Is the Second Superpower of the Cold War Going Down?

By Tom Engelhardt

In a 1998 interview with Le Nouvel Observateur, Zbigniew Brzezinski, former national security adviser to President Jimmy Carter, spoke proudly of how, in July 1979, he had "signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul" and so helped draw a Russian interventionary force into Afghanistan. "On the day that the Soviets officially crossed the border," Brzezinski added, "I wrote to President Carter, saying, in essence: 'We now have the opportunity of giving to the USSR its Vietnam War.'" And so they did -- with the help of the CIA, Saudi money, the Pakistani intelligence services, and an influx of Arab jihadis, including Osama bin Laden. In fact, their Afghan War would prove far more disastrous for the Soviet Union than defeat in Vietnam had been for the United States. By the time the Soviets withdrew their last troops in February 1989, the economy of the Cold War's weaker superpower was tottering on the brink. Less than three years later, the Soviet Union itself was no more, even as Washington, at first unbelieving, then celebratory, declared eternal victory.

It is far clearer now, as American economic power visibly crumbles, that rather than a victor and a vanquished there were two great power losers in the Cold War. The weaker, the Soviet Union, simply imploded first, while the U.S., enwreathed in a rhetoric of triumphalism and self-congratulation, was far more slowly making its way toward the exit. Seldom mentioned here, however, is a grotesque irony: as the U.S. seems to be experiencing the beginning stages of its imperial implosion, it is also -- as the Soviet Union was in the 1980s -- enmired in a war without end in Afghanistan against a ragtag army of Afghan insurgents supported by foreign jihadist volunteers.

One difference, of course: The Soviets were, in part, brought to the edge of bankruptcy and collapse by a war supported to the hilt, and to the tune of billions of dollars as well as massive infusions of weaponry, by the other superpower. The U.S. is heading for its analogous moment without an enemy superpower in sight. If anything, a single man -- Osama bin Laden -- might be said to have filled the former superpower role, which, were the results less grim, would be little short of farcical. That this has come to pass is, of course, partly the result of the Bush administration's many imperial blunders, including its invasion of Iraq and its urge to garrison the oil lands of the planet from the Middle East to Central Asia. Like all historical analogies, the Afghan one may be less than exact, but it does stare us in the face and, eerie as it is, it's hard to account for its absence from discussion here in the U.S.

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October 9, 2008

Who Is the Oracle?

By Laura Flanders

Tuesday night's Presidential debate in Nashville featured a notable clash or two, but on one topic there was agreement: Warren Buffett. The so-called "Oracle of Omaha" is an Obama supporter but also received a nod from John McCain. When asked who would be a suitable Treasury Secretary both men invoked Buffett's name. So who is the Oracle everybody admires?

Warren Buffett is the 78-year old chairman of Berkshire Hathaway, a holding company based in Omaha, Nebraska. In 2007 Forbes ranked him the richest man in the world, worth $62 billion, now only $50 billion...but you get the idea.

How does somebody get that rich? By buying the stocks of companies that make good returns for their investors. Some of Buffett's picks over the years include: Coca-Cola and McDonalds as well as Dow Chemical, and of course WalMart. Trouble is, those that make the best returns for their shareholders don't generally treat their workers all that well -- or the environment. All that shareholder profit's got to come from somewhere. Buffett also owns Mid-Atlantic Energy, a utility that burns coal and runs nuclear power plants.

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October 8, 2008

Bush's Failing Financial "Surge"

By Tom Engelhardt

Here we are, with ringside seats--far too close for comfort--at the Great Global Crash of '08. Nobody's quite calling it that yet, but what else could it be? All over the world yesterday stocks plummeted; the Russian and Brazilian stock indexes went down so precipitously -- 19% and 13% -- that exchanges in both countries were closed for parts of the day; the Indonesian index tumbled an unprecedented 10%; the Paris bourse, 9%; the London FTSE 100, a historic 8%; and the main German index 7%; while, at the New York Stock Exchange, the Dow Jones dipped under 10,000 on its wild ride toward the depths.

In moments like this, if you're an American, you look for ironies. And here's one to consider. In the last year, the Bush administration's top officials have sunk much of their increasingly lame-duck energy into pacifying Iraq, and so getting it out of the news and the spotlight at least long enough for election '08 to happen (and undoubtedly long enough as well for them to get out of town in January). And then what happens? The administration is ambushed, not by Sunni militants or Shiite radicals but by its own people: investment bankers, lenders, hedge-fund managers, financial management types--the very people for whom they organized the world and who had long been playing fast and loose (and profitably) with our economic system. The ambush, of course, took the form of a financial meltdown of massive proportions for which, as in Iraq in 2003, the administration had clearly done no significant preplanning or war-gaming. And, as with the insurgency then, so now they operated by the increasingly worn seats of their pants. Their attempted $700 billion "surge," as stock exchanges around the world indicated yesterday, wasn't likely to pacify a global financial system near cardiac arrest.

And I'm getting to that irony, if you'll just hang on. But first recall the administration's dreams only five years ago. Then, they were convinced that they would create a Pax Americana globally and a Pax Republicana domestically that would last generations. Now, "Bush's brain" Karl Rove is talking about an Obama November victory, while what Iraq started, the economic meltdown looks to be ending.

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October 7, 2008

Out of Money for the Next War?

By Tom Engelhardt

Think of this as the month when Fannie and Freddie entered everyday speech as something other than friendly names, when Americans realized that WaMu wasn't an over-performing Orca at SeaWorld but a massive failing savings bank, and that Wachovia wasn't a watch brand, but a finance group, as well as the fourth largest bank holding company in the U.S.

And the faster we learned those names, the faster they disappeared into the dustbin of history. First, Bear Stearns hit the skids, then Lehman Brothers vanished into the ether just as Fannie Mae and Freddie Mac were being absorbed by the U.S. government. Merrill Lynch headed directly down the gullet of Bank of America. Just behind was a desperate American International Group (A.I.G.), the world's largest insurer, in a state of financial collapse, only to be bailed out by the Bush administration. Next, Washington Mutual (or WaMu) fell into the clutches of JP Morgan Chase, and Wachovia into the embrace of Citigroup, just as five big banks in Europe were being "rescued" and two of them essentially nationalized. Meanwhile, other banks in the U.S., Europe, Russia, and East Asia, as well as brokerage houses, and even hedge funds seemed to be stumbling like so many zombies to the brink of catastrophe, teetering over the abyss of… well, we really don't yet know what.

As the stock market began its trip south, the Bush administration made one of its typical grabs for unparalleled executive power (to be vested in the person of the Secretary of the Treasury). Unfortunately -- for its top officials -- they had a tad of a "credibility gap" problem and, after an outpouring of popular anger at the thought of bailing out the rich and improvident, a revolt in the House of Representatives by anxious Democrats and a horde of angry conservative Republicans got the administration's plan voted down. Politicians across the political spectrum, especially those up for election in competitive districts, surely feared being labeled supporters of the "bailout party," especially when the bailout was to be run by the gang that couldn't shoot straight in Iraq, Afghanistan, Pakistan, or New Orleans.

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October 2, 2008

The Day Chicken Little Croaked?

By Laura Flanders

"You have nothing to fear but fear itself." Hearing those words from Franklin Delano Roosevelt quoted again today, they rang true in a whole new way. The fear is out there. Of course it's there -- when the Dow Jones drops a spooky 777 points in a day -- that fear's inevitable -- and the hurt's real enough -- in people's pensions and their pocket books.

But bail-out supporter or not, there are lots of reasons to celebrate the vote that so many powerful people are wringing their hands about today. There's a lot of arm-twisting going on right now, and a new package may be put up for a vote as soon as Friday, but what happened Monday is a game changer moment and it's worth taking note: calls into Congress came in 9 to 1 against the bailout. Even after every powerful opinion pusher in the land preached the urgency of the bailout. The politics of pure panic failed. Chicken Little croaked.

People in this country have been told to fear so much for so long -- from terrorism, Islam, abortion, gay marriage, Iraq, deficits, trade, no-trade; layoffs, no layoffs, environmental regulations -- you name it -- that finally, they just didn't buy it.

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September 30, 2008

The Iraq War as a Financial Sinkhole

By Tom Engelhardt

Let's start with the money the Bush administration has already thrown at the war in Iraq. According to the June congressional testimony of William Beach, director of the Center for Data Analysis, the war has cost $646 billion so far. The new defense budget for 2009 tacks on another $68.6 billion for Iraq and Afghanistan in the coming year. However, military expert Bill Hartung of the New America Foundation puts a conservative estimate of the costs of a single week of the Iraq War at approximately $3.5 billion (or about $180 billion a year).

In other words, the war in Iraq will cost far more in the next year than the Iraq portion of that $68.6 billion Congress is about to pony up in the defense budget, and so will be funded, as has long been true, through supplemental war bills submitted by the Bush administration (and then whatever administration follows). In other words, sometime in 2009 the direct costs of the war the Bush administration once predicted would cost perhaps $50-60 billion in total will stand at more than $800 billion, or $100 billion above the cost (if all goes well, which it won't) of the bailout of the financial system now being proposed in Washington.

Estimates of the true long-term costs of the President's war of choice, including payments of health care and veterans benefits into the distant future, soar into the budgetary stratosphere. They range from the Congressional Budget Office's $1-2 trillion to an estimate by economists Joseph Stiglitz and Linda J. Bilmes of up to $4-5 trillion. So we're talking somewhere between one-and-a-half and seven bailouts-worth of taxpayer dollars flowing into the morass of disaster, corruption, and carnage in Iraq.

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September 29, 2008

Obama's Missed Moment

By William Greider

My bottom line on Friday's debate: Barack Obama failed to step up to the historic moment. He made perfunctory remarks about the massive banking bailout facing the political system, but he decided not to speak to the American people with anything resembling forceful honesty and clarity. McCain wasn't any better. Both men faced a gut check in their campaign and both of them flinched.

The explanation, I suspect, is that Barack Obama and John McCain know they are going to wind up voting for this outrageous package, probably sometime next week, so why pretend to be thinking independently? McCain had flirted with the idea that he could speak for the public's anger and reap big benefits for his troubled candidacy. Someone advised him not to go down that road. He folded.

Obama has offered critical comments on how the bailout should be redesigned for greater equity, but it seems clear he won't press the point. Left-labor groups are pushing Democrats to address the burdens of indebted Americans and the swooning economy with substantive measures. But party leaders are resisting - reluctant to slow down the bankers' bonanza with complicating issues.

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September 27, 2008

McCain's Major Meltdown

By Adam Howard

In the wake of several new polls showing Barack Obama's lead widening in the presidential race--which has been attributed to the public's perception that he is the better candidate on the economy--John McCain has made a stunning announcement.

He has requested that their foreign-policy themed debate, long scheduled for this Friday, be postponed so that he and Senator Obama can reach a bipartisan solution to the ongoing economic crisis. Here is an excerpt from McCain's statement:

Last Friday, I laid out my proposal and I have since discussed my priorities and concerns with the bill the Administration has put forward. Senator Obama has expressed his priorities and concerns. This morning, I met with a group of economic advisers to talk about the proposal on the table and the steps that we should take going forward. I have also spoken with members of Congress to hear their perspective.

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September 24, 2008

Bailout Increasingly Unpopular in Congress

By Ari Berman

The Bush Administration continues to aggressively push its Wall Street bailout plan on Congress, where it's reaching a surprising amount of resistance. Congressional Leaders in the House and Senate are still trying to cut a deal with Treasury Secretary Hank Paulson, but the bailout seems to be getting more unpopular by the day with rank-and-file members of Congress from both parties.

Democrats are unhappy because the bailout favors Wall Street over Main Street. Republicans are unhappy about the $700 billion cost and expansion of "big government."

Matt Stoller of Open Left has been doing an excellent job of monitoring how members of Congress are reacting. Here's a great clip from Ohio Democratic Representative Marcy Kaptur:

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September 24, 2008

An Economic Coup?

By Laura Flanders

A threatened elite seeks to consolidate control and tighten its grip on a nation's resources ...

You could be forgiven for thinking I'm describing Bolivia, where conflict between landowners and backers of the democratically elected president Evo Morales claimed 30 lives so far this month, but I'm not. Reading the economic plan proposed by the Bush Administration for Wal St., I'm struck by the thought that what we're going through right here might not be an election season, but rather a coup.

The oligarchs in Bolivia used bullets and batons to undermine democracy. Here the weapons look like bailouts and blank checks, but the end goal is the same: Put the economy in a vice and you've tied the hands of whomever's in office. You, the voter, may not vote for the team that promises -- as the GOP service-cutters have promised -- to shrink the Treasury to a puddle that can be drowned in a bathtub. But no matter, your candidate gets the keys to the Treasury and - presto, the Treasury is bare.

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September 22, 2008