Diminishing Marginal Utility

Source: Newsweek

The plunging greenback threatens to cripple U.S. power. Why are the candidates ignoring this critical issue?
Nov 23, 2007 | Updated: 3:50 p.m. ET Nov 23, 2007

Great powers die slowly. It took years before the world realized that Great Britain was an imperial corpse, sapped of its strength by two world wars. The funeral finally occurred on Feb. 21, 1947, a freezing winter day in bomb-torn, bedraggled London, when the British wrote their own epitaph. That was the day that London cabled Washington: "His Majesty's Government, in view of their own situation, find it impossible to grant further financial assistance to Greece," amounting to a half billion dollars a year and a garrison of 40,000 troops. The British also announced the same day that they were withdrawing from Turkey. "The British are finished," remarked a stunned Dean Acheson, who was soon to be Harry Truman's secretary of State. And so they were. It was the early cold war. With the Soviet Union threatening to extend its influence over Greece and Turkey, there was no time for elegies. Instead, a quick passing of the baton took place: the United States would now fill Britain's role and become the central, stabilizing power in the West. This was the moment of "creation" of the U.S.-led world order, Acheson later realized.

One has to wonder now whether the American superpower is also experiencing a terminal illness, with its decline marked by the dollar's downward drift. The one difference being that there is no successor on the horizon (the Chinese have a long, long way to go), and the currency that is replacing the dollar, the euro, is backed not by an emerging superpower but by the feeble cacophony of voices that is the European Union. Yet the signs of imperial decadence are unmistakable. The world is losing confidence in the dollar, in no small part because it has lost confidence in America's strategic judgment and in its sustainability as a great power in the face of record budget and trade deficits, which are forcing the United States to borrow ever more money from future rivals like China and Russia.

Even as the Bush administration savors the calming news out of Iraq, and prepares for a major Mideast peace conference in Annapolis on Tuesday that will look and feel like grand American gestures of the past, finance ministries and central banks around the world--especially in places like Beijing and the wealthy Persian Gulf states--are making decisions that will further undermine U.S. power, perhaps permanently. The irony for George W. Bush, of course, is that more than anything else he began as a president who wanted to build up American power, which he presumed to have been frittered away by Bill Clinton. Bush believed that enemies such as Osama bin Laden and Saddam Hussein perceived America as soft. "It was clear," he said after 9/11, "that bin Laden felt emboldened and didn't feel threatened by the United States." Bush vowed to reverse that image.

Instead, the world monetary system now is making unfavorable comparisons to America at the height of the Clinton years. And bin Laden seems to be achieving his publicly avowed goal of provoking the United States into overextending itself and draining its economy. In a blistering essay in the current Vanity Fair, Nobel laureate Joseph Stiglitz, a former World Bank economist, notes that Bush took a nation with a budget surplus upon assuming office and turned it into a global debtor, and he has underinvested in education and alternative energy. "In breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous 'war of choice' in Iraq. A budget surplus of 2.4 percent of gross domestic product (GDP), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II," Stiglitz writes. "Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle 'worst president' when it comes to stewardship of the American economy. The economic effects of Bush's presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America's being displaced from its position as the world's richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush."

If the passing of American hegemony happens, it will occur very slowly--death by a thousand cuts of credit. One reason why it's so hard for Americans to contemplate their loss of prestige, symbolized by the fall of the once-almighty dollar, is that politicians and pundits tend to cast the issue as all-or-nothing. What would happen, they say, if China suddenly decided to dump the trillion dollars of U.S. debt it holds in reserves? This, however, will almost certainly never occur. While China and other big dollar-holding countries such as Singapore, Russia and the Persian Gulf states are very worried about the erosion in value of their dollar-denominated holdings and inflationary pressure, they also know that an abrupt move to cut their pegs to the dollar or to sell off in large amounts would force a run on the currency. That would leave them even poorer. Instead these countries are pursuing careful reallocations of their investment holdings, shifting slowly to the euro or a "basket" of currencies that will allow them to hedge against the dollar's decline. Credit will become more expensive, the U.S. economy will find itself increasingly crimped, and America's ability and willingness to act as the defense umbrella to the world will gradually peter out. The effect will be more like a slow-acting poison: drip, drip, drip.

But the financial world order is such a precarious house of cards today that the markets are getting increasingly jittery. Markets operate on confidence. And today's markets seem to have little confidence that the Bush administration can emerge from its economic never-never land, one in which as Dick Cheney's first-term pronouncement that "deficits don't matter" was allowed to stand unchallenged, in which zero-saving Americans continue their profligate spending habits and descent into deeper indebtedness by simply assuming the rest of the world will continue to fund those habits. "The American consumer is dramatically overleveraged," says Bob Hormats a vice chairman of Goldman Sachs International. That "means we have to borrow roughly $3 billion a day from rest of world. That inflow is now slowing down. Foreigners will say 'we're concerned about lending in dollars, so we're going to be more cautious about lending money to you.' At some point, if we get a lot less money, the dollar will plunge and interest rates will go up." Even wealthy Americans, Hormats notes, are beginning to ship their money abroad, to Europe and Asia, to hedge the dollar.

We should be careful, of course, not too pronounce the death of Pax Americana too quickly. That has been done before. The illness need not be terminal: deficits can be cured, and foreigners still crowd cargo containers and the backs of trucks to sneak into the land of opportunity. (China, by contrast, is not undergoing an immigration debate.) But the country is in such a fiscal hole right now that, as David Walker, the comptroller general of the United States, told my colleague Jeff Bartholet last week, "You could decide not to renew the Bush tax cuts, you could eliminate all foreign aid, eliminate all earmarks, eliminate NASA, eliminate the National Endowment for Humanities and eliminate the entire Defense Department tomorrow, and you still wouldn't solve the problem." This most critical of issues has barely made it into the presidential debates. The drooping dollar is driving it to the public's attention, particularly as gas, oil and other essentials continue to go up in price. Perhaps the next president, whoever he or she is, ought to pay more attention, too.

© 2007 Newsweek, Inc.

Posted by Hugo Albert Orwell at 09:20 AM | Permalink | TrackBacks (0)

Source: Consortium News

By Daniel Ellsberg
September 26, 2007 (Text of a speech delivered September 20, 2007)

Editor’s Note: Daniel Ellsberg, the former Defense Department analyst who leaked the secret Pentagon Papers history of the Vietnam War, offered insights into the looming war with Iran and the loss of liberty in the United States at an American University symposium on Sept. 20.

Below is an edited transcript of Ellsberg’s remarkable speech:

I think nothing has higher priority than averting an attack on Iran, which I think will be accompanied by a further change in our way of governing here that in effect will convert us into what I would call a police state.

If there’s another 9/11 under this regime … it means that they switch on full extent all the apparatus of a police state that has been patiently constructed, largely secretly at first but eventually leaked out and known and accepted by the Democratic people in Congress, by the Republicans and so forth.

Will there be anything left for NSA to increase its surveillance of us? … They may be to the limit of their technical capability now, or they may not. But if they’re not now they will be after another 9/11.

And I would say after the Iranian retaliation to an American attack on Iran, you will then see an increased attack on Iran – an escalation – which will be also accompanied by a total suppression of dissent in this country, including detention camps.

It’s a little hard for me to distinguish the two contingencies; they could come together. Another 9/11 or an Iranian attack in which Iran’s reaction against Israel, against our shipping, against our troops in Iraq above all, possibly in this country, will justify the full panoply of measures that have been prepared now, legitimized, and to some extent written into law. …

This is an unusual gang, even for Republicans. [But] I think that the successors to this regime are not likely to roll back the assault on the Constitution. They will take advantage of it, they will exploit it.

Will Hillary Clinton as president decide to turn off NSA after the last five years of illegal surveillance? Will she deprive her administration her ability to protect United States citizens from possible terrorism by blinding herself and deafening herself to all that NSA can provide? I don’t think so.

Unless this somehow, by a change in our political climate, of a radical change, unless this gets rolled back in the next year or two before a new administration comes in – and there’s no move to do this at this point – unless that happens I don’t see it happening under the next administration, whether Republican or Democratic.

The Next Coup

Let me simplify this and not just to be rhetorical: A coup has occurred. I woke up the other day realizing, coming out of sleep, that a coup has occurred. It’s not just a question that a coup lies ahead with the next 9/11. That’s the next coup, that completes the first.

The last five years have seen a steady assault on every fundamental of our Constitution, … what the rest of the world looked at for the last 200 years as a model and experiment to the rest of the world – in checks and balances, limited government, Bill of Rights, individual rights protected from majority infringement by the Congress, an independent judiciary, the possibility of impeachment.

There have been violations of these principles by many presidents before. Most of the specific things that Bush has done in the way of illegal surveillance and other matters were done under my boss Lyndon Johnson in the Vietnam War: the use of CIA, FBI, NSA against Americans.

I could go through a list going back before this century to Lincoln’s suspension of habeas corpus in the Civil War, and before that the Alien and Sedition Acts in the 18th century. I think that none of those presidents were in fact what I would call quite precisely the current administration: domestic enemies of the Constitution.

I think that none of these presidents with all their violations, which were impeachable had they been found out at the time and in nearly every case their violations were not found out until they were out of office so we didn’t have the exact challenge that we have today.

That was true with the first term of Nixon and certainly of Johnson, Kennedy and others. They were impeachable, they weren’t found out in time, but I think it was not their intention to in the crisis situations that they felt justified their actions, to change our form of government.

It is increasingly clear with each new book and each new leak that comes out, that Richard Cheney and his now chief of staff David Addington have had precisely that in mind since at least the early 70s. Not just since 1992, not since 2001, but have believed in Executive government, single-branch government under an Executive president – elected or not – with unrestrained powers. They did not believe in restraint.

When I say this I’m not saying they are traitors. I don’t think they have in mind allegiance to some foreign power or have a desire to help a foreign power. I believe they have in their own minds a love of this country and what they think is best for this country – but what they think is best is directly and consciously at odds with what the Founders of this country and Constitution thought.

They believe we need a different kind of government now, an Executive government essentially, rule by decree, which is what we’re getting with signing statements. Signing statements are talked about as line-item vetoes which is one [way] of describing them which are unconstitutional in themselves, but in other ways are just saying the president says “I decide what I enforce. I decide what the law is. I legislate.”

It’s [the same] with the military commissions, courts that are under the entire control of the Executive Branch, essentially of the president. A concentration of legislative, judicial, and executive powers in one branch, which is precisely what the Founders meant to avert, and tried to avert and did avert to the best of their ability in the Constitution.

Founders Had It Right

Now I’m appealing to that as a crisis right now not just because it is a break in tradition but because I believe in my heart and from my experience that on this point the Founders had it right.

It’s not just “our way of doing things” – it was a crucial perception on the corruption of power to anybody including Americans. On procedures and institutions that might possibly keep that power under control because the alternative was what we have just seen, wars like Vietnam, wars like Iraq, wars like the one coming.

That brings me to the second point. This Executive Branch, under specifically Bush and Cheney, despite opposition from most of the rest of the branch, even of the cabinet, clearly intends a war against Iran which even by imperialist standards, standards in other words which were accepted not only by nearly everyone in the Executive Branch but most of the leaders in Congress. The interests of the empire, the need for hegemony, our right to control and our need to control the oil of the Middle East and many other places. That is consensual in our establishment. …

But even by those standards, an attack on Iran is insane. And I say that quietly, I don’t mean it to be heard as rhetoric. Of course it’s not only aggression and a violation of international law, a supreme international crime, but it is by imperial standards, insane in terms of the consequences.

Does that make it impossible? No, it obviously doesn’t, it doesn’t even make it unlikely.

That is because two things come together that with the acceptance for various reasons of the Congress – Democrats and Republicans – and the public and the media, we have freed the White House – the president and the vice president – from virtually any restraint by Congress, courts, media, public, whatever.

And on the other hand, the people who have this unrestrained power are crazy. Not entirely, but they have crazy beliefs.

And the question is what then, what can we do about this? We are heading towards an insane operation. It is not certain. It is likely. … I want to try to be realistic myself here, to encourage us to do what we must do, what is needed to be done with the full recognition of the reality. Nothing is impossible.

What I’m talking about in the way of a police state, in the way of an attack on Iran is not certain. Nothing is certain, actually. However, I think it is probable, more likely than not, that in the next 15, 16 months of this administration we will see an attack on Iran. Probably. Whatever we do.

And … we will not succeed in moving Congress probably, and Congress probably will not stop the president from doing this. And that’s where we’re heading. That’s a very ugly, ugly prospect.

However, I think it’s up to us to work to increase that small perhaps – anyway not large – possibility and probability to avert this within the next 15 months, aside from the effort that we have to make for the rest of our lives.

Restoring the Republic

Getting back the constitutional government and improving it will take a long time. And I think if we don’t get started now, it won’t be started under the next administration.

Getting out of Iraq will take a long time. Averting Iran and averting a further coup in the face of a 9/11, another attack, is for right now, it can’t be put off. It will take a kind of political and moral courage of which we have seen very little…

We have a really unusual concentration here and in this audience, of people who have in fact changed their lives, changed their position, lost their friends to a large extent, risked and experienced being called terrible names, “traitor,” “weak on terrorism” – names that politicians will do anything to avoid being called.

How do we get more people in the government and in the public at large to change their lives now in a crisis in a critical way? How do we get Nancy Pelosi and Harry Reid for example? What kinds of pressures, what kinds of influences can be brought to bear to get Congress to do their jobs? It isn’t just doing their jobs. Getting them to obey their oaths of office.

I took an oath many times, an oath of office as a Marine lieutenant, as an official in the Defense Department, as an official in the State Department as a Foreign Service officer. A number of times I took an oath of office which is the same oath office taken by every member of Congress and every official in the United States and every officer in the United States armed services.

And that oath is not to a Commander in Chief, which is not mentioned. It is not to a fuehrer. It is not even to superior officers. The oath is precisely to protect and uphold the Constitution of the United States.

Now that is an oath I violated every day for years in the Defense Department without realizing it when I kept my mouth shut when I knew the public was being lied into a war as they were lied into Iraq, as they are being lied into war in Iran.

I knew that I had the documents that proved it, and I did not put it out then. I was not obeying my oath which I eventually came to do.

I’ve often said that Lt. Ehren Watada – who still faces trial for refusing to obey orders to deploy to Iraq which he correctly perceives to be an unconstitutional and aggressive war – is the single officer in the United States armed services who is taking seriously in upholding his oath.

The president is clearly violating that oath, of course. Everybody under him who understands what is going on and there are myriad, are violating their oaths. And that’s the standard that I think we should be asking of people.

Congressional Courage

On the Democratic side, on the political side, I think we should be demanding of our Democratic leaders in the House and Senate – and frankly of the Republicans – that it is not their highest single absolute priority to be reelected or to maintain a Democratic majority so that Pelosi can still be Speaker of the House and Reid can be in the Senate, or to increase that majority.

I’m not going to say that for politicians they should ignore that, or that they should do something else entirely, or that they should not worry about that.

Of course that will be and should be a major concern of theirs, but they’re acting like it’s their sole concern. Which is business as usual. “We have a majority, let’s not lose it, let’s keep it. Let’s keep those chairmanships.” Exactly what have those chairmanships done for us to save the Constitution in the last couple of years?

I am shocked by the Republicans today that I read in the Washington Post who yesterday threatened a filibuster if we … get back habeas corpus. The ruling out of habeas corpus with the help of the Democrats did not get us back to George the First it got us back to before King John 700 years ago in terms of counter-revolution.

We need some way, and Ann Wright has one way, of sitting in, in Conyers office and getting arrested. Ray McGovern has been getting arrested, pushed out the other day for saying the simple words “swear him in” when it came to testimony.

I think we’ve got to somehow get home to them [in Congress] that this is the time for them to uphold the oath, to preserve the Constitution, which is worth struggling for in part because it’s only with the power that the Constitution gives Congress responding to the public, only with that can we protect the world from mad men in power in the White House who intend an attack on Iran.

And the current generation of American generals and others who realize that this will be a catastrophe have not shown themselves – they might be people who in their past lives risked their bodies and their lives in Vietnam or elsewhere, like [Colin] Powell, and would not risk their career or their relation with the president to the slightest degree.

That has to change. And it’s the example of people like those up here who somehow brought home to our representatives that they as humans and as citizens have the power to do likewise and find in themselves the courage to protect this country and protect the world. Thank you.

Daniel Ellsberg is author of Secrets: A Memoir of Vietnam and the Pentagon Papers.

Posted by Hugo Albert Orwell at 05:02 PM | Permalink | TrackBacks (0)

Source: Slate.com

By Dahlia Lithwick
Posted Saturday, Dec. 30, 2006, at 6:30 AM ET

I love those year-end roundups—ubiquitous annual lists of greatest films and albums and lip glosses and tractors. It's reassuring that all human information can be wrestled into bundles of 10. In that spirit, Slate proudly presents, the top 10 civil liberties nightmares of the year:

10. Attempt to Get Death Penalty for Zacarias Moussaoui
Long after it was clear the hapless Frenchman was neither the "20th hijacker" nor a key plotter in the attacks of 9/11, the government pressed to execute him as a "conspirator" in those attacks. Moussaoui's alleged participation? By failing to confess to what he may have known about the plot, which may have led the government to disrupt it, Moussaoui directly caused the deaths of thousands of people. This massive overreading of the federal conspiracy laws would be laughable were the stakes not so high. Thankfully, a jury rejected the notion that Moussaoui could be executed for the crime of merely wishing there had been a real connection between himself and 9/11.

9. Guantanamo Bay
It takes a licking but it keeps on ticking. After the Supreme Court struck down the military tribunals planned to try hundreds of detainees moldering on the base, and after the president agreed that it might be a good idea to close it down, the worst public relations fiasco since the Japanese internment camps lives on. Prisoners once deemed "among the most dangerous, best-trained, vicious killers on the face of the earth" are either quietly released (and usually set free) or still awaiting trial. The lucky 75 to be tried there will be cheered to hear that the Pentagon has just unveiled plans to build a $125 million legal complex for the hearings. The government has now officially put more thought into the design of Guantanamo's court bathrooms than the charges against its prisoners.

8. Slagging the Media
Whether the Bush administration is reclassifying previously declassified documents, sidestepping the FOIA, threatening journalists for leaks on dubious legal grounds, or, most recently, using its subpoena power to try to wring secret documents from the ACLU, the administration has continued its "secrets at any price" campaign. Is this a constitutional crisis? Probably not. Annoying as hell? Definitely.

7. Slagging the Courts
It starts with the president's complaints about "activist judges," and evolves to Congressional threats to appoint an inspector general to oversee federal judges. As public distrust of the bench is fueled, the stripping of courts' authority to hear whole classes of cases—most recently any habeas corpus claims from Guantanamo detainees—almost seems reasonable. Each tiny incursion into the independence of the judiciary seems justified. Until you realize that the courts are often the only places that will defend our shrinking civil liberties. This leads to ...

6. The State-Secrets Doctrine
The Bush administration's insane argument in court is that judges should dismiss entire lawsuits over many of the outrages detailed on this very list. Why? Because the outrageously illegal things are themselves matters of top-secret national security. The administration has raised this claim in relation to its adventures in secret wiretapping and its fun with extraordinary rendition. A government privilege once used to sidestep civil claims has mushroomed into sweeping immunity for the administration's sometimes criminal behavior.

5. Government Snooping
Take your pick. There's the NSA warrantless eavesdropping program wherein the president breezily authorized spying on the phone calls of innocent citizens, in violation of the Foreign Intelligence Surveillance Act. The FBI's TALON database shows the government has been spying on nonterrorist groups, including Quakers, People for the Ethical Treatment of Animals, and Veterans for Peace. The Patriot Act lives on. And that's just the stuff we know about.

4. Extraordinary Rendition
So, when does it start to become ordinary rendition? This government program has us FedEx-ing unindicted terror suspects abroad for interrogation/torture. Khalid El-Masri, a German citizen, was shipped off to Afghanistan for such treatment and then released without charges, based on some government confusion about his name. Heh heh. Canadian citizen Maher Arar claims he was tortured in Syria for a year, released without charges, and cleared by a Canadian commission. Attempts to vindicate the rights of such men? You'd need to circle back to the state-secrets doctrine, above.

3. Abuse of Jose Padilla
First, he was, according to then-Attorney General John Ashcroft, "exploring a plan to build and explode a radiological dispersion device, or 'dirty bomb,' in the United States." Then, he was planning to blow up apartments. Then he was just part of a vague terror conspiracy to commit jihad in Bosnia and Chechnya. Always, he was a U.S. citizen. After three and a half years, in which he was denied the most basic legal rights, it has now emerged that Padilla was either outright tortured or near-tortured. According to a recent motion, during Padilla's years of almost complete isolation, he was treated by the U.S. government to sensory and sleep deprivation, extreme cold, stress positions, threats of execution, and drugging with truth serum. Experts say he is too mentally damaged to stand trial. The Bush administration supported his motion for a mental competency assessment, in hopes that will help prevent his torture claims from ever coming to trial, or, as Yale Law School's inimitable Jack Balkin put it: "You can't believe Padilla when he says we tortured him because he's crazy from all the things we did to him."

2. The Military Commissions Act of 2006
This was the so-called compromise legislation that gave President Bush even more power than he initially had to detain and try so-called enemy combatants. He was generously handed the authority to define for himself the parameters of interrogation and torture and the responsibility to report upon it, since he'd been so good at that. What we allegedly did to Jose Padilla was once a dirty national secret. The MCA made it the law.

1. Hubris
Whenever the courts push back against the administration's unsupportable constitutional ideas—ideas about "inherent powers" and a "unitary executive" or the silliness of the Geneva Conventions or the limitless sweep of presidential powers during wartime—the Bush response is to repeat the same chorus louder: Every detainee is the worst of the worst; every action taken is legal, necessary, and secret. No mistakes, no apologies. No nuance, no regrets. This legal and intellectual intractability can create the illusion that we are standing on the same constitutional ground we stood upon in 2001, even as that ground is sliding away under our feet.

What outrage did I forget? Send mail to Dahlia.Lithwick@hotmail.com. (E-mail may be quoted by name unless otherwise stipulated.)

Wishing you and yours a happy, and freer, New Year.

A version of this piece appears in the Washington Post Outlook section.

Posted by Hugo Albert Orwell at 10:04 AM | Permalink | TrackBacks (0)

Source: The Nation

November 3rd, 2006

By Scott Ritter
Former US-weapons inspector in Iraq

The distance between the northern suburbs of the Iranian capital of Tehran and the nuclear enrichment facility of Natanz is roughly 180 miles. What transpires on the ground between these two geographical points has seized the attention of the international community, and in particular the government of the United States, as the world wrestles with how best to respond to the issues surrounding Iran's decision to pursue indigenous enrichment of uranium in defiance of the United Nations Security Council's resolution demanding that all such activity cease.

I recently returned from a trip to Iran, where over the course of a week I made the journey from the northern suburbs of Tehran to the gates of the Natanz enrichment facility, and in doing so had my eyes opened. The Iran that I witnessed was far removed from the one caricatured in the US media. I left with the frustrating realization that, as had been the case with Iraq, America was stumbling toward a conflict, blinded by the prejudice and fear born of our collective ignorance.

The first thing that becomes apparent upon arrival in Tehran is that Iran is nothing like Iraq. I spent more than seven years in Iraq and know firsthand what a totalitarian dictatorship looks and acts like. Iran is not such a nation. Once I cleared passport control, I was thrust into a vibrant society that operates free of an oppressive security apparatus such as the one that dominated Iraqi daily life in the time of Saddam Hussein. This does not mean there is no internal security apparatus in Iran--far from it. A visit to the cable cars operating in the mountains north of Tehran puts you next to a major communications station of the ministry, where cellphone conversations can be monitored using advanced software procured from the United States. Iran has a functioning domestic security apparatus, but it most definitely is not an all-seeing, all-controlling police state, any more than the United States is in the post-9/11 era, when the FBI and the National Security Agency use similar software to selectively monitor the conversations of American citizens.

Iran is certainly not an open society that operates on a par with the West. I recently had the honor of spending some time with Shirin Ebadi, who was awarded the 2003 Nobel Peace Prize, and have heard her account of the intense repression meted out to those who challenge the political system. The theocrats who govern in Tehran have a history of shutting down media that are not obedient to the state, and the Iranian prison system is notorious for the jailing, beating and even execution of those who dare to protest publicly the rule of the mullahs.

In spite of these abuses of human rights and civil liberties, Iran is not a closed society. There is a ban on satellite television dishes, but many Iranians get their news from the BBC, CNN and other international television services simply by flouting the rules, which seem not to be too widely enforced. Some, like the Revolutionary Guards I became acquainted with, disguise their dish as a flower planter. The government has tried to censor the Internet, and has targeted online journalists and blocked thousands of websites. But the Internet is heavily used by Iranians, who continue to find ways to evade government controls. And cellphones are as ubiquitous as they are here in the West.

The point is that while the Iranian government often cracks down on organized public displays of dissent, the free flow of information that is vital to any dynamic society exists despite the efforts of the government to contain or control it. Ebadi is permitted to travel abroad, speaking and publishing words harshly critical of the Iranian theocracy. She has been harassed by the government but still operates freely, unlike her fellow Nobel laureate, Aung San Suu Kyi, who won the Peace Prize in 1991 and is again under house arrest in Myanmar.

During my visit to the northern suburbs of Tehran, I was struck by the presence of wealth. Many ideologues in the United States, including those who currently occupy the corridors of power in Washington, conclude that this segment of society not only awaits US intervention to overthrow the regime but would actually cooperate with and facilitate any such effort. There is certainly a circle of Iranian secular intellectuals who chafe under Islamic law. Many of them are drawn from the ranks of the "old rich," those who made their fortunes during the time of the Shah and who yearn for the return of a Westernized, secular society. In conversation, these intellectuals often speculate about the possibility of US intervention, but more and more the hope of such liberation has been tempered by the ever-deepening disaster in Iraq. While most Iranians welcomed the elimination of Saddam, the horrors inflicted and unleashed by US military forces next door have left many of the old rich in Tehran with the realization that the dream of American intervention may turn into a nightmare. My trip convinced me that support for US intervention does not exist to any significant degree but rather resides solely in the minds of those in the West who have had their impressions of Iran shaped by pro-Shah expatriates who have been absent from the country for more than a quarter-century.

Iran today is a fully functioning capitalist society, and in addition to the old rich, there is a larger population of wealthy Iranians who made their fortunes after the Islamic revolution and who owe their ability to sustain their wealth to the continued governance of the Islamic Republic. Likewise, those in the West who believe that the youth of Iran (more than two-thirds of the population today is under 30) share the same aspirations as the Western-oriented moneyed class will be disappointed. Those under 30 have no memory of the Iran that existed pre-theocracy and seem more willing to support a moderating change from within than a drastic change imposed from without.

The vast majority of Tehran's citizens are working- and lower middle class. These people reside in the urban sprawl of southern Tehran, where out-of-control population growth strains the resources of municipal government and the Islamic Republic as a whole. The province of Tehran has expanded from 6.8 million people a decade ago to a current official count of 10.5 million; the actual population may be closer to 12 million, with more arriving every day. Unemployment is rampant (the official figure for the country is 12.4 percent, but it's probably closer to 20 percent), and there is a growing level of dissatisfaction that has manifested itself politically in recent years.

The political center of Iran used to rest in northern Tehran. However, the 2005 presidential election saw a dramatic shift to the southern neighborhoods, whose voters helped elect one of their own, Mahmoud Ahmadinejad. The Western media have for the most part depicted his victory as evidence of a resurgent religious fundamentalism, but anyone who walks the streets of southern Tehran (where most Western journalists are loath to wander) and visits the workshops and markets will find a much more nuanced reality. In the motorcycle repair shop I walked into I found the owner and customers evenly divided between Ahmadinejad and his principal rival, former President Hashemi Rafsanjani. Rafsanjani actually won the most votes in the first round, but in the runoff Ahmadinejad shocked everyone by bringing over to his conservative platform the supporters of the reformist candidates. The key factor in his stunning victory was not religious fundamentalism but widespread disillusionment over the state of the economy, coupled with charges of nepotism and corruption surrounding Rafsanjani. Ahmadinejad was, more than anything, a reform candidate. This is what swept him into office, and it is on this issue that he continues to be judged today, with decidedly mixed results, by the people of Iran.

For all the attention the Western media give to Ahmadinejad's foreign policy pronouncements, the reality is that his effective influence is limited to domestic issues. The citizens of Tehran I spoke with, from every walk of life, understood this and were genuinely perplexed as to why we in the West treat Ahmadinejad as if he were a genuine head of state. "The man has no real power," a former Revolutionary Guard member told me. "The true power in Iran resides with the Supreme Leader." The real authority is indeed the Ayatollah Sayeed Ali Khamenei, successor to the Ayatollah Ruhollah Khomeini.

According to the Iranian Constitution, the Supreme Leader has absolute authority over all matters pertaining to national security, including the armed forces, the police and the Revolutionary Guard. Only the Supreme Leader can declare war. In this regard, all aspects of Iran's nuclear program are controlled by Khamenei, and Ahmadinejad has no bearing on the issue. Curiously, while the Western media have replayed Ahmadinejad's anti-Israel statements repeatedly, very little attention has been paid to the Supreme Leader's pronouncement--in the form of a fatwa, or religious edict--that Iran rejects outright the acquisition of nuclear weapons, or to the efforts made by the Supreme Leader in 2003 to reach an accommodation with the United States that offered peace with Israel. While Ahmadinejad plays to the Iranian street with his inflammatory rhetoric, the true authority in Iran has been attempting to navigate a path of moderation.

The Supreme Leader's powers are impressive, but they are not absolute. Iran has a system of checks and balances that is played out through two primary bodies: the Guardian Council and the Expediency Council. Until recently the Guardian Council had absolute veto power over parliamentary legislation and was unchecked in the exercise of its oversight responsibilities. However, in 1997 Khamenei beefed up the role and responsibility of the Expediency Council, and it was further strengthened last year; now the decisions of the Guardian Council, if challenged by the Iranian Parliament, can be overturned by the Expediency Council. The Guardian Council is still a dauntingly authoritative body, especially when one considers that the Supreme Leader has the power to appoint half its members (and all of the Expediency Council's). Iran, after all, remains an Islamic republic, which means that the political pulse is generated not in Tehran but some fifty-five miles to the south, in the holy city of Qom.

It is in Qom where many of the religious figures on the two councils reside. They teach at religious schools and have developed their own followings, comprising religious, civil and military officials who have an enormous effect on day-to-day policy. Qom is a very conservative city, and the religious figures who study there reflect this. However, this conservatism does not directly translate into the embrace of strict religious fundamentalism. There is a growing recognition among the ayatollahs who serve on the councils of the need to seek compromise on matters of religion not only to dilute internal dissent but also to better tend to the needs of the country. The greatest reform pressure on these figures comes not from religious students but rather from the traditional watchdog of the Islamic Republic, the Revolutionary Guard.

The Islamic Revolutionary Guard Corps remains very much an enigmatic entity to most Western observers. Born from the tumult of the revolution that swept the Shah from power in 1979, the Revolutionary Guard was the primary defender of the Islamic Republic during its infancy, serving as the country's first line of defense after the 1980 Iraqi invasion and against anti-regime forces, in particular the guerrillas of the Mujahedeen-e-Khalq, or People's Mujahedeen (MEK). The Revolutionary Guard also served as defender of the Shiite faith abroad, playing a pivotal role in the formation of Hezbollah in southern Lebanon after the 1982 Israeli invasion.

Many of the actions of the guard have been cited by the United States as evidence that Iran is a state sponsor of terrorism. The guard members I spoke with reject this characterization. "We did some pretty terrible things in our early years, but we were fighting for our national survival," one veteran member told me. "The MEK was waging a war in our cities, ambushing our forces, assassinating our politicians and killing our citizens with car bombs. We had to crush them, either in Iran or out. But if we kill an MEK operative in France or Germany, we become terrorists. If America kills an Al Qaeda operative in another country, you are counterterrorists. This makes no sense. We have never targeted or attacked Americans or American interests. We condemned the 9/11 attacks as a crime against Islam and a crime against humanity. And yet we are reviled as terrorists, or even worse, co-conspirators with Al Qaeda. Doesn't America understand that we oppose Al Qaeda and all it stands for? Do you not know that the teachings of Sunni Wahhabism are anathema to the teachings of the Shia faith?"

In our haste to lash out at those who attacked us on September 11, 2001, we forget that Iran not only condemned the attacks, as did its Hezbollah allies in Lebanon, but that it nearly fought a war against Afghanistan's Taliban and their Al Qaeda allies in the late 1990s. There is no greater potential ally in the struggle against Sunni extremism than Shiite Iran, a point made over and over by everyone I talked to, especially those affiliated with the Revolutionary Guard. As one veteran told me, "Iraq is our neighbor, and of course we have a vested interest in its stability. We fought an eight-year war with Iraq, so we understand the realities of that country. We are very glad the United States got rid of Saddam. But now what America is doing only makes the region more insecure. We could help America in Iraq if only they would let us."

Moving south from Qom, along modern highways interspersed with rest stops that would meet with the approval of any traveler on the New York State Thruway, I was struck by the long lines of cars at gas stations. For all its oil wealth, Iran has an energy crisis. With its economy focused on the cash business of oil export, little attention has been paid to the needs of the domestic consumer. Iran is woefully lacking in domestic refining capacity, so much so that it spends billions every year importing gasoline at world market prices, which it then discounts so that the Iranian consumer pays only some 40 cents a gallon. This makes no economic sense, but Iran's oil is already fully leveraged in the export market. With reserves shrinking and new discoveries waning, Iran faces a serious energy crisis in the coming decades unless alternative sources are developed.

Some 180 miles south of Tehran lies the Natanz nuclear enrichment facility. Tucked away on the side of the road, surrounded by a makeshift berm and numerous antiaircraft artillery emplacements, the facility has the outward appearance of something dark and ominous. But the secrets concerning what lies within are well-known to the world as a result of inspections carried out by the International Atomic Energy Agency. What the inspectors say is crystal clear: There is no evidence that Iran is pursuing a nuclear weapons program. Furthermore, the enrichment program is plagued with technical problems that prevent any rapid progress. There is no imminent nuclear weapons threat from Iran, which hasn't mastered the technologies and methodologies of enrichment needed to sustain a nuclear energy program, let alone a nuclear weapons effort.

The Bush Administration speaks of the need to move quickly on the issue of Iran's nuclear ambition and to roll back the forces of terror represented by the Islamic Republic. The repeated and explicit demand of the Administration is for regime change, as evidenced in the March 2006 "National Security Strategy of the United States," where Iran is named repeatedly as the number-one threat to the United States. The alleged Iranian threat espoused by Bush is based on fear, and arises from a combination of ignorance and ideological inflexibility. The path that the United States is currently embarked on regarding Iran is a path that will lead to war. (Indeed, there are numerous unconfirmed reports that the United States has already begun covert military operations inside Iran, including overflights by pilotless drones and recruitment and training of MEK, Kurdish and Azeri guerrillas.) Such a course of action would make even the historic blunder of the Iraq invasion pale by comparison. When we talk of war, we must never forget that we are talking about the lives of the men and women who serve us in the armed forces. We have a duty and responsibility to insure that all options short of war are exhausted before any decision to enter into conflict is made. On the issue of Iran, the United States hasn't even come close to exhausting the available options.

The solution to this problem is clear. The most logical course would be to put Secretary of State Condoleezza Rice on a flight to Tehran, where she could negotiate directly with the principal players on the Iranian side, including Supreme Leader Khamenei. If Administration officials actually engaged with the Iranians, they would have an eye-opening experience. Of course, Rice would need to come with a revamped US policy, one that rejects regime change, provides security guarantees for Iran as it is currently governed and would be willing to recognize Iran's legitimate right to enrich uranium under Article IV of the Non-Proliferation Treaty (although under stringent UN inspections, and perhaps limited to the operation of a single 164-centrifuge cascade).

Rice would undoubtedly be surprised at the degree of moderation (and pro-American sentiment) that exists in Iran today. She might also be shocked to find out that the Iranians are more than ready to sit down with the United States and work out a program for stability in Iraq, as well as a reduction of tensions between Israel and Hezbollah. In addition to significantly reducing the risk of a disastrous conflict, such a visit would do more to encourage moderation and peace in the region than any amount of saber-rattling could ever hope to accomplish. And it would do more to help America prevail in the so-called Global War on Terror than any war plan the Pentagon could assemble. In the end, that is what defines good policy--something sadly lacking in Washington today.

Posted by Hugo Albert Orwell at 12:14 PM | Permalink | TrackBacks (0)

Source: Znet

Transcript
September 21, 2006

Madam President, Excellencies, Heads of State, Heads of government and other government’s representatives, good morning.

First, and with all respect, I highly recommend this book by Noam Chomsky, one of the most prestigious intellectuals in America and the world, Chomsky. One of his most recent works: Hegemony or Survival: America’s Quest for Global Dominance (The American Empire Project) . It’s an excellent work to understand what’s happened in the world in the 20th Century, what’s currently happening, and the greatest threat on this planet; the hegemonic pretension of the North American imperialism endangers the human race’s survival.

We continue warning about this danger and calling on the very same U.S. people and the world to stop this threat, which resembles the Sword of Damocles over our heads. I had considered reading from this book, but for the sake of time, I shall just leave it as a recommendation. It reads easily. It's a very good book. I'm sure, Madam, you are familiar with it.

(APPLAUSE)

The book is in English, in Russian, in Arabic, in German.

I think that the first people who should read this book are our brothers and sisters in the United States, because their threat is in their own house. The devil is right at home. The devil -- the devil, himself, is right in the house.

And the devil came here yesterday.

(APPLAUSE)

Yesterday, the devil came here. Right here. Right here. And it smells of sulfur still today, this table that I am now standing in front of.

Yesterday, ladies and gentlemen, from this rostrum, the president of the United States, the gentleman to whom I refer as the devil, came here, talking as if he owned the world. Truly. As the owner of the world.

I think we could call a psychiatrist to analyze yesterday's statement made by the president of the United States. As the spokesman of imperialism, he came to share his nostrums, to try to preserve the current pattern of domination, exploitation and pillage of the peoples of the world.

An Alfred Hitchcock movie could use it as a scenario. I would even propose a title: "The Devil's Recipe."

As Chomsky says here, clearly and in depth, the American empire is doing all it can to consolidate its system of domination. And we cannot allow them to do that. We cannot allow world dictatorship to be consolidated.

The world parent's statement -- cynical, hypocritical, full of this imperial hypocrisy from the need they have to control everything.

They say they want to impose a democratic model. But that's their democratic model. It's the false democracy of elites, and, I would say, a very original democracy that's imposed by weapons and bombs and firing weapons.

What a strange democracy. Aristotle might not recognize it or others who are at the root of democracy.

What type of democracy do you impose with marines and bombs?

The president of the United States, yesterday, said to us, right here, in this room, and I'm quoting, "Anywhere you look, you hear extremists telling you can escape from poverty and recover your dignity through violence, terror and martyrdom."

Wherever he looks, he sees extremists. And you, my brother -- he looks at your color, and he says, oh, there's an extremist. Evo Morales, the worthy president of Bolivia, looks like an extremist to him.

The imperialists see extremists everywhere. It's not that we are extremists. It's that the world is waking up. It's waking up all over. And people are standing up.

I have the feeling, dear world dictator, that you are going to live the rest of your days as a nightmare because the rest of us are standing up, all those who are rising up against American imperialism, who are shouting for equality, for respect, for the sovereignty of nations.

Yes, you can call us extremists, but we are rising up against the empire, against the model of domination.

The president then -- and this he said himself, he said: "I have come to speak directly to the populations in the Middle East, to tell them that my country wants peace."

That's true. If we walk in the streets of the Bronx, if we walk around New York, Washington, San Diego, in any city, San Antonio, San Francisco, and we ask individuals, the citizens of the United States, what does this country want? Does it want peace? They'll say yes.

But the government doesn't want peace. The government of the United States doesn't want peace. It wants to exploit its system of exploitation, of pillage, of hegemony through war.

It wants peace. But what's happening in Iraq? What happened in Lebanon? In Palestine? What's happening? What's happened over the last 100 years in Latin America and in the world? And now threatening Venezuela -- new threats against Venezuela, against Iran?

He spoke to the people of Lebanon. Many of you, he said, have seen how your homes and communities were caught in the crossfire. How cynical can you get? What a capacity to lie shamefacedly.

The bombs in Beirut with millimetric precision? Is this crossfire?

He's thinking of a western, when people would shoot from the hip and somebody would be caught in the crossfire.

This is imperialist, fascist, assassin, genocidal, the empire and Israel firing on the people of Palestine and Lebanon. That is what happened. And now we hear, "We're suffering because we see homes destroyed.'

The president of the United States came to talk to the peoples -- to the peoples of the world. He came to say -- I brought some documents with me, because this morning I was reading some statements, and I see that he talked to the people of Afghanistan, the people of Lebanon, the people of Iran. And he addressed all these peoples directly.

And you can wonder, just as the president of the United States addresses those peoples of the world, what would those peoples of the world tell him if they were given the floor? What would they have to say?

And I think I have some inkling of what the peoples of the south, the oppressed people think. They would say, "Yankee imperialist, go home." I think that is what those people would say if they were given the microphone and if they could speak with one voice to the American imperialists.

And that is why, Madam President, my colleagues, my friends, last year we came here to this same hall as we have been doing for the past eight years, and we said something that has now been confirmed -- fully, fully confirmed.

I don't think anybody in this room could defend the system. Let's accept -- let's be honest. The U.N. system, born after the Second World War, collapsed. It's worthless.

Oh, yes, it's good to bring us together once a year, see each other, make statements and prepare all kinds of long documents, and listen to good speeches, like Evo's yesterday, or President Lula's. Yes, it's good for that.

And there are a lot of speeches, and we've heard lots from the president of Sri Lanka, for instance, and the president of Chile.

But we, the assembly, have been turned into a merely deliberative organ. We have no power, no power to make any impact on the terrible situation in the world. And that is why Venezuela once again proposes, here, today, September 20th, that we re-establish the United Nations.

Last year, Madam, we made four modest proposals that we felt to be crucially important. We have to assume the responsibility, our heads of state, our ambassadors, our representatives, and we have to discuss it.

The first is expansion, and Lula talked about this yesterday right here: The Security Council’s expansion, both regarding its permanent and non-permanent categories. New developed and developing countries, the Third World, must be given access as new permanent members. That's step one.

Second, effective methods to address and resolve world conflicts, transparent decisions.

Point three, the immediate suppression -- and that is something everyone's calling for -- of the anti-democratic mechanism known as the veto, the veto on decisions of the Security Council.

Let me give you a recent example. The immoral veto of the United States allowed the Israelis, with impunity, to destroy Lebanon. Right in front of all of us as we stood there watching, a resolution in the council was prevented.

Fourthly, we have to strengthen, as we've always said, the role and the powers of the secretary general of the United Nations.

Yesterday, the secretary general practically gave us his speech of farewell. And he recognized that over the last 10 years, things have just gotten more complicated; hunger, poverty, violence, human rights violations have just worsened. That is the tremendous consequence of the collapse of the United Nations system and American hegemonistic pretensions.

Madam , Venezuela a few years ago decided to wage this battle within the United Nations by recognizing the United Nations, as members of it that we are, and lending it our voice, our thinking.

Our voice is an independent voice to represent the dignity and the search for peace and the reformulation of the international system; to denounce persecution and aggression of hegemonistic forces on the planet.

This is how Venezuela has presented itself. Bolivar's home has sought a nonpermanent seat on the Security Council.

Let's see. Well, there's been an open attack by the U.S. government, an immoral attack, to try and prevent Venezuela from being freely elected to a post in the Security Council.

The imperium is afraid of truth, is afraid of independent voices. It calls us extremists, but they are the extremists.

And I would like to thank all the countries that have kindly announced their support for Venezuela, even though the ballot is a secret one and there's no need to announce things.

But since the imperium has attacked, openly, they strengthened the convictions of many countries. And their support strengthens us.

Mercosur, as a bloc, has expressed its support, our brothers in Mercosur. Venezuela, with Brazil, Argentina, Paraguay, Uruguay, is a full member of Mercosur.

And many other Latin American countries, CARICOM, Bolivia have expressed their support for Venezuela. The Arab League, the full Arab League has voiced its support. And I am immensely grateful to the Arab world, to our Arab brothers, our Caribbean brothers, the African Union. Almost all of Africa has expressed its support for Venezuela and countries such as Russia or China and many others.

I thank you all warmly on behalf of Venezuela, on behalf of our people, and on behalf of the truth, because Venezuela, with a seat on the Security Council, will be expressing not only Venezuela's thoughts, but it will also be the voice of all the peoples of the world, and we will defend dignity and truth.

Over and above all of this, Madam President, I think there are reasons to be optimistic. A poet would have said "helplessly optimistic," because over and above the wars and the bombs and the aggressive and the preventive war and the destruction of entire peoples, one can see that a new era is dawning.

As Silvio Rodriguez says, the era is giving birth to a heart. There are alternative ways of thinking. There are young people who think differently. And this has already been seen within the space of a mere decade. It was shown that the end of history was a totally false assumption, and the same was shown about Pax Americana and the establishment of the capitalist neo-liberal world. It has been shown, this system, to generate mere poverty. Who believes in it now?

What we now have to do is define the future of the world. Dawn is breaking out all over. You can see it in Africa and Europe and Latin America and Oceania. I want to emphasize that optimistic vision.

We have to strengthen ourselves, our will to do battle, our awareness. We have to build a new and better world.

Venezuela joins that struggle, and that's why we are threatened. The U.S. has already planned, financed and set in motion a coup in Venezuela, and it continues to support coup attempts in Venezuela and elsewhere.

President Michelle Bachelet reminded us just a moment ago of the horrendous assassination of the former foreign minister, Orlando Letelier.

And I would just add one thing: Those who perpetrated this crime are free. And that other event where an American citizen also died were American themselves. They were CIA killers, terrorists.

And we must recall in this room that in just a few days there will be another anniversary. Thirty years will have passed from this other horrendous terrorist attack on the Cuban plane, where 73 innocents, in a Cubana de Aviacion airliner, died.

And where is the biggest terrorist of this continent who took the responsibility for blowing up the plane? He spent a few years in jail in Venezuela. Thanks to CIA and then government officials, he was allowed to escape, and he lives here in this country, protected by the government.

And he was convicted. He has confessed to his crime. But the U.S. government has double standards. It protects terrorism when it wants to.

And this is to say that Venezuela is fully committed to combating terrorism and violence. And we are one of the people who are fighting for peace.

Luis Posada Carriles is the name of that terrorist who is protected here. And other tremendously corrupt people who escaped from Venezuela are also living here under protection: a group that bombed various embassies, that assassinated people during the coup. They kidnapped me and they were going to kill me, but I think God reached down and our people came out into the streets and the army was too, and so I'm here today.

But these people who led that coup are here today in this country protected by the American government. And I accuse the American government of protecting terrorists and of having a completely cynical discourse.

We mentioned Cuba. Yes, we were just there a few days ago. We just came from there happily.

And there you see another era born. The Summit of the 15, the Summit of the Nonaligned, adopted a historic resolution. This is the outcome document. Don't worry, I'm not going to read it.

But you have a whole set of resolutions here that were adopted after open debate in a transparent matter -- more than 50 heads of state. Havana was the capital of the south for a few weeks, and we have now launched, once again, the group of the nonaligned with new momentum.

And if there is anything I could ask all of you here, my companions, my brothers and sisters, it is to please lend your good will to lend momentum to the Nonaligned Movement for the birth of the new era, to prevent hegemony and prevent further advances of imperialism.

And as you know, Fidel Castro is the president of the nonaligned for the next three years, and we can trust him to lead the charge very efficiently.

Unfortunately they thought, "Oh, Fidel was going to die." But they're going to be disappointed because he didn't. And he's not only alive, he's back in his green fatigues, and he's now presiding the nonaligned.

So, my dear colleagues, Madam President, a new, strong movement has been born, a movement of the south. We are men and women of the south.

With this document, with these ideas, with these criticisms, I'm now closing my file. I'm taking the book with me. And, don't forget, I'm recommending it very warmly and very humbly to all of you.

We want ideas to save our planet, to save the planet from the imperialist threat. And hopefully in this very century, in not too long a time, we will see this, we will see this new era, and for our children and our grandchildren a world of peace based on the fundamental principles of the United Nations, but a renewed United Nations.

And maybe we have to change location. Maybe we have to put the United Nations somewhere else; maybe a city of the south. We've proposed Venezuela.

You know that my personal doctor had to stay in the plane. The chief of security had to be left in a locked plane. Neither of these gentlemen was allowed to arrive and attend the U.N. meeting. This is another abuse and another abuse of power on the part of the Devil. It smells of sulfur here, but God is with us and I embrace you all.

May God bless us all. Good day to you.

Posted by Hugo Albert Orwell at 04:23 PM | Permalink | TrackBacks (0)

Source: The Progressive

By Greg Palast, The Progressive
July 2006 Issue

You’d think George Bush would get down on his knees and kiss Hugo Chávez’s behind. Not only has Chávez delivered cheap oil to the Bronx and other poor communities in the United States. And not only did he offer to bring aid to the victims of Katrina. In my interview with the president of Venezuela on March 28, he made Bush the following astonishing offer: Chávez would drop the price of oil to $50 a barrel, “not too high, a fair price,” he said—a third less than the $75 a barrel for oil recently posted on the spot market. That would bring down the price at the pump by about a buck, from $3 to $2 a gallon.

But our President has basically told Chávez to take his cheaper oil and stick it up his pipeline. Before I explain why Bush has done so, let me explain why Chávez has the power to pull it off—and the method in the seeming madness of his “take-my-oil-please!” deal.

Venezuela, Chávez told me, has more oil than Saudi Arabia. A nutty boast? Not by a long shot. In fact, his surprising claim comes from a most surprising source: the U.S. Department of Energy. In an internal report, the DOE estimates that Venezuela has five times the Saudis’ reserves.

However, most of Venezuela’s mega-horde of crude is in the form of “extra-heavy” oil—liquid asphalt—which is ghastly expensive to pull up and refine. Oil has to sell above $30 a barrel to make the investment in extra-heavy oil worthwhile. A big dip in oil’s price—and, after all, oil cost only $18 a barrel six years ago—would bankrupt heavy-oil investors. Hence Chávez’s offer: Drop the price to $50—and keep it there. That would guarantee Venezuela’s investment in heavy oil.

But the ascendance of Venezuela within OPEC necessarily means the decline of the power of the House of Saud. And the Bush family wouldn’t like that one bit. It comes down to “petro-dollars.” When George W. ferried then-Crown Prince (now King) Abdullah of Saudi Arabia around the Crawford ranch in a golf cart it wasn’t because America needs Arabian oil. The Saudis will always sell us their petroleum. What Bush needs is Saudi petro-dollars. Saudi Arabia has, over the past three decades, kindly recycled the cash sucked from the wallets of American SUV owners and sent much of the loot right back to New York to buy U.S. Treasury bills and other U.S. assets.

The Gulf potentates understand that in return for lending the U.S. Treasury the cash to fund George Bush’s $2 trillion rise in the nation’s debt, they receive protection in return. They lend us petro-dollars, we lend them the 82nd Airborne.

Chávez would put an end to all that. He’ll sell us oil relatively cheaply—but intends to keep the petro-dollars in Latin America. Recently, Chávez withdrew $20 billion from the U.S. Federal Reserve and, at the same time, lent or committed a like sum to Argentina, Ecuador, and other Latin American nations.

Chávez, notes The Wall Street Journal, has become a “tropical IMF.” And indeed, as the Venezuelan president told me, he wants to abolish the Washington-based International Monetary Fund, with its brutal free-market diktats, and replace it with an “International Humanitarian Fund,” an IHF, or more accurately, an International Hugo Fund. In addition, Chávez wants OPEC to officially recognize Venezuela as the cartel’s reserve leader, which neither the Saudis nor Bush will take kindly to.

Politically, Venezuela is torn in two. Chávez’s “Bolivarian Revolution,” a close replica of Franklin Roosevelt’s New Deal—a progressive income tax, public works, social security, cheap electricity—makes him wildly popular with the poor. And most Venezuelans are poor. His critics, a four-centuries’ old white elite, unused to sharing oil wealth, portray him as a Castro-hugging anti-Christ.

Chávez’s government, which used to brush off these critics, has turned aggressive on them. I challenged Chávez several times over charges brought against Súmate, his main opposition group. The two founders of the nongovernmental organization, which led the recall campaign against Chávez, face eight years in prison for taking money from the Bush Administration and the International Republican [Party] Institute. No nation permits foreign funding of political campaigns, but the charges (no one is in jail) seem like a heavy hammer to use on the minor infractions of these pathetic gadflies.

Bush’s reaction to Chávez has been a mix of hostility and provocation. Washington supported the coup attempt against Chávez in 2002, and Condoleezza Rice and Donald Rumsfeld have repeatedly denounced him. The revised National Security Strategy of the United States of America, released in March, says, “In Venezuela, a demagogue awash in oil money is undermining democracy and seeking to destabilize the region.”

So when the Reverend Pat Robertson, a Bush ally, told his faithful in August 2005 that Chávez has to go, it was not unreasonable to assume that he was articulating an Administration wish. “If he thinks we’re trying to assassinate him,” Robertson said, “I think that we really ought to go ahead and do it. It’s a whole lot cheaper than starting a war . . . and I don’t think any oil shipments will stop.”

There are only two ways to defeat the rise of Chávez as the New Abdullah of the Americas. First, the unattractive option: Cut the price of oil below $30 a barrel. That would make Chávez’s crude worthless. Or, option two: Kill him.

Palast: Your opponents are saying that you are beginning a slow-motion dictatorship. Is that what we are seeing?

Hugo Chávez: They have been saying that for a long time. When they’re short of ideas, any excuse will do as a vehicle for lies. That is totally false. I would like to invite the citizens of Great Britain and the citizens of the U.S. and the citizens of the world to come here and walk freely through the streets of Venezuela, to talk to anyone they want, to watch television, to read the papers. We are building a true democracy, with human rights for everyone, social rights, education, health care, pensions, social security, and jobs.

Palast: Some of your opponents are being charged with the crime of taking money from George Bush. Will you send them to jail?

Chávez: It’s not up to me to decide that. We have the institutions that do that. These people have admitted they have received money from the government of the United States. It’s up to the prosecutors to decide what to do, but the truth is that we can’t allow the U.S. to finance the destabilization of our country. What would happen if we financed somebody in the U.S. to destabilize the government of George Bush? They would go to prison, certainly.

Palast: How do you respond to Bush’s charge that you are destabilizing the region and interfering in the elections of other Latin American countries?

Chávez: Mr. Bush is an illegitimate President. In Florida, his brother Jeb deleted many black voters from the electoral registers. So this President is the result of a fraud. Not only that, he is also currently applying a dictatorship in the U.S. People can be put in jail without being charged. They tap phones without court orders. They check what books people take out of public libraries. They arrested Cindy Sheehan because of a T-shirt she was wearing demanding the return of the troops from Iraq. They abuse blacks and Latinos. And if we are going to talk about meddling in other countries, then the U.S. is the champion of meddling in other people’s affairs. They invaded Guatemala, they overthrew Salvador Allende, invaded Panama and the Dominican Republic. They were involved in the coup d’état in Argentina thirty years ago.

Palast: Is the U.S. interfering in your elections here?

Chávez: They have interfered for 200 years. They have tried to prevent us from winning the elections, they supported the coup d’état, they gave millions of dollars to the coup plotters, they supported the media, newspapers, outlaw movements, military intervention, and espionage. But here the empire is finished, and I believe that before the end of this century, it will be finished in the rest of the world. We will see the burial of the empire of the eagle.

Palast: You don’t interfere in the elections of other nations in Latin America?

Chávez: Absolutely not. I concern myself with Venezuela. However, what’s going on now is that some rightwing movements are transforming me into a pawn in the domestic politics of their countries, by making statements that are groundless. About candidates like Morales [of Bolivia], for example. They said I financed the candidacy of President Lula [of Brazil], which is totally false. They said I financed the candidacy of Kirchner [of Argentina], which is totally false. In Mexico, recently, the rightwing party has used my image for its own profit. What’s happened is that in Latin America there is a turn to the left. Latin Americans have gotten tired of the Washington consensus—a neoliberalism that has aggravated misery and poverty.

Palast: You have spent millions of dollars of your nation’s oil wealth throughout Latin America. Are you really helping these other nations or are you simply buying political support for your regime?

Chávez: We are brothers and sisters. That’s one of the reasons for the wrath of the empire. You know that Venezuela has the biggest oil reserves in the world. And the biggest gas reserves in this hemisphere, the eighth in the world. Up until seven years ago, Venezuela was a U.S. oil colony. All of our oil was going up to the north, and the gas was being used by the U.S. and not by us. Now we are diversifying. Our oil is helping the poor. We are selling to the Dominican Republic, Haiti, Cuba, some Central American countries, Uruguay, Argentina.

Palast: And the Bronx?

Chávez: In the Bronx it is a donation. In all the cases I just mentioned before, it is trade. However, it’s not free trade, just fair commerce. We also have an international humanitarian fund as a result of oil revenues.

Palast: Why did George Bush turn down your help for New Orleans after the hurricane?

Chávez: You should ask him, but from the very beginning of the terrible disaster of Katrina, our people in the U.S., like the president of CITGO, went to New Orleans to rescue people. We were in close contact by phone with Jesse Jackson. We hired buses. We got food and water. We tried to protect them; they are our brothers and sisters. Doesn’t matter if they are African, Asian, Cuban, whatever.

Palast: Are you replacing the World Bank and the International Monetary Fund as “Daddy Big Bucks”?

Chávez: I do wish that the IMF and the World Bank would disappear soon.

Palast: And it would be the Bank of Hugo?

Chávez: No. The International Humanitarian Bank. We are just creating an alternative way to conduct financial exchange. It is based on cooperation. For example, we send oil to Uruguay for their refinery and they are paying us with cows.

Palast: Milk for oil.

Chávez: That’s right. Milk for oil. The Argentineans also pay us with cows. And they give us medical equipment to combat cancer. It’s a transfer of technology. We also exchange oil for software technology. Uruguay is one of the biggest producers of software. We are breaking with the neoliberal model. We do not believe in free trade. We believe in fair trade and exchange, not competition but cooperation. I’m not giving away oil for free. Just using oil, first to benefit our people, to relieve poverty. For a hundred years we have been one of the largest oil-producing countries in the world but with a 60 percent poverty rate and now we are canceling the historical debt.

Palast: Speaking of the free market, you’ve demanded back taxes from U.S. oil companies. You have eliminated contracts for North American, British, and European oil companies. Are you trying to slice out the British and American oil companies from Venezuela?

Chávez: No, we don’t want them to go, and I don’t think they want to leave the country, either. We need each other. It’s simply that we have recovered our oil sovereignty. They didn’t pay taxes. They didn’t pay royalties. They didn’t give an account of their actions to the government. They had more land than had previously been established in the contracts. They didn’t comply with the agreed technology exchange. They polluted the environment and didn’t pay anything towards the cleanup. They now have to comply with the law.

Palast: You’ve said that you imagine the price of oil rising to $100 dollars per barrel. Are you going to use your new oil wealth to squeeze the planet?

Chávez: No, no. We have no intention of squeezing anyone. Now, we have been squeezed and very hard. Five hundred years of squeezing us and stifling us, the people of the South. I do believe that demand is increasing and supply is dropping and the large reservoirs are running out. But it’s not our fault. In the future, there must be an agreement between the large consumers and the large producers.

Palast: What happens when the oil money runs out, what happens when the price of oil falls as it always does? Will the Bolivarian revolution of Hugo Chávez simply collapse because there’s no money to pay for the big free ride?

Chávez: I don’t think it will collapse, in the unlikely case of oil running out today. The revolution will survive. It does not rely solely on oil for its survival. There is a national will, there is a national idea, a national project. However, we are today implementing a strategic program called the Oil Sowing Plan: using oil wealth so Venezuela can become an agricultural country, a tourist destination, an industrialized country with a diversified economy. We are investing billions of dollars in the infrastructure: power generators using thermal energy, a large railway, roads, highways, new towns, new universities, new schools, recuperating land, building tractors, and giving loans to farmers. One day we won’t have any more oil, but that will be in the twenty-second century. Venezuela has oil for another 200 years.

Palast: But the revolution can come to an end if there’s another coup and it succeeds. Do you believe Bush is still trying to overthrow your government?

Chávez: He would like to, but what you want is one thing, and what you cannot really obtain is another.

Investigative reporter Greg Palast, who interviewed President Hugo Chávez for the British Broadcasting Corporation (BBC), is the author of “Armed Madhouse: Dispatches from the Front Lines of the Class War,” from which this is adapted.

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