Remora

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.

Remora

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.

Note

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?

Remora

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.

Remora

"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.

Remora

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."

Remora

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.

Remora
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.

Remora

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 brinklindsey.com, 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.

Remora
Prediction fiction

The NYT reports official preliminary figures show fourth quarter growth at 0.7%. Further in the story we come to these two grafs:

Most economists had predicted a weak figure for the fourth quarter, and none interviewed yesterday said they planned to change their forecasts. Though they expect growth to improve slightly this year, it might not be enough to create jobs until the spring or summer.

Many companies hesitate even to bet on a midyear recovery, said Carl T. Camden, president and chief operating officer of Kelly Services, a leading provider of temporary workers. His clients "talk about things turning around in the third quarter," he said, "and then they realize that's the same speech they gave last year"

So, is that what "most economists" had predicted? Wow, somehow we bet those predictions were revised about two weeks ago. Long range, that isn't what most economists were predicting at all. When Business Week did its annual half year business conditions survey in July, 2002, the picture was a lot rosier:


"BusinessWeek's midyear survey of business economists shows that, on average, the forecasters expect real gross domestic product to grow at a healthy, if unspectacular, 3% annual rate during the second and third quarters, with the pace picking up to 3.5% in the first half of 2003 (table)."

Is LI nitpicking? No. The importance of this is that those messages, percolating out into the national subconscious, set the stage for Bush's push-over midterm election. After all, what is there to worry about when the forecasters are showing a pickup? That, in fact, we got a downturn is now going to be written away as, somehow, a bad call. Well, we would like to point out the ideological biases of the bad callers. The professional Pollyannas -- people like James Suriowiecki of New Yorker and the ever erroneous James Glassman of the Washington Post -- have been assuring us that the CEOs are too worried for their own good -- the recovery is just around the corner. Their reasons aren't found in the economy itself, but in a particular, libertarian philosophy -- the same one underlying Bush's Great Giveaway.

In July, while economists were not -- not is the operative word -- within ballpark range of the end of the year's GDP figures, Mr. Surioweicki published a defense of the New Economy paradigm in Wired. It is a rather funny document.. As with all defenders of discredited doctrines, the first order of business is to redefine the semantics of the doctrine to make it work. So, here is how Suriowiecki goes about it:

http://www.wired.com/wired/archive/10.07/Myth_pr.html

"Stephen Roach, chief economist at Morgan Stanley, insists that the US can look forward only to "very subdued growth" until it works off "the bubble-induced excesses of the late 1990s."


Don't count on it. In fact, the overall shallowness of the recession and strong productivity growth during the downturn show that the skeptics are wrong. Call it the myth of the myth of the new economy. The naysayers ignore the economic fundamentals that drove the boom, emphasizing instead the over-the-top rhetorical flourishes - and outrageous stock prices - that accompanied it. Because wild-eyed optimists once said technology would change everything, it must have changed nothing. But if it's 2002 and you're still saying that things aren't fundamentally different than they were a decade ago, you're living in a dream world at least as fantastic as anything a new economy fanatic could conjure. I

n reality, 1995 marked the beginning of a long-lived shift in US economic performance. Productivity growth accelerated due to what economists call secular, rather than cyclical, factors. That is, the pace of productivity growth didn't start rising in 1995 because the business cycle had turned upward. It started rising because crucial aspects of the economy had changed. As a result, today's economy can expand much faster than previously thought possible. Between 1972 and 1995, productivity rose a paltry 1.4 percent a year. Between 1995 and 2000, it rose 2.5 percent a year - an increase of 79 percent. "There has absolutely been a sizable change in the secular growth rate of both labor productivity and total factor productivity," says Harvard economist Dale Jorgenson. Many of the truisms of the boom, it turns out, were true.

Now, what those stats aren't telling you is that they are calculated with the assumption that productivity has to be defined differently -- an assumption that kicked in during the late 90s. That assumption is being tested now. Like a lot of the accounting techniques of the 90s, it isn't looking very good.

Further, the New Economy model implied that this new boom in productivity would create a recession proof economy. That is what the New Economy was all about, in spite of Suriowiecki's smoke screen. And it wasn't just about that for bored pundits -- these were the assumptions that underlay AOL buying Time Warner. Hmm, I wonder how that worked out? And I wonder why Suriowiecki's model sorta forgets the slump in equity value that shows no sign of reversing itself right now. In fact, many of the truisms of the boom turned out to apply to the boom, and the boom only. One of the truisms of the post-boom, though, is certainly true for Suriewiecki -- bs in, bs out. Here, for instance, is the dance he does using the cooked productivity figures:

"Note that information technology's benefits increase over time. If you study the relationship of IT spending to productivity over a single year, you'll find that computers deliver benefits roughly equal to their costs."

That is a perfect New Economy sentence. The metric that you use to measure a firm's performance is no longer anything so plebian as profit and loss. Oh no. It is a 'benefit." And oh, this wonderous benefit -- this rise in productivity due to measuring productivity in a new way that i"incorporates" IT -- why, lo and behold, it equals the cost over a single year. This was the kind of thinking that boosted Yahoo stock to what was it, $300 per share? in 2000.

Behind Suriowiecki's nuttiness is one major fact about the current economy: we are being held up not by IT, but by people buying cars and houses. That's it, folks. There's no magic in the figures. The dream world inhabited by Suriowiecki's skeptics seems to be panning out as the real world, brother. Cooked productivity figures don't compare with 0% financing and the incessant barrage of mortgage offers even LI, who doesn't have a pot to piss in, gets regularly every morning in our email.

Alas, Surowiecki's kind of thinking will be used to justify the disastrous divident tax cut. The pied pipers are still out there, boys and girls.

Notes.

We received a nice email from a friend in NY re the previous post. Here it is:

"hi Roger - kind of a sweet post today, if I don't say so myself ....and, ah, evocative; in the sense that your introflashback brought me back to a memory of a moment in Austin in '91: I was sitting in the bar at the union (what the hell was it called?) drinking a beer and "protesting" the gulf war in the same way that all my "political" activity transpired (well, to be sure, very much as I did pretty much everything back then): sitting in a dark room on a sunny day, talking, drinking coffee, smoking, drinking beer, smoking, talking, drinking wine, talking, smoking..... when you happened in and we discussed having the same shameful, horrifying, stultifyingly humiliating realization the night before: that we agreed with Ross Perot - the war is not about oil. Well, were just about to go back to war and it still aint about oil. Trouble is, GW Dauphin and the rest of the cast of characters from '91 might think that it is (well, probably not Colin Powell, he's too focused on the exit strategy to ponder the whys and wherefores). We'll end up just as angry and sad and dumbfounded about the war as we were in '91, and the bullets will fly and the bombs will do what they do, and I will find a dark room on a sunny day and have a beer, alone and silent."

Speaking of exit strategies:
Today, of course, is the day the phone company decided to strike against Limited Inc, depriving us of phone service unless they receive some more of the ready... and of course LI isn't sure there's any ready in the bank. Not to worry, we will be posting from libraries and the like, if we have to... we will fight on the beaches, we will fight on the hills, we will fight in the divorce courts...

The latter is where we will be appearing tomorrow. A friend is divorcing a man who is convinced that LI has carnally known this friend. The man has been dragging said friend -- his ex-wife -- through the nightmare of the legal system in order to extract buckets of the ready. The man seems convinced that the courts are going to reward him for his varied virtues, in spite of the fact that the numbers say otherwise. And that the court will punish LI for our many vices. Drama, that is what we live for on this site, don't you know. Here it is. No wonder lately we are reading Dostoevsky's The Idiot.

Dope

In 1991, I received the call, and went down to U.T., where I found about a thousand people assembled. George Bush had just launched operation Desert Storm. We were assembled to protest the war. I remember running into my friend Emrys. We didn't talk about the war -- we talked about Emrys' dissertation, which at that time occupied his entire social life. Both of us were old enough to have been demonstrating, at this point, since the seventies. I was thirty two, which was a little above the average age of the demonstrators, but not much. The eighties had been full of demonstrations -- divestment, disarmament, Nicaragua -- and almost everyone there knew the drill. Neither Emerys nor I was happy to be there -- demonstrating had long lost its appeal over, say, having a beer in a burger joint. But duty called. We rallied in the dark -- as I recall, it was around eight o'clock -- and marched to the capital. I don't recall the next couple of weeks in crystal clear detail, but I do know that I went to several rallies, one of which entered the state capital. We lay down on the floor, under the rotunda. We were not, alas, arrested.

Yesterday I went along the path by the lake to the center of town. The anti-war rally was going to be held, either cleverly or bizarrely, on Congress street bridge. The usual demonstration routine is to march to the capital steps and listen to a couple of hours of hopelessly inelegant speeches, which we punctuate with cries of encouragement or outrage. As I approached the bridge, I saw that it was jammed with people -- this caused me to smile real broadly at the women approaching me on the path. They smiled back, and then called my name. I focused -- it was S. and her friend, J. S., who never really utters a political word in my presence, surprised me when I talked to her on the telephone last week by telling me that she was going to go to the anti-war rally. She and J. handed me a sign that they'd been handed. It recommended peace as a means of lowering taxes -- perhaps a sentiment that would appeal to passing Congress street drivers, but not exactly the beatitudes. I think they were a little disappointed -- S. mentioned that the crowd didn't go anywhere. She was up for a march. J. mentioned that it was the first demonstration she had ever been to.

I proceeded with my little tax sign to the bridge. Both sides of it -- the walkways -- were covered with people -- although as I walked from one end to the other, I realized that the crowd came in lumps. There were stretches that were pretty bare. The atmosphere was midway between a serious demonstration and a summer afternoon at Barton Springs Pool. The same kids that you see at the pool -- the lanky seventeen year old boys with goatees and drums -- were assembled at the south end of the bridge, in their third world knits, drumming. There were a number of girls of around the same age. There were some middle aged people like me, there were college students, there was a man who unfurled a large black flag (nice gesture), there were bicyclers I recognized as Critical Mass, there were people in trucks and cars going back and forth across the bridge, there were signs asking drivers to honk for peace, and there was an endless amount of flashing the peace sign at drivers, many of whom flashed it back. A woman --maybe nineteen -- had painted a peace symbol on her face, and was telling her friends that maybe they should sing something by that guy, you know... Bob Dylan, or like the Beatles. Another woman, whose sign was dense with a long quote, was asked about it and gave a long explanation of how she had gotten the quote from the Egyptian book of the dead and how Bush's nephew at Fox news had gotten him in during the coup, etc.

On the whole, the rally showed two things. On the dark side, since the grassroots politics of the eighties were pretty much decimated during the nineties, the mechanics of rallying large groups of people and directing acts of civil disobedience have to be learned all over again. This group, however good hearted, was far from being the shock troops of the revolution, unless the revolution requires a lot of bongoing.

On the bright side, the rally did draw at least a thousand people. It is a start. There are, this time, no leaders, no leading organizations, to organize what will probably be a struggle this year and the next. The Democrats have disappeared into a vacuum. The Greens, after embarrassing the Dems, seem more concerned with extending the principles of the Feingold McCain bill than with the kind of politics we get AFTER we elect our politicians. Perhaps the leaders of the new anti-war movement are still in grad schools in Michigan, or working in software in San Jose -- I don't know. There are big questions ahead. If Bush does commit troops to Iraq, the big question is going to be withdrawing them. Of course, the anti-war side has to be for withdrawal. But the devil in the details is that withdrawal, at that point, will lead to chaos; while occupation will lead to a war of low level attrition as in Vietnam. A peace movement should definitely put these scenarios before the American public continually, before the war starts. When I went home, I switched on the radio, but the unctuous Southern tones of our President were more than I could take, so I switched it off, and then waited for the commentators. An hour latter, I turned it on again and listened to them. Amazingly, the Dem's house leader, Nancy Pelosi, mentioned the hazards of occupying Iraq. Wow -- a woman who actually thinks, in a position of some power!
Surely she will be attacked for that.

Remora

Conservatives like Mickey Kaus have been cannonading the NY Times for its leftwing bias since Howell Raines became editor in chief. Liberals like Eric Alterman have naturally retaliated by defending Raines. In LI's opinion, the NYT crusade to open the Augusta Masters to women is eminently defensable. However, we aren't golfers, we believe that gender biases in sports are much more pronounced in, say, football or basketball than in golf, and we don't really have any interest in the story.

A more serious breach of journalistic integrity has emerged about the Time's reporting from Venezuala. We wonder if Kaus or his conservative cohorts are going to report on the right wing bias of the newspaper... No we don't. We dont' think for a moment that they will report on this story, which goes like this.

Narco news is a site run by Al Giordano. In a news story about the Times' firing, or letting go, of its Venezualan stringer, Francisco Toro, Giordano revealed a systematic bias towards the upper class side in the dispute between Chavez and the national strikers. In fact, Giordiano's piece is revelatory about what it means to "strike" in this instance. It means that the owners of banks locked out their employees for a number of days -- which was reported in the Times as a bank employees strike. More, in Toro's case, the Times news reporting was being done by a man who was politically active, by his own account, on the anti-Chavez side. Toro finally resigned. Actually, Toro comes out of Giordano's story as a decent man, torn by conflicting interests. Giordiano published Toro's resignation letter to the NYT editor Lyon:


Dear Pat,

After much careful consideration, I�ve decided I can�t continue reporting for the New York Times. As I examine the problem, I realize it would take much more than just pulling down my blog to address your conflict of interests concerns. Too much of my lifestyle is bound up with opposition activism at the moment, from participating in several NGOs, to organizing events and attending protest marches. But even if I gave all of that up, I don�t think I could muster the level of emotional detachment from the story that the New York Times demands. For better or for worse, my country�s democracy is in peril now, and I can�t possibly be neutral about that.

I appreciate your understanding throughout this difficult time, and I hope in the future, conditions will allow for me to contribute with the World Business page again.

Sincerely,

Francisco Toro

What is interesting is that Giordano's generally accurate report on the NYT reporting has been attacked by the NYT in a really silly and stupid way. Giordiano printed this reply to his site from Patrick Lyon:


To: "Alberto M. Giordano"
Subject: Re: To Pat Lyons from Al Giordano
Date: Wed, 15 Jan 2003 10:54:53 -0500

Mr. Giordano,

Requests for information or comment from The New York Times should be directed to our vice president for corporate communications, Catherine Mathis, at (212) 556-1981.

Questions about whether a defamatory screed posted on the Internet with reckless disregard as to its truth or falsity is libelous should be directed to a competent lawyer.

Patrick J. Lyons
International Business Editor
The New York Times

Now, it is true that NarcoNews, like LI, like almost any media site on the web, exhibits a gleeful contrarian style that contrasts with the establishment media's tone of evenhandedness. The latter tone isn't always a bad thing. I would pity the man who got all his news and views from, say, this site. There is certainly something reactive about that gleefulness. It reeks of the back row of the classroom.

However, it is also a lively corrective to the deadening biases of the corporate media. My little experience of Timesmen is parallel to Girodano's -- Timesmen seem to regard themselves as members of an exclusive fraternity, and in their offhours take on that country club drawl, indicative of the delusion that they are the very giants of the earth.

As for Narco News publishing a defamatory screed -- that is simply silly. That said, Giordano shouldn't hug this big splat of NYT vitriol too closely to his breast -- he isn't, really, being censored by the heavy hand of government. His reply is a little too cumbersome, and involves imagining a courtroom exchange between himself and the Times. Like Tom Sawyer daydreaming of the ways in which he would be missed if he were dead, there is something queasy about the wish fullfillment involved in daydreaming about having one's day in court with the NYT. This kind of thing happens when a freelancer gets to confront a real media giant -- proportion is the first casualty of media criticism. However, the NYT does measure its language -- it is hard to imagine Lyon sending a similar message to the much more read Kaus.

Dope

Hume, Huxley, and war

The importance of distance should never be under-estimated. Heidegger, whose defense of Nazi-ism is well known, is continually being rediscovered (surprise) as the rotten bug under the rug of continental philosophy; that Derrida relies so much upon his work has been discussed in the terms one would usually reserve for talking about hiring Typhoid Mary to cook the cutlets in some local dinner. Yet who cares that David Hume, the surely one of the roots of English philosophy and its rather sterile offshoot, analytic philosophy, had, shall we say, rather dim views about blacks during a period in which the trade in black flesh (and the attendant destruction of African culture) was at its height? LI was pondering this while reading, yesterday, Thomas Huxley�s excellent Victorian study of Hume. Huxley himself is rather impatient with the �nonsense� that is usually ground out about race and national character. We like Huxley for that. We like Huxley for his reasons for embracing Darwinism. And more than that � we actually like Hume. But we have to admit that Hume admitted to the inroads of prejudice on his philosophical degree zero, his wariness in the presence of generalizations. Here is what Hume has to say about race:

"I am apt to suspect the Negroes to be naturally inferior to the Whites. There scarcely ever was a civilised nation of that complexion, nor even any individual, eminent either in action or speculation.... Such a uniform and constant difference [between the negroes and the whites] could not happen in so many countries and ages, if nature had not made an original distinction between these breeds of men.... In Jamaica, indeed, they talk of one Negro as a man of parts and learning; but it is likely he is admired for slender accomplishments, like a parrot who speaks a few words plainly."

This was from his essays, which Huxley justly celebrates. On the whole, Hume�s essays are under-appreciated today, except by libertarians and fans of Adam Smith. That�s because, before Adam Smith, Hume put into theoretical language a lot of what we now consider the foundations of classical political economy.

It is hard to swallow apercu like the above, however. One�s inclination is to think that such thoughts have no influence, really, on, say, Hume�s epistemology. Perhaps this says something about the success of analytic philosophy in convincing its constituency that philosophy consists of isolated areas of focus � epistemology, ontology, ethics, etc. � which are logically separated from each other. Really, though, I think it is that we are far enough away from the slave trade, as opposed to the Holocaust, not to feel it in the skin, like some old war wound. But it is an old war wound, nonetheless. A hole in the side of the world.

Analytic philosophers -- and, even more, the incompetent commentators on philosophy in the popular press -- are much more eager to discuss the influence of Heidegger�s Nazi-ism on his ontology than they are to bracket it, and discuss the ontology alone. We are being a little unfair: Hume never claimed that his epistemology was interwoven with his racism, as Heidegger claimed that his encounter with Seyn was interwoven with Hitler. Still, frankly owning up to a belief in black inferiority, especially during a time when Scottish merchants were making a pretty penny in selling blacks on the theory of that inferiority, should raise some questions about Mr. Hume. However, I doubt they ever will.

The tremendous influence of this contempt for a �lower� race has never, really, been traced to its most extreme ends in all the branches of our history. LI wouldn�t even attempt it � it is too depressing. But when we hear casual remarks about the war of civilizations, and about �reforming� the Islamic world, we have to wonder whether the speakers have any acquaintance with western civilization, besides driving in its huge cars and admiring its overpasses and malls. We live on a very thin crust of liberalism. It is about forty years old � as old as LI. That the inheritors of the most vigorous opponents of the liberal mindset � the people who opposed civil rights for blacks, women, and the working class for the better part of American history, those who defended lynch law, laws to break up unions, and opposed giving women legal equality with men � now casually claim this as their heritage and their sanction for making war on the benighted. This has to be an irony worthy of one of Hardy�s poems, or perhaps � we are enmeshed in the dark ignorance in the belly of the beast..

Remora

Tomorrow, as the President gives his State of the Union address, LI will be out with (one hopes) thousands of Austinites protesting the war.

Why? Why shouldn't the U.S, with or without a coalition of allies, invade a country that is ruled by a bloody dictator? A country that manifestly would do better without the dictator?

As we have hammered home on this site, the problem with Saddam Hussein is not his expansionist policies. These have been little in evidence since the Kuwait war. The most striking instance of the change in S.H.'s view, or more likely, ability to incurse on his neighbors is the practical division of his own country. Those attempts that he has made to take back Northern Iraq have been feeble. They've been feeble even judged by his military strength. Though Iraqi forces are probably strong enough to defeat the Kurds in Northern Iraq, those forces, as Hussein knows, would be quickly reinforced by others. Or at least so he must calculate, given his relative inaction.

LI thinks S.H. will topple internally. We also think that an invasion is no guarantee that the country would manifestly do better -- there is absolutely no guarantee that the U.S. would even dismantle the Ba'athist infrastructure; or that, if they did, they would do it in order to create democracy. The Bush administration, while making the required rhetorical genuflection to democracy, has made evident plans for post-Saddam Iraq that are anything but democratic, involving the use of Iraq's oil, and the use of the country as a platform to attack Iran. The kind of country that would allow such things would most likely be either a colony or a tyranny.

This isn't a case of blaming America first -- it is a case of reading the press. Business Week, back in November, published one of those cheerfully obscene articles that you come across in the business press about re-arming Iraq. This one sounds like it could have come from one of the war game scenarios created by the Washington Institute for Near East Policy, who are to the D.C. belligerent crowd what the Lake District was for the Romantic poets -- an inspiration and a home.


"Flash forward to 2003. Saddam Hussein, the despised Iraqi despot, is now in exile on the isle of Elba, once Napoleon's haunt. A new coalition government in Baghdad friendly to the U.S. is getting organized. But Iran is making ominous noises about border issues, raising fears it might exploit its neighbor's weakness. A decade of economic sanctions has seriously eroded the Iraqi military's conventional capability, and now the country is sorely in need of weapons to defend itself. So the U.S., which just finished disarming Iraq by rooting out weapons of mass destruction, now is considering how to rearm Bagdhad.

Sound farfetched? Hardly. Indeed, some U.S. Iraqi watchers already are mulling how to fortify a friendly post-Saddam regime. And some Wall Street analysts are talking about a new export market for American arms makers -- though comparisons to the bullish market for sales to Egypt and Israel after Camp David are probably overblown."

LI has often pointed out that the occupation of Iraq is almost surely going to create the kind of attrition visited upon American troops in Lebanon in 1982 and 1983, bringing forth the same choices: do I stay or do I go? But staying involves ratcheting up hostilities and taking casualties on a scale that begins to look like the first couple years of the Vietnam war. Meanwhile, at home, instead of the Great Society, Bush is pushing the Great Giveaway. We've been here before. William D. Nordhaus, of the Yale Economics Department, has a paper on his website that asks about the economic consequences of a war with Iraq. It begins with some sobering historical considerations (oh, and this is a pdf link):



"While historians have documented the many miscalculations
involved in war, little has been written on faulty economic forecasts, but a
couple of examples will suffice. Lincoln�s Secretary of the Treasury
estimated that the direct cost of the war to the North would be $240 million,
which amounted to about 7 percent of annual GDP at that time. The actual
cost to the North turned out to be $3,200 million, or about 13 times the
original estimated cost.2 The cost to the South was much greater, for most of
its capital stock was destroyed and output per worker was depressed for
nearly a century. The most prophetic economic analysis of war and peace of
all time, Keynes�s Economic Consequences of the Peace, did not foresee the
great German inflation that was virtually at hand, nor did it contain any
hints of the Great Depressions in Britain of the 1920s or of the world of the
1930s.

"In more recent times, the costs of the Vietnam War were grossly
underestimated when the buildup occurred. The original budget estimate
in early 1966 underestimated the cost for the coming fiscal year by $10
billion, or about 1� percent of GDP. By assuming that the war would end
by June 1967, the Pentagon underestimated the cost of the war by around
90 percent. The war in fact dragged on until 1973, and the total direct cost
was in the range of $110 to $150 billion.3 The indirect costs were more
difficult to gauge but comprise inflation and economic instability, civil
unrest, and, some have argued, a growing disenchantment with authority
and government in the United States."

Of course, left out of this list, and considered most pertinent by the belligerents, is the cost of the last Gulf war. However, that comparison is probably misguided. The financial contribution of the Kuwaitis and the Saudis is not going to carry the burden of this one. Alas, when the war is discussed in the mainstream press so far, the emphasis is on the defeat of S.H. That, it seems to us, is only the first stage in the war. The next stage, the occupation, will be filled with low level conflicts -- acts that will be described as terrorist. If we take the intifada in Israel as a model, we are talking about a couple of thousands of casualties -- U.S. soldiers and their collaborators in Iraq taking the hits. It is at this point that the money meter -- to say nothing of the blood meter -- starts ticking. This is why we find analyses like this of the Independent's Jeremy Warner much too optimistic.



".... The double-dip recession, so much talked about at the last WEF annual meeting in New York but widely dismissed as unlikely, may already be upon us, and that's before an Iraqi war has even begun.As one chief executive puts it: "We need a quick and successful outcome. If we don't get it, we're dead." This seems to me still by far the likely outcome, but don't bet on it. A senior Bush adviser told me: "If the war is still going after a month, then we may be in trouble."

In the less benign scenario, the war proves difficult and protracted. The price of oil rises sharply and then stays there. Developed economies are not as reliant on oil as they used to be, but the consequences would still be catastrophic, turning a weak recession of the type that followed the Gulf War into something much more serious.

As war stretched into a third and fourth month, with no end in sight, the Fed would continue to cut rates, perhaps down to zero if necessary. With the federal funds rate already at an historic low of 1.25 per cent, it can readily be seen that the US is already very low on monetary ammunition. Furthermore, higher oil prices might eventually prove inflationary, necessitating a rise in interest rates and deepening any economic downturn.

All very scary, and alarmingly, only too possible."

Remora

Well, Donald Rumsfeld's crack about "old Europe" has created some odd alliances. For instance, the Frankfurter Allgemeine Zeitung actually soliticted an opinion from Jacques Derrida, hero of this site, on the matter.

Here's the story from Liberation:

"Even the very conservative and traditionally pro-American Fr. Allgemeine Zeitung consecrated two pages of editorials to Rumsfeld's remark, with contributions from philosophers as well known as the German Jurgen Habermas and the French Jacques Derrida.

Their criticisms with regard to their European friends put them in contradiction with the great American ideals of the 18th century, estimates Habermas, making reference to the influence of the great European thinkers of the Enlightenment on the "founding fathers" of American Democracy.

Derrida, for his part, wrote in the FAZ: my reaction can be summed up in a few words. I find this declaration (of Rumsfeld's) shocking, scandalous and typical. These remarks show how important the unity of Europe is."

My friend Tom in NY sent me a link to a review of the movie Derrida on the National Review site. The review is funny. Here is a graf:


"Zeitgeist Films, distributor of the documentary Derrida, currently in limited release in select cities across the country, poses the following rhetorical question on its promotional website: What if you could watch Socrates, on film, rehearsing his Socratic dialogues? The insinuation, of course, is that Jacques Derrida, the contemporary French thinker sometimes called the "father of deconstruction" deserves to be mentioned in the same breath as the ancient Greek thinker sometimes called the "father of philosophy." This is true only insofar as a firecracker and a hydrogen bomb both go pop. Otherwise, the comparison is ludicrous."

This is of course true. The comparison, however, is made not so much, we think, for the reasons that Mark Goldblatt suspects -- that is, a high reverence for Derrida -- as for the usual advertising dilemma: how many people recognize philosophers' names? Derrida could, rightly, be compared to Brentano or Meinong, for instance -- solid names, but not exactly as important as Husserl or Russell. Frege would be another apposite comparison.

Goldblatt has a good time knocking down Derrida's pretentiousness:

"The high point of the film, judging from the comments of several notable reviewers, comes halfway through and consists of Derrida's five-minute meditation on the concept of love. After a token demurral and his customary song and dance about the difficulty of the topic � including the self-contradictory howler "I'm incapable of generalities" � Derrida hones in on the dilemma of whether love consists of our being drawn to the "singularity" of another person or to a set of specific qualities possessed by the person we love. In other words, do I love you for your essential you-ness or for the sum of characteristics I associate with you? He provides no answer, naturally. But, at the screening I attended, as Derrida wound down his discourse, an audible gasp rose from the sparse crowd in the theater."

Anyone who has ever heard Derrida knows that he has a weakness for his own yarn-spinning. What begins as Mallarme often ends up sounding like second rate Derrida. A pity, but not a surprise. He requires paper -- like most philosophers, actually. The Socratic exception is not going to occur again. A philosopher speaking philosophy is much like a dog speaking dog -- you have to be a dog to catch it in the latter case, and you have to be a philosopher to interrupt it in the former case. LI can understand the attraction of the idea that you will film a philosopher thinking -- it is like the idea of filming a writer writing. The witless Adaptation, which we saw last week, falls into the trap of doing the latter, and the results are both boring and insulting, to anybody who writes. The best film that shows Philosophy (that LI knows) remains The man who envied women, with that excrutiating pas de deux at the end as a man and a woman recite almost impenetrable Foucauldian speeches at each other.

Goldblatt's trope -- of Derrida as a sort of rascal, a grifter, as he calls him, more important for what some future audience (the future, you know, is always on one's side) will make of him -- a symbol of our present decadence -- is designed to say nothing about Derrida's work. The advantage is that you don't have to read it, then. Derrida has said enough about the nature of the inability to read himself. But I don't expect the National Review's guest film critic to make it through Marges de la Philosophie. Actually, if he did, he'd find many things in it reminiscent of Hayek. Ah, but that assumes he's read Hayek -- and his review gives LI no evidence that he has that degree of literacy.

Remora

The best comment on the looming war this morning comes from an Independent columnist, Mark Steel. Steel zeros in on the logic of this caper. Here are two delicious grafs:

"Blair admitted how pointless the inspections are when he justified military action by saying "The inspections can't go on forever." Which seems to miss out the point that the reason the inspectors are asking for more time is they haven't found anything. So another way for Blair to have put this would have been to say, "Saddam continues to try and hold up this war by not having weapons of mass destruction, and that is something we simply cannot allow. He consistently flouts the inspectors by not having a secret cave full of chemical warheads, with Tariq Aziz laughing loudly next to a giant map with a ring drawn round Chicago while a digital clock counts down, and that is, frankly, intolerable.

"Blair went on to say he wasn't prepared to play "hide-and-seek" with Saddam, which again assumes the only possible reason why stuff hasn't been found is Saddam must be hiding it. You could apply this to anywhere and come up with a reason for war. After Iraq, Blair could send weapons inspectors into the Blue Peter Garden, and after six weeks announce that as no nuclear devices have been found, the only way to ensure peace was a full-scale invasion. Then, when the presenters started running round the studio with rifles and shouting "We're ready to make you die," Blair could say "See, it's working because they're rattled."

The Independent is full of jewels this morning. While Steel intended to be funny, the serious news report about Iraq is even funnier. Here's the latest in the Blair government's attempt to justify its synthesis of sycophancy and belligerence:

"British sources said there was further evidence of internal opposition to Saddam's regime as the military build-up and diplomatic pressure on Iraq increased. They said graffiti, slogans and underground activity had increased sharply in recent weeks. Slogans such as "Down with Saddam" and "How long will the Iraqi people sleep?" were appearing on statues and photographs of Saddam and on the walls of public buildings. Opposition groups, including the Iraqi Communist Party and National Liberation Movement, had also stepped up activity."

There you have it, folks. Surely Rumsfeld should mention the sharp spiking of the grafitti factor in his next broadcast to the "real Europe" ... the Europe of our allies ... the Europe of Poland, Italy and Spain. (We have the finest allies, you see. Rumor has it that Slovenia itself is about to join our mighty coalition).

Remora

Yesterday, LI went downtown and witnessed the remains of the inauguration parade that heralded the enthronement of Rick Perry as Governor -- surely one of the luckiest politicians in Texas history; surely, also, one of the dumbest. Perry is at the crest of the Republican tide in this state. LI was delighted to see old men, in coonskin caps, carrying rifles, walking down Congress avenue. These had surely come from pockets of Perry's warmest supporters -- little villes in East Texas where lynching is looked back to, nostalgically. We nearly bumped into two cowgirl cheerleaders, who flashed very, very pearly smiles at us.

While one governor of Texas was whooping it up, our gift to the world -- the current commander in chief -- was pouting. Or at least for the cameras. As the war Bush has been planning on is about to take off, there are these last minute hitches. The American press has been especially kind about this. How often, in the last four months, have we been assured that, in secret, the Europeans and the Arabs are one hundred percent for us? The commentators explain this by saying that nobody wants to miss out when the U.S. occupies Iraq. However, it never seems to occur to them that France, for instance, might get more out of opposing that occupation. After all, positioning itself to oppose the U.S. might be more popular with not only the Middle East's street, but be welcomed by Middle Eastern leaders as a tool to redress the balance with the states. As has been the case since the get go, the scenarios go only one way in the U.S. press. The deluge of foreign news items that, over the past year, have assured us that Turkey, or Saudi Arabia, or France, or Germany, or Ireland, or whoever, was privately assuring the Bush administration of their undying love and devotion has started to shut off as it becomes more and more implausible that this is the case. To guage the deluge, go back to, say, July of last year. The US News published an analysis of Europe by Michael Barone that assured readers of European compliance with the Bush foreign policy. Barone points out that the chattering classes -- and oh yes, the popular majority -- is against war with Iraq. But he breezily continues:

Interviews and talks with government leaders and political insiders in London and Berlin leave a different impression. The leaders of major European governments would not have chosen on their own to require democratic reform among Palestinians before pressuring Israel to make concessions or to insist on regime change in Iraq--policies set forth by Bush and supported by large majorities of American voters. But they are going along with the first and will go along with the second--although both are opposed vociferously by articulate elites and not supported by popular majorities in their countries. America is leading and European governments, although grumbling that they have not been consulted on what will come after a war in Iraq, are following.

... Britain, as after September 11, will be on our side.That is true as well of major countries on the Continent. Italy's Defense Minister Antonio Martino, as reported here three months ago, is confident that his government can muster its majority in favor of military action in Iraq. Germany's Defense Minister Rudolf Scharping, interviewed July 4, says that his government would very likely do so too, a view that is echoed by the foreign affairs spokesman for the Christian Democratic opposition, which has been leading in polls and may take office after the September 22 elections. These European leaders are careful to say that the United States must make a convincing case that it has exhausted nonmilitary alternatives. But they argue only perfunctorily if at all that inspections can limit Iraq's weapons of mass destruction. Perhaps reluctantly, they accept what their chattering classes are busy denouncing."

That was at the summer height of Bush's propaganda offensive. Now we have the frustrated Bush. Perhaps we are witnessing a charade, as the European nations fold and the coalition invades Iraq. But what if we are not? What if the advantage is in opposing the US invasion?

There's an editiorial in the Nouvelle Obs that makes a timely point about opposition to the war: it shouldn't be support for Saddam Hussein.

Un h�ros de Malraux (un anarchiste dans �l�Espoir�) finit par se demander s�il n�est pas aussi important de savoir avec qui l�on se bat que contre qui on le fait. Mais on pourrait dire aussi qu�il est important de savoir aux c�t�s de qui on renonce � se battre. Lorsque le pape, comme il vient de le faire avec force, rappelle que toute guerre est une d�faite de l�humanit�, il stimule la r�flexion. Mais lorsque, le m�me jour, nous apprenons que des �pacifistes� europ�ens, et surtout fran�ais, acclament dans Bagdad le r�gime et la personne de Saddam Hussein, alors on se sent pris d�un immense malaise. Et c�est un euph�misme. Ce que je ne pardonnerai jamais � George Bush, c�est de para�tre justifier par sa politique tous ceux qui, en se pr�tendant les champions des victimes et des faibles, confortent le pouvoir des oppresseurs et des bourreaux. Il n�en manque pas, je le sais depuis longtemps, du c�t� de ces pr�tendus amis de la cause arabe, qui ont toujours �t� plus soucieux d�obtenir les faveurs des gouvernants que de contribuer � l��mancipation des peuples.


"One of Malraux's heros (an anarchist in Man's Hope) ends by asking himself if it isn't as important to know who one is fighting with as to know who one is fighting against. It could be said that it is also important to know on the side of whom one renounces to fight. When the Pope, as he just said with force, recalls that every war is a defeat for humanity, he stimulates reflection. But when, the same day, we learn that european pacifists, mostly french, have acclaimed, in Baghdad, the regime and the person of Saddam Hussein, then we feel an immense malaise. And that's a euphemism. What I will never pardon George Bush for is to appear to justify, by his politics, all those who, pretending to be the champions of the weak, comfort the power of the oppressers and the hangmen. There are plenty of pretended friends of the Arab cause who are always more careful to obtain the favors of their governments than to contribute to the emancipation of their people -- that I know."

Remora

The Bush administration, in pursuit of its policy of why not the worst? is pushing for tax credits for SUVs. Of course, many of you think LI is pulling your leg, but we aren't. Here's the story in the NYT:



"ETROIT, Jan. 20 � The Bush administration's economic plan would increase by 50 percent or more the deductions that small-business owners can take right away on the biggest sport utility vehicles and pickups.

The plan would mean small businesses could immediately deduct the entire price of S.U.V.'s like the Hummer H2, the Lincoln Navigator and the Toyota Land Cruiser, even if the vehicles were loaded with every available option. Or a business owner, taking full advantage, could buy a BMW X5 sport utility vehicle for a few hundred dollars more than a Pontiac Bonneville sedan, after the immediate tax deductions were factored in."

Surprisingly, this is not surprising, considering that the Bush administration is beginning to look exactly like the Enron management team, circa 2000. The same hasty looting of resources, the same arrogance, the same accounting shenanigans. This is about it for the Bush energy plan -- endless war in the Middle East to provide endless oil for the most gas guzzling of vehicles that emit endless pollution into the atmosphere. Infinite Justice, indeed.

"And the third angel sounded, and there fell a great star from heaven, burning as it were a lamp, and it fell upon the third part of the rivers, and upon the fountains of waters;

And the name of the star is called Wormwood: and the third part of the waters became wormwood; and many men died of the waters, because they were made bitter."

Remora

Protests

Martin Luther King's holiday weekend was appropriately chosen as the time to protest by about a hundred thousand anti-belligerents in D.C. -- although the press coverage has been typical. The Washington Post quoted the police as saying that "three people and a cat" showed up; then they quoted a man, claiming to be David Bowie's Martian twin, who said a million people showed up; then they sagely opined that it might have been in the middle, say, six men and two cats. The NYT claims the number of cats was, well, chuckle, sorta exaggerated, and then respectfully quoted an unnamed Bush administration official on the problem of using nuclear tactical weapons against protesters and their cats. The Democratic leadership denounced the idea of nuclear weapons being used against the cats -- although Lieberman, saying he was a "different kind of Democrat," admitted to being fascinated by the possibilities of blasting protesters with nuclear tactical weapons, saying that more weapons and less protesters might be acceptable if the nuclear tactical weapons industry gave stock options to its workers.

Here's the Guardian:


"On Saturday, a great throng stretched from the grounds of the U.S. Capitol and along the National Mall back to the Smithsonian Institution for a rally in bitter cold. U.S. Park Police no longer gives estimates of rally attendance. In the past, crowds taking up similar space were thought to be 70,000 strong or higher, but any parallels with other events were highly inexact. A much smaller group from the rally, but still numbering over 30,000 by police estimates, marched to the Washington Navy Yard. Rally speakers offered varying estimates of the crowd size, with one telling the crowd that 500,000 had come, but even some supporters of the event thought that was wildly exaggerated."