Saturday, February 08, 2003


All Terrorism, all the time

There's a profile of the dangerous Mr. Zoellick, Bush's free trade ambassador, in the NYT today, penned by ELIZABETH BECKER and EDMUND L. ANDREWS

Inevitably, Zoellick spouts the Bush line about what he does:

"The long-term war against terrorism has to include trade, openness and development," he said in a recent interview."

I can't wait until somebody tells us that the war against terrorism has to include privatizing social security. Or has it already happened?

Anyway, the profile is worth reading not only to find out what Zoellick is up to, but also because there's an unexpected bitchiness in the thing. This is our favorite part"

"A prolific writer and a man driven to make his mark on the world stage, Mr. Zoellick has been plagued throughout his career with assertions that he lacks the kind of bonhomie and people skills that would help him widen his influence inside the administration and build broad-based coalitions outside it.

"I am a big fan and friend of Bob's, but I have to say it is amazing he's gotten as far as he has, given the number of enemies he's made," said a former official who spoke on the condition of anonymity."

Also, in terms of in-fighting: Zoellick distances himself from the debacle of blocking generic anti-AIDS drugs to third world countries -- one of the many sterling skuzzy moments of our administration's recent history.

Oddly, the article doesn't mention Bob's Enron connection. However, he's mentioned in the Harvard Watch report, the one that fingered Harken/Harvard connection. Here's his bio through the lens of Enron.
Robert B. Zoellick
Harvard affiliation
: J.D., MPP, Harvard; former director and faculty member of Harvard's
Belfer Center
Enron affiliation
: U.S. Trade Representative; Enron Advisory Board; board member of Alliance
Capital, major Enron shareholder
Zoellick sits precariously at the nexus of Harvard, the Bush White House and Enron. While at Harvard, Zoellick directed a pro-corporate energy research center funded by Enron's largest shareholder.

Friday, February 07, 2003


Ah, for the time to make a long, leisurely post about the tax shelter shell game that was apparently played by Ernst and Young! To sing of how they roped in the greedy, incompetent CEO class (their pockets bulging with stock option money they evidently did nothing to earn, and that soon receded into the electronic ether from whence it came, paper wealth to paper loss, dust to dust, worldcom without end, amen)! I mean, is LI above smirking at such a relic of the nineties as this piece of news, from the NYT business section?

"Two firms being sued, Ernst & Young and KPMG, offered shelters that they said would make taxes on salaries, stock option profits and capital gains from the sale of a business either shrink to pennies on the dollar or disappear.

:The fees and savings on taxes can be enormous. Ernst & Young charged some clients $1 million just to hear a sales pitch, according to court papers. And the firms made millions from the sale of each shelter. The shelters allowed accounting firms, their clients and the law firms that blessed the deals to share money that otherwise would have gone to the government."

As Oscar Wilde once said about the death of Nell, it would take a heart of stone not to laugh at all of this. To our tender hearted president, however, this is no laughing matter. With the Great Giveaway, we can see a day coming when the rich will no longer be suckered into tax shelters like these -- the government itself will provide the ultimate tax shelter by abolishing their taxes, and hence wiping away the tears of such paragons of virtue as Sprint's former CEO, Ronald T. LeMay. NYT columnist
Floyd Norris reports

"Thanks to the clever Ernst tax strategy, it appears that Mr. LeMay may have paid no taxes on the $149 million in profits he recorded by exercising his stock options in 1999 and 2000. That meant he did not have to sell shares to pay the taxes, as it appears he did in prior years, when his profits were far smaller."

We imagine the reader in the White House, starting this story (Once upon a time, Mr. President, there was a valiant prince of the Spint Corporation, Ron LeMay, who for his various manly virtues earned himself $149 million dollars. That was his money, right Mr. President? Well, just think, there were some tailors that came along, Ernst and Young were their names, and they promised to weave Mr. LeMay a beautiful invisible suit, which they called a Tax Shelter. Isn't that sweet, Mr. President? But listen to what happened to our poor and noble knight!) will splutter with indignation at how it all turned out so badly. Mr. Norris explains where the $149 million came from:

"In his years at Sprint, Mr. LeMay was well paid, but his annual cash compensation never exceeded $2.7 million. It was stock options that offered him the opportunity to become really wealthy.

"It was emblematic of the times that Sprint's board was willing to award millions of options to Mr. LeMay in 2000, the same year he gained a paper profit of $127 million by exercising options. But he obviously wanted more, and he acted as if there was no chance that his tax strategy would fail or his Sprint shares would fall."

Ah, yes. It is for the victims of the stock crash like these that Bush is acting like Providence itself. Only problem is, his drunk driving of the national treasury isn't going to help with his buds in the end. It's a typical frathouse beer run -- Junior is going to get into trouble before it is all over.

Our best friend Dave leaves a message on the recorder: your last refutations didn�t refute anything.
Ah, he knows how to stick the knife into LI�s heart. We imagine that we are the great refuters, the universal refuters. Like a village wrestler, our world is bounded by our strength, and our strength is untested by the wide world. So� it turns out we didn�t present an overwhelming case for peace in our last couple of posts. But� we can�t help but think that the real value of the post that Dave is referring to (not the Kipling post, surely, which wasn�t a refutation) is our use of the words "surreption" and "clanculation." Long after our Mesopotamian misadventure has sunk to the dusty status of the War of Jenkins Ear, we like to imagine that the OED will have an entry for clanculation, quoting, well, we blush to say, but LI. What are current events compared to the long history of the language?

Thursday, February 06, 2003


And now, for an entre-act in LI's unremitting stream of anti-belligerent propaganda:

There's a nice essay about Kipling in Hudson Review -- one with which LI disagrees mutitudinously, but one which we urge our readers to look at. Or those of our readers who have read Kipling. The concentration here is on Kim, but we must admit never to have finished Kim. Our Kipling is the Kipling of the short stories. We were recently reading the short stories again (background to our endless paper about James Fitzjames Stephen) so that we came to the Hudson Review essay with some thoughts of our own.

Every essay about Kipling begins with the same note: he was a secret pleasure, for political reasons, of the dominant literary class. His art, by achieving an uncritical popularity, became, perforce, suspect among those who were popular only, sometimes, among the critics. He was admired by Eliot, Orwell, and Wilson. The politics of these tropes goes back to that certain pall of resentment that seems to hang over the rightwing writer --- as though, having once and for all dissented from the pursuit of happiness (that liberal buNch of bunk), he were virtuously intent on the pursuit of gloom. Recently, Weekly Standard writers like Christopher Caldwell have pondered the reversal of fortune between left and right -- pointing out how much happier, and more fun, right wing publications are than left wing ones. There is some justification for this -- the left has its puritanical side, as well as its factious inquisitions, and cycles through periods of paranoid dread, and the right, with reason, believes itself politically dominant right now -- but in the sphere of culture, the right is far from happy and gay. One has merely to read the New Criterion to discover that the barbarians are at the gates and have the tenure, drat their hides.

Clara Claibourne Park is an exceptionally good writer, however, and goes through the minefield pretty easily. She isn't intent on scoring points -- a rare quality in Kipling scholarship. She takes as her guide to Kipling two studies -- Harry Ricketts� Rudyard Kipling, and David Gilmour�s The Long Recessional: The Imperial Life of Rudyard Kipling.

Her comments on Gilmour mix appreciation and disavowal. To our taste, however, there is not enough disavowal. For instance, here:

"Gilmour is not afraid to take on �The White Man�s Burden.� It is important, of course, to correct the common impression that by �lesser breeds without the law� Kipling meant Britain�s colonial subjects. Rather, the phrase was aimed at European imperialists (probably German) less responsible than the British. For �in spite of the prejudice and violence of expression, the message of �The White Man�s Burden� is idealistic.�

'Take up the White Man�s Burden,
The savage wars of peace,
Fill full the mouth of famine,
And bid the sickness cease . . .'

Long before, barely out of his teens, Kipling had written from India a passionate reply to his cousin Margaret Burne-Jones, who had asked, �Do the English as a rule feel the welfare of the natives at heart?� �For what else do the best men . . . die from overwork and disease, if not to keep the people alive in the first place and healthy in the second [?] . . . Do you know how many Englishmen, Oxford men expensively educated, are turned off . . . to make their own arrangements for the cholera camps; for the prevention of disorder; or for famine relief, to pull the business through or die, whichever God wills [?]� Gilmour reminds us that Kipling wrote in a world �without Oxfam or the United Nations�; he leaves it to us to substitute AIDS for cholera, and to recall the disorder unprevented in Nigeria, in Kashmir, and in other places that maps once tinted red�not least Zimbabwe, the land once part of Cecil Rhodes�s dream and now its own people�s nightmare."

This won't do. India, as we know, suffered a series of famines after the Mutiny was put down that are to be measured in the millions of casualties: 6 million, perhaps, for the 1875-1876 famine, and 4 million for the famines of the 1890s, under Curzon. The fact of famine is invariably treated, by the colonial apologists, as a natural given -- something that happened because of the weather. And that the British, heroically gallant, were helping out about. It is never pointed out that the money the British were using was from taxes collected from Indians. It is never pointed out that there is no reason to think that if the Indians had succeeded, after the Mutiny of 1857, in throwing off the British, that they wouldn't have been as successful as the Russians in attracting financing for railroads and other technology. That is, it isn't pointed out by those for whom the British Raj was a pageant staged by PBS. However, as long ago as the 1780s, Edmund Burke was not having this myth of British altruism. As he pointed out in his speech in support of Fox's Reform of the East India Company, hunger that is caused by natural calamity is magnified by political calamity. He describes the Company's policy of invariable greed as having this effect on a (somewhat idealized) countryside:

This object required a command of money; and there was no Pollam, or castle, which in the happy days of the Carnatic was without some hoard of treasure, by which the governors were enabled to combat with the irregularity of the seasons, and to resist or to buy off the invasion of an enemy. In all the cities were multitudes of merchants and bankers, for all occasions of monied assistance; and on the other hand, the native princes were in condition to obtain credit from them. The manufacturer was paid by the return of commodities, or by imported money, and not, as at present, in the taxes that had been originally exacted from his industry. In aid of casual distress, the country was full of choultries, which were inns and hospitals, where the traveller and the poor were relieved. All ranks of people had their place in the public concern, and their share in the common stock and common prosperity; but the chartered rights of men, and the right which it was thought proper to set up in the Nabob of Arcot, introduced a new system. It was their policy to consider hoards of money as crimes; to regard moderate rents as frauds on the sovereign; and to view, in the lesser princes, any claim of exemption from more than settled tribute, as an act of rebellion. Accordingly all the castles were, one after the other, plundered and destroyed. The native princes were expelled; the hospitals fell to ruin; the reservoirs of water went to decay; the merchants, bankers, and manufacturers disappeared; and sterility, indigence, and depopulation, overspread the face of these once flourishing provinces."

Burke put his finger on the essentials of the system. Kipling's India was the result of a revolution. The revolution came from above, through the British administration. Its goal was to create an export economy and a completely monetized internal market. To do this, it was necessary to get the peasantry to think in terms of money, instead of in terms of sufficiency. To effect this, the British demanded their tax in money, not goods. In order to get money, the peasants turned to a new class, the money-lenders promoted by the British with the idea that these money-lenders would invest in the land and become a rural middle class. They didn't. The system of subsistence was intentionally uprooted, and a system put in place that exposed the peasantry to the cycle of the climate, and the possibility of food shortage, without the traditional buffers to hardship. As we've mentioned before, Mike Davis's documentation in The Victorian Holocaust is quite overwhelming. Of the famines that occured in 1876, Robert Conquest's term, terror-famine, seems appropriate. Conquest, setting out the case against Stalin's agricultural policy, says this, in the Harvest of Sorrow: "... in 1932-3 came what may be described as a terror-famine inflicted on the collectivized peasants of the Ukraine and the largely Ukrainian Kuban... by methods of setting for their grain quotas far above the possible, removing every handful of food, and preventing help from the outside..."

Similarly, the much vaunted British technology -- i.e. the trains -- operated, in 1876, to take grain AWAY from effected areas in accordance with the British policy of export; the state operated to ensure a free market by making sure that grain distribution was kept to a minimum -- as Viceroy Lytton put it, the relief camps were like picnics, and so they were made unpleasant places indeed. A pound of grain a day was the amount given to the unfortunates at these camps -- was, indeed, all the food distributed to them, so that they died numerously. As Davis has pointed out, the Nazis distributed food more generously at Dachau. There's no getting over the failure of British policy in India. There is only... forgetting it. So Park can bear with much more equanimity than LI Gilmour's absurd assertions. As in this graf:

"For us, of course, the deterrents to the imperialist worldview are appreciable, to say the least. Current history, however, gives some weight to Gilmour�s observation that �when all appropriate qualifications are made, minorities usually fare better within imperial or multinational systems than in nations dominated by the ethos or ethnicity of a majority,� particularly when we are thinking about Bosnia, or Saudi Arabia�or India and Pakistan."

That India is, if anything, a society in which majorities are vigorously disputed -- much more vigorously than in, say, the apartheid South of my youth -- should be pointed out. As is the fact that the most various multi-national empire in Europe, the Austro-Hungarian one, saw born in it and nurtured by its politics one Adolf Hitler. Not a high recommendation, we'd say.

Wednesday, February 05, 2003


"Thus the word of the LORD came to me:

Son of man, you live in the midst of a rebellious house; they have eyes to see but
do not see, and ears to hear but do not hear, for they are a rebellious house." -- Ezekiel

My ears heard Colin Powell make a long speech to the UN and basically re-iterate the Bush administration's position, exemplifying it with some examples culled from military telecommunications that mean very little. Actually, they mean more than the administration may want them to mean. If the Iraqi military is calling each other up saying hey, haul those nerve gas cannisters that we are going to use on the Kurds over to site 7, you would think the U.S. would have a much easier time making its case, at least in as far as the surreption and clanculation of the famed Weapons of Mass Destruction are concerned.

However, LI's ears aren't Vernon Loeb's, the Washington Post's excitable National Security correspondant. In his online Q and A after the speech, Loeb seemed to forget, for a moment, that he is not (officially) employed as a propagandist for the Bush administration. Here's what he had to say about the pesky naysayers of pacifistic nostrums:

Wheaton, Md.: Is the issue with the world community really about evidence? It seems pretty clear that those nations, such as France, will never support the U.S. effort. Why waste any more time trying to convince them?

[V.L.] No, I think presenting evidence is very important, and I think Powell was quite eloquent in bolstering his case using evidence that this is not some academic exercise for the United States, but a very visceral one, in the wake of the Sept. 11 terrorist attacks. I think Powell's remarks will have a persuasive effect on many around the world, and while they may not convince the French government, I bet France will not exercise its Security Council veto to nix a second U.N. resolution authorizing war, if it comes to that."

But, of course, Mr. Loeb is, primarily, a journalist -- a hardheaded kind of guy who'd never shill for his country:

Vernon Loeb: I found Powell's case quite persuasive, partly because he made repeated reference to information developed by other countries and by U.N. inspectors. I mean, nothing he said struck me as particularly far-fetched. As a journalist, I try to be skeptical about everything I hear from the U.S. government, but in this case, Powell's case passed the test. As for U.S. Special Forces, they are in Iraq already, and they will play a very important part in any war, attacking important weapons sites and leadership targets, among many others things."

Well, the convinced will hear what convinces them. LI, convinced that the war in the offing is a big mistake, did not hear what would convince us that we were wrong -- i.e., that Iraq is planning to attack a specific target. In fact, the schizophrenic position of this administration is quite clear about this. We must attack Iraq right now because they are so weak (that is, they are less of a danger to their neighbors than they were before the Gulf War) in order to prevent them from someday getting strong. Since any nation with the potential resources of Iraq has the potential for getting strong, this argument goes without saying. The problem is with the assumption behind it, which is grossly insane. Nor did we hear anything that would make us think that weapons inspectors aren't efficient -- the kind of chaotic removal of weapons, if Powell is right, that has been happening in Iraq is itself disruptive to any well planned use of the weapons. We did, however, have a feeling that the U.N. will not be doing this with another country for a long time. The next Iraq will have no advantage in disarming itself and revealing its every defense secret to a country that then uses this information to attack it. We are watching a unique moment in history -- oh boy.

Cupidity on a scale unexampled...

Last week, with little fanfare, FERC released information conclusively showing that Reliant closed down electric generating plants in order to create artificial energy shortages, and thus raise prices, in California in the great energy heist of 2000.

Jason Leonard of Counterpunch has a nice, detailed article about this. Here's the smoking gun graf -- of course. You can't have a scandal without a smoking gun, anymore:

"This latest smoking gun in the ongoing investigation into California's energy crisis, a transcript of a conversation between a trader and a power plant operator at Houston-based Reliant Energy in which the two discuss shutting down some of the company's power plants in California between June 20 and 22, 2000 to create an artificial shortage so the price of power would skyrocket, was released by the FERC Friday. The tactic worked. It caused power prices to reach "unjust and unreasonable" levels in California, which under the Federal Power Act is illegal.

We "started out Monday losing $3 million... So, then we decided as a group that we were going to make it back up, so we turned like about almost every power plant off. It worked. Prices went back up. Made back about $4 million, actually more than that, $5 million," the Reliant trader says in a tape-recorded conversation on June 23, 2000.

As we pointed out yesterday, Adam Smith shrewdly advanced the proposition that a government of traders is a government with an incentive to work against the interests of the governed. This plays itself out in the punishment of Reliant the fine against them, as Leonard puts it (reaching for the cliche) is a slap on the wrist.

"Reliant cut a deal with FERC, agreeing to refund California $13.8 million to settle the issue and will not be penalized under federal laws."

Our point, yesterday, was that while the United States itself might not have a primary interest in spending 100 billion dollars to accrue the oilfields and reserves of Iraq, its actions could well be drvien by the mindset of oilmen who arise from a culture in which that interest is lively. As we know, the foundation of Bush's personal fortune was laid in Bahrain, the small Gulf principality with which Harken cut a suspiciously profitable deal in 1990. To say this is not to say that the Blood for Oil equation is a sufficient account of the Iraq crisis -- really, there are other factors here than the culture from which Cheney and Bush have sprung -- but it is to say that there exists a bias here critically skewing the way this administration is moving towards war. This war resembles, in its causes, the Boer War, which was also driven by a combination of greed and jingoism. The greed part of the equation is continuous between domestic and foreign policy, and has a similar form: the sinister contiguity of the Bush "emergency energy policy," designed by the lugubrious Cheney in secret council with his energy pals, and the brownouts in California, is reproduced in the plan to target Iraq, which we've been assured was initiated in the aftermath of 9/11 even though there was no link between Iraq and 9/11 -- or, at least, less of a link than between, say, Saudi Arabia and 9/11. Again, we have Cheney as the hawk, again we have distorted information driving the operation, again we have a president reluctantly taking action he manifestly wants to take.

I'm listening to Powell give his speech to the U.N., and I'm amazed by the quality of it. That Powell denounces Iraq for chemical warfare that the U.S. tacitly condoned, and that Western companies, in the eighties, profited from is deeply cynical move. And I'm thinking of the last paragraph of this story about the timing of the war in the NYT:

"Waiting months, however, seems unlikely, and from a strictly military standpoint inadvisable. The Bush administration has yet to lay out all of the evidence about Iraq's weapons programs or its links to terrorists but it has already laid the groundwork for an early war. The military preparations have a momentum and dynamic of their own. The administration will not want to keep the military in idle for long so the diplomats will also not have long. The forces are getting in place. The gun is cocked. Nobody can tell the future, but the forecast is for war."

Tuesday, February 04, 2003


It was Napoleon who made the phrase "nation of shopkeepers" famous. As it happened, he was quoting Adam Smith -- who coined the phrase in the chapter that considers the motives animating the building of empires. The passage is arresting:

"To found a great empire for the sole purpose of raising up a people of customers may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation whose government is influenced by shopkeepers. Such statesmen, and such statesmen only, are capable of fancying that they will find some advantage in employing the blood and treasure of their fellow-citizens to found and maintain such an empire. Say to a shopkeeper, "Buy me a good estate, and I shall always buy my clothes at your shop, even though I should pay somewhat dearer than what I can have them for at other shops"; and you will not find him very forward to embrace your proposal. But should any other person buy you such an estate, the shopkeeper would be much obliged to your benefactor if he would enjoin you to buy all your clothes at his shop. England purchased for some of her subjects, who found themselves uneasy at home, a great estate in a distant country."

LI has been thinking about this passage in relation to the question of Blood for Oil. In the mainstream press, the issue of Iraqi oil is delicately circumvented with the assurance that the Bush administration would, in pursuing its war, spend more money than the oil is worth. However, as Smith points out, the point of the imperial project, from the viewpoint of the shopkeeper, is to unload the unavoidable costs of conquest on the imperial power while enjoying the fruits of those conquests. The war against Iraq might not be a project fit for a nation of oilmen, but it is extremely fit for a nations whose government is influenced by oilmen.

US policy towards the Middle East cannot and should not avoid the issue of oil. That the U.S. should be spending billions trying to find alternatives to Middle Eastern oil is one part of the political equation; that it should be trying to maintain such relationships with oil producing countries as to mitigate disturbances in the supply of oil is the other side of the equation. We were reading a book on America's imperial power by Raymond Aron, the French gaullist, the other day and were struck by how clearly Aron saw this issue. We were also struck by Aron's remembrance of the U.S. role in the Suez crisis (which was almost twenty years past when the book came out in 1974) -- you remember, the objection lodged by Eisenhower against the attack on Egypt coordinated by a coalition of France, Britain and Israel. That objection was a brilliant stroke on Eisenhower's part. For decades, the U.S. was able to support Israel and Saudi Arabia simultaneously. Aron thought that the Suez incident precipitated the French distrust of American intentions that resulted in De Gaulle's rupture with NATO. Interestingly, the US commentators on the French objection of Bush's war all assume that the French will simply adhere to the fait accompli of an invasion, without pondering the advantages France could reap by not doing that. The advantages would be along lines similar to those that accrued to the U.S. after 1956: the oil producing nations would be able to turn to France/Europe to mitigate the unilateral weight of the U.S. The French, we are assured, would lose out on Iraq's oil wealth. But that of course assumes that 1., the post Saddam government would be pro-American into the foreseeable future, and 2., that the Persian Gulf states would be unappreciative of France's bucking the American initiative.

This view seems to have no supporters, or even thinkers, in the U.S. More typical -- in fact, almost uniform -- is the view of Chris Suellentrop at Slate, who after giving the reasons for France's recalcitrance -- it all has to due with wounded pride, which is a not so subtle way of dividing the case between the belligerents and their opponents as a case of passion (that womanly emotion) on the one side, and reason (represented by, I suppose, Cheney) on the other side. After exploring this worn topic, Suellentrop concludes:

"Which is why, in the end, France will go along with the Bush administration on Iraq. If France vetoes a Security Council resolution, and the Bush administration goes to war anyway, France will have been proved powerless. But if it accedes to the war after demanding more evidence, it will be able to claim that it influenced American policy�whether it's true or not. Germany will likely stand on principle and oppose the war. But France would never do such a thing. As a U.N. diplomat said last week, "It matters to matter for France."

Our assurance that the World will line up behind Bush depends on Bush's successful conclusion of a war that will be successful if the World lines up behind Bush. Otherwise, America occupies Iraq alone, and the mess will be to the advantage of any nation bold enough to play the game among the Arab states.

Monday, February 03, 2003

Deficits and us

LI is not a deficit hawk. We felt that the budget surplus under Clinton was a mark of shame, rather than a badge of honor -- it represents the lost opportunity of finally implementing a true national health care system, which in the end would be a much more valuable asset to this country than paying down on the national debt. Our idea is that the question of the deficit has to start with the premise that all deficits are not equal. One has to judge a deficit on the basis of where the money has gone, and where it will go. The supply siders have formed a meretricious cult around a fundamental truth: a budget is part of an ongoing process. It is embedded in a history. Deficits now may make way for surpluses later. Why? Because the money borrowed was spent wisely. What is wise spending? Spending that benefits the general welfare in health, education, science, infrastructure, etc. What is unwise spending? Spending that leads to death, or increases inequality, or is so excessive in one department that other necessary departments are squeezed to accomodate it. The idea that deficits should be judged wholly on whether they squeeze credit for private enterprise is probably deficient both on the evidence and on its motivated neglect of what state spending does. It is accounting that only concentrates on expenditure. It is, in other words, religion rather than rationality.

Judging, then, by our criteria, we find the Bush maladministration of the budget one of the most shocking large facts of the age. And the bodyguard of lies that have surrounded the looting of the Treasury are so blatant, and so unexamined, that we have to go all the way back to... well, the days of the New Economy, when Enron was Fortune's most innovative company in the U.S.A.

So, a little history.
Last year, in July, the Bush administration floated the news story that the surplus of 2001 was being reversed, slightly.

"The Bush administration expects the federal government to post a deficit of $165 billion this fiscal year, a 56 percent increase over earlier projections due in part to a surprise downturn in tax revenue caused by the stock market sell-off, officials said."

Now, when earlier projections are that much off, what you want is a new model. Did the 165 billion dollar deficit, in fact, eventuate? According to the Center for Budget and Policy Priorities, the budget deficit for 2002 was probably about 16 billion over that.

Excluding the surpluses in Social Security, the budget is in deficit by $181 billion in the current fiscal year, 2002; such deficits are projected to continue for the following seven years, with surpluses not reappearing outside Social Security until 2010. The cumulative non-Social Security deficit over the period 2002-2011 is projected to total $700 billion. This outlook is a remarkable change from the projection CBO made only one year ago, when it projected surpluses outside of Social Security totaling $3.1 trillion over the ten-year period 2002-2011.

Just two weeks ago, the Bush backgrounders were telling the press to expect a budget deficit of around 200 billion for 2003. Now the budget has been officially presented. Guess what? Just as, last year, the real budget deficit was grossly larger than the one projected by the government, so, too, the new projection is about 50% bigger than it was just two weeks ago. My my, how an AOL-like sum of money can just pass through your fingers!

"WASHINGTON -- Due in large part to his proposed $670 billion tax-cut plan, President Bush's fiscal year 2004 budget will post a record deficit of $307 billion on spending of $2.23 trillion, according to budget documents distributed Monday. In addition, the budget makes no provision for the cost of fighting a war against Iraq. However, in his budget message, Mr. Bush argued the deficit wasn't all that large. "Compared to the overall federal budget and the $10.5 trillion national economy, our budget gap is small by historical standards," Mr. Bush said in his budget message."

Not putting in the cost of the war in Iraq was a bit of imbecile brilliance that is sure not to attract attack from the belligerent press. Don't look for the Washington Post or the Wall Street Journal to editiorialize about the fiction of ignoring a figure that is potentially half the size of the budget deficit. Alas, we suspect that the Dems will simply take the Hoover route and attack the deficit itself. That you run a deficit in a recession is ... well, what you do. That you spend money in such a way that you eventually make it back, in increased tax revenue, to pay for State services, is the key, here. The Great Giveaway will simply dissipate wealth among the most profligant, shift equity investment to companies that will have to borrow to increase capital expenditure, and operate as a salve to the massively bad investments of the dishonest upper ten percentile. This is Moral Hazard writ large.

Yesterday, LI went with a friend car-buying. The friend thought she�d like to buy a car from a dealer in Georgetown; or at least check out his lot. He told us, casually, that he�d come in at eight, and on the way in had seen the Shuttle break up in the sky.

That is all we can contribute about the sad news � a bystander of a bystander�s account. We hope this doesn�t interrupt the shuttle for too long � and we wonder how the three crew members up there on the shuttle are going to get home.

We suggest an article from, of all places, the Cato Institute today. The libertarian think tank is better known for coming up with hairbrained schemes to privatize social security than for its dovishness. But there is a considerable tradition on the American right that suspects that the impulse driving imperialism is a kissing cousin to the impulse driving big government elsewhere. This ties in with a Burkean suspicion of all schemes to better mankind that impose an order of ideas from above. Russell Kirk, America�s premiere Burkean, was, in his time, an anti-imperialist. And so, apparently, is Gene Healy, senior editor of the Institute, whose anti-war plea looks like � well, like LI could have signed it. As LI has done in several posts, Healy works out the worst case scenarios for the war itself. He doesn�t believe that these worst case scenarios will be realized. He believes, as we do, that Saddam Hussein will be defeated with a minimum of American (as opposed to expendable Iraqi) casualties. And he thinks that we are then in for it:

�In the best-case scenario, Hussein doesn't pass WMD off to terrorists and he never gets to launch the Scuds. Shortly after the air war begins, he's deposed by a Republican Guard coup. We take Baghdad without a single U.S. battlefield casualty. Triumphalism is in the air, and the chorus of self-congratulatory "I-told-you-so's" rings out in op-ed pages and TV talk shows across the land.
But our troubles are just beginning.

Welcome to the Occupation �

Healy�s concern about the Occupation is a little different from ours. His concern is that it would fuel Osama bin Laden-ites. He has a few pity observations about that:

"Indeed, it's hard to think of a foreign policy initiative that could do more to empower Al Qaeda than invasion, occupation and reconstruction of Iraq. To see why this is so, it's necessary to examine what motivates Bin Laden's murderous band. Some commentators on the Right have offered a theory of "why they fight" that amounts to "they hate us just because we're beautiful." The cover of the first post-September-11th edition of National Review declared that Al Qaeda attacked us "because we are rich, and powerful, and good." On July 4, 2002, libertarian Brink Lindsey, on his popular weblog, titled an entry "Why They Hate Us," and quoted the Declaration of Independence: "We hold these truths to be self-evident: that all men are created equal�"

Those who have made a career of studying Al Qaeda do not agree that the primary motivation behind the Bin Ladenists' anti-American jihad is hatred of the West's political and cultural freedom. Peter Bergen, Bin Laden's biographer, and one of the few Westerners to have interviewed him, writes in his book Holy War, Inc. that:

"In all the tens of thousands of words that bin Laden has uttered on the public record there are some significant omissions: he does not rail against the pernicious effects of Hollywood movies, or against Madonna's midriff, or against the pornography protected by the U.S. Constitution. Nor does he inveigh against the drug and alcohol culture of the West, or its tolerance for homosexuals...."

In Healy�s view, Osama�s pre-occupation is with local issues, not the debilitating effect of the Jerry Springer show on the American worship of Allah. This makes such sense that it sounds like it couldn�t be true � it is too far outside of the narcissistic circle of American concerns to think that our concerns aren�t their concerns.

Healy sums up his arguments like this:

�What's utterly unreasonable is to assume, as the administration and its fellow travelers seem to, that the number of recruits to Al Qaeda's murderous jihad is relatively fixed, and will not increase dramatically if the U.S. begins a policy of conquering and occupying Middle Eastern Muslim countries with the avowed purpose of making them secular and free.�

LI agrees with Healy that the probable result of occupying Iraq would be to increase bin Laden�s forces. The more violent result that we fear, however, is that occupying Iraq would inject American soldiers into a bloody civil war, in which not only Iraqi groups would be involved, but also proxies for the powers around Iraq. And that American withdrawal � which will occur if the casualties mount too high, a result easy to obtain by suicide bomber, as recent Israeli history will attest � will hasten a collapse that will inevitably bring the Americans back. In other words, chronic, sporadic violence for years on end, with the brunt of the casualties being borne by the supposedly �liberated� Iraqis.

Elia meets Karl Marx at the South Sea House

    When Charles Lamb, a scholarship boy at Christ’s Hospital, was fifteen, one of his patrons, Thomas Coventry, had a discussion with a...