Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

Saturday, March 01, 2008

HERE WE GO -- MORE DETAILS ON Spending, rev

THE ABSURD TRIBUNE


Just a reminder that he is there and this is his baby:



Tom Dispatch

posted 2008-02-28 14:22:40

Tomgram: Iraq, 2003-2008, Two Recipes for Disaster

The Commander-in-Chef Cooks Up a Storm

Recipes for Disaster in Iraq
By Tom Engelhardt and Frida Berrigan

In the week that oil prices once again crested above $100 a barrel and more Americans than at any time since the Great Depression owed more on their homes than the homes were worth; in the year that the subprime market crashed, global markets shuddered, the previously unnoticed credit-default swap market threatened to go into the tank, stagflation returned, unemployment rose, the "R" word (for recession) hit the headlines (while the "D" word lurked), within weeks of the fifth anniversary of his invasion of Iraq, the President of the United States officially discovered the war economy.

George W. Bush and Laura Bush were being interviewed by NBC's Ann Curry when the subject turned to the war in Iraq. Curry reminded the President that his wife had once said, "No one suffers more than their president. I hope they know the burden of worry that's on his shoulders every single day for our troops." The conversation continued thusly:

"Bush: And as people are now beginning to see, Iraq is changing, democracy is beginning to tak[e] hold. And I'm convinced 50 years from now people look back and say thank God there was those who were willing to sacrifice.

"Curry: But you're saying you're going to have to carry that burden... Some Americans believe that they feel they're carrying the burden because of this economy.

"Bush: Yeah, well --

"Curry: They say -- they say they're suffering because of this.

"Bush: I don't agree with that.

"Curry: You don't agree with that? Has nothing do with the economy, the war? The spending on the war?

"Bush: I don't think so. I think actually, the spending on the war might help with jobs.

"Curry: Oh, yeah?

"Bush: Yeah, because we're buying equipment, and people are working. I think this economy is down because we built too many houses."

In other words, in honor of the soon-to-arrive fifth anniversary of his war without end, the President has offered a formula for economic success in bad times that might be summed up this way: less houses, more bases, more weaponry, more war. This, of course, comes from the man who, between 2001 and today, presided over an official Pentagon budget that leapt by more than 60% from $316 billion to $507 billion, and by more than 30% since Iraq was invaded. Looked at another way, between 2001 and the latest emergency supplemental request to pay for his wars (first in Afghanistan and then in Iraq), supplemental funding for war-fighting has jumped from $17 billion to $189 billion, an increase of 1,011%. At the same time, almost miraculously, the U.S. armed forces have been driven to the edge of the military equivalent of default.

It's clear that as a "war president" our Commander-in-Chef has really whipped up a storm in the White House kitchen between the moment he launched his invasion on March 19, 2003 and the present. Think of it as a tale of two recipes:

George Bush's Commander-in-Chef Mission Accomplished Baghdad Victory Stew

Ingredients:

3 tablespoons, Iraqi extra virgin oil [no olives]

A "sea" of crude oil (and the necessary no-bid contracts to protect it)

Misinformation and disinformation (including Iraqi mushroom [clouds] and 9/11 Saddam [pork] links)

Shock 'n awe-tichoke cruise missiles and B-1 bombers (in quantity)

130,000 American troops (Army Chief of Staff Gen. Eric Shinseki suggested that, for this victory stew, "several hundred thousand" American troops were needed, but he was hustled out of the kitchen.)

1 head of Saddam Hussein

Spices:

1 bunch, coalition of the dilling, finely chopped

1 cup, Congressional authorization for war

2 sprigs of Iraqi exiles

Embedded reporters (to taste)

Dough for accompanying Iraqi flatbread, $50-60 million worth (Top Bush economic advisor Larry Lindsey suggested that $200 billion might be a more reasonable figure, but he, too, was promptly ousted from the kitchen.)

Flower petals (edible and in season)

To prepare:

In a heavy casserole, heat extra virgin Iraqi oil over a medium flame.

Add disinformation (mushrooms and links) and sauté until brown; repeat process. (You cannot repeat too many times.)

Add sprigs of Iraqi exiles.

Pour in cup of Congressional authorization for war. Stir vigorously as this tends to evaporate.

Pour in sea of crude oil. Raise heat to high. Quickly add shock 'n awe-tichoke cruise missiles and B-1 bombers. Cover tightly and bring to a boil. (If this "decapitation" cooking process works and you suddenly find yourself with the head of Saddam Hussein, add it as well.)

Stir in 130,000 American troops. Grind in embedded reporters (to taste). Add chopped coalition of the dilling. Bring back to a boil.

Cover, lower the heat, and simmer, stirring periodically, for three weeks.

Remove to a platter. Serve piping hot, otherwise "stuff happens." If possible, hire Shiite waiters to strew edible flower petals atop the victory stew at the table for dramatic effect.

In fact, we know who sat down to that "table" in the years after 2003 to eat more than their fill. It was, of course, a cast of characters from the war economy.

The Feasters (a non-inclusive list):

Kellogg, Brown & Root (KBR): Until April 2007 a subsidiary of Halliburton, KBR garnered $20.1 billion in Iraq contracts from the Bush administration. The company reported a $2.3 billion profit in 2006. According to a Center for Public Integrity investigation, KBR was the single biggest corporate winner from the wars in Iraq and Afghanistan. In terms of the dollar value of its Iraq contracts, it received nine times as much as the second largest Iraq contractor, DynCorp.

Halliburton: In 2002, Halliburton was number 37 on the Pentagon's list of top 100 contractors with $500 million in contracts. By 2006, it was number six, with $6.1 billion in contracts, an increase of more than 1,000%.

Brookings Institution Senior Fellow Peter W. Singer puts this in context, noting in a September 2007 policy paper that "the amount paid to Halliburton-KBR for just that period is roughly three times what the U.S. government paid to fight the entire 1991 Persian Gulf War. When putting other wars into current dollar amounts, the U.S. government paid Halliburton about $7 billion more than it cost the United States to fight the American Revolution, the War of 1812, the Mexican-American War, and the Spanish American War combined."

Bechtel: In all, Bechtel was granted about $3 billion in contracts for work in Iraq between 2003 and 2007. According to the San Francisco Chronicle, some of its projects included: $1.075 billion for repairs to power stations and the electrical grid; $210 million for water and sanitation projects; $109 million for surface transportation repairs, including roads and railways; and $90 million for repairing or replacing buildings. The company ran afoul of investigators for not finishing many of the jobs it started. Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, issued a report in 2006 that repeatedly cited Bechtel mismanagement, including for the construction of the Basra Children's Hospital, a project that was supposed to be completed by December 2005 at a cost of $50 million. By July 2007, costs had soared to between $90 million and $131 million. The company was dropped from the project which to this day remains uncompleted.

Blackwater: According to investigative journalist Jeremy Scahill, Blackwater, the notorious private security company, has won about $1 billion in State Department contracts.

Lockheed Martin: This company is the largest recipient of Pentagon contracts. It received $26.6 billion in contracts from the Pentagon in 2006, a 36% increase over 2005. Since 2003, when the war against Iraq began, the company has seen its Pentagon contracts jump 20% or nearly $5 billion. Lockheed Martin's slogan, "we never forget who we're working for," clearly refers to the Pentagon, the company's best customer by a long shot. According to the Orlando Business Journal, "Lockheed Martin Corp. reported profits up 9.6 percent last quarter… The Bethesda-based defense contractor posted fourth-quarter [2007] net income of $799 million, or $1.89 per share, compared with $729 million, or $1.68 per share in the same quarter a year ago… Sales rose in every category of Lockheed's business except its aeronautics division."

Boeing: In 2003, the number two recipient of Pentagon contracts received $17.3 billion worth of them. By 2006, the Pentagon had upped that figure to $20.3 billion. According to the Chicago Tribune, "Boeing's net income rose a better-than-expected 4 percent, to $1.03 billion, or $1.36 per share" in the fourth quarter of 2007. The paper went on to note that the company "expects to build on its strong results from 2007, when its net income jumped 84 percent…to $4.07 billion… on sales of $66.39 billion."

Northrop Grumman: The third largest recipient of Pentagon contracts recorded a net profit of $454 million for the last quarter of 2007, according to Reuters. In 2003, the company took in $11.1 billion in Pentagon contracts. Three years later, that figure had jumped nearly 50% to $16.6 billion.

General Dynamics: According to analysts, because the work of General Dynamics is concentrated on Army systems, it has reaped the most direct benefits of all the large weapons makers from the Iraq war. "The combat-systems business... it's a cash cow for them, it's a solid business," said Eric Hugel, an industry analyst for Stephens Inc. The New York Times reported that fourth-quarter 2007 earnings for General Dynamics were up 42%. "For all of 2007, General Dynamics had net earnings of $2.1 billion," up 11% from $1.86 billion in 2006.

The Oil Majors: The oil majors have not actually entered Iraq (yet) in any significant way, but they have profited enormously from the havoc the Iraq War has unleashed in the Middle East as well as from the fact that, in these years, less Iraqi oil has been heading to market than in the worst years of the Saddam Hussein era. The Washington Post reported, for instance, that Exxon Mobil set new records for quarterly and annual corporate profits in 2007, breaking its own 2006 record by making $40.6 billion. Chevron was next in line with an almost 30% increase in profits from 2006 to 2007. The Post went on to note that profits from the five biggest international oil companies have tripled since 2002.

Parsons: This Pasadena-based engineering and construction company has been awarded more than $5 billion in contracts to rebuild the country's health care and security facilities as well as its water and sewage systems. With Worley Group of Australia, Parsons has also received $800 million in contracts to restore Iraq's northern oil infrastructure. In negotiating its Iraq reconstruction contracts, Parsons built in an additional bonus of up to 12% for good performance. Fortunately for taxpayers, good performance has been in short supply. Awarded a $75 million contract to build a police academy, Parsons typically cut corners. In the "completed" project, the bathrooms leaked waste water into student barracks to such an extent that one room was dubbed "the rainforest." The Pentagon terminated one contract when an audit found that, after two years' work, only six of the 142 health clinics Parsons had signed on to build were completed.

All in all, the Commander-in-Chef whipped up quite a meal back in 2003. As late as March 2006, he was still trying to serve a version of it at a "strategy for victory" event (though he was no longer accompanying it with a desert of Cakewalk Ice Cream Cake).

Finally, on the eve of the fifth anniversary of the invasion, the war economy seems to have had its fill. Now, the rest of us are being seated at a table with an oil-stained tablecloth, uncleared places, dirty dishes, used silverware, and bones strewn everywhere. Of course, it's for a multi-trillion dollar meal and, for us, it's a pay-as-you-go affair. (Bring your home mortgage papers with you.) Oh, and when you get your bill, note that the tip, a 150% gratuity, is already included. (Another thing, skip the ice water in those dirty glasses. Cholera is passing around Baghdad right now.) This time, however, the President is offering us a new dish, a special anniversary recipe:

George W. Bush's Commander-in-Chef Losing Mulligatawny Soup

Ingredients:

At least 140,000 American troops

Tens of thousands of private security contractors

Nearly 4,000 dead Americans

Tens of thousands of wounded Americans

From several hundred thousand to a million or more dead Iraqis

4.5 million Iraqi refugees or internally displaced persons

4 million hungry Iraqis

Assorted Shiite militias and death squads

Assorted Kurdish militias

80,000 U.S.-armed Sunni "concerned citizens" (militias)

At least 24,000 Iraqi prisoners in American jails

Thousands of Sunni insurgents.

Hundreds (or thousands) of Al-Qaeda-in-Mesopotamia militants

Hundreds of foreign jihadis and suicide bombers.

Up to 10,000 Turkish troops.

Numerous Iranian agents

Crude oil (where available)

Water (polluted)

Hundreds of IEDs (roadside bombs)

361 U.S. Army unmanned drones operating in Iraqi airspace

Hundreds of thousands of pounds of explosives released by U.S. Air Force planes

Dough for accompanying Iraqi flatbread, now possibly $3 trillion -- and rising.

To prepare:

Heat whatever crude oil is available in the largest kettle you can find until smoking. Dump in all ingredients in whatever quantities in any order you choose. (Warning: popping oil, shield eyes.) Add polluted water. Bring to a roiling boil at highest heat. Cook for as much -- or as little -- time as you want. Pour the soup, boiling hot, across the table (no need for bowls) and dig in.

Bon appétit! Happy anniversary!

And keep in mind, for the next 11 months our Iron (Commander-in-) Chef will still be in the kitchen cookin' up a storm and undoubtedly hummin' to himself:

"War! -- huh -- yeah --
What is it good for?
Absolutely nothing
Uh-huh."

Tom Engelhardt, who runs the Nation Institute's Tomdispatch.com, is the co-founder of the American Empire Project. His book, The End of Victory Culture (University of Massachusetts Press), has been thoroughly updated in a newly issued edition that deals with victory culture's crash-and-burn sequel in Iraq.

Frida Berrigan is Senior Program Associate with the Arms and Security Initiative at the New America Foundation. She is a columnist for Foreign Policy in Focus and a contributing editor at In These Times magazine. She is the author of reports on the arms trade and human rights, U.S. nuclear weapons policy, and the domestic politics of U.S. missile defense and space weapons policies. She can be reached at berrigan@newamerica.net.

Copyright 2008 Tom Engelhardt and Frida Berrigan

Wednesday, March 21, 2007

Illustration: Anything but Iraq -- thanks Hugh

*********************************************

The last week:

We started off with more talk of the Scooter. Most think he was a scapegoat for Karl Rove or Dick Cheney. In fact, when it started, Absurd Times called it “Rovegate.”

Now we have Gonzales and the firing of 8 or so federal prosecutors. The strange thing about it is that the Decider could have fired them all when he was elected and there would have been no problem at all. They are political appointments, after all. The problem is firing them for not serving political ends as they come up, such as for not stopping investigations of Republicans and not prosecuting Democrats fast enough. Many think that Karl is behind this as well. Gonzales will be subpoenaed and under oath soon.

The 21,500 extra troops to Iraq has now become over 31,000 and more to come. After all, how can we put an end to violence without troops and weapons? Just be patient. After Iraq passes a bill privatizing (giving to American Corporations) Iraq’s oil, then we will think about it.

Halliburton, the billion dollar no-bid contract firm of which Cheney used to be CEO has moved its headquarters to the UAE. See, they like Moslems. Either that, or Michael Jackson.

On Tuesday, 3/20/07, the news mentioned that Bush called Gonzales to say that he had his full support. This was after Tony Snow said “We hope so” in response to the question of whether Gonzales would stay. The support call came the day after revelations about the FBI’s abuse of the Patriot Act (it is difficult to imagine how it could be abused). Janet Reno was held responsible for Waco as the FBI reports to the Attorney General. The removal of Gonzales will make no difference, but it is worthwhile to point out that many Bush supporters thought he was too liberal for the position.

Recent reports about Blackwater indicate that there are about 50,000 mercenaries in Iraq in addition to the official troops. (It was Blackwater agents who were hanged in Fallujah.)

It turns out that all 93 federal prosecutors were fired and replaced by the ones in office, and some of them were fired – poor performance was the reason give. So Gonzales will testify.

The Senate threw out a part of the Patriot Act by a vote of 96 to 2. This was called “Partisan Politics,” indicating that arithmetic is not a strong suit of the administration, even though Karl Rove, I believe, said he knew the “real math” once.

The decider offered a compromise. Rather than have Rove and Cheney testify under oath, some senators can talk to them off the record in some room somewhere, no tape, no transcript, no notes.

A great deal of this is actually considered good news by the administration because it keeps attention away from Iraq.

Therefore, our single article this week is an interview with Noam Chomsky on Iraq:

*ZNet | Foreign Policy*

*War, Neoliberalism and Empire in the 21st Century

Noam Chomsky Connects the Dots*

*by Noam Chomsky and Sameer Dossani; CounterPunch

<http://www.counterpunch.org/dossani03092007.html>; March 14, 2007*

*Sameer Dossani: Let's talk about the recently passed Iraqi oil

law. It's well known that the law was drafted in the U.S. and

then consulted on by very few Iraqis all loyal to Prime Minister

Noori al-Maliki, then finally pushed through the Iraqi

parliament. This law paves the way for regionalization and

privatization of Iraqi oil. What's the U.S. economic agenda in

Iraq and will it be able to carry that agenda out, given the

disastrous nature of the occupation so far?*

Noam Chomsky: It's not very clear. What you said is correct. The

law was not even seen by the Iraqi Parliament until it was

finished, so it's an inside job. Exactly what this entails is

still kind of open. It allows for Production Sharing Agreements

(PSAs) which have traditionally been a way of gouging the

producer and ensuring that foreign corporations have control and

make huge profits. It's quite different from other contractual

arrangements in the region--it's what they used to have but

they've since nationalized their oil production and countries

set terms more in their own interest with the corporations that

are moving in. This law is vague on that so it leaves it open.

As far as the U.S. economic interests I think we have to make a

distinction. The primary interest, and that's true throughout

the Middle East, even in Saudi Arabia, the major energy

producer, has always been control, not access, and not profit.

Profit is a secondary interest and access is a tertiary interest.

So in the years when the U.S. was not using Middle East oil at

all, [the U.S.] was the largest producer and the largest

exporter, it still had the same policies. It wanted to control

the sources of oil and the reasons are understood. In the

mid-1940s, the State Department made it clear that the oil

resources of the region, primarily then Saudi Arabia, were a

stupendous source of strategic power which made the Middle East

the most strategically important area of the world. They also

added that its one of the greatest material prizes in world

history. But the basic point is that it's a source of strategic

power, meaning that if you control the energy resources, then

you can control the world, because the world needs the energy

resources.

This was made explicit by George Kennan when he was one of the

Middle East planners [in the U.S. State Department]. [He said

that] control over Middle East oil will give us veto power over

our rivals. He was specifically talking about Japan, in case

Japan industrialized, it was devastated by the war still, we'll

have veto power as long we control the oil. And that's been

understood through the years. So in the early stages of the Iraq

war [former U.S. National Security Advisor] Zbigniew Brzezinski,

who's one of the more astute of the planners--he was not

terribly enthusiastic about the war--said that if the U.S. wins

the war, which means that it succeeds in imposing a client

regime in Iraq, then the U.S. will have critical leverage over

its industrial rivals in Europe and Asia because it will have

its hand on the spigot.

And that is also understood very well at the highest level of

the administration. So a few months ago, Dick Cheney said that

control over [oil] pipelines can be "tools for intimidation and

[blackmail]". He was talking about control over pipelines in the

hands of others, so if our enemies have it, it's a tool of

intimidation and coercion. But of course the same is true if it

is in our hands. We're not supposed to think that because we're

supposed to be noble, but the rest of the world certainly

understands it. Yes, it's a tool of intimidation and coercion,

whether it's the direction of pipelines or whether its control

over the production or over the regimes in question, and control

can take many forms.

So that's the primary concern--control. A secondary concern is

undoubtedly profit for U.S.-based corporations and British based

corporations and several others of course. And yes [in the case

of the Iraqi oil law] that's a possibility. The Production

Sharing Agreements and the other arrangements for long-term

contracts at ridiculous rates, those are expected to be sources

of immense profit as they have been in the past, so for example

a couple of weeks ago Exxon-Mobil posted its profits for 2006

which are the highest for any corporation in U.S. history. That

broke the record of the preceding year, which also happened to

be Exxon-Mobil and the other energy corporations are doing just

great--they have money pouring out of their ears. And the same

with the corporations that link to them, like Haliburton,

Bechtel and so on.

The material prize of oil production is not just from energy.

It's also from many other things. Take Saudi Arabia or the

[United Arab] Emirates. They have huge constriction projects

paid for by petro-dollars which recycle back to Bechtel and

other major construction companies. A lot of it goes right back

to U.S. military industry. So these are huge markets for U.S.

military exports and the military industry in the United States

is very closely linked to the high-tech economy generally. So

it's a sort of a cycle--high prices for oil, the petro-dollars

pour back to the U.S. for major construction projects for

high-tech industry, for development, for purchasing treasury

securities which helps bolster the economy--it's a major part of

the economy and of course it's not just the United States.

Britain, France and others are trying very hard to sell them the

same things and sometimes succeeding. There was a big bribery

scandal in Britain recently because of efforts to bribe Saudi

officials into buying jet aircraft and so on. So the basic idea

of the energy system is that it should be under the control of

loyal clients of the United States, and they're allowed to

enrich themselves, become super rich in fact, but the

petro-dollars are basically to cycle back to the West, primarily

the United States in various forms. So that's a secondary concern.

A tertiary concern is access. That's much less of a concern. One

of the reasons is that the distribution systems are pretty much

in the hands of big energy corporations anyway and once oil is

on the high seas, it can go anywhere. So access is not

considered a major problem. Political scientists, when they make

fun of the idea that the U.S. invaded Iraq to gain its oil, they

point out is that the U.S. can get Middle East oil in other ways

so therefore that can't be the reason. That's true, but it's

irrelevant because the true issues are and always have been

control and secondarily profit and in fact U.S. intelligence

projections for the coming years have emphasized that while the

U.S. should control Middle East energy for the traditional

reasons, it should rely primarily on more stable Atlantic basin

resources, namely West Africa and the Western hemisphere.

They're more secure, presumably and therefore we can use those,

but we should control the Middle East oil because it is a

stupendous source of strategic power.

*SD: The difficulties surround the occupation Iraq has deflected

the U.S.'s attention away from other parts of the world,

including Latin America. Recently, Venezuelan President Hugo

Chavez and others such as Rafael Correa of Ecuador, Evo Morales

of Bolivia, have been talking about regional trade agreements

such as ALBA and, in the case of Venezuela, aid packages that

are supposedly designed to actually benefit local populations as

opposed to transnational companies. Critics claim that these

policies are a) unsustainable, because they depend on revenues

from Venezuela's oil wealth, and b) self serving for the

government of Hugo Chavez. What is your response to these

criticisms?*

NC: It's very odd criticism in the first place. Are U.S. aid

programs sustainable? No, not if there's a depression or even a

recession. Furthermore, U.S. aid happens to be about the lowest

relative to the economy of any advanced society so there isn't

much of it in the first place and it also can be withdrawn at

any time and often is.

As for doing it for self interest, what do you think other

countries provide aid for? They're perfectly open about it.

Sometimes, there's something done for altruistic reasons maybe

by Norway, but overwhelmingly, aid is openly presented as "in

our interest", not just by the U.S. but by Britain and France

and others. It is part of general strategic policies of

controlling whatever part of the world you can. So, if in fact

Venezuela's doing it for that reason, that just says, "yeah,

they're just like us". So whatever that is, it's not a criticism.

What are the reasons? Well, they're complicated. First of all,

there's a background. For the first time in 500 years since the

Spanish conquest Latin America--especially South America--is

beginning to move towards some sort of integration. Actually

it's a dual type of integration. Part of it is

international

integration meaning the countries are becoming more integrated

with one another. The traditional structure in LA has been that

each of the countries is primarily oriented towards Western

imperial powers. So [economies are oriented toward trade with]

Spain, and in recent years mostly the United States, not with

one another. That's even true of the transportation systems.

They're designed for export of resources abroad and import of

luxury goods for the rich within.

There's a very clear contrast with East Asia. East Asia is

resource poor, Latin America is resource rich. You would have

expected Latin America to have rapid growth, not East Asia, but

it didn't. One of the reasons is that Latin America adhered very

rigorously to the neo-liberal policies of the last 25 years, the

IMF World Bank policies, and those are basically offshoots of

the U.S. Treasury department. They adhered to the rules and they

suffered severely--most of the population that is. The rich

sectors did ok. East Asia just disregarded the rules and

followed the same kinds of programs that the rich countries

themselves, including the U.S., had followed to gain their

wealth and power. So East Asia grew, but in addition to that, if

you look at say imports and exports, Latin America exported raw

materials, which is low income basically, and imported luxury

goods for the wealthy. East Asia imported capital goods and

moved up the ladder of industrial progress and ended up

exporting high technology goods.

*SD: What do you mean by "capital goods"?*

NC: Machine tools, things that you can use for producing

commodities, electronics, bio-technology and so on. I mean those

are the high-value exports, not rice. I mean for the U.S., rice

is such a low value export that agribusiness has to get about

40% of its profit from U.S. government subsidies, provided

primarily since the Reagan administration, as part of their

efforts to undermine markets--they love rhetoric about markets,

but they greatly dislike the concept applied to us. And the

terms of trade tend to decline for commodities, you know there's

variation, but they tend to decline for primary commodities as

compared with high value goods like industrial exports. So

[economists like to talk about] this notion called "comparative

advantage", you should produce what you're good at, but the way

countries develop is by rejecting that principle and acting in

order to shift their comparative advantage.

So let's take the United States. 200 years ago the comparative

advantage of the United States was exporting fish and fur, and

maybe cotton, thanks to slavery. If the U.S. had followed the

principles that are dictated to the poor countries, we'd be a

sparsely populated, pretty poor country, exporting primary

resources. Instead, the United States violated all of the

rules--the rules of the economists and the neo-liberal

principles. It imposed extremely high tariffs on imports from

Britain, textiles at first, later steel and others, and it had

the highest tariffs in the world, the highest protection in the

world in the 19th century. As a result, it was able to shift its

comparative advantage from primary resource exports to

manufacturing, finally high-tech technology and so on, and that

goes on right until today. Only the poor countries are supposed

to follow the principles that economists dictate. In the United

States there's a state sector of the economy, which is the core

of high-technology advanced production. That's where computers

come from, and the Internet, and lasers, and containers for

trade; civilian aircraft are mostly an offshoot of the military

industry, right now moving on to genetic engineering,

bio-technology, pharmaceuticals, and so on. Research and

development--which are the risky, costly parts of

development--those costs are imposed on the public by funding

through the state sector and development in the state sector.

When there are profits to be made it's handed over to private

corporations and that's the basic structure of the advanced economy.

That's one reason why the U.S. simply can't enter into the free

trade agreement--it just doesn't accept market systems

internally. So going back to East Asia and Latin America, Latin

America followed the rules and became impoverished; East Asia

ignored the rules, and was able to grow and develop pretty much

the way the rich countries had themselves. So one form of

integration in Latin America is integration of the societies

with one another, although the alternative is the more

far-reaching version of this, but there are others. And the

second form of integration is internal. Latin America at last is

beginning to do something, not much, but something about the

internal fracturing of the societies, which is extreme. Each of

those societies is characterized by a very wealthy small elite,

and a huge impoverished mass. There's also a pretty close

correlation to race. The wealthy elite tends to be the white,

Europeanized part of the society; the huge impoverished mass

tends to be the Mestizo, Indian, Black part of the society. Not

a perfect correlation, but it's very noticeable. And that's

beginning to be addressed, in large part as a result of the

pressure of mass popular movements, which are very significant

in Latin America now more than any other part of the world.

It's in this context that the Venezuelan phenomenon surfaces.

Venezuela is indeed now, under Chavez, using its oil wealth to

accelerate these processes--both the international integration

and the internal integration. It's helped countries of the

region free themselves from U.S. controls, exercised in part

through the traditional threat of violence, which has been much

weakened, and in part through economic controls. That's why

country after country is kicking out the IMF, restructuring

their debts, or refusing to pay them, often with the specific

help of Venezuela. In Argentina particularly, Venezuela bought

about a third of the debt and enabled Argentina to "rid herself

of the IMF" as the President [Nestor Kirchner] put it. The

international integration is also proceeding, not just through

Venezuela. It doesn't get reported here because it's sort of not

the right story, but a lot of things are happening. So in early

December for example, there was a meeting of all South American

leaders in Cochabamba, Bolivia--which is right at the heart of

Morales territory, Indian territory--and they proposed, they had

constructive ideas and suggestions which could lead towards sort

of a European Union type structure for South America.

The more extreme version of this, advanced version of it is

ALBA, which you mentioned, the Venezuelan initiative, but there

are others. MERCOSUR, which is a regional trade alliance is

stumbling, but it exists. There are great barriers to

integration, it's not an easy matter to dismantle 500 years of

history, either internally or regionally, but there are steps

towards it, and Venezuela is playing a significant role in them.

In the U.S. there's kind of a new party line on this matter. The

party line is that, OK, we admit the subcontinent is drifting to

the Left, but there are good Leftists and bad Leftists, and we

have to distinguish between them. The bad Leftists are Chavez,

of course, Morales, and probably Correa, not certain yet, and

Kirschner's also one of the bad ones. The good Leftists are Lula

in Brazil, García in Peru, they don't know about Bachelet in

Chile, and so on.

In order to maintain this propaganda line, it's necessary to

suppress quite a lot of facts. For example, the Cochabamba

conference that I mentioned, or the fact that when Lula was

reelected in last October, his first foreign trip and one of his

first acts was to visit Caracas to support Chávez and his

electoral campaign, and to dedicate a joint Venezuelan-Brazilian

project, a major bridge over the Orinoco river, and to discuss

some other projects. Well that doesn't fit the story so, as far

as I can tell, I don't think it was reported anywhere in the

United States--I didn't check everything, but I couldn't find

it--and many other things like that. I mean with any kind of

propaganda, there's at least some thread of truth to it, but

it's much more complex than that. There's a real will towards

integration and popular pressure towards internal integration,

which are very significant. It's worth remembering that these

are steps toward reversing a 500-year-old pattern, and among

other things, it's weakening the traditional measures of U.S.

control over South America. So the kind of governments the U.S.

is supporting now, including Lula, are the kinds of governments

they might well have been overthrowing not many years ago.

*SD: In Latin America, Venezuela is only one part of the general

discontent that is driving governments away from the IMF. But in

other parts of the world, notably Africa, the IMF and its

neoliberal diktaats are as strong as ever, and the predictable

result is that extreme poverty is still on the rise. Other

countries -- for example India -- are not under this pressure

but still are wildly pursuing neoliberal economic policies. What

hope do you see for citizens and movements in these places? Are

there lessons to be learned from the case of Latin America? How

can we in the U.S. be supportive of struggles for economic

justice in these places?*

A lot depends on what we do. After all [the U.S. is] the most

powerful country in the world and the richest country in the

world and has enormous influence. These policies that you

describe are not without reason called the Washington Consensus;

that's where they emanate from.

Sub-Saharan Africa and Latin America are the two areas of the

world that most rigorously followed the neo-liberal principles,

the orthodox principles of the Washington Consensus, and those

are the two parts of the world that suffered most severely. And

you're right, in Sub-Saharan Africa it largely continues. They

simply do not have the resources, the capacities, the countries

are torn to shreds as a result of history of imperial conquest

and devastation, and they've not been able to put themselves

back together again. Their hopes for revival after the the

formal end of colonialism were pretty much shattered by Western

intervention. So for example, the murder of [Patrice]Lumumba in

the Congo, which is the richest, and potentially the most

powerful country of the region, and the installation of the

corrupt and brutal murderer Mobuto [Sese Seko] not long after, I

mean that set off a chain of catastrophes which is still

devastating the area and no sign of resolution.

The French in their regions of Africa did the same. One gangster

after another, the French backed state terrorism, and did all

sorts of things. And pretty much the British, too, in their

regions. So [many African countries] have a hideous legacy to

overcome, and it's very difficult, and they're not getting much

support from the outside. But we should be doing what we can to

support authentic liberation struggles within the countries.

It's too complicated to go into the history here, but it's worth

remembering many of the things that happened. So for example,

when the Portuguese empire collapsed in the mid-70's, the former

Portuguese colonies had a chance, Angola, Mozambique, a couple

other Portuguese colonies, might have moved towards some sort of

independent development. But South Africa, with U.S. backing,

would not allow it--remember that's apartheid South Africa. So

for example in Angola, South African troops backed by the United

States just invaded to try to throw out the elected government,

and again, with U.S. support, supported terrorist movements, the

Savimbi movement, to try to undermine the government, and they

would have succeeded had it not been for the fact that Cuba sent

forces to support the government.

That led to hysteria in the United States. You had [the U.S.

Ambassador to the United Nations] Daniel Moynihan saying 'the

Russians are trying to cut our lifeline, our oil supplies to the

Middle East', [Henry] Kissinger raving and so on, and it was

all, believed to be or presented to be a Russian operation. In

fact, we now know from excellent contemporary U.S. scholarship

that it was a Cuban initiative--it was mainly Piero Gleijeses at

Johns Hopkins University who's going through the archival

material and has done outstanding scholarship. What happened is

that Cuba entered on its own initiative and very

selflessly--they never took any credit for what they were doing,

it's still mostly unknown--but Cuban troops beat back the South

African offensive, and not only did that prevent the re-conquest

of Angola, but it also had extraordinary symbolic significance.

Those Cuban troops were black, and that broke the kind of

mythology of white conquest; it was the first time that black

soldiers had defeated advanced white armies, South African with

U.S. backing. And that was a very important, had a very

important effect on all of Africa. For the South African whites

it was a sign that their conquest was not permanent. And for

blacks in South Africa and elsewhere in the region, it showed

that you don't have to subordinate yourself to white power.

That breaking of the hold of the mythology of [white] power is

extremely significant, not just in this case. The same is true

with many other cases, slavery, the women's movement, all sorts

of things. Just breaking the idea that you must subject yourself

to overwhelming power, when that's broken, a lot collapses with

it. So that was a very important step towards the liberation of

Africa, and Cuba deserves enormous respect for this, also for

never taking credit for it, because they wanted the credit to be

taken by the African countries themselves. It's only now

beginning to be known, and mostly only known in scholarly

circles because you don't get front page stories in the New York

Times about topics like this. And then Angola fell into total

catastrophe, mainly because of the depredations of the

U.S.-backed terrorist forces, which were horrendous, and now

it's a horror story. Similar things were happening elsewhere.

The United Nations commission on Africa estimated that in the

former Portuguese colonies alone--Mozambique and Angola--about a

million and a half people were killed by South African

aggression backed by the Reagan administration, just during the

Reagan years. That's a pretty serious catastrophe. They also

estimated about 60 billion dollars of damage, and the French and

Algeria and their regions elsewhere were doing pretty much the

same. It's a hideous, ugly story, and sub-Saharan Africa has a

long way to go to extricate itself from these centuries of

destruction still continuing.

India is a complicated story; it has been independent since

1947. Before the British conquest back in the 18th century,

India and China had been the commercial and industrial centers

of the world. British conquest turned India into a poor, peasant

society. [The British] built roads and infrastructure, but they

were mostly for the benefit of the invaders, the export of goods

and so on. There were hideous famines--Mike Davis has a

wonderful book on this Victorian famines, huge famines that

could have easily been prevented, right thru the British rule up

to the very end in the 1940s. Since Indian independence, they

resumed their growth and there were no more famines; it became a

more or less governable society and was beginning to develop. In

the 1980s, there was a significant increase in the rate of

growth. In the 1990s, they instituted the so-called neo-liberal

reforms on their own, I mean, that was not under IMF control, as

you said, and since then there have been changes.

They're very highly praised in the West--you know, the Thomas

Friedman-style adulation of the new India--and in fact growth

has increased, and a sector of the society has become much

better off, has been raised from poverty. But remember that

means a sector of the society; the large majority of the society

is deeply impoverished, maybe even harmed by the neo-liberal

policies, the same policies that are responsible for the

marvelous labs in Hyderabad and Bangalore - which are indeed

marvelous, I've seen them and they're just like MIT - and there

is increase in the wealth of that sector of society. Those same

policies are undermining the large majority of the population,

which is peasant-based. Also the government has withdrawn

support for peasant agriculture, meaning cheap credits,

irrigation, rural aid, assistance programs, and so on, and

they've also kind of pressured the poor farmers to turn from

subsistence crops to export crops--that's the advice of

economists generally.

Mexico, for example, under NAFTA was supposed to turn away from

producing rice for the population and corn, turned away from

that to, say, producing flowers for export to the United States

with "more valued added". In some seminar somewhere that might

look good, but in the real world it happens not to work for very

simple reasons. Commodity prices tend to vary quite a lot, and

if there's like a natural disaster, say a hurricane or whatever,

and you're producing flowers, they might be wiped out that year,

just like the citrus crop has been pretty much wiped out in

California this year because of the cold spell. Well if you're

agribusiness, you can handle that. So wiping out the citrus crop

in California may raise the price of oranges in the United

States, but U.S. agribusiness is going to survive it just fine.

However, poor farmers cannot, I mean a farmer can't tell his

children 'don't bother eating this year' because cotton prices

went down, or because a storm wiped out our flowers, and 'maybe

you'll be able to eat the next year', you can't do that. So what

you have to do is to try to get credit. Well with the government

having withdrawn support for the vast majority of the

population, you go to usurers, who charge you huge levels of

interest, which you're not going to be able to pay, so then you

have to sell off the little plot of land you have, and pretty

soon you can't support your family at all, so you commit suicide.

And in fact the rate of peasant suicides has been rising [in

India] about as fast as the adulation by Thomas Friedman for the

marvels of the economy. The per capita grain intake for people

in India has declined, the average has declined considerably,

since the onset of the reforms. Manufacturing productivity has

gone way up, manufacturing wages have gone way down. At the

beginning of the so-called reforms, India was ranked around

124th or so in the UN development rankings, which measure infant

mortality and so on. Since the reforms have been undertaken,

it's actually declined--the last time I looked I think it was

127th, it certainly hasn't advanced.

Well, these are parts, I can go on, but these are the several

aspects of the Indian development story. For some it's been very

good, and for others it's been, at best, stagnation, at worst, a

disaster. And remember, for huge parts of India, like say for

women, life is kind of like under the Taliban. Careful studies

of say [the Indian state of] Uttar Pradesh, which maybe has 160

million people, has found that they have about the lowest female

to male ratio in the world and it's not because of female

infanticide, it's because of the way women are treated, which

would make the Taliban look pretty decent. And these are huge

areas, and they're not getting better, many are getting worse.

The same is true in China, it's harder to say about China, it's

a closed society, I don't know the details, but it's probably

quite similar. India's a more open society so there's a lot of

evidence.

Going back to Mexico and producing corn and beans, I mean, why

is there a vast increase in illegal immigration from Mexico in

recent years? It's partly the predicted effects of NAFTA. If you

flood, the worst is yet to happen but even the beginning of it,

if you flood Mexico with U.S. agribusiness exports, which are

highly subsidized--that's how they get their profits--then

Mexican farmers aren't going to be able to compete. Then comes

the economists' theory, you know, turn from producing corn and

beans and rice to producing flowers and [other] export crops,

and you have the mode I described, and people can't survive. So

there's a flight of people from the countryside to the cities

where there are no jobs because Mexican businesses can't compete

with U.S. multinationals, which are given enormous advantages

under the mislabeled trade agreements. And yes, you get a flight

of population [across the border]. The price of tortillas, you

know, the basic food for the poor, it's gone out of sight,

people can't pay for it. If you're growing your own food, you

can manage, or if there's a subsistence agriculture, yeah, you

can kind of manage, but not when you abandon it.

Again, for parts of the population it's been a benefit, so the

number of billionaires has gone way up, just like in India.

India now ranks very high internationally among the number of

billionaires, but also for peasant suicides, and for severe

malnutrition and so on. These countries, which are pretty rich,

[are in some respects doing worse than] the poorest countries.

GDP per capita in India is below Bolivia. That's nothing to rave

about, Bolivia is the poorest country in South America. These

are several sides of the same policies.

Remember that when NAFTA was enacted in 1994, another policy was

enacted. In 1994, Clinton militarized the border in Operation

Gatekeeper. Now previously, that had been a pretty open border.

The border, of course, was established by conquest, like most

borders. And there were similar people on both sides, people who

would cross the border to visit their friends and relatives and

that sort of thing. Now the border was militarized in 1994. OK,

maybe it's a coincidence, more likely I think it's because the

Clinton administration understood that their glowing predictions

[about the benefits of NAFTA] were for propaganda, and that the

likelihood was that there would be effects in Mexico which would

lead to substantial flight, immigration, joined by people

fleeing the wreckage of Central America after Reagan's terrorist

wars there. And yes, now you have what they call an immigration

crisis. These things are connected, you can't look at them in

isolation.

*Sameer Dossani *is the Director of 50 Years Is Enough: U.S.

Network for Global Economic Justice <http://www.50years.org/>.

*Noam Chomsky* is emeritus professor of linguistics and

philosophy at the Massachusetts Institute of Technology. His

most recent books are Failed States: The Abuse of Power and the

Assault on Democracy

and Interventions

, forthcoming from

City Lights.