- Watergate – The First Deep State Coup
Authored by Peter Brimelow via The Unz Review,
James Fulford writes:
The Mueller Report, which was supposed to be about alleged “Russian collusion” with Trump, is due out, and many people in the Democrat/Media conglomerate are hoping for a rerun of Watergate, which they think of as a victory for the Rule of Law. It wasn’t, and we need to have one of those famous “conversations” about what it was, and why it mustn’t happen again.
In 1972, Richard Nixon was reelected with 520 electoral votes. He was running on winning the Vietnam War and also fighting a War on Crime. His opponent, George McGovern (17 electoral votes) was running on a plan to lose the Vietnam War, and surrender on the War on Crime.
But by August 1974, Nixon was removed from office, and in April 1975, Vietnamese Communist troops occupied Saigon. What finished off South Vietnam was the “Watergate Congress” which voted to cut off all supplies. For details see James Webb’s Peace? Defeat? What Did the Vietnam War Protesters Want?American Enterprise Institute, May/June 1997.
Who did this? Well, the Democrat-controlled Senate investigated the hell out of a break-and-enter committed by Republicans, which they never did when LBJ, JFK, Truman, and FDR engaged in similar activities. See It Didn’t Start With Watergate , [PDF]by Victor Lasky, published in 1977. On the Senate investigative staff was a young, far-Left Wellesley graduate named Hillary Clinton.
The Democratic media, which hated Nixon with the same kind of hate they now display towards Trump, did the same thing, led by the famous Woodward and Bernstein, who probably get too much “credit” for this.
Finally, in something that VDARE.com Editor Peter Brimelow speculated about in his 1981 Policy Review article reposted below, the secret figure of “Deep Throat” (Woodward and Bernstein’s name for an source inside the Government) turned out to Mark Felt, second in command of the FBI. [The Myth of Deep Throat | Mark Felt wasn’t out to protect American democracy and the rule of law; he was out to get a promotion, by Max Holland September 10, 2017]
Peter Brimelow described this phenomenon of using lawfare to overturn elections by trying to criminalize the victors in his post Manafort, Marlborough, And Robert E. Lee: Criminalizing Policy/ Personnel, Differences— U.S. Politics Regressing To The Primitive.
Once again, the Establishment is trying, as they did during Watergate, to overturn the results of an election with the aid of a Deep State, and the “foreign policy” establishment. “Deep Throat” Felt thought Nixon was interfering with the “independence” of the FBI, which he thought should be immune to interference by the President of the United States, and apparently James Comey feels the same way.
If this coup succeeds, instead of the Republic of South Vietnam being overrun by foreign invaders and destroyed, the victim will be the Historic American Nation.
Machiavelli Redux
By Peter Brimelow, Policy Review,Winter 1981
GO QUIETLY . . . OR ELSE. By Spiro T. Agnew. (Wm. Morrow, New York, 1980)
THE TERRORS OF JUSTICE. By Maurice Stans. (New York, Everest House, 1978)
WILL: THE AUTOBIOGRAPHY OF G. GORDON LIDDY. By G. Gordon Liddy. (St. Martins Press, New York, 1980)
Machiavelli concluded The Prince by quoting Petrarch in an attempt to inspire the rulers of Italy:
For th’ old Romane valour is not dead
Nor in th’ Italians brests extinguished.Reading these three books by survivors of the Nixon disaster brings home how totally that Administration, which more than any other in recent history would have welcomed comparisons with Machiavelli, departed from his prescription. The reason was not exactly lack of patriotism, but rather a failure to understand the humane, even idealistic spark that animated Machiavelli’s ironic realism. Indeed, the books raise the broader question of whether American society itself is going through the kind of degeneration Machiavelli decried in Italy, so that it no longer supports what might loosely be called the “Roman” or “military” virtues: courage, loyalty, and personal integrity.
These reflections may seem odd, given that all three authors fought losing bouts with the law. Spiro Agnew resigned the Vice-Presidency and entered a plea of nolo contendere to a charge that he received payments in 1967 which were not expended for political purposes and which were therefore subject to income tax. The prosecution’s statement included forty pages about Mr. Agnew’s alleged bribe-taking while he was Governor of Maryland; Mr. Agnew issued a one-page denial. The judge said, accurately, that both were irrelevant to the case before him, and fined Mr. Agnew $10,000. Maurice Stans, Nixon’s 1972 Finance Chairman, pleaded guilty to two charges of unknowingly accepting illegal contributions and three charges of reporting contributions tardily. He was fined $5,000. Previously Mr. Stans had been found innocent, along with John Mitchell, on ten counts of conspiracy, obstruction of justice, and perjury relating to an alleged attempt by financier Robert Vesco to buy protection from the Securities and Exchange Commission. Gordon Liddy was sentenced to twenty years in prison and fined $40,000 for the Watergate burglary, a year and a half for refusing to talk to the Watergate grand jury, and a (suspended) year for contempt of Congress.
With the exception of Mr. Liddy, who merits separate examination, it will immediately be seen that the infractions that were actually proved were basically technical. The connection between them was a hysterical illusion, and the punishments unusually harsh. This is particularly true for Maurice Stans, who was dealing with a complex law which changed in the course of the campaign, and who was also the victim of a quantum jump in public standards. Mr. Stans makes a convincing case that his CREEP stewardship was at least as respectable as the work of his contemporaries in other campaigns. They too had (less publicized) legal difficulties; Edmund Muskie’s fundraiser even volunteered to testify for Mr. Stans at the Vesco trail.
If Mr. Agnew did accept rake-offs, as the prosecutors claimed, it should be asked in all fairness whether his conduct varied substantially from accepted Maryland standards—particularly since there is no evidence that the money influenced his decisions. As always where Watergate is concerned, the real question becomes: Why did such practices excite such abnormal attention under Nixon, when Congress and press have shrugged off similar standards before and since? The many disparate Nixonian problems combined to produce a mixture that makes free-base cocaine look safe as chewing gum in comparison, under the influence of mysterious forces similar to those that produced the Grande Peur, or Salem’s witch trials. An instructive parallel might well be Britain’s 1962-63 Profumo crisis, which likewise enabled hostile opinion to l ink wildly unrelated charges, and incinerated an unpopular government.
As Mr. Agnew has repeatedly pointed out, of course, allegation is not conviction, although it has been treated as such by the media and the IRS, whose demands for back taxes on bribes Mr. Agnew denied taking caused him a cash-flow crisis from which he was rescued by the remarkable generosity of Frank Sinatra. But the irreducible fact of his resignation overshadows any attempted defense. Mr. Agnew ascribes his surrender to the impossibility of receiving a fair trial because of prejudicial publicity, overheated politics, implacably ambitious prosecutors, and impossible costs; and to his own exhaustion and bitterness at his abandonment by Nixon.
Mr. Agnew also says that Alexander Haig implied he might be killed if he did not “go quietly.” However, this may be the token sensational revelation all Watergate memoirs require, like H.R. Haldeman’ s claim of a mooted partition of China, Gordon Liddy’s contemplated assassinations of Jack Anderson and Howard Hunt, and John Dean’s insinuation that Nixon faked Alger Hiss’ typewriter. Other regular features of this new literary form are dramatic opening scenes, followed by flashbacks; and copious direct speech. On the whole, the results have compared very favorably with other native American genres like Westerns and Perry Mason.
Mr. Agnew’s story rings sincere when he writes of “the emotional reaction that made me physically ill” on reviewing the prosecutors’ files on his case (obtained years later), or of his wife’s dead faint when he told her he was capitulating. But even after that, he assured conservatives he would fight to the end, although his lawyers were already negotiating terms. This unedifying betrayal of his loyal supporters renders consideration of his guilt or innocence ultimately irrelevant.
On the other hand, Mr. Agnew had hardly been given a good example by the Nixon White House. Incredibly, President Nixon apparently hoped to induce Mr. Agnew to resign without even discussing the subject face to face. The picture of Mr. Agnew and his staff waiting in his office until 9 p.m. after Attorney General Richardson had revealed the charges to them—hoping desperately for a call from the President or a summons to Camp David (whence, it emerged, he had fled)—is infinitely pathetic. What they got was a meeting with General Haig and Bryce Harlow, who announced that they thought that the President felt that he should resign. Loyalty to Nixon was a one-way proposition. The White House staff was quick to pounce on any of their number who suffered political injury.
This cult of toughness was naive to the point of stupidity. Even elementary precautions like funding the Watergate burglars’ families were reneged on. It is hardly surprising that the front-line troops mutinied, whereupon the whole structure disintegrated. Machiavelli in a famous passage urged rulers to ensure that the interests of their lieutenants were advanced along with their own; this promoted mutual confidence. This seemingly obvious advice was never more needed. In fact, one of the Administration’s subsequent rationales for its detente policies—that Americans were too engrossed in current gratifications to finance any alternative—can probably best be explained as merely a projection of the leaders’ own short-sighted selfishness.
All three books make the point that the guarantees of equal justice, due process, and presumption of innocence—generally thought to be intrinsic to our system of justice—are simply not operative in a modern bureaucratic state. Mr. Stans spent $400,000 to defend himself against the Vesco charges. The prosecution probably spent over $1 million, but that was taxpayers’ money. That both Mr. Stans and Mr. Agnew could afford no more defense at that price is quite plausible. The IRS even threatened to have Mr. Agnew’s passport revoked if he attempted to resist their demands—an unbreakable hold on a man forced to earn his living in international business because of his Untouchable status at home. The three books also establish that there are few real checks on the legal bureaucracy once it is determined to bring home a conviction. Judge Sirica’s excesses in Mr. Liddy’s trial featured his seating of a juror who could not understand English—a mistake arising because Judge Sirica truncated the voir dire to prevent defense questions about pretrial publicity. (Judge Sirica used his powe r to seal the record about that incident, which remained a secret.) Mr. Liddy was amused: “I really had to hand it to the old goat; neither of us ever hesitated to use power.”
Less amusing were the lengths to which the prosecutors went in the Stans and Agnew cases to induce potential witnesses to co-operate. It should be a matter of some concern that Mr. Agnew was brought down by the testimony of men who themselves were guilty of serious crimes, the consequences of which seem to have been palliated by their cooperation. One witness actually had his conviction overthrown because he was able to show that his guilty plea was induced by illegal promises of leniency, which the trial judges chose to ignore. Having indicted Mr. Stans on the basis of two grand jury appearances—which he made after being assured he was not under investigation—the prosecutors launched an incredible nationwide search for evidence. They hauled President Nixon’s brother in from the West Coast ten times, for example, to “review” his testimony on the single point of whether Mr. Stans had asked for Vesco’s contribution in cash. (Answer: No.)
Worst of all were the constant leaks to the press, from Justice Department and grand jury alike. Maurice Stans found that newspapers routinely printed as fact allegations against him that had been disproved, and that major media outlets like Time refused to carry retractions even when caught in indisputable error. Mr. Stans, whose book is a model of reason and comprehensiveness, suggests thoughtfully that maybe the U.S. media should follow the British system of restricting publicity after indictment, and also that the Supreme Court’s Sullivan ruling went too far in depriving public figures of the means to protect their reputation. He even permits himself to wonder why the media should not (voluntarily) retract untruths in the same way that the Federal Trade Commission compels corporations to correct unsupported advertising claims.
This is the problem in a nutshell. All three books make it depressingly clear that, yes, there is a New Class. And that class makes its own rules in the struggle with rival powers like corporations and elected officials—of either party; previous attorney generals would not have been defeated in attempts to suppress Billygate.
Gordon Liddy’s beautifully written book adds a cultural dimension to this struggle within America, although his factual contribution to the Watergate saga appears limited. Mr. Liddy confines himself narrowly to what he personally saw. He says that he waited until the statute of limitations had expired before speaking, to protect his colleagues. (Actually, he is probably still protecting them.) Although he does reveal that the Nixon administration had CIA technical assistance in some operations, he generally supports the thesis that Watergate was after all a second-rate burglary, not a set-up, as some have speculated. The order came from above, he says, and he believes that the purpose was to find out what derogatory material the Democrats had on their opponents. This version is not likely to satisfy everyone. On closer examination, moreover, Mr. Liddy’s account does leave some questions carefully open. Some of these relate to the details of the burglary; others to the extraordinary circumstances that led to the creation of the White House “Plumbers” unit in the first place: the withdrawal (by J. Edgar Hoover) of the FBI cooperation upon which all previous administrations had relied. Mr. Liddy had been proud to be an FBI agent, and stresses his admiration for Mr. Hoover. But he also prints a memo he wrote in late 1971 urging that Mr. Hoover be removed as Director by the end of the year. Mr. Liddy notes laconically that the President praised the memo, but Mr. Hoover survived. As usual, one is left with an eerie feeling that the Watergate affair has a secret history, untold despite the millions of words.
Mr. Liddy is obviously a cultured man, but his preoccupation with matters of honor, strength, and courage—matters that have been traditional male concerns in almost every society except our own—has rendered him about as comprehensible to the average book reviewer as a Martian. Hence he is ridiculed (by Larry L. King in theNew York Times) or ignored (by the Wall Street Journal, the leading conservative newspaper, which has not reviewed his book—or Mr. Stans’s either, for that matter). The situation is complicated because Mr. Liddy is a cultist, one of the tiny minority of conservatives (and others) who are fascinated by the Third Reich. It is hard to know how serious he is about this. Some of his hints are so blatant (he named the Plumbers group ODESSA, after “a World War II German veterans organization belonged to by some acquaintances of mine”—i.e., the Waffen SS) as to recall his celebrated hand-in-the-flame exhibitions of willpower. Professor Alan Dershowitz of Harvard picked up all these hints, and wrote an angry review in The New Republicasking how a card-carrying Nazi went so far in anyone’s White House. But in fact cultism often has about as much relevance to contemporary politics as transvestism, which it rather resembles. Mr. Liddy supported the liberal Republican who beat him in the New York 25th district primary in 1968, to the chagrin of the Conservative Party, which had nominated him on its own line. His White House career showed a similar pragmatism, except perhaps when his G-man instincts were engaged. And Mr. Liddy obviously liked the blacks he met in prison, finding their harsh society a satisfying substitute for the Korean War he missed through illness, and possibly a rest after the Nixon White House. He quietly but systematically supplies much other evidence of lack of prejudice.
However repellant Mr. Liddy’s code may be, it has some strengths, notably his evident pride in his handsome family. Men like Mr. Liddy are the falcons of society, to be kept hooded until needed. James E. Mahon, who became Eli Hazeev and died training his gun on the Palestinians ambushing Meir Kahane’s followers in Hebron, was reportedly another example. Both found no place in modern America. We need look no further to explain the fiasco at Desert One.
- Civilian Passenger Gets Ejected From A French Two-Seat Rafale Jet
In an unusual accident, a civilian passenger was ejected from a Dassault Rafale fighter jet of the French Air Force as the aircraft was taking off on Wednesday, reported AeroTime.
The fighter jet departed from Saint-Dizier – Robinson Air Base, a French Air Force base located 2.5 miles west of Saint-Dizier in northwestern France, for a training mission, on March 20.
A spokesperson for the French Air Force told the media, the passenger “did not belong to the Ministry of the Armed Forces” and was participating in an “information flight.”
The spokesperson added the passenger’s injuries were not life-threatening.
The pilot of the Rafale was able to take control of the aircraft when the canopy snapped off during the ejection process and landed the jet without incident. The pilot sustained injuries to his hands due to glass debris, French newspaper Le Parisien reported.
The passenger, 64, was “hospitalized and is in stable condition,” said the French newspaper. The man’s back sustained trauma following the hard impact when the ejection seat landed on the ground.
Reuters reported three investigations had opened into the accident, which the spokesperson described as a “rare” incident.
Each investigation will get to the bottom of what exactly happened during the takeoff. Officials want to know if a malfunction triggered the ejection or was it human error.
Ouest-France, a French newspaper, quoted an Air Force spokesperson as saying an ejection seat accident on a Rafale has never happened.
- 16 Years After Iraq, The US Has Become A Nation Of Passive Neocons
Authored by Whitney Webb via MintPressNews.com,
After Iraq, the neocons began waging another war, one for America’s soul.
Sixteen years have passed and the memory of the Iraq War is distant for many, save for the millions of people — Iraqi and American alike — who saw their lives destroyed by one of the greatest lies ever sold to the American public.
Yet, while plenty of Americans sleep easy thinking that such an atrocity as the invasion and occupation of Iraq could never happen again, the U.S. government has continuously been involved in many smaller, equally disastrous wars — both seen and unseen — largely thanks to the fact that those who brought us the Iraq War remain both respected and still present in the halls of power.
Indeed, the only thing the domestic outrage over the Iraq War seemed to accomplish has been a massive effort waged by the government and the corporate elite to engineer a public that doesn’t complain and doesn’t care when their government meddles or invades another country.
For many Americans today, much like the war itself, the outrage over the Iraq War is a distant memory and comparable outrage has failed to emerge over any other U.S. government crime committed or contemplated on a similar scale — whether it be the “regime change” invasion of Libya, the ongoing genocide in Yemen, or in response to crimes the government is now setting up.
Our forgetfulness has informed our silence and our silence is our complicity in the crimes — past and present — orchestrated by the neocons, who never left government after Iraq but instead rebranded themselves and helped to culturally engineer our passivity. As a consequence, we have again been hoodwinked by the neocons, who have transformed America in their image, creating a nation of neocon enablers, a nation of passive neocons.
Iraq War lies revisited
Though the lies that led the U.S. to invade Iraq are well-documented, they deserve to be remembered. A summary of the many lies — including those regarding alleged yet false links between Saddam Hussein and Al Qaeda as well as Saddam’s alleged links to the anthrax attacks and Iraq’s nonexistent nuclear weapons program — can be found here.
Yet arguably more important than the lies told in the direct lead-up to the war, is the conclusive evidence that key officials in the Bush administration, many of them members of the neoconservative organization known as the Project for a New American Century (PNAC), had planned and called for an invasion of Iraq long before the September 11th attacks had even taken place.
Some researchers say the plan for the Iraq War began decades before with the drafting of the 1992 Defense Policy Guidance (DPG), which was overseen by Paul Wolfowitz, then Under-Secretary of Defense for Policy, who would later become one of the chief architects of the 2003 Iraq War. The DPG spoke of the need to secure “access to vital raw materials, primarily Persian Gulf oil.” It also spoke of the need for the U.S. to develop a protocol for unilaterally pursuing interventions abroad, stating that “the United States should be postured to act independently when collective action cannot be orchestrated.”
The DPG would again find prominence among a new group who called themselves the Project for a New American Century (PNAC). Founded in 1997 by Robert Kagan and Bill Kristol, its first act was to publish a statement of principles that promoted “a Reaganite policy of military strength and moral clarity.” That statement was signed by several politically prominent neoconservatives — Wolfowitz, Dick Cheney and Donald Rumsfeld among them.
Bush, center, answers questions from the media while standing with, from left to right, National Security Adviser Condoleezza Rice, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, and Joint Chiefs Chairman Richard Myers, about his Iraq War strategy. Pablo Martinez Monsivais | AP
PNAC is arguably best known for publishing the document “Rebuilding America’s Defenses” in September 2000. That document, which cites the DPG as its inspiration, contains many controversial passages, one of which reads:
The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”
After George W. Bush was declared the winner of the 2000 election, many PNAC signatories took prominent positions in his administration, including Cheney and Rumsfeld. Other PNAC signatories — including Dov Zakheim, John Bolton, and Elliott Abrams — would also soon find their way into the Bush administration, where they too would become intimately involved in planning and executing the Iraq War. Notably, Bush’s brother Jeb Bush was also a PNAC signatory.
Once the Bush administration took office, planning for the invasion of Iraq quickly moved ahead, with Saddam’s removal the priority topic during Bush’s inaugural national-security meeting. Former Treasury Secretary Paul O’Neill later recalled that the meeting “was all about finding a way to do it. The president saying, ‘Go find me a way to do this.’”
Just two weeks later, Vice President Dick Cheney — former Halliburton CEO — took the helm of a newly formed energy task force that began secretly meeting with top oil executives. In a matter of weeks, by March 2001, the Pentagon produced a document called “Foreign Suitors for Iraqi Oilfield Contracts” for Cheney’s taskforce, which included potential areas of Iraq primed for exploratory drilling. Notably, other top Bush officials, such as Condoleezza Rice, were, like Cheney, former petroleum industry executives.
Then, just hours after the 9/11 attacks, a Rumsfeld aid wrote: “Best info fast. Judge whether good enough [to] hit SH [Saddam Hussein] @ same time. Not only UBL [Usama bin Laden].”
On September 19, 2001, the Pentagon’s Defense Policy Board, chaired by Richard Perle — another PNAC member — declared that Iraq must be invaded after Afghanistan.
The next day, PNAC, in a letter to Bush, wrote:
Even if evidence does not link Iraq directly to the attack, any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power.”
It was not until December 2001 that the administration, led by Cheney, had begun to claim that Saddam was linked to Al Qaeda.
Yet, as outlined above, the war plan by then was already well underway.
As the public outrage over the lies and years-old schemes that led to the Iraq war mounted, it was not the exposure of their crimes that riled neoconservatives. Instead, their concern was over the lingering public outrage that severely limited the U.S.’ ability to intervene militarily abroad, leading them to develop more covert operations and other “regime-change” methods aside from outright military intervention. Indeed, Bush had complained that, after Iraq, his “hands were tied,” a reality that prompted him to push the development of secret cyberwarfare programs and the expansion of the drone war, among other new and quieter arrows in the quiver.
In addition to the rise of more covert “regime-change” operations after Iraq, a concerted effort began that aimed to whitewash neoconservatives, particularly the prominent neocons who had been the architects of the Iraq War. These neocons began to rebrand themselves, dumping the now-tainted PNAC in favor of the Foreign Policy Initiative and several other prominent think-tanks that obfuscate their past. Their rebranding has been so successful that PNAC co-founders like Bill Kristol are now considered a part of the Democratic-led “Resistance” to President Donlad Trump.
Jon Lovett, Bill Kristol, Symone Sanders and Jason Miller attend Politicon at The Pasadena Convention Center on Aug. 29, 2017, in Pasadena, Calif. Colin Young-Wolff | Invision | AP
By 2008, the neocons made it clear that rebranding their ideology was the plan, with PNAC co-founder Robert Kagan penning the article “Neocon Nation,” in which, in an effort to whitewash the ideology’s bloodsoaked legacy, he claimed that neoconservatism is “deeply rooted in American history and widely shared by Americans.”
Of course, Kagan’s claim was ironic given that he once criticized Colin Powell for not believing that “the United States should enter conflicts without strong public support,” revealing Kagan’s own disdain for the opinion of the American public. However, his 2008 article shows how, after Iraq, the neocons began waging another war, one for America’s soul.
Obama and “The World the Kagans Made”
After Barack Obama won the 2008 presidential election, many Americans felt that the days of “wars for oil” and wars built on lies would end, particularly after then-President-elect Obama won the Nobel Peace Prize for his warm rhetoric about the need for world peace. Sadly, to this day, many who viscerally opposed the Bush administration’s Iraq War either fail or refuse to acknowledge that Obama was every bit as murderous as his predecessor, though he did so with smooth words, charm and a media-generated personality cult.
While neoconservatives, particularly those who brought us the Iraq War under Bush, are often associated with the Republican Party, the Obama administration — particularly the Hillary Clinton-led State Department — was plugged directly into the same network of neoconservative actors responsible for the destruction of Iraq.
Indeed, upon becoming secretary of state, Clinton quickly appointed Robert Kagan to her 25-member Foreign Affairs Policy Board, a position he continued to hold after John Kerry took over the State Department. Kagan’s book “The World America Made,” was particularly influential on Obama, who cited the book as having inspired his 2012 State of the Union address as well as his 2012 re-election campaign.
Kagan, one of the most influential and prominent neocons of all, served as a State Department official in the Reagan administration and later went on to co-found PNAC in 1997. As early as 1998, Kagan was calling for the U.S. government to “remove Mr. Hussein and his regime from power.” In 2002, Kagan — along with fellow PNAC member Bill Kristol — claimed that Saddam was supporting “a terrorist training camp in Iraq, complete with a Boeing 707 for practicing hijackings, and filled with non-Iraqi radical Muslims.” He also assertedthat alleged 9/11 “mastermind” Mohammad Atta had met with Iraqi intelligence just months before September 11. Both allegations were extremely influential in promoting the Iraq War, and both are completely false.
However, Kagan’s troubling track record didn’t stop the Obama administration from giving both Kagan and his wife considerable influence over government policy. In 2011, the Obama administration brought on Kagan’s wife, Victoria Nuland, to serve as State Department spokesperson. Nuland was subsequently given the post of Assistant Secretary of State for European and Eurasian Affairs in 2013, which she used to engineer the 2014 “regime change” coup in Ukraine — an event that continues to have deadly consequences in that country and has even helped bolster Neo-Nazi elements in the United States.
Nuland is a textbook example of the continuity of the neocons from the Bush administration to the Obama administration. From 2003 to 2005, during the Iraq War and subsequent occupation, Nuland was Dick Cheney’s deputy national security advisor. Cheney, thrilled with her performance, recommended she be appointed to serve as U.S. ambassador to NATO. As the executive branch changed management in 2008, Nuland became the special envoy for conventional armed forces in Europe before becoming the Obama state department spokesperson just three years later.
Trump: “Against” the Iraq War But Willingly Surrounded By Iraq War Criminals
Though Donald Trump blasted the Iraq War, and the Bush administration’s role in creating it, on the campaign trail, he — like Obama before him — has invited neocons into his administration since its inception.
Trump’s first secretary of defense, Jim “Mad Dog” Mattis, as well as his first national security advisor, H.R. McMaster, were close to Iraq War architect and influential neocon Paul Wolfowitz — so much so that Wolfowitz was covertly guiding their policy through email correspondence in the early days of the Trump administration.
Mattis’ nomination by Trump was particularly strange given the latter’s frequent criticism of the Iraq War, where Mattis earned his nickname “Mad Dog” after overseeing the 2004 sieges of Fallujah, in which the U.S. military illegally used white phosphorus, a chemical weapon, as well as depleted uranium in the densely populated Iraqi city. As a consequence of the U.S.’ attack over a decade ago, Fallujah’s children continue to be born with horrific birth defects.
While Mattis and McMaster have since departed, the neocons are more powerful than ever in the Trump administration, as seen in the appointment of another PNAC signatory, John Bolton, to the role of national security advisor. In addition, PNAC signatory, Elliot Abrams, was recently named special representative for Venezuela, despite his role in the Iran-Contra affair and in arming Latin American death squads that slaughtered thousands of civilians, and also despite the fact that Abrams is a convicted felon.
A Nation of Enablers
Though they have done their best to hide it, the United States has become a nation governed by and for the neoconservatives and their various corporate clients. The outrage voiced over their crimes in Iraq — to them — was not a call for change but merely an indicator that such outrage must be reduced and silenced, a task since accomplished through cultural engineering and, more recently, censorship.
The bodies of four children killed after their family car came under fire from U.S. troops in Fallujah, Iraq, Sept. 30, 2004. Bilal Hussein | AP
Since the Iraq War, neocons and their allies have used every tool at their disposal to mold us in their image, creating an uncaring nation that feels little or no empathy for the millions murdered and maimed in their name; a nation that is not repulsed by the fact that many of its top public officials are convicted war criminals; a nation that worships war and death and mocks anti-war voices — even when they are themselves war veterans — as “apologists” for foreign leaders who want to keep their countries out of the Pentagon’s crosshairs.
With millions set to die in Yemen from a man-made famine supported by the U.S. and a war being planned for Venezuela, a country that is twice the size of Iraq, our silence and noninterest in these matters is our complicity.
How many millions must neocons and their ilk murder before we say enough is enough? The “War on Terror” alone has already taken an estimated 8 million lives. How many nations will we allow its architects to destroy? We have already laid waste to Afghanistan, Libya, Syria, Iraq, and Somalia; engineered the war in South Sudan; supported the war in Yemen and the destruction of Palestine. Would Venezuela be the “last straw” that finally rouses us to action? It seems unlikely.
The hard truth is that, while the Iraq War may be publicly remembered as an “embarrassment” for the neocons, it was the true beginning of our transformation into a nation of their passive enablers. Regular Americans may not plan and plot forever wars or the destruction of nations and innocent lives, but most certainly go along with it, especially when we are told that “Leader X” kills his own people and “Leader Y” represents a threat to “national security.” Our consent to be governed and guided by madmen has led us to become a nation of passive neocons.
The neocons are still in power and still the public face of American policy only because we allow it. That simple fact means that they will remain in power until we say we have had enough. How many years after the Iraq War will it be before that moment finally arrives?.
- Your Volvo Will Soon Call The Cops On You If It Thinks You've Been Drinking
Call it a mix between an auto pilot and big brother.
Volvo has always been synonymous with safety in the automobile world. Now, the Swedish automaker is taking drastic steps to push the borders between “safety” and “big brother” with proactive safety systems in its vehicles. These systems will soon take control of your car if the notice what they “judge” to be an impaired or distracted driver.
To achieve this control over incapacitated drivers, Volvo soon equip its cars with cameras to monitor and evaluate the responsiveness of drivers, in what the automaker is positioning as a hope to combat against drunk and distracted drivers. If a driver is deemed impaired, the vehicle’s autonomous safety systems will intervene on various levels and also “call the authorities”, according to Motor 1 .
Henrik Green, senior vice president for research and development at Volvo said: “When it comes to safety, our aim is to avoid accidents altogether rather than limit the impact when an accident is imminent and unavoidable. In this case, cameras will monitor for behaviour that may lead to serious injury or death.”
The company hasn’t released specific details on how the cameras will work yet. The vehicle will also “monitor steering input and recognize excessive weaving or wandering.” If the vehicle senses a distracted or impaired driver, it could limit the car’s speed and even bring the car to a stop in a safe manner autonomously.
Interior facing cameras are currently only available on a couple of vehicles, including Teslas and select vehicles by Mazda and Subaru, among a few others. The data from cameras is generally run through image recognition software to try and determine whether or not a driver is paying attention, looking at their cell phone, or perhaps even getting sleepy.
Volvo has plans to implement the cameras on its cars in the early 2020s.
Back in January, we wrote an article saying that cars would “soon be monitoring their drivers and selling the data they collect”.
A report by Reuters noted that at CES in Las Vegas this year, start up companies were looking to demonstrate to automakers how their technology gathers data on drivers – all in the name of enhanced safety purposes.
It is unclear if demand for Volvos will collapse as a result of big brother watching over every move, or if potential customers will welcome this latest incursion of their privacy, boosting sales.
- US Cold Warriors Escalate Toward Actual War With Russia
Authored by Stephen Cohen via TheNation.com,
The Cold War Ides of March
Heedless of the consequences, or perhaps welcoming them, America’s Cold Warriors and their media platforms have recently escalated their rhetoric against Russia, especially in March.
Anyone who has lived through or studied the preceding 40-year Cold War will recognize the ominous echoes of its most dangerous periods, when actual war was on the horizon or a policy option. Here are only a few random but representative examples:
1. In a March 8 Washington Post opinion article, two American professors, neither with any apparent substantive knowledge of Russia or Cold War history, warned that the Kremlin is trying “to undermine our trust in the institutions that sustain a strong nation and a strong democracy. The media, science, academia and the electoral process are all regular targets.” Decades ago, J. Edgar Hoover, the policeman of that Cold War, said the same, indeed made it an operational doctrine.
2. Nor is the purported threat to America only. According to (retired) Gen. David Petraeus and sitting Senator Sheldon Whitehouse, also in the Post on the following day, the “world is once again polarized between two competing visions for how to organize society.” For Putin’s Kremlin, “the existence of the United States’ rule-of-law world is intrinsically threatening.” This is an “intensifying worldwide struggle.” So much for those who dismissed post–Soviet Russia as merely a “regional” power, including former President Barack Obama, and for the myopic notion that a new Cold War was not possible.
3. But the preceding Cold War was driven by an intense ideological conflict between Soviet Communism and Western capitalism. Where is the ideological threat today, considering that post–Soviet Russia is also a capitalist country? In a perhaps unprecedented nearly 10,000-word manifesto from March 14 in the front news pages of (again) the Post, Robert Kagan provided the answer: “Today, authoritarianism has emerged as the great challenge facing the liberal democratic world—a profound ideological, as well as strategic, challenge.” That is, “authoritarianism” has replaced Soviet Communism in our times, with Russia again in the forefront.
The substance of Kagan’s “authoritarianism” as “an ideological force” is thin, barely enough for a short opinion article, often inconsistent and rarely empirical. It amounts to a batch of “strongman” leaders (prominently Putin, of course), despite their very different kinds of societies, political cultures, states, and histories, and despite their different nationalisms and ruling styles. Still, credit Kagan’s ambition to be the undisputed ideologist of the new American Cold War, though less the Post for taking the voluminous result so seriously.
The 40-year Cold War often flirted with hot war, and that, too, seems to be on the agenda. Words, as Russians say, are also deeds. They have consequences, especially when uttered by people of standing in influential outlets. Again, consider a few examples that might reasonably be considered warmongering:
4. The journal Foreign Policy found space for disgraced former Georgian president Mikhail Saakashvili to declare: “It is not a question of whether [Putin] will attack, but where.” (Saakashvili may be the most discredited “democratic” leader of recent times, having brought the West close to war with Russia in 2008 and since having had to flee his own country and then decamp even from US-backed Ukraine.)
5. NBC News, a reliable source of Cold War frenzy, reported, based on Estonian “intelligence,” an equally persistent source of the same mania, that “Russia is most likely to attack the Baltic States first, but a conflict between Russia and NATO would involve attacks on Western Europe.”
6. Also in March, in The Economist, another retired general, Ben Hodges, onetime commander of the US army in Europe, echoes that apocalyptic perspective: “This is not just about NATO’s eastern front.” (Readers may wish to note that “eastern front” is the designation given by Nazi Germany to its 1941 invasion of Soviet Russia. Russians certainly remember.)
7. Plenty of influential American Cold War zealots seem eager to respond to the bugle charge, among them John E. Herbst, a stalwart at the Atlantic Council (NATO’s agitprop “think tank” in Washington), and the Post’s deputy editorial-page editor, Jackson Diehl. Both want amply armed US and NATO warships sent to what Russians sometimes call their bordering “lakes,” the Sea of Azov and the Black Sea. To do so would likely mean the “war” NBC envisages.
Lest readers think all this is merely the “chattering” of opinion-makers, as Aleksandr Solzhenitsyn once termed it, consider a summary of legislation being prepared by a bipartisan US Senate committee, pointedly titled and with a fearsome acronym, DASKA (the Defending American Security from Kremlin Aggression Act of 2019).
Again, Russia is ritualistically accused of “malign influence” and “aggression” around the world, the quality of the committee’s thinking succinctly expressed by one of the Republican senators:
“Putin’s Russia is an outlaw regime that is hell-bent on undermining international law and destroying the US-led liberal global order.”
There is no evidence for these allegations—Russian policy-makers are constantly citing international law, and the US “liberal global order,” if it ever existed, has done a fine job of undoing itself—but with “an outlaw regime,” there can be no diplomacy, nor do the senators propose any, only war.
A recurring theme of my recently published book War with Russia? is that the new Cold War is more dangerous, more fraught with hot war, than the one we survived. All of the above amply confirms that thesis, but there is more. Histories of the 40-year US-Soviet Cold War tell us that both sides came to understand their mutual responsibility for the conflict, a recognition that created political space for the constant peace-keeping negotiations, including nuclear arms control agreements, often known as détente. But as I also chronicle in the book, today’s American Cold Warriors blame only Russia, specifically “Putin’s Russia,” leaving no room or incentive for rethinking any US policy toward post-Soviet Russia since 1991. (See, for example, Nataliya Bugayova’s recent piece for the Institute for the Study of War.)
Still more, as I have also long pointed out, Moscow closely follows what is said and written in the United States about US-Russian relations. Here too words have consequences. On March 14, Russia’s National Security Council, headed by President Putin, officially raised its perception of American intentions toward Russia from “military dangers” (opasnosti) to direct “military threats” (ugrozy). In short, the Kremlin is preparing for war, however defensive its intention.
Finally, there continues to be no effective, organized American opposition to the new Cold War. This too is a major theme of my book and another reason why this Cold War is more dangerous than was its predecessor. In the 1970s and 1980s, advocates of détente were well-organized, well-funded, and well-represented, from grassroots politics and universities to think tanks, mainstream media, Congress, the State Department, and even the White House. Today there is no such opposition anywhere.
A major factor is, of course, “Russiagate.” As evidenced in the sources I cite above, much of the extreme American Cold War advocacy we witness today is a mindless response to President Trump’s pledge to find ways to “cooperate with Russia” and to the still-unproven allegations generated by it. Certainly, the Democratic Party is not an opposition party in regard to the new Cold War. Nancy Pelosi, the leader of its old guard, needlessly initiated an address to Congress by NATO’s secretary general, in April, which will be viewed in Moscow as a provocation. She also decried as “appalling” Trump’s diplomacy with Russian President Putin, whom she dismissed as a “thug.” Such is the state of statesmanship today in the Democratic Party.
Its shining new pennies seem little different. Beto O’Rourke, now a declared candidate for the Democratic presidential nomination, promises to lead our “indispensable country,” an elite conceit that has inspired many US wars and cold wars. Another fledgling would-be Democratic leader, Alexandria Ocasio-Cortez, seems to have bought into Russiagate’s iconic promotion of US intelligence agencies, tweeting on January 12, “The FBI had to open inquiry on whether the most powerful person in the United States is actually working for Russia.” Evidently, neither she nor O’Rourke understand that growing Cold War is incompatible with progressive policies at home, in America or in Russia.
Among Democrats, there is one exception, Representative Tulsi Gabbard, who is also a declared candidate for the Democratic presidential nomination. Not surprisingly, for lamenting Russiagate’s contribution to the worsening new Cold War and calling for new approaches to Russia itself, Gabbard was shrilly and misleadingly slurred by NBC News. (For a defense of Gabbard, see Glenn Greenwald in The Intercept.) Herself a veteran of the US military forces, Representative Gabbard soldiers on, the only would-be Democratic president calling for an end to this most dangerous new Cold War.
- Hotel Guests Secretly Filmed For 'Hidden Camera' Voyeur Website
Over 1,600 guests in 42 hotel rooms across 10 cities in South Korea were secretly filmed and livestreamed by a voyeur website with ove 4,000 members – 97 of whom paid $44.95 per month to access extra features, such as being able to replay streams, according to Stuff. 30 hotels were affected, however police say there is no indication the businesses were involved.
Guests were filmed between November 24, 2018 and March 2 of this year, while the website brought in over $6,200 for those running the site. Four people have been arrested in the scheme.
One of the main culprits allegedly installed the cameras after entering the hotels as a guest.
The other was accused of being responsible for launching and managing the now-shuttered website.
The other two were allegedly involved in buying the spy cameras or funding the internet site’s operation, according to police. –Stuff
The cameras were hidden inside wall sockets, hair dryer holders and digital TV boxes, according to the Cyber Investigation Department at the National Police Agency.
“There was a similar case in the past where illegal cameras were (secretly installed) and were consistently and secretly watched, but this is the first time the police caught where videos were broadcast live on the internet,” said the police.
South Korea has a serious problem with spy cameras and illicit filming. In 2017, more than 6,400 cases of illegal filming were reported to police, compared to around 2,400 in 2012.
Last year, tens of thousands of women took to the streets of Seoul and other cities to protest against the practice and demand action, under the slogan “My Life is Not Your Porn.” –CNN
The two main perpetrators face up to seven years in prison and a penalty of 30 million won ($26,581 US).
“The police agency strictly deals with criminals who post and share illegal videos as they severely harm human dignity,” said a Seoul Metropolitan Police Agency cyber investigation unit, via the Korea Herald.
“There was a similar case in the past where illegal cameras were installed in (hotels) and were consistently and secretly watched, but this is the first time the police caught where videos were broadcast live on the internet,” said the police agency.
- US Army Major: America Is Exceptional…In All The Wrong Ways
Authored by Major Danny Sjursen (ret.) via TruthDig.com,
I was born and raised in an America far more Orwellian than many now remember.
Matters have gone so far off the rails since 9/11 that few seem to recall the madness of the 1980s. The U.S. had a celebrity actor for president, who railed about America’s ostensibly existential adversary—the Soviet “evil empire.” Back then, Ronald Reagan nearly started a nuclear war during the all-too-real Able Archer war game. He also secretly sold missiles to Iran, and then laundered the windfall to the Contras’ Central American hit squads, resulting in some 100,000 dead.
Looking back from 2019, at least as the contemporary media tell it, those were the good old days. Heck, even Barack Obama—faux liberal that he was—proudly and publicly admired Reagan. Oh, and one of Reagan’s favorite campaign slogans: “Make America Great Again.”
Today, matters seem to be coming farcically full circle, what with Elliott Abrams—convicted in the aforementioned Iran-Contra scandal—being appointed special envoy to Venezuela, and Uncle Sam again bullying a Latin American country. Welcome to America’s own grisly ’80s foreign affairs theme party! Which all got me thinking, again, about the whole notion of American exceptionalism. Only a country that truly, deeply believes in its own special mission could repeat the hideous policies of the 1980s and hardly notice.
Perhaps one expects this absurd messianism from the likes of The Donald, but the real proof is that America’s supposed progressives—like Obama—also obediently pray at the temple of exceptionalism. “Orwellian” is the only word for a nation whose leaders and commentariat were absolutely aghast when candidate Obama was seen without (gasp!) an American flag pin on his lapel. Even more disturbing was how quickly he folded and dutifully adorned his mandatory flair. This sort of nonsense is dangerous, folks: It’s hypernationalism—the very philosophy that brought us World War I.
So it was this week, while sitting on a plane reading my oh-so-bourgeois Economist, and getting infuriated about seeing Elliott Abrams’ war-criminal face, that my thoughts again turned to good old American exceptionalism. My opinions on the topic have waxed and waned over the course of a career spent waging illegal war. First, as a young cadet at West Point, I bought it hook, line and sinker; then, as an Iraq War vet and dissenter, I rejected the entire notion. Only now, observing the world as it is, have I begun to think that America really is exceptional after all—only in all the wrong ways.
Humor me, please, while I run through a brief laundry list of the ways the US of A is wildly and disconcertingly different from all the other “big-boy countries” in the developed world. Let’s start with domestic policy:
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The U.S. has been the site of exponentially more mass shootings than any other nation. And unlike in New Zealand—where officials took immediate steps to tighten gun control in the wake of its recent tragedy—American politicians won’t do a thing about it. We also own more guns per capita than any other country in the world. In second place is Yemen.
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The U.S. is essentially alone in the Western world in not guaranteeing health care as a basic human right. It spends much more cash, yet achieves worse health outcomes than its near-peer countries.
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America is home to some of the starkest income inequality on the globe—right up there with Turkey and South Africa.
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The U.S. keeps migrant kids in cages at the border, or did until recently. Even more exceptional is that Washington is largely responsible for the very unrest in Central America that generates the refugees, all while American conservatives proudly wear their “Christianity” as badge of honor—but wasn’t Jesus a refugee child? Maybe I read the wrong Bible.
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America is alone among 41 Western nations in not guaranteeing paid family leave. How’s that for “family values?”
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As for representative democracy, only the U.S. has an Electoral College. This fun 18th-century gimmick ensures that here in America—in 40 percent of its elections since 2000—the presidential candidate with fewer votes actually won. Furthermore, our peculiar system ensures that a rural Wyoming resident has—proportionally—several times more representative power in Washington than someone who lives in California.
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Similarly, America counts several non-state “territories”—think Guam, Samoa, Puerto Rico—that don’t even get to vote for the president that it can legally send to war. But hey, why should we grant them statehood? It’s not as though some of them have higher military enlistment ratesthan any U.S. state … oh, wait.
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The U.S. is essentially solo in defining corporations as “people,” and thanks to the Citizens United Supreme Court ruling, has lifted limits on money in politics. Buying elections is officially as American as apple pie.
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The USA locks up its own people at the highest rate in the world and is nearly alone among developed nations in maintaining the death penalty. Last year, the U.S. was the only country in the Americas to conduct executions and the only Western democracy to do so. But our friends the Saudis still execute folks, so it’s got to be OK. Dostoyevsky famously claimed that “the degree of civilization in a society can be judged by entering its prisons.” How are we doing there?
Then there’s the foreign policy of the great American empire:
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The U.S. spends exponentially more on military defense than anyone else, and more than the next seven competitors (most of which are allies) combined.
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America’s bloated military is all by itself in dotting the globe with hundreds of foreign military bases—by some estimates more than any country or empire in world history. As for our two biggest rivals, Russia has 21 (mostly close to home); China has maybe three.
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Benevolent, peaceful, freedom-loving America is also the world’s top arms dealer—even selling death-dealing weapons to famous human rights abusers.
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After Syria signed on, the U.S. became the last nation on earth not party to the Paris Climate Accord. Heck, the occupant of the Oval Office doesn’t even believe in man-made climate change.
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Then there’s the discomfiting fact that the U.S.—along with Russia—won’t even make a “no-first-use” pledge regarding nuclear weapons. And that’s reality, not “Dr. Strangelove.”
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The U.S. was first and, until recently, alone in flying its drone fleet through sovereign national airspace and executing “terrorists” from the sky at will. I wonder how Washington will respond when other countries cite that American precedent and do the same?
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Only the U.S. Navy patrols all the world’s oceans in force and expects to maintain superiority everywhere. And only the U.S. boasts near total control of the goings-on in two whole continents—unflinchingly asserting that North and South America fall in its “sphere of influence.” Crimea abuts Russia and the people speak Russian—still, the U.S. denies Moscow any sphere of influence there or anywhere else. Ah, consistency.
Of course there is so, so much more, but let’s end our tour of American “exceptionalism” there in the interest of time.
What’s so staggeringly unique about the United States is ultimately this: It stands alone among historical hegemons in denying the very existence of its empire. This, truly, is something new. Kids in 19th-century Great Britain knewthey had an empire—they even colored their colonies red on school maps. Not so here in the land of the free and the home of the brave. No, Washington seems to believe its own lie—and has its people convinced—that the U.S. is no empire at all, but rather a benevolent “democratic” gentle giant.
American colonies were founded from the outset as mini-empires wrested from the natives. Next, the nascent U.S. grew up enough to take what was left of the continent from the Mexicans. Since then, Washington has been trolling the world’s oceans and spreading the gospel of its own hyper-late-stage capitalism and bullying others in order to get its way. Sure, there are countries where worse human-rights abusers and worse authoritarian regimes are in power. But do we really want to be competing for last place? Especially if we’re supposedly so exceptional and indispensable?
Me, I’m sick of patriotism, of exceptionalism, of nationalism. I’ve seen where all those ideologies inevitably lead: to aggressive war, military occupations and, ultimately, dead children. So count me as over hegemony—it’s so 20th-century, anyway—and bring on the inevitable decline of U.S. pretense and power. Britain had to give up most of an empire to gain a social safety net. That was the humane thing to do.
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- Beijing Threatens "Retaliation" Over Sale Of F-16s To Taiwan
Beijing has been ratcheting up its rhetoric over Taiwan all year, ever since President Xi kicked off 2019 with a speech calling for the “reunification” of Taiwan with the mainland, which provoked a fiery response from Taiwanese President Tsai Ing-wen. So when the US approved the sale of 70 new F-16s to Taiwan, crossing one of Beijing’s “red lines”, and further straining Washington’s relationship with Beijing at a very delicate time, when there’s a lot on the line for the global economy and markets.
Yet, in the latest hair-raising warning that the markets will almost inevitably ignore, one of the Communist Party’s most visible mouthpieces just warned that Beijing “will definitely retaliate” if the sale is completed.
Whether that retaliation might come via the trade war – or an actual war – was left ambiguous.
To China, these fight jets have lost physical meaning, but they constitute a major political provocation. If the sale is executed, Beijing will definitely retaliate. pic.twitter.com/Fo4OBuOw61
— Hu Xijin 胡锡进 (@HuXijin_GT) March 22, 2019
https://platform.twitter.com/widgets.js
Though the State Department hasn’t officially given its stamp of approval, media reports suggest the sale is all but assured. China’s foreign ministry has already registered its displeasure, Bloomberg reported.
“China’s position to firmly oppose arms sales to Taiwan is consistent and clear,” Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing Friday in Beijing. “We have made stern representations to the U.S. We have urged the U.S. to fully recognize the sensitivity of this issue and the harm it will cause.”
While it’s unlikely, Congress now has a 30 day window during which it could opt to block the deal, which marks the first US sale of fighter jets to Taiwan since 1992, when the Bush (senior) administration sold 150 F-16s to Taipei in the wake of the Tiananmen Square massacre. The Obama administration rejected a similar request from Taiwan.
In addition to the fighter jets, Taiwan has also requested a purchase order for 108 American-made battle tanks.
Mark Harrison, an adjunct director of Australian National University’s Australian Centre on China in the World, told BBG that China’s retaliation could come in several forms, be it trade, or more heavy handed interference in Taiwan’s upcoming election, where Tsai’s pro-independence party is sagging in the polls.
Since his inauguration, Trump has pursued a military policy of steady low-level antagonism to keep Beijing’s expansionist vision for the Pacific in check. The US has carried out several controversial “freedom of navigation” operations involving US destroyers sailing through the South China Sea, as well as missions involving B-52 bombers flying through the islands’ air space.
- The Fed Has Given Up: Get Ready For More QE
Authored by Ryan McMaken via The Mises Institute,
The Federal Reserve’s Federal Open Market Committee on Wednesday voted unanimously to keep the federal funds rate unchanged. Overall, the FOMC signaled it has made a dovish turn away from the promised normalization of monetary policy which the Fed has promised will be implemented “some day” for a decade. Although the Fed began to slowly raise rates in late 2016 — after nearly a decade of near-zero rates — the target rate never returned to even three percent, and thus remains well below what would have been a more normal rate of the sort seen prior to the 2008 financial crisis.
Much of the Fed’s continued reluctance to upset the easy-money apple cart comes from growing concerns over the strength of the economy. Although job growth numbers have been high in recent years — and this has been assumed to be proof of a robust economy — other indicators point toward less strength. Workforce participation numbers, wage growth, net worth numbers, auto-loan delinquencies and other indicators suggest many Americans are in a more precarious position than headlines might suggest.
The Fed’s refusal to follow through on raising rates, however, has highlighted this economic weakness, and today’s front-page headline in the Wall Street Journal reads: “Growth Fears to Keep Fed on Hold”
Abandoning Plans to Reduce the Balance Sheet
For similar reasons, the Fed has also signaled it won’t be doing much about it’s enormous balance sheet which ballooned to over four trillion dollars in the wake of the financial crisis. Faced with enormous amounts of unwanted assets such as mortgage-backed securities, the Fed began buying up these assets both to prop up — and bail out — banks and to produce an artificially high price for debt of all sort.
This kept market interest rates low while increasing asset inflation — all of which is great for both Wall Street and for the US government which pays hundreds of billions in interest on federal debt.
At best, “total balance sheet will be around $3.8 trillion, down from $4.5 trillion at its peak.” Moreover, “the Fed will soon be a net buyer of Treasurys once again,” analysts said, and some estimate “the Fed is on course to be buying $200 billion of net new Treasurys by the second half of 2020.”
Put simply: the days of quantitative easing are back, and we’re not even in a recession yet.
Some observers might simply respond with “big deal, the economy’s growing, and better yet, the Fed has given us both growth and little inflation.”
But things are not all as pleasant as they seem.
Problems with Easy-Money Policy
First of all, even by the Fed’s own measures, inflation isn’t as subdued as the headline “core inflation” or CPI measure suggests. According to the Fed’s “Underlying Inflation Gauge” which takes a broader view beyond the small basket of consumer goods used for the CPI, inflation growth over the past year has returned to the elevated levels found back in 2005 and 2006.
This hasn’t been great for consumers, and it’s been especially problematic when coupled with ultra-low interest rates. The low interest rates are a problem because people of ordinary means — i.e., the non-wealthy — don’t have the ability to access the high yield investments that wealthier investors do.
Rising Inequality
Earlier this week, finance researcher Karen Petrou explained the problem that comes from ultra-low rates which lead to yield-chasing for the wealthy:
When interest rates are ultra-low, wealthy households with asset managers acting on their behalf can play the stock market to beat zero or even negative returns. We’ve shown in several recent blog posts how wide the wealth inequality gap is and how disparate wealth sources help to make it so. However, even where low-and-moderate income households can get into the market, their investment advisers should not and often cannot chase yields. As a result, ultra-low rates mean negligible or even negative return.
Thus, ordinary people are faced with rising asset prices — driven in part by the Fed’s balance sheet purchases — while also finding themselves unable to save in way that keeps up with inflation.
Meanwhile, the wealthy reap the most benefits from Fed policy as they’re able to more effectively engage in yield-chasing.
Ordinary people get the short end of the stick from Fed policy in other ways. Petrou continues:
Historically, pension funds and insurance companies have invested only in the safest assets. These are now in scarce supply due in large part to QE andcomparable programs by central banks around the world . Pension plans and life-insurance companies increasingly have two terrible choices: to play it safe and become increasingly unable to honor benefit obligations or to make big bets and hope for the best. Under-funded pension plans are so great a concern in the U.S. that the agency established to protect pensioners from this risk, the Pension Benefit Guaranty Corporation, faces its own financial challenges . Yield-chasing life insurers are also a prime source of potential systemic risk.
Middle class people who have been told for decades to rely on pensions are now imperiled by Fed policy as well.
Not surprisingly, this has led to rising income inequality. While some free-market advocates tend to dismiss inequality as an unimportant metric, this is not a good approach when we’re talking about public policy. Fed policy — and resulting inequality — does not reflect natural trends arising from market transactions. Monetary policy is something imposed on markets by policymakers. And that’s what’s going on when we witness rising inequality due to the Fed’s monetary policy.
This has been going on since the late 1980s when Alan Greenspan relentlessly opened the easy-money spigot to spur economic growth throughout the 1990s. But, there were problems that resulted, as noted by Daniell DiMartino-Booth:
[A]t the National Association for Business Economics recent annual conference, University of California-Berkeley economics professor Gabriel Zucman presented his findings on the widening divide between the “haves” and “have nots” in the U.S. His conclusion: “Both surveys and tax data show that wealth inequality has increased dramatically since the 1980s, with a top 1 percent wealth share around 40 percent in 2016 vs. 25 – 30 percent in the 1980s.” Zucman also noted that increased wealth concentration has become a global phenomenon, albeit one that is trickier to monitor given the globalization and increased opacity of the financial system.
Defenders of ultra-low policy tend to claim low rates aren’t the real culprit here because even middle-class buyers can take advantage of easy money.
But experience suggests this hasn’t been the case. Part of the problem is that banking regulations handed down by the Fed and other federal regulators make loaning to smaller enterprises and lower-income households less attractive. Writes Petrou:
But, wasn’t there a burst of lower-rate mortgage refinancings that allowed households to reduce their debt burden and thus accumulate wealth? Did low rates allow higher-risk households at least to reduce their mortgage debt through refinancings? Again, low-and-moderate income households were left behind. They continued to seek refis after the financial crisis ebbed, but subprime borrowers current on their loans regardless of loan-to-value (LTV) ratios were less likely than prime or super-prime borrowers to receive refi loans even though higher-scored borrowers may or may not have been current and lower rates enhance repayment potential.
The overall effect suggests the accelerating reliance on quantitative easing and near-zero interest rates has been great for some Wall Street hedge fund managers — but for those at the low end of the lending and saving apparatus, things are even more constraining than ever. It’s hard to get a loan, and it’s also hard to save.
But at least the aggregate numbers are great, right?
Well, the Fed can’t brag about even that. A policy that favors billionaires might work on paper, of course, so long as the aggregate numbers point toward sizable growth. But even those numbers are so iffy as to prompt growth fears at the FOMC, and to ensure that the Fed puts an end to its promises to return policy to something that might be called normal.
As it is, it looks like we should expect a continuation of the policies which have coincided with both an unimpressive economy and rising inequality.
If that’s not evidence of the Fed’s failure, it’s hard to imagine what is.
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