At the time, much was made of the capture of Saddam Hussein. Touted by the US government-controlled American mainstream press as a fatal blow to the insurgency that would lead to rejoicing in the streets of Baghdad, the reality, as we have seen, has turned out to rather different. Iraqis, logically enough, seem to be less concerned about Saddam's capture and trial than about the fact that a brutal US military force of occupation has essentially taken possession of their country and its resources and has caused the deaths of 655,000 of their fellow citizens.
After his initial capture in December 2003, Saddam was paraded in front of the press at his first court appearance in July 2004 where he stood accused of up to 12 crimes, including the alleged gassing of the Kurdish town of Halabja in 1988. But fate (and in Iraq these days "fate" wears the red white and blue ) has decreed that "Saddam" will not suffer the ignominy of answering those particular charges because his first trial for the killing of 148 people in a Shiite town in 1982 was enough, it seems, to convict and sentence him to death. The sense of relief in the White House over the fact that the "gassing" allegation will not have to be dissected is surely palpable, given that, if Saddam gassed anyone, it was with the chemical weapons supplied to him by the US government.
When he first appeared in court in 2004, Saddam was weak and pale and could be hardly heard. Strangely, the US military instituted a severe clampdown on media coverage of the proceedings which were not broadcast live. Frustrated members of the press had to wait until after the event to receive just FOUR minutes of audio and just a few seconds of video of the occasion. Furthermore, Saddam's lawyers claimed that they had been denied access to their client and that they had received death threats from members of the Iraqi government. While no mainstream media outlet at the time offered an explanation of these strange occurrences, logic would suggest that there is something about the man that appeared in court that the US military did not want the Iraqi people and the rest of the world, to see, or hear. It is one thing to present a few seconds of specifically chosen footage of a possibly drugged or mind programmed Saddam lookalike on television and thereby half-convince Iraqis that knew Saddam that the person in court is the real deal. It is a much more difficult task however to make an impostor's voice sound like the real Saddam's. There is also the danger that the impostor might suddenly and unexpectedly reveal his true identity. It seems likely that it was for this reason that the US military had to limit and edit the audio coverage and then "clear" it for broadcast.
Saddam's second "public" appearance came in May 2005 in the form of sensationalist pictures of the former dictator in US custody in his underpants.
In US custody, half-naked Saddam
TIMES NEWS NETWORK
MAY 20, 2005
LONDON: A British tabloid has run a humiliating, half-naked photo feature on Saddam Hussein, the prisoner firmly in US military custody, sparking fears of an Arab backlash and an investigation into possible human rights abuses.
The US authorities have promised to investigate how and when the intimate photographs of the former Iraqi dictator wound up in The Sun , Britain's best-selling newspaper. The tabloid, frontpaged on Friday a photograph of a bare-chested Saddam standing in white underpants and folding a pair of trousers.
The photograph is headlined 'Tyrant's in his pants' and sets the tone for still more humble ones inside the tabloid. The inside photographs show the man who once had a palace in every part of Iraq meekly washing his clothes by hand. Yet another photograph shows Saddam asleep on his bed. The Sun , which refused on Friday, to reveal where, when and how it came by the sensational photographs of the Butcher of Baghdad, would only quote American military sources to say they handed over the photos in the hope of dealing a body blow to the resistance in Iraq.
"Saddam is not superman or God, he is now just an ageing and humble old man. It's important that the people of Iraq see him like that to destroy the myth," the American source is quoted to say. The source added, "Maybe, that will kill a bit of the passion in the fanatics who still follow him. It's over, guys. The evil days of Saddam's Baath Party are never coming back - and here's the proof." But a furore has erupted over the release of the photographs, with presumed American logistical support, from Saddam's American-run prison, at a compound near Baghdad since his December 2003 capture.
British military experts pointed out that the photographs, which may or may not be up to one year old, could still be deemed to have contravened Saddam's rights as a prisoner and could have violated the Geneva Convention.
West Asian observers said the photographs of the toppled dictator wearing nothing but white underpants risked re-igniting the Arab sense of burning rage over the Iraqi prisoner abuse scandal at Abu Ghraib. Under the Geneva Convention, Iraq's invaders, the US-UK-led military alliance, are not allowed release photographs and details about prisoners of war such as Saddam.
Saddam's status as a high-profile prisoner of the West makes the photographs particularly sensitive because Arabs might feel the West is poking fun at it.
Western diplomats said the photographs could spark a new wave of violence against the West.
The photos of Saddam also appeared in the New York Post, which - like the British tabloid 'The Sun' - is owned by die-hard Israeli supporter and media mogul Rupert Murdoch. It was also of note that the release of the pictures was designed to deal a "body blow" to the Iraq insurgency, the clear implication being that the Iraq insurgency is made up of Saddam loyalists, which is of course completely untrue. Since then, the insurgency has gone from strength to strength, despite the attempts by Israeli and US covert intelligence to demonise them through the use of "false flag" operations. Yet it suited the US and Israel very well for the world to believe the lie that the Iraqi insurgents are a fringe group of supporters of an evil tyrant rather than the truth: that they are, in fact, ordinary Iraqis attempting to oust a foreign occupying power.
At his second day in court (his third public appearance), again the world and even his lawyers were denied the opportunity to hear "Saddam" give evidence in his own words, and were provided with only short video segments with the former dictator's words interpreted for us by the US military.
Saddam Back In Court
Tuesday June 14, 2005
The GuardianAppearing by turns pensive and quizzical, Saddam Hussein returned to public view yesterday when Iraq's special tribunal released video images of the former president being interrogated.
The first official pictures since his court appearance last July were mute but a tribunal statement said he was being questioned about a 1982 massacre at a Shia village north of Baghdad, one of the cases expected to arise at his trial.
Saddam's chief lawyer, Khalil al-Duleimi, said he would have to view the video before commenting. The tribunal said Mr Duleimi was present during the filming.
However, a London-based member of the defence team, Giovanni di Stefano, said the former president was without legal assistance during the video and that it would be inadmissible in the trial.
The defence team has accused the tribunal of denying it proper access to the ousted dictator, withholding documents and leaking information to the press.
Since that time, the trial of "Saddam" has resembled a south American soap opera more than a credible trial, with constant adjournments and outbursts from just about everyone involved in the show, not to mention the untimely and suspicious deaths of several of "Saddam's" lawyers, the murder of the only witness to Saddam's alleged mass graves, and the testimony of one of Saddam's lawyers that he was psychologically disturbed, terrified about his possible execution, urinated on himself several times during the interview and broke into tears without reason. Par for the course, I suppose, in the judicial system of a country that is entirely controlled by the psychopathic leaders of another.
But let's back up a little to the time of the actual capture of "Saddam". You may remember images of the unearthing from a "rat hole" of some old bugger on a farm in the village of al-Dwar near Saddam's home town of Tikrit in December 2004. This, we were told, was "Saddam", finally captured more than 7 months after Bush had bravely declared "Mission Accomplished" from the safety of an American aircraft carrier docked in an American port. Images of the capture scene revealed a hole in the ground and a prone and disheveled santa-claus-type character with a burly American soldier poised over him for the 'money shot'. The money as it happens, was produced soon thereafter, $750,000 in crisp $100 dollar bills in a nice metal box, but it wasn't long before suspicions were raised by the presence of yellow dates on a tree at the entrance to the "rat hole" (below). You see, In Iraq, dates grow and ripen between March and August, with harvesting taking place between August and October. It is unlikely therefore that any variety of date would still be hanging on a tree in mid December in Iraq. At the very least, this information allows us to conclude that in all probability, "Saddam" was not captured in December as alleged by the US government, and that we are dealing with some sort of staged show for the general public.
 |
 |
 |
 |
Indeed, it seems that a planned and staged "capture" of "Saddam" was common knowledge in political circles in Washington in 2004:
McDermott in Hot Water for Saddam Quip
By MATTHEW DALY
Associated Press Writer
December 15, 2003WASHINGTON -- Rep. Jim McDermott, D-Wash., who earned headlines across the globe last year for criticizing President Bush while in Baghdad, is enmeshed in a new controversy over remarks he made about the capture of Saddam Hussein.
In an interview Monday with a Seattle radio station, McDermott said the U.S. military could have found the former Iraqi dictator "a long time ago if they wanted."
Asked if he thought the weekend capture was timed to help Bush, McDermott chuckled and said, "Yeah. Oh, yeah."
McDermott went on to say, "There's too much by happenstance for it to be just a coincidental thing."
When interviewer Dave Ross asked again if he meant to imply the Bush administration timed the capture for political reasons, McDermott said: "I don't know that it was definitely planned on this weekend, but I know they've been in contact with people all along who knew basically where he was. It was just a matter of time till they'd find him.
"It's funny," McDermott added, "when they're having all this trouble, suddenly they have to roll out something."
State Republicans immediately condemned McDermott's remarks, saying the Seattle Democrat again was engaging in "crazy talk" about the Iraq war. [...]
In these troubled times, the truth is labeled "crazy talk". Remember that Mc Dermott wasn't the only US politician to hint that the was more to the capture of Saddam than the public were being told.
LaHood: Hussein's capture imminent
Pantagraph Staff
Tuesday, December 2, 2003
BLOOMINGTON -- U.S. Rep. Ray LaHood held his thumb and forefinger slightly apart and said, "We're this close" to catching Saddam Hussein." [...]A member of The Pantagraph editorial board -- not really expecting an answer -- asked LaHood for more details, saying, "Do you know something we don't?"
"Yes I do," replied LaHood. [...]
So on the 2nd December 2003, a full 11 days before "Saddam" was actually "captured" by US troops, LaHood all but admitted that Saddam had already been captured. Are we to believe that he was left lying in his "rat hole" under vegetables for so long? If not, where was he?
Let's pause for a moment and have a closer look at the physical evidence for the claim that the real Saddam was captured almost three years ago. Consider the following images of "Saddam" and Saddam, paying close attention to the teeth of both men:
 |
 |
Check out the teeth
 |
 |
Notice anything?
 |
 |
While I am not claiming that these images provide conclusive proof that we are dealing with two different men, it does seem reasonable to suggest that there is cause for significant doubt. The source of the problem here is the fact that the US government had only to claim that this man is the real Saddam for the vast majority of people to accept it as fact. In the months prior to his capture, news reports were increasingly informing the public that US troops were searching for Saddam and were "closing in" on him. Then, when anticipation was deemed to be at its height: "Bingo" "We got him!" With such a build up of expectation among the general population that Saddam would "soon be captured" there was no real chance that anyone was going to look closely at the details when the event finally occurred. The fact remains however that when all of the evidence IS scrutinized, we are led to the conclusion that it is highly improbable that the man that was "caught" in a "rat hole" in December 2003, appeared in court in July 2004, was splashed across the British tabloids in May 2005, and yesterday was sentenced to death, is in fact the real Saddam Hussein.
Indeed, is laughable to suggest that Saddam would ever have allowed himself to be demeaned in this way. Indeed, it is laughable that the Americans would have allowed Saddam to be demeaned in this way. While Saddam was a tyrant, and no worse than the many other tyrants that the US placed in power (or those currently in power in the US), he was first and foremost one of the power brokers of this world who controlled on one of the world's largest oil reserves. We should remember that Saddam was placed in power by the US and, for a long time, was flavor of the month in the US even receiving the keys to the city of Detroit in 1980 and serving as a US ally in the Middle East until 1991 when he was baited to invade Kuwait and provide justification for the first Gulf War. After that he was allowed to remain in power until he could be used again, and for the last time, as the boogey man to facilitate a direct US invasion of Iraq.
For such service there are surely some rewards. So if this is not the real Saddam but a useful idiot and stand in, where is the real Saddam? Well, if we are to believe the words of Donald Rumsfeld (for once) just prior to the 2003 Iraq invasion, the most plausible answer is that, for the last 3 years, the real Saddam has been living it up in Belorussia, having been flown out by the USAF just before Baghdad was "taken".
Iraqi Commander Swears he saw USAF fly Saddam out of Baghdad
Bill Dash
Alamo Christian Ministries Online
10/16/2003Film will soon be made public of an Iraqi Army officer describing how he saw a US Air Force transport fly Saddam Hussein out of Baghdad. The explosive eyewitness testimony was shot by independent filmmaker Patrick Dillon, who recently returned from a risky one-man odyssey in Iraq. In the film, the officer, who told Dillon that he commanded a special combat unit during the battle for Baghdad airport and whose identity is temporarily being withheld, explains in detail how he watched as the Iraqi dictator and members of his inner circle were evacuated from Iraq's capital by what he emphatically insists were United States Air Force cargo planes. [...]
Dillon says his film lends major support to what many have believed for years: that Saddam was little more than an american tool, a stage-managed "evildoer", just one in a long line of useful villains bought and paid for by the United States in order to better manipulate international politics and commerce. [...]
Hussein Given Safe Haven in Belarus?
The World Tribune - 25 April 2003
Iraqi President Saddam Hussein has obtained safe haven in Belarus, several intelligence agencies believe.
Western intelligence sources said several intelligence agencies in the Middle East and Europe base this assessment on new information about a March 29 flight from Baghdad to Minsk. They said the flight of a chartered cargo plane could have transported Saddam, his sons and much of his family to Belarus.
"There's no proof that Saddam was on the plane but we have proof that a plane left on that day from Baghdad airport and arrived in Minsk," a senior intelligence source said. "If you can think of anybody else who could obtain permission to fly out of Baghdad in the middle of a war, then please tell me."
U.S. officials and Iraqi opposition sources said Saddam and his sons appear to have escaped two assassination attempts during the war. But they did not confirm the registration of a cargo flight from Baghdad to Minsk on March 29, Middle East Newsline reported.
The sources said the cargo aircraft took off from an unspecified Baghdad-area airport and entered Iranian air space on the flight toward Minsk. They said Iran did not attempt to interfere with the Iraqi flight.
About two weeks later, a registration of the cargo flight was found by the U.S. military in wake of the capture of the airport and the rest of the Baghdad area. Baghdad International Airport was captured on April 4.
U.S. officials said Saddam had been exploring the prospect of fleeing to Belarus over the last year. They said the Iraqi ruler was in close contact with Belarus President Alexander Lukashenko and that Minsk became a major military supplier to Baghdad.
Within hours after the departure of the cargo flight to Minsk on March 29, the Saddam regime was awash with rumors that the president had escaped. Intelligence sources said the rumors spread rapidly throughout the military command and among field officers.
"There was a significant decline in Iraqi combat strength starting from around March 31," an intelligence source said. "In interviews with coalition interrogators, Iraqi commanders have attributed the decline in combat to the feeling that Saddam had fled."
While the above article is interesting and informative, it fails to draw one critical conclusion: Given that coalition forces had complete mastery over Iraqi airspace, the US government must have authorised Hussein's flight out of Iraq.
Saddam may find refuge in Belarus Says Rumsfeld
Ottawa Citizen
31.12.2002The former Soviet republic of Belarus has emerged as a possible refuge for Saddam Hussein after American officials hinted that the Iraqi leader might be allowed to flee into exile to avert a U.S. assault on Baghdad.
A visit to Iraq by a presidential delegation from Belarus last week coincided with a suggestion by U.S. Defence Secretary Donald Rumsfeld that Mr. Saddam and his family could "leave the country."
Mr. Rumsfeld said in a television interview: "If he doesn"t care to give up his weapons of mass destruction, then he"s got the choice of leaving."
As military preparations intensified with the mobilization of two more aircraft carrier battle groups and a 1,000-bed hospital ship, U.S. officials emphasized that no deal had been struck to allow Mr. Saddam to escape.
Mr. Rumsfeld's remark may have been no more than a psychological gambit intended to stir confusion in Baghdad.
Yet the Belarus visit heightened American suspicion that Mr. Saddam might be making contingency plans for a last-minute dash.
While it remains far from certain that the Iraqi dictator would flee, Mr. Rumsfeld recently singled out Belarus as one of the few countries that might offer him sanctuary.
"If Saddam Hussein is in a corner, it is because he has put himself there," he told a congressional committee.
"One choice he has is to take his family and key leaders and seek asylum elsewhere. Surely one of the 180-plus countries would take his regime - possibly Belarus."
The former Soviet republic has become a pariah state under the dictatorial rule of President Alexander Lukashenko and is suspected of violating United Nations sanctions against Iraq.
debka.com
However, according to our information, the deposed ruler and his sons were carried to safety in Minsk in late March aboard two chartered airliners. This week, the Polish news agency PAP sent a team of reporters to the Belarus capital to check on this account. They quote Natalia Pietkiewicz, spokesperson at President Aleksandr Lukashenko's bureau, as evading a direct reply when asked if the former Iraqi ruler was in the country. She said: "We have no information that Saddam Hussein is in Belarus." This is a long way from a flat denial.
The big question is how did the trio and its following of several hundred manage to elude coalition air forces, by then in full command of Iraqi skies, a question which leads to another: How did the men at the pinnacle of enemy power come to survive the two wars the Bush administration fought in less than two years?
This last question is an excellent one and goes right to the heart of the matter. The simple answer is that these "enemies" were not enemies at all, but either useful idiots or actual agents of the US government. As such, when they were no longer useful, they were retired from service, with an excellent pension.
Consider also the testimony of Former Russian Prime Minister Primakov that Saddam had made a "pre-war deal" with the US...
24/06/2004 - (SA)
News24.comMoscow - Former Iraqi leader Saddam Hussein cut a deal with the United States before the March 2003 invasion of Iraq, former Russian prime minister Yevgeny Primakov said in an interview published on Thursday.
"There was an understanding with the Americans, as paradoxical as it may seem," Primakov told the Russian daily Gazeta in a lengthy interview.
"Why weren't the bridges of the Tigris blown up when the American tanks approached Baghdad? Why weren't Iraqi aviation and tanks used, and where are they now?" asked Primakov, a former head of the Russian secret service and a specialist in Arab affairs who was formerly on good terms with Saddam.
"Why was there an immediate ceasefire? Why was there practically no resistance a year ago?" he added.
Primakov, who now heads Russia's chamber of trade and industry, also cast doubt on the authenticity of footage of Saddam's reported capture that circled the world on December 14.
"They showed two soldiers with guns with palm trees in the background near the hole (where Saddam was reportedly hiding). At that time of year, date palms are never in bloom," he said.
"Finally, any man can tell you that such a long beard (as Saddam had when he was reportedly caught) could not grow in seven months," he said.
"All evidence suggests that Saddam surrendered earlier and the story of the hole was invented later," he said.
Primakov, who was also Russian foreign minister, made two secret trips to Iraq at the request of President Vladimir Putin, shortly before the invasion by US and British troops.
Iran then backed up the Russian Prime Minister's story...
Iran Media Leaks Secret US Deal with Saddam
Gulf News Apr 15, 2003AN Iranian news agency close to top conservative military figures attributed the fall of Baghdad to a secret tripartite agreement between Saddam Hussein, Russia and the US.
According to the Baztab agency, 13 days after the start of the war, Saddam and Russian intelligence allegedly pledged to hand over Baghdad with minimal resistance to allied forces provided they spared the lives of Saddam and a hundred of his close relatives. The US, for its part, promised to safely send Saddam and his entourage to a third country.
Baztab added that Mohammed Saeed Al Sahaf, Iraqi Information Minister, was instructed to stay in Baghdad until the very last moments to lend the impression that everything in Saddam's camp was under control. The agency also claimed that Russia gained $5 billion to orchestrate this agreement. [...]
Saddam's wife could not recognize her husband
04/13/2004
Pravda.ruLast week, American authorities arranged a meeting of the former Iraqi dictator with his wife.
She was the first of Hussein's relatives to meet with the ex-leader of Iraq at a new place, at the American military base in Qatar. Accompanied by Sheikh Hamad Al-Tani, Sajida Heiralla Tuffah has arrived from Syria on his private jet in the end of March.
The outcome of their meeting turned out to be quite scandalous. Sajina claims that the person she encountered was not her husband, but his double. If someone were to say for sure that it was not insinuation, it would have been easy to believe the wife with a 25-year experience. It is also possible to assume that Saddam has simply changed since the day of his sons' deaths, June 24 2003. This however is highly unlikely. In case we believe Hussein's wife, all DNA testing of the ex-Iraqi leader should be considered a mere fake. Overall, today there remain more questions then there are answers.
It is of note that since his capture, and with the exception, or perhaps because, of the above meeting, "Saddam" has not been allowed to see any family members, friends, or lawyers of his choice. Saddam's daughter, also appearing to recognise that something was amiss, stated at the time that the images of "her father" in court led her to believe that he was drugged that he was "not fully conscious". A few days after his capture, ordinary Iraqis reacted skeptically to the news that this was indeed the real Saddam.
Iraqis doubt real Hussein behind barsGlobe and Mail
December 18, 2003Baghdad - Jassim Abu Ahmed almost spits his disgust at the television set showing yet another image of the dazed and bedraggled Saddam Hussein.
"It's not him," Mr. Ahmed says, waving his hand and looking away from the screen.
In an interview given to Deborah Moore in July 2004, one of Saddam's "lawyers", Giovanni Di Stefano, stated categorically that Saddam would not face execution and would not be handed over to Iranian authorities who are seeking his extradition for alleged war crimes during the Iran/Iraq war. When asked how he knew this he stated that he would not say anymore on the matter.
Interestingly, Di Stefano claims to have "the greatest respect" for Salem Chalabi, nephew of CIA asset and recently appointed Iraqi Deputy PM and "oil minister", Ahmed Chalabi. An article from the Arab-American Institute tell us that, not long after the "fall of Baghdad" (a misnomer if there ever was one):
Salem Chalabi established the Iraq International Law Group (IILG), which describes itself as "your professional gateway to the new Iraq." Assisting Salem in setting up the IILG was a partner Marc Zell (the IILG's website has been registered in Zell's name). Zell is an Israeli settler of the Gush Emunim (Bloc of the Faithful) stripe. Here the plot thickens.
Zell had for many years been Feith's partner in their Washington-Tel Aviv law firm, Feith and Zell (FANDZ). FANDZ had been set up when Feith left government to pursue the work of a "foreign agent" representing Turkey and some Israeli interests.
Following the Baghdad opening of the IILG, Zell soon opened, in the U.S., an office for Zell, Goldberg & Co., which promises to assist "American companies in their relations with the U.S. government in connection with Iraq's reconstruction projects." It is interesting to note that Zell, Goldberg still uses the website FANDZ, the site of the old Feith and Zell firm. So when Zell boasts his connections to government, businesses know exactly what is meant.
In the relatively short period of time since the fall of the Ba'ath Party regime, IILG and Zell, Goldberg have facilitated contracts in the tens, possibly hundreds of millions of dollars.
Salem Chalabi incidentally has also been appointed by the Coalition Provisional Authority to head the Iraqi tribunal that will investigate and prosecute the crimes Saddam and his cohorts committed against the Iraqi people. His uncle is meanwhile railing against the former regime's corruption and demanding the right to investigate profiteering and kick-backs he alleges occurred in the UN's food for oil program.
Feith and Calabi were at the forefront of the plundering of Iraq's resources in order to fill the coffers of American and Israeli big business. Feith also promised the Israelis and their U.S. supporters that, not only would post-Saddam Iraq trade with Israel, but it would resurrect the Iraq-Israel pipeline for oil export. Given that Chalabi is clearly in bed with the Neocons - the architects of the illegal Iraq war - AND the chief prosecutor of Saddam, it is a little troubling, although not at all surprising that one of Saddam's lawyers would have the "greatest respect" for Chalabi, or that Ahmed Chalabi met with "Saddam" for at least one little chat not long after he was "captured"
 |
| Ahmed Chalabi discusses the finer points of acting under the influence with "Saddam" |
Even less surprising is the news that Di Stefano is a convicted fraudster with a client list of mostly mass murderers, and with his praise for a liar and thief like Chalabi who could be shocked to learn that Di Stefano may not actually be a lawyer at all.
Such sordid relationships between repugnant reprobates simply add to our suspicions that the entire Saddam capture, trial and now death sentence is nothing more than a carefully planned publicity stunt, employing a fake Saddam periodically pulled out on stage in order to maintain the illusion. The producers of this dodgy drama are, however, extremely careful to limit the exposure of their lead actor lest the truth that he is an imposter should become more apparent than it already is.
Despite
the fact that "Saddam" has been
sentenced to death, there is a potentially lengthy appeal process to
be suffered before it is decided if he will actually face the hangman's
noose, so we must wait to see if Di Stefano had some "inside" information
in this matter. Perhaps Saddam's appeal will take
approximately 2 years, with an execution date just happening to coincide
with the next US elections, or, perhaps the US government has decided
that, with the intial guilty verdict, there is little more in the way
of propaganda to be extracted out of "Saddam", and with the
help of the American mainstream media, the "evil dictator"
will now fade from our collective awareness, whether we like it or not.
Comment on this Editorial
Gold closed at 629.10 dollars an ounce on Friday, up 4.4% from $602.30 at the close of the previous Friday. The dollar closed at 0.7863 euros Friday, up 0.2% from 0.7848 euros for the week. That put the euro at 1.2718 dollars compared to 1.2742 at the end of the week before. Gold in euros would be 494.65 euros an ounce, up 4.6% from 472.69 for the week. Oil closed at 59.14 dollars a barrel Friday, down 2.7% from $60.75 at the close of the previous week. Oil in euros would be 46.50 euros a barrel, down 2.5% from 47.68 for the week. The gold/oil ratio closed at 10.64, up 7.4% from 9.91 at the end of the week before. In U.S. stocks the Dow closed at 11,986.04 Friday, down 0.9% from 12,090.26 for the week. The NASDAQ closed at 2,330.79 Friday, down 0.9% from 2,350.62 at the close of the previous Friday. In U.S. interest rates, the yield on the ten-year U.S. Treasury note closed at 4.71%, up three basis points from 4.68 for the week.
Gold rose sharply last week while oil dropped. Oil is dropping in reaction to a number of reports indicating an economic slowdown. Stock prices may have also begun to reflect that as the Dow dipped below 12,000 last week after six days of losses.
Chad Hudson
November 1, 2006The economic news took a decidedly negative tone over the past week. The Commerce Department reported that economic growth slowed to 1.6% in the third quarter. This was below the 2.6% pace from the second quarter and lower than the 2.0% growth economists forecasted. Residential construction and the increase in imports were the two largest drags on economic growth. Residential construction dropped 17.4%, the largest drop since December 1991, and imports surged 7.8%. An increase in imports means that consumers purchased more goods produced oversees and not here, and this means that total economic activity was lower than total receipts would indicate. The record level of imports shaved 128 basis points off economic growth, while the drop in residential construction reduced growth by 112 basis points. This was the largest negative impact residential housing has had on economic growth since fourth quarter of 1981. Non-residential construction increased 14%, a deceleration from the 20.3% gain last quarter, and contributed to 88 basis points to the growth rate. While commercial construction has strengthened as residential construction has slumped, it has not been able to offset the full impact of the decline in residential construction.
Personal consumption accelerated in the third quarter, up 3.1%, led by an 8.4% increase in durable goods. A few economists have commented that a portion of this strength is attributed to the accounting treatment of automotive sales. Joe Carson, director of economic research at AllianceBernstein and former economists with the Commerce Department, said that the drop in wholesale prices of SUVs and light trucks as automakers cleared out 2006 inventory made production look stronger than it actually was. Without this distortion, economic growth would have only been 0.9%, and will be reversed this quarter, lowering reported GDP. The other item economists noted was the buildup of inventories. This will likely reduce fourth-quarter GDP as inventories have to be worked off, curtailing production.
Besides the weaker than expected GDP report, the ISM survey also showed that the manufacturing sector has decelerated. The survey of supply mangers fell 1.7 points to 51.2. Economists were expecting a slight increase to 53. The prices paid component was the largest negative factor. Prices paid dropped 14 points to 47, the lowest it has been since February 2002. Obviously the drop in energy prices fueled the plunge. Production and new orders also dropped, but remained over 50. Employment rose by 1.8 points to 50.8.
The tight labor market has supported consumer spending. The unemployment rate has remained low and income growth has accelerated over the past two years. On Monday, the Commerce Department reported that personal income increased 0.5% in September and has gained 6.8% over the past year. The wage & salary component has jumped 7.6% from a year ago. The report also revealed that spending increased only 0.1% in September and has increased by 5.9% over the past year. The string of negative savings rate continued for the eighteenth consecutive month, but is was the highest its been since May 2005.
Last month, the Labor Department reported that only 58,000 jobs were created in September. This was the lowest number of new workers since last October, which was skewed by the hurricanes. The ADP Employment Report showed that 128,000 jobs were added in October. This is close to the 120,000 new jobs economists are expecting. While most indications show that the labor market remains healthy, Friday's reports will be very important considering the September report was much weaker than expected.
While most economic indicators point to a healthy labor market, the latest consumer confidence survey from the Conference Board revealed that consumers have gotten less optimistic. The percentage of respondents that said that jobs were hard to get jumped 1.1 points to 22.0, the highest since December 2005. This was one of main causes of the surprise decline in the survey. Economists were expecting confidence to increase to 108, but instead it dropped half-a-point to 105.4. September was revised higher by 1.4 points. Interestingly, the lower optimism regarding the labor market pulled down the present situation index 3.4 points to 124.7. But, expectations rose 1.6 points to 92.6. This is the highest level since December 2005. The present situation index fell 3.4 points to 124.7. This was the second lowest level this year. The weekly ABC News/Washington Post survey jumped four points to -3, the highest since January 2004. The decline in energy prices has been thought to be a leading reason for the jump in consumer confidence. But this might not be causing consumers to spend more. The buying climate component of the ABC News survey didn't budge this week, but views on the economy and personal finances surged to multi-year highs.
Wal-Mart announced that its same store sales increased 0.5% in October, the smallest gain in six years. Retailers will report October same store sales on Thursday. The International Council of Shopping Centers estimates that October sales increased 3.0%. While this might be achievable, it appears consumers have started to tire. The past two weeks have seen a sharp declaration in same store sales. As energy prices declined since late summer the ICSC has reported that weekly chain store sales accelerated from the 2% level in late July and early August to the 4% level in September. Since topping out at 4.9% in mid-September, chain store sales increased only 2.3% last week. Part of the explanation is the strong sales experienced last year, making for difficult comparisons this year. These comparisons get even more difficult in November. Same store sales increased by more than 4% in three of the four weeks in November last year.
Richard Bernstein, Merrill Lynch's chief economist, published a note this week commenting that according to its recession-risk indicator, which is based on New York Fed's yield curve model that normalizes for the level of interest rates, the chance of a recession is 51% for the next year. The last time it surged past 50% was in 2001. Questions regarding the strength of the economy have heightened over the past few weeks and will likely continue into 2007. If the economy slips into recession that includes a slowdown in consumer spending, the economic downturn will be much more severe than the previous recession.
Thoughts like that led to the faltering of the stock market in the United States:
U.S. Stocks Snap Five-Week Winning Streak; Wal-Mart Declines
By Michael Patterson
Nov. 4 (Bloomberg) -- U.S. stocks fell this week, snapping the longest such winning streak since 2005, as reports on manufacturing and consumer spending suggested that the economy may slow enough to curtail profit growth.
Retailers led the decline after Wal-Mart Stores Inc. forecast its worst monthly sales performance in more than 10 years and a gauge of consumer confidence unexpectedly dropped. Telecommunications shares slumped as Verizon Communications Inc. reported earnings that trailed some analysts' estimates.
Data that showed rising labor costs and falling unemployment also damped optimism that the Federal Reserve may cut interest rates. The Dow Jones Industrial Average extended its retreat from a record for a sixth day, sliding below the 12,000 level it had crossed for the first time ever last month.
"The market has priced in a pretty rosy situation," said Alec Young, an equity market strategist at Standard & Poor's in New York. "You've got a situation where growth is slowing, but the Fed is not riding to the rescue right away."
For the week, the Dow industrials dropped 0.9 percent to 11,986.04. The 30-stock gauge has retreated every session since reaching a record on Oct. 26, the longest daily losing streak since June 2005.
The Standard & Poor's 500 Index declined 1 percent to 1364.30, its biggest drop in almost three months. Both the Dow average and the S&P 500 fell for the first time in six weeks.
A slump in shares of Whole Foods Market Inc. weighed on the Nasdaq Composite Index, which slid 0.8 percent to 2330.79.
November Retreat
Expectations that better-than-expected earnings and a drop in oil prices will support economic growth without spurring inflation had sent the Dow industrials to a record on Oct. 26, while the S&P 500 reached a level not seen since November 2000.
The gauges have stumbled since then as data showed the economy grew at the lowest rate in more than three years, manufacturing slowed and labor costs increased.
Manufacturing in the U.S. expanded at the slowest pace in more than three years last month, a private report indicated on Nov. 1. The Institute for Supply Management's factory index fell to 51.2 from 52.9 in September. Economists in a Bloomberg News survey expected 53. Readings above 50 signal expansion.
Separate data indicated that consumer spending unexpectedly slowed even as incomes rose.
The Commerce Department said personal spending increased 0.1 percent in September, down from a 0.2 percent gain the previous month. Economists expected a 0.2 percent rise. Incomes increased 0.5 percent in September.
Wal-MartThe report, along with a forecast from Wal-Mart, suggested that oil's slide from a July record may do little to bolster household spending in the holiday shopping season.
Wal-Mart fell 6.3 percent to $47.53 for the worst performance in the Dow average. The world's largest retailer forecast that sales at stores open at least a year will be unchanged this month as disappointing clothing sales and disarray from store renovations hurt results. The estimate means Wal-Mart is headed for its worst performance since April 1996.
Whole Foods plunged 29 percent to $46.26 for the biggest slide in the S&P 500. The largest U.S. natural-foods grocer had its biggest one-day plunge ever yesterday after cutting its 2007 sales forecast.
Retailers Slide
The declines in Wal-Mart and Whole Foods helped send a gauge of food and household products merchants down 4.8 percent, the biggest drop among two-dozen S&P 500 industry groups.
A separate measure of retailers, including Gap Inc., slid 2.6 percent. The Conference Board said its index of consumer sentiment fell to 105.4 last month from a revised 105.9 in September. Economists had estimated a reading of 108.
Gap retreated 5.6 percent to $19.57. The largest U.S. clothing chain said that third-quarter profit was about 21 cents to 23 cents a share. Analysts expected 23 cents, the average estimate in a survey by Thomson Financial.
...Reports on labor costs and unemployment suggested that central bankers may have little room to cut interest rates even as profit growth decelerates.
U.S. wage costs increased at a 3.8 percent pace in the third quarter, the Labor Department said, exceeding economists' estimates for a 3.4 percent gain. Costs are up 5.3 percent in the 12 months though September, the biggest gain since 1982.
That data may undermine the Fed's statement last week that inflation is "likely to moderate over time." Policy makers kept their target rate at 5.25 percent the past three meetings, after 17 straight increases.
'Spooked'
"The market's kind of spooked, a little bit afraid of inflation right now," said Todd Clark, director of trading at Nollenberger Capital Partners, a San Francisco-based brokerage firm.
The unemployment rate fell to a five-year low of 4.4 percent in October, while companies added more workers in previous months than indicated, the Labor Department said.
Before the jobs report, interest-rate futures showed traders saw a 14 percent chance the central bank would cut the Fed funds target rate to 5 percent by the end of January. Following the report's release, the odds of a rate cut in both January and February fell to zero...
The jobs numbers actually came in around 90,000 for October, yet it was announced that unemployment hit a five-year low. There was a lot of skepticism about the unemployment number, coming as it did just in time for Bush to tout a revived economy on the campaign trail. But it seems to me anecdotally that it might well be true that unemployment is at a Bush II era low. You tend to get a lot of people working when the government borrows hundreds of billions and spends it on a disastrous war. You also get a lot of people working when the people themselves have borrowed vast sums and spent it all.
Unemployment rate lowest in 5-1/2 years
Glenn Somerville
Fri Nov 3, 5:10 PM ETWASHINGTON (Reuters) - The U.S. unemployment rate fell to a 5-1/2 year low in October and hiring in the two prior months was revised up, the government said on Friday, leading financial markets to slash bets on interest-rate cuts.
The U.S. unemployment rate fell to a 5-1/2 year low in October and hiring in the two prior months was revised up, the government said on Friday, leading financial markets to slash bets on interest-rate cuts.
The rosier-than-expected job picture, days before next Tuesday's congressional elections in which ruling Republicans are considered at risk of losing control, caused rejoicing among President George W. Bush's party but Democrats countered that most Americans still say household budgets are under pressure.
The Labor Department said 92,000 jobs were added in October. But it said hiring in each of September and August was far more vigorous than first thought, implying enough economic vigor to keep growing despite a housing-industry slowdown.
September's job-creation total was revised up to 148,000, nearly three times the 51,000 reported a month ago, and there were 230,000 new jobs in August instead of 188,000.
The unemployment rate fell in October to 4.4 percent from 4.6 percent in September. It was the lowest jobless rate since 4.3 percent in May 2001.
...Analysts said the jobs data adds to confusion about the economy's direction, since it comes just a week after the government reported the weakest expansion in more than three years in the third quarter. Gross domestic product slowed to a 1.6 percent annual rate of growth from 2.6 percent in the second quarter.
EARNINGS UP
Notwithstanding softer overall growth, the Labor Department said average hourly earnings in October rose 0.4 percent to $16.91 -- higher than the 0.3 percent that analysts had anticipated -- while the average workweek edged up to 33.9 hours from 33.8. Over the year, average hourly earnings have risen by 3.9 percent, the department said.
The combination of slower growth and rising wages has to be unsettling for economic policy-makers, analysts said.
"The Fed would have liked the unemployment rate to jump 0.2 percentage point and payrolls to have been revised downward," said economist Joel Naroff of Naroff Economic Advisors in Holland, Pennsylvania. "They got the worst of all worlds and any thoughts of a near-term rate cut should be out the window."
Hugh Johnson, chief investment officer for Johnson Illington Advisors in Albany, New York, said the report underlined a tightening labor market that could mean future rate hikes instead of reductions.
"There's tightness showing up in the decline in the unemployment rate and in the upward pressure on wages, which were stronger than expected," Johnson said. "This will certainly give hawks on the Federal Open Market Committee some ammunition."
The payroll report is calculated from two separate surveys of households and businesses. The household survey showed that a whopping 437,000 more people were employed in October.
The business survey showed most of the new hiring in October was in service industries, where 152,000 new jobs were created, while goods-producing industries shed 60,000 jobs.
The question is how long will this last? One sign of nervousness in those who can pump up the stock market is the recent announcement by the Securties and Exchange Commission (SEC) of a proposal to drastically reduce margin requirements, the amount a purchaser of securities must put up towards a purchase thus pumping more (borrowed) money into the markets:
Curious Change in Margin Requirements
Bob Hoye
October 31, 2006Through the SEC, the Fed controls margin requirements and a recent announcement was described by the deputy director of the SEC as "a very significant change". Remember that this is essentially the same Fed and SEC that argued that no increases were needed during the late 1990s' tech mania.
Now they are talking about lowering margin requirements for institutions on stocks, options, and futures. Now ranging from 25% to 50%, the proposal is to drop them to 15%.
...Traditionally, the Fed raised margin requirements as a stock boom matured and then lowered them near the end of the inevitable contraction. Despite the remarkable intensity of the 2000 mania, margin requirements were not increased. Perhaps the Fed rationalized this non-action as not wanting to be seen doing anything that could be construed as breaking the mania - a curious abandonment of touted contra-cyclical genius.
Why then the "significant change" in margin requirements now?
An answer could be found in reviewing the last time a senior central bank lowered margin requirements close to the peak of a boom, and that was in early 1990.
At the peak of the Tokyo mania, the Japan Times headline "Economists Believe The coming Decade Will Be A Golden Era" (December 26, 1989). Our May 1, 1990 edition reviewed the initial decline as follows:
The main problem is that everyone has always expected the Japanese government to support the stock market. With the first break in Tokyo, the authorities lowered margin requirements and margin accounts bought. So far as we can tell, most sharp breaks at the end of a Bull market are caused by the liquidation of speculative positions.
Usually with this, there is a reduction in margin debt. In Tokyo's case, the market sold off 20% with a substantial rise in margin debt. This is a very vulnerable stock market.
That edition pointed out that after such a mania the index could decline to about 18% of the high. The low in 2003 was 19.5% of the high.
Obviously, on the initial break, pain to big players was sufficient to prompt concerned policymakers to lower margin requirements. As noted at the time, this was a grave error and yet another example of naive policymakers exacerbating natural market forces.
In looking at the senior indexes and credit spreads, the conviction is that nothing can go wrong. Essentially, this is based upon the short-lived folly that the last rate hike is a good thing.
Beneath the ebullient veneer is a serious problem in the housing market which, with a huge 50% of their assets committed to mortgages, will feed into commercial banks. The other problem is the threat of more blowups in hedge-fund-land.
Possibly these two threatening conditions have prompted the discussion about reducing margin requirements, which would likely be as impractical as the one at the end of the Tokyo bubble.
The stock market supposedly also likes divided government in the United States, so the political news of the past week, with the Democratic party poised to gain control of the House of Representatives but probably not the Senate, should have boosted the markets. The grave desperation of the political situation in the United States, however, does not bode well for the markets. The leading news organs of the four main branches of the military are all coming out with editorials Monday calling for Defense Secretary Rumsfeld to resign. This, coming the day before an election, is as close to a military coup as the U.S. has had in a long time. Yet Bush last week said that Cheney and Rumsfeld will continue at their posts for the rest of his term. Bush also in his deluded fashion keeps talking about "victory" in Iraq, but serious analysts are now discussing the best way to manage the defeat. The difference between a well-managed defeat and a chaotic, poorly managed one could spell the difference in whether or not the U.S. empire survives the second Bush administration. The scale of the disaster cannot be overstated, yet financial markets in the United States go on as if nothing out of the ordinary is happening. :
"The American Era in the Middle East Has Ended"
Baghdad is SurroundedBy Mike Whitney
November 2, 2006Don Rumsfeld is not a good leader. In fact, he is a very bad leader. Leadership is predicated on three basic factors: Strong moral character, sound judgment, and the ability to learn from one's mistakes. None of these apply to Rumsfeld. As a result, every major decision that has been made in Iraq has been wrong and has cost the lives of countless Iraqis and American servicemen. This pattern will undoubtedly continue as long as Rumsfeld is the Secretary of Defense.
Here's a simple test: Name one part of the occupation of Iraq which has succeeded?
Security? Reconstruction? De-Ba'athification? Dismantling the Iraqi military? Protecting Saddam's ammo-dumps? Stopping the looting? Body armor? Coalition government? Abu Ghraib? Falluja? Even oil production has been slashed in half.
Every facet of the occupation has been an unmitigated disaster. Nothing has succeeded. Everything has failed.Everything.
Never the less, Rumsfeld assures us that "these things are complicated" and that we should just "Back off".
It was Rumsfeld's decision to replace America's first Iraqi Viceroy, General Jay Garner after Garner wisely advised that we maintain the Iraqi military, leave many of the Ba'athists in the government (to maintain civil society) and convene leaders from the three main groups (Sunni, Shia and Kurds) to form a coalition government. This didn't square with Rumsfeld's plans to revolutionize Iraqi society and transform it into a neoliberal Valhalla; so Garner was unceremoniously dumped for Kissinger's protégé, Paul Bremer.
Once Bremer was installed, things started heading downhill fast and have only gotten worse ever since.
Apart from the immense damage to Iraqi society, the enormous human suffering, and the massive loss of life; there is also the astronomical cost of the war which has been purposely concealed by the Defense Dept. Originally, the war was supposed to "pay for itself in oil revenues". (according to neocon Paul Wolfowitz) That, of course, never happened but, the real costs appeared in this week's Washington Post in an article by Jim Wolf called "Pentagon Expands War-funding Push". The article states:
"With the passage of the fiscal 2006 supplemental spending bill, war-related appropriations would total about $436.8 billion for Iraq, Afghanistan and enhanced security at military bases, the non-partisan Congressional Research Service said in a Sept 22 report.this is in addition to the more than $500 billion sought by President Bush in his baseline fiscal 2007 national defense request."
That's right; we're spending a whopping $1 trillion a year for a war that we're losing!
Still, don't expect accountability from the Pentagon where taxpayer dollars are carelessly flung into the Mesopotamian black-hole with utter abandon. Heads never role because no one in charge ever accepts responsibility for their mistakes.
So, "Back off"!...A growing number of establishment-elites are frustrated with Rumsfeld's bungling and are ready for a change. But that doesn't matter because the Sec-Def has the backing of powerful constituents in the banking, corporate and defense industries as well as neoconservative aficionados in many of Washington's preeminent think-tanks. He also has Bush's support, which is a mere formality since Cheney and Rumsfeld run the government anyway. The bottom line is, Rumsfeld is "here to stay".
...Rumsfeld flattened Fallujah nearly 2 years ago thinking that the destruction of the city of 300,000 would "send a message" to the Sunnis; convincing them that it was useless to resist. His action, which was enthusiastically applauded by right-wing pundits and politicians in America, produced exactly the opposite response. The resistance is now stronger than ever, the attacks on American troops have increased dramatically, and al-Anbar province is no longer under U.S. control.
Anyone with even a superficial understanding of psychology could have predicted the outcome, but Rumsfeld blundered on with his iron-fisted tactics regardless of the facts.
Rumsfeld's over-reliance on force has spread turmoil throughout the Sunni-heartland making it virtually ungovernable. The sectarian violence is now so bad that a leaked-Pentagon report prepared by the US Central Command says the country is in a state of "chaos". This is the logical corollary of the Rumsfeld approach and it is unlikely to change.
For American troops in Iraq, there is a worse scenario than chaos; that is defeat. Patrick Cockburn's 11-1-06 article "Baghdad is under Siege" provides the chilling details of an armed Iraqi resistance which has now cut off supply lines to the capital and threatens to make America's ongoing occupation impossible. Cockburn says:
"Sunni insurgents have cut the roads linking the city to the rest of Iraq. The country is being partitioned as militiamen fight bloody battles for control of towns and villages north and south of the capital.The country has taken another lurch towards disintegration. Well armed Sunni tribes now largely surround Baghdad and are fighting Shia militias to complete the encirclement. The Sunnis insurgents seem to be following a plan to control all approaches to Baghdad."
Baghdad is surrounded and the predicament for American troops is increasingly tenuous. The battle is being lost on all fronts. So, what is Secretary Rumsfeld's response to these new and urgent developments?
Rumsfeld held a press conference in which he blasted his critics for "focusing too much on the bad news coming out of Iraq" and announced the launching of a new public relations campaign which will attempt to elicit greater support for the ongoing occupation. The Pentagon plans to "develop messages" to respond to the negative news-coverage and, as Rumsfeld said, "correct the record."
"Correct the record"? Is the Pentagon planning to "repackage" the war even while the Resistance is tightening its grip around the capital?
What type of madness is this? This is not the behavior of serious men. This is just more of the same "faith-based," public relations hucksterism which leads nowhere. The worsening situation in Iraq will not improve by ramping-up the propaganda-machine, appealing to American chauvinism, or attacking critics of the war. This is real life; not some skit that's been choreographed to dupe the Washington press corps. We need leaders who are capable of grasping the situation in realistic terms and initiating political dialogue with the warring parties. All the cheerleading and yellow ribbons in the world will not create a viable solution for the impending catastrophe.
The American people are way ahead of Rumsfeld on the issue of Iraq. Nearly 70% now believe that the war was a "mistake" and a clear majority is looking for candidates who will support a change in policy. A poll conducted by the New York Times/CBS News on 11-2-06 shows that "a substantial majority of Americans expect Democrats to reduce or end American military involvement in Iraq if they win control of Congress." That tells us in stark terms that the public wants to "get out now". The November 7 midterms will be a referendum on Bush's "war of choice" and a flat rejection of the conflict which Rumsfeld so desperately wants to popularize. So far, the Democrats are showing substantial leads in all the polls.
The media has been a steadfast ally to the Bush troupe and given them a "free pass" throughout the conflict. They successfully drew an Iron Curtain around Iraq and kept the public from knowing about the 650,000 men, women and children were savagely butchered in Bush's Petrol-War. Despite their best-efforts, however, public opinion has shifted away from the present policy and the American people are looking for an end to the fighting.
Rumsfeld's plan for "a new kind of war" that depends on high-tech, laser-guided weaponry, massive counterinsurgency operations, and a submissive "embedded" media has fallen on hard times. The tremors can already be felt from Baghdad to Washington D.C. As Richard Haass, President of the Council on Foreign Relations (CFR) said in the November issue of Foreign Affairs, "The American era in the Middle East, the fourth in the region's modern history, has ended." All that's left is to sweep up the pieces of a failed policy and head home.
So the President of the Council on Foreign Relations says that "the American era in the Middle East... has ended." Astonishing. It won't be pretty when the markets realize what's happening. And if an insane and desperate Bush decides to roll the dice and widen the war by attacking Iran...
The Worst is Yet to Come
The Third and Final Act: Attacking IranBy William S. Lind
October 31, 2006The third and final act in the national tragedy that is the Bush administration may soon play itself out. The Okhrana reports increasing indications of "something big" happening between the election and Christmas. That could be the long-planned attack on Iran.
An attack on Iran will not be an invasion with ground troops. We don't have enough of those left to invade Ruritania. It will be a "package" of air and missile strikes, by U.S. forces or Israel. If Israel does it, there is a possibility of nuclear weapons being employed. But Israel would prefer the U.S. to do the dirty work, and what Israel wants, Israel usually gets, at least in Washington.
That this would constitute folly piled on top of folly is no deterrent to the Bush administration. Like the French Bourbons, it forgets nothing and it learns nothing. It takes pride in not adapting. Or did you somehow miss George W. Bush's declaration of Presidential Infallibility? It followed shortly after the visit to the aircraft carrier with the "Mission Accomplished" sign.
The Democrats taking either or both Houses of Congress, if it happens, will not make any difference. They would rather have the Republicans start and lose another war than prevent a national disaster. Politics comes first and the country second. Nor would they dare cross Israel.
Many of the consequences of a war with Iran are easy to imagine. Oil would soar to at least $200 per barrel if we could get it. Gas shortages would bring back the gas lines of 1973 and 1979. Our European alliances would be stretched to the breaking point if not beyond it. Most people outside the Bushbubble can see all this coming.
What I fear no one foresees is a substantial danger that we could lose the army now deployed in Iraq. I have mentioned this in previous columns, but I want to go into it here in more detail because the scenario may soon go live.
Well before the second Iraq war started, I warned in a piece in The American Conservative that the structure of our position in Iraq could lead to that greatest of military disasters, encirclement. That is precisely the danger if we go to war with Iran.
The danger arises because almost all of the vast quantities of supplies American armies need come into Iraq from one direction, up from Kuwait and other Gulf ports in the south. If that supply line is cut, our forces may not have enough stuff, especially fuel, to get out of Iraq. American armies are incredibly fuel-thirsty, and though Iraq has vast oil reserves, it is short of refined oil products. Unlike Guderian's Panzer army on its way to the Channel coast in 1940, we could not just fuel up at local gas stations.
There are two ways our supply lines from the south could be cut if we attack Iran. The first is by Shiite militias including the Mahdi Army and the Badr Brigades, possibly supported by a general Shiite uprising and, of course, Iran's Revolutionary Guards (the same guys who trained Hezbollah so well).
The second danger is that regular Iranian Army divisions will roll into Iraq, cut our supply lines and attempt to pocket us in and around Baghdad. Washington relies on American air power to prevent this, but bad weather can shut most of that air power down.
Unfortunately, no one in Washington and few people in the U.S. military will even consider this possibility. Why? Because we have fallen victim to our own propaganda. Over and over the U.S. military tells itself, "We're the greatest! We're number one! No one can defeat us. No one can even fight us. We're the greatest military in all of history!"
It's bull. The U.S. armed forces are technically well-trained, lavishly resourced Second Generation militaries. They are being fought and defeated by Fourth Generation opponents in both Iraq and Afghanistan. They can also be defeated by Third Generation enemies who can observe, orient, decide and act more quickly than can America's vast, process-ridden, Powerpoint-enslaved military headquarters. They can be defeated by strategy, by stratagem, by surprise and by preemption. Unbeatable militaries are like unsinkable ships. They are unsinkable until someone or something sinks them.
If the U.S. were to lose the army it has in Iraq, to Iraqi militias, Iranian regular forces, or a combination of both (the most likely event), the world would change. It would be our Adrianople, our Rocroi, our Stalingrad. American power and prestige would never recover.
One of the few people who does see this danger is the doyenne of American foreign policy columnists, Georgie Anne Geyer. In her column of October 28 in The Washington Times, she wrote,
The worst has not, by any means, yet happened. When I think of abandoning a battleground, I think of the 1850s, when thousands of Brits were trying to leave Afghanistan through the Khyber Pass and all were killed by tribesmen except one man, left to tell the story.
Our men and women are in isolated compounds, not easy even to retreat from, were that decision made. Time is truly running out.
What would a catastrophic military defeat do to the economic optimism of the U.S. population, optimism that encourages the debt-driven consumption that has kept the whole world's economy afloat for the past generation? Russia and China, de facto allies in blocking U.S. hegemonic ambitions, have become much more powerful since Bush came to office and accelerated the process of U.S. imperial overreach. What if Europe tilts towards the Russian/Chinese side in the aftermath of the "end of the U.S. era in the Middle East?"
Since Bush is so stubborn, the dilemma the elites face in the United States is that they can only prevent a catastrophic defeat by ripping the political fabric apart. Bush and the Neocons will not go easily. That is why the elite are placing such great hope on James Baker's Iraq Commission recommendations. The Baker Commission is waiting for the election before recommending a soft partition of Iraq and, much worse for Bush, negotiating with Iran and Syria. For that reason, there is no chance that Bush will accept Baker's recommendations unless forced to. But it's their only hope of avoiding a political civil war and of limiting the damage of the United States' defeat in the Middle East wars. A showdown is coming after the election and it has nothing to do with Republican-Democrat.
Whichever side wins will probably feel the need to enact a plan like this:
10-Year U.S. Strategic Plan For Detention Camps Revives Proposals From Oliver North
News Analysis/Commentary, Peter Dale Scott,
New America Media, Feb 21, 2006Editor's Note: A recently announced contract for a Halliburton subsidiary to build immigrant detention facilities is part of a longer-term Homeland Security plan titled ENDGAME, which sets as its goal the removal of "all removable aliens" and "potential terrorists." Scott is author of "Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina" (Rowman & Littlefield, 2003).
The Halliburton subsidiary KBR (formerly Brown and Root) announced on Jan. 24 that it had been awarded a $385 million contingency contract by the Department of Homeland Security to build detention camps. Two weeks later, on Feb. 6, Homeland Security Secretary Michael Chertoff announced that the Fiscal Year 2007 federal budget would allocate over $400 million to add 6,700 additional detention beds (an increase of 32 percent over 2006). This $400 million allocation is more than a four-fold increase over the FY 2006 budget, which provided only $90 million for the same purpose.
Both the contract and the budget allocation are in partial fulfillment of an ambitious 10-year Homeland Security strategic plan, code-named ENDGAME, authorized in 2003. According to a 49-page Homeland Security document on the plan, ENDGAME expands "a mission first articulated in the Alien and Sedition Acts of 1798." Its goal is the capability to "remove all removable aliens," including "illegal economic migrants, aliens who have committed criminal acts, asylum-seekers (required to be retained by law) or potential terrorists."
...Significantly, both the KBR contract and the ENDGAME plan are open-ended. The contract calls for a response to "an emergency influx of immigrants, or to support the rapid development of new programs" in the event of other emergencies, such as "a natural disaster." "New programs" is of course a term with no precise limitation. So, in the current administration, is ENDGAME's goal of removing "potential terrorists."
It is relevant that in 2002, Attorney General John Ashcroft announced his desire to see camps for U.S. citizens deemed to be "enemy combatants." On Feb. 17 of this year, in a speech to the Council on Foreign Relations, Defense Secretary Donald Rumsfeld spoke of the harm being done to the country's security, not just by the enemy, but also by what he called "news informers" who needed to be combated in "a contest of wills." Two days earlier, citing speeches critical of Bush by Al Gore, John Kerry, and Howard Dean, conservative columnist Ben Shapiro called for "legislation to prosecute such sedition."
Since 9/11 the Bush administration has implemented a number of inter-related programs, which had been planned for secretly in the 1980s under President Reagan. These so-called "Continuity of Government" or COG proposals included vastly expanded detention capabilities, warrantless eavesdropping and detention, and preparations for greater use of martial law.
Prominent among the secret planners of this program in the 1980s were then-Congressman Dick Cheney and Donald Rumsfeld, who at the time was in private business as CEO of the drug company G.D. Searle.
The principal desk officer for the program was Oliver North, until he was forced to resign in 1986 over Iran-Contra.
When planes crashed into the World Trade Center on Sept. 11, 2001, Vice President Cheney's response, after consulting President Bush, was to implement a classified "Continuity of Government" plan for the first time, according to the 9/11 Commission report. As the Washington Post later explained, the order "dispatched a shadow government of about 100 senior civilian managers to live and work secretly outside Washington, activating for the first time long-standing plans."
Things may move quickly after the election. No doubt the economic landscape will look very different six months from now.
"A man may build himself a throne of bayonets, but he cannot sit on it." William Ralph Inge
"What's the point of having this superb military... if we can't use it?" Madeleine Albright, former American ambassador to the UN and former Sec. of State
"It is not an exaggeration to say that it is clearly in the interests of the world's leading arms exporters to make sure that there is always a war going on somewhere." Marilyn Waring (Counting for Nothing)
As far as nuclear arms proliferation is concerned, we all know about the efforts by a growing number of countries to obtain them. This is happening even though the 1968 Treaty on Non-Proliferation of Nuclear Weapons (NPT). was designed to limit the spread of nuclear weapons. Far from contracting, the club of countries with nuclear capabilities (USA, Russia, China, France, United Kingdom, India, Pakistan, Israel) is expanding, while the goal of nuclear disarmament has become a dead letter.
Some among the most heavily armed countries, such as the United States, have revealed plans to replace their ageing nuclear weapons stockpiles with more modern and more deadly weapons. The Bush-Cheney Administration, for instance, announced last March 5 (2006), its plan for building as many as 125 new nuclear bombs a year, from 2010 to 2022, while at the same time assuring other nations that it is not seeking a new arms race. - Last June 13 (2006), the Bush-Cheney administration also made it clear that whatever the 1967 U.N. treaty banning weapons of mass destruction from space says, the United States is going ahead with plans to develop weapons for use in Outer Space, with the clear intention of asserting American dominance of this common property of humankind. If needs be, the Bush-Cheney administration will not hesitate to pull out of the 1967 Treaty, just as it pulled out, in 2002, from the 1972 Anti-Ballistic Missile (ABM) Treaty. It is obvious that a nuclear arms race is on the way, with very few checks in its path.
In the world of conventional weapons, their production, their spread and their use is even more endemic. Existing international conventions against the use of inhumane weapons against populations, such as the 1980 Convention on Conventional Weapons (CCW), are openly violated, as the summer 2006 destruction of Lebanon by Israel vividly illustrated. And, what is more, new efforts to restrict their proliferation, especially in the developing world, such as the proposed Arms Trade Treaty, are being resisted by some of the countries that are the larger producers and exporters of armaments.
On October 27 (2006), for example, the vast majority (139) of countries represented at the United Nations voted an historic resolution to have the new UN Secretary General, Ban Ki-moon prepare a global Arms Trade Treaty for 2007. The aim is to introduce some regulation of the wide-open international arms transfers that fuel conflict, poverty and serious human rights violations in many developing countries. However, the main exporter of armaments, the United States, voted against the resolution. -It was the only country to vote no. Twenty-four countries, among them large arms exporters such as Russia and China, abstained. It can be considered a tribute to some European countries that are large arms exporters, such as France, Great Britain and Germany, that they supported the resolution in favor of the coming arms trade control treaty. These European countries, at least, are showing some leadership, even though the U.S. has abdicated any pretense of leadership in this domain. -To be effective, however, the proposed treaty would need to be implemented by all countries that are large producers and exporters of armaments and by most other countries. The reason is simple: a weapons company with its headquarters in a given country with strict export controls can always circumvent national regulations by manufacturing weapons in a non-complying country. Even then, there would remain the hurdle of stopping those underground international arms dealers who do their illegal trade without requesting any export licenses.
The total international arms trade has been increasing rapidly, in 2005 reaching an all-time high in current dollars of $44.2 billion (from $38.9 billion in 2004). The United States is the world's leading conventional arms exporting nation, accounting for about 29 percent of all international arms trade. Last year, in 2005, it exported $12.8 billion of military gear of all sorts, about half of it ($6.2 billion) going to developing nations. The other main arms exporting nations last year were France (second with $7.9 billion in total arms sales) and Russia (the third exporter, with $7.4 billion in total sales). The United Kingdom and China came in behind, with $2.8 and $2.1 billion in arms exports in 2005. Overall, however, the 25 countries of Western Europe surpass the U.S. in trade of armaments, with about 44 percent of total arms exports. The other two non-Western countries, Russia and China, are responsible respectively for about 17 percent and 5 percent of total world arms exports.
Such a large-scale trade in armaments has the expected consequences of fueling regional conflicts, when they are not solidifying undemocratic and abusive regimes. It also has the effect of increasing poverty in countries that are already poor. But is it realistic to want to reduce arms exports without at the same time attempting to reduce military production?
Indeed, the fundamental cause of the flourishing international trade in armaments is the large military establishments that industrial countries subsidize year after year. The Stockholm International Peace Research Institute has estimated that total world military expenditures, (which had been falling from 1991 to 1996), are on the rise again, especially since 2001, and amounted to $1,118 billion in current dollars, in 2005, or 2.5 per cent of total world production, or again, about $173 per capita. This is big business and it can only be sustained with the threat of oncoming armed conflicts or through arms exports to countries in turmoil.
The USA is responsible for close to half (48% in 2005) of all military expenditures in the world. It is, therefore, not too surprising that it is also the largest arms exporter and that many of its industries are reluctant to loose such a lucrative business. Fourteen other countries account for about 36 per cent of global military expenditures, with such countries as Russia, UK, France, Japan and China, each spending about 4 to 5 per cent of the total. In other words, the five nuclear members of the U.N. Security Council (USA, Russia, China, U.K. and France) are also the world's largest military spenders -Therefore, it is only normal that leadership on this matter should originate from this quarter.
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at tremblay.rodrigue@yahoo.com
He is the author of the book 'The New American Empire'
Visit his blog site at: www.thenewamericanempire.com/blog.
