Monday, September 6, 2010

As Americans Celebrate Labor Day 2010, U.S. Factories Are Closing In Droves

As Americans Celebrate Labor Day 2010, U.S. Factories Are Closing In Droves

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Labor Day 2010 comes in the midst of a stunning wave of U.S. factory closings that stretches from coast to coast. Once upon a time America was the greatest manufacturing machine that the world has ever seen, but now it seems as though the only jobs available for working class Americans involve phrases such as "Welcome to Wal-Mart" and "Would you like fries with that?" Even though the population of the United States has exploded over the last several decades, the number of Americans employed in the manufacturing sector today is smaller than it was in 1950. America has become a voracious economic black hole that "consumes" as much as possible and yet actually produces very little. The United States is becoming deindustrialized at a blinding pace, and it is becoming increasingly difficult for blue collar American workers to find jobs that will actually enable them to support their families. The sad truth is that American workers don't have a whole lot to actually celebrate this Labor Day. 14 million U.S. workers are "officially unemployed" and tens of millions of others have been forced to take part-time or temporary jobs that they are overqualified for just so they can survive. Unfortunately, this is not just a temporary situation for American workers. As millions of good jobs continue to get outsourced and offshored, Labor Day celebrations in coming years will be even more depressing.

The following are just some examples of the recent factory closings that have been sweeping the nation....

*Chrysler has announced that its plans to close an engine plant in Kenosha, Wisconisn are official. The factory will be shut down for good on approximately October 8th and about 575 jobs will be lost.

*The largest milk producer in the United States, Dean Foods, says that it will close a South Carolina dairy plant in October. That factory closing will eliminate 151 jobs. This is just the latest in a string of factory closings for Dean Foods. Over the past several years Dean Foods has closed factories in Michigan, Nebraska, Pennsylvania, Tennessee and Wisconsin.

*Continental Structural Plastics, a major producer of body panels for cars, is shutting down its plant in North Baltimore, Ohio in October and as a result 214 people will lose their jobs.

*Perfect Fit Industries (a prominent manufacturer of bedding accessories, pillows and comforters) has announced that it plans to close a factory in Loogootee, Indiana by the end of the year. As a result, 95 jobs will be lost.

*Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul, Minnesota. Approximately 750 good paying jobs are going to be lost. Minnesota Governor Tim Pawlenty was so desperate to keep the plant open that he offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep it open, but Ford rejected the offer, saying that the St. Paul plant just does not fit with Ford's new "global" manufacturing strategy.

*The city of Breckenridge, Texas has been shaken by news that Karsten Homes notified nearly 130 employees that their local factory will be closing in two months.

*It has been announced that there will be a new round of layoffs at the Whirlpool factory in Fort Smith, Arkansas, but at this point the company is not saying how many jobs will be lost. Whirlpool has been laying off workers at the plant steadily over the past few years as much of the work that was once done at the factory has been moved to a facility down in Mexico.

*Midcoast Aviation is closing its Savannah, Georgia factory by the end of the year. This move will affect approximately 362 jobs.

*Federal-Mogul has been making headlamps for automobiles and for industrial use since 1954 in Boyertown, Pennsylvania, but now that era is coming to an end. Federal-Mogual has announced that the Boyertown plant will close by the end of the year and 70 jobs will be lost.

*Duro Bag Manufacturing Co. plans to close its factory in Hudson, Wisconsin by October 22nd. As a result, 63 workers will be without jobs.

*Quad/Graphics is the second-largest commercial printer in the United States. It prints Newsweek, Rolling Stone, Sports Illustrated, Time and Wired magazines. Unfortunately, times are tough for Quad/Graphics and they have announced the closing of five plants. The facilities to be closed are located in Mississippi, Ohio, Nevada and Tennessee. As a result of the closings, 2,200 workers will lose their jobs.

Scenes such as these are being repeated over and over and over across the United States.

What we are witnessing is the slow-motion deindustrialization of the United States.

This is very bad news for American workers, and indeed it is very bad news for all Americans, because the truth is that any economy that consumes far more than it produces does not have a bright future.

We're Being Conned on Social Security

We're Being Conned on Social Security - How We Could Easily Raise Benefits or Allow People to Retire Earlier

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They just want to steal our money.

Allow me to take a moment to fix that whole “Social Security crisis” that has everyone in Washington gnashing their teeth. When you see how easily it’s done, you may begin to realize that whenever our elites start chattering about “tax-gaps," they’re almost certainly trying to rip you off -- making a slick grab for something to which you are, ultimately, “entitled.”

But why stop there? Why play defense? After we fix the program, why don’t we increase Social Security benefits? Why not lower the age of retirement? With unemployment hovering around 10 percent, and some economists, like James Galbraith, arguing that at least some of those lost jobs are never to return, why not open up some jobs for the young ‘uns and put a dent in the number of Americans who are out of work? Maybe with more demand for workers, employers would see their way to raising wages a bit, bucking the long-term trend of stagnation that the majority of Americans have endured over the past 30 years. Think about it: if you enter the labor market at age 20, isn’t busting your ass for four decades long enough to merit a dignified retirement? We are a wealthy country -- we can afford it.

According to Bruce Bartlett, in an incredibly typical scare-piece in billionaire granny-basher Pete Peterson’s Fiscal Times, that’s not true. Social Security’s problems are immense. “The 2009 report of Social Security’s trustees,” Bartlett writes, “showed a long-term actuarial deficit in that program of $15 trillion.” That is an almost unimaginably large number, given that the entire annual output of the United States was only $14 trillion last year.

But what does it really mean? Well, it turns out that Bartlett’s not even referring to the dubious 75-year projection of the Social Security “gap.” His terrifyingly big figure actually represents the program’s “shortfall” stretching out to infinity. That’s right-- it’s the program’s “unfunded liability” if everything remains as projected forever, and assuming the earth isn’t destroyed by a moon-sized meteor at some point before forever arrives. (The geeks at the American Academy of Actuaries have suggested that the “infinite horizon” measure is complete nonsense.)

According to the 2010 Social Security Trustees’ report, the 75-year gap is estimated to be $5.4 trillion -- still a big number. But there’s another way to express it: it equals just 0.7 percent of our projected economic output over that same period. That’s less than one penny on the dollar.

So if we, as members of a nominal democracy, want to live in a society where older people aren’t mired in poverty -- it’s estimated that four in 10 would be without Social Security benefits -- then all we have to do to close the gap is increase overall taxes by less than a single percentage point. Problem solved! And we didn’t even require an august commission.

But, we are told, that’s not the case. Fixing it isn’t that simple -- and increasing benefits or dropping the age of eligibility are just crazy ideas -- because we can’t afford any of it. Raising taxes, no matter how modestly, supposedly kills jobs and destroys economies. But ask yourself: where would those jobs go? To Somalia or Papua New Guinea? Our firms compete with companies from other advanced economies, and the United States has one of the lowest tax burdens in the developed world. In 2007, our overall tax burden ranked 26th out of the 30 countries in the Organization for Economic Cooperation and Development, dubbed the “rich countries club.”

As I write in my forthcoming book, The 15 Biggest Lies About the Economy, budgeting comes down to a simple question of priorities. Do we want to live in an America where the elderly are forced to eat cat food? If not, we can pay a bit more in taxes, or bring defense spending in line with other advanced countries or eliminate the cap on payroll taxes so higher earners kick in the same share of their paychecks as everyone else.

According to the Center on Budget and Policy Priorities, the 75-year “Social Security gap” represents the same dollar figure as those Bush tax cuts that were targeted at the top 2 percent of American earners projected over the same period of time. For much of Washington’s cognoscenti, one is an imminent crisis, and the other is something we simply must keep in place in order to retain our economic edge. That should tell you all you need to know about the nature of our Social Security “crisis.”

US unemployment rose in August

US unemployment rose in August

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US payrolls fell by 54,000 and the official unemployment rate rose to 9.6 percent in August from 9.5 percent the previous month, according to the monthly employment report released Friday by the Labor Department.

The net job loss in August marked the third straight month in which the US economy shed jobs. The private sector added a mere 67,000 new jobs during the month, about half the total needed just to keep pace with the normal growth of the labor force. It is estimated that 250,000 to 300,000 new jobs have to be generated every month to recoup the 8.4 million jobs lost since the recession that began in December 2007 and significantly reduce the unemployment rate.

Over the past eight months through August, the US economy has produced a net increase of 723,000 jobs, an average of only about 90,000 a month. The earlier pace of job creation has slowed and gone into reverse in recent months as US economic growth sharply receded.

Friday’s jobs report was consistent with other recent indicators of economic slump—a collapse in home sales, declining manufacturing activity, rising mortgage delinquency rates—that portend further increases in joblessness in the months ahead.

In a separate survey published Friday, the Institute for Supply Management (ISM) reported that growth in the US non-manufacturing sector, which accounts for about 90 percent of the US economy, slowed in August, with a key index hitting 51.5 percent compared with 54.3 percent in July. Economists had expected a reading of 53.5 percent. Service industries expanded at the weakest pace in seven months, the ISM reported.

In its employment report, the Labor Department said public-sector employment fell by 121,000. The bulk of government job cuts, 114,000, resulted from the termination of part-time workers hired to help conduct the 2010 census. An additional 10,000 jobs were eliminated by state and local governments that are slashing public services to close gaping budget shortfalls.

Manufacturing payrolls unexpectedly dropped by 27,000.

The entry of 550,000 new workers into the job market, combined with the net reduction in non-farm payrolls, resulted in the rise in the official jobless rate, the first increase in four months. The 9.6 percent figure, however, masks the true scale of the jobs crisis. The government’s so-called “underemployment rate,” which includes workers who want a job but have given up looking for work and those who want full-time work but are forced to work part-time, is a closer approximation of joblessness. That figure rose in August from 16.5 percent to 16.7 percent.

The total number of Americans counted by the government as unemployed rose in August to 14.86 million, up from 14.59 million in July. When so-called “discouraged” workers and those involuntarily working part-time are added, the number of jobless workers approaches 26 million.

The Labor Department upwardly revised its figures for new private-sector jobs in June and July, saying businesses added 168,000 jobs in those two months instead of 102,000 estimated earlier. It downwardly revised its estimate of net job losses during the two months to 229,000, 123,000 fewer than had been reported previously.

However, the upward revision of private payrolls in July to 107,000 means that 40,000 fewer private-sector jobs were created in August than in the previous month, indicating a negative trend in the job market.

Other data in the report highlight the devastating impact of the jobs crisis.

• The number of people working part-time because they could not find full-time work rose to 8.9 million in August from 8.5 million in July.

• The jobless rates for African-Americans, Hispanics and young workers were substantially higher than for the general population. The overall unemployment rate for African-Americans was 13.2 percent; for African-American men it was 17.3 percent. The jobless rate among Hispanics was 12 percent. Some 26.3 percent of teens and 14.9 percent of workers aged 20 to 24 were unemployed and seeking work.

Despite these grim figures, the media for the most part portrayed the jobs report as positive or “mixed,” largely because the private-sector job number was higher than had been anticipated and the net job loss was lower.

The financial markets responded enthusiastically to the jobs report. The Dow Jones Industrial Average rose more than 127 points, or 1.24 percent, and the S&P 500 and Nasdaq indexes gained even more, in percentage terms. This rise reflected the class calculations of the corporate-financial elite.

There was relief that the report did not point to a downward deflationary spiral, but rather a continuation of the environment of high unemployment and anemic growth which has been exploited by big business to ruthlessly attack the working class. Despite the stalling economy and the fictitious character of the “recovery,” corporate profits have been booming, based almost entirely on downsizing, wage-cutting and speedup.

The ruling class is at this point content to have the jobs crisis continue in order to press its advantage and permanently impoverish the working class.

In the Obama administration, it has a willing and pliant instrument for doing so. Obama, flanked by his team of economic advisers, hailed the jobs report in remarks delivered Friday morning from the White House Rose Garden. Oozing complacency and indifference, he pointed to “the eighth consecutive month of private job growth” and said, “Now, that’s positive news, and it reflects the steps we’ve already taken to break the back of this recession.”

He managed to include in his brief remarks the clichés that there is “no quick fix” and “no silver bullet” to reduce the highest jobless rate since the Great Depression. He sought to make a verbal acknowledgment of the social distress confronting workers, while belittling the depth of the crisis and claiming that the “recovery” merely needed to be sped up.

“But the key point I’m making now,” he said, “is that the economy is moving in a positive direction. Jobs are being created. They’re just not being created as fast as they need to…We just have to speed it up.”

Obama ignored a reporter who called out, “What about a poverty agenda, Mr. President? What about a poverty agenda for all classes?”

The president said he would hold a press conference next week and announce new initiatives to “keep the recovery moving.” However, the White House has already made it clear that there will be no major spending programs and no use of public funds to hire unemployed workers.

On Wednesday, Christina Romer, who has resigned her post as chair of Obama’s Council of Economic Advisers, gave a speech before the National Press Club in Washington in which she hinted at frustration over the refusal of the White House to undertake more aggressive stimulative measures.

“The only sure-fire ways for policymakers to substantially increase aggregate demand in the short run,” she said, “are for the government to spend more and tax less. In my view, we should be moving forward on both fronts.”

Asked about Romer’s remarks at a press briefing on Thursday, White House Press Secretary Robert Gibbs said, “Some big new stimulus plan is not in the offing.”

Administration officials are letting it be known that any new proposals will be “small bore” and “targeted” and will consist of new tax breaks and subsidies to businesses.

In the face of a worsening economic and social crisis—unemployment has stayed above 9 percent for 16 straight months and is more than 1.5 percent higher than when Obama took office—the administration has ruled out a continuation of even the half-measures of 2009 in order to prosecute the ruling class offensive against the working class. The corporate-financial elite has seized on the breakdown in its own system to carry through a historic attack aimed at rolling back all of the social gains won by workers over more than a century of struggle.

In particular, unemployment is being used to force workers to accept poverty-level wages and intensified exploitation in return for a job.

The Economic Policy Institute issued a report August 31 on wage-cutting in the US, in which it wrote: “Workers who have kept their jobs or found new work during this downturn have also suffered from a broad-based collapse of wage growth over the last two years. And with unemployment expected to remain elevated for many years to come, we do not expect the suppression of wage growth to ease anytime soon.”

Flying the Flag; Faking the News

Flying the Flag; Faking the News

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Edward Bernays, the American nephew of Sigmund Freud, is said to have invented modern propaganda. During the First World War, he was one of a group of influential liberals who mounted a secret government campaign to persuade reluctant Americans to send an army to the bloodbath in Europe. In his book, "Propaganda," published in 1928, Bernays wrote that the "intelligent manipulation of the organised habits and opinions of the masses was an important element in democratic society" and that the manipulators "constitute an invisible government which is the true ruling power in our country." Instead of propaganda, he coined the euphemism "public relations."

The American tobacco industry hired Bernays to convince women they should smoke in public. By associating smoking with women's liberation, he made cigarettes "torches of freedom." In 1954, he conjured a communist menace in Guatemala as an excuse for overthrowing the democratically-elected government, whose social reforms were threatening the United Fruit company's monopoly of the banana trade. He called it a "liberation."

Bernays was no rabid right winger. He was an elitist liberal who believed that "engineering public consent" was for the greater good. This was achieved by the creation of "false realities," which then became "news events." Here are examples of how it is done these days:

False Reality: The last US combat troops have left Iraq "as promised, on schedule," according to President Barack Obama. TV screens have filled with cinematic images of the "last US soldiers" silhouetted against the dawn light, crossing the border into Kuwait.

Fact: They are still there. At least 50,000 troops will continue to operate from 94 bases. American air assaults are unchanged, as are special forces' assassinations. The number of "military contractors" is currently 100,000 and rising. Most Iraqi oil is now under direct foreign control.

False Reality: BBC presenters and reporters have described the departing US troops as a "sort of victorious army" that has achieved "a remarkable change in [Iraq's] fortunes." Their commander, Gen. David Petraeus, is a "celebrity," "charming," "savvy" and "remarkable."

Fact: There is no victory of any sort. There is a catastrophic disaster; and attempts to present it as otherwise are a model of Bernays' campaign to "rebrand" the slaughter of the first world war as "necessary" and "noble." In 1980, Ronald Reagan, running for president, rebranded the invasion of Vietnam, in which up to three million people died, as a "noble cause," a theme taken up enthusiastically by Hollywood. Today's Iraq war movies have a similar purging theme: the invader as both idealist and victim.

False Reality: It is not known how many Iraqis have died. They are "countless" or maybe "in the tens of thousands."

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Fact: As a direct consequence of the Anglo-American-led invasion, a million Iraqis have died. This figure from Opinion Research Business is based on peer-reviewed research led by Johns Hopkins University in Washington, DC, whose methods were secretly affirmed as "best practice" and "robust" by the Blair government's chief scientific adviser, as revealed in a Freedom of Information search. This figure is rarely reported or presented to "charming" and "savvy" American generals. Neither is the dispossession of four million Iraqis, the malnourishment of most Iraqi children, the epidemic of mental illness and the poisoning of the environment.

False Reality: The British economy has a deficit of billions, which must be reduced with cuts in public services and regressive taxation, in a spirit of "we're all in this together."

Fact: We are not in this together. What is remarkable about this public relations triumph is that, only 18 months ago, the diametric opposite filled TV screens and front pages. Then, in a state of shock, truth was unavoidable, if briefly. The Wall Street and city of London financiers' trough was on full view for the first time, along with the venality of once celebrated snouts. Billions in public money went to inept and crooked organizations known as banks, which were spared debt liability by their Labour government sponsors.

Within a year, record profits and personal bonuses were posted, and state and media propaganda had recovered its equilibrium. Suddenly, the "black hole" was no longer the responsibility of the banks, whose debt is to be paid by those not in any way responsible: the public. The received media wisdom of this "necessity" is now a chorus, from the BBC to the Sun. A masterstroke, Bernays would surely say.

False Reality: The former government minister Ed Miliband offers a "genuine alternative" as leader of the British Labour Party.

Fact: Miliband, like his brother David, the former foreign secretary, and almost all those standing for the Labour leadership, is immersed in the effluent of New Labour. As a New Labour member of Parliament and minister, he did not refuse to serve under Blair or speak out against Labour's persistent warmongering. He now calls the invasion of Iraq a "profound mistake." Calling it a mistake insults the memory and the dead. It was a crime, of which the evidence is voluminous. He has nothing new to say about the other colonial wars, none of them mistakes. Neither has he demanded basic social justice: that those who caused the recession clear up the mess and that Britain's fabulously rich corporate minority be seriously taxed, starting with Rupert Murdoch.

Of course, the good news is that false realities often fail when the public trusts its own critical intelligence, not the media. Two classified documents recently released by WikiLeaks express the CIA's concern that the populations of European countries, which oppose their governments' war policies, are not succumbing to the usual propaganda spun through the media. For the rulers of the world, this is a conundrum, because their unaccountable power rests on the false reality that no popular resistance works. And it does.

US companies shift bigger share of health care costs onto workers

US companies shift bigger share of health care costs onto workers

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Amid a weakening economy and growing joblessness, employers shifted more health care costs onto workers in 2010, according to a study released Thursday. The findings follow a previous report that showed big companies plan to shift even more of the burden of health care costs onto their workforces in 2011.

The study by the Kaiser Family Foundation and the Health Research & Education Trust (HRET) found that premiums paid by employees for employer-sponsored family coverage rose an average of 13.7 percent this year, while the company-paid portion fell—by 0.9 percent.

The survey found that total premiums for employer-sponsored coverage—the combined amount paid by employer and employee—rose an average of 3 percent for family coverage and 5 percent for single coverage.

The burden for this somewhat modest rise, however, fell disproportionately upon workers. In 2010, of the average $224 premium increase for single coverage, employees were responsible for footing more than half the rise.

In order to maintain health care insurance, workers are paying an average of 30 percent of the premium for family coverage and 19 percent of the premium for individual coverage. These are the highest percentages recorded in the 12 years the two organizations have been conducting their surveys. By comparison, the 2009 percentages paid by workers were an average of 27 percent for family coverage and 17 percent for single coverage.

From 2000 to 2010, the combined premium for the average employer-sponsored family health care plan has more than doubled, rising from $6,438 to $13,770. But while employers—who rail against rising health care costs—increased their share of the contribution by 114 percent, workers were mandated to increase their contribution by 147 percent.

From 2005 to 2010, while overall premiums have risen by 27 percent, workers’ premium payments have shot up a staggering 47 percent. According to the survey’s figures, wages during these five years have increased by 18 percent.

While the study showed that 69 percent of firms reported offering some form of health benefits, even at those companies offering coverage, significant sections of their employees are not covered. While some workers are able to access coverage through a spouse, others are either excluded from coverage or choose not to enroll for economic reasons.

Many companies subject employees to waiting periods before they qualify. Others deny coverage to employees because they don’t meet minimum work-hour requirements, e.g., workers at many companies are ineligible for health care coverage if they work less than 30 hours, and employers deliberately keep a portion of workers below this level.

The result of all these factors is that among the 69 percent of companies that offer health care coverage to their employees, an average of only 79 percent are eligible for benefits. Of those eligible, 80 percent enroll, resulting in only 63 percent of workers in companies that offer health benefits actually being covered by their employer.

A significant portion of workers also choose not to enroll in their employer’s health care plan because they cannot afford the burgeoning costs. Indeed, “health care coverage” is itself a misnomer under conditions where the plans that are offered are so economically burdensome that workers choose—or are forced by their financial situation—not to enroll.

Those workers with coverage for themselves or their families also face additional costs when they access health care services. In particular, most coverage is subject to a deductible—an amount that must be paid by the employee before coverage kicks in. Although some routine care and other services are exempt, this means that workers must cover most medical costs completely out of pocket until this figure is met.

A recent study on the “Economic Crisis and Medical Care Usage” showed that 26.5 percent of Americans have reported reducing their use of routine medical care as a result of the economic crisis. The majority of these people are covered by some form of health insurance, but find that the costs for services that are not covered are just too much.

From 2006 to 2010, the percentage of employees with single coverage who are subject to a $1,000 deductible has risen from 10 percent to 27 percent. For those working in a small firm (defined by the study as 3-199 workers) those with a $1,000 deductible have almost tripled, rising in four years from 16 percent to 46 percent.

Employers are increasingly turning to these high deductible plans to foist more of the health care costs onto their workforces. The deductible for family coverage is often $2,000 or more. Certain spending is also often excluded from counting towards the deductible, such as physician office visit co-payments or money spent on prescription drugs.

Employers are also targeting retiree health benefits. Only 28 percent of large firms (200 workers or more) currently offer retiree health benefits, down from 34 percent in 2005. Only 3 percent of small firms offer any retiree benefits, leaving retired workers to be covered by the federal Medicare program, whose services are themselves under attack.

In one of the most telling statistics, the Kaiser/HRET study found that 30 percent of employers offering health benefits reported that they had reduced benefits or increased employee cost sharing this year due to the economic downturn. These shifts in costs included raising the employee’s share of premium costs, increasing deductibles and co-pays, and trimming services covered.

A study conducted by the National Business Group on Health and published last month showed that this trend will undoubtedly continue. The report, based on a survey of 72 companies including Wal-Mart and General Electric, showed that 63 percent of these firms plan to shift more of the premium costs to employees next year.

The report showed that companies expected their health care costs to rise by 9 percent in 2011, about 2 percent higher than the 7 percent average rise in 2010. While big corporations have pointed to the provisions of the Obama-backed health care bill passed earlier this year as a driver of health care spending, it is notable that those firms surveyed indicated that only 1 percent of the 9 percent increase expected in 2011 would result from changes related to the bill.

The legislation in fact aims to cut health care spending for ordinary Americans—targeting in particular the Medicare program for the elderly—while leaving in place the private delivery of health care. As these studies show, employers plan to shift any increases in costs as a result of the profit-driven motives of the giant health care industry and pharmaceuticals onto the backs of their workforces.

China and the New World Order

China and the New World Order

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Amid all the alleged threats to the world's reigning superpower, one rival is quietly, forcefully emerging: China. And the U.S. is closely scrutinizing China's intentions.

On August 13, a Pentagon study expressed concern that China is expanding its military forces in ways that "could deny the ability of American warships to operate in international waters off the coast," Thom Shanker reports in The New York Times.

Washington is alarmed that "China's lack of openness about the growth, capabilities and intentions of its military injects instability to a vital region of the globe."

The U.S., on the other hand, is quite open about its intention to operate freely throughout the "vital region of the globe" surrounding China (as elsewhere).

The U.S. advertises its vast capacity to do so: with a growing military budget that roughly matches the rest of the world combined, hundreds of military bases across the globe, and a huge lead in the technology of destruction and domination.

China's lack of understanding of the rules of international civility was illustrated by its objections to the plan for the advanced nuclear-powered aircraft carrier USS George Washington to take part in the U.S.-South Korea military exercises near China's coast in July, with the alleged capacity to strike Beijing.

By contrast, the West understands that such U.S. operations are all undertaken to defend stability and its own security.

The term "stability" has a technical meaning in discourse on international affairs: domination by the U.S. Thus no eyebrows are raised when James Chace, former editor of Foreign Affairs, explains that in order to achieve "stability" in Chile in 1973, it was necessary to "destabilize" the country--by overthrowing the elected government of President Salvador Allende and installing the dictatorship of Gen. Augusto Pinochet, which proceeded to slaughter and torture with abandon and to set up a terror network that helped install similar regimes elsewhere, with U.S. backing, in the interest of stability and security.

It is routine to recognize that U.S. security requires absolute control. The premise was given a scholarly imprimatur by historian John Lewis Gaddis of Yale University in "Surprise, Security, and the American Experience," in which he investigates the roots of President George W. Bush's preventive war doctrine.

The operative principle is that expansion is "the path to security," a doctrine that Gaddis admiringly traces back almost two centuries--to President John Quincy Adams, the intellectual author of Manifest Destiny.

When Bush warned "that Americans must `be ready for pre-emptive action when necessary to defend our liberty and to defend our lives,"' Gaddis observes, "he was echoing an old tradition rather than establishing a new one," reiterating principles that presidents from Adams to Woodrow Wilson "would all have understood ... very well."

Likewise Wilson's successors, to the present. President Bill Clinton's doctrine was that the U.S. is entitled to use military force to ensure "uninhibited access to key markets, energy supplies and strategic resources," with no need even to concoct pretexts of the Bush II variety.

According to Clinton's defense secretary, William Cohen, the U.S. therefore must keep huge military forces "forward deployed" in Europe and Asia "in order to shape people's opinions about us" and "to shape events that will affect our livelihood and our security." This prescription for permanent war is a new strategic doctrine, military historian Andrew Bacevich observes, later amplified by Bush II and President Barack Obama.

As every Mafia don knows, even the slightest loss of control might lead to unraveling of the system of domination as others are encouraged to follow a similar path.

This central principle of power is formulated as the "domino theory," in the language of policy-makers, which translates in practice to the recognition that the "virus" of successful independent development might "spread contagion" elsewhere, and therefore must be destroyed while potential plague victims are inoculated, usually by brutal dictatorships.

According to the Pentagon study, China's military budget expanded to an estimated $150 billion in 2009, approaching "one-fifth of what the Pentagon spent to operate and carry out the wars in Iraq and Afghanistan" in that year, which is only a fraction of the total U.S. military budget, of course.

The United States' concerns are understandable, if one takes into account the virtually unchallenged assumption that the U.S. must maintain "unquestioned power" over much of the world, with "military and economic supremacy," while ensuring the "limitation of any exercise of sovereignty" by states that might interfere with its global designs.

These were the principles established by high-level planners and foreign policy experts during World War II, as they developed the framework for the post-war world, which was largely implemented.

The U.S. was to maintain this dominance in a "Grand Area," which was to include at a minimum the Western hemisphere, the Far East and the former British empire, including the crucial energy resources of the Middle East.

As Russia began to grind down Nazi armies after Stalingrad, Grand Area goals extended to as much of Eurasia as possible. It was always understood that Europe might choose to follow an independent course--perhaps the Gaullist vision of a Europe from the Atlantic to the Urals. The North Atlantic Treaty Organization was partially intended to counter this threat, and the issue remains very much alive today as NATO is expanded to a U.S.-run intervention force responsible for controlling the "crucial infrastructure" of the global energy system on which the West relies.

Since becoming the world-dominant power during World War II, the U.S. has sought to maintain a system of global control. But that project is not easy to sustain. The system is visibly eroding, with significant implications for the future. China is an increasingly influential player--and challenger.

The Triumph of Evil

The Triumph of Evil

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Modern societies have justified their adoption of criminal activities by claiming that such techniques are necessary to combat evil. But the war against evil by the good cannot be won using evil tactics. Evil never yields goodness, and by using these evil practices, the amount of evil in the world increases both in amount and extent. Attempting to save the nation by becoming what you are trying to save the nation from is suicidal. Unless benign techniques such as those developed by primitive societies are put to use, evil will prevail. Then, paraphrasing J. Robert Oppenheimer's comment after the first atomic bomb was successfully tested, We will have become evil, the destroyer of goodness.

Some decades ago, while having dinner with a newly elected Attorney General of the State of North Carolina and the Chief Justice of that state's Supreme Court, the jurist told me that everyone involved in the legal system and enforcement had to think like criminals to catch them. He believed the statement to be straight forward and evident until I pointed out that the line between thinking like a criminal and acting like one is very fine and is easily and frequently crossed, which results in increasing the amount of evil in society rather than reducing it. Few apparently notice this consequence and the criminal-like behavior of those charged with enforcing and adjudicating the law has increased so substantially that it has become common practice.

YouTube is replete with videos of police brutality. Police have been videoed beating subdued prisoners, tasering people (even little old ladies) indiscriminately, shooting mentally challenged people they have been called upon to help, and killing people caught committing non-capital crimes who try to escape (sometimes by shooting them in the back). Investigations to determine whether those officers should be held accountable rarely result in any punishment.

People providing forensic information in trials have been shown to have falsified evidence in ways that facilitate convictions. A recent report claims that "agents of the [N.C.] State Bureau of Investigation repeatedly aided prosecutors in obtaining convictions over a 16-year period, mostly by misrepresenting blood evidence and keeping critical notes from defense attorneys . . . calling into question convictions in 230 criminal cases." Similar problems have been found with other forensic labs.

In Dallas, TX, a former prosecutor, Henry Wade, now deceased, has become infamous for having convicted a large number of innocent defendants. Dallas has had more exonerations than any other county in America; yet most requests for the retesting of DNA have been denied by trial court judges on the recommendation of former District Attorney Bill Hill, a protégé of Wade's. Mr. Hill's prosecutors routinely opposed testing. In addition to almost complete reliance on eyewitness testimony, a review of the Dallas County DNA cases shows that 13 of the 19 wrongly convicted men were black, eight were misidentified by victims of another race, investigators, prosecutors, and many of the juries in the cases were all white, police used suggestive lineup procedures and sometimes pressured victims to pick their suspect and then cleared the case once an identification was made, prosecutors frequently went to trial with single-witness identifications and flimsy corroboration and tried to preserve shaky identifications by withholding evidence that pointed to other potential suspects, and judges routinely approved even tainted pretrial identifications. When Bill Hill, who said he was confident his assistants verified the accuracy of all eyewitness identifications was told his office prosecuted one those exonerated, Mr. Hill said the two prosecutors on the case were incompetent holdovers from the previous administration. Terri Moore, the current DA's top assistant and a former federal prosecutor, said, "It's almost like it's the whole system. Everybody drops the ball somewhere, starting with the police investigation. And we just take the case and adopt what the police say."

Then there are those prosecutions that rely on the testimony of criminals who have been bribed to act as informants. Bribery is a criminal activity, and if a defense attorney were shown to have bribed a witness, disbarment would be the likely result; yet prosecutors commonly do it.

The preceding paragraphs limn an ugly picture, ugly indeed!

But the evil is not limited to local law enforcement. When officials realized that they can act with impunity without fear of suffering any personal consequences, the maxim, one must think like criminals to catch them, underwent subtle alterations. Now one must think like bankers to be able to regulate them. The same thing is said of stock brokers, oil men, and every other interest group. Everyone wants to be self-regulated. But self-regulation is nothing but a license to engage in criminal behavior. The whole system of governing becomes an oligarchy of old boys scratching each other's backs. Everyone knows just how well that works out.

Federal agencies, including the Supreme Court, are complicit, too. The Court violates the Constitution routinely. Remember the decision validating the incarceration of Japanese Americans during WWII? Other decisions, perhaps not quite so obvious, can easily be cited. The FBI and Homeland Security routinely violate the privacy provisions of both the Constitution and the law, and the courts have failed to intervene. The CIA has become an official version of Murder, Inc., now even advocating the assassination of Americans living abroad who have been labeled "terrorists." The agency has become the dispenser of vigilante justice, while Americans are told to never take the law into their own hands.

No one seems to realize that the war against evil by the good cannot be won using evil tactics. Evil never yields goodness, and by using these evil practices on the pretext of fighting evil, the amount of evil in the world increases both in amount and extent. Attempting to save a nation by becoming what you are trying to save the nation from is an act of national self-destruction; it is suicidal.

So how can the good be expected to fight evil?

Edmund Burke's claim, "All that is necessary for the triumph of evil is that good men do nothing," is often cited. Sounds good, doesn't it? But the claim falls into the category of notions that Michael Faraday labeled "favorite ideas," and he warned us to be leery of them. Think about it for just a minute. Are people who do nothing really good?

Anyone who has watched network television over the past decade has seen stories about people who have seen crimes taking place without ever intervening and people collapsing in the street without ever stopping to render aid. ABC News currently has a series, titled What Would You Do?, that stages illegal acts in public places to see how unaware bystanders respond. Many do nothing. The implication of these stories is that there's something wrong with such people.

In fact, no one knows what the ratio of good to bad people in society is. Perhaps there simply are not enough good people to make a difference no matter what they do. But even supposing, as most people do, that the good outnumber the bad, few realize how hard it is for the good to fight evil.

Good people are repelled by it; they can never employ it even with the best of intentions; they know multiple wrongs never make right. So what are they to do?

They can, of course, rail against the evil. Some like the ACLU, the Innocence Project, and others file lawsuits, others expose evil by requesting documents through the Freedom of Information act and by becoming whistleblowers. Although all of these actions are worthwhile and often result in combating specific wrongful acts, they have little effect on the systemic evil that has been incorporated into institutional behavior. Good people seem to be limited by their very goodness. Is there then no hope? Can nothing be done to prevent the triumph of evil?

Some societies have developed benign and civil ways of dealing with it. Gandhi was able to use passive resistance to expel the evil British RAJ from India, but, unfortunately, the Indians were unable to use it to keep an evil local RAJ from acquiring control. Nevertheless, Gandhi demonstrated that passive resistance can work.

The Norwegians during WWII redefined the surname Quisling to mean traitor and thereby vilified Vidkun Quisling who assisted Nazi Germany after it conquered Norway so that he himself could rule. The term was later used to vilify fascist political parties, military and paramilitary forces and other collaborators in occupied Allied countries. If, as some claim, America is becoming a fascist state, "Quisling" can still be used today. Recently, Stephanie Madoff, daughter-in-law of Bernard Madoff, filed court papers asking to change her and her children's last name to Morgan to avoid additional humiliation and harassment. Vilification by associating a person's name with his acts and applying it to others who act likewise is an effective, benign way of attacking evil. In an earlier piece, I suggested that those who advocate war but deliberately avoid serving themselves be called Cheyneys.

The French Resistance, during and after WWII, shaved the heads of women caught consorting with German occupiers. These "shaved-heads" exposed their shame until their hair re-grew, and even later, others rarely forgot who they were. (Some would consider forcefully shaving a person's head a battery which is illegal, but even so, it is a rather harmless battery.)

Primitive societies developed a whole range of benign ways of confronting evil, some of which are still in use today in isolated places. Ostracism, shunning, anathema, and social rejection have been used successfully. Then there are the more modern practices of boycotting and picketing.

But modern technological advances have made even other practices available. Imaginative uses of these tried and proven methods can be very effective.

For instance, most computer literate people are familiar with denial of service attacks used by hackers. A denial of service attack is an attempt to make a computer resource unavailable to its intended users. These attacks are a great nuisance, but often cause no real damage. No good person would recommend using such attacks, but consider the following situation:

People are routinely asked to write their congressmen to influence their voting on specific issues. These letters are usually delivered to Capitol Hill, perhaps causing congressmen some annoyance, but rarely enough to induce much real change. But what if the letters, written in civil language without threats, were sent to the residences of a congressman's parents, siblings, spouse, and children? What if the letters merely asked the recipient's to urge their relatives to consider changing his/her mind? What if thousands of letters were sent to these people? The annoyance would be enormous. If this were done to enough congressmen often enough, perhaps they would consider acting in more responsible ways or perhaps leaving office altogether. Denying miscreants of the convenient use of the proceeds of their actions could be a powerful tool.

This technique can be used against corporate officers and their governing boards, judges who routinely reduce the amounts jurors award plaintiffs, the police who are shown to have acted brutally, Justices of the Supreme Court who issue rulings that cannot be justified by normal readings of the Constitution, in short, anyone acting in an official capacity who has done a great wrong. Furthermore, the U.S. Postal Service needs the money. The establishment does not expect people to act in such ways; it expects them to use the normal established channels to express their disapproval. But those established channels have long ago been shown to be ineffective.

All that is required to win the battle against evil is to find ways to make the lives of the miscreants miserable. No laws, not violence, not even punishment is needed. Annoy them, shame them, shun them, ostracize them, turn them into social outcasts, personae non gratae. Even if the good in society constitute only a minority, if the minority is large enough, it can succeed using such benign but annoying techniques.

The situation described above is only one of many possibilities. Imaginative people can conceive of others which can be equally effective. Think of ways of using the telephone, twitter, posters, and anything else in similar ways. The governing maxim needed is just make the miscreant's life miserable.

Unless such techniques are put to use, evil will prevail. Then, paraphrasing J. Robert Oppenheimer's comment after the first atomic bomb was successfully tested, We will have become evil, the destroyer of goodness.

Hands Off Social Security

Hands off Social Security

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The White House deficit commission is reportedly considering deep benefit cuts for Social Security, including a steep rise in the retirement age. We cannot let that happen.

The deficit and our $13 trillion national debt are serious problems that must be addressed. But we can — and must — address them without punishing America’s workers, senior citizens, the disabled, widows and orphans.

First, let’s be clear: Despite all the right-wing rhetoric, Social Security is not going bankrupt. That’s a lie!

The truth is that the Social Security Trust Fund has run surpluses for the last quarter century. Today’s $2.5 trillion cushion is projected to grow to $4 trillion in 2023. The nonpartisan Congressional Budget Office, experts in this area, say Social Security will be able to pay every nickel owed to every eligible beneficiary until 2039.

Got that? In case you don’t, let me repeat it. The people who have studied this issue most thoroughly and have no political bias report that Social Security will be able to pay out all benefits to every eligible beneficiary for the next 29 years.

It is true that by 2039, if nothing is changed, Social Security will be able to pay out only about 80 percent of benefits. That is why it is important that Congress act soon to make sure Social Security is as strong in the future as it is today.

The hatred of Social Security from the right-wing, anti-government crowd is based on the fact that the government program has been enormously successful in accomplishing its mission. For 75 years, in good times and bad, Social Security has provided financial security for tens of millions of Americans.

Despite this outstanding record, Social Security has become a political football. For ideological reasons, some in Congress believe that government should not be in the business of providing benefits to seniors or the disabled. They want to privatize Social Security. Others say, incorrectly, that Social Security is going bankrupt, so benefits should be reduced and the retirement age set at 70. I strongly disagree with both assertions.

While the critics profess concern about Social Security’s financial future, their fuzzy math ignores the fact that this highly successful program has not added a dime to our deficit. From the day when the first check landed in the Ludlow, Vt., mailbox of retired legal secretary Ida May Fuller on Jan. 31, 1940, Social Security has more than paid for itself.

With regard to the future of Social Security, there are some really dangerous ideas out there — and one proposal that makes a lot of sense.

One of the worst ideas is privatization. After the greed and recklessness of Wall Street caused markets to collapse in 2008, does anyone still seriously believe it would be a good idea to turn the retirement security of millions of Americans over to Wall Street CEOs whose dishonesty and irresponsibility have no end?

Their administrative fees alone would take a 15 percent bite out of workers’ retirement investments, not to mention the real threat of another stock market collapse. In sharp contrast, administrative costs for Social Security are less than 1 percent of the program’s budget.

Most importantly, despite economic conditions and the ups and downs of the stock market, Social Security has never failed to pay full benefits to every eligible beneficiary.

Another horrible idea is to move the retirement age up to 70. That would cheat today’s young workers out of about 15 percent of their retirement benefits over a lifetime. The proposal also ignores the reality that millions of workers in demanding professions simply cannot continue to work until they are 70. The upshot for them would be reduced lifetime benefits for retiring “early.” Lower-income workers, those less likely to have other savings, would be hurt the most.

In the midst of all of the destructive rhetoric and ideas out there, there is one proposal that is simple, sensible and would keep Social Security strong and solvent in a fair and just way.

Under the law today, the Social Security payroll tax is levied only on earnings up to $106,800 a year. That means millionaires and billionaires get off scot free on all of their income above that amount. In other words, an individual who earns $106,800 pays the same Social Security tax as a multimillionaire. That’s wrong.

Applying the Social Security payroll tax on those with the most income, say over $250,000 a year, would correct this inequity. According to CBO, applying the tax to all income would provide all the revenue that Social Security needs for the foreseeable future — for our kids and grandchildren and great grandchildren.

Sen. Bernie Sanders (I-Vt.) serves on the Senate Budget Committee.

Global Collapse of the Fiat Money System: Too Big To Fail Global Banks Will Collapse Between Now and First Quarter 2011

Global Collapse of the Fiat Money System: Too Big To Fail Global Banks Will Collapse Between Now and First Quarter 2011

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Readers of my articles will recall that I have warned as far back as December 2006, that the global banks will collapse when the Financial Tsunami hits the global economy in 2007. And as they say, the rest is history.

Quantitative Easing (QE I) spearheaded by the Chairman of Federal Reserve, Ben Bernanke delayed the inevitable demise of the fiat shadow money banking system slightly over 18 months.

That is why in November of 2009, I was so confident to warn my readers that by the end of the first quarter of 2010 at the earliest or by the second quarter of 2010 at the latest, the global economy will go into a tailspin. The recent alarm that the US economy has slowed down and in the words of Bernanke “the recent pace of growth is less vigorous than we expected” has all but vindicated my analysis. He warned that the outlook is uncertain and the economy “remains vulnerable to unexpected developments”.

Obviously, Bernanke’s words do not reveal the full extent of the fear that has gripped central bankers and the financial elites that assembled at the annual gathering at Jackson Hole, Wyoming. But, you can take it from me that they are very afraid.


Let me be plain and blunt. The “unexpected developments” Bernanke referred to is the collapse of the global banks. This is FED speak and to those in the loop, this is the dire warning.

So many renowned economists have misdiagnosed the objective and consequences of quantitative easing. Central bankers’ scribes and the global mass media hoodwinked the people by saying that QE will enable the banks to lend monies to cash-starved companies and jump start the economy. The low interest rate regime would encourage all and sundry to borrow, consume and invest.

This was the fairy tale.

Then, there were some economists who were worried that as a result of the FED’s printing press (electronic or otherwise) working overtime, hyper-inflation would set in soon after.

But nothing happened. The multiplier effect of fractional reserve banking did not take off. Bank lending in fact stalled.


What happened?

Let me explain in simple terms step by step.

1) All the global banks were up to their eye-balls in toxic assets. All the AAA mortgage-backed securities etc. were in fact JUNK. But in the balance sheets of the banks and their special purpose vehicles (SPVs), they were stated to be worth US$ TRILLIONS.

2) The collapse of Lehman Bros and AIG exposed this ugly truth. All the global banks had liabilities in the US$ Trillions. They were all INSOLVENT. The central banks the world over conspired and agreed not to reveal the total liabilities of the global banks as that would cause a run on these banks, as happened in the case of Northern Rock in the U.K.

3) A devious scheme was devised by the FED, led by Bernanke to assist the global banks to unload systematically and in tranches the toxic assets so as to allow the banks to comply with RESERVE REQUIREMENTS under the fractional reserve banking system, and to continue their banking business. This is the essence of the bailout of the global banks by central bankers.

4) This devious scheme was effected by the FED’s quantitative easing (QE) – the purchase of toxic assets from the banks. The FED created “money out of thin air” and used that “money” to buy the toxic assets at face or book value from the banks, notwithstanding they were all junks and at the most, worth maybe ten cents to the dollar. Now, the FED is “loaded” with toxic assets once owned by the global banks. But these banks cannot declare and or admit to this state of affairs. Hence, this financial charade.

5) If we are to follow simple logic, the exercise would result in the global banks flushed with cash to enable them to lend to desperate consumers and cash-starved businesses. But the money did not go out as loans. Where did the money go?

6) It went back to the FED as reserves, and since the FED bought US$ trillions worth of toxic wastes, the “money” (it was merely book entries in the Fed’s books) that these global banks had were treated as “Excess Reserves”. This is a misnomer because it gave the ILLUSION that the banks are cash-rich and under the fractional reserve system would be able to lend out trillions worth of loans. But they did not. Why?

7) Because the global banks still have US$ trillions worth of toxic wastes in their balance sheets. They are still insolvent under the fractional reserve banking laws. The public must not be aware of this as otherwise, it would trigger a massive run on all the global banks!

8) Bernanke, the US Treasury and the global central bankers were all praying and hoping that given time (their estimation was 12 to 18 months) the housing market would recover and asset prices would resume to the levels before the crisis. .

Let me explain: A House was sold for say US$500,000. Borrower has a mortgage of US$450,000 or more. The house is now worth US$200,000 or less. Multiply this by the millions of houses sold between 2000 and 2008 and you will appreciate the extent of the financial black-hole. There is no way that any of the global banks can get out of this gigantic mess. And there is also no way that the FED and the global central bankers through QE can continue to buy such toxic wastes without showing their hands and exposing the lie that these banks are solvent.

It is my estimation that they have to QE up to US$20 trillion at the minimum. The FED and no central banker would dare “create such an amount of money out of thin air” without arousing the suspicions and or panic of sovereign creditors, investors and depositors. It is as good as declaring officially that all the banks are BANKRUPT.

9) But there is no other solution in the short and middle term except another bout of quantitative easing, QE II. Given the above caveat, QE II cannot exceed the amount of the previous QE without opening the proverbial Pandora Box.

10) But it is also a given that the FED will embark on QE II, as under the fractional reserve banking system, if the FED does not purchase additional toxic wastes, the global banks (faced with mounting foreclosures, etc.) will fall short of their reserve requirements.

11) You will also recall that the FED at the height of the crisis announced that interest will be paid on the so-called “excess reserves” of the global banks, thus enabling these banks to “earn” interest. So what we have is a merry-go-round of monies moving from the right pocket to the left pocket at the click of the computer mouse. The FED creates money, uses it to buy toxic assets, and the same money is then returned to the FED by the global banks to earn interest. By this fiction of QE, banks are flushed with cash which enable them to earn interest. Is it any wonder that these banks have declared record profits?

12) The global banks get rid of some of their toxic wastes at full value and at no costs, and get paid for unloading the toxic wastes via interest payments. Additionally, some of the “monies” are used by these banks to purchase US Treasuries (which also pay interests) which in turn allows the US Treasury to continue its deficit spending. THIS IS THE BAILOUT RIP OFF of the century.

Now that you fully understand this SCAM, it is left to be seen how the FED will get away with the next round of quantitative easing – QE II.

Obviously, the FED and the other central banks are hoping that in time, asset prices will recover and resume their previous values before the crisis. This is a fantasy. QE II will fail just as QE I failed to save the banks.

The patient is in intensive care and is for all intent and purposes brain dead, although the heart is still pumping albeit faintly. The Too Big To Fail Banks cannot be rescued and must be allowed to be liquidated. It will be painful, but it is necessary before there is recovery. This is a given.


When the ball hits the ceiling fan, sometime early 2011 at the earliest, there will be massive bank runs.

I expect that the FED and other central banks will pre-empt such a run and will do the following:

1) Disallow cash withdrawals from banks beyond a certain amount, say US$1,000 per day; 2) Disallow cash transactions up to a certain amount, say US$10,000 for certain transactions; 3) Transactions (investments) for metals (gold and silver) will be restricted; 4) Worst-case scenario – the confiscation of gold AS HAPPENED IN WORLD WAR II. 5) Imposition of capital controls etc.; 6) Legislations that will compel most daily commercial transactions to be conducted through Debit and or Credit Cards; 7) Legislations to make it a criminal offence for any contraventions of the above.


Maintain a bank balance sufficient to enable you to comply with the above potential impositions.

Start diversifying your assets away from dollar assets. Have foreign currencies in sufficient quantities in those jurisdictions where the above anticipated impositions are least likely to be implemented.


There will be a financial tsunami (round two) the likes of which the world has never seen.

Global banks will collapse!

Be ready.

The Imperial Anatomy of Al-Qaeda. The CIA’s Drug-Running Terrorists and the “Arc of Crisis”

The Imperial Anatomy of Al-Qaeda. The CIA’s Drug-Running Terrorists and the “Arc of Crisis”

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As the 9th anniversary of 9/11 nears, and the war on terror continues to be waged and grows in ferocity and geography, it seems all the more imperative to return to the events of that fateful September morning and re-examine the reasons for war and the nature of the stated culprit, Al-Qaeda.

The events of 9/11 pervade the American and indeed the world imagination as an historical myth. The events of that day and those leading up to it remain largely unknown and little understood by the general public, apart from the disturbing images repeated ad nauseam in the media. The facts and troubled truths of that day are lost in the folklore of the 9/11 myth: that the largest attack carried out on American ground was orchestrated by 19 Muslims armed with box cutters and urged on by religious fundamentalism, all under the direction of Osama bin Laden, the leader of a global terrorist network called al-Qaeda, based out of a cave in Afghanistan.

The myth sweeps aside the facts and complex nature of terror, al-Qaeda, the American empire and literally defies the laws of physics. As John F. Kennedy once said, “The greatest enemy of the truth is not the lie – deliberate, contrived, and dishonest – but the myth – persistent, pervasive, and unrealistic.”

This three-part series on “The Imperial Anatomy of Al-Qaeda” examines the geopolitical historical origins and nature of what we today know as al-Qaeda, which is in fact an Anglo-American intelligence network of terrorist assets used to advance American and NATO imperial objectives in various regions around the world.

Part 1 examines the origins of the intelligence network known as the Safari Club, which financed and organized an international conglomerate of terrorists, the CIA’s role in the global drug trade, the emergence of the Taliban and the origins of al-Qaeda.

The Safari Club

Following Nixon’s resignation as President, Gerald Ford became the new US President in 1974. Henry Kissinger remained as Secretary of State and Ford brought into his administration two names that would come to play important roles in the future of the American Empire: Donald Rumsfeld as Ford’s Chief of Staff, and Dick Cheney, as Deputy Assistant to the President. The Vice President was Nelson Rockefeller, David Rockefeller’s brother. When Donald Rumsfeld was promoted to Secretary of Defense, Dick Cheney was promoted to Chief of Staff. Ford had also appointed a man named George H.W. Bush as CIA Director.

In 1976, a coalition of intelligence agencies was formed, which was called the Safari Club. This marked the discreet and highly covert coordination among various intelligence agencies, which would last for decades. It formed at a time when the CIA was embroiled in domestic scrutiny over the Watergate scandal and a Congressional investigation into covert CIA activities, forcing the CIA to become more covert in its activities.

In 2002, the Saudi intelligence chief, Prince Turki bin Faisal gave a speech in which he stated that in response to the CIA’s need for more discretion, “a group of countries got together in the hope of fighting Communism and established what was called the Safari Club. The Safari Club included France, Egypt, Saudi Arabia, Morocco, and Iran [under the Shah].”[1] However, “The Safari Club needed a network of banks to finance its intelligence operations. With the official blessing of George H.W. Bush as the head of the CIA,” Saudi intelligence chief, Kamal Adham, “transformed a small Pakistani merchant bank, the Bank of Credit and Commerce International (BCCI), into a world-wide money-laundering machine, buying banks around the world to create the biggest clandestine money network in history.”[2]

As CIA director, George H.W. Bush “cemented strong relations with the intelligence services of both Saudi Arabia and the shah of Iran. He worked closely with Kamal Adham, the head of Saudi intelligence, brother-in-law of King Faisal and an early BCCI insider.” Adham had previously acted as a “channel between [Henry] Kissinger and [Egyptian President] Anwar Sadat” in 1972. In 1976, Iran, Egypt, and Saudi Arabia formed the Safari Club “to conduct through their own intelligence agencies operations that were now difficult for the CIA,” which was largely organized by the head of French intelligence, Alexandre de Marenches.[3]

The “Arc of Crisis” and the Iranian Revolution

When Jimmy Carter became President in 1977, he appointed over two-dozen members of the Trilateral Commission to his administration, which was an international think tank formed by Zbigniew Brzezinski and David Rockefeller in 1973. Brzezinski had invited Carter to join the Trilateral Commission, and when Carter became President, Brzezinski became National Security Adviser; Cyrus Vance, also a member of the Commission, became Secretary of State; and Samuel Huntington, another Commission member, became Coordinator of National Security and Deputy to Brzezinski. Author and researcher Peter Dale Scott deserves much credit for his comprehensive analysis of the events leading up to and during the Iranian Revolution in his book, “The Road to 9/11”,* which provides much of the information below.

Samuel Huntington and Zbigniew Brzezinski were to determine the US policy position in the Cold War, and the US-Soviet policy they created was termed, “Cooperation and Competition,” in which Brzezinski would press for “Cooperation” when talking to the press, yet, privately push for “competition.” So, while Secretary of State Cyrus Vance was pursuing détente with the Soviet Union, Brzezinski was pushing for American supremacy over the Soviet Union. Brzezinski and Vance would come to disagree on almost every issue.[4]

In 1978, Zbigniew Brzezinski gave a speech in which he stated, “An arc of crisis stretches along the shores of the Indian Ocean, with fragile social and political structures in a region of vital importance to us threatened with fragmentation. The resulting political chaos could well be filled by elements hostile to our values and sympathetic to our adversaries.” The Arc of Crisis stretched from Indochina to southern Africa, although, more specifically, the particular area of focus was “the nations that stretch across the southern flank of the Soviet Union from the Indian subcontinent to Turkey, and southward through the Arabian Peninsula to the Horn of Africa.” Further, the “center of gravity of this arc is Iran, the world's fourth largest oil producer and for more than two decades a citadel of U.S. military and economic strength in the Middle East. Now it appears that the 37-year reign of Shah Mohammed Reza Pahlavi is almost over, ended by months of rising civil unrest and revolution.”[5]

With rising discontent in the region, “There was this idea that the Islamic forces could be used against the Soviet Union. The theory was, there was an arc of crisis, and so an arc of Islam could be mobilized to contain the Soviets. It was a Brzezinski concept.”[6] A month prior to Brzezinski’s speech, in November of 1978, “President Carter named the Bilderberg group’s George Ball, another member of the Trilateral Commission, to head a special White House Iran task force under the National Security Council’s Brzezinski.” Further, “Ball recommended that Washington drop support for the Shah of Iran and support the fundamentalist Islamic opposition of Ayatollah Khomeini.”[7] George Ball’s visit to Iran was a secret mission.[8]

Throughout 1978, the Shah was under the impression that “the Carter administration was plotting to topple his regime.” In 1978, the Queen and Shah’s wife, told Manouchehr Ganji, a minister in the Shah’s government, that, “I wanted to tell you that the Americans are maneuvering to bring down the Shah,” and she continued saying that she believed “they even want to topple the regime.”[9] The US Ambassador to Iran, William Sullivan, thought that the revolution would succeed, and told this to Ramsey Clark, former US Attorney General under the Johnson administration, as well as professor Richard Falk, when they were visiting Sullivan in Iran in 1978. Clark and Falk then went from Iran to Paris, to visit Khomeini, who was there in exile. James Bill, a Carter adviser, felt that, “a religious movement brought about with the United States’ assistance would be a natural friend of the United States.”[10]

Also interesting is the fact that the British BBC broadcast pro-Khomeini Persian-language programs daily in Iran, as a subtle form of propaganda, which “gave credibility to the perception of United States and British support of Khomeini.”[11] The BBC refused to give the Shah a platform to respond, and “[r]epeated personal appeals from the Shah to the BBC yielded no result.”[12]

In the May 1979 meeting of the Bilderberg Group, Bernard Lewis, a British historian of great influence (hence, the Bilderberg membership), presented a British-American strategy which, “endorsed the radical Muslim Brotherhood movement behind Khomeini, in order to promote balkanization of the entire Muslim Near East along tribal and religious lines. Lewis argued that the West should encourage autonomous groups such as the Kurds, Armenians, Lebanese Maronites, Ethiopian Copts, Azerbaijani Turks, and so forth. The chaos would spread in what he termed an ‘Arc of Crisis,’ which would spill over into the Muslim regions of the Soviet Union.”[13] Further, it would prevent Soviet influence from entering the Middle East, as the Soviet Union was viewed as an empire of atheism and godlessness: essentially a secular and immoral empire, which would seek to impose secularism across Muslim countries. So supporting radical Islamic groups would mean that the Soviet Union would be less likely to have any influence or relations with Middle Eastern countries, making the US a more acceptable candidate for developing relations.

A 1979 article in Foreign Affairs, the journal of the Council on Foreign Relations, described the Arc of Crisis, saying that, “The Middle East constitutes its central core. Its strategic position is unequalled: it is the last major region of the Free World directly adjacent to the Soviet Union, it holds in its subsoil about three-fourths of the proven and estimated world oil reserves, and it is the locus of one of the most intractable conflicts of the twentieth century: that of Zionism versus Arab nationalism.” It went on to explain that post-war US policy in the region was focused on “containment” of the Soviet Union, as well as access to the regions oil.[14] The article continued, explaining that the most “obvious division” within the Middle East is, “that which separates the Northern Tier (Turkey, Iran, Afghanistan) from the Arab core,” and that, “After World War II, Turkey and Iran were the two countries most immediately threatened by Soviet territorial expansionism and political subversion.”[15] Ultimately, “the Northern Tier was assured of a serious and sustained American commitment to save it from sharing the fate of Eastern Europe.”[16]

While Khomeini was in Paris prior to the Revolution, a representative of the French President organized a meeting between Khomeini and “current world powers,” in which Khomeini made certain demands, such as, “the shah's removal from Iran and help in avoiding a coup d'état by the Iranian Army.” The Western powers, however, “were worried about the Soviet Union's empowerment and penetration and a disruption in Iran's oil supply to the west. Khomeini gave the necessary guarantees. These meetings and contacts were taking place in January of 1979, just a few days before the Islamic Revolution in February 1979.”[17] In February of 1979, Khomeini was flown out of Paris on an Air France flight, to return to Iran, “with the blessing of Jimmy Carter.”[18] Ayatollah Khomeini named Mehdi Bazargan as prime minister of the Provisional Revolutionary Government on February 4, 1979. As Khomeini had demanded during his Paris meeting in January 1979, that western powers must help in avoiding a coup by the Iranian Army; in that same month, the Carter administration, under the direction of Brzezinski, had begun planning a military coup.[19]

Could this have been planned in the event that Khomeini was overthrown, the US would quickly reinstate order, perhaps even place Khomeini back in power? Interestingly, in January of 1979, “as the Shah was about to leave the country, the American Deputy Commander in NATO, General Huyser, arrived and over a period of a month conferred constantly with Iranian military leaders. His influence may have been substantial on the military's decision not to attempt a coup and eventually to yield to the Khomeini forces, especially if press reports are accurate that he or others threatened to withhold military supplies if a coup were attempted.”[20] No coup was subsequently undertaken, and Khomeini came to power as the Ayatollah of the Islamic Republic of Iran.

As tensions increased among the population within Iran, the US sent “security advisers” to Iran to pressure the Shah’s SAVAK (secret police) to implement “a policy of ever more brutal repression, in a manner calculated to maximize popular antipathy to the Shah.” The Carter administration also began publicly criticizing the Shah’s human rights abuses.[21] On September 6, 1978, the Shah banned demonstrations, and the following day, between 700 and 2000 demonstrators were gunned down, following “advice from Brzezinski to be firm.”[22]

The US Ambassador to the UN, Andrew Young, a Trilateral Commission member, said that, “Khomeini will eventually be hailed as a saint,” and the US Ambassador to Iran, William Sullivan, said, “Khomeini is a Gandhi-like figure,” while Carter’s adviser, James Bill, said that Khomeini was a man of “impeccable integrity and honesty.”[23]

The Shah was also very sick in late 1978 and early 1979. So the Shah fled Iran in January of 1979 to the Bahamas, allowing for the revolution to take place. It is especially interesting to understand the relationship between David Rockefeller and the Shah of Iran. David Rockefeller’s personal assistant, Joseph V. Reed, had been “assigned to handle the shah’s finances and his personal needs;” Robert Armao, who worked for Vice President Nelson Rockefeller, was sent to “act as the shah’s public relations agent and lobbyist;” and Benjamin H. Kean, “a longtime associate of Chase Manhattan Bank chairman David Rockefeller,” and David Rockefeller’s “personal physician,” who was sent to Mexico when the shah was there, and advised that he “be treated at an American hospital.”[24]

It is important to note that Rockefeller interests “had directed U.S. policy in Iran since the CIA coup of 1953.”[25] Following the Shah’s flight from Iran, there were increased pressures within the United States by a handful of powerful people to have the Shah admitted to the United States. These individuals were Zbigniew Brzezinski, former Secretary of State Henry Kissinger, John J. McCloy, former statesman and senior member of the Bilderberg Group, Trilateral Commission and the Council on Foreign Relations, who was also a lawyer for Chase Manhattan, and of course, David Rockefeller.[26]

Chase Manhattan Bank had more interests in Iran than any other US bank. In fact, the Shah had “ordered that all his government’s major operating accounts be held at Chase and that letters of credit for the purchase of oil be handled exclusively through Chase. The bank also became the agent and lead manager for many of the loans to Iran. In short, Iran became the crown jewel of Chase’s international banking portfolio.”[27]

The Iranian interim government, headed by Prime Minister Bazargan, collapsed in November of 1979, when Iranian hostages seized the US Embassy in Teheran. However, there is much more to this event than meets the eye. During the time of the interim government (February, 1979 to November, 1979), several actions were undertaken which threatened some very powerful interests who had helped the Ayatollah into power.

Chase Manhattan Bank faced a liquidity crisis as there had been billions in questionable loans to Iran funneled through Chase.[28] Several of Chase’s loans were “possibly illegal under the Iranian constitution.”[29] Further, in February of 1979, once the interim government was put in power, it began to take “steps to market its oil independently of the Western oil majors.” Also, the interim government “wanted Chase Manhattan to return Iranian assets, which Rockefeller put at more than $1 billion in 1978, although some estimates ran much higher,” which could have “created a liquidity crisis for the bank which already was coping with financial troubles.”[30]

With the seizure of the American Embassy in Iran, President Carter took moves to freeze Iranian financial assets. As David Rockefeller wrote in his book, “Carter’s ‘freeze’ of official Iranian assets protected our [Chase Manhattan’s] position, but no one at Chase played a role in convincing the administration to institute it.”[31]

In February of 1979, Iran had been taking “steps to market its oil independently of the Western oil majors. In 1979, as in 1953, a freeze of Iranian assets made this action more difficult.”[32] This was significant for Chase Manhattan not simply because of the close interlocking of the board with those of oil companies, not to mention Rockefeller himself, who is patriarch of the family whose name is synonymous with oil, but also because Chase exclusively handled all the letters of credit for the purchase of Iranian oil.[33]

The Shah being accepted into the United States, under public pressure from Henry Kissinger, Zbigniew Brzezinski and David Rockefeller, precipitated the hostage crisis, which occurred on November 4. Ten days later, Carter froze all Iranian assets in US banks, on the advice of his Treasury Secretary, William Miller. Miller just happened to have ties to Chase Manhattan Bank.[34]

Although Chase Manhattan directly benefited from the seizure of Iranian assets, the reasoning behind the seizure as well as the events leading up to it, such as a hidden role for the Anglo-Americans behind the Iranian Revolution, bringing the Shah to America, which precipitated the hostage crisis, cannot simply be relegated to personal benefit for Chase. There were larger designs behind this crisis. So the 1979 crises in Iran cannot simply be pawned off as a spur of the moment undertaking, but rather should be seen as quick actions taken upon a perceived opportunity. The opportunity was the rising discontent within Iran at the Shah; the quick actions were in covertly pushing the country into Revolution.

In 1979, “effectively restricting the access of Iran to the global oil market, the Iranian assets freeze became a major factor in the huge oil price increases of 1979 and 1981.”[35] Added to this, in 1979, British Petroleum cancelled major oil contracts for oil supply, which along with cancellations taken by Royal Dutch Shell, drove the price of oil up higher.[36] With the first major oil price rises in 1973 (urged on by US Secretary of State Henry Kissinger), the Third World was forced to borrow heavily from US and European banks to finance development. With the second oil price shocks of 1979, the US Federal Reserve, with Paul Volcker as its new Chairman, (himself having served a career under David Rockefeller at Chase Manhattan), dramatically raised interest rates from 2% in the late 70s to 18% in the early 80s. Developing nations could not afford to pay such interest on their loans, and thus the 1980s debt crisis spread throughout the Third World, with the IMF and World Bank coming to the “rescue” with their Structural Adjustment Programs (SAPs), which ensured western control over the developing world’s economies.[37]

Covertly, the United States helped a radical Islamist government come to power in Iran, “the center of the Arc of Crisis,” and then immediately stirred up conflict and war in the region. Five months before Iraq invaded Iran, in April of 1980, Zbigniew Brzezinski openly declared the willingness of the US to work closely with Iraq. Two months before the war, Brzezinski met with Saddam Hussein in Jordan, where he gave support for the destabilization of Iran.[38] While Saddam was in Jordan, he also met with three senior CIA agents, which was arranged by King Hussein of Jordan. He then went to meet with King Fahd in Saudi Arabia, informing him of his plans to invade Iran, and then met with the King of Kuwait to inform him of the same thing. He gained support from America, and financial and arms support from the Arab oil producing countries. Arms to Iraq were funneled through Jordan, Saudi Arabia and Kuwait.[39] The war lasted until 1988 and resulted in over a million deaths.

This was the emergence of the “strategy of tension” in the “Arc of Crisis,” in particular, the covert support (whether in arming, training, or financing) of radical Islamic elements to foment violence and conflict in a region. It was the old imperial tactic of ‘divide and conquer’: pit the people against each other so that they cannot join forces against the imperial power. This violence and radical Islamism would further provide the pretext for which the US and its imperial allies could then engage in war and occupation within the region, all the while securing its vast economic and strategic interests.

The “Arc of Crisis” in Afghanistan: The Safari Club in Action

In 1978, the progressive Taraki government in Afghanistan managed to incur the anger of the United States due to “its egalitarian and collectivist economic policies.”[40] The Afghan government was widely portrayed in the West as “Communist” and thus, a threat to US national security. The government, did, however, undertake friendly policies and engagement with the Soviet Union, but was not a Communist government.

In 1978, as the new government came to power, almost immediately the US began covertly funding rebel groups through the CIA.[41] In 1979, Zbigniew Brzezinski worked closely with his aid from the CIA, Robert Gates (who is currently Secretary of Defense), in shifting President Carter’s Islamic policy. As Brzezinski said in a 1998 interview with a French publication:

According to the official version of history, CIA aid to the Mujahadeen began during 1980, that is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979. But the reality, secretly guarded until now, is completely otherwise: Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention.[42]

Brzezinski elaborated, saying he “Knowingly increased the probability that [the Soviets] would invade,” and he recalled writing to Carter on the day of the Soviet invasion that, “We now have the opportunity of giving to the USSR its Vietnam war. Indeed, for almost 10 years, Moscow had to carry on a war unsupportable by the government, a conflict that brought about the demoralization and finally the breakup of the Soviet empire.” When asked about the repercussions for such support in fostering the rise of Islamic fundamentalism, Brzezinski responded, “What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war?”[43]

As author Peter Dale Scott pointed out in, The Road to 9/11:*

For generations in both Afghanistan and the Soviet Muslim Republics the dominant form of Islam had been local and largely Sufi. The decision to work with the Saudi and Pakistani secret services meant that billions of CIA and Saudi dollars would ultimately be spent in programs that would help enhance the globalistic and Wahhabistic jihadism that are associated today with al Qaeda.[44]

Hafizullah Amin, a top official in Taraki’s government, who many believed to be a CIA asset, orchestrated a coup in September of 1979, and “executed Taraki, halted the reforms, and murdered, jailed, or exiled thousands of Taraki supporters as he moved toward establishing a fundamentalist Islamic state. But within two months, he was overthrown by PDP remnants including elements within the military.”[45] The Soviets also intervened in order to replace Amin, who was seen as “unpredictable and extremist” with “the more moderate Barbak Karmal.”[46]

The Soviet invasion thus prompted the US national security establishment to undertake the largest covert operation in history. When Ronald Reagan replaced Jimmy Carter in 1981, the covert assistance to the Afghan Mujahideen not only continued on the path set by Brzezinski but it rapidly accelerated, as did the overall strategy in the “Arc of Crisis.” When Reagan became President, his Vice President became George H.W. Bush, who, as CIA director during the Ford administration, had helped establish the Safari Club intelligence network and the Bank of Credit and Commerce International (BCCI) in Pakistan. In the “campaign to aid the Afghan rebels ... BCCI clearly emerged as a U.S. intelligence asset,” and CIA Director “Casey began to use the outside – the Saudis, the Pakistanis, BCCI – to run what they couldn’t get through Congress. [BCCI president] Abedi had the money to help,” and the CIA director had “met repeatedly” with the president of BCCI.[47]

Thus, in 1981, Director Casey of the CIA worked with Saudi Prince Turki bin Faisal who ran the Saudi intelligence agency GID, and the Pakistani ISI “to create a foreign legion of jihadi Muslims or so-called Arab Afghans.” This idea had “originated in the elite Safari Club that had been created by French intelligence chief Alexandre de Marenches.”[48]

In 1986, the CIA backed a plan by the Pakistani ISI “to recruit people from around the world to join the Afghan jihad.” Subsequently:

More than 100,000 Islamic militants were trained in Pakistan between 1986 and 1992, in camps overseen by CIA and MI6, with the SAS [British Special Forces] training future al-Qaida and Taliban fighters in bomb-making and other black arts. Their leaders were trained at a CIA camp in Virginia. This was called Operation Cyclone and continued long after the Soviets had withdrawn in 1989.[49]

CIA funding for the operations “was funneled through General Zia and the ISI in Pakistan.”[50] Interestingly, Robert Gates, who previously served as assistant to Brzezinski in the National Security Council, stayed on in the Reagan-Bush administration as executive assistant to CIA director Casey, and who is currently Secretary of Defense.

The Global Drug Trade and the CIA

As a central facet of the covert financing and training of the Afghan Mujahideen, the role of the drug trade became invaluable. The global drug trade has long been used by empires for fuelling and financing conflict with the aim of facilitating imperial domination.

In 1773, the British colonial governor in Bengal “established a colonial monopoly on the sale of opium.” As Alfred W. McCoy explained in his masterful book, The Politics of Heroin:

As the East India Company expanded production, opium became India’s main export. [. . . ] Over the next 130 years, Britain actively promoted the export of Indian opium to China, defying Chinese drug laws and fighting two wars to open China’s opium market for its merchants. Using its military and mercantile power, Britain played a central role in making China a vast drug market and in accelerating opium cultivation throughout China. By 1900 China had 13.5 million addicts consuming 39,000 tons of opium.[51]

In Indochina in the 1940s and 50s, the French intelligence services “enabled the opium trade to survive government suppression efforts,” and subsequently, “CIA activities in Burma helped transform the Shan states from a relatively minor poppy-cultivating area into the largest opium-growing region in the world.”[52] The CIA did this by supporting the Kuomintang (KMT) army in Burma for an invasion of China, and facilitated its monopolization and expansion of the opium trade, allowing the KMT to remain in Burma until a coup in 1961, when they were driven into Laos and Thailand.[53] The CIA subsequently played a very large role in the facilitation of the drugs trade in Laos and Vietnam throughout the 1960s and into the 1970s.[54]

It was during the 1980s that “the CIA’s covert war in Afghanistan transformed Central Asia from a self-contained opium zone into a major supplier of heroin for the world market,” as:

Until the late 1970s, tribal farmers in the highlands of Afghanistan and Pakistan grew limited quantities of opium and sold it to merchant caravans bound west for Iran and east to India. In its decade of covert warfare against the Soviet occupation of Afghanistan, the CIA’s operations provided the political protection and logistics linkages that joined Afghanistan’s poppy fields to heroin markets in Europe and America.[55]

In 1977, General Zia Ul Haq in Pakistan launched a military coup, “imposed a harsh martial-law regime,” and executed former President Zulfiqar Ali Bhutto (father to Benazir Bhutto). When Zia came to power, the Pakistani ISI was a “minor military intelligence unit,” but, under the “advice and assistance of the CIA,” General Zia transformed the ISI “into a powerful covert unit and made it the strong arm of his martial-law regime.”[56]

The CIA and Saudi money flowed not only to weapons and training for the Mujahideen, but also into the drug trade. Pakistani President Zia-ul-Haq appointed General Fazle Haq as the military governor of Pakistan’s North-West Frontier Province (NWFP), who would “consult with Brzezinski on developing an Afghan resistance program,” and who became a CIA asset. When CIA Director Casey or Vice President George H.W. Bush reviewed the CIA Afghan operation, they went to see Haq; who by 1982, was considered by Interpol to be an international narcotics trafficker. Haq moved much of the narcotics money through the BCCI.[57]

In May of 1979, prior to the December invasion of the Soviet Union into Afghanistan, a CIA envoy met with Afghan resistance leaders in a meeting organized by the ISI. The ISI “offered the CIA envoy an alliance with its own Afghan client, Gulbuddin Hekmatyar,” who led a small guerilla group. The CIA accepted, and over the following decade, half of the CIA’s aid went to Hekmatyar’s guerillas.[58] Hekmatyar became Afghanistan’s leading mujahideen drug lord, and developed a “complex of six heroin labs in an ISI-controlled area of Baluchistan (Pakistan).”[59]

The US subsequently, through the 1980s, in conjunction with Saudi Arabia, gave Hekmatyar more than $1 billion in armaments. Immediately, heroin began flowing from Afghanistan to America. By 1980, drug-related deaths in New York City rose 77% since 1979.[60] By 1981, the drug lords in Pakistan and Afghanistan supplied 60% of America’s heroin. Trucks going into Afghanistan with CIA arms from Pakistan would return with heroin “protected by ISI papers from police search.”[61]

Haq, the CIA asset in Pakistan, “was also running the drug trade,” of which the bank BCCI “was completely involved.” In the 1980s, the CIA insisted that the ISI create “a special cell for the use of heroin for covert actions.” Elaborating:

This cell promoted the cultivation of opium and the extraction of heroin in Pakistani territory as well as in the Afghan territory under Mujahideen control for being smuggled into Soviet controlled areas in order to make the Soviet troops heroin addicts.[62]

This plan apparently originated at the suggestion of French intelligence chief and founder of the Safari Club, Alexandre de Marenches, who recommended it to CIA Director Casey.[63]

In the 1980s, one program undertaken by the United States was to finance Mujahideen propaganda in textbooks for Afghan schools. The US gave the Mujahideen $43 million in “non-lethal” aid for the textbook project alone, which was given by USAID: “The U.S. Agency for International Development, [USAID] coordinated its work with the CIA, which ran the weapons program,” and “The U.S. government told the AID to let the Afghan war chiefs decide the school curriculum and the content of the textbooks.”[64]

The textbooks were “filled with violent images and militant Islamic teachings,” and “were filled with talk of jihad and featured drawings of guns, bullets, soldiers and mines.” Even since the covert war of the 1980s, the textbooks “have served since then as the Afghan school system's core curriculum. Even the Taliban used the American-produced books.” The books were developed through a USAID grant to the “University of Nebraska-Omaha and its Center for Afghanistan Studies,” and when the books were smuggled into Afghanistan through regional military leaders, “Children were taught to count with illustrations showing tanks, missiles and land mines.” USAID stopped this funding in 1994.[65]

The Rise of the Taliban

When the Soviets withdrew from Afghanistan in 1989, the fighting continued between the Afghan government backed by the USSR and the Mujahideen backed by the US, Saudi Arabia, and Pakistan. When the Soviet Union collapsed in 1991, so too did its aid to the Afghan government, which itself was overthrown in 1992. However, fighting almost immediately broke out between rival factions vying for power, including Hekmatyar.

In the early 1990s, an obscure group of “Pashtun country folk” had become a powerful military and political force in Afghanistan, known as the Taliban.[66] The Taliban “surfaced as a small militia force operating near Kandahar city during the spring and summer of 1994, carrying out vigilante attacks against minor warlords.” As growing discontent with the warlords grew, so too did the reputation of the Taliban.[67]

The Taliban acquired an alliance with the ISI in 1994, and throughout 1995, the relationship between the Taliban and the ISI accelerated and “became more and more of a direct military alliance.” The Taliban ultimately became “an asset of the ISI” and “a client of the Pakistan army.”[68] Further, “Between 1994 and 1996, the USA supported the Taliban politically through its allies Pakistan and Saudi Arabia, essentially because Washington viewed the Taliban as anti-Iranian, anti-Shia, and pro-Western.”[69]

Selig Harrison, a scholar with the Woodrow Wilson International Centre for Scholars and “a leading US expert on South Asia,” said at a conference in India that the CIA worked with Pakistan to create the Taliban. Harrison has “extensive contact” with the CIA, as “he had meetings with CIA leaders at the time when Islamic forces were being strengthened in Afghanistan,” while he was a senior associate of the Carnegie Endowment for International Peace. As he further revealed in 2001, “The CIA still has close links with the ISI.”[70] By 1996, the Taliban had control of Kandahar, but still fighting and instability continued in the country.

Osama and Al-Qaeda

Between 1980 and 1989, roughly $600 million was passed through Osama bin Laden’s charity front organizations, specifically the Maktab al-Khidamat (MAK), also known as Al-Kifah. The money mostly originated with wealthy donors in Saudi Arabia and other areas in the Persian Gulf, and was funneled through his charity fronts to arm and fund the mujahideen in Afghanistan.[71]

In the 1980s, the British Special Forces (SAS) were training mujahideen in Afghanistan, as well as in secret camps in Scotland, and the SAS is largely taking orders from the CIA. The CIA also indirectly begins to arm Osama bin Laden.[72] Osama bin Laden’s front charity, the MAK, “was nurtured” by the Pakistani ISI.[73]

Osama bin Laden was reported to have been personally recruited by the CIA in 1979 in Istanbul. He had the close support of Prince Turki bin Faisal, his friend and head of Saudi intelligence, and also developed ties with Hekmatyar in Afghanistan,[74] both of whom were pivotal figures in the CIA-Safari Club network. General Akhtar Abdul Rahman, the head of the Pakistani ISI from 1980 to 1987, would meet regularly with Osama bin Laden in Pakistan, and they formed a partnership in demanding a tax on the opium trade from warlords so that by 1985, bin Laden and the ISI were splitting the profits of over $100 million per year.[75] In 1985, Osama bin Laden’s brother, Salem, stated that Osama was “the liaison between the US, the Saudi government, and the Afghan rebels.”[76]

In 1988, Bin Laden discussed “the establishment of a new military group,” which would come to be known as Al-Qaeda.[77] Osama bin Laden’s charity front, the MAK, (eventually to form Al-Qaeda) founded the al-Kifah Center in Brooklyn, New York, to recruit Muslims for the jihad against the Soviets. The al-Kifah Center was founded in the late 1980s with the support of the U.S. government, which provided visas for known terrorists associated with the organization, including Ali Mohamed, the “blind sheik” Omar Abdel Rahman and possibly the lead 9/11 hijacker, Mohamed Atta.[78]

This coincided with the creation of Al-Qaeda, of which the al-Kifah Center was a recruiting front. Foot soldiers for Al-Qaeda were “admitted to the United States for training under a special visa program.” The FBI had been surveilling the training of terrorists, however, “it terminated this surveillance in the fall of 1989.” In 1990, the CIA granted Sheikh Omar Abdel Rahman a visa to come run the al-Kifah Center, who was considered an “untouchable” as he was “being protected by no fewer than three agencies,” including the State Department, the National Security Agency (NSA) and the CIA.[79]

Robin Cook, a former British MP and Minister of Foreign Affairs wrote that Al-Qaeda, “literally ‘the database’, was originally the computer file of the thousands of mujahideen who were recruited and trained with help from the CIA to defeat the Russians.”[80] Thus, “Al-Qaeda” was born as an instrument of western intelligence agencies. This account of al-Qaeda was further corroborated by a former French military intelligence agent, who stated that, “In the mid-1980s, Al Qaida was a database,” and that it remained as such into the 1990s. He contended that, “Al Qaida was neither a terrorist group nor Osama bin Laden's personal property,” and further:

The truth is, there is no Islamic army or terrorist group called Al Qaida. And any informed intelligence officer knows this. But there is a propaganda campaign to make the public believe in the presence of an identified entity representing the 'devil' only in order to drive the 'TV watcher' to accept a unified international leadership for a war against terrorism. The country behind this propaganda is the US and the lobbyists for the US war on terrorism are only interested in making money.[81]

The creation of Al-Qaeda was thus facilitated by the CIA and allied intelligence networks, the purpose of which was to maintain this “database” of Mujahideen to be used as intelligence assets to achieve US foreign policy objectives, throughout both the Cold War, and into the post-Cold War era of the ‘new world order’.

Part 2 of “The Imperial Anatomy of al-Qaeda” takes the reader through an examination of the new imperial strategy laid out by American geopolitical strategists at the end of the Cold War, designed for America to maintain control over the world’s resources and prevent the rise of competitive powers. Covertly, the “database” (al-Qaeda) became central to this process, being used to advance imperial aims in various regions, such as in the dismantling of Yugoslavia. Part 2 further examines the exact nature of ‘al-Qaeda’, its origins, terms, training, arming, financing, and expansion. In particular, the roles of western intelligence agencies in the evolution and expansion of al-Qaeda is a central focus. Finally, an analysis of the preparations for the war in Afghanistan is undertaken to shed light on the geopolitical ambitions behind the conflict that has now been waging for nearly nine years.

* [Note on the research: For a comprehensive analysis of the history, origins and nature of al-Qaeda, see: Peter Dale Scott, The Road to 9/11: Wealth, Empire and the Future of America, which provided much of the research in the above article.]

Andrew Gavin Marshall is a Research Associate with the Centre for Research on Globalization (CRG). He is co-editor, with Michel Chossudovsky, of the recent book, "The Global Economic Crisis: The Great Depression of the XXI Century," available to order at


[1] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 62

[2] Ibid, page 63.

[3] Ibid, page 62.

[4] Ibid, pages 66-67.

[5] HP-Time, The Crescent of Crisis. Time Magazine: January 15, 1979:,9171,919995-1,00.html

[6] Peter Dale Scott, op. cit., page 67.

[7] F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto Press, 2004: page 171

[8] Manouchehr Ganji, Defying the Iranian Revolution: From a Minister to the Shah to a Leader of Resistance. Greenwood Publishing Group, 2002: page 41

[9] Ibid, page 39.

[10] Ibid, page 41.

[11] Ibid.

[12] F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto Press, 2004: page 172

[13] Ibid, page 171.

[14] George Lenczowski, The Arc of Crisis: It’s Central Sector. Foreign Affairs: Summer, 1979: page 796

[15] Ibid, page 797.

[16] Ibid, page 798.

[17] IPS, Q&A: Iran's Islamic Revolution Had Western Blessing. Inter-Press Service: July 26, 2008:

[18] Michael D. Evans, Father of the Iranian revolution. The Jerusalem Post: June 20, 2007:

[19] Peter Dale Scott, op cit., page 89.

[20] George Lenczowski, The Arc of Crisis: It’s Central Sector. Foreign Affairs: Summer, 1979: page 810

[21] F. William Engdahl, op cit., page 172.

[22] Peter Dale Scott, op cit., page 81.

[23] Michael D. Evans, Father of the Iranian revolution. The Jerusalem Post: June 20, 2007:

[24] Peter Dale Scott, op cit., page 83.

[25] Ibid, page 84.

[26] Ibid, page 81.

[27] Ibid, pages 85-86.

[28] Ibid.

[29] Ibid, page 87.

[30] Ibid, pages 88-89.

[31] Ibid.

[32] Ibid, pages 87-88.

[33] Ibid, page 85.

[34] Ibid, page 86.

[35] Ibid, page 88.

[36] F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. London: Pluto Press, 2004: page 173

[37] Andrew Gavin Marshall, Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve. Global Research: August 3, 2009:

[38] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 89

[39] PBS, Secrets of His Life and Leadership: An Interview with Said K. Aburish. PBS Frontline:

[40] Michael Parenti, Afghanistan, Another Untold Story. Global Research: December 4, 2008:

[41] Oleg Kalugin, How We Invaded Afghanistan. Foreign Policy: December 11, 2009:

[42] ‘'Le Nouvel Observateur' (France), Jan 15-21, 1998, p. 76:

[43] Ibid.

[44] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 73

[45] Michael Parenti, Afghanistan, Another Untold Story. Global Research: December 4, 2008:

[46] Peter Dale Scott, op cit., page 78.

[47] Ibid, page 116.

[48] Ibid, page 122.

[49] Ibid, page 123.

[50] Ibid,.

[51] Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade. (Lawrence Hill Books: Chicago, 2003), page 80

[52] Ibid, page 162.

[53] Ibid.

[54] Ibid, pages 283-386.

[55] Ibid, page 466.

[56] Ibid, page 474.

[57] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 73

[58] Alfred W. McCoy, op cit., page 475.

[59] Peter Dale Scott, op cit., page 74.

[60] Ibid, pages 75-76.

[61] Ibid, page 124.

[62] Ibid, pages 75-76.

[63] Ibid, page 124.

[64] Carol Off, Back to school in Afghanistan. CBC: May 6, 2002:

[65] Joe Stephens and David B. Ottaway, From U.S., the ABC's of Jihad. The Washington Post: March 23, 2002:

[66] Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, From the Soviet Invasion to September 10, 2001. Penguin Books, New York, 2004: Page 328

[67] Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, From the Soviet Invasion to September 11, 2001. (London: Penguin, 2005), page 285

[68] Steve Coll, “Steve Coll” Interview with PBS Frontline. PBS Frontline: October 3, 2006:

[69] Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam. (New York: Metropolitan Books, 2005), page 326

[70] ToI, “CIA worked in tandem with Pak to create Taliban”. The Times of India: March 7, 2001:

[71] Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam. (New York: Metropolitan Books, 2005), pages 279-280

[72] Simon Reeve, The New Jackals: Ramzi Yousef, Osama bin Laden, and the Future of Terrorism. (London: André Deutsch Ltd, 1999), page 168

[73] Michael Moran, Bin Laden comes home to roost. MSNBC: August 24, 1998:

[74] Veronique Maurus and Marc Rock, The Most Dreaded Man of the United States, Controlled a Long Time by the CIA. Le Monde Diplomatique: September 14, 2001:

[75] Gerald Posner, Why America Slept: The Failure to Prevent 9/11. (New York: Random House, 2003), page 29

[76] Steve Coll, The Bin Ladens. (New York: Penguin, 2008), pages 7-9

[77] AP, Al Qaeda Financing Documents Turn Up in Bosnia Raid. Fox News: February 19, 2003:,2933,78937,00.html

[78] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: pages 140-141

[79] Ibid, page 141.

[80] Robin Cook, The struggle against terrorism cannot be won by military means. The Guardian: July 8, 2005:

[81] Pierre-Henri Bunel, Al Qaeda -- the Database. Global Research: November 20, 2005: