Conspiracy is going mainstream. Paula Zahn of CNN went into wide-eyed mode as she parleyed with Richard Butler, former head of the UN inspection team in Iraq, latterly part of the wipe-out-Saddam lobby and now on the CNN payroll, coyly described by the lovely Paula as "ambassador in residence." On January 8 they were discussing the hot book of the hour, Ben Laden: la verité interdite ("Bin Laden, the Forbidden Truth''), by Jean-Charles Brisard and Guillaume Dasquie, which has just appeared in France.
ZAHN: Start off with what your understanding is of what is in this book--the most explosive charge.
BUTLER: The most explosive charge, Paula, is that the Bush Administration--the present one, just shortly after assuming office, slowed down FBI investigations of Al Qaeda and terrorism in Afghanistan in order to do a deal with the Taliban on oil--an oil pipeline across Afghanistan.
ZAHN: And this book points out that the FBI's deputy director, John O'Neill, actually resigned because he felt the US Administration was obstructing...
BUTLER: A proper...
ZAHN: ...the prosecution of terrorism.
And that's only the tip of the iceberg. From the American Patriots, through BuzzFlash (which seems to have an umbilical cord to the Democratic National Committee) to ultraleft sites, there's a menu of conspiracy charges that would sate the most indefatigable gourmand. To cite a by-no-means-complete list, we have the charges noted above; we also have foreknowledge by the Bush Administration of the 9/11 attacks, with a deliberate decision to do nothing to thwart the onslaughts.
What else? We have the accusation that members of the US intelligence community, possibly in league with Bush-related business operatives, used their foreknowledge of the attacks to invest large sums in "put options," gambling on the likelihood that the stock value of United Airlines and American Airlines would plummet in the wake of the suicide attacks.
Don't stop there! The Internet boils with accusations that US fighter planes were ordered to stand down on September 11, although there was a possibility these planes could have intercepted and downed the suicide planes. Then there's the role of oil. Innumerable columns begin with the news that the war in Afghanistan is "all about oil." From this premise flow torrents of speculation of the sort made by the two Frenchmen cited above.
Advanced conspiracy theory suggests that the attacks on the trade center were actually designed to silence FBI agent John O'Neill, who had quit the bureau on the grounds that his pursuit of the Taliban and bin Laden had been obstructed by the oil lobby, now controlling the White House through its designated operatives in the form of Bush, Dick Cheney and Condoleezza Rice. O'Neill quit the FBI and became head of security at the towers, and thus a loose cannon to be silenced by the White House/Al Qaeda networks, with the 3,000 other victims thrown in as collateral damage.
The trouble with many conspiracy theories is that they strain excessively to avoid the obvious:
Both under Bush's and Clinton's presidencies the United States has been eager since the fall of the Soviet Union to find some way to assist the hopes of US oil and pipeline companies to exploit the oil resources of the Asian republics, most notably reserves in western Kazakhstan. Similarly consistent has been the US desire not to have oil from Kazakhstan pass through Russia. Until US-Iranian relations are restored, that has left the option of a pipeline from Kazakhstan westward to Baku, Azerbaijan, then to Ceyhan, on the Mediterranean coast of Turkey, or a pipeline south through Afghanistan to a Pakistani port.
In tandem with these hopes to ship out Kazakh oil was the desire for a regime in Afghanistan sufficiently stable to allow Unocal to build its line, and sufficiently deferential to the United States to arrest or at least boot out bin Laden. American relations with the Saudis were, as always, predicated on insuring the stability of the regime without burdening it with unpalatable demands. If history is any guide, a lot of this diplomacy was probably clumsily done.
But does this mean that the United States went to war in Afghanistan "for oil"? Surely not. If stability was the goal, then war was a foolish option. The Bush regime hastened into war because America had sustained the greatest massacre on its soil since Pearl Harbor and faced the political imperative of finding an enemy at top speed on which to exact vengeance. This isn't to say there weren't hawks inside the Bush Administration who were lobbying for plans to overthrow the Taliban in early summer, plans of which the Taliban became aware, possibly conniving in the September 11 attacks in consequence.
As for all those mad theories about permitting the September 11 attacks to occur, or about remote-controlled planes: They seem to add up to the notion that America's foes are too incompetent to mount operations unaided by US agencies, or that US agencies aren't vast, bumbling bureaucracies quite capable of discounting warnings of attack.
But there is wheat among the chaff. It's true that someone gambled on those put options, that the profits have remained uncollected and that Buzzy Krongard is an interesting character who did go from the post of vice chairman of Banker's Trust/AB Brown (now owned by Deutsche Bank, which handled many of the put-option bets) to the CIA, where he's now number three. It is true that the anthrax disseminated through the mails almost certainly came at some recent point in its journeys from a US agency.
It is also true that the CIA ushered bin Laden into Afghanistan, and it is true that the CIA was complicit in Afghanistan's emergence in the 1980s as the West's leading supplier of opium and morphine, just as it helped construct the caves of Tora Bora. The US taxpayers underwrote that construction, just as they're underwriting the destruction.
That's not conspiracy-mongering. That's true.
It scarcely seems possible, but two of the staple items on the conversational menu of the left these past years might well be on the edge of disappearance, or at least a change in content. Mumia Abu-Jamal is no longer on death row. Pacifica's wars are amid final settlement. In both instances, it's a good advertisement for pertinacity.
"Arafat is guilty of everything that is happening here," Israeli Prime Minister Ariel Sharon declared on television Monday night. "Arafat has made his strategic choices: a strategy of terrorism." In sync with these fierce words, Israeli forces launched attacks close to the Palestinian leader's house and destroyed his helicopters, an onslaught that the US government conspicuously failed to condemn.
So, in the wake of the recent suicide bomb attacks launched by Hamas, the sky is now the limit for Israeli reprisals: the killing of Arafat and, not so far down the road, perhaps forced expulsion of tens of thousands of Palestinians from the West Bank. In other words, untrammeled military repression by Israel's forces, and a deaf ear by the United States to all Palestinian calls for fair dealing. Write FINIS to all efforts over the past thirty-four years to secure a just settlement in Israel and some measure of satisfaction for Palestinian aspirations.
But isn't that exactly what Israelis like Ariel Sharon have wanted all along? Can anyone claim with a straight face that Sharon and those like him actually want a just peace that would see an end to Israeli settlements on the West Bank, the rise of a Palestinian state in any guise other than pathetic little bantustans ringed by Israel's security forces?
There are those in Israel who outlined clearly in November Sharon's plan to force matters exactly along the lines they have now taken.
Alex Fishman is the main commentator on security matters for Israel's largest mass-circulation paper, Yediot Ahronot, a publication with right-of-center politics. Fishman is known for his excellent contacts in the military. On Sunday, November 25, Fishman issued a prediction based on the November 23 assassination by Israel's security services of the Hamas leader Mahmoud Abu Hanoud. It was featured in a box on the newspaper's front page.
It began, "We again find ourselves preparing with dread for a new mass terrorist attack within the Green Line [Israel's pre-1967 border]." Since Fishman was entirely accurate in this regard, we should mark closely what he wrote next. "Whoever gave a green light to this act of liquidation knew full well that he is thereby shattering in one blow the gentleman's agreement between Hamas and the Palestinian Authority; under that agreement, Hamas was to avoid in the near future suicide bombings inside the Green Line, of the kind perpetrated at the Dolphinarium" discotheque in Tel Aviv on June 1.
Fishman stated flatly that such an agreement did exist, even if neither the Palestinian Authority nor Hamas would admit it in public. "It is a fact," he continued, "that, while the security services did accumulate repeated warnings of planned Hamas terrorist attacks within the Green Line, these did not materialize. That cannot be attributed solely to the Shabak's [Israel's security service] impressive success in intercepting the suicide bombers and their controllers. Rather, the respective leaderships of the Palestinian Authority and Hamas came to the understanding that it would be better not to play into Israel's hands by mass attacks on its population centers."
In other words, Arafat had managed to convince Hamas to curb its suicide bombers. This understanding was shattered by the assassination of Abu Hanoud. "Whoever decided upon the liquidation of Abu Hanoud," Fishman continued, "knew in advance that that would be the price. The subject was extensively discussed both by Israel's military echelon and its political one, before it was decided to carry out the liquidation. Now, the security bodies assume that Hamas will embark on a concerted effort to carry out suicide bombings, and preparations are made accordingly."
Ever since September 11 Israel's leaders followed with deep trepidation the building of the coalition against the Taliban and Al Qaeda. The months of studious indifference displayed by the Bush Administration toward the crises in the Middle East suddenly gave way to President Bush's abrupt, post-September 11 statement that he had always nourished the dream of a Palestinian state.
Consequently, the prime task of the Israeli government and of its supporters here has been to turn back any serious pressure for accommodation with even the most modest of Palestinian demands. In parallel, the faction mustered around Deputy Defense Secretary Paul Wolfowitz and Defense Policy Board chairman Richard Perle has been to push for the United States to reopen direct hostilities with Iraq and settle accounts with Saddam Hussein once and for all.
The Wolfowitz-Perle group knows perfectly well that any serious new confrontation with Saddam would probably be a prolonged and bloody affair. There is no Northern Alliance ready and eager for US intervention in Iraq. The Shiites in the south remember well what happened in 1991, when they rose against Saddam and the United States stood by while he methodically slaughtered them. The Kurds know that a post-Saddam regime might move against them, with similar US indifference. If the United States acted as supervisor and guarantor for an invasion by Ahmed Chalabi and his Iraqi National Congress, the military and diplomatic consequences would be both messy and far-reaching.
It's clear that the Wolfowitz-Perle group is equable in the face of such uncertainties, since whatever the ghastly consequences for ordinary people in Iraq, the one outcome that would be certain is that Israel would be confirmed in its status as the United States' prime ally and supporter in the region, even as the post-September 11 coalition with Islamic countries falls apart. Small wonder they rapturously echo Sharon's denunciations of Arafat as a man of terror even though they, being smart people, probably don't need Alex Fishman to explain how the game is actually being played.
These are the stakes. They're far larger than the present tragicomic efforts to assemble a coalition to run Afghanistan, and there isn't much sign thus far that President Bush understands that comic-book advisories such as "You're for us or against us" do not, in this situation, really apply.
The weekend before Thanksgiving, as the Taliban fled into the Hindu Kush and America's children flocked to Harry Potter, the nation's opinion formers suddenly discovered that the Bush Administration had hijacked the Constitution with the Patriot Act and the order for military tribunals. Time burst out that "War Is Hell (on Your Civil Liberties)." The New York Times began to run big news stories about John Ashcroft as if he were running an off-the-shelf operation, clandestinely consummating all those dreams of Oliver North back in Reagan time about suspending the Constitution.
In the Washington Post for November 15 Richard Cohen discarded his earlier defenses of Ashcroft and declared the Attorney General to be "the scariest man in government." Five days earlier, a New York Times editorial was particularly incensed about suspension of attorney-client privileges in federal jails, with monitoring of all conversations. For the Hearst papers, Helen Thomas reported on November 17 that Ashcroft "is riding roughshod over individual rights" and cited Ben Franklin to the effect that "if we give up our essential rights for some security, we are in danger of losing both."
In this sudden volley of urgent barks from the dogs of the Fourth Estate, the first yelp came on November 15, from William Safire. In fine fury Safire burst out in his first paragraph that "misadvised by a frustrated and panic-stricken attorney general, a president of the United States has just assumed what amounts to dictatorial power." Safire lashed out at "military kangaroo courts" and flayed Bush as a proto-Julius Caesar.
Even mainstream politicians began to wail about the theft of liberty. Vermont's independent Senator Jim Jeffords proclaimed on November 19 that "I am very concerned about my good friend John Ashcroft. Having 1,000 people locked up with no right to habeas corpus is a deep concern." Jeffords said that he felt his own role in swinging the Senate to Democratic control was vindicated because it had permitted his fellow senator from Vermont, Democrat Patrick Leahy, to battle the White House's increased police powers, as made legal in the terrorism bill.
Speak, memory! It is not as though publication on November 13 of Bush's presidential order on military tribunals for Al Qaeda members and sympathizers launched the onslaught on civil liberties. Recall that the terrorism bill was sent to Congress on September 19. Nor were the contents of that proposed legislation unfamiliar, since in large part they had been offered by the Clinton Administration as portions of the Antiterrorism and Effective Death Penalty Act of 1996. Well before the end of September, Ashcroft's proposals to trash the Bill of Rights were available for inspection and debate.
At the time when it counted, when a volley of remonstrance from the watchdogs might have provoked resistance in Congress, amended the Patriot bill and warned Bush not to try his luck with military courts, there was mostly silence from the opinion makers, aside from amiable discussions of the propriety of torture. Taken as a whole, the US press did not raise adequate alarm about legislation designed to give the FBI full snoop powers on the Internet; to deny habeas corpus to noncitizens; to expand even further the warrantless searches unleashed in the Clinton era with new powers given in 1995 to secret courts. These courts operated under the terms of the Foreign Intelligence Surveillance Act, passed in 1978, in the Carter years.
In the run-up to Bush's signing of the Patriot Act on October 25, the editorial columns of the major papers offered only nugatory comment about the dangers of the bill. While not as bad as the silence of the press over the internment of Japanese-Americans after Pearl Harbor, the tepid reaction of the media had disastrous consequences.
It would have taken only a few fierce columns or editorials, such as were profuse after November 13, to have given frightened politicians cover to join the only bold soul in the Senate, Russell Feingold of Wisconsin. It was Feingold, remember, whose vote back in the spring let Ashcroft's nomination out of the Judiciary Committee, at a time when most of his Democratic colleagues were roaring to the news cameras about Ashcroft's racism and contempt for due process. The New York Times and the Washington Post both editorialized then against Ashcroft's nomination.
But then, when the rubber met the road and Ashcroft sent up the Patriot bill, which vindicated every dire prediction of the spring, all fell silent except Feingold, who made a magnificent speech in the Senate the day the bill was signed, citing assaults on liberty going back to the Alien and Sedition Acts of John Adams, the suspension of habeas corpus sanctioned by the Supreme Court during the Civil War, the internments of World War II (along with 110,000 Japanese-Americans there were 11,000 German-Americans and 3,000 Italian-Americans put behind barbed wire), the McCarthyite blacklists of the 1950s and the spying on antiwar protesters in the 1960s. Under the terms of the bill, Feingold warned, the Fourth Amendment as it applies to electronic communications would be significantly curtailed. He flayed the measure as an assault on "the basic rights that make us who we are." It represented "a truly breathtaking expansion of police power."
Feingold was trying to win time for challenges in Congress to specific provisions in Ashcroft's bill. Those were the days in which sustained uproar from Safire or Lewis or kindred commentators would have made a difference. Feingold's was the sole vote against the bill in the Senate. Just like Wayne Morse and Ernest Gruening in their lonely opposition to the Gulf of Tonkin Resolution in 1964, Feingold will receive his due and be hailed as a hero by the same people who held their tongue in the crucial hours when a vigilant press could have helped save the day. Instead, as Murray Kempton used to say of editorial writers, they waited till after the battle to come down from the hills to shoot the wounded.
Open the November 5 edition of Newsweek and here's Jonathan Alter, munching on the week's hot topic, namely the propriety of the FBI torturing obdurate September 11 suspects in the bureau's custody here in the United States. Alter says no to cattle prods, but continues the sentence with the observation that something is needed to "jump-start the stalled investigation." The tone is lightly facetious: "Couldn't we at least subject them to psychological torture, like tapes of dying rabbits or high-decibel rap?" There are respectful references to Alan Dershowitz (who's running around the country promoting the idea of "torture warrants" issued by judges) and to Israel, where "until 1999 an interrogation technique called 'shaking' was legal. It entailed holding a smelly bag over a suspect's head in a dark room, then applying scary psychological torment.... Even now, Israeli law leaves a little room for 'moderate physical pressure' in what are called 'ticking time bomb' cases."
As so often with unappealing labor, Alter arrives at the usual American solution: outsource the job. "We'll have to think about transferring some suspects to our less squeamish allies," he says.
What's striking about Alter's commentary and others in the same idiom is the abstraction from reality, as if torture is so indisputably a dirty business that all painful data had best be avoided. One would have thought it hard to be frivolous about the subject of torture, but Alter managed it.
Would one know from his commentary that under international covenants--signed and ratified by the United States--torture is illegal? One would not, and one assumes that as with the war against the Taliban's Afghanistan, Alter regards issues of legality as entirely immaterial. Would one know that in recent years the United States has been charged by the UN and also by human rights organizations such as Human Rights Watch and Amnesty International with tolerating torture in prisons, by methods ranging from solitary, twenty-three-hour-a-day confinement in concrete boxes for years on end, to activating 50,000-volt shocks through a mandatory belt worn by prisoners?
Would one know that one of the darkest threads in postwar US imperial history has been the CIA's involvement with torture, as instructor, practitioner or contractor?
Remember Dan Mitrione, kidnapped and killed by Uruguay's Tupamaros and portrayed by Yves Montand in Costa-Gavras's film State of Siege? In the late 1960s Mitrione worked for the US Office of Public Safety, part of the Agency for International Development. In Brazil, so A.J. Langguth (a former New York Times bureau chief in Saigon) related in his book Hidden Terrors, Mitrione was among the US advisers teaching Brazilian police how much electric shock to apply to prisoners without killing them. In Uruguay, according to the former chief of police intelligence, Mitrione helped "professionalize" torture as a routine measure and advised on psychological techniques such as playing tapes of women and children screaming that the prisoner's family was being tortured.
Alter expresses a partiality for "truth drugs," an enthusiasm shared by the US Navy after the war against Hitler, when its intelligence officers got on the trail of Dr. Kurt Plotner's research into "truth serums" at Dachau. Plotner gave Jewish and Russian prisoners high doses of mescaline and then observed their behavior, in which they expressed hatred for their guards and made confessional statements about their own psychological makeup.
As part of its larger MK-ULTRA project the CIA gave money to Dr. Ewen Cameron, at McGill University. Cameron was a pioneer in the sensory-deprivation techniques for which Jonathan Alter has issued his approval. Cameron once locked up a woman in a small white box for thirty-five days, deprived of light, smell and sound. The CIA doctors were amazed at this dose, knowing that their own experiments with a sensory-deprivation tank in 1955 had induced severe psychological reactions in less than forty hours.
Start torturing, and it's easy to get carried away. Torture destroys the tortured and corrupts the society that sanctions it. Just like the FBI today, the CIA in 1968 got frustrated by its inability to break suspected leaders of Vietnam's National Liberation Front by its usual methods of interrogation and torture. So the agency began more advanced experiments, in one of which it anesthetized three prisoners, opened their skulls and planted electrodes in their brains. They were revived, put in a room and given knives. The CIA psychologists then activated the electrodes, hoping the prisoners would attack one another. They didn't. The electrodes were removed, the prisoners shot and their bodies burned. Alter can read about it in Gordon Thomas's book Journey into Madness.
The Israelis? They're still torturing. In July, AP and the Baltimore Sun relayed charges from the Israeli human rights group B'tselem of "severe torture" by police: Palestinian youths as young as 14 being badly beaten, their heads shoved into toilet bowls and so forth. But Israel outsourced too. After Israel finally retreated from its "security strip" in southern Lebanon, run by its puppet South Lebanese Army, the journalist Robert Fisk visited Khiam prison. His report for The Independent, May 25, 2000, began thus: "The torturers had just left but the horror remained. There was the whipping pole and the window grilles where prisoners were tied naked for days, freezing water thrown over them at night. Then there were the electric leads for the little dynamo--the machine mercifully taken off to Israel by the interrogators--which had the inmates shrieking with pain when the electrodes touched their fingers or penises. And there were the handcuffs which an ex-prisoner handed to me yesterday afternoon. Engraved into the steel were the words: 'The Peerless Handcuff Co. Springfield, Mass. Made in USA.' And I wondered, in Israel's most shameful prison, if the executives over in Springfield knew what they were doing when they sold these manacles."
If handcuffs are sold these days to the FBI's subcontractor of choice, at least the executives will know they have Jonathan Alter to explain the patriotic morality of their bottom line.
The left is getting itself tied up in knots about the Just War and the propriety of bombing Afghanistan. I suspect some are intimidated by laptop bombardiers and kindred bully boys handing out white feathers and snarling about "collaborators" and being "soft on fascism." A recent issue of The Nation carried earnest efforts by Richard Falk and an editorial writer to mark out "the relevant frameworks of moral, legal and religious restraint" to be applied to the lethal business of attacking Afghans.
I felt sorry for Falk as he clambered through his moral obstacle course. This business of trying to define a just war against Afghanistan is what C. Wright Mills used to call crackpot realism. War, as the United States has been fighting it in Iraq and Yugoslavia, consists mostly of bombing, intended to terrify the population and destroy the fabric of tolerable social existence.
Remember too that bombs mostly miss their targets. Col. John Warden, who planned the air campaign in Iraq, said afterwards that dropping dumb bombs "is like shooting skeet; 499 out of 500 pellets may miss the target, but that's irrelevant." There will always be shattered hospitals and wrecked old folks' homes, just as there will always be Defense Department flacks saying that the destruction "cannot be independently verified" or that the hospitals or old folks' homes were actually sanctuaries for enemy forces or for "command and control."
How many bombing campaigns do we have to go through in a decade to recognize all the usual landmarks? What's unusual about the latest onslaught is that it is being leveled at a country where, on numerous estimates from reputable organizations, around 7.5 million people were, before September 11, at risk of starving to death. On September 16 New York Times Islamabad correspondent John Burns reported that the United States "demanded elimination of truck convoys that provide much of the food and other supplies to Afghanistan's civilian population."
In early October the UN's World Food Program was able to resume shipments at a lower level, then the bombing began and everything stopped once more, amid fierce outcry from relief agencies that the United States was placing millions at risk, with winter just around the corner. On October 15 UN special rapporteur Jean Ziegler said the food airdrops by the same military force dropping bombs undermined the credibility of humanitarian aid. "As special rapporteur I must condemn with the last ounce of energy this operation called snowdropping [the air drops of food packages]; it is totally catastrophic for humanitarian aid." Oxfam reckons that before September 11, 400,000 were on the edge of starvation, 5.5 million "extremely vulnerable" and the balance of the overall 7.5 million at great risk. Once it starts snowing, 540,000 will be cut off from the food convoys that should have been getting them provisions for the winter.
So, by the time Falk was inscribing the protocols of what a just war might be, the United States was already engineering civilian deaths on an immense scale. Not, to be sure, the ghastly instant entombment of September 11, what Noam Chomsky has called "the most devastating instant human toll of any crime in history, outside of war," but death on the installment plan: malnutrition, infant mortality, disease, premature death for the old and so on. The numbers will climb and climb, and there won't be any "independent verification" such as the Pentagon demands.
Let's not be pettifogging and dwell on the point that nothing resembling proof of bin Laden's responsibility for the September 11 attack has yet been put forward either by the United States or its subordinate in Downing Street. Let's accept that the supreme strategist of the September 11 terror is Osama bin Laden. He's the Enemy. So what have been the Enemy's objectives? He desires the widest possible war: to kill Americans on American soil, to destroy the symbols of US military power, to engage the United States in a holy war.
The first two objectives the Enemy could accomplish by itself; the third required the cooperation of the United States. Bush fell into the trap, and Falk, The Nation and some on the left have jumped in after him.
There can be no "limited war with limited objectives" when the bombing sets match atop tinder from Pakistan and Kashmir to Ramallah, Bethlehem, Jerusalem. "Limited war" is a far less realistic prospect than to regard September 11 as a crime, to pursue its perpetrators to justice in an international court, using all relevant police and intelligence agencies here and abroad.
The left should be for peace, which in no way means ignoring the demands of either side. Bin Laden calls for: an end to sanctions on Iraq; US troops out of Saudi Arabia; justice for Palestinians. The left says aye to those, though we want a two-state solution whereas bin Laden wants to drive Jews along with secular and Christian Palestinians into the sea. The US government calls for a dismantling of the Terror Network, and the left says aye to that too. Of course we oppose networks of people who wage war on civilians, as Seth Bardacke remarked to his dad after September 11. What the American people should have learned from September 11 is that bombing civilians is wrong. As Doug Lummis then wrote in Japan: "Fully grasping the total criminality and horror of those attacks can be used to grasp the equal criminality and horror of similar acts in the past. This understanding can provide a solid ground for opposing all similar acts (including state terrorism) in the future."
So we're pretty close to supporting demands on both sides, but we know these demands are not going to be achieved by war. What is this war about? On Bush's side it's about the defense of the American Empire; on the other, an attempt to challenge that in the name of theocratic fundamentalist Islam. On that issue the left is against both sides. We don't want anyone to kill or die in the name of the American Empire, for the "war on terror" to be cashed in blood in Colombia or anywhere else, or for anyone to kill or die in the name of Islamic fundamentalism. Go to the UN, proceed on the basis that September 11 was a crime. Bring the perpetrators to justice by legal means.
The new war on terror isn't going to be of much use in combating the present plunge in America's well-being. Well before the twin towers fell to earth the country was entering a fierce decline, and it is assuredly going to get worse.The fall in growth and investment from early 2000 to early 2001 was the fastest since 1945, from 5 percent growth to zero. So fast, indeed, that people are only now catching on to the extent of the bad numbers, and battening down the hatches as bankruptcies begin to rise.
How did we get from the Merrie Then to the Dismal Now? The bubble in stock prices in those last five years sparked an investment boom, as corporations found mountains of cash available, either from the sale of overvalued stocks or by borrowing money from the banks against the high asset value of those same stocks. And as the Lewinsky years frolicked gaily by, there was a simultaneous consumption boom as the richest fifth of the citizenry--the Delta Force of national consumer spending--saved a lot less and spent a lot more.
The shadows were there for those who cared to look for them. In 1998, 1999 and 2000, when the boom was reaching historic proportions, when annual borrowing by US corporations had reached a historic peak as a percentage of GDP, when Fed Chairman Alan Greenspan was vaunting the power of markets, the rate of profits was falling in the nonfinancial corporate sector, significantly so in manufacturing.
The bubble was due to burst. Now, with the market going down, corporations have less money, can borrow less and invest less. Consumers have less to spend and have begun to lose their appetite anyway. Down go the rates of investment and consumption, and the amount of government debt that the Bush Administration can muster as a Keynesian stimulus will be more than offset by a decline in private debt, as people turn prudent and ratchet up their savings.
But the problems go deeper. The corporate investment boom of the late 1990s took place against a backdrop of falling profitability. Who builds new plants when the bottom line is turning sour year by year? Answer: US corporations in the late 1990s. There was no correlate of investment against the rate of return, hence the amassing of overcapacity on a herculean scale. Between 1995 and 2000 retail store space grew five times faster than the population. Earlier this year, Business Week reckoned that only 2.5 percent of communications capacity is being used.
The most notorious sector was telecommunications, where borrowing was vast and stocks insanely inflated, with analysts boiling up ever more ludicrous ways of claiming profitability for their favored stocks. The degree to which stocks rose above profits was greatest in technology, media and telecommunications (TMT). In this sector, the leading edge of the boom, between 1995 and 2000 the value of TMT stocks grew by 6.1 times, but their earnings by only 2.1 times.
The Organization for Economic Cooperation and Development's survey of the United States for 2000 makes for chastening reading. By that year, the final distension of the bubble, the value of Internet companies reached 8 percent of the total value of all nonfinancial corporate assets in the economy. But most of those companies made only losses. Of 242 Internet companies reviewed in the OECD study, only thirty-seven made profits in the third quarter of 1999, the prepeak of the bubble. Their price-to-earnings ratio was 190 to one; precisely two of these accounted for 60 percent of profits. The other thirty-five profitable companies traded on an average p/e ratio of 270 to one; the 205 remaining companies made losses. For 168 of the companies for which data are available, total losses in the third quarter of 1999 amounted to $12.5 billion at an annualized rate, even as their stock-market valuation reached $621 billion.
You want a definition of a bubble? That's it.
So was there really a "New Economy" emerging in the sunset of the century, as proclaimed by so many exuberant choristers? True, the 1995 to 2000 economy did do better than in any five-year period back to the early 1970s. By all standard measures, such as productivity, economic growth, wages, growth of investment, unemployment and inflation, it was a pretty good time. But as Professor Robert Brenner of UCLA, whose Boom, Bubble, Bust: The US in the World Economy is about to be published by Verso, aptly asks, "If the five years 1995 to 2000 truly saw the emergence of a New Economy, manifesting 'extraordinary performance,' as Clinton's Council of Economic Advisers put it, what are we to call the period 1948 to 1973, which excelled the recent period in every respect?" Productivity growth was about 15 percent slower in those five recent years than in the twenty-five years between 1948 and 1973.
Obit writers for the great boom of 1995-2000 usually avert their eyes from the fact that despite all the exuberance of those giddy years, in terms of growth of gross domestic product, of per capita GDP, of wages and productivity, the 1990s as a whole did worse than the 1980s, and the 1980s worse than the 1970s. In other words, the golden end of the twentieth century was a continuance of the long stagnation of the world economy that began in 1973.
For now? On the one hand, overcapacity; on the other, a drop in investment and consumption, driven first by the drop in the market, then by fear. It will be quite a while before anyone feels the need to invest, hence to borrow. Give the rich a tax cut? It won't help. They'll put it in the bank. Government investment? Yes, if it were done on an appropriately vast scale, but only public investments of a sort that Republicans have never countenanced and that vanished from the political platforms of the Democratic Party decades ago. For sure, planes and missiles for the Navy and Air Force, plus the millions in food aid dropped on Afghanistan, plus new computers for the Office of Homeland Security, aren't going to do the trick.
I've been surprised, here in Petrolia, listening to some people say they're afraid. Afraid of what? I ask. Remember, even in the days when the imminent possibility of nuclear holocaust was dinned into schoolkids, ducking and covering, California's North Coast was held in high esteem as a possible sanctuary. It's a reason many nutsos like the Rev. Jim Jones headed up to Mendocino and Humboldt counties in the years when Mutual Assured Destruction seemed just around the corner.
In this case, after that crime against humanity known as the September 11 attacks, the fearful folk amid the daily scrum round our post office and local store were concerned about further terrorist attacks, dire onslaughts on the Bill of Rights, war or a blend of all three.
We may yet see just such a dread combo, but to be honest about it, I've been somewhat heartened, far beyond what I would have dared hope in the immediate aftermath of the awful destruction. Take the pleas for tolerance and the visit of President W. Bush to mosques. Better than FDR, who didn't take long to herd the Japanese-Americans into internment camps.
Of course, President WB has been dishing out some ferocious verbiage about dire retribution and an endless war against terror, but what do you expect? You can't kill 6,000 or so, destroy the World Trade towers and expect soft talk. And of course there's been plenty of waving of the Big Stick, with B-52s taking off and aircraft carriers churning across the oceans of the world, but again, what do you expect?
In times of national emergency there are always those who see opportunity. The Justice Department has been trying to expand wiretapping and e-surveillance for years. The Pentagon and State Department have long chafed at the few puny restraints on their ability to arm and fund tyrants and train their torturers. So far as the Office of Homeland Security is concerned, we needn't expect Governor Tom Ridge, who presided over the savaging of constitutional protections during the demonstrations in Philadelphia at the GOP convention in July 2000, to be sensitive to constitutional issues. But even here let me offer a grain of encouragement.
The reaction in Congress to Attorney General John Ashcroft's wish list has been considerably better than that single voice of courage a few days earlier, when Representative Barbara Lee stood alone against the stampede of all her colleagues to give the President full war-making powers. At this juncture I never would have expected to cheer Representative Bob Barr of Georgia, as he thundered his indignation at Ashcroft for presuming to use this emergency as the pretext for every DoJ attempt over the past years to savage further the Bill of Rights.
War fever? Maybe, but I can't say I feel that crackle in the air. Plenty of flags, naturally, but they seem to symbolize national togetherness more than dire national purpose. When I drove into Eureka, the nearest town to Petrolia, the shopkeepers and customers were mostly making cheery jokes about the presidential command to keep the economy afloat by shopping. On the way home I listened to Dan Schorr lamenting the lost language of national sacrifice, but over Churchillian "blood, toil, tears and sweat," I'll take "shop till you drop" any day.
In times like these the role of the press is to beef up national morale, instill confidence in the leader, pound the drum. Here, too, things aren't nearly so bad as they might have been. Two weeks after the attacks I got an e-mail from Bill Blum, who's written masterful records of the crimes wrought in America's name by the CIA and other agencies down the years.
"I think," Blum wrote, "that if this article can appear in USA Today, then some good may come out of the tragedy yet. And it's one of many I've read, in the a and elsewhere, the past two weeks that mention truths about the US role in the world that are normally filed by the media under 'leftist propaganda garbage.' The Post quoted Castro at length about American imperialism, without putting him down. To us leftist propagandists, it's all old stuff, but to the American mass mind, it's 'huh?'"
Then Blum attached an article by Sandy Tolan, published on September 20, 2001, in USA Today, titled "Despair Feeds Hatred, Extremism." Tolan wrote, "The men in the four doomed airliners were filled with hatred and a twisted interpretation of Islam. But this explanation alone is not sufficient. It does not account for the flammable mix of rage and despair that has been building up in the Middle East since the Gulf War's end." Tolan vividly described the "humiliation and anger of a population living under decades of occupation: Israeli bulldozers knocking over families' ancient stone homes and uprooting their olive groves; military checkpoints, sometimes eight or 10 within 15 miles, turning 20-minute commutes into 3-hour odysseys; the sealing off of Jerusalem and the third-holiest shrine in Islam to Muslims across the West Bank; the confiscation of Jerusalem identification cards, and hence citizenship, from Palestinian students who'd been abroad for too long; the thirst of villagers facing severe water shortages while Israeli settlers across the fence grew green lawns and lounged by swimming pools; U.S. M-16s used to shoot at stone-throwing boys."
Easy, concluded Tolan, to dwell only on the madness of Wahabbite Islam, but "much harder is to understand that our own failure to witness and address the suffering of others--the children of Iraq, for example--has helped create fertile recruiting ground for groups seeking vengeance with the blood of innocents." This, mind you, in one of the largest-circulation papers in the country.
How truly terrible it would be if Americans utterly declined to think about their history, even if only to reject the notion of its relevance. That would imply a sense of absolute moral and historical self-assurance equivalent to that of bin Laden. In no way do I sense this to be the case today, and that's the most heartening omen of all.
Footnote: The Nation's editorial directors decree no inter-columnist disputes. It's obvious that I differ utterly with Christopher Hitchens's "Against Rationalization," printed last week. For specific reflections on Hitchens's recent Nation pieces, please visit the CounterPunch website, www.counterpunch.org.