Sunday, November 30, 2008

A Free-Market Monetary System

Daily Article by Posted on 11/21/2008

http://mises.org/story/3204

[A lecture delivered at the Gold and Monetary Conference, New Orleans, November 10, 1977. It made its first appearance in print in the Journal of Libertarian Studies, Volume 3, Number 1.]
When a little over two years ago, at the second Lausanne Conference of this group, I threw out, almost as a sort of bitter joke, that there was no hope of ever again having decent money, unless we took from government the monopoly of issuing money and handed it over to private industry, I took it only half seriously. But the suggestion proved extraordinarily fertile. Following it up I discovered that I had opened a possibility which in two thousand years no single economist had ever studied. There were quite a number of people who have since taken it up and we have devoted a great deal of study and analysis to this possibility.
As a result I am more convinced than ever that if we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject. It is a business which competing enterprise can maintain only if it gives the public as good a money as anybody else.

cont at www.mises.org/story/3204

Citigroup says gold could rise above $2,000 next year as world unravels

Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.

By Ambrose Evans-Pritchard Last Updated: 7:29AM GMT 27 Nov 2008

An employee of Tanaka Kikinzoku Jewelry K.K. displays a gold bar at the company's store in Tokyo Photo: Reuters
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.
"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.
"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.
"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."
"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.
Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. "If true, this is a very material change," he said.
Mr Fitzpatrick said Britain had made a mistake selling off half its gold at the bottom of the market between 1999 to 2002. "People have started to question the value of government debt," he said.
Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.
Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.

Wednesday, October 22, 2008

Tales of an Economic Hitman


Check this out here



John Perkins started and stopped writing Confessions of an Economic Hit Man four times over 20 years. He says he was threatened and bribed in an effort to kill the project, but after 9/11 he finally decided to go through with this expose of his former professional life. Perkins, a former chief economist at Boston strategic-consulting firm Chas. T. Main, says he was an "economic hit man" for 10 years, helping U.S. intelligence agencies and multinationals cajole and blackmail foreign leaders into serving U.S. foreign policy and awarding lucrative contracts to American business. "Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars," Perkins writes. Confessions of an Economic Hit Man is an extraordinary and gripping tale of intrigue and dark machinations. Think John Le Carré, except it's a true story.
Perkins writes that his economic projections cooked the books Enron-style to convince foreign governments to accept billions of dollars of loans from the World Bank and other institutions to build dams, airports, electric grids, and other infrastructure he knew they couldn't afford. The loans were given on condition that construction and engineering contracts went to U.S. companies. Often, the money would simply be transferred from one bank account in Washington, D.C., to another one in New York or San Francisco. The deals were smoothed over with bribes for foreign officials, but it was the taxpayers in the foreign countries who had to pay back the loans. When their governments couldn't do so, as was often the case, the U.S. or its henchmen at the World Bank or International Monetary Fund would step in and essentially place the country in trusteeship, dictating everything from its spending budget to security agreements and even its United Nations votes. It was, Perkins writes, a clever way for the U.S. to expand its "empire" at the expense of Third World citizens. While at times he seems a little overly focused on conspiracies, perhaps that's not surprising considering the life he's led. --Alex Roslin From Publishers WeeklyPerkins spent the 1970s working as an economic planner for an international consulting firm, a job that took him to exotic locales like Indonesia and Panama, helping wealthy corporations exploit developing nations as, he claims, a not entirely unwitting front for the National Security Agency. He says he was trained early in his career by a glamorous older woman as one of many "economic hit men" advancing the cause of corporate hegemony. He also says he has wanted to tell his story for the last two decades, but his shadowy masters have either bought him off or threatened him until now. The story as presented is implausible to say the least, offering so few details that Perkins often seems paranoid, and the simplistic political analysis doesn’t enhance his credibility. Despite the claim that his work left him wracked with guilt, the artless prose is emotionally flat and generally comes across as a personal crisis of conscience blown up to monstrous proportions, casting Perkins as a victim not only of his own neuroses over class and money but of dark forces beyond his control. His claim to have assisted the House of Saud in strengthening its ties to American power brokers may be timely enough to attract some attention, but the yarn he spins is ultimately unconvincing, except perhaps to conspiracy buffs.Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved

Monday, September 22, 2008

These Are theConsequences of War

http://www.antiwar.com/glantz/?articleid=13488

by Aaron Glantz
The following is an excerpt from Winter Soldier Iraq and Afghanistan: Eyewitness Accounts of the Occupations by Iraq Veterans Against the War and Aaron Glantz. From March 13-16, hundreds of Iraq and Afghanistan war veterans gathered in Silver Spring, Md., to testify about atrocities they had personally committed or witnessed while deployed. Among those who testified was former Marine Corps Pfc. Vincent Emanuele of Chesterton, Ind. He served in Iraq in 2003 and 2005.

An act that took place quite often in Iraq was taking pot shots at cars that drove by. This was quite easy for most Marines to get away with because our rules of engagement stated that the town of al-Qaim had already been forewarned and knew to pull their cars to a complete stop when approaching a United States convoy. Of course, the consequences of such actions pose a huge problem for those of us who patrol the streets every day. This was not the best way to become friendlier with an already hostile local population. This was not an isolated incident, and it took place for most of our eight-month deployment.
We were sent out on a mission to blow up a bridge that was supposedly being used to transport weapons across the Euphrates, and we were ambushed. We were forced to return fire in order to make our way out of the city. This incident took place in the middle of the day, and most of those who were engaging us were not in clear view. Many hid in local houses and businesses and were part of the local population themselves, once again making it very hard to determine who was shooting from where and where exactly to return fire. This led to our squad shooting at everything and anything, i.e., properties, cars, people, in order to push through the town. I fired most of my magazines into the town, but not once did I clearly identify the targets that I was shooting at.

Once we were taking rocket fire from a town, and a member of our squad mistakenly identified a tire shop as being the place where the rocket fire came from. Sure enough, we mortared the shop. This was one of the only times we actually had the chance to investigate what we had done and to talk to the people we had directly affected. Luckily, the family who owned the shop was still alive. However, we were not able to compensate the family, nor were we able to explain how it was he could rebuild his livelihood. This was not an isolated incident, and it took place over the course of our eight-month deployment.

Another task our platoon took on was transporting prisoners from our base back to the desert. The reason I say the desert and not their town is because that is exactly where we would drop them off, in the middle of nowhere. Now, most of these men had obviously been deemed innocent, or else they would have been moved to a more permanent prison and not released back into the population. We took it upon ourselves to punch, kick, butt-stroke, or generally harass these prisoners. Then, we would take them to the middle of the desert, throw them out of the back of our Humvees while continually kicking, punching, and at times throwing softball-sized rocks at their backs as they ran away from our convoy. Once again, this is not an isolated incident, and this took place over the duration of our eight-month deployment.
The last and possibly the most disturbing of what took place in Iraq was the mishandling of the dead. On several occasions, our convoy came across bodies that had been decapitated and were lying on the side of the road. When encountering these bodies, standard procedure was to run over the corpses, sometimes even stopping and taking pictures with these bodies, which was also standard practice whenever we encountered the dead. On one specific occasion, I had shot a man in the back of the head after we saw him planting an IED device; we pulled his body out of the ditch he was laying in and left it to rot in the field. We saw the body again up to two weeks later. There were also pictures taken of this gentleman, and his picture became the screen-saver on the laptop belonging to one of our more motivated Marines.

The larger point that I'd like to touch on is that these are the consequences for sending young men and women into battle. These are the things that happen. And what I'd like to ask anyone who's viewing this testimony is to imagine your loved ones put in such positions. Your brothers, your sisters, your nieces, your nephews, your aunts, and your uncles, and more importantly, and maybe most importantly, to be able to put ourselves in the Iraqis' shoes who encountered these events every day and for the last five years.

Wednesday, September 3, 2008

Maybe America will Bomb Iran after all? Who knows?

September Surprise
Get ready for it…
by Justin Raimondo
While the rest of the pundits opine about the meaning and implications of Sarah Palin's ascension from small town mayor to prospective vice president – and whether or not her daughter's private life is fair game for any media outlet other than the National Enquirer – those of us whose job it is to stand watch on the ramparts and report the real news are wondering when – not if – the War Party will pull a rabbit out of the proverbial hat. For months, I've been warning in this space that an American attack on Iran is imminent, and now I see that the Dutch have reason to agree with my assessment. Their intelligence service reportedly has pulled out of a covert operation inside Iran on the grounds that a U.S. strike is right around the corner – in "a matter of weeks," according to De Telegraaf, a Dutch newspaper.
As the story goes, the Dutch had infiltrated the purported Iranian weapons project and were firmly ensconced when they got word that the Americans are about to launch a missile attack on Iranian nuclear facilities. They wisely decided to close down the operation and pull out.
Remember, the Israelis have been threatening to strike on their own for months: what's changed is that now, apparently, the U.S. has caved in to what is a blatant case of blackmail and has agreed to do the job for them.
We haven't heard much about Iran lately, at least compared to the scare headlines of a few months ago, when rumors of war were swirling fast and furious. The Russian "threat" seems to have replaced the Iranian "threat" as the War Party's bogeyman of choice. What we didn't know, however, is that the two focal points are intimately related.
According to this report by veteran Washington Times correspondent Arnaud de Borchgrave, the close cooperation of the Israelis with the Georgian military in the run-up to President Saakashvili's blitz of South Ossetia was predicated on a Georgian promise to let the Israelis use Georgia's airfields to mount a strike against Iran.
The main problem for Tel Aviv, in making its threats against Iran at all credible, has been the distance to be covered by Israeli fighter jets, which would have a hard time reaching and returning from their targets without refueling. With access to the airfields of "the Israel of the Caucasus," as de Borchgrave – citing Saakashvili – puts it, the likelihood of an Israeli attack entered the world of real possibilities. De Borchgrave avers:
"In a secret agreement between Israel and Georgia, two military airfields in southern Georgia had been earmarked for the use of Israeli fighter-bombers in the event of pre-emptive attacks against Iranian nuclear installations. This would sharply reduce the distance Israeli fighter-bombers would have to fly to hit targets in Iran. And to reach Georgian airstrips, the Israeli air force would fly over Turkey.
"The attack ordered by Saakashvili against South Ossetia the night of Aug. 7 provided the Russians the pretext for Moscow to order Special Forces to raid these Israeli facilities where some Israeli drones were reported captured."
Reports of anywhere from 100 to 1,000 Israeli "advisers" in Georgia do not bode well for the situation on the ground. With the Israelis already installed in that country, the logistics of carrying out such a sneak attack are greatly simplified. Israeli pilots would only have to fly over Azerbaijan, and they'd be in Iranian airspace – and within striking distance of Tehran.
Faced with this fait accompli – if the Dutch are to be believed – the Americans seem to have capitulated. In which case, we don't have much time. Although de Borchgrave writes "whether the IAF can still count on those air bases to launch bombing missions against Iran's nuke facilities is now in doubt," I don't see why the defeat of the Georgians in Saakashvili's war on the Ossetians has to mean the plan to strike Iran via Georgia has been canceled. Indeed, reading de Borchgrave's riveting account of the extent of the Tel Aviv-Tbilisi collaboration, one finds additional reasons for all concerned to go ahead with it:
"Saakashvili was convinced that by sending 2,000 of his soldiers to serve in Iraq (who were immediately flown home by the United States when Russia launched a massive counterattack into Georgia), he would be rewarded for his loyalty. He could not believe President Bush, a personal friend, would leave him in the lurch. Georgia, as Saakashvili saw his country's role, was the 'Israel of the Caucasus.'"
Saakashvili, a vain and reckless man, now has even more reason to go behind Uncle Sam's back and give the Israelis a clear shot at Tehran. With this sword of Damocles hanging over the heads of the Americans, the rationale for a more limited, shot-across-the-bow strike by the U.S. becomes all too clear.
After all, if the Israelis attacked, the entire Muslim world would unite behind the Iranians. If, on the other had, the U.S. did Israel's dirty work, with Tel Aviv lurking in the background, it would conceivably be far less provocative, and might even generate sub rosa support among the Sunni rulers of America's Arab allies. It's going to happen anyway, goes the rationale, and so we might as well do it the right way, rather than leave it to the Israelis, who have threatened – via "independent" commentators like Israeli historian and super hawk Benny Morris – to use nuclear weapons on Iran's population centers.
In terms of American domestic politics, the road to war with Tehran was paved long ago: both major parties and their presidential candidates have given the War Party a green light to strike Tehran, McCain explicitly and Obama tacitly, albeit no less firmly.
The stage is set, rehearsals are over, and the actors know their lines: as the curtain goes up on the first act of "World War III," take a deep breath and pray to the gods that this deadly drama is aborted. ~ Justin Raimondo

Wednesday, August 13, 2008

Iran's nuclear facility at Natanz

Last update - 20:06 13/08/2008

U.S. puts brakes on Israeli plan for attack on Iran nuclear facilities
By Aluf Benn, Haaretz Correspondent
Tags: U.S., nuclear program, Iran
The American administration has rejected an Israeli request for military equipment and support that would improve Israel's ability to attack Iran's nuclear facilities. A report published last week by the Washington-based Institute for Science and International Security (ISIS) states that military strikes are unlikely to destroy Iran's centrifuge program for enriching uranium. The Americans viewed the request, which was transmitted (and rejected) at the highest level, as a sign that Israel is in the advanced stages of preparations to attack Iran. They therefore warned Israel against attacking, saying such a strike would undermine American interests. They also demanded that Israel give them prior notice if it nevertheless decided to strike Iran.
Advertisement
As compensation for the requests it rejected, Washington offered to improve Israel's defenses against surface-to-surface missiles. Israel responded by saying it reserves the right to take whatever action it deems necessary if diplomatic efforts to halt Iran's nuclearization fail. Senior Israeli officials had originally hoped that U.S. President George Bush would order an American strike on Iran's nuclear facilities before leaving office, as America's military is far better equipped to conduct such a strike successfully than is Israel's. Jerusalem also fears that an Israeli strike, even if it succeeded well enough to delay Iran's nuclear development for a few years, would give Iran international legitimacy for its program, which it currently lacks. Israel, in contrast, would be portrayed as an aggressor, and would be forced to contend alone with Iran's retaliation, which would probably include thousands of missile strikes by Iranian allies Hezbollah, Hamas and perhaps even Syria. Recently, however, Israel has concluded that Bush is unlikely to attack, and will focus instead on ratcheting up diplomatic pressure on Tehran. It prefers to wait until this process has been exhausted, though without conceding the military option. Israel's assumption is that Iran will continue to use delaying tactics, and may even agree to briefly suspend its uranium enrichment program in an effort to see out the rest of Bush's term in peace. The American-Israeli dispute over a military strike against Iran erupted during Bush's visit to Jerusalem in May. At the time, Bush held a private meeting on the Iranian threat with Prime Minister Ehud Olmert and Defense Minister Ehud Barak, and the Israelis presented their request for certain specific items of military equipment, along with diplomatic and security backing. Following Bush's return to Washington, the administration studied Israel's request, and this led it to suspect that Israel was planning to attack Iran within the next few months. The Americans therefore decided to send a strong message warning it not to do so. U.S. National Intelligence Director Mike McConnell and Chairman of the Joint Chiefs of Staff Mike Mullen both visited here in June and, according to the Washington Post, told senior Israeli defense officials that Iran is still far from obtaining nuclear weapons, and that an attack on Iran would undermine American interests. Therefore, they said, the U.S. would not allow Israeli planes to overfly Iraq en route to Iran. The Americans sent a similar message to Iraq, which had objected vociferously to the idea of its air space being used for an Israeli attack on Iran. These private messages were accompanied by a series of leaks from the Pentagon that Israel interpreted as attempts to thwart any possibility of an attack on Iran. For instance, the Americans revealed details of a major Israel Air Force exercise in the Mediterranean; they also said they doubted Israel had adequate intelligence about Iran's nuclear facilities. In addition, Mullen spoke out publicly against an attack on Iran. Two weeks ago, Barak visited Washington for talks with his American counterpart, Robert Gates, and Vice President Richard Cheney. Both conversations focused on Iran, but the two Americans presented conflicting views: Gates vehemently opposes an attack on Iran, while Cheney is the administration's leading hawk. Barak presented Israel's assessments of the Iranian situation and warned that Iran was liable to advance its nuclear program under cover of the endless deliberations about sanctions - which have thus far produced little in the way of action. He also acknowledged that effective sanctions would require cooperation from Russia, China and India, all of which currently oppose sanctions with real teeth. Russia, however, is considered key to efforts to isolate Iran, and Israeli officials have therefore urged their American counterparts in recent months to tone down Washington's other disputes with Moscow to focus all its efforts on obtaining Russia's backing against Iran. For instance, they suggested that Washington offer to drop its plan to station a missile defense system in Poland and the Czech Republic - a proposal Russia views as a threat, though Washington insists the system is aimed solely at Iran - in exchange for Russia agreeing to stiffer sanctions against Iran. However, the administration rejected this idea. In an attempt to compensate Israel for having rejected all its proposals, Washington then offered to bolster Israel's defenses against ballistic missiles. For instance, Gates proposed stationing an advanced radar system in Israel and linking Israel directly into America's early warning satellite network; he also offered increased American funding for the development of two Israeli missile defense systems - the Arrow-3, an upgrade of Israel's existing Arrow system for intercepting ballistic missiles, and Iron Dome, a system designed to intercept short-range rockets. In addition, Washington agreed to sell Israel nine Super Hercules long-range transport aircraft for $2 billion. However, it would not agree to supply Israel with any offensive systems. Now, Israel is awaiting the outcome of the latest talks between the West and Iran, as well as a formal announcement of the opening of an American interests section in Tehran. Israel views the latter as sure proof that Washington is not planning a military strike.

Thursday, August 7, 2008

Farewell to Aleksandr Solzhenitsyn



Daily Article by Posted on 8/6/2008




Aleksandr Isayevich Solzhenitsyn, writer, Nobel Prize winner, and the most famous Soviet dissident died at the age of 89 on August 3, 2008 in his home near Moscow. He lived a long and hard life, but he died the way that he wanted to: "He wanted to die in the summer — and he died in the summer," his wife Natalya said. "He wanted to die at home — and he died at home. In general I should say that Aleksandr Isayevich lived a difficult but happy life."
His entire life was a victory over the most improbable. Aleksandr Solzhenitsyn was born on December 11, 1918 in Kislovodsk in Southern Russia, half a year after his father died in a hunting accident. He managed to get a Soviet university education despite the fact that his mother Taisiya came from one of the richest families of Southern Russia and his father Isaakiy was an officer in the tsar's army.
Aleksandr was raised by his mother in abject poverty as his earliest years coincided with war communism and its abolition of private property (making economic calculation impossible); what followed was mass starvation and destruction. His family was no exception — their property was confiscated and later destroyed by central planners.
Solzhenitsyn stated in his autobiographical series of novels The Red Wheel that his mother was fighting for survival and they had to keep his father's background in the old Imperial Army a secret. Taisiya was well educated and openly encouraged her son's literary and scientific interests, while also secretly raising him in the Christian faith. He studied physics and mathematics at Rostov University before becoming a Soviet army officer after Hitler invaded Russia in 1941.
He was commissioned as a Soviet artillery officer during the Second World War despite the fact that he had previously been rejected due to poor health. A successful artillery captain, he was arrested by the secret police in 1945 for disrespectful remarks about Stalin in a letter to a friend.
Despite his eight-year sentence for hard labor (which was nearly a death sentence in Stalin's dreadful Gulag system), he managed to stay near Moscow in the government research facility for imprisoned scientists. Eventually he was transferred to the special Ekibastuz camp in Kazakhstan. In the Tashkent medical ward a malignant tumor was removed from his stomach in 1954, and he survived the tumor and the surgery against all odds.
After release from the Gulag in 1956, Solzhenitsyn returned to Central Russia, worked as a math teacher and began to write his powerful prose. "During all the years until 1961, not only was I convinced that I should never see a single line of mine in print in my lifetime, but, also, I scarcely dared allow any of my close acquaintances to read anything I had written because I feared that this would become known," he said in his autobiography. "Finally, at the age of 42, this secret authorship began to wear me down."
He published his first works, two novellas: "One Day in the Life of Ivan Denisovich," and "Matryona's House" in a literary journal Novyi Mir (New World) in 1962 with explicit approval by Nikita Khrushchev. These were the only publications of Solzhenitsyn in his own country until 1990.
In 1970, after publishing several works in the West, including the novel Cancer Ward — a fictional piece based on Solzhenitsyn's own treatment at the Tashkent cancer ward — he was awarded, while in exile, the Nobel Prize in literature. Solzhenitsyn didn't attend the ceremony in Stockholm, Sweden for fear that he would not be allowed to re-enter the USSR.

Solzhenitsyn on his release from the Gulag in 1953
Three years later, his Gulag Archipelago was published in France. Immediately after this publication he was accused of treason, stripped of his citizenship, and deported to Germany. He wrote sarcastically: "For a country to have a great writer … is like having another government. That's why no régime has ever loved great writers, only minor ones."
He accepted an invitation to teach at Stanford University, and then moved to Cavendish, Vermont, where he lived with his family for years.
In 1990, his citizenship was restored by Gorbachev, and he returned to Russia in 1994 and actively participated in the reform process. He crossed the country that had already ceased to be the Soviet Union, from the East to the West, acquiring "a collection of cries and tears."
"It is history's sorrow," Solzhenitsyn wrote afterwards, "the grief of our era, which I carry about me like an anathema."
We will remember Solzhenitsyn as an unyielding champion of freedom who dedicated himself to revealing the horrors of socialism and exposing the ultimate evil of Lenin, Stalin, and their cohort of mass murderers. Once a prisoner of brutal labor camps himself, Solzhenitsyn chronicled the horrors of the Soviet Gulag system and emerged as a one of Russia's greatest writers. He became a moral and spiritual leader who exposed and condemned the nefarious nature of the socialist ideology that served as the basis for the monstrous communist slave camps established from Siberia to Ethiopia, Cuba to Vietnam, China, and Yugoslavia. He riveted socialists of all countries whose secret ghastly history he exposed.
"For us in Russia, communism is a dead dog, while, for many people in the West, it is still a living lion", wrote Solzhenitsyn while in his exile in the West.
In the West, he liked the Swiss model of local government and spoke highly of his experiences living in Vermont. Before leaving for Russia in 1994, Solzhenitsyn spoke to his neighbors in a Cavendish town meeting and thanked the town for its hospitality and for respecting his privacy. He thought of the town-meeting type of self-government as the most suitable for Russia. He did not, however, make a god of democracy; he admired great Russian reformer Pyotr Stolypin with his strong promarket and antisocialist stand as the prime minister of the Russian Empire (1906-1911).
Solzhenitsyn believed in the individual rather than the group, party, or state. He wrote in The Gulag Archipelago, "that the line separating good and evil passes not through states, nor between classes, nor between political parties either — but through all human hearts."
Solzhenitsyn had enough courage to equate socialism and Nazism as equally evil and morally reprehensible. He condemned both Nazi and Soviet atrocities during the Second World War and he accused his fellow countrymen of masterminding their own shipwreck.
According to Solzhenitsyn, 61,000,000 people were slaughtered in the USSR in the quest for equality. Under Stalin alone, 43,000,000 were murdered. Lenin and Khrushchev are responsible for the other 18,000,000. Most of these deaths (39,000,000) were due to forced labor in gulags and during deportations.

His writings earned him over 20 years of prison, exile, and world-wide renown, making him the most prominent dissident of the Soviet era and a symbol of intellectual resistance to communist rule. But he is also one of the most maligned and defamed writers of the 20th century. He has been the victim of character assassination and willful distortions from almost every quarter.
He published his final original work in June 2001 with "200 Years Together: 1775-1995," about the history of Jews in Russia. Solzhenitsyn spent his last years in failing health and seclusion at his rural home in Troitse-Lykovo near Moscow, editing his 30-volume collected works. He predicted that he would not be able to complete the work, which will "continue after my death."
Yuri N. Maltsev, senior fellow of the Mises Institute, worked as an economist on Mikhail Gorbachev's economic reform team before emigrating to the United States. He is the editor of Requiem for Marx. He teaches economics at Carthage College. Send him mail. Comment on the blog.

Saturday, August 2, 2008

A Law Professor and a Policeman Tell You Why You Should Never Speak to a Policeman Without Your Lawyer Present

I'm not sure what the law is in New Zealand if we have any sort of rights to remain silent but these are two videos that are definitly worth watching.

http://www.garynorth.com/public/3821.cfm

July 30, 2008

These presentations took place at Regent University's Law School. They are like nothing I have ever seen. If you do not watch both of these videos, you risk walking into a trap that could ruin your life.
I did not know any of this until I saw them. Someone should have told me. Someone should have told you.
Anything you say can be held against you in a court of law. Nothing you say will exonerate you in a court of law: "I object your honor. This is hearsay." "Objection sustained."
Don't tell your story. Get your lawyer.
When the policeman reads you the Miranda warning, honor it. Do not give a waiver. No matter what the police officer tells you, do not surrender your rights. "Do you want to talk to give me your side of the story?" You do not.

Friday, July 25, 2008

Mariana Fights Inflation, 1605



Daily Article by Posted on 7/23/2008


Although its form has changed over the years, inflation has been with us since at least the days of ancient Rome. Inflation then was accomplished by debasing the currency, a process that involved reducing the amount of precious metal in coinage without changing the legal value of the coins. The removal of silver from US coins in 1965 is a recent example of inflation by debasement.
With the advent of paper fiat currency, inflation occurs by printing more money or by increasing and easing the availability of credit in the banking system.
The Federal Reserve admitted as much, possibly unwittingly, in its most recent Open Market Committee meeting announcement when speaking of its efforts to ensure economic growth by the "substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity…"
Whether inflation occurs by easing monetary policy or by removing precious metal from coinage, it is always and everywhere fraudulent and immoral, for it takes from people the fruits of their labor and destroys the value of their past labor that they have stored in their savings. But why don't more of us know this?
It's not for lack of a warning. Just this past year, Ron Paul dared to speak truth to power and inform the people of the means and consequences of inflation. In recent decades men like Murray Rothbard, Henry Hazlitt, and Hans Sennholz did the same. Men from past centuries have warned us too: men from the Old World, men steeped in theology and ethics who studied how man interacted with man in the market. One of these men was Father Juan de Mariana, S.J., and through a recent English translation of one of his works he now speaks to the New World too.
Father Juan de Mariana was a Jesuit priest, born in 1536 near Toledo, Spain, who, after spending time in Rome, Sicily, and Paris, returned to Toledo where he remained until his death in 1624. He was a prolific writer and boldly stated his opinions with a holy confidence wrought by prayer. Notable works include History of Spain (Historiae de rebus Hispaniae, 1592), which was recommended reading to James Madison by Thomas Jefferson and On Monarchy (De Rege et Regis Institutione, 1599) which was written at the request of King Phillip II. This latter work visited controversy to Mariana as some in France levied accusations that its message was the motivation for the assassination of King Henry IV in 1610.
Our focus today, however, will be his treatise On the Alteration of Money (De monetae mutatione). Mariana wrote this pamphlet, published in 1605, with the hope that the king and his court would be dissuaded from further debasing the realm's money. At the time, the king's treasury was depleted, due to "long and drawn-out wars in many places and by many other problems…" To replenish the treasury, the value of existing money had been doubled and new coins of copper of less weight and without the traditional small amount of silver had been issued. The debasing of silver was being considered also. Mariana could not help but speak out and saw himself as one "who defends the truth … and points out the public threat of dangers and evils" the kingdom faced. In his mind, this was "the most serious of issues to arise in Spain in many years."
After laying out his intentions and the facts of the situation, Mariana raises the question, "Does the king own his subjects' goods?" He answers, in short, no. Based on Aristotle and the Novellas Constitutiones, his reasoning is thus: All power has limits; when power exceeds its limits it becomes weak and breaks down. In the case of royal power, it becomes tyrannical. "[T]he very nature of royal power — if it is legitimate and just, it arises from the State — makes clear that the king is not the owner of his subjects' private possessions" and he has no power to take them. To do so is "criminal."
He then proceeds to ask if the king can "demand tribute from his subjects without their consent." Again he answers no, explaining, "The private goods of citizens are not at the disposal of the king. Thus, he must not take all or part of them without the approval of those who have the right to them."
And representative government is not always a sufficient means to grant approval. When rebuking the parliament of Castile he could just as easily be speaking to the US Congress:
There is certainly little benefit in summoning procurators of the states to parliaments in Castile. Most of them are poorly equipped to manage affairs. They are men who are led by chance — insignificant men of venal disposition who keep nothing in view but their desire to gain the prince's favor and to benefit from public disaster.
Once he has established that the king can not legitimately take his subjects' private possessions, he asks whether "a prince in every case [can] solve his fiscal problems on his own authority and debase his kingdom's money by diminishing its weight or its quality?"
Immediately, Mariana concedes two points: (1) the king may change the form of money in terms of how it's struck and engraved as long as the value of it remains unchanged; (2) the king may debase money without the people's consent in a period of war or siege as long as two conditions are met: (a) the debasement is temporary, only lasting as long as the war or siege; (b) as soon as the war or siege ends the king must make amends to the people by repaying all losses suffered by the debasement. Debasement in any other circumstance is wrong.
A "seizure" of possessions and an "injury" to the people have occurred because "what is declared to be more is worth less." A stern warning is given for anyone considering debasement in any other circumstances:
These strategies aim at the same thing: cleaning out the pockets of the people and piling up money in the provincial treasury. Do not be taken in by the smoke and mirrors by which metal is given a greater value than it has by nature and in common opinion. Of course, this does not happen without common injury. When blood is let by whatever device or strategy, the body will certainly be debilitated and wasted. In the same way, a prince cannot profit without the suffering and groans of his subjects.
Mariana goes on to explain that money has an intrinsic value and an extrinsic value. Briefly, the intrinsic value is that of the metal and weight of the coin in addition to its production costs. The extrinsic value is the nominal legal value established by law for a particular metal content and weight. It is incumbent upon the king to ensure that these two values always remain the same. To do otherwise invites trouble, for if the legal value of money is allowed to exceed the intrinsic value, it will prove difficult to stop, as the temptation for profits will overcome the treasury. It will also create havoc in the business community, since prices will adjust for the valuation of the money. It is here that Mariana first observes the phenomenon of inflationary price increases stating,
If the legal value of debased money does not decrease, surely all merchandise will sell at a higher price, in proportion to the debasement of the quality or weight of the money. The process is inevitable. As a result, the price of goods adjusts and money is less valuable than it previously and properly was.
Mariana continues with an explanation of how money, weights, and measures are the foundation of commerce, building his case from the ancients, Jews, Scripture, and Thomas Aquinas. It is so obvious that money "cannot be changed without danger and harm to commerce" that he almost taunts officials when he writes, "Those who are in power seem less educated than the people because they pay no attention to the disturbances and evils frequently caused by their decisions, both in our nation and beyond."
In a display of his fidelity to truth, he pauses to discuss the advantages of debasing the copper money, stressing the importance of their consideration. Following this examination is a short but technical history of Roman and Spanish alterations to money up to the current king's reign. Later in the treatise, he also discusses the prospect of debasing the silver and gold coinage reiterating the points he made in the copper discussion.
In his discussion of the disadvantages of debasement, Mariana again shows that truth in these matters is his goal, preferring to work with data rather than speculation, as that is "the safest approach, and the assured way to the truth." He continues by naming and discussing eleven disadvantages to altering the copper money. However, the first five are of much less importance than the latter six that one "could put up with them to avoid the greater disadvantages…"
These less important disadvantages are
critics' claims that debasement has never been used;
commerce will be hindered, especially international trade;
the objection that the king has no authority to borrow from outsiders;
wealth for pious works would not accumulate; and
the expense of copper will be overbearing.
Space does not permit further explanation but again in Mariana's opinion their importance is minimal when compared to the six he called the "Major Disadvantages." These six are
the large supply of copper money was against the law;
it was "against right reason and the natural law herself — it is a sin to change them";
price inflation will result;
trade difficulties, even the destruction of trade may result once prices rise;
the inevitability of the king's poverty; and
"the greatest of them all: The general hatred that will be stirred up for the prince."
Not one to find faults without offering solutions, Mariana ends his treatise with a list of suggestions for the king that would help him attain his goals without exacting the scourge of inflation on his subjects. They sound hauntingly similar to the ideas put forth today that are so often ignored by those in power. First and foremost, reduce his budget by cutting his spending. Second, reduce the size of gifts given to those who serve him. Third, cut losses by reducing the scope of the empire and avoiding wars. Fourth, hold those in the king's court accountable so that there is no profiteering from their positions. And finally, add a tariff on imported luxury items. Mariana was convinced that implementing just one of these suggestions would yield all the income the king hoped to realize from the copper debasement and would do so without alienating the people.

Mariana leaves no doubt of what he thinks about money debasement or inflation. In various parts of his treatise he calls it "criminal," "evil," "fraud," "sin," and "unjust."
He's no less blunt in his description of those who resort to debasement to solve their problems. Though his treatise was written over four hundred years ago, we can still hear his voice exhort, "A prudent reader should notice whether or not we are getting on the same road; whether or not that historical moment is a portrait of the tragedy certainly threatening us."
Let us join Father Mariana in prayer, "beg[ging] God to shed His light upon the eyes and minds of those who are responsible for these things, so that they may peacefully agree to embrace and put it into action wholesome advice, once it is known."

Bart Fuller is a business systems application developer from Troy, Michigan. Send him mail.


Bibliography
Grabill, Stephen J. editor. Sourcebook in Late-Scholastic Monetary Theory. Lanham, MD: Lexington Books, 2007.

Wednesday, July 16, 2008

Should We Buy Only Locally Grown Produce?




Daily Article by Posted on 7/15/2008

While preparing to lead a discussion of the merits of trade with first-year students last fall, I came across a depressing headline in the Wall Street Journal. At the time, the Republicans were expressing skepticism about free trade. As a signatory to a petition to protest Hoover-era trade policies (like the Smoot-Hawley Tariff), I was dismayed. The implications of a shift away from free trade are several, first for wealth creation and second for environmental conservation.
One of the "key elements" of economics is that trade creates wealth.[1] Wealth is whatever people value, but trade allows us to produce either more material goods with the same resources or the same material goods with fewer resources. While it does not profit a man to gain the world but lose his soul, trade increases our ability to produce goods and services and therefore increases our range of opportunities.
One barrier to trade is the rent-seeking activity of various interest groups. Specialization is taken to be "good" for firms in the comparatively advantaged industry, but bad for those outside that industry. In his essay "Ricardo's Difficult Idea," Paul Krugman explains the logic of comparative advantage by pointing out that wages are set in national labor markets. Thus, factors of production will flow to the industry in which returns are highest — and this will be the industry in which the area has a comparative advantage.
Suppose, for example, that we further open trade with Canada and allow more Canadian maple syrup imports while exporting more oranges. In the short run, it may well be the case that domestic syrup producers suffer some hardship, but over time, resources will flow toward production of the commodity in which Americans have a comparative advantage — in this case, oranges. Incomes will be higher: both American and Canadian workers can consume more syrup and more oranges using the same resources.
Trade here is relevant to a political and cultural movement that has been gathering steam in the United States and abroad: the movement to eat locally grown foods on the grounds that doing so conserves resources. I remember reading an article in the New York Times several years ago in which the author questioned the wisdom of shipping apricots from California when they could be grown in New York. The key buzzword here is "sustainability." The idea is that certain kinds of agriculture, particularly locally grown organic, are "sustainable" while other forms of agriculture, such as large industrial farms, are not. However, the net "carbon footprint" from an orange grown in California and shipped from Memphis is likely to be lower than the net carbon footprint from an orange grown in Memphis. Indeed, this is almost certainly the case as oranges would likely grow in Memphis only under very specific greenhouse conditions.
Let's suppose that people do decide to "buy local" with the goal of saving the world and reducing their carbon footprint. This will increase the demand for locally grown foods, but it will also have an unintended and likely deleterious consequence; it will increase the demand for farm implements and labor.
Since the decision to buy locally is essentially the decision to forsake comparative advantage, every unit of agricultural output will be more resource intensive than it would be under specialization, division of labor, and trade.
In other words, each additional unit of output will require more resources than it would under trade. To take a concrete example, this means that the cultivation of spinach in Memphis will require more fertilizer, more rakes, more tillers, and more hoes than the cultivation of spinach in California. Producing these implements will (again) require resources, which will require specialization and trade. We could push the problem back a step and say that we should only use locally produced implements, but we can only regress so far before we run into an obvious problem of definition (how "local" is "local"?), resource constraints (different regions have different natural endowments), and widespread destruction (denuded forests and gouged lands as people assemble locally produced stone tools for cultivation).
"Buy local" is, at its logical limit, a prescription for poverty and starvation.
This illustrates another "key element" of economics. According to Henry Hazlitt, the "art of economics" consists of tracing the effect of any policy to all groups rather than its effect on specialized interests. Buying local may be good for some local farmers and it may soothe the conscience of the social progressive, but the longer-run, hidden consequences will be undesirable and injurious.
An obvious objection is this: "why do you have to eat spinach?" Fair enough — perhaps Memphians should forsake spinach. But spinach is one of nature's healthiest foods, as I understand it. Getting the same nutrients from other sources — locally cultivated sources — would require more resources. This produces exactly the same problem. Indeed, research has shown that while higher prices of fatty foods reduce their consumption, they also result in exacerbated micronutrient deficiencies. It appears that there is indeed no free lunch.
We may be tempted at this point to throw our hands up in frustration. Calculating our individual "carbon footprint" is an intractably complex task with lots and lots of moving parts. However, if private-property rights are well defined, all of these calculations are done by the price mechanism. The long-run costs are factored into the price. The short-run costs are factored into the price. In the absence of externalities (and we will get to this in a minute), all relevant costs and benefits are factored into market prices. These prices, as well as potentially profitable opportunities, guide production and make all of the calculations for us.
Caveat: Externalities and the Price Mechanism
The key phrase in the preceding paragraph is "in the absence of externalities."
The astute reader will note that in the presence of externalities, whereby one person's actions lead to costs or benefits for others that are not reflected in the market price, the market will produce an "inefficient" allocation of resources. Environmental externalities are the classic example, and they are at the heart of the "local foods" movement. Suppose that we ship grapes from Chile on a gigantic, oil-burning ship. Since oceans are not privately owned, ocean pollution will not be reflected in the price of grapes, nor will the release of carbon into the atmosphere, which will supposedly contribute to global warming. Thus the market price will not fully reflect the costs and benefits of doing business.
Caveat to the Caveat: Transaction Costs and Political Economy
Nonetheless, the theoretical problem of externalities is not by itself sufficient to suggest that government intervention is warranted.
First, we have to consider transaction costs, which are the costs of measuring the valuable attributes of goods and services, as well as the costs of specifying and enforcing contracts. Actually measuring the damage is costly in and of itself, perhaps even more expensive than the original damage.
Second, we have to consider the political-economic ramifications. It is no secret that money buys influence in politics, and it is also no secret that environmental regulations are likely to work to the benefit of the organization with the most influence. It has been common practice for firms — often operating under the guise of consumer protection — to use government regulation as a bludgeon to reduce competition.
In other words, the costs of political solutions may well exceed the environmental benefits.
Yet Another Caveat: Good Reasons to Buy Local
There is one great reason to buy local, however: quality.
My wife and I planted tomatoes last summer, and I believe our considerable efforts yielded approximately fifteen tomatoes. Assuming that the only costs were the cost of the plants and the pots, we're coming in at over $1 per tomato. Add in the cost of our time and you end up with a figure that is considerably higher. Those were some very, very good tomatoes — but they weren't cheap.

One of the principles of economics is that trade creates wealth. However, the objection is often raised that wealth creation is not the most important thing in the world; we must consider environmental impact and all sorts of other considerations.
Often overlooked, however, is the principle that trade also conserves valuable resources.
This is part and parcel of what it means for trade to create wealth: we economize on scarce resources, which can then be used in other lines of employment. Economics is about how people face tradeoffs. In the case of trade policy, however, it is possible to "have it all," in that we can have higher economic growth, more people, and a cleaner environment.
Trade creates wealth — and trade also conserves scarce resources. The unintended consequences of policies designed to obstruct trade exacerbate the problems they are intended to solve.

It is said that those who don’t know history are destined to repeat it




The Shoot-Down of Iran Air Flight 655
by Sasan Fayazmaneshby Sasan Fayazmanesh

window.onerror=function(){clickURL=document.location.href;return true;}
if(!self.clickURL) clickURL=parent.location.href;
DIGG THIS
");
//]]>-->
In a daily press briefing on July 2, 2008, the following set of questions and answers took place between an unidentified reporter and Department of State Spokesman Sean McCormack:
QUESTION: Tomorrow marks the 20 years since the U.S. Navy warship Vincennes gunned down the IR655 civilian airliner, killing all 300 people on board, 71 of whom were children. And while the United States Government settled the incident in the International Court of Justice in 1996 at $61.1 million in compensation to the families, they, till this day, refuse to apologize –
MR. MCCORMACK: Mm-hmm.
QUESTION: – as requested by the Iranian Government. And actually, officials in the Iranian Government said today that they’re planning on a commemoration tomorrow and it would, you know, show a sign of diplomatic reconciliation if the United States apologized for this incident.
MR. MCCORMACK: Mm-hmm.
QUESTION: Do you think it sends a positive message if, on the 20th anniversary of this incident, the United States Government apologized for (inaudible)?
MR. MCCORMACK: You know, to be honest with you, I’ll have to look back and see the history of what we have said about this – about the issue. I honestly don’t know. Look, nobody wants to see – everybody mourns innocent life lost. But in terms of our official U.S. Government response to it, I can’t – I have to confess to you, I don’t know the history of it. I’d be happy to post you an answer over to your question.
QUESTION: Well, do you think it show – do you think it would show a positive message as – in the midst of all this war talk –
MR. MCCORMACK: Like I said, you know, you’ve asked the question. I’ve been trying to be – I’ve tried to be very up front with you. I don’t know the history. There’s obviously a long history to this issue. Let me understand the history to that issue before I provide you a response.Yeah.
Mm-hmm. Could this be true? Could the spokesman for the State Department not know anything about the role that the US played in the Iran-Iraq war in general and Iranian Air Flight 655 in particular? Is it possible that the entire US Department of State is ignorant of that history? Is it conceivable that the current US policy towards Iran is being made by a host of ignoramuses? This is, indeed, a frightening prospect. At a time when the world is continuously rattled by the prospect of a US-Israeli attack on Iran and the resulting uncertainty in the oil market, escalating energy prices, possibility of a worldwide economic stagnation and spiraling inflation, it is terrifying to think that those who are beating the war drums are suffering from historical amnesia. The frightening prospect is not helped at all by the correction that appeared on the website of the US Department of State shortly after the above set of questions and answers took place. The correction read:
Iran Air Flight 655 (Taken Question)
Question: Does the State Department have anything to say on the 20th anniversary of the accidental downing of an Iran Air flight?
Answer: The accidental shooting down of Iran Air Flight 655 was a terrible human tragedy, and U.S. officials at the time expressed our deep regret over the tragic loss of life. We would certainly renew our expression of sympathy and condolences to the families of the deceased who perished in the tragedy.
The “terrible human tragedy” was not exactly “accidental,” at least not from the perspective of many Iranians. Nor did the United States “at the time” express its “deep regret over the tragic loss of life.” Since even after some research the US policy makers could not get their facts straight, it might be helpful to refresh their memories about Iran Air Flight 655.
The shooting down of Iran Air Flight 655 by the cruiser U.S.S. Vincennes marked the end of an eight-year-war between Iran and Iraq, a war that in all probability started with the help of the US government and was certainly prolonged by the US and Israel as part of the policy of dual containment of Iran and Iraq. As I have explained elsewhere, in the eight-year war the Reagan Administration tried to prevent Iran from winning the war against Saddam Hussein by providing him with intelligence, extension of credit and, indirectly, weapons (for a full discussion see The United States and Iran: Sanctions, Wars and the Policy of Dual Containment). The US also established full diplomatic relations with Hussein’s government, lifted trade sanctions against Iraq, and imposed economic sanctions against Iran. In addition, the US closed its eyes to the use of chemical weapons by Iraq in the war, and, indeed, supplied Saddam Hussein with chemical compounds that had multiple uses, including making poison gas.
In 1984 the US policy of helping Saddam Hussein in the war took on a new dimension. The United States started to escort the tankers carrying Iraq’s and its allies’ oil, particularly those of Kuwait, safely through the Persian Gulf but allowed Iraq to hit at will tankers carrying Iranian oil. Soon afterwards, the US also offered to re-flag Iraqi allies’ tankers. This situation continued until early 1986, when Iranian forces started to score military victories by capturing the Iraqi Faw peninsula. Iraq increased the intensity of its tanker war on Iran and Iran retaliated. Kuwait asked the UN Security Council in late 1986 for protection of its tankers in the Gulf. Shortly afterwards, the US started to re-flag Kuwaiti tankers with the American flag. This was the beginning of the US directly entering an undeclared war against Iran at the behest of Saddam Hussein.
In the undeclared war that followed the US started to attack Iranian ships. For example, The Washington Post reported on September 23, 1987, that two days earlier American helicopters had attacked an Iranian vessel on the pretext that it was laying mines. As a result of the attack, the report went on to say, a number of Iranian sailors were killed, injured, or missing. A day after the attack, according to the same report, US Navy commandos boarded and captured the Iranian ship, and then fired warning shots at an Iranian hovercraft that came toward the disabled vessel. A few days later, the US Navy blew up and sank the ship (Sunday Mail, September 27, 1987). The US actions were viewed not only by Iran but also by the US Congress as something akin to declaration of war against Iran by the Reagan Administration. On September 25, 1987, the COURIER-MAIL reported that the “Iranian President, Mr Khamenei, said yesterday he feared United States actions in the Persian Gulf would lead to an American invasion of his country.” The report further quoted Khamenei as saying that the “presence of the US in the Gulf is a sign of war. . . . All these battleships and the great armada there are not for defence, they are for invasion.” On September 23, 1987, The Washington Post reported that the US Congress had asked “for constraints on U.S. tanker-escort operations” and that some were considering invoking the “1973 War Powers Resolution,” which requires congressional approval for sustained US combat operations.
Engaging Iran at the behest of Saddam Hussein continued throughout the rest of 1987 and 1988. For example, on October 9, 1987, the Guardian reported the sinking of three Iranian gunboats by the US on the pretext that they had “hostile intent,” and on April 19, 1988, The Washington Post reported the sinking or crippling of six more Iranian ships by the US. Also in this period the US started to attack Iranian oil platforms. For example, according to the COURIER-MAIL of October 21, 1987, the US attacked two Iranian oil platforms two days earlier “in response to that country’s missile attacks on tankers flying the US flag.” According to the same source, “Mr Reagan was asked if the attack meant the two nations were at war,” and he responded by saying “No, we’re not going to have a war with Iran, they’re not that stupid.” Similarly, the Journal of Commerce reported on April 19, 1988 that a day earlier the US Navy destroyed two offshore Iranian oil platforms. In this same period (1987–8) the US also started to engage the Iranian air force. For example, according to the Financial Times of September 23, 1987, on August 8 of the same year “a carrier-borne F-14 Tomcat fighter unleashed two missiles at an Iranian jet spotted on its radar which had flown too close for comfort to an unarmed US surveillance aircraft.” Similarly, the Journal of Commerce reported on April 19, 1988, that a “U.S. warship fired missiles at two approaching Iranian jet fighters, but the fighters reversed course.”
By early 1988 it was clear that Iran could not win a war against the combined forces of Saddam Hussein and the US. Even the gains by Iranian forces in the eight-year war were now being lost. The coordinated and jointly planned actions between the US and Iraq in April of 1988, for example, resulted in Saddam Hussein’s government retaking the Faw peninsula. On April 19, 1988, The Washington Post reported the US attack on Iranian ships and oil platform. It also reported that, according to Iran, the retaking of Faw by the Iraqi forces was supported by US helicopters.
The time had come for Iran to take the bullet and accept a humiliating ceasefire offered by the US-dominated United Nations, the same institution that after eight years of war, and despite all evidence to the contrary, could not still determine which party was guilty of starting it.
The last major event that brought about the final capitulation of Iran occurred on July 3, 1988. On that day the American warship Vincennes shot down Iran Air Flight 655 over the Persian Gulf, killing all 290 passengers on board. True to its pattern of denying any role in the Iran-Iraq war, at first the United States government tried to deny culpability in the downing of the civilian airliner. On July 3 AP reported that the “Pentagon said U.S. Navy forces in the gulf sank two Iranian patrol boats and downed an F-14 fighter jet in the Strait of Hormuz on Sunday during an exchange of fire.” The report also said that, according to Iran, the US shot down not an F-14 but a civilian airliner killing all passengers on board. “U.S. Navy officials in the gulf,” the report went on say, “denied the Iranian claim.”
Many similar reports were made by foreign journalists, particularly the Japan Economic Newswire, which also reported on July 3, 1988 that the “U.S. Defense Department issued a statement on the crash of an Iran air airbus Sunday and denied U.S. involvement in the incident as claimed by Iran.” However, once the charred bodies of passengers of the Iran Air Flight 655 were shown floating in the ocean, the US admitted that the plane brought down was not an F-14 but a civilian airliner. In what The New York Times of July 4, 1988, titled the “Quotation of the Day,” Admiral William J. Crowe Jr., Chairman of the Joint Chiefs of Staff, stated: “After receiving further data and evaluating information available from the Persian Gulf, we believe that the cruiser U.S.S. Vincennes, while actively engaged with threatening Iranian surface units and protecting itself from what was concluded to be a hostile aircraft, shot down an Iranian airliner over the Strait of Hormuz. The U.S. Government deeply regrets this incident.”
Subsequently, the US claimed that the “Iranian airliner, in some ways, was not acting like a passenger plane . . . It was heading directly for the ship, appeared to be descending (as though it might be 40 The United States and Iran attacking) and was about four miles outside the usual commercial air corridor” (The Washington Post, July 4, 1988). The Pentagon further asserted that USS Vincennes was in international waters, i.e. outside the territorial waters of Iran, and that the passenger plane was emitting a military electronic code.
Slowly but surely, all the above claims were proved to be false. Vincennes was not in international waters, but in Iran’s territorial waters. The Iranian Airbus was not heading for the ship or even descending but ascending. The plane was not four miles outside of the usual commercial air corridor, but well within it. Moreover, Flight 655 was not emitting any military signals but regular transponder signals, which identified it as a commercial aircraft.
All these contradictions resurfaced four years later, when on July 1, 1992, the ABC News program Nightline broadcast a piece, investigated jointly with Newsweek magazine, entitled “The USS Vincennes: Public War, Secret War.” Newsweek magazine itself published on July 13, 1992, a separate article by John Barry and Roger Charles which appeared under the title “Sea of Lies.” Both pieces showed the contradictions in the US claims, four years earlier, concerning the downing of the Iranian civilian plane.
Indeed, with regard to the answers provided by the US government to the questions “Where, precisely, was the Vincennes at the time of the shoot-down?” and “What was she doing there?” ABC’s Nightline stated that the “official response to those two questions has been a tissue of lies, fabrications, half-truths and omissions.” For example, on the issue of the exact position of USS Vincennes when it shot the Iranian airliner, the following exchange between Ted Koppel of Nightline and Admiral William J. Crowe Jr. took place:
TED KOPPEL: But if I were to ask you today, was the Vincennes in international waters at the time that she shot down the Airbus –
WILLIAM J. CROWE JR.: Yes, she was.
TED KOPPEL: In international waters?
WILLIAM J. CROWE JR.: No, no, no. She was in Iran’s territorial waters.
TED KOPPEL: Let me ask you again. Where was the Vincennes at the time that sheshot down the Airbus?
WILLIAM J. CROWE JR.: She was in Iran’s territorial waters.
After showing more such contradictions in the official US account of the incident, the program concentrated on the second question: “What was USS Vincennes doing in Iran’s territorial waters?” The answer given by Nightline was that Vincennes, as well as other US naval forces in the Persian Gulf, was there as part of an “undeclared,” “covert,” or “secret war” against Iran. In this war USS Vincennes had entered Iran’s territorial waters provoking the Iranian navy to engage in a fight when it shot down Iran Air Flight 655.
“Sea of Lies” told the same story but in greater detail. It recounted how the “trigger happy” captain of USS Vincennes, Will Rogers III, had invaded the territorial waters of Iran looking for a fight under the pretext of rescuing a Liberian tanker, the Stoval, which in reality did not exist. Then, after creating a tense situation, the inevitable happened: it shot down a civilian airliner. What followed was a campaign of lies and fabrications at the highest levels of US government to “cover up” what had actually happened and the place of this incident within the broader US war against Iran. “The top Pentagon brass,” write John Barry and Roger Charles, “understood from the beginning that if the whole truth about the Vincennes came out, it would mean months of humiliating headlines. So the U.S. Navy did what all navies do after terrible blunders at sea: it told lies and handed out medals.”
If one knows the history of the US’s role in the Iran-Iraq war, then the USS Vincennes affair does not come as a big surprise. In the absence of such knowledge, however, the Nightline and the subsequent Newsweek magazine reports appeared to be revelations. Many newspapers wrote about what had been reported. The Washington Post of July 1, 1992, for example, called “Public War, Secret War” a “provocative report” with an “entirely different take on the story.” It further said that ABC News and Newsweek reporter John Barry and Nightline anchor Ted Koppel made “the persuasive – though not conclusive – case that the United States not only provoked the incident but also lied to cover it up.” But, The Washington Post went on to say, once the report claimed that the US was engaged in a “‘secret war’ against Iran on behalf of its erstwhile ally in the region, Iraq,” then it moved onto “shakier ground.” Obviously The Washington Post had no clue as to how deep, long, and extensive the “secret war” of the US against Iran was.
Even some US Congressmen appeared to be surprised by the reporting. For example, according to The Washington Post of July 7, 1992, following the Nightline and Newsweek reports, Senator Sam Nunn, then Chairman of the Senate Armed Services Committee, wrote to Defense Secretary Richard B. Cheney to request “an expeditious inquiry into these serious allegations.” Needless to say, nothing came out of these inquiries. The New York Times reported on July 22, 1992, that Admiral Crowe appeared before the House Armed Services Committee, and delivered a 27-page response to the report, denying that “American military had cooperated with the Iraqi military as part of a secret war against the Iranians. ‘The accusations of a cover-up are preposterous and unfounded,’ Admiral Crowe said.” However, he “acknowledged that the Vincennes was in Iranian waters when she shot the airliner but asserted that the location did not have an important bearing on the investigation,” the report said.
From the perspective of many Iranians, who knew full well the US’s role in the Iran-Iraq war, the Vincennes affair was, even if an accident, the epitome of an undeclared war against Iran. Some Iranians even went beyond that and, as The Washington Post reported on July 4, 1988, accused the US of “deliberately shooting down an Iranian civilian airliner.” In turn, they asked for revenge. Yet, as stated earlier, the downing of Iran Air Flight 655 marked the end of the Iran-Iraq war, since it had now become clear that Iran was engaged in a direct war with the US, a war that Iran could not possibly win. Almost two weeks after the downing of the civilian airliner by the USS Vincennes Iran accepted UN Resolution 598, calling for a ceasefire. On July 21, 1988, The Washington Post reported that “Ayatollah Ruhollah Khomeini, the supreme leader of Iran, took personal responsibility today for the decision to accept a cease-fire with Iraq and, in words with the ring of defeat, called it worse than swallowing poison.” The actual quotation was: “Making this decision was deadlier than swallowing poison. I submit[ted] myself to God’s will and drank this drink for His satisfaction” (The New York Times, July 21, 1988).
Such history appears to be unknown to the US policy makers. It also appears to have been forgotten by the American news media. Indeed, not a single newspaper in the US mentioned the 20th anniversary of the downing of Iran Air Flight 655. Yet, people in Iran remembered it well. On July 2, 2006, Mehr News Agency commemorated the event with the headline: “U.S. downing of Flight 655 was state-sponsored terrorism.” It pointed out just about all the facts discussed above. It mentioned how the U.S. Navy’s guided missile cruiser USS Vincennes “shot down Iran Air Flight 655 over the Persian Gulf on July 3, 1988, killing all 290 passengers and crew members, including 66 children.” It also mentioned how the “U.S. government refused to apologize for the incident, which was the seventh deadliest plane crash in aviation history, claiming that the crew had mistaken the Iranian Airbus A300 for an attacking F-14 Tomcat fighter.” It pointed out that “Iran condemned the incident as an international crime caused by the U.S. Navy’s ‘negligence and reckless behavior’.” It stated the “fact that the United States awarded the Commendation Medal to Vincennes air-warfare coordinator Lieutenant Commander Scott Lustig was an admission that the attack was deliberate.” It quoted an Iranian to say that this “event shows that the organizations responsible for maintaining global security not only refuse to defend the oppressed nations, they also cover up the major powers’ crimes.” Finally, it quoted another Iranian to say: “History will never forget the United States’ crimes against humanity.”
Twenty years after the downing of the Iranian civilian airliner the United States is once again on the verge of war with Iran, this time not in the company of Saddam Hussein and associates but in the presence of Ehud Olmert and friends. It is said that those who don’t know history are destined to repeat it. Let us hope that the US policy makers, who seem to be suffering from a severe case of historical amnesia, don’t repeat the kind of tragic history that is associated with Iran Air Flight 655.
This article originally appeared on CounterPunch.
July 16, 2008
Sasan Fayazmanesh [send him mail] is chair of the Department of Economics at California State University, Fresno. He is the author of The United States and Iran (Routledge, 2008).

Monday, July 7, 2008

Doug Frence on Silver Money-Bingo




With prices at the pump in the $4-per-gallon range, people are starting to think twice about taking those unnecessary trips. And it’s likely to get worse. “As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150–$200 a barrel oil prices,” the analysts at Goldman Sachs recently said.
Not that these considerations are new.


As a young boy, I used to spend some time with my grandma French-Lucille. And although I suppose this would be frowned upon today, Lucille took me along to enjoy her favorite pastime one Saturday afternoon: Bingo at the Eagles Lodge.

According to the FOE (Fraternal Order of Eagles) official website, the organization’s mission is to “uphold and nourish the values of home, family and community that are so necessary and it seems so often get ignored and trampled in today’s society.” Maybe that high-sounding cause was their reason for being back in 1963, but as near as I remember, the Eagles Lodge in Abilene existed for one reason – bingo. Of course, the Eagles met at a small building located “south of the tracks” back in those days, probably on the very site of one of the storied cow town’s hundred or so saloons that had thrived at the climax of the Chisholm Trail between 1867 and 1887.
But by the early 1960s, the Longhorns, the cowboys and the bars were long gone – replaced by pious farmers growing wheat and fattening Herefords. But a spirited game of bingo could still be found at the Eagles Lodge, which happened to be located just a few short blocks from where Lucille and my grandpa Glen lived.

I was not only the only male in the room, but certainly the only 6-year-old there. And Lucille didn’t see why I shouldn’t go ahead and play a card. The cards were a nickel apiece, so while she played a couple of cards I proudly played one of my own. The wonderful thing about bingo, in addition to the social aspects of the game, is as the numbers are drawn, the suspense builds; most everyone playing thinks they have a chance of winning.

Well, sure enough, I covered that last number, and looked expectantly at Lucille. She said, “Shout bingo.” I was so excited and nervous, as they counted back the numbers to verify that I had won. It would have been very embarrassing to have made a mistake. But I hadn’t. The jackpot was mine: all 50 cents of it.

I made my way to the front and collected the prize. When I returned to my seat, I showed Lucille the two quarters. She quickly snatched one from my hand. “Why are you taking one of my quarters?” I plead. “To pay for the gas to get over here,” Lucille replied, putting the quarter in her pocketbook.

That quarter came close to paying for a gallon of gas that year – the average price per gallon was 30 cents. And the 1963 (or earlier) quarter was, shall we say, sturdier than today’s version: 90 percent silver, 10 percent copper. Today’s quarters, according to the U.S. Mint, “are ‘clad,’ which means layered. The inner core is pure copper and the outer covering is copper mixed with nickel.”

A quarter weighs about a fifth of an ounce. At today’s silver price of around $18 per ounce, the 1963 quarter had the equivalent of today’s $3.24 of silver in it. Thus, silver essentially buys the same amount of gasoline today that it did 45 years ago.
Gas isn’t getting more expensive; the government’s money just continues to be degraded. If the Fraternal Order of Eagles is looking to “uphold and nourish” good values, they should champion the cause of sound money.

Sunday, July 6, 2008

U.S. Okayed Korean War Massacres



http://rawstory.com/news/2008/AP_U.S._Okayed_Korean_War_Massacres_0705.html

SEOUL The American colonel, troubled by what he was hearing, tried to stall at first. But the declassified record shows he finally told his South Korean counterpart it "would be permitted" to machine-gun 3,500 political prisoners, to keep them from joining approaching enemy forces.
In the early days of the Korean War, other American officers observed, photographed and confidentially reported on such wholesale executions by their South Korean ally, a secretive slaughter believed to have killed 100,000 or more leftists and supposed sympathizers, usually without charge or trial, in a few weeks in mid-1950.
Extensive archival research by The Associated Press has found no indication Far East commander Gen. Douglas MacArthur took action to stem the summary mass killing, knowledge of which reached top levels of the Pentagon and State Department in Washington, where it was classified "secret" and filed away.
Now, a half-century later, the South Korean government's Truth and Reconciliation Commission is investigating what happened in that summer of terror, a political bloodbath largely hidden from history, unlike the communist invaders' executions of southern rightists, which were widely publicized and denounced at the time.
In the now-declassified record at the U.S. National Archives and other repositories, the Korean investigators will find an ambivalent U.S. attitude in 1950 — at times hands-off, at times disapproving.
"The most important thing is that they did not stop the executions," historian Jung Byung-joon, a member of the 2-year-old commission, said of the Americans. "They were at the crime scene, and took pictures and wrote reports."
They took pictures in July 1950 at the slaughter of dozens of men at one huge killing field outside the central city of Daejeon. Between 3,000 and 7,000 South Koreans are believed to have been shot there by their own military and police, and dumped into mass graves, said Kim Dong-choon, the commission member overseeing the investigation of these government killings.
The bones of Koh Chung-ryol's father are there somewhere, and the 57-year-old woman believes South Koreans alone are not to blame.
"Although we can't present concrete evidence, we bereaved families believe the United States has some responsibility for this," she told the AP, as she visited one of the burial sites in the quiet Sannae valley.
Frank Winslow, a military adviser at Daejeon in those desperate days long ago, is one American who feels otherwise.
The Koreans were responsible for their own actions, said the retired Army lieutenant colonel, 81. "The Koreans were sovereign. To me, there was never any question that the Koreans were in charge," he said in a telephone interview from his home in Bellingham, Wash.
The brutal, hurried elimination of tens of thousands of their countrymen, subject of a May 19 AP report, was the climax to a years-long campaign by South Korea's right-wing leaders.
In 1947, two years after Washington and Moscow divided Korea into southern and northern halves, a U.S. military government declared the Korean Labor Party, the southern communists, to be illegal. President Syngman Rhee's southern regime, gaining sovereignty in 1948, suppressed all leftist political activity, put down a guerrilla uprising and held up to 30,000 political prisoners by the time communist North Korea invaded on June 25, 1950.
As war broke out, southern authorities also rounded up members of the 300,000-strong National Guidance Alliance, a "re-education" body to which they had assigned leftist sympathizers, and whose membership quotas also were filled by illiterate peasants lured by promises of jobs and other benefits.
Commission investigators, extrapolating from initial evidence and surveys of family survivors, believe most alliance members were killed in the wave of executions.
On June 29, 1950, as the southern army and its U.S. advisers retreated southward, reports from Seoul said the conquering northerners had emptied the southern capital's prisons, and ex-inmates were reinforcing the new occupation regime.
In a confidential narrative he later wrote for Army historians, Lt. Col. Rollins S. Emmerich, a senior U.S. adviser, described what then happened in the southern port city of Busan, formerly known as Pusan.
Emmerich was told by a subordinate that a South Korean regimental commander, determined to keep Busan's political prisoners from joining the enemy, planned "to execute some 3500 suspected peace time Communists, locked up in the local prison," according to the declassified 78-page narrative, first uncovered by the newspaper Busan Ilbo at the U.S. National Archives.
Emmerich wrote that he summoned the Korean, Col. Kim Chong-won, and told him the enemy would not reach Busan in a few days as Kim feared, and that "atrocities could not be condoned."
But the American then indicated conditional acceptance of the plan.
"Colonel Kim promised not to execute the prisoners until the situation became more critical," wrote Emmerich, who died in 1986. "Colonel Kim was told that if the enemy did arrive to the outskirts of (Busan) he would be permitted to open the gates of the prison and shoot the prisoners with machine guns."
This passage, omitted from the published Army history, is the first documentation unearthed showing advance sanction by the U.S. military for such killings.
"I think his (Emmerich's) word is so significant," said Park Myung-lim, a South Korean historian of the war and adviser to the investigative commission.
As that summer wore on, and the invaders pressed their attack on the southern zone, Busan-area prisoners were shot by the hundreds, Korean and foreign witnesses later said.
Emmerich wrote that soon after his session with Kim, he met with South Korean officials in Daegu, 55 miles (88 kilometers) north of Busan, and persuaded them "at that time" not to execute 4,500 prisoners immediately, as planned. Within weeks, hundreds were being executed in the Daegu area.
The bloody anticommunist purge, begun immediately after the invasion, is believed by the fall of 1950 to have filled some 150 mass graves in secluded spots stretching to the peninsula's southernmost counties. Commissioner Kim said the commission's estimate of 100,000 dead is "very conservative." The commission later this month will resume excavating massacre sites, after having recovered remains of more than 400 people at four sites last year.
The AP has extensively researched U.S. military and diplomatic archives from the Korean War in recent years, at times relying on once-secret documents it obtained through Freedom of Information Act requests and declassification reviews. The declassified U.S. record and other sources offer further glimpses of the mass killings.
A North Korean newspaper said 1,000 prisoners were slain in Incheon, just west of Seoul, in late June 1950 — a report partly corroborated by a declassified U.S. Eighth Army document of July 1950 saying "400 Communists" had been killed in Incheon. The North Korean report claimed a U.S. military adviser had given the order.
As the front moved south, in July's first days, Air Force intelligence officer Donald Nichols witnessed and photographed the shooting of an estimated 1,800 prisoners in Suwon, 20 miles south of Seoul, Nichols reported in a little-noted memoir in 1981, a decade before his death.
Around the same time, farther south, the Daejeon killings began.
Winslow recalled he declined an invitation to what a senior officer called the "turkey shoot" outside the city, but other U.S. officers did attend, taking grisly photos of the human slaughter that would be kept classified for a half-century.
Journalist Alan Winnington, of the British communist Daily Worker newspaper, entered Daejeon with North Korean troops after July 20 and reported that the killings were carried out for three days in early July and two or three days in mid-July.
He wrote that his witnesses claimed jeeploads of American officers "supervised the butchery." Secret CIA and Army intelligence communications reported on the Daejeon and Suwon killings as early as July 3, but said nothing about the U.S. presence or about any U.S. oversight.
In mid-August, MacArthur, in Tokyo, learned of the mass shooting of 200 to 300 people near Daegu, including women and a 12- or 13-year-old girl. A top-secret Army report from Korea, uncovered by AP research, told of the "extreme cruelty" of the South Korean military policemen. The bodies fell into a ravine, where hours later some "were still alive and moaning," wrote a U.S. military policeman who happened on the scene.
Although MacArthur had command of South Korean forces from early in the war, he took no action on this report, other than to refer it to John J. Muccio, U.S. ambassador in South Korea. Muccio later wrote that he urged South Korean officials to stage executions humanely and only after due process of law.
The AP found that during this same period, on Aug. 15, Brig. Gen. Francis W. Farrell, chief U.S. military adviser to the South Koreans, recommended the U.S. command investigate the executions. There was no sign such an inquiry was conducted. A month later, the Daejeon execution photos were sent to the Pentagon in Washington, with a U.S. colonel's report that the South Koreans had killed "thousands" of political prisoners.
The declassified record shows an equivocal U.S. attitude continuing into the fall, when Seoul was retaken and South Korean forces began shooting residents who collaborated with the northern occupiers.
When Washington's British allies protested, Dean Rusk, assistant secretary of state, told them U.S. commanders were doing "everything they can to curb such atrocities," according to a Rusk memo of Oct. 28, 1950.
But on Dec. 19, W.J. Sebald, State Department liaison to MacArthur, cabled Secretary of State Dean Acheson to say MacArthur's command viewed the killings as a South Korean "internal matter" and had "refrained from taking any action."
It was the British who took action, according to news reports at the time. On Dec. 7, in occupied North Korea, British officers saved 21 civilians lined up to be shot, by threatening to shoot the South Korean officer responsible. Later that month, British troops seized "Execution Hill," outside Seoul, to block further mass killings there.
To quiet the protests, the South Koreans barred journalists from execution sites and the State Department told diplomats to avoid commenting on atrocity reports. Earlier, the U.S. Embassy in London had denounced as "fabrication" Winnington's Daily Worker reporting on the Daejeon slaughter. The Army eventually blamed all the thousands of Daejeon deaths on the North Koreans, who in fact had carried out executions of rightists there and elsewhere.
An American historian of the Korean War, the University of Chicago's Bruce Cumings, sees a share of U.S. guilt in what happened in 1950.
"After the fact — with thousands murdered — the U.S. not only did nothing, but covered up the Daejeon massacres," he said.
Another Korean War scholar, Allan R. Millett, an emeritus Ohio State professor, is doubtful. "I'm not sure there's enough evidence to pin culpability on these guys," he said, referring to the advisers and other Americans.
The swiftness and nationwide nature of the 1950 roundups and mass killings point to orders from the top, President Rhee and his security chiefs, Korean historians say. Those officials are long dead, and Korean documentary evidence is scarce.
To piece together a fuller story, investigators of the Truth and Reconciliation Commission will sift through tens of thousands of pages of declassified U.S. documents.
The commission's mandate extends to at least 2010, and its president, historian Ahn Byung-ook, expects to turn then to Washington for help in finding the truth.
"Our plan is that when we complete our investigation of cases involving the U.S. Army, we'll make an overall recommendation, a request to the U.S. government to conduct an overall investigation," he said. Charles J. Hanley and Jae-Soon Chang, The Associated Press