse until you had the final [austerity] agreement on August 20, 2015.

It was a step-by-step retreat from [Syriza’s election in] January 2015, because Syriza had the wrong strategy and was not engaged in certain necessary tactics. Of course, the troika itself had a lot of cards to play. It would have been an uphill fight for Syriza. The time where they might have been able to strike some concessions from the troika was 2012, but New Democracy [the center-right party in power at the time in Greece] was totally in the pocket of the troika, so that was impossible.

[This past spring], the IMF and the troika were worried about “Brexit” and what impact that might have on renewing “Grexit.” So they put the screws to Greece again, raised the debt even more, austerity even more, and I think another round of that is coming, because the IMF wants out of the troika deal. We’ll see what happens at the IMF meeting, but they haven’t endorsed even the 2015 agreement because they know it’s unsustainable. I think the IMF is maneuvering to have the EC to buy its portion of the debt, and once that happens, the EC will demand even more austerity from Greece.

President of France Francois Hollande, U.S. President Barack Obama, Britain’s Prime Minister David Cameron and Germany’s Chancellor Angela Merkel attend the Transatlantic Trade and Investment Partnership (TTIP) meeting at the G20 the G-20 leaders summit in Brisbane, Australia, Sunday, Nov. 16, 2014.

President of France Francois Hollande, U.S. President Barack Obama, Britain’s Prime Minister David Cameron and Germany’s Chancellor Angela Merkel attend the Transatlantic Trade and Investment Partnership (TTIP) meeting at the G20 the G-20 leaders summit in Brisbane, Australia, Sunday, Nov. 16, 2014.

MPN: In the event that a parallel currency is implemented and steps are taken to maintain or strengthen its value, could that be a prelude to a switch to a national, domestic currency?

JR: Yes. At some point, one currency will become dominant. You can’t have two equal currencies like that. Another advantage of the new currency is that it will start out at less value than the euro, and that will be used as the trading currency. That will stimulate Greek exports to elsewhere, outside the eurozone.

Part of the problem is that the periphery in Europe is so dependent on exports and imports to Germany and the north, that it can’t really engage in its own independent export strategy without cutting wages. Throughout Europe, you have what’s called “internal devaluation,” when you are stuck with a currency and someone else’s central bank, the ECB and the euro. You can’t really engage in independent monetary policy to stimulate your economy and you can’t engage in lowering your currency in order to gain some advantage in exports. You’re stuck, and only the most powerful country that’s most efficient and has the lowest costs is able to take advantage of global exports, and that’s Germany. The weaker economies of the periphery will always be at a disadvantage to Germany when it comes to trying to push their exports anywhere else outside the eurozone.

That’s the lesson. The lesson is that you’ve got a 1999 agreement in which you have this quasi-central bank, the ECB, and you have [the euro], and that arrangement significantly benefits the most efficient, low-cost producer, which is Germany, at the expense of the periphery. Until you have a true central bank and fiscal union to some extent, that will pump the money into the periphery to help it grow when it doesn’t, you will always have the situation you have in Europe right now.

Compare that to the U.S., where there’s a fiscal union, so that if certain states have economic problems … the federal government can pump money into those specific locations. If you don’t have a true federal government and fiscal union, you can’t do that, and if your central bank is dominated by the largest economy — Germany — even the monetary policy has no effect. And if it’s a single currency, it’s to the advantage of the stronger economy at the disadvantage of the weaker.

The eurozone economy is structured to emphasize the growth of the strongest economies at the expense of the weaker, and that’s not going to change. It’s built into the eurozone. You cannot create a currency union and a customs union without a true banking union and fiscal union. More and more countries in the eurozone are beginning to come to that conclusion, but it was foreordained. Economists knew this from the beginning, and that’s the tragedy. Greece has tied its tail to the eurozone, dominated by Germany, and it can never get out of this situation as long as Germany dominates the institutions, which it does, because the whole arrangement is great for Germany.

A protesters carries a protest sign during a rally prior to the opening of the new European Central Bank (ECB) headquarter in Frankfurt, Germany, Wednesday, March 18, 2015. At least four police cars were set alight and two officers injured Wednesday as authorities confronted violent anti-austerity protesters ahead of the inauguration ceremony for the European Central Bank’s new headquarters (AP Photo/dpa, Arne Dedert)

A protesters carries a protest sign during a rally prior to the opening of the new European Central Bank (ECB) headquarter in Frankfurt, Germany, Wednesday, March 18, 2015. At least four police cars were set alight and two officers injured Wednesday as authorities confronted violent anti-austerity protesters ahead of the inauguration ceremony for the European Central Bank’s new headquarters (AP Photo/dpa, Arne Dedert)

MPN: Tell us about your most recent book, “Looting Greece.”

JR: It’s really a case study of the consequences of financialization and globalization and integration. I argue that there is this phenomenon of the smaller economies being tied into the larger economies through free trade agreements, which lead to currency unions, which lead to banking unions, and then you’ve got a situation like Greece and the euro periphery and the problems associated with that.

The book also takes a historical look at the origins of the Greek debt, that starts in 1999 with the [creation of the] eurozone, the adoption of the euro by Greece in 2002 and the consequences of that, how the debt developed, first in the private sector because of German export domination and then conversion of the private debt in 2008-2009 to the public debt, and then the collapse of 2008-2009, which added to the government debt. Then you had the 2012 agreement where the private sector was bailed out, and that added more debt, and then 2015 and so forth. All this is described in detail in the early chapters, and then most of the book is a step-by-step look at the negotiations between Syriza and the troika, from [Syriza’s January 2015 election] through the spring of 2016, and what were the strategic and tactical errors of Syriza and the strategic and tactical moves by the troika which enabled it to prevail.

At the end, [the book discusses] how this is a form of a new emerging financial and wealth extraction from smaller economies by the larger economies, because of the globalization and integration arrangement that exists, the emergence of financial extraction and financial exploitation, and how central banks are feeding that all. This will lead to my next book, which is about global central banks and the problems they’ve created as we move to another crisis, which I think is coming in the next five years.

Demonstrators dressed as clowns pass by a burning police car Wednesday, March 18, 2015 in Frankfurt, Germany. Blockupy activists try to blockade the new headquarters of the ECB to protest against government austerity and capitalism. (AP Photo/Michael Probst)

Demonstrators dressed as clowns pass by a burning police car Wednesday, March 18, 2015 in Frankfurt, Germany. Blockupy activists try to blockade the new headquarters of the ECB to protest against government austerity and capitalism. (AP Photo/Michael Probst)

 

 

Nov 032016
 

By James Petras99GetSmart

united-states-us-military-bases-asia-1-400x273

Introduction

Wall Street and the Pentagon greeted the onset of 2016 as a ‘banner year’, a glorious turning point in the quest for malleable regimes willing to sell-off the most lucrative economic resources, to sign off on onerous new debt to Wall Street and to grant use of their strategic military bases to the Pentagon.

Brazil and Argentina, the most powerful and richest countries in South America and the Philippines, Washington’s most strategic military platform in Southeast Asia, were the objects of intense US political operations in the run-up to 2016.

In each instance, Wall Street and the Pentagon secured smashing successes leading to premature ejaculations over the ‘new golden era’ of financial pillage and unfettered military adventures. Unfortunately, the early ecstasy has turned to agony: Wall Street made easy entries and even faster departures once the ‘honeymoon’ gave way to reality. The political procurers persecuted center-left incumbents but, were soon to have their turn facing prosecution. The political prostitutes, who had decreed the sale of sovereignty, were replaced by nationalists who would turn the bordello back into a sovereign nation state.

This essay outlines the rapid rise and dramatic demise of these erstwhile ‘progeny’ of Wall Street and the Pentagon in Argentina and Brazil, and then reviews Washington’s shock and awe as the newly elected Philippines President Rodrigo Duterte embraced new ties with China while proclaiming, ‘We are no one’s ‘tuta’ (puppy dog)!’

Argentina and Brazil: Grandiose Schemes and Crapulous Outcomes

The international financial press was ecstatic over the election of President Mauricio Macri in Argentina and the appointment of former Wall Street bankers to his cabinet. They celebrated the ouster of the ‘evil populists’, accusing them of inflating economic results, reneging on debt obligations and discouraging foreign lenders and investors. Under the Macri regime all market obstacles were to be removed and all the bankers trembled with anticipation at the ‘good times’ to come.

After taking office in December 2015, President Macri unleashed the ‘animal instincts’ of the market and the carrion birds flocked in. US ‘vulture funds’ scooped up and demanded payment for on old Argentine debt ‘valued’ at $3.5 billion — constituting a 1,000% return on their initial investment. A devaluation of the peso of 50% tripled inflation and drove down wages by 20%.

Firing over 200,000 public sector employees, slapping 400% price increases on utilities and transport, driving small and medium size firms into bankruptcy and enraged consumers into the streets ended the honeymoon with the Argentine electorate quite abruptly. This initial massive dose of free enterprise ‘medicine’ was prescribed by the local and Wall Street bankers and investors who had promised a new golden era for capitalism!

Now that he had banished the ‘populists’, Macri was free to tap into the international financial markets. Argentina raised $16.5 billion from a bond sale taken up by the big bankers and speculators, mostly from Wall Street, who were eager to cash in on the high rates in the belief that there was no risk with their champion President Macri at the helm. Wall Street based its giddy predictions on a mere three-month experience with Mauricio!

But then … some of the hedge fund managers began to raise questions about the viability of Mauricio Macri’s presidency. Instead of reducing the fiscal deficit, Macri began to increase public spending to offset mass discontent over his triple digit increases in utility fees and transportation, the mass layoffs in the public sector and the slashing of pension funds.

The major banks had counted on the abrupt devaluation of the currency to invest in the export sector, but instead they were confronted with a sudden 11% appreciation of the peso and a skyrocketing inflation of 40% leading to high interest rates. As a result, the economy fell even deeper in recession exceeding minus 3% for the year.

While most Wall Street bankers still retain some faith in the Macri regime, they are not willing to fork-over the kind of cash that might allow this increasingly unpopular regime to survive. What keep Wall Street on board the sinking ship are the political and ideological commitments rather than any objective assessment of their protégée’s dismal economic performance. Wall Street counts on free market bankers appointed to the ministries, the massive purge of social services (health and education) personnel and the lucrative bond sales to cover the burgeoning deficit. They hope the vast increase in profits resulting from increased utility fees and the sharp cuts in salaries, pensions and subsidies will ultimately lead them into the promised land.

Wall Street has expressed dismay over Macri’s failure to stimulate growth – in fact GDP is falling. Furthermore, their ‘golden boy’ failed to attract productive investments. Instead thousands of Argentine small and medium businesses have ‘gone under’ as consumer spending tanked and extortionate tariffs were slapped on vital public utilities and transport – devastating profits. Inflation has undermined the purchasing power of the vast majority of households. Wall Street speculators, concentrating on fixed-rate peso denominated debt, are at risk of losing their shirts.

In other words, the administration’s ‘free enterprise’ regime is based largely on attracting foreign loans, plundering the national treasury, firing tens of thousands of public sector workers and slashing spending on social services and business-friendly subsidies. Macri has yet to generate any large-scale investment in new innovative productive sectors, which might sustain long-term growth.

Already facing growing discontent and a general strike of private and public sector workers, the ‘bankers’ regime’ lacks the political links with the trade unions to neutralize the growing opposition.

To hold back the growing tidal wave of discontent, President Macri had to betray his overseas investors by boosting fiscal spending, which has had little or no impact on the national economy.

Wall Street’s hopes that President Mauricio Macri would inaugurate a ‘golden era’ of free market capitalism lasted less than a year and is turning into a real fiasco. Rising foreign debt, economic depression and class warfare ensures Macri’s rapid demise.

Brazil: Wall Street’s Three Month ‘Whirl-Wind’ Honeymoon

Most of the current elected members of the Brazilian Congress, Senate and the recently-installed (rather than elected) President, as well as his cabinet, are in trouble: The hero, Michael Temer and his argonauts, chosen by Wall Street to privatize the Brazilian economy and usher in another ‘golden dawn’ for finance capital, now all face criminal changes, arrest and long prison sentences for money laundering, bribery, fraud, tax evasion and corruption.

In less than four months, the entire political edifice constructed to impeach the elected President Dilma Rousseff and then de-nationalize key sectors of the economy, is shaking. So much for the financial press’s proclamation of a new era of “business friendly” policies in Brazilia.

The pundits, politicians, journalists and editors, who prematurely celebrated the appointment of Michael Temer to the Presidency by legislative coup, now have to face a new reality. The key to understanding the rapid collapse of the New Right project in Brazil lies in the growing ‘rap sheets’ of the very same politicians who engineered the ouster of Rousseff.

Eduardo Cunha, the ex-president of the Congress in Brasilia, used his influence to ensure the super majority of Congressional votes for the impeachment. Cunha was godfather to ensuring the appointment of Michael Temer as interim president.

Cunha’s influence and control over the Congress was based on his wide network of bribes and corruption involving over a hundred members of congress, including the newly anointed President Temer.

Once Cunha secured the ouster of Rousseff, the Brazilian elite washed their collective hands of the ‘fixer’, overwhelmed by the stench of his corruption. In September 2016, Cunha was suspended from Congress and lost his immunity. One month later, he was arrested on over a dozen charges, including fraud and tax evasion. It was public knowledge that Cunha had squirreled away a ‘tidy nest’ of over $70 million in Swiss banks.

Cunha directed (extorted) public and private firms to finance the campaigns of many of his political colleagues. He had intervened to secure bribes for President Temer, his foreign minister and even the next presidential hopeful, Jose Serra. One of the most powerful representatives of the new regime, Moreira Franco, Grand Wizard of the Privatization Program, was ‘in hock’ to Cunha.

As all this has come to light, Cunha has been negotiating a plea bargain with the prosecutor and judges in return for his ‘singing’ a few arias. He is facing over a hundred years in jail; his wife and daughter face trial; Eduardo Cunha is prepared to talk and finger political leaders to save his own neck. Most knowledgeable observers and judicial experts fully expect Cunha to bring down the Temer Administration with him and devastate the leadership of Temer’s Brazilian Democratic Movement Party, as well as ex-president Fernando Henrique Cardoso’s Brazilian Social Democratic Party.

The Brazilian elite, Wall Street bankers and their mass media propagandists, who wrote and directed the impeachment plot scenario are now discredited and bereft of political front men. Their expectations of a new ‘golden era of free market capitalism’ in Brazil has turned into a political mad scramble with every politico and corporate leader desperate to save his own skin and illicit fortune by denouncing each other.

With the demise of the ‘Brazilian takeover’, Wall Street and Washington are bereft of key markets and allies in Latin America.

The Philippines: The Duterte turn from the US to China

In April 2014, Washington ‘secured’ an agreement granting access to five strategic military bases in the Philippines critical to its ‘pivot to target’ China. Under the outgoing President ‘Noynoy’ Aquino, Jr. the Pentagon believed it had an ‘iron-clad’ agreement to organize the Philippines as its satrap and military springboard throughout Southeast Asia. Washington even prodded the Aquino government to bring its Spratly Island dispute with China before the obscure Permanent Court of Arbitration in the Hague. Washington anticipated using the Court’s ‘favorable’ ruling as a pretext to confront the Chinese.

All this has changed with the June 2016 ascent to the Presidency of Rodrigo Duterte: In only four months, all Washington’s imperial designs had been swept off the table. By October 21, 2016 President Duterte announced he would end military exercises with Washington because they threatened Philippine sovereignty and made his country vulnerable to a military confrontation with China. He promised to end sea patrols of disputed waters that the US uses to harass China in the South China Sea.

In advance of the Philippines President’s meeting with China, he had already declared that he would not press the Dutch-based ruling over the South China Sea island dispute against Beijing but rely on diplomacy and compromise. During the China meeting President Duterte declared that the two countries would engage in a constructive dialogue to resolve the Spratly Islands as well as other outstanding issues. The ‘agreement’ over US access to bases in the Philippines was put in doubt as the President declared “a separation from the US” and promised long-term, large scale economic and investment ties with China. Undergirding the Philippines pivot to China were 13 trade and investment agreements worth more than $20 billion, covering financing of infrastructure, transport, social projects, tourism, industry and agriculture.

The military base agreement, signed by the notoriously servile ex-President Aquino without Congressional approval, was review by the Philippine Supreme Court and can be revoked by the new President Duterte by decree.

Inside of four months, the US strategy of armed encirclement and intervention against China has been dealt a major blow. The newly emerging China-Philippines linkage strikes a fatal blow to Washington’s overtly militarist ‘pivot’ against China.

Conclusion

2016 opened with great fanfare: The defeat of the two major center-left governments (Argentina and Brazil) and the advent of hard-right US-backed regimes would inaugurate a ‘golden era of free market capitalism’. This promised to usher in a prolonged period of profit and pillage by rolling back ‘populist’ reforms and creating a bankers paradise. In Southeast Asia, US officials and pundits would proclaim another ‘golden era’, this time of rampant militarism, encircling and provoking China on its vital sea lanes, and operating from five strategic military bases obtained through a Philippine Presidential decree by an unpopular and recently replaced puppet, ‘Noynoy’ Aquino, Jr.

These dreams of ‘golden eras’ lasted a few months before objective reality intruded.

By the autumn of 2016 the rightist regimes had been replaced in the Manila by a colorful ardent nationalist, while the ‘banker boys’ in Brasilia faced prison, and the ‘Golden Boys’ of Buenos Aires were mired in deep crisis. The notion of an easy Rightist restoration was based on several profound misunderstandings:

1) The belief that the reversal of social reforms and denial of popular demands would smoothly give way to an explosion of foreign financing and investment was shattered when private bond purchases profited the financial sector but did not bring in large-scale productive investment. Devaluation of the currency was followed by skyrocketing inflation, which led to fiscal deficits and the loss of business confidence.

2) Washington’s promotion of ‘corruption investigations’ started with prosecuting democratically elected center-left politicians and ended up with the arrest of Wall Street’s own protégés encompassing the entire right-wing political class and decimating the ‘Golden’ regimes.

3) The belief that long-term hegemonic relations, based on client regimes in Asia, could resist the attraction of signing trade and investment agreements with the rising Chinese mega-economy, while sacrificing vital economic development, and relegating their masses to more stagnation and unemployment, collapsed with the massive electoral of nationalist Rodrigo Duterte as President of the Philippines.

In fact, these and other political assessments among the decision makers in Washington and on Wall Street were proven wrong leading to a strategic retreat of the empire in both Latin America and Asia. The policy failures were not merely ‘mistakes’ but the inevitable results of changing structural conditions embedded in a declining empire.

These decisions were based on a calculus of power, rooted in class and national relations that may have held true two decades ago. At the dawn of the new millennium the US still dominated Asia and China was not yet an economic alternative for its neighbors eager for investment. Washington could and did dictate policy in Southeast Asia.

Twenty years ago, the US had the economic leverage to sustain the neoliberal policies of the Washington Consensus throughout Latin America.

Today the US continues to pursue policies based on anachronistic power relations, seeming to ignore the fact that China is now a world power and a viable economic trade and investment alternative successfully competing for markets and influence in Asia. Washington is failing to compete in that marketplace and, therefore, can no longer rely on docile client state.

Washington cannot effectively control and direct large-scale capital flows to shore-up its newly installed rightist regimes in Argentina and Brazil as they crumble under their own corruption and incompetence. Meanwhile the world is watching a domestic US economy, mired in stagnation with its own political elites torn by corruption and scandals at the highest level, and staging the most bizarre presidential campaign in its history. Corruption has become the mode of governing under conditions of deregulation and rule by political warlords. Political allegiance to the empire and open doors to foreign pillage do not attract capital when those making political decisions are facing prison and the business ‘doormen’ are busy stuffing their suitcases with cash and making a mad-dash for the airports!

For Wall Street and the Pentagon, Latin America and Asia are lost opportunities – betrayals to be mourned at the officers clubs and exclusive Manhattan restaurants. For the people in mass social movements these are emerging opportunities for struggle and change.

The strenuous US effort to rebuild its empire in Latin America and Southeast Asia has suffered a rapid succession of blows. Washington can still seize power but it lacks the talent and the favorable conditions to hold it.

The vision of a Brazilian state, build on the edifice of the privatized oil giant, Petrobras, and the political incarceration of its left adversaries, with foreign capital attracted and seduced by political procurers, pimps and prostitutes, has ended in a debacle.

In this vacuum, it will be up to the new governments and peoples’ movements to seize the opportunity to advance their struggles and explore political and economic alternatives. The aborted rightist power grab inadvertently has done the peoples’ movements a great favor by exposing and ousting the corrupt and compromised center-left regimes opening the door for a genuine anti-imperialist transformation.

James Petras is author of  The End of the Republic and the Delusion of EmpireExtractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer), and The Politics of Empire: The US, Israel and the Middle EastRead other articles by James, or visit James’s website.

Nov 022016
 

By The Radical Democrat, 99GetSmart

Academia and media in Turkey have been devastated by two gruesome decree rulings that stripped academics of their work and shut down over a dozen media organisations. The purge continues with full speed, and an unfortunate victim of imprisonment has been Tolaz the Parrot.

Tolaz the parrot, DIHA

Tolaz the parrot, DIHA

Dicle News Agency (DIHA) offices have been sealed after a ruling by decree decision (October 29th) declared over a dozen media organizations closed in the early hours of November 1st, when there was no office worker there. When the offices were sealed without any prior notification after the tax officers and police made their inspection and reporting, Tolaz the Parrot – the mascot of the news agency – was locked inside, and door-locks were changed.

According to media reports Tolaz answered upon a reporter knocking on the door by saying “Heval who is there” (heval: [Kurdish] brother). Several journalists kept staying at the door of the news agency offices, keeping company to the parrot from a behind the door and waiting for someone to come and open the door to free Tolaz. However for a long time, no official that had answered, seemed willing to take any responsibility, and Tolaz’s fate depended heavily on the bureaucracy of Turkey.

One Nation, One Language, One Parrot?

Contrary to the echoing motto being chanted on streets by many people and political leaders as “One State, One Language, One Nation”, Tolaz the bilingual parrot can speak up to 70 words in both Turkish and Kurdish. Tolaz’s name also comes from Kurdish, and it means “womanizer”.

Caretaker of Tolaz, a DIHA journalist Hayri Demir stated “Tolaz has not been fed since early hours of the day before and he needs food and water urgently. He gets upset when there is no one around him talking; that’s why I brought him to the office. He is quite social, responds when there is doorbell ringing or dances if there is music.”

DIHA journalists waiting to free Tolaz

DIHA journalists waiting to free Tolaz

Amidst the raids on critical news organizations and imprisonment of journalists with alleged crimes of “harboring terrorist activities without being a member of a terrorist organization” Tolaz the Parrot is now of symbolic value beyond a pet, in all absurdity of the situation already.

Upon the suffering cries of Tolaz, main opposition CHP’s deputy Sezgin Tanrıkulu initiated a process and notified the Çankaya Municipality in Ankara to find a solution, to free the parrot from captivity. Finally when all official steps were taken, Tolaz was saved from captivity at 14.00, thanks to DIHA journalists’ efforts.

As a final word, it would be appropriate to have a closing remark with this couplet from the poet Cemal Süreya:

“Life is short,

Birds are flying…”

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Oct 292016
 

By , 99GetSmart

Iceland's top Pirates (photo: Pirate Party Iceland Blog)

Iceland’s top Pirates (photo: Pirate Party Iceland Blog)

A decade after it was founded, the Pirate Party are set to make yet another historic step, this time in Iceland, where it has has mobilized a great level of public support and has been leading the polls ever since the announcement of the national election.

A decade ago I was invited to a meeting of the newly founded Pirate Party in Sweden. It was intriguing, since I was fed up with the traditional right-left party politics, which keeps falling back to questions of identity rather than ideology. Having started out as an anti-copyright movement, the Pirate Party has definitely become something beyond a radical protest party. Its agenda is quite simple: transparency, freedom of information, direct democracy, public participation and decriminalization of narcotics.

Birgitta Jónsdóttir (photo: Pirate Party)

Birgitta Jónsdóttir (photo: Pirate Party)

Ahead of the Icelandic election that will take place on October 29, the Pirates look forward to at least quadruple their presence in the parliament. With only 5% support and three MPs, the Pirates have already led a successful term. Former spokesperson of Wikileaks and the Icelandic Pirates’ figurehead Birgitta Jónsdóttir defines herself as “poetician” (poet+politician). Her vision for Iceland is very different from that of other political parties. The party currently stands at over 22% in opinion polls and she might have a major impact by becoming the parliamentary speaker in the next term.

The Icelandic Pirates had forced Prime Minister Sigmundur Davíð Gunnlaugsson to resign after it was revealed in the Panama Papers that his wife owned an offshore investment company with claims on Iceland’s failed banks, which constituted an evident conflict of interest for the former prime minister. The week after the prime minister stepped down, the polls showed Pirates at 43%, after a long march reclaiming a new record every second week for over a year.

Mattias Bjärnemalm

Mattias Bjärnemalm

The Pirates set out to bring a new approach to party politics also elsewhere in Europe. Vice-President and Net Political Spokesperson of Pirate Party Sweden, Mattias Bjärnemalm, says “I cannot emphasize enough how important it would be for the pirate movement globally to have a government with pirate ministers. Today before the elections, they are standing with more parliamentary experience.”

Julia Reda, a Member of the European Parliament and the president of Young Pirates of Europe (YPE), the European federation of Pirate Party youth organizations,  states:

“The Icelandic Pirates are not just carried by the hopes of the electorate, they have been convincing in their day-to-day parliamentary work. I think they are a great role model for Pirate Parties in other countries, where voters may want to give the local Pirates a chance. But may have doubts about their effectiveness in parliament.”

Getting elected to the Abgeordnetenhaus, Berlin’s state assembly in 2011,  the German Pirate Party were the first Pirates to ever enter state parliament. However, partially due to internal divisions, the public support in the party fell dramatically in the Berlin’s state election this year. With 1.7% of the votes, the party lost its seats in the assembly.

Julia Reda, MEP

Julia Reda, MEP

Over the years, when I had been talking to people about the Pirate Party, most responses revolved around “they too have no ideology” or “it’s just another radical protest party.” Yet in Iceland, the Pirates have successfully led campaigns to abolish blasphemy laws, declare asylum for Edward Snowden, campaign for Chelsea Manning, and they have been speaking up against injustice and dysfunctional systems; there is more to the party than a mere protest voice.

The electoral agenda of the Pirates in Iceland promises an adoption of a new constitution, ensuring just distribution of the wealth generated through natural resources, re-establishing free health care, increasing public participation in decision-making, restoring trust and tackling corruption. A strong set of promises on the road to sustaining liberties and empowering the people.

Smari McCarthy

Smari McCarthy

Pirate Party Iceland’s prime ministerial candidate, Smari McCarthy, reiterates the promises saying:

“We are on the cusp of a new wave of liberal politics, where corruption and abuse of power is challenged and systems reformed to serve the needs of the public, rather than the needs of powerful elites.”

Even though all party-groups from right to left have Europe-wide associations, the Pirates might have the highest interconnectedness thanks to their focus on digital communications and social media. This weekend in Reykjavik, Iceland’s Pirates will welcome the support of Pirate Party representatives from over 30 other countries.

They are pioneers in terms of structure, like no other political movement before. As a Europe-wide grassroots movement, the Pirates are validating themselves through elections in the eyes of the electorate, while refusing to be categorized in traditional terms.

Oct 282016
 

By James Petras99GetSmart

u-s-military-build-up-vs-china

In 2012 President Obama, Secretary of State Hillary Clinton and Defense Secretary Ashton Carter launched a new chapter in their quest for global dominance: a realignment of policies designed to shift priorities from the Middle East to Asia. Dubbed the ‘pivot to Asia’, it suggested that the US would concentrate its economic, military and diplomatic resources toward strengthening its dominant position and undercutting China’s rising influence in the region.

The ‘pivot to Asia’ did not shift existing resources from the Middle East, it added military commitments to the region, while provoking more conflicts with Russia and China.

The ‘pivot to Asia’ meant that the US was extending and deepening its regional military alliances in order to confront and encircle Russia and China. The goal would be to cripple their economies and foster social unrest leading to political instability and regime change.

The US onslaught for greater empire depended on the cooperation of proxies and allies to accomplish its strategic goals.

The so-called ‘pivot to Asia’ had a two-pronged approach, based on an economic trading pact and various military treaty agreements. The entire US strategy of retaining global supremacy depended on securing and enhancing its control over its regional allies and proxies. Failure of the Obama regime to retain Washington’s vassal states would accelerate its decline and encourage more desperate political maneuvers.

Strategic Military Posturing

Without a doubt, every military decision and action made by the Obama Administration with regard to the Asia-Pacific Region has had only one purpose – to weaken China’s defense capabilities, undermine its economy and force Beijing to submit to Washington’s domination.

In pursuit of military supremacy, Washington has installed an advanced missile system in South Korea, increased its air and maritime armada and expanded its provocative activities along China’s coastline and its vital maritime trade routes. Washington has embarked on a military base expansion campaign in Australia, Japan and the Philippines.

This explains why Washington pressured its client regime in Manila under the former President ‘Nonoy’ Aquino, Jr., to bring its territorial dispute with China over the Spratly Islands before a relatively obscure tribunal in Holland. The European ruling, unsurprisingly in favor of Manila, would provide the US with a ‘legal’ cover for its planned aggression against China in the South China Sea. The Spratly and Paracel Islands are mostly barren coral islands and shoals located within the world’s busiest shipping trade routes, explaining China’s (both Beijing and Taipei) refusal to recognize the ‘Court of Special Arbitration’.

Strategic Economic Intervention: The Trans-Pacific Partnership (TPP)

The US authored and promoted Trans-Pacific Partnership (TTP) is a trade and investment agreement covering 12 Pacific countries designed to ensure US regional dominance while deliberately cutting out China. The TPP was to be the linchpin of US efforts to promote profits for overseas US multi-nationals by undercutting the rules for domestic producers, labor laws for workers and environmental regulations for consumers. As a result of its unpopular domestic provisions, which had alienated US workers and consumers, the electorate forced both Presidential candidates to withdraw their support for the TPP – what one scribbler for the Financial Times denounced as “the dangers of popular democracy”. The Washington empire builders envisioned the TPP as a tool for dictating and enforcing their ‘rules’ on a captive Asia-Pacific trading system. From the perspective of US big business, the TPP was the instrument of choice for retaining supremacy in Asia by excluding China.

The Eclipse of Washington’s “Asian Century”

For over seventy years the US has dominated Asia, ravaging the continent with two major wars in Korea and Indo-China with millions of casualties, and multiple counter-insurgency interventions in Indonesia, Thailand, Malaysia, the Philippines, Timor, Myanmar, Pakistan and Afghanistan. The strategic goal has been to expand its military and political power, exploit the economies and resources and encircle China and North Korea.

Under the Obama-Clinton-Kerry Regime, the imperial structures in Asia are coming apart.

Washington’s anti-China TPP is collapsing and has been replaced by the Chinese sponsored Regional Comprehensive Economic Partnership (RCEP) with over fifty member countries worldwide, including the ten nations of the Association of Southeast Asian Nations (ASAEN), plus Australia, India, South Korea and New Zealand. Of course, China is funding most of the partnership and, to no one’s surprise, Washington has not been invited to join…

As a result of the highly favorable terms in the RCEP, each and every current and former US ally and colony has been signing on, shifting trade allegiances to China, and effectively changing the configuration of power.

Already Cambodia, Laos, Thailand and Indonesia have formalized growing economic ties with China. The debacle of the TPP has just accelerated the shift toward China’s new trade pact (RCEP). The US is left to rely on its ‘loyalist four’, a stagnant Japan, Australia, South Korea and its impoverished former colony, Philippines, to bolster its quest to militarily encircle China.

The Dangers of Popular Democracy: President Duterte’s Pivot to China and the End of US Supremacy in SE Asia

For over a century (since the invasion of the Philippines in 1896), especially since the end of WWII, when the US asserted its primacy in Asia, Washington has used the strategic Philippine Archipelago as a trampoline for controlling Southeast Asia. Control of the Philippines is fundamental to US Imperialism: Washington’s strategic superiority depends on its access to sea, air, communications and ground bases and operations located in the Philippines and a compliant Philippine ruling class.

The centerpiece of US strategy to encircle and tighten control over China’s maritime routes to and from the world-economy is the massive build-up of US military installations in the Philippines.

The US self-styled “pivot to Asia” involves locating five military bases directed at dominating the South China Sea. The Pentagon expanded its access to four strategic air and one military base through the ‘Enhanced Defense Cooperation Agreement’ signed by the Philippine President Aquino in 2014 but held up by the Philippine Courts until April 2016. These include:

(1) Antonio Bautista Airbase on the island of Palawan, located near the contested Spratly Islands in the South China Sea.

(2) Basa Airbase 40 miles northwest of the Philippines capital of Manila, overlooking the South China Sea.

(3) Lumbia Airbase located in the port of Cagayan de Oro, Mindanao, a huge US facility under construction.

(4) Mactan – Benito Ebuen airbase located on Mactan Island off the coast of Cebu in the central Philippines.

(5) Fort Magsaysay located in Nueva Ecija, on Luzon, the Philippine Army’s Central Training and command center, its largest military installation which will serve the US as the training and indoctrination base for the Philippine army.

Pentagon planners had envisioned targeting Chinese shipping and air bases in the South China Sea from its new bases on western shores of the Philippines. This essentially threatens the stability of the entire region, especially the vital Chinese trade routes to the global economy.

Washington has been intensifying its intervention in the South China Sea relying on decrees issued by its previous proxy President Benigno (Noynoy) Aquino, III (2010-2016). These, however, were not ratified by the Congress and had been challenged by the Philippine Supreme Court.

Washington’s entire ‘pivot to Asia’ has centered its vast military build-up on its access to the Philippines. This access is now at risk. Newly elected President Rodrigo Duterte, who succeeded Aquino in June 2016, is pursuing an independent foreign policy, with the aim of transforming the impoverished Philippines from a subservient US military colony to opening large-scale, long-term economic trade and development ties with China and other regional economic powers. Duterte has openly challenged the US policy of using the Philippines to encircle and provoke China.

The Philippine ‘pivot to China’ quickly advanced from colorful rhetoric to a major trade and investment meeting of President Duterte and a huge delegation of Philippine business leaders with his Chinese counterparts in Beijing in late October 2016. During his first 3 months in office Duterte blasted Washington for meddling in his ongoing campaign against drug lords and dealers. Obama’s so-called ‘concerns for human rights’ in the anti-drug campaign were answered with counter-charges that the US had accommodated notorious narco-politician-oligarchs to further its military base expansion program. President Duterte’s war on drugs expanded well beyond the alleged US narco-elite alliance when he proposed two strategic changes: (1) he promised to end the US-Philippine sea patrols of disputed waters designed to provoke Beijing in the South China Sea; and (2) President Duterte announced he would end military exercises with Washington, especially in Mindanao, because they threatened China and undermined Philippine sovereignty.

President Duterte, in pursuit of his independent nationalist-agenda, has moved rapidly and decisively to strengthen the Philippines ‘pivot’ toward China, which in the context of Southeast Asia is really ‘normalizing’ trade and investment relations with his giant neighbor. During the third week of October (2016) President Duterte, his political team and 250 business leaders met with China’s leaders to discuss multi-billion-dollar investment projects and trade agreements, as well as closer diplomatic relations. The initial results, which promise to expand even more, are over $13 billion dollars in trade and critical infrastructure projects. As the Philippine’s pivot to China advances, the quid pro quo will lead to a profound change in the politics and militarization of Southeast Asian. Without total US control over the Philippines, Washington’s strategic arc of encirclement against China is broken.

According to a recent ruling by the Philippine Supreme Court, the controversial US military base agreement (Enhanced Defense Cooperation Agreement) imposed by the former President Aquino by fiat without congressional ratification can be terminated by the new President by executive order. This ruling punches some major holes in what the Pentagon had considered its ‘ironclad’ stranglehold on the strategic Philippine bases.

The Duterte government has repeatedly announced its administration’s commitment to a program of economic modernization and social reconstruction for Philippine society. That agenda can only be advanced through changes that include multi-billion dollar infrastructure investments, loans and technical cooperation from China, whereas remaining a backward US military colony will not only threaten their Asian economic partners, but will condemn the Philippines to yet another generation of stagnation and corruption. Unique in Southeast Asia, the Philippines has long been mired in underdevelopment, forcing half of its qualified workforce to seek contract servitude abroad, while at home the society has become victims of drug and human trafficking gangs linked to the oligarchs.

Conclusion

Washington’s ‘pivot to Asia’, enshrined in its effort to corral the Asian countries into its anti-China crusade is not going as the Obama-Clinton-Kerry team had envisioned. It is proving to be a major foreign policy debacle for the outgoing and (presumably) incoming US presidential administrations. Democratic Party candidate Hillary Clinton has been forced to denounce the Transpacific Trade Partnership (TPP), one of her own pet projects when she was Secretary of State. The Pentagon’s military base strategy stuck in a 1980’s time-warped vision of Southeast Asia is on the verge of imploding. The Philippines, its former colony and vassal state, is finally turning away from its total subservience to US military dictates and toward greater independence and stronger regional ties to China and the rest of Asia. Southeast Asia and the South China Sea are no longer part of a grand chessboard subject to Pentagon moves for domination.

In desperation, Washington may decide to resort to a military power grab – a coup in the Philippines, backed by a coalition of Manila-based oligarchs, narco-bosses and generals. The problem with a precipitate move to ‘regime change’ is that Rodrigo Duterte is immensely popular with the Philippine electorate – precisely for the reasons that the Washington elite and Manila oligarchs despise him. The mayor of Manila, Joseph Estrada, himself a former victim of a Washington-instigated regime change, has stated that any US backed coup will face a million-member mass opposition and the bulk of the nationalist middle and powerful Chinese-oriented business class. A failed coup, like the disastrous coup in Venezuela in 2002 against Hugo Chavez could radicalize Duterte’s policy well beyond his staunchly nationalist agenda and further isolate the US.

___________________________

See James Petras latest book from Clarity Press: ISBN: 978-0-9972870-5-9, $24.95 / 252 pp. / 2016
http://www.claritypress.com/PetrasVIII.html

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Oct 192016
 

By 99GetSmart

Originally published at MintPressNews:

Far from representing truly alternative voices, three Syriza leaders crafted empty public images as anti-austerity renegades and champions of democracy and justice.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

ATHENS — (Analysis) In January of 2015, opponents of neoliberalism and the harsh policies of economic austerity rejoiced at the electoral victory of Syriza in the Greek parliamentary elections.

Touted as the “first-time left,” the new Syriza-led government was portrayed as a “would-be savior” for Greece. It was further hailed as the regime that would reverse the country’s fortunes and stand up to the demands of Greece’s lenders in the European Commission, the European Central Bank, and the International Monetary Fund–the trio collectively known as the “troika.”

Flash forward to today: One year after ignoring the result of a referendum which rejected further austerity measures proposed by Greek lenders, the Syriza-led government is enforcing the dictates the third memorandum, an even more onerous austerity agreement agreed to in August 2015. In the interim, further legislation has been passed which has ceded control over the entirety of Greece’s publicly-owned assets for 99 years and relinquished the sovereign parliamentary right to pass legislation on key budgetary and economic issues.

The end results of these agreements and the new austerity plan which has followed have been catastrophic. Already-battered pensions have been further slashed by as much as 50 percent or more. The port of Piraeus, 14 profitable regional airports, the national railway system, and the prime site of Athens’ former international airport have been sold off to foreign investors at bargain-basement prices and privatized. The sell-off of Greece’s municipal water utilities, which Syriza officials at one time claimed would occur “over our dead body,” is the next in line to be completed. Further, automatic budget cuts lurk ominously ahead, to be implemented automatically if Greece does not meet its troika-imposed fiscal targets.

After a long period of dormancy, lulled by the promise of a government that was purportedly engaged in hard negotiations with Greece’s lenders, the people of Greece have roared back to life. Air traffic controllers recently staged a wildcat strike, walking off from their jobs in protest of the privatization of Greece’s airports–a process slated to be expanded to the remaining facilities in which the Greek state still owns a share. With nothing left to lose, pensioners have taken to the streets to protest the virtual elimination of their already meager pensions.

A protester chants anti austerity slogans during a demonstration in central Athens, on Friday, May 6, 2016.

A protester chants anti austerity slogans during a demonstration in central Athens, on Friday, May 6, 2016.

While back in January of 2015, the world celebrated as the “saviors” in Syriza removed barricades around the Hellenic Parliament and promised to dissolve the violent, corrupt riot police, nowadays the Syriza government prefers to unleash the very same riot police on elderly, impoverished protesters, who are also targeted with generous sprays of tear gas. Instead of tearing up the memorandum and austerity agreements, as had been promised prior to January of 2015 by current Prime Minister Alexis Tsipras and other Syriza officials, Syriza officials now express regret that the word “memorandum” has been “demonized.”

Within Greece at least, the hero worship previously afforded Syriza has transformed into a wide-ranging sentiment in which many citizens and voters now openly support “anyone but Syriza.” In such a climate, voters have once again begun searching in earnest for a new “savior” to rescue Greece from its death spiral of austerity, hopelessness, and crippling economic depression. Several such political personalities loom large in the imaginations of many voters, including “radical” economist and former finance minister Yanis Varoufakis, former speaker of the Hellenic Parliament and founder of the “Course of Freedom” party Zoe Konstantopoulou, and former energy minister and founder of the Popular Unity party Panagiotis Lafazanis.

Do these personalities represent a true hope for change and optimism? Or are they merely the next in line to follow Syriza’s footsteps in promising radical change but delivering continued austerity instead? Their respective backgrounds and actions while in positions of power reveal the likely answer.

 

Yanis Varoufakis: Radically promoting austerity

Former Greek finance minister Yanis Varoufakis attends a news conference about the launch of a new left-wing pan-Europe political movement called 'Democracy in Europe Movement 2025' in Berlin, Germany, Tuesday, Feb. 9, 2016. (AP Photo/Markus Schreiber)

Former Greek finance minister Yanis Varoufakis attends a news conference about the launch of a new left-wing pan-Europe political movement called ‘Democracy in Europe Movement 2025’ in Berlin, Germany, Tuesday, Feb. 9, 2016. (AP Photo/Markus Schreiber)

Yanis Varoufakis has crafted a reputation for being a “radical,” “anti-austerity” renegade economist who is unafraid to break conventions and tackle the status quo.

However, his record–particularly during his time as Greece’s finance minister from January to July 2015–tells a different story.

In his early days as Syriza’s finance minister, Varoufakis entered negotiations at the February 2015 Eurogroup summit proposing the continuation of 70 percent of previously implemented austerity measures for an additional six months. He refused to raise the possibility of a eurozone departure for Greece, not even as a “plan B” or a negotiation tactic. The 70 percent proposed by Varoufakis ultimately became an agreement for the continuation of 100 percent of the existing austerity measures for four additional months. Varoufakis, in his usual style, described the agreement as an exemplar of “creative ambiguity,” while suggesting that the troika now be referred to as the “institutions” instead.

In these early days of the “first-time left” government, Varoufakis hired Wall Street firm Lazard to advise the Greek finance ministry. This is the same firm which advised the government of George Papandreou (whom Varoufakis advised for six years) on the signing of the first memorandum agreement in 2010, the government of unelected technocrat Lucas Papademos on the introduction of further austerity in 2012, and the previous New Democracy-PASOK coalition government on the privatization of public assets.

Varoufakis’ “radical” rhetoric continued when he repeatedly stated, as finance minister, that Greece’s debt was legal and would be repaid “ad infinitum,” even while a parliamentary committee which was purportedly investigating the legality of this very same debt was in session.

In an interview with The Associated Press, Varoufakis stated that he would “squeeze blood out of stone” in order to repay the IMF, while in another interview, Varoufakis stated that he sought to develop good relations with Christine Lagarde and the IMF, which holds views that he said he personally agreed with. In an interview with Australia’s ABC, Varoufakis further stated that even if the government wanted to proceed with the “Grexit,” it was unable to mint its own currency, claiming that Greece’s mint was destroyed when the country joined the eurozone. In reality, Greece’s mint is still operational; it’s where €10 notes are printed today.

Former Greek Finance Minister Yanis Varoufakis, explains why he thinks Brexit could trigger dire economic consequences for the European Union.

As finance minister, Varoufakis tapped Elena Panaritis as Greece’s representative to the IMF. This is the same Panaritis who was a former World Bank official and who was the architect of the catastrophic “Fuji Shock” policies implemented in Peru under the regime of the now-jailed Alberto Fujimori.

These policies drove millions of Peruvians into poverty, resulted in price increases of up to 8,000 percent on basic goods, and led to the privatization of hundreds of public assets. Later, as a member of parliament with PASOK, Panaritis voted in favor of austerity and the memorandum agreements. In turn, Varoufakis, as finance minister, stated that previously implemented privatizations would not be rescinded and that he supported the privatization of public airports and harbors “under certain conditions.” He also spoke out favorably of the so-called “investments” of China’s COSCO, including the privatization of the port of Piraeus, describing this as a “positive development” for Greece.

Forging ahead in the spring of 2015, Varoufakis, in his capacity as finance minister, oversaw the implementation of a governmental decree which confiscated the cash reserves of the entirety of the Greek public sector. Later ratified by parliament, including Varoufakis’ vote, the decree authorized the payment of the May 2015 installment of Greece’s loans to the IMF with the confiscated funds. This action was then followed up by a 47-page proposal crafted by the finance ministry under Varoufakis’ watch as part of supposedly “fierce” negotiations with the troika. That proposal foresaw €8 billion in new austerity measures, including a perpetually increasing primary budget surplus (which would mean more cuts in order to maintain a surplus in a sinking economy) and the privatization of major public assets.

At around this time, Varoufakis presented a proposal for the introduction of a parallel currency, similar to the IOUs that had been issued by the state of California in 2009. He also announced the impending implementation of capital controls in the form of weekly limits on withdrawals from domestic bank accounts. These capital controls remain in place today and have significantly crippled the Greek economy, particularly small and medium-sized businesses which have been stripped of access to their own capital.

This set the stage for the July 5, 2015 referendum which was scheduled soon thereafter. Varoufakis did not present any proposals to the people of Greece nor give any indication of what the government’s plan would be should the “no” vote against austerity prevail, as it ultimately did. Following his resignation from his post as finance minister–a well-timed move which allowed him to make a heroic exit in time to avoid the forthcoming trainwreck, Varoufakis was absent from the parliamentary vote which ultimately authorized Prime Minister Tsipras to make a deal with the country’s lenders. Varoufakis did publicly state, however, that had he voted in parliament, he would have voted to give Tsipras authorization to reach an agreement—authorization which led to the third, and harshest, memorandum agreement for Greece.

Other highlights of Varoufakis’ tenure include his vote for corrupt conservative former New Democracy minister Prokopis Pavlopoulos as president of the Hellenic Republic, his asinine plan to hire tourists as “tax snitches” to report on cases of tax evasion, his high praise for Margaret Thatcher, and his statements calling for Greeks to lead an “austere existence” while he posed alongside his wife for a photoshoot at his luxury residence in Athens with a view of the Acropolis and a table set with a rich lunch spread.

Yanis Varoufakis poses with his wife on a terrace of the his luxury family villa Danae in Athens.

Yanis Varoufakis poses with his wife on a terrace of the his luxury family villa Danae in Athens.

A scion of a family of wealthy Greek industrialists, Varoufakis is comfortable mingling with a crowd far removed from the “leftist” rhetoric he supposedly embodies. In January of 2015, just prior to that month’s elections, Varoufakis’ new book in Athens was presented by television talking head Babis Papadimitriou, infamous for proposing that the conservative New Democracy consider a future governing coalition with a “more serious” Golden Dawn, Greece’s far-right party.

This is the same Varoufakis who is now poised to “save Europe from itself” through his new pan-European “pro-democracy” movement, DiEM25. The movement claims to have a plan to “reform” EU institutions, yet ignores the deeply undemocratic, authoritarian foundations upon which it has been constructed. And it further refuses to raise the specter of abolishing the grossly neoliberal European common currency project or to advocate for the bloc’s weaker economies to depart from the eurozone, including Greece.

 

Zoe Konstantopoulou: Charting a new course or more of the same?

Zoe Konstantopoulou acknowledges the supporters during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Zoe Konstantopoulou acknowledges the supporters during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Even more so than Yanis Varoufakis, the political figure who has been presented as a beacon of hope and change in Greece in recent months is Zoe Konstantopoulou, president of the Hellenic Parliament during the first Syriza-led government of January to August 2015. Like Varoufakis, she stems from a prominent family: Her father, Nikos Konstantopoulos, had been the head of Syriza’s predecessor party, Synaspismos, while her mother, Lina Alexiou, is the acting president of the (essentially defunct) National Committee for Radio and Television, a rough equivalent of the United States’ FCC.

As president of the Hellenic Parliament, Konstantopoulou (via the same mass media which was purportedly battling her at every turn) engineered an image of a fierce champion of law and justice. This perception was formulated both as a result of the establishment of a parliamentary commission to audit Greece’s debt—overseen by Konstantopoulou—and by seemingly not being afraid to speak out against the male-dominated Greek political establishment.

The devil is in the details, however, and many of the details of Konstantopoulou’s tenure were overlooked. The debt audit commission began its investigation in parallel with statements repeatedly being made by Yanis Varoufakis, Prime Minister Tsipras, other Syriza government ministers, and even the newly-elected president of the Hellenic Republic, Prokopis Pavlopoulos, promising that Greece’s debt would be repaid in full.

Watch Zoe Konstantopoulou speak out against the Greek government’s agreement with the European troika regarding the political and economic countermeasures to the Greek government-debt crisis:

The otherwise outspoken Konstantopoulou did not respond to these statements, nor did she address actions such as the implementation of a decree to confiscate the cash reserves of the Greek public sector for the purpose of repaying an IMF loan installment. In fact, Konstantopoulou voted for Pavlopoulos in the parliamentary vote to confirm him as the Hellenic Republic’s president, just as she voted to confirm all of the austerity bills passed by the Syriza-led government during its initial term in power.

Far from speaking out, Konstantopoulou publicly stated in May 2015 that Syriza’s pre-election promises to “tear apart the austerity agreements” were a mere “figure of speech.” These are hardly the actions of a dynamic anti-austerity advocate of justice, and neither was her show of support in favor of the Tsipras government following the betrayal of the July 5, 2015 referendum result which rejected the lenders’ austerity proposals. Instead of speaking out against the government or resigning from her post–even at that late moment, even following the passage of the third and harshest memorandum agreement to date, Konstantopoulou continued to publicly support Tsipras and the Syriza-led government, just as she, as president of parliament, never suspended parliamentary debate as further austerity bills were being debated. Konstantopoulou courageously voted “present” (as opposed to “no”) in the parliamentary vote ratifying the third memorandum agreement. The public proclamations of support for the Tsipras government only ceased when Konstantopoulou and other Syriza “renegades” were informed that they would not be included on the ballot for the September 2015 snap parliamentary elections.

This tenure has apparently served as the perfect preparation for Konstantopoulou to now swoop in and save the day for Greece and its people. This past spring, she announced the establishment of the Course of Freedom political party, which promises to deliver an end to austerity and to chart a course for a “plan B” for the country—a plan, however, which does not encompass a departure from the eurozone or the European Union, but instead proposes a parallel domestic currency in circulation alongside the euro and the likely formation of a two-tiered economy of “haves” and “have nots.”

 

Panagiotis Lafazanis: Hardly a fresh face

Panagiotis Lafazanis, former energy minister and head of the left-wing Popular Unity party, flashes the victory sign during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Panagiotis Lafazanis, former energy minister and head of the left-wing Popular Unity party, flashes the victory sign during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Panagiotis Lafazanis is no stranger to the political landscape. An old mainstay of the Greek “left,” Lafazanis has passed through Greece’s Communist Party (KKE), Syriza’s predecessor party Synaspismos, and Syriza prior to founding the Popular Unity political party ahead of the September 2015 elections.

In the first Syriza-led government of January to August 2015, a particularly sensitive time for such issues in Greece, Lafazanis served as energy and environment minister. His portfolio encompassed the issue of the controversial and environmentally damaging gold-mining activities in Skouries in northern Greece, as well as the potential privatization of Greece’s largest water utilities. Syriza, prior to being elected, campaigned heavily against the activities in Skouries and against the privatization of water utilities, which Tsipras had once said would occur “over our dead body.”

While Lafazanis did suspend two licenses issued to the operators of the Skouries mine, the Canadian-owned Barrick Gold Corp., gold mining activity in the region continued, as did the government’s talks with Suez and other foreign corporations which are interested in buying up Greek water utilities. Lafazanis deliveredmixed messages, stating his opposition to the mining activities while referencing Greece’s “commitments” to its investors. Like Yanis Varoufakis and Zoe Konstantopoulou, Lafazanis voted in favor of the election of Prokopis Pavlopoulos as president of the Hellenic Republic; he also voted yes for all of the austerity bills presented by the Syriza-led government leading up to the July 5, 2015 referendum.

Like Konstantopoulou, Lafazanis also continued to support the Syriza-led government even after the betrayal of the July 5, 2015 referendum outcome. This support continued until Lafazanis, like Konstantopoulou, was not included on the Syriza ballot for the September 2015 snap elections. It was at this time that Lafazanis hastily announced the formation of Popular Unity, a purportedly anti-austerity party which essentially regurgitated the old Syriza promises from prior to its initial elections, while presenting mixed messages regarding its stance on a “Grexit” and whether Greece should remain in the eurozone or return to a domestic currency.

 

Discovering the savior within

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

Far from representing truly alternative voices, Yanis Varoufakis, Zoe Konstantopoulou, and PanagiotisLafazanis have acted as political opportunists. They’ve crafted a public image as anti-austerity renegades and champions of democracy and justice, even as their real actions while in a position of power and authority belied that empty rhetoric.

This matches Syriza’s ascension to power and its current ludicrous efforts to pass off the harsh austerity and privatization regime that they are enforcing as an example of “leftist” politics and a triumph of “social justice.” It is absurd to believe that political figures who voted for and justified the policies that they are supposedly denouncing, are capable of delivering on those same promises.

Instead of placing all their hopes with the next establishment-anointed political savior or an official electoral process, Greek voters have a golden opportunity to make their voices heard and demand real change. Each day is a chance to call for an end to stifling austerity and privatizations that are further crippling the domestic economy, the much-needed reform of Greece’s corrupt justice system and collapsing educational and health care systems, and a departure from the European Union and the eurozone, two institutions which have been so destructive for Greece, its people, and its economy.

Even as more and more rumors circulating in Greece of impending snap parliamentary elections, the time has come for the people of Greece to become their own saviors rather than place their homes with tired, discredited political retreads.

 

Oct 192016
 

By James Petras99GetSmart

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During most of the past two decades Washington has aggressively launched military and economic wars against at least nine countries, either directly or through its military aid to regional allies and proxies. US air and ground troops have bombed or invaded Afghanistan, Iraq, Pakistan, Libya, Somalia, Syria, Yemen, and Lebanon.

More recently Washington has escalated its global economic war against major economic rivals as well as against weaker countries. The US no longer confines its aggressive impulses to peripheral economic countries in the Middle East, Latin America and Southern Asia: It has declared trade wars against world powers in Asia, Eastern and Central Europe and the Gulf states.

The targets of the US economic aggression include economic powerhouses like Russia, China, Germany, Iran and Saudi Arabia, as well as Syria, Yemen, Venezuela, Cuba, and the Donbas region of Ukraine.

There is an increasingly thinner distinction between military and economic warfare, as the US has frequently moved from one to the other, particularly when economic aggression has not resulted in ‘regime change’ – as in the case of the sanctions campaign against Iraq leading up to the devastating invasion and destruction.

In this essay, we propose to examine the strategies and tactics underlying Washington’s economic warfare, their successes and failures, and the political and economic consequences to target nations and to world stability.

Washington’s Economic Warfare and Global Power

The US has used different tactical weapons as it pursues its economic campaigns against targeted adversaries and even against its long-time allies.

Two supposed allies, Germany and Saudi Arabia, have been attacked by the Obama Administration and US Congress via ‘legal’ manipulations aimed at their financial systems and overseas holdings. This level of aggression against sovereign powers is remarkable and reckless. In 2016 the US Justice Department slapped a $14 billion dollar penalty on Germany’s leading international bank, Deutsche Bank, throwing the German stock market into chaos, driving the bank’s shares down 40% and destabilizing Germany’s financial system. This unprecedented attack on an ally’s major bank was in direct retaliation for Germany’s support of the European Commission’s $13 billion tax levy against the US-tax evading Apple Corporation for its notorious financial shenanigans in Ireland. German political and business leaders immediately dismissed Washington’s legalistic rhetoric for what it was: the Obama Administration’s retaliation in order to protect America’s tax evading and money laundering multinationals.

The chairman of the German parliament’s economic committee stated that the gross US attempt to extort Deutsche Bank had all the elements of an economic war. He noted that Washington had a “long tradition of using every available opportunity to wage what amounted to a trade war if it benefits their own economy” and the “extortionate damages claim” against Deutsche Bank were a punitive example. US economic sanctions against some of Germany’s major trade partners, like Russia, China and Iran, constitute another tactic to undermine Germany’s huge export economy. Ironically, Germany is still considered “a valued ally” when it comes to the US wars against Syria, Afghanistan and Iraq, which have driven millions of refugees to Europe creating havoc with Germany’s political, economic and social system and threatening to overthrow the government of ‘ally’ Angela Merkel.

The US Congress launched an economic-judicial war against its closest ally in the Gulf region when it approved legislation granting US victims of Islamist terrorism, especially related to the attacks on September 11, 2001 the right to sue the government of Saudi Arabia and seize its overseas assets. This included the Kingdom’s immense ‘sovereign funds’ and constitutes an arbitrary and blatant violation of Saudi sovereignty. This opens the Pandora’s Box of economic warfare by allowing victims to sue any government for sponsoring terrorism, including the United States! Saudi leaders immediately reacted by threatening to withdraw billions of dollars of assets in US Treasuries and investments.

The US economic sanctions against Russia are designed to strengthen its stranglehold on the economies of Europe which rely on trade with Russia. These have especially weakened German and Polish trade relations with Russia, a major market for German industrial exports and Polish agriculture products. Originally, the US-imposed economic sanctions against Moscow were supposed to harm Russian consumers, provoke political unrest and lead to ‘regime change’. In reality, the unrest it provoked has been mainly among European exporters, whose contracts with Russia were shredded and billions of Euros were lost. Furthermore, the political and diplomatic climate between Europe and Russia has deteriorated while Washington has ‘pivoted’ toward a more militaristic approach.

Results in Asia have been even more questionable: Washington’s economic campaign against China has moved awkwardly in two directions: Prejudicial trade deals with Asian-Pacific countries and a growing US military encirclement of China’s maritime trade routes.

The Obama regime dispatched Treasury Secretary Jack Lew to promote the Trans- Pacific Partnership (TPP) among a dozen regional governments, which would blatantly exclude China, Asia’s largest economic power. In a slap to the outgoing Obama Administration, the US Congress rejected his showpiece economic weapon against China, the TPP.

Meanwhile, Obama ‘encouraged’ his erstwhile ‘allies’ in the Philippines and Vietnam to sue China for maritime violations over the disputed ‘Spratly Islands’ before the Permanent Court of Arbitration. Japan and Australia signed military pacts and base agreements with the Pentagon aimed at disrupting China’s trade routes. Obama’s so-called ‘Pivot to Asia’ is a transparent campaign to block China from its markets and trading partners in Southeast Asia and Pacific countries of Latin American. Washington’s flagrant economic warfare resulted in slapping harsh import tariffs on Chinese industrial exports, especially steel and tires. The US also sent a ‘beefed up’ air and sea armada for ‘joint exercises’ along China’s regional trade routes and its access to critical Persian Gulf oil, setting off a ‘war of tension’.

In response to Washington’s ham-fisted aggression, the Chinese government deftly rolled out the Asian Infrastructure Investment Bank (AIIB) with over fifty countries eagerly signing on for lucrative trade and investment deals with Beijing. The AIIB’s startling success does not bode well for Obama’s ‘Pivot to Pacific Hegemony’.

The so-called US-EU-Iran accord did not end Washington’s trade war against Tehran. Despite Iran’s agreement to dismantle its peaceful uranium enrichment and nuclear research programs, Washington has blocked investors and tried to undermine trade relations, while still holding billions of dollars of Iranian state assets, frozen since the overthrow of the Shah in 1979. Nevertheless, a German trade mission signed on a three billion trade agreement with Iran in early October 2016 and called on the US to fulfill its side of the agreement with Tehran – so far to no avail.

The US stands alone in sending its nuclear naval armada to the Persian Gulf and threatens commercial relations. Even the Kingdom of Saudi Arabia, the longstanding enemy of the Iranian Islamic Republic, has agreed to a cooperative oil production arrangement at a recent OPEC meeting.

Washington’s declaration of economic warfare against two of its most strategic powerful allies, Germany and Saudi Arabia and three rising competitor world powers, has eroded US economic competitiveness, undermined its access to lucrative markets and increased its reliance on aggressive military strategies over diplomacy.

What is striking and perplexing about Washington’s style of economic warfare is how costly this has been for the US economy and for US allies, with so little concrete benefit.

US oil companies have lost billions in joint exploitation deals with Russia because of Obama’s sanctions. US bankers, agro-exporters, high-tech companies are missing out on lucrative sales just to ‘punish’ Russia over the incredibly corrupt and bankrupt US coup regime in Ukraine.

US multi-national corporations, especially those involved in Pacific Coast transport and shipyards, Silicon Valley high tech industry and Washington State’s agro-export producers are threatened by the US trade agreements that exclude China.

Iran’s billion dollar market is looking for everything from commercial airplanes to mining machinery. Huge trade deals have has been lost to US companies because Obama continues to impose de facto sanctions. Meanwhile, European and Asian competitors are signing contracts.

Despite Washington’s dependence on German technical knowhow and Saudi petro-dollar investments as key to its global ambitions, Obama’s irrational policies continue to undermine US trade.

Washington has engaged in economic warfare against ‘lesser economic powers’ that nevertheless play significant political roles in their regions. The US retains the economic boycott of Cuba; it wages economic aggression against Venezuela and imposes economic sanctions against Syria, Yemen and the Donbas region in eastern Ukraine. While these countries are not costly in terms of economic loss to US business interests, they exercise significant political and ideological influence in their regions, which undermine US ambitions.

Conclusion

Washington’s resort to economic warfare complements its military fueled empire building.

But economic and military warfare are losing propositions. While the US may extract a few billion dollars from Deutsch Bank, it will have lost much more in long-term, large-scale relations with German industrialists, politicians and financiers. This is critical because Germany plays the key role in shaping economic policy in the European Union. The practice of US multi-national corporations seeking off-shore tax havens in the EU may come to a grinding halt when the European Commission finishes its current investigations. The Germans may not be too sympathetic to their American competitors.

Obama’s Trans-Pacific Partnership (TPP) has not only collapsed, it has compelled China to open new avenues for trade and cooperation with Asian-Pacific nations – exactly the opposite of its original goal of isolating Beijing. China’s Asia Infrastructure and Investment Bank (AIIB) has attracted 4 time more participants than Washington’s TPP and massive infrastructure projects are being financed to further bind ASEAN countries to China. China’s economic growth at 6.7% more than three times that of the US at 2%. Worse, for the Obama Administration, Washington has alienated its historically most reliable allies, as China, deepens economic ties and cooperation agreements with Thailand, Philippines, Pakistan, Cambodia and Laos.

Iran, despite US sanctions, is gaining markets and trade with Germany, Russia, China and the EU.

The Saudi-US conflict has yet to play-out, but any escalation of law suits against the kingdom will result in the flight of hundreds of billions of investment dollars from the US.

In effect, Obama’s campaign of economic warfare may lead to the infinitely more costly military warfare and the massive loss of jobs and profits for the US economy. Washington is increasingly isolated. The only allies supporting its campaign of economic sanctions are second and third rate powers, like Poland and current corrupt parasites in Ukraine. As long as the Poles and Ukrainians can ‘mooch’ off of the IMF and grab EU and US ‘loans’, they will cheerlead Obama’s charge against Russia. Israel, as long as it can gobble up an additional $38 billion dollars in ‘aid’ from Washington, remains the biggest advocate for war against Iran.

Washington spends billions of US tax-payer dollars on its military bases in Japan, Philippines and Australia to maintain its hegemony in the Asia-Pacific region. Its allies, though, are salivating at the prospect for greater trade and infrastructure investment deals with China.

Economic warfare doesn’t work for the Washington because the US economy cannot compete, especially when it attacks its own allies and traditional partners. Its regional allies are keen to join the ‘forbidden’ markets and share in major investment projects funded by China. Asian leaders increasingly view Washington, with its ‘pivot to militarism’ as politically unreliable, unstable and dangerous. After the Philippine government economic mission to China, expect more to ‘jump ship’.

Economic warfare against declared adversaries can only succeed if the US is committed to free trade with its allies, ends punitive sanctions and stops pushing for exclusive trade treaties that undermine its allies’ economies. Furthermore, Washington should stop catering to the whims of special domestic interests. Absent these changes, its losing campaign of economic warfare can only turn into military warfare – a prospect devastating to the US economy and to world peace.

James Petras is author of  The End of the Republic and the Delusion of EmpireExtractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer), and The Politics of Empire: The US, Israel and the Middle EastRead other articles by James, or visit James’s website.

Oct 112016
 

By James Petras99GetSmart

temer-dilma

Introduction

Brazilian President Dilma Rousseff was removed from office through a well-organized, carefully planned operation among the corrupt Brazilian political elite, closely linked to the stock-market, financial institutions and foreign energy companies. This ‘legislative coup d’état ’eliminated the democratically-elected ‘political intermediaries’ and installed a regime directly controlled by the CEOs of leading multi-nationals. The corporate composition of the post-coup regime insured there would be a radical restructuring of the Brazilian economy, with a massive shift from wage support, social spending and public ownership toward profits, a foreign capital take-over of strategic sectors and foreign-domestic elite dominance over the entire economy.

This paper will describe the socio-economic dynamics of the coup and its aftermath, as well as the strategy and program that Brazil’s new rulers will pursue. In the second half of the paper, we will discuss the Workers Party regimes’ policies (under Lula and Rousseff) that prepared the political and economic ground-work for the right-wing seizure of power.

Socio-Economic Dynamics of the Coup

The overthrow of President Rousseff was organized and implemented by Brazil’s capitalist class for its benefit, even though it had the superficial appearance of a power grab by corrupt politicians.

Rousseff’s Vice-President, Michel Temer, acted as the front-man on behalf of the major investment banks: They set the agenda; he played his part.

Moreover, the principal beneficiaries of the economic giveaways under ‘President’ Temer, most notably the privatization of the energy sector, are clearly foreign capitalists. Once the coup makers lined up the votes among Brazil’s notoriously corrupt Congressmen to oust Rousseff, the multinational corporations emerged from the shadow of the stock market to take control over the levers of power.

In the run-up to the coup, when the so-called ‘impeachment’ was gaining momentum, the shares of the largely state-owned oil company sky-rocketed by 70%. In anticipation of the privatization and sell-off of assets, leading speculators and overseas investment houses seized the moment.

The ‘coup’ was no ‘secretive conspiracy’ – it was an overt, direct capitalist seizure of power. Once installed, it proceeded to dismantle the public sector economy and transfer the jewels of Brazil’s economy to foreign multi-nationals.

Master of Pillage

To ensure that the coup would not deviate from the course set by the capitalist coup-masters, Pedro Parente, ‘one of their own’ and the former head (CEO) of the giant agricultural trader, Bunge, was put in charge of the economy. With dizzying speed, Parente imposed the New Order onto the puppet Temer coup regime. He used a set of phony ‘technocratic’ euphemisms to explain the ongoing plunder of Petrobras, the state oil company.

Parente lowered Petrobras’ public investment sector by 25%, which he called ‘debt reduction’. The brutal programed sell-off of Petrobras’ most valuable assets was described as a ‘deleverage timetable’.

The unelected ‘Privatization Czar Parente’, in effect, ended the state’s role in the Brazilian economy by placing it under the exclusive dictates of private capitalist. The primary beneficiaries will prove to be foreign over national capital.

Parente has undermined the competitiveness of the national manufacturing sector and transport system with a hefty increase in domestic fuel prices. On the surface, he claimed the price increase would ‘raise profits for Petrobras’, obscuring the fact that the oil giant’s public assets had been given over to private capitalists. Meanwhile, Parente privatized the gas stations, ethanol production and distribution, as well as the billion-dollar fertilizer and petro chemical industry. Over $15 billion worth of Brazilian prime public assets were sold off to private, mostly foreign capital, in 2015-2016.

Parente’s onslaught deepened. The ‘grand prize’ was access to its rich off-shore oil fields. By the middle of 2016, a large-scale offshore oil license was sold to the Norwegian multi-national, Statoil, for a mere $2.5 billion.

With Parente in command, the ruling elite is on track to sell-off an additional $20 billion worth of Petrobras assets to foreign capital in 2017-18. The key goal has been to replace the state sector as lead operator in the deep water oil and gas fields.

The ongoing pillage of the Brazil’s huge state energy sector, is only the first course in an orgy of privatization: Infrastructure, transport, utilities and basic state-protected industries are on the chopping block. This private plunder of the state economic jewels accompanies a brutal slashing of public pensions, salaries and wages guarantees as well as public sector budgets for health and education and public workers. In order to reduce corporate taxes, increase profits and attract capital, the coup regime has ordered the cuts by fiat.

Conclusion: Challenges to Capitalist Power

The capitalist class seized state power through the corrupt political and judicial machinations of Brazil’s Vice President and Congressional cronies. The take-over was based on a series of alleged corruption scandals by the Workers Party. The fact that the entire Brazilian congress, most notably the capitalist operatives behind the coup, has been deeply immersed in the scandal over an alleged $15 billion looted from Petrobras, undermines their credibility. In fact, the ousted President Rousseff was cleared of all charges of corruption, while her successor faces ongoing investigations. This tragic comedy exposes that some members of the Workers Party are tiny amateurs in this orgy of capitalist plunder.

The current President Michel Temer is charged with receiving bribes from private contractors. If these investigations undermine his already dubious leadership, the capitalist coup-masters will be forced to call for early election. This will introduce considerable uncertainty about the viability of Privatization Czar Parente’s capitalist power grab.

The regime’s ‘slash and burn’ campaign against wages and pensions has heightened class conflicts within Brazil. The three major labor confederations are preparing for major strikes against a regime of questionable legitimacy.

The business coup has allowed the capitalist class to seize state power and decree its agenda. However it has yet to show it can directly impose its draconian polices aimed at reconcentrating wealth and income for the top five percent while repressing scores of millions of industrial workers, rural landless laborers and the urban poor.

In addition, while the rulers can offer the jewels of Brazil’s economy to foreign capital, the current low oil prices, ongoing corruption trials at the highest level of elite power and intensifying class conflicts will undermine their ability to implement their agenda. Indeed the prospect of escalating state repression and criminal gang violence may persuade foreign capitalists to skim off the top of Brazil’s most profitable assets and abandon the ensuing chaos.

Epilogue

After 13 years of Workers Party control of the Brazilian presidency, how did the coup-masters rise so quickly and decisively? The political leader of the coup was Vice President Michel Tener, who had been selected by the Workers Party (PT) leadership as part of their ‘coalition strategy’ of working with the most corrupt elements of the Brazilian capitalist class. The members of the Congressional majority, which voted to impeach President Rousseff, were in partnership with the PT, elected in joint election platforms. The economic decline and recession, which undermined public support for the PT government, was a result of its emphasis on the ‘boom and bust’ commodity strategy. The strategic role played by the private banking and business sector in the ‘legislative coup’ resulted from the PT’s decision to implement the privatizations started by the previous regime of President Cardoso, thus strengthening this parasitic class.

Above all, it was the PT’s new reliance on financing their political campaigns through the donation of contractors and the business elites, instead of combining electoral politics with class warfare and mass struggle that opened the Party to the everyday corrupt practices of the capitalist parties. It is a perverse justice that only the PT newcomers to political corruption would be caught and prosecuted!

In other words’ the PT continued to win elections by becoming a normal bourgeois party with its social welfare agenda reliant on an unstable capitalist growth cycle of commodity exports. The PT were profoundly mistaken when they saw their alliance with the capitalist class as something permanent rather than an ‘alliance of convenience’ where the business elite would tolerate them until it was in a position to overthrow them.

Oct 052016
 

By James Petras99GetSmart

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“What Russia is sponsoring and doing [in Syria] is not counter-terrorism it is barbarism” – Samantha Power, US Representative to the United Nations

Introduction

The US representative to the United Nations, Ambassador ‘Ranting Sam’ Samantha Power, accused the Russian and Syrian governments of ‘barbarism’, claiming Moscow or Damascus had attacked an unarmed United Nations humanitarian convoy delivering aid to civilians in Aleppo. No evidence was presented. Rants and threats do not require facts or proof; they only require vehement emotional ejaculations and compliant mass propaganda organs.

‘Barbarians’, to be clear, evoke images of leaders and groups, which abjure all civilized norms and laws. They only respond to armed force.

In the present context Power’s charges of barbarism against Russia and Syria was used to justify the US aerial bombardment of a Syrian army outpost, which killed and maimed almost 200 government troops engaged in combating ISIS terrorists and jihadi invaders.

In other words, accusing Syrian soldiers of ‘barbarism’ was Ambassador Power’s cynical way of dehumanizing the young victims of an earlier and deliberate US war crime.

Let’s analyze the appropriate context for the use and abuse of the language of ‘barbarism’ – and its rightful application.

Barbarism: The Deed

Over the past decade and a half, the US and its allies have invaded, occupied, killed, wounded and dispossessed over ten million people, in countries from Afghanistan, Iraq, Somalia, Libya, Syria, Yemen and Lebanon. Military and civilian officials have systematically destroyed entire economies, fostered ethno-religious wars, undermined ancient community and family ties and placed corrupt political puppets in power.

Promoted by the US, torture, arbitrary arrest and incarceration have become the norm creating lawless and chaotic societies, which had once been productive and stable. The shredding of  social structures has provokes massive population flight, with millions of desperate refugees fleeing invasions, wars and total society breakdown. The result of these deliberate imperial policy decisions has been emptied cities and neighborhoods, broken families, destroyed lives and futures for many millions of young Arabs and Muslims.

As the human toll mounts and Western Europe is flooded with the results of US aggressive wars, the imperialists have sharpened their shrill rhetoric, labeling all of their adversaries and critics as ‘accomplices in war crimes’, and ‘barbarians’.

The greater and more sustained the policy of wanton imperial pillage, the more intense the frustration of its leaders over its ultimate failures, and the greater the recourse of its ‘diplomats’ to vituperative language.

Barbarism in Search of Barbarians

The barbarism underlying the US and EU imperial wars of conquest in the Middle East is unmatched. The principal adversaries to US aggression, Russia, China and Iran, have not invaded any sovereign countries, nor have they provoked the desperate flight of millions of refugees. Russia was invited to aid its Syrian government ally confronting an invasion of terrorist mercenaries who are intent on dividing the country. Crimea peacefully re-joined Russia via elections. Moscow rejected playing any military role in support of Western wars against Iraq, Yemen and Libya. None of this rose to the level of US-EU barbarism.

In Asia, the West has invaded and devastated Viet Nam, the Philippines and Afghanistan. Japan, now a US ally, had invaded China, Korea and Southeast Asia. China for its part has not engaged in any imperial war of conquest for centuries.

Iran has not invaded any country in modern times. On the contrary, Iraq invaded Tehran in the 1980’s with US support and waged a decade-long war which caused millions of casualties.

In truth, if waging wars, staging invasions, destroying whole societies and causing millions of deaths are the measure of barbarism, then the US, Europe and Japan have been clearly barbaric.

To claim otherwise and follow the ranting script of Ambassador Samantha Power is to enter into a tunnel of hallucinations where the language of liberal values embellishes truly barbarian acts.

The entire language of politics has been perverted and converted into an artifice of self-delusion. Terrorist militias are re-packaged as ‘rebels’ and ‘moderates’, spreading barbarism from the imperial Western center to the periphery. The deliberate spread of terrorism is itself a barbaric deed, which degrades the status of Western powers.

Conclusion

In ancient Greece, the barbarians were those outside of the empire who did not speak the language of civilization. They were savage invaders seeking to pillage the wealth and culture of the empire. Today the barbarians emerge from inside the empire and spread outward. The imperial leaders have engaged in serial wars of destruction and pillage, even as their own societies and economies wallow in ignorance, misery, debt, addiction and criminality. Imperial barbarians devastate whole cultures, erasing the great historical legacy of ancient civilizations like Iraq and Syria, while imposing their culture of morons, drugs and electronic gadgets, which has already infantilized its own population.

The empire of barbarians is infested with moneychangers and corrupt speculators. They have debased the entire legal system and legislative bodies. The public space has become a private latrine for the elite, closed to any real public discourse and debate.

Electoral spectacles, rather than reasoned debates, undermine republican principles. Imperial conquerors, enmeshed in a military metaphysic, cannot reconstruct a devastated society into a productive colony, nor can they learn or benefit from the best and brightest among its captives, as Rome did with Greece, because it has sown such destruction and salted the very soil under the feet of its conquered peoples.

The barbarian-imperial world order is constantly at war with ‘others’ and can never assimilate and learn from the precious human treasures it has so wantonly destroyed. It rules by terror abroad and deceit at home. As so crudely displayed by the imperial rants of Ambassador Samantha Power, its oratory at international forums reflect the hysteria of mediocre functionaries: mindless barbarians raving among themselves in marbled echo chambers.

In the end, the imperial barbarians will be besieged by their own fleeing vassals and puppets. When they finally confront their own decay and internal dissolution they have to decide whether to engage in a last global conflagration or dismantle the imperial barbaric order and choose justice, law and civilization.

Oct 042016
 

By James Petras, 99GetSmart

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Introduction

Washington’s quest for perpetual world power is underwritten by systematic and perpetual propaganda wars. Every major and minor war has been preceded, accompanied and followed by unremitting government propaganda designed to secure public approval, exploit victims, slander critics, dehumanize targeted adversaries and justify its allies’ collaboration.

In this paper we will discuss the most common recent techniques used to support ongoing imperial wars.

Propaganda Techniques of Empire

            Role Reversal

A common technique, practiced by the imperial publicists, is to accuse the victims of the same crimes, which had been committed against them. The well documented, deliberate and sustained US-EU aerial bombardment of Syrian government soldiers, engaged in operations against ISIS-terrorist, resulted in the deaths and maiming of almost 200 Syrian troops and allowed ISIS-mercenaries to overrun their camp. In an attempt to deflect the Pentagon’s role in providing air cover for the very terrorists it claims to oppose, the propaganda organs cranked out lurid, but unsubstantiated, stories of an aerial attack on a UN humanitarian aid convoy, first blamed on the Syrian government and then on the Russians. The evidence that the attack was most likely a ground-based rocket attack by ISIS terrorists did not deter the propaganda mills. This technique would turn US and European attention away from the documented criminal attack by the imperial bombers and present the victimized Syrian troops and pilots as international human rights criminals.

Hysterical Rants

Faced with world opprobrium for its wanton violation of an international ceasefire agreement in Syria, the imperial public spokespeople frequently resort to irrational outbursts at international meetings in order to intimidate wavering allies into silence and shut down any chance for reasonable debate resolving concrete issues among adversaries.

The current ‘US Ranter-in-Chief’ in the United Nations, is Ambassador Samantha Power, who launched a vitriolic diatribe against the Russians in order to sabotage a proposed General Assembly debate on the US deliberate violation (its criminal attack on Syrian troops) of the recent Syrian ceasefire. Instead of a reasonable debate among serious diplomats, the rant served to derail the proceedings.

Identity Politics to Neutralize Anti-Imperialist Movements

Empire is commonly identified with the race, gender, religion and ethnicity of its practioners. Imperial propagandists have frequently resorted to disarming and weakening anti-imperialist movements by co-opting and corrupting black, ethnic minority and women leaders and spokespeople. The use of such ‘symbolic’ tokens is based on the assumption that these are ‘representatives’ reflecting the true interests of so-called ‘marginalized minorities’ and can therefore presume to ‘speak for  the oppressed peoples of the world’. The promotion of such compliant and respectable ‘minority members’ to the elite is then propagandized as a ‘revolutionary’, world liberating historical event – witness the ‘election’ of US President Barack Obama.

The rise of Obama to the presidency in 2008 illustrates how the imperial propagandists have used identity politics to undermine class and anti-imperialist struggles.

Under Obama’s historical black presidency, the US pursued seven wars against ‘people of color’ in South Asia, the Middle East and North Africa. Over a million men and women of sub-Saharan black origin, whether Libyan citizens or contract workers for neighboring countries, were killed, dispossessed and driven into exile by US allies after the US-EU destroyed the Libyan state – in the name of humanitarian intervention. Hundreds of thousands of Arabs have been bombed in Yemen, Syria and Iraq under President Obama, the so-called ‘historic black’ president. Obama’s ‘predator drones’ have killed hundreds of Afghan and Pakistani villagers. Such is the power of ‘identity politics’ that ignominious Obama was awarded the ‘Nobel Peace Prize’.

Meanwhile, in the United States under Obama, racial inequalities between black and white workers (wages, unemployment, access to housing, health and educational services) have widened. Police violence against blacks intensified with total impunity for ‘killer cops’. Over two million immigrant Latino workers have been expelled – breaking up hundreds of thousands of families – and accompanied by a marked increase of repression compared to earlier administrations. Millions of black and white workers’ home mortgages were foreclosed while all of the corrupt banks were bailed out – at a greater rate than had occurred under white presidents.

This blatant, cynical manipulation of identity politics facilitated the continuation and deepening of imperial wars, class exploitation and racial exclusion. Symbolic representation undermined class struggles for genuine changes.

Past Suffering to Justify Contemporary Exploitation

Imperial propagandists repeatedly evoke the victims and abuses of the past in order to justify their own aggressive imperial interventions and support for the ‘land grabs’ and ethnic cleansing committed by their colonial allies – like Israel, among others. The victims and crimes of the past are presented as a perpetual presence to justify ongoing brutalities against contemporary subject people.

The case of US-Israeli colonization of Palestine clearly illustrates how rabid criminality, pillage, ethnic cleansing and self-enrichment can be justified and glorified through the language of past victimization. Propagandists in the US and Israel have created ‘the cult of the Holocaust’, worshiping a near century-old Nazi crime against Jews (as well as captive Slavs, Gypsies and other minorities) in Europe, to justify the bloody conquest and theft of Arab lands and sovereignty and engage in systematic military assaults against Lebanon and Syria. Millions of Muslim and Christian Palestinians have been driven into perpetual exile. Elite, wealthy, well-organized and influential zionist Jews, with primary fealty to Israel, have successfully sabotaged every contemporary struggle for peace in the Middle East and have created real barriers for social democracy in the US through their promotion of militarism and empire building. Those claiming to represent victims of the past have become among the most oppressive of contemporary elites. Using the language of ‘defense’, they promote aggressive forms of expansion and pillage. They claim their monopoly on historic ‘suffering’ has given them a ‘special dispensation’ from the rules of civilized conduct: their cult of the Holocaust allows them to inflict immense pain on others while silencing any criticism with the accusation of ‘anti-Semitism’ and relentlessly punishing critics. Their key role in imperial propaganda warfare is based on their claims of an exclusive franchise on suffering and immunity from the norms of justice.

Entertainment Spectacles on Military Platforms

Entertainment spectacles glorify militarism. Imperial propagandists link the public to unpopular wars promoted by otherwise discredited leaders. Sports events present soldiers dressed up as war heroes with deafening, emotional displays of ‘flag worship’ to celebrate the ongoing overseas wars of aggression. These mind-numbing extravaganzas with crude elements of religiosity demand choreographed expressions of national allegiance from the spectators as a cover for continued war crimes abroad and the destruction of citizens’ economic rights at home.

Much admired, multi-millionaire musicians and entertainers of all races and orientations, present war to the masses with a humanitarian facade. The entertainers smiling faces serve genocide just as powerfully as the President’s benign and friendly face accompanies his embrace of militarism. The propagandist message for the spectator is that ‘your favorite team or singer is there just for you … because our noble wars and valiant warriors have made you free and now they want you to be entertained.’

The old style of blatant bellicose appeals to the public is obsolete: the new propaganda conflates entertainment with militarism, allowing the ruling elite to secure tacit support for its wars without disturbing the spectators’ experience.

Conclusion

Do the Imperial Techniques of Propaganda Work?

How effective are the modern imperial propaganda techniques? The results seem to be mixed. In recent months, elite black athletes have begun protesting white racism by challenging the requirement for choreographed displays of flag worship … opening public controversy into the larger issues of police brutality and sustained marginalization. Identity politics, which led to the election of Obama, may be giving way to issues of class struggle, racial justice, anti-militarism and the impact of continued imperial wars. Hysterical rants may still secure international attention, but repeated performances begin to lose their impact and subject the ‘ranter’ to ridicule.

The cult of victimology has become less a rationale for the multi-billion dollar US-tribute to Israel, than the overwhelming political and economic influence and thuggery of billionaire Zionist fundraisers who demand US politicians’ support for the state of Israel.

Brandishing identify politics may have worked the first few times, but inevitably black, Latino, immigrant and all exploited workers, all underpaid and overworked women and mothers reject the empty symbolic gestures and demand substantive socio-economic changes – and here they find common links with the majority of exploited white workers.

In other words, the existing propaganda techniques are losing their edge – the corporate media news is seen as a sham. Who follows the actor-soldiers and flag-worshipers once the game has begun?

The propagandists of empire are desperate for a new line to grab public attention and obedience. Could the recent domestic terror bombings in New York and New Jersey provoke mass hysteria and more militarization? Could they serve as cover for more wars abroad … ?

A recent survey, published in Military Times, reported that the vast majority of active US soldiers oppose more imperial wars. They are calling for defense at home and social justice. Soldiers and veterans have even formed groups to support the protesting black athletes who have refused to participate in flag worship while unarmed black men are being killed by police in the streets. Despite the multi-billion dollar electoral propaganda, over sixty percent of the electorate reject both major party candidates. The reality principle has finally started to undermine State propaganda!