Tuesday, May 28, 2013

Why Disinformation Works

Have you ever wondered how the government’s misinformation gains traction?
What I have noticed is that whenever a stunning episode occurs, such as 9/11 or the Boston Marathon bombing, most everyone whether on the right or left goes along with the government’s explanation, because they can hook their agenda to the government’s account.
The leftwing likes the official stories of Muslims creating terrorist mayhem in America, because it proves their blowback theory and satisfies them that the dispossessed and oppressed can fight back against imperialism.
The patriotic rightwing likes the official story, because it proves America is attacked for its goodness or because terrorists were allowed in by immigration authorities and nurtured by welfare, or because the government, which can’t do anything right, ignored plentiful warnings.
Whatever the government says, no matter how problematical, the official story gets its traction from its compatibility with existing predispositions and agendas.
In such a country, truth has no relevance. Only agendas are important.
A person can see this everywhere. I could write volumes illustrating how agenda-driven writers across the spectrum will support the most improbable government stories despite the absence of any evidence simply because the government’s line can be used to support their agendas.
For example, a conservative writer in the June issue of Chronicles uses the government’s story about the alleged Boston Marathon bombers, Dzhokhar and Tamerlan Tsarnaev, to argue against immigration, amnesty for illegals, and political asylum for Muslims. He writes: “Even the most high-tech security systems imaginable will inevitably fail as they are overwhelmed by a flood of often hostile and dangerous immigrants.”
The writer accepts all of the improbable government statements as proof that the brothers were guilty. The wounded brother who was unable to respond to the boat owner who discovered him and had to be put on life support somehow managed to write a confession on the inside of the boat.
As soon as the authorities have the brother locked up in a hospital on life support, “unnamed officials” and “authorities who remain anonymous” are planting the story in the media that the suspect is signing written confessions of his guilt while on life support. No one has seen any of these written confessions. But we know that they exist, because the government and media say so.
The conservative writer knows that Dzhokhar is guilty because he is Muslim and a Chechen. Therefore, it does not occur to the writer to wonder about the agenda of the unnamed sources who are busy at work creating belief in the brothers’ guilt. This insures that no juror would dare vote for acquittal and have to explain it to family and friends. Innocent until proven guilty in a court has been thrown out the window. This should disturb the conservative writer, but doesn’t.
The conservative writer sees Chechen ethnicity as an indication of guilt even though the brothers grew up in the US as normal Americans, because Chechens are “engaged in anti-Russian jihad.” But Chechens have no reason for hostility against the US. As evidence indicates, Washington supports the Chechens in their conflict with Russia. By supporting Chechen terrorism, Washington violates all of the laws that it ruthlessly applies to compassionate Americans who give donations to Palestinian charities that Washington alleges are run by Hamas, a Washington-declared terrorist organization.
It doesn’t occur to the conservative writer that something is amiss when martial law
is established over one of America’s main cities and its metropolitan area, 10,000 heavily armed troops are put on the streets with tanks, and citizens are ordered out of their homes with their hands over their heads, all of this just to search for one wounded 19-year old suspect. Instead the writer blames the “surveillance state” on “the inevitable consequences of suicidal liberalism” which has embraced “the oldest sin in the world: rebellion against authority.” The writer is so pleased to use the government’s story line as a way of indulging the conservative’s romance with authority and striking a blow at liberalism that he does not notice that he has lined up against the Founding Fathers who signed the Declaration of Independence and rebelled against authority.
I could just as easily have used a left-wing writer to illustrate the point that improbable explanations are acceptable if they fit with predispositions and can be employed in behalf of an agenda.
Think about it. Do you not think that it is extraordinary that the only investigations we have of such events as 9/11 and the Boston Marathon bombing are private investigations, such as this investigation of the backpacks: http://whowhatwhy.com/2013/05/20/official-story-has-odd-wrinkles-a-pack-of-questions-about-the-boston-bombing-backpacks/
There was no investigation of 9/11. Indeed, the White House resisted any inquiry at all for one year despite the insistent demands from the 9/11 families. NIST did not investigate anything. NIST simply constructed a computer model that was consistent with the government’s story. The 9/11 Commission simply sat and listened to the government’s explanation and wrote it down. These are not investigations.
The only investigations have come from a physicist who proved that WTC 7 came down at free fall and was thus the result of controlled demolition, from a team of scientists who examined dust from the WTC towers and found nano-thermite, from high-rise architects and structural engineers with decades of experience, and from first responders and firefighters who were in the towers and experienced explosions throughout the towers, even in the sub-basements.
We have reached the point where evidence is no longer required. The government’s statements suffice. Only conspiracy kooks produce real evidence.
In America, government statements have a unique authority. This authority comes from the white hat that the US wore in World War II and in the subsequent Cold War. It was easy to demonize Nazi Germany, Soviet Communism and Maoist China. Even today when Russian publications interview me about the perilous state of civil liberty in the US and Washington’s endless illegal military attacks abroad, I sometimes receive reports that some Russians believe that it was an impostor who was interviewed, not the real Paul Craig Roberts. There are Russians who believe that it was President Reagan who brought freedom to Russia, and as I served in the Reagan administration these Russians associate me with their vision of America as a light unto the world. Some Russians actually believe that Washington’s wars are truly wars of liberation.
The same illusions reign among Chinese dissidents. Chen Guangcheng is the Chinese dissident who sought refuge in the US Embassy in China. Recently he was interviewed by the BBC World Service. Chen Guangcheng believes that the US protects human rights while China suppresses human rights. He complained to the BBC that in China police can arrest citizens and detain them for as long as six months without accounting for their detainment. He thought that the US and UK should publicly protest this violation of due process, a human right. Apparently, Chen Guangcheng is unaware that US citizens are subject to indefinite detention without due process and even to assassination without due process.
The Chinese government allowed Chen Guangcheng safe passage to leave China and live in the US. Chen Guangcheng is so dazzled by his illusions of America as a human rights beacon that it has never occurred to him that the oppressive, human rights-violating Chinese government gave him safe passage, but that Julian Assange, after being given political asylum by Ecuador is still confined to the Ecuadoran embassy in London, because Washington will not allow its UK puppet state to permit his safe passage to Ecuador.
Perhaps Chen Guangcheng and the Chinese and Russian dissidents who are so enamored of the US could gain some needed perspective if they were to read US soldier Terry Holdbrooks’ book about the treatment given to the Guantanamo prisoners. Holdbrooks was there on the scene, part of the process, and this is what he told RT: “The torture and information extraction methods that we used certainly created a great deal of doubt and questions in my mind to whether or not this was my America. But when I thought about what we were doing there and how we go about doing it, it did not seem like the America I signed up to defend. It did not seem like the America I grew up in. And that in itself was a very disillusioning experience.” http://rt.com/news/guantanamo-guard-islam-torture-608/
In a May 17 Wall Street Journal.com article, Peggy Noonan wrote that President Obama has lost his patina of high-mindedness. What did Obama do that brought this loss upon himself? Is it because he sits in the Oval Office approving lists of US citizens to be assassinated without due process of law? Is it because he detains US citizens indefinitely in violation of habeas corpus? Is it because he has kept open the torture prison at Guantanamo? Is it because he continued the war that the neoconservatives started, despite his promise to end it, and started new wars?
Is it because he attacks with drones people in their homes, medical centers, and work places in countries with which the US is not at war? Is it because his corrupt administration spies on American citizens without warrants and without cause?
No. It is none of these reasons. In Noonan’s view these are not offenses for which presidents, even Democratic ones, lose their high-minded patina. Obama can no longer be trusted, because the IRS hassled some conservative political activists.
Noonan is a Republican, and what Obama did wrong was to use the IRS against some Republicans. Apparently, it has not occurred to Noonan that if Obama–or any president–can use the IRS against opponents, he can use Homeland Security and the police state against them. He can use indefinite detention against them. He can use drones against them.
All of these are much more drastic measures. Why isn’t Peggy Noonan concerned?
Because she thinks these measures will only be used against terrorists, just as the IRS is only supposed to be used against tax evaders.
When a public and the commentators who inform it accept the collapse of the Constitution’s authority and the demise of their civil liberties, to complain about the IRS is pointless.

How Corporations Are Subverting Attempts to Rein in Their Power

Citizens have won important policy victories only to be undermined by the growing web of international investment rules and arbitration courts.

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The Japanese Financial System Is Beginning To Spin Wildly Out Of Control

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The financial system of the third largest economy on the planet is starting to come apart at the seams, and the ripple effects are going to be felt all over the globe.  Nobody knew exactly when the Japanese financial system was going to begin to implode, but pretty much everyone knew that a day of reckoning for Japan was coming eventually.  After all, the Japanese economy has been in a slump for over a decade, Japan has a debt to GDP ratio of well over 200 percent and they are spending about 50 percent of all tax revenue on debt service.  In a desperate attempt to revitalize the economy and reduce the debt burden, the Bank of Japan decided a few months ago to start pumping massive amounts of money into the economy.  At first, it seemed to be working.  Economic activity perked up and the Japanese stock market went on a tremendous run.  Unfortunately, there is also a very significant downside to pumping your economy full of money.  Investors start demanding higher returns on their money and interest rates go up.  But the Japanese government cannot afford higher interest rates.  Without super low interest rates, Japanese government finances would totally collapse.  In addition, higher interest rates in the private sector would make it much more difficult for the Japanese economy to expand.  In essence, pretty much the last thing that Japan needs right now is significantly higher interest rates, but that is exactly what the policies of the Bank of Japan are going to produce.

There is a lot of fear in Japan right now.  On Thursday, the Nikkei plunged 7.3 percent.  That was the largest single day decline in more than two years.  Then on Monday the index fell by another 3.2 percent.

And according to Business Insider, things are not looking good for Tuesday at this point...

In post-close futures trading, the Nikkei has dropped by another couple hundred points, and has dropped below 14,000.
Are we witnessing the beginning of a colossal financial meltdown by the third largest economy on the planet?  The Bank of Japan is starting to lose control, and if Japan goes down hard the crisis could spread to Europe and North America very rapidly.  The following is from a recent article by Graham Summers...

As Japan has indicated, when bonds start to plunge, it’s not good for stocks. Today the Japanese Bond market fell and the Nikkei plunged 7%. The entire market down 7%… despite the Bank of Japan funneling $19 billion into it to hold things together.

This is what it looks like when a Central Bank begins to lose control. And what’s happening in Japan today will be coming to the US in the not so distant future.

If you think the Fed is not terrified of this, think again. The Fed has pumped over $1 trillion into foreign banks, hoping to stop the mess from getting to the US. As Japan is showing us, the Fed will fail.

Investors, take note… the financial system is sending us major warnings…

If you are not already preparing for a potential market collapse, now is the time to be doing so.
And all of this money printing is absolutely crushing the Japanese yen.  Since the start of 2013, the yen has declined 16 percent against the U.S. dollar, even though the U.S. dollar is also being rapidly debased.   Just check out this chart of the yen vs. the U.S. dollar.  It is absolutely stunning...

Japanese Yen

The term "currency war" is something that you are going to hear a lot more over the next few years, and what you can see in the chart above is only the beginning.

What the Bank of Japan is doing right now is absolutely unprecedented.  It has announced that it plans to inject the equivalent of approximately $1.4 trillion into the Japanese economy in less than two years.

As Kyle Bass recently discussed, that dwarfs the quantitative easing that the Federal Reserve has been doing...

"What they're doing represents 70% of what the Fed is doing here with an economy 1/3 the size of ours"
The big problem for Japan will come when government bond yields really start to rise.  The yield on 10 year government bonds has been creeping up over the past few months, and if they hit the 1.0% mark that will set off some major red flags.

Because Japan has a debt to GDP ratio of more than 200 percent, the only way that it can avoid a total meltdown of government finances is to have super low interest rates.  The video posted below does a great job of elaborating on this point...

It really is very simple.  If interest rates rise substantially, Japan will be done.

Investor Kyle Bass is one of those that have been warning about this for a long time...

There's a fatalism, he says, in everyone he talks to in Japan. Their thinking is changing, and the way they talk to him about debt is changing. They already spend 50% of tax revenue on debt service.

"If rates go up, it's game over."
The financial problems in Cyprus and Greece are just tiny blips compared to what a major financial crisis in Japan would potentially be like.  The Japanese economy is larger than the economies of Germany and Italy combined.  If the house of cards in Japan comes tumbling down, trillions of dollars of investments all over the globe are going to be affected.

And what is happening right now in Japan should serve as a sober warning to the United States.  Like Japan, the money printing that the Federal Reserve has been doing has caused economic activity to perk up a bit and it has sent the stock market on an unprecedented run.

Unfortunately, no bubble that the Federal Reserve has ever created has been able to last forever.  At some point, we will pay a very great price for all of the debt that the U.S. government has been accumulating and all of the reckless money printing that the Fed has been engaged in.

So enjoy the calm before the storm while you still can.

The War On Terror And The Fate Of US Democracy

The speech delivered by President Barack Obama at the National Defense University in Washington, D.C. last week has revealed not only a crisis within the Obama administration and increasingly bitter conflicts within the highest echelons of the state, but also, and most profoundly, a historic crisis of class rule.
Obama’s speech is of exceptional political significance. More than a half-century after Eisenhower warned that American democracy was threatened by the emergence, in the aftermath of World War II, of a “military-industrial complex,” Obama all but acknowledged that American democracy is approaching a point of breakdown.
A decade after the beginning of the “war on terror,” Obama warned, “America stands at a crossroads.” He continued, “We must define the nature and scope of this struggle, or else it will define us. We have to be mindful of James Madison’s warning that no nation could preserve its freedom in the midst of continual warfare.”
In other words, the danger to American democracy comes not from “terrorists”—the catch-all pretext for every action taken by the American ruling class since September 11, including by the present administration—but from within the state itself.
Obama’s speech clearly emerged out of bitter conflicts within the state apparatus. He seemed engaged in a debate, without naming the parties with whom he was arguing. At times he would pause, as if he was waiting for a response. He took an almost passive attitude to the actions of his own administration, as if these were somehow external, somehow directed by forces outside of his own control.
This was not the speech of a confident chief executive, but the representative of an administration under siege, torn by internal contradictions, in which his control over the government seems entirely questionable.
The president repeatedly referred to illegal actions taken. The American government had, he acknowledged, “compromised our basic values—by using torture to interrogate our enemies, and detaining individuals in a way that ran counter to the rule of law.”
By designating them as “counter to the rule of law,” Obama was effectively admitting that actions taken by the United States government—that have continued under his own administration—were illegal, criminal, unconstitutional.
Obama sought to defend these actions, while openly betraying his own nervousness that he was directly implicated in violations of the Constitution, for which he could be held liable.
Obama repeatedly reminded his audience that there were others involved in making these decisions. “Not only did Congress authorize the use of force, it is briefed on every strike that America takes, every strike,” he insisted. “That includes the one instance where we targeted an American citizen.”
Hidden from the American people, preparations are far advanced for an open break with democratic forms of rule in the United States. Under the framework of the “war on terror,” the American ruling class has brought democracy to the very brink of extinction. Under first Bush and then Obama, the executive has claimed vast powers to wage war, spy on the American people, torture and hold prisoners indefinitely without charge, try them in military commissions, and kill anyone, anywhere, including US citizens, without due process.
Little more than a month ago, following the still unexplained bombings at the Boston Marathon, the entire city was placed in lockdown and virtual martial law. As the WSWS noted at the time, “The events in Boston have laid bare the modus operandi for the establishment of dictatorial forms of rule in the US.” Once again, as with the attacks of September 11 that set off the “war on terror,” the bombers were being closely monitored by sections of the state apparatus, and the events were seized on to implement new and unprecedented attacks on democratic rights.
The breakdown of democracy is tied to an immense growth in the strength of the military and intelligence apparatus. These institutions operate as virtual laws unto themselves.
Confirming that issues of civilian-military relations are being intensively discussed within the ruling class, an article appeared in the New York Times on Monday, penned by retired Army lieutenant general Karl Eikenberry, the former head of Armed Forces in Afghanistan, and historian David Kennedy. Under the headline, “Americans and Their Military, Drifting Apart,” the two authors worry that the expansion of the military is taking place under conditions of “a minimum citizen engagement and comprehension.”
To address this situation, they call for the institution of the draft in some form, before concluding, “While the armed forces retool for the future, citizens cannot be mere spectators. As Adams said about military power, ‘A wise and prudent people will always have a watchful and jealous eye over it.’”
The advanced state of the breakdown of bourgeois democracy, under conditions of perpetual war, has generated intense conflicts among different factions of the ruling class. Within and between various branches of the military, the CIA and FBI, there are continuous factional wars, in which the conflicts within the ruling class are worked out behind the backs of the American people.
While there are sections of the ruling class that would back an open military dictatorship, the break with legality and bourgeois democracy is also fraught with immense dangers. The legitimacy of the American political system is defined by the Constitution.
The American ruling class is destroying the political foundations upon which it has based its rule. They cannot invoke legality when they are confronting challenges to the state from the working class when they are the greatest law-breakers. The more they dispense with constitutional legality, the more illegitimate the ruling elite appears before the great mass of the population, within the United States and internationally.
Yet, despite these concerns, neither Obama nor any sections of the ruling class has anything else to offer. This explains the strange, contradictory character of Obama’s speech.
While voicing concern over the state of American democracy, one of the central aims of Obama’s remarks was to defend the most egregious violation of democratic principles thus far taken—namely, the assassination of US citizens without due process. These operations would continue, he said, with at most a pseudo-legal fig leaf, one or another form of Star Chamber proceedings to rubber stamp the decision of the executive.
As for militarism, while urging an end to a “boundless war on terror,” Obama outlined a series of military operations all over the world. He called for stepping up the arming of the Syrian “rebels,” many of which are tied to Al Qaeda, as part of the campaign to unseat President Bashar Al Assad. At the same time, sections of the American ruling class are trying to extract some of their forces from the Middle East in order to shift towards Asia and a more direct confrontation with China.
In the end, whatever Obama’s public displays of self-doubt, he has neither the will nor the ability to change anything. Efforts by the apologists of the Democratic Party, including the New York Times and the Nation magazine, to present Obama’s speech as a transformative event combine complacency, deceit and naiveté. As if to confirm this fact, Obama stressed on Memorial Day yesterday that the nation was “still at war.”
Moreover, if the most powerful sections of the bourgeoisie and the military/intelligence apparatus ever seriously considered for a moment that Obama was abandoning the program of global hegemony, his administration would come to a brutal and rapid end.
A crisis of bourgeois rule is one of the most important indicators of impending revolutionary upheaval. History substantiates a general political rule that revolutions arise not only because the oppressed classes cannot live in the old way, but that the ruling classes cannot rule in the old way.
The crisis of class rule and the collapse of American democracy are rooted in, on the one hand, endless war abroad, and, on the other, the uncontrollable and historically unprecedented degree of social inequality.
These developments pose grave dangers for the working class. Not only is it possible for a dictatorship to emerge in the United States, it is already emerging.
The defense of democratic rights is more than ever a class issue. Democracy on the basis of capitalism and imperialist militarism is impossible. To defend its interests, the working class cannot rely on any section of the bourgeois state apparatus or its auxiliary organizations.
The independent political mobilization of the working class is a matter of the highest urgency.

Half of America in Poverty -- and It's Creeping toward 75%

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Japanese Share Sell-Off A Sign Of Growing Financial Instability

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The sharp drop in Japan’s Nikkei stock market index last Thursday and subsequent global share sell-off have highlighted mounting instability in world financial markets.
The Nikkei went down by 7 percent and then showed considerable volatility on Friday, before ending the day marginally higher. In the United States, markets posted their first weekly loss after a month of record highs. While one of the factors in the Japanese plunge was a fall in manufacturing in China, a key element was fear of a major crisis if the US Federal Reserve Board ceases or significantly cuts back its “quantitative easing” program, which is pumping $85 billion per month into financial markets.
On Wednesday, Federal Reserve chairman Ben Bernanke indicated that if economic conditions in the US improved, the Fed may consider a “step down” in its asset-purchasing program. There was no definite commitment and no date was set, but such is the dependence of financial markets on the injections of cheap money from the Fed and other central banks that the mere suggestion that supplies could be cut back triggered a market slide.
Commenting on the sell-off in the Financial Times, HSBC chief economist Stephen King pointed to the widening gap between “financial hope and economic reality.” He commented: “At the beginning of the year, there were high hopes that the world economy would be dragged out of its torpor thanks to the copious use of monetary drugs, recovery in the US and strength in China. Monetary drugs, however, appear to have hallucinatory effects.”
The turbulence in Japan is particularly significant because the program initiated by Prime Minister Shinzo Abe’s government and the Bank of Japan (BoJ)—doubling the country’s money supply within the space of two years—represents the most extreme form of “quantitative easing.”
It is estimated that since the program started at the beginning of April, the BoJ is buying the equivalent of 70 percent of newly-issued government bonds. The stated aim of the policy is to lower interest rates, stimulate inflation and increase economic activity.
One of its unstated aims is to undermine Japan’s trade rivals in Korea, China and beyond, by devaluing the yen against their currencies and thereby boosting Japanese exports. This is fuelling sharp tensions between the major powers, as each power attempts to gain advantage at the others’ expense through competitive devaluation. Such tensions aggravate the dangerous strategic situation in East Asia, with the Obama administration encouraging Japan’s aggressive posture against China over regional territorial disputes.
The Abe government also aims to utilise its quantitative easing program to help finance and push through economic restructuring plans to attack the working class—such as pension cuts, value-added tax increases, industrial restructuring, and other reactionary measures. This is in line with policies in the US and Europe, where quantitative easing has been combined with deep social cuts, mass layoffs, and deep wage cuts and productivity speed-up.
The immediate impact of the Japanese central bank’s program has been a rapid rise in stock prices. This has raised fears that the BoJ’s policy, rather than providing a means to revive the Japanese economy, is creating the conditions for a major financial crisis.
One objective of the policy is to increase the price of government bonds through central bank purchases, resulting in lower interest rates. But instead of falling as was expected, bond yields have increased over the past month, indicating that large-scale investors may be trying to reduce their exposure to government debt, fearing a major downturn in the bond market in the future. If this move to the exits increases, then it could spark a major financial crisis.
Japanese government debt, equivalent to around 245 percent of gross domestic product (GDP), has been financed by investment houses and domestic savings. But this may not continue. A government panel’s draft report has reportedly warned that there is “absolutely no guarantee” that domestic investors will keep financing government debt.
In a speech to a symposium on Sunday, BoJ governor Haruhiko Kuroda warned that if there was no improvement in economic conditions while interest rates continued to rise because of concerns over the state of government finances, then major financial institutions would suffer losses on their bond holdings. The BoJ has calculated that a rise in interest rates of just 1 percentage point would lead to market losses equivalent to 10 percent of their core capital for the major banks, and 20 percent for the smaller regional banks.
While claiming that banks would be able to cope with rising interest rates once the economy improved, Kuroda’s voicing of concerns over government debt had a definite political purpose. Japanese and international finance capital are insisting that debt levels have become unsustainable and the government must start an austerity program directed against the working class.
However, the Abe government’s policies have attracted one prominent international supporter. New York Times columnist Paul Krugman has hailed the measures as an antidote to the “economic defeatism” that taken over the Western world.
“If Abenomics works, it will serve a dual purpose, giving Japan itself a much-needed boost and the rest of us an even more-needed antidote to policy lethargy,” he wrote.
Krugman’s enthusiasm for the Abe government’s quantitative easing program is a striking demonstration of the utter bankruptcy of the school of liberal Keynesian economics which he represents and which holds that the economic crisis can be resolved if only there is more enlightened government policy.
In the first place, so-called Abenomics cannot be separated from his government’s political agenda: an ever-more aggressive foreign policy based on the assertion of the Japanese ruling elite’s interests in the region and deepening attacks on the working class at home.
The gyrations on the share markets point to the fact that far from providing a “model” for the United States or the rest of the world, Abenomics is another expression of the deepening crisis of the global capitalist system as a whole.