The Revenant: Brief Glimpses of Empire's Reality

by Chris Floyd

May 1, 2010


I. The Ghost Who Walks
Last week, the reappearance of a figure from the recent past briefly stirred the amnesiac fog that enfolds the brutal reality of the American empire. Former Panamanian ruler Manuel Noriega was taken from the American prison which has been his home for the past 21 years and flown to Paris, where he is to stand trial for decades-old drug-trafficking charges.

The extradition was itself illegal. Noriega, who was captured after  the illegal American invasion of his country in 1989, was classed by the United States as a "prisoner of war." In fact, he is the only official POW in American hands today; the empire's innumerable Terror War captives have been denied this designation and its legal protections under the Geneva Conventions. But of course the United States long ago stopped paying even lip service to those "quaint" strictures, as the Noriega case once again demonstrates. Under the Geneva Conventions, POWs cannot be sent by their captors to a third country. But Washington wants to keep Noriega – a former CIA asset who left the rez and defied his imperial paymasters – under wraps, even though his U.S. sentence for drug charges has now been served. So off he went to France at the order of Secretary of State Hillary Clinton – convention, and Conventions, be damned.

But why is it so vital to keep the ex-CIA hireling deep-sixed? Simon Tisdall  has some answers in the Guardian. Tisdall notes that the U.S. invasion was ordered by Noriega's former CIA boss turned president, George Herbert Walker Bush, to complete an American-backed coup that had failed a few months earlier. Bush sent 24,000 troops to the tiny Central American country – which had been illegally hived off from Colombia in the early 20th century in order to give America control over the territory where the Panama Canal would be built.

By the time of the Bush invasion, American elites had been fuming for years over the Panama Canal Treaty signed in 1977 by President Jimmy Carter, which finally gave control of the Canal to Panama. Even though the treaty would not go into effect until 1999, it evoked bitter and virulent controversy, as anyone around in those days will remember well: Carter was a traitor, a socialist, a weakling, giving away sacred American territory and undermining national security, etc., etc.  In fact, the battle was in many ways a test-run for the well-oiled combination of corporate interests, aggressive nationalism and right-wing crankery that would dominate American life after 1980.

Noriega came to power after the death of the Panamanian leader who had signed the treaty, Omar Torrijos – who went down in a plane crash a few months after anti-treaty stalwarts Ronald Reagan and CIA chief Herbie Walker took over in Washington. Noriega, who had been a CIA "asset" since the late 1950s, carried on his yeoman service on behalf of his new bosses for awhile – but the assumption of formal power went to his head. He forgot he was a servant, was surly with his masters, and finally crossed the line: refusing to take part in the secret terrorist war that Reagan and Bush were waging, with Iranian money, against Nicaragua. Suddenly, Noriega's manifold crimes and massive corruption, which Washington had tolerated – indeed rewarded – for decades, suddenly became matters of urgent concern. Noriega went from imperial pet to "new Hitler" in fairly short order. Tisdall takes up the story:

Noriega was a thug. But for many years, he was America's thug – until he turned on his mentors. Trained in military and intelligence matters at the School of the Americas, he became for a time a valued CIA "asset" working for the agency and the US Drug Enforcement Administration. Government documents submitted to the Miami court in pre-trial hearings in 1991-92 confirmed that Noriega was paid (at least) $320,000 by the US government for services rendered. Simply put, Noriega knew too much. He acted as a cold war listening post for the US during turbulent times in Guatemala, El Salvador and Honduras, according to William Buckley's book, Panama: the Whole Story. … 

In this capacity, Noriega would have heard a great deal of interesting material, as the Reagan-Bush team aided and abetted horrific atrocities carried out by their right-wing proxies in the region, depredations that killed  thousands of innocent people – more than 200,000 in Guatemala alone. Back to Tisdall:

The jury in Noriega's trial on 10 narrowly defined drug-related counts heard none of this. Nor did it hear about Noriega's contacts with Oliver North, John Poindexter, CIA chief William Casey and other key figures in the Ronald Reagan and Bush administrations who, allegedly, connived in the supply of arms to Nicaragua's Contra rebels paid for with Medellín cartel drug cash. There were many other such allegations; and Noriega claimed to have proof of senior US politicians' connivance in drug trafficking for political purposes. But none was allowed in evidence.

Having served his sentence, the "prisoner of war" Noriega should now be returned to his own country. But this cannot be allowed. As Tisdall notes:

In Panama, Noriega would have been free to tell all he knew. And for many powerful men in Washington, some of whom are still alive, that prospect was potentially dangerous. The outcome of the Noriega case in Miami, like the 1989 invasion, was never in doubt from day one. It was a show trial, a warning to others. It was pure vengeance. It was a cover-up of decades of illicit regional meddling. But it was also a demonstration of raw American power, of which the world was soon to have more frightening examples.

II. The Past is Prologue
What does this "ancient" history have to do with our brave new world, where world-renowned progressive heroes and Peace Laureates guide with benign and benevolent hand? Plenty.

Noriega's case reminds us of the cynical and brutal nature of the American empire's actual operations. Not the gauzy pictures painted by the increasingly all-pervading "psy-ops" warfare conducted by our militarist honchos to control the "information battlespace" of the American mind (as powerfully detailed  in a new piece by Tom Hayden), but the genuine blood-soaked filth and crime which undergirds "the shining city on a hill." This is not old news or ancient history: it is happening today, all over the world, in shadows and corners we will never see – except in stolen glimpses revealed by accident, or by leaks from one pack of courtiers trying to bring down another, or through diligent efforts of a handful of journalists and investigators, and the enormous courage of some survivors and eyewitnesses to the operations of power.

The rise of Barack Obama to temporary management of the imperial enterprise has changed nothing of this. Nor was it ever intended to. As I noted here  back in March 2008, before Obama had secured the Democratic nomination:

Well, it doesn't really get much plainer than this, does it? From AP:

Obama Aligns Foreign Policy with GOP
Sen. Barack Obama said Friday … "that my foreign policy is actually a return to the traditional bipartisan realistic policy of George Bush's father, of John F. Kennedy, of, in some ways, Ronald Reagan...."

Obama is doing two things here, reaching out to two very different audiences, on different wavelengths. First, for the hoi polloi, he is simply pandering in the most shameless way imaginable, throwing out talismans for his TV-addled audience to comfort themselves with: "You like JFK? I'll be like him! You like Reagan? I'll be like him too! You like the first George Bush? Hey, I'll be just like him as well!" This is a PR tactic that goes all the way back to St. Paul the spinmeister, who boasted of his ability to massage his message and "become all things to all men." Obama has long proven himself a master of this particular kind of political whoredom -- much like Bill Clinton, in fact, another champion of "bipartisan foreign policy" who for some strange reason got left off Obama's list of role models.


But beyond all the rubes out there, Obama is also signaling to the real masters of the United States, the military-corporate complex, that he is a "safe pair of hands" -- a competent technocrat who won't upset the imperial applecart but will faithfully follow the 60-year post-war paradigm of leaving "all options on the table" and doing "whatever it takes" to keep the great game of geopolitical dominance going strong.


What other conclusion can you draw from Obama's reference to these avatars, and his very pointed identification with them? He is saying, quite clearly, that he will practice foreign policy just as they did. And what they do? Committed, instigated, abetted and countenanced a relentless flood of crimes, murders, atrocities, deceptions, corruptions, mass destruction and state terrorism… [This was followed by detailed examples from this glorious record.]

What Obama promised, he has delivered. Escalating the Terror War, expanding arbitrary powers over life and liberty (even openly proclaiming the power to kill American citizens by executive order), protecting the avowed torturers of his predecessor while continuing "enhanced interrogations" by American agents and foreign proxies, filling the coffers of war profiteers with ever-increasing mountains of loot – in all things he has proved himself an apt pupil and worthy heir of the imperial ancestors he lauded.

Just last month had another of those rare glimpses into the thuggish reality of imperial power in its continuity under Obama. It was in Afghanistan, now ruled by Obama's hand-picked commander, General Stanley McChrystal – a long-time expert in the blackest ops of covert war, a man "whose entire career in Iraq remains a classified secret," as Hayden reminds us. It was a small story, making only the slightest stir for a few hours: the report that Obama's  secret terror warriors had dug the bullets out of the bodies of two pregnant women and a teenage girl they had killedin a botched night raid on a home that was actually  occupied by officials of the American-backed Afghan government. Evidence indicated that the American agents used knives – or for all we know, can openers – to pry their bullets loose from the still-fresh corpses, and from the surrounding walls which had been sprayed, berserker-style, in the raid. Then the respectable official spokesmen for the American military put out the story that the dead women had been victims of an "honor killing" at the hands of the barbaric natives: the hands, in fact, of the two men who had also been killed in the raid – a police commander and a prosecutor for the U.S-backed government, now transformed into "insurgents."

In this particular case, the operations of the fog machine were thwarted by a reporter for the UK paper, The Times, who, practicing the ever more novel art of journalism, uncovered the truth by going to the scene and talking to eyewitnesses, survivors, and local officials. Finally, weeks later, the American brass were forced to admit that their agents had murdered the innocent villagers, violated their corpses and then lied to the world about it. The usual scrapings from petty cash were passed around to the survivors -- $10,000 for five lives. American officials made the usual apologies. "Black Ops" McChrystal made the usual noises about avoiding civilian casualties and tightening the reins on his night riders.

That's it. That's all that happened. No one was punished, no one was prosecuted, no one was fired or even reprimanded for this act of murder and butchery. The story appeared, there was the slightest parting of the cloud, then the fog enfolded reality again.

And this was just one story. What of the many – the countless – other stories that never see even a glint of the light of day? The incidents that go on – the murder, corruption, subornation, subversion, thuggery, and crime of every description that are the daily business of maintaining a system of military dominion and rampant oligarchy? We don't know the half of it, the tenth of it; we wander in the fog, hearing the distant ghostly moans, but never knowing where they come from, or what they mean.


Article nr. 65585 sent on 01-may-2010 22:31 ECT


www.uruknet.info?p=65585

Confessions Of A Wall St. Nihilist: Forget About Goldman Sachs, Our Entire Economy Is Built On Fraud

Must read for the sunday (my emphasis): by Mark Ames, April 30, 2010


There was a strange moment last week during President Obama's speech at Cooper Union. There he was, groveling before a cast of Wall Street villains including Goldman Sachs chief Lloyd Blankfein, begging them to "Look into your heart!" like John Turturro's character in Miller's Crossing...when out of the blue, the POTUS dropped this bombshell: "The only people who ought to fear the kind of oversight and transparency that we're proposing are those whose conduct will fail this scrutiny."


The Big Secret, of course, is that every living creature within a 100-mile radius of Cooper Union would fail "this scrutiny"--or that scrutiny, or any scrutiny, period. Not just in a 100-mile radius, but wherever there are still signs of economic life beating in these 50 United States, the mere whiff of scrutiny would work like nerve gas on what's left of the economy. Because in the 21st century, fraud is as American as baseball, apple pie and Chevrolet Volts--fraud's all we got left, Doc. Scare off the fraud with Obama's "scrutiny," and the entire pyramid scheme collapses in a heap of smoldering savings accounts.
That's how an acquaintance of mine, a partner in a private equity firm, put it: "Whoever pops this fraud bubble is going to have to escape on the next flight out, faster than the Bin Laden Bunch fled Kentucky in their chartered jets after 9/11."
And that's why this SEC suit accusing Goldman Sachs of fraud is really just a negotiating bluff to give Obama's people some leverage--or it's supposed to be, anyway--according to the PE guy. He dismissed all the speculation that the fraud investigations would turn on other obvious villains like Deutsche, Merrill, Paulson & Co., the Rahm Emmanuel-linked Magnetar and so on.
"You don't get it, Ames. Even Khuzami, the SEC guy in charge of the Goldman case, is a fraud; the fucker was Deutsche's general counsel when they pulled the same CDO scam as Goldman. You have no idea how deep this goes."
And it's clear that a lot more people here are aware of how fundamentally rotten things are but they're not willing to face the big fraudonomics bummer yet, preferring instead to stick with specific accusations.


My position on this was, "Good, throw the book at those crooks too, I don't see what the problem is here."
This was exactly what I argued a week ago, during a verbal slapfight with that acquaintance of mine. We were making a scene in a Midtown yuppie restaurant, arguing over just how much damage Wall Street had caused, and what to do about it.
His position was indefensible, and he knew it, so he switched tactics:
"OK Ames, which bankers would you throw the book at? Because you're arguing that they're all guilty. So which ones do you go after? Two of them? Three? Half of them?"
"Every last one of them. Lock 'em up in one of their private prisons."
"Not gonna happen, Che."
"Che? Me? Listen, Scarface, I'm about law and order. Don't any of you PE degenerates believe in that anymore?"
"OK, here's the deal, Che. I'm going to walk you through this nice and slow so that even an agave-sweetened hippie like you can understand this. Stick with me, this is gonna be a little complicated. Ready?" And so he began.
"Let's say the government decides one day, 'You know, we oughta listen to Che here, let's throw the book at every firm and every executive that our people can make a case against. Because you know, gosh, it's all about rule of law and blind justice, just like Che says.' OK, so now this means indicting just about every serious player in finance, so they take down Goldman Sachs, they take down Citigroup, JP Morgan, BofA... and they also serve all the big funds who are at least as guilty, if not more. So they shut down Pimco, Blackrock, Citadel... maybe they indict Geithner and Summers, haul in some of Bush's crooks... right?"
"Too bad they don’t serve popcorn here, this is getting good."
"OK, now guess what you've just done? You've just caused the markets to completely tank. Remember what happened after the Lehman collapse? Remember how popular that made every politician in Washington? Still wondering why they coughed up a trillion bucks? They were scared for their lives; that's why they voted for that bailout. You'd have done the same goddamn thing. But if we go after everyone guilty of fraud and theft, the market crash this country would see would make 2008 look like Sesame Street. Open that can of worms labeled 'Fraud' and the whole fucking economy collapses. You may as well prosecute people for masturbating. No one will know where the fraud investigation stops and who will be charged next--everyone will try to cash out, and the markets will tank to zero. And guess what happens when the markets tank to zero? Every fucking American with a retirement plan, or an investment portfolio, or a 401k--every state pension plan in the country, every teacher's pension fund, every fireman's pension--every last one of them will be wiped out. That's what the Lehman collapse taught us."
"Us? It didn't teach anything but that this country is run by maniacs."

"Jesus H. Christ, Ames– you're even more clueless than the idiots who managed the Lehman collapse. I mean, didn't everyone get it how badly those idiots screwed up with Lehman? It was the biggest screw-up this hemisphere has ever seen. You had Secretary Paulson and Fed Chief Bernanke scratching their asses not knowing what to do, so then they go, 'OK, we're supposed to be a free market economy, and we're supposed to be the Republicans--let's try something different for a change since nothing else is working. Let's go out on a limb and actually give this "free market" thing a whirl. Who knows? Maybe the "free market" really works the way we always say it does. Nothing else seems to work, let's let the free market decide Lehman's fate. Maybe corporate-socialism isn't the answer.' So they hung Lehman out in the free-market, and BAM! The. Shit. Hit. The. Fan. No shit, dudes--the free market is for suckers, didn't your daddy teach you idiots that? Not only did Lehman collapse--everything collapsed; confidence in the entire system collapsed. And here's what I'm trying to explain to simpletons like you: Our economy is just a confidence game. Don't ask me how it got this way, don't care."
I tried saying something insulting to him, but he just talked right over me, lurching forward baring his laser-whitened teeth.
"I'm sure you have the answer, you and Ron Paul and all the other pot-smoking libertarian do-gooders have it all figured out. But what I'm saying is, no confidence means end of the confidence game. That's what Lehman showed. Every single player in finance suddenly had to face the fundamental problem--this whole fucking economy is built on fraud and lies and garbage. So when Lehman collapsed, every single player panicked, going, 'If Lehman was nothing but a Ponzi scheme--and I know what I'm running is a Ponzi scheme--holy shit, that means everyone else is running a Ponzi scheme too! Run for the exits!' No one trusted anyone else, everyone pulled out, and the entire global economy collapsed just like that. And that meant your parents, my parents, every teacher, every fireman, every person in the country going into retirement, every price on every asset--wiped out.
"And here's what I'm trying to get you to understand: In the grown-up world, when an entire country's savings accounts are wiped out because of some do-gooder and his law books and his Thomas Jefferson 'What about free and fair markets?' crap, that is a big problem--people don't give a fuck about Jefferson and 'free and fair markets,' they just want their savings to be worth something. And people are right: Jefferson was an imbecile. He should have been a folk singer, not a Founding fucking Father. But that's another issue that's over your head--the point is, the guy who destroys this economy because it's 'the right thing to do' will have to flee for his life, and whatever president or political party was in power when that decision was made will be out of power for the next 200 years. That's why Washington panicked and passed 'the bailout,' they didn't want to be the fools whom all the Ponzi victims blame for tanking the Ponzi scheme, so they broke the glass and pumped up a newer, bigger Ponzi scheme. It was an expensive 14 trillion dollar lesson in, 'Stay the fuck away from free-market experiments, assholes!' How naive are you people to actually believe that 'free market' crap? The problem is when people in power are stupid enough to listen to guys like you: all the do-gooder libertarians and the do-gooder free-market Republicans who forgot that they're supposed to lie. Hello!"
"Libertarian, me? Since when was I ever a libertarian?"
"That's my point: Fools like you don't even know who you are anymore. They forgot that they're supposed to lie about all that libertarian free-market shit, keep it far the fuck out of policy. But instead of just lying about free-markets while secretly propping up Lehman, the idiots actually tried pulling off a 'free-market' miracle, and we had to pay $14 trillion just to find out what I could have told them for no fee at all, which is: 'Hey, assholes, you're supposed to be hypocrites, OK? You're supposed to be two-faced free-market liars, not libertarian Quakers! You're not supposed to believe in anything--your job is to get up in front of the public and lie about free markets and the rest. Period.'
"That's it, how fucking hard is it? Look, watch my face: Say one thing out of one side… and do the other out of the other side. Got that? Let everyone else whine and cry about, 'Ooh, that's not fair, ooh, that's a bailout, that's socialism, that's corruption.' That's what losers do--they whine. You, for example, Che--you whine all the time, and look at you… Can you pay the bill for this meal? Is there a libertarian on earth who can afford to buy a decent meal in Manhattan? And now, look at me: I'm a hypocrite. Hell yes I am! I lie every day of my life, I lie to myself in my sleep. Hell, I'm lying to you right now, in fact I don't even know what the fuck I'm saying anymore because I'm so used to lying. And yet--who's the guy with the black card? Who's the one who's going to pick up the check tonight? Guys with power, guys like me, we lie. You got that? 'Lie' as in 'My Lai' the massacre--as in, 'My Lai you long time, me so free-markety.' You distract the dumbshits with free-market B.S. because hey, for whatever reason, that's what the public likes to hear, it doesn't really matter what lie you feed them so long as it's the lie that puts them in a trance. And then behind the scenes, you do the very opposite: You fix the game, you cover up this problem here with those funds there, you move shit around, you skim budgets and you subsidize the system, you cover up the bad shit and once in a while throw a has-been to the wolves to keep the public entertained--that's the way the system works, and anyone who's an adult understands that. And everyone who doesn't understand that can go form an online libertarian chat group and complain with all their little libertarian friends about free markets and Jekyll Island and 'Wahhh! It's not not fair, waahhhh!'"
"What's with the libertarian accusation?"
"It's just that you all sound the same to me. Libertarians, hippies--is there really a difference? You all whine alike: 'It's not fair, man! Ooh! You can't do that, it's fraud, it's corruption, ooh no!' Or: 'It's the income inequality, man; Goldman Sachs controls us all man; it's socialism for the rich; it's all too scary for my retarded 5-year-old libertarian brain!' Seriously, anytime I meet libertarians like you--"
"Listen--I'm not a fucking libertarian, OK? I want free handouts. How clear do I have to make this? Me--handouts. Me--Big Government. I want to collectivize your productive cash, because I am a resentful parasite. Are you capable of processing a single word of what I'm saying to you, Spaz?"
"Uh-huh, sure, whatever. Here's the thing: I think it's great that you and your friends memorized Road to Serfdom in between Star Trek episodes--no really, I'm happy for you. Yeah, we're all so proud. But here's the thing: We grown-ups are really, really busy now trying to sort out the free-market mess you made with that Lehman move of yours. Yeah, so why don't you run along to your libertarian chat rooms and have your little debates about Jekyll Island and the gold standard, because it really means a lot to us. And report back to me as soon as you have it all figured out, m'kay? Just get the fuck out of my face and leave the adults alone."

It got a lot more vicious and personal than this, but when our verbal slap-fight ended--and he paid the bill--I thought about what he said, and it made a lot more sense. Fraud has become so endemic in this country that it's woven its way into America's DNA, forming a symbiotic relationship that can't be undone without killing off the host. If they push it just a little too hard, the entire American economy could crash, asset values could tank, and that means tens of millions of extremely pissed off retirees and Baby Boomers. As the Wall Streeter put it: "Whoever is responsible for bursting this latest bubble by exposing all the fraud--and tanking all the markets--will not only be out of power for at least a generation, but they'll all have to get radical reconstructive surgery on their faces and seek political asylum somewhere remote. No one wants to be that guy, and that's why it's not going to happen."

That may be true, but all bubbles to eventually burst, all Ponzi schemes do collapse. The only question is when. For those of us not on the verge of retiring, the sooner we have this day of reckoning and get it over with, the better.

Fraudonomics: 10 Fun Fraud Facts

Ever since I got kicked out of Russia and forced back home, I've been collecting all kinds of news articles about fraud, in a document file titled "America Is Russia." Here's a little taste of the wonderful world of American Fraud:
1). Accounting Fraud: Last year, America's leading banks were insolvent. They had tens or hundreds of billions in losses on their books, and the only way to wipe those losses out would be to either a) own up to the mess, raise enormous amounts of money on top of all the bailout money; or b) get out a big fat eraser, and wipe those losses off the books as if they never existed. The first option was nice and all, but a real hassle. So Geithner and Larry Summers chose Door Number Two: Accounting Fraud. They forced the FASB to accept a rule-change in the accounting methodology called "mark-to-model" which let banks decide how much their assets were worth, rather than letting the markets decide. So if for example a BofA owned a complex security called "Orion Butt Fungus" that was worth 5 pesos on the open market, but BofA was too broke to go out and raise 5 pesos to cover that loss, under the new accounting rules, the government told BofA that rather than pricing "Orion Butt Fungus" at what the market will actually pay for it, why not first ask, "How much would BofA like 'Orion Butt Fungus' to be worth, in a perfect world?'" If BofA answers, "Doyee, gee I dunno, how about $500 million?" then under the "mark-to-model" accounting rules, BofA could now value "Orion Butt Fungus" at $500 million, and voila! Their problems are over. That wasn't so hard, was it? Suddenly, BofA looks like it knows how to pick winners! And no one's going to second-guess them, because everyone else is mark-to-modeling their "Orion Butt Fungi" too! The end result: under the old rules, BofA would have had to raise money just to cover its debts, sort of like you and me have to do, and that's just a lot of money going to waste. But now that its portfolio is so profitable, BofA has a much easier time raising money, which it uses to pay ginormous bonuses to its executives.
2). Big Pharma Fraud. Remember that scene early in Fight Club, when Edward Norton explained his job, when it was more profitable to let a car defect go and pay whatever lawsuit settlements come from the deaths, and when it's better to recall the cars because the number of deaths will result in too many lawsuits? This is humanitarian do-gooder stuff compared to the savage real-world fraud-for-profit model that drives America's drug companies. It's really simple and it goes like this: the more fraud a drug company commits, so long as it's off-the-scale fraud with the most horrible consequences for the victims, the drug company's profits always outdo the criminal fines and lawsuits by factors of 20, 30, 100... It's as simple as that. Because the billion in penalties here or the two billion in class action lawsuit settlements there are always far less than the tens of billions you earn from pushing harmful drugs on unsuspecting idiots. To wit: Between May 2004 and March 2010, a handful of top drug companies like Pfizer, Eli Lilly and Bristol-Myers paid over $7 billion in criminal penalties for bribing doctors to prescribe drugs for unapproved uses, with sometimes deadly consequences. However, as a Bloomberg report noted, the fines are always a fraction of the profits--Pfizer alone paid almost $3 billion in criminal fines since 2004, yet that was just one percent of their total revenues; Eli Lilly got busted bribing doctors to prescribe a schizophrenia drug, Zyprexa, to elderly patients suffering from dementia, even though company-run clinical trials showed an alarming death rate of 31 people out of 1,184 participants (double the placebo rate). Whatever--the market for elderly dementia patients meant billions in extra revenues. So Eli Lilly continued pushing Zyprexa on the elderly for another four years until it the Feds busted them. Eli Lilly got hit with $1.42 billion fine, but that was peanuts compared to the $36 billion it earned on Zyprexa sales from 2000-2008. To make it happen, the drug companies buy off all the checks and balances: lawsuits revealed the enormous bribes they pay to doctors, and even America's medical journals are so corrupted by drug company influence that they're no longer reliable as much more than hidden advertisements, according to a recent UCSF study. Medical journals are 5 times more likely to publish "positive" drug reviews than negative reviews, and one-quarter of all clinical trials are never published at all, leading doctors to prescribe drugs assuming they have all the information. The result:prescription drugs kill one American every five minutes ...while Americans pay more for drugs than anyone in the world, spending a total of $12 billion on drugs in 1980 to spending $291 billion in 2008--a 1,700% increase. America is ranked only 17^th in the world in life expectancy.
3). Alan Greenspan: Fraudonomics Maestro. America's central banker from 1987-2006 once told a do-gooder regulator not to fuck with the bankers' fraud schemes, because in Greenspan's mind, fraud was not a crime and didn't need to be regulated. Then Greenspan forced the regulator, Brooksley Born, to resign. Just in time for his next and final act as Central Bank chief: from 2001-2004, Greenspan pumped up the biggest housing bubble in human history by holding rates down to nothing, while touring the country promoting the glories of subprime and Alt-A mortgages. Then in late 2005, when the bubble was ready to burst, Greenspan tendered his resignation and switched over to the other side, signing lucrative contracts with three investment firms all of which bet big against gullible American homeowners, and reaped billions. First, Greenspan signed up to work for Deutsche Bank, which is being sued for securities fraud for selling an Abacus-like CDO to a Warren Buffett-owned bank, M&T; Greenspan also worked for Pimco, which earned $2 billion in a single day in September 2008, when Fannie Mae and Freddie Mac were nationalized with Greenspan's lobbying help; and lastly, Greenspan went to work for Paulson & Co., the hedge fund that raked in $1 billion off the same Abacus CDO deal that brought the SEC fraud suit against Goldman Sachs. It's an unusually perfect record for Greenspan, given his atrocious forecasting record at the Fed. It recalls the old Greenspan circa 1984-5, when he worked as a lobbyist for Charles Keating trying to push regulators off his back and vouching on the record for Keating's character...Keating was eventually jailed for fraud in the worst savings and loan collapse of all.
4). Municipal Debt Fraud. America's $2.8 trillion municipal bond market is rife with fraud of the sort you'd expect in an emerging tinpot economy: opacity rather than transparency, plenty of corruption and kickbacks, resulting in decimated budgets and services cutbacks in communities across the country. The problem all stems from way the bonds are issued these days: instead of holding open tenders, nearly all are the result of backroom deals. Back in 1970, only 15 percent of municipal bond contracts were awarded through no-bid contracts; last year, 85% of muni bond deals were assigned in no-bid, non-transparent agreements. Studies show that no-bid bonds invariably cost municipalities more than bonds resulting from open tenders. So far, fraud and corruption charges have been leveled against state employees and city councilors in Florida, New York, New Mexico, Alabama and California, to name a few. Muni bond defaults soared from just $348 million in 2007 to $7.4 billion in 2008--that's an increase of 20 times– with growing numbers of cities, counties and states on the verge of bankruptcy.
5). Journalism fraud. The Washington Post got caught whoring out their venerable editorial staff to corporate lobbyists for anywhere from $25,000 to $250,000 a date, depending on the access. The Atlantic Monthly admitted to TalkingPointsMemo that it routinely sold access to its editorial staff for cash. As for business journalism, all sorts of articles and studies have asked the obvious question: "How did every mainstream business outlet miss the financial collapse of 2008?" Among all the self-flagellating mea-kinda-culpas, you won't find the word "fraud" in their answer. Speaking of business journalism and fraud, The Business Insider, one of the top business news blogs, published a pair of articles defending Goldman Sachs against the SEC fraud charges. The author of the articles defending Goldman Sachs is Business Insider's co-founder and editor, Henry Blodget. In 2003, Blodget himself was charged with securities fraud by the SEC for repeatedly misleading clients into buying stocks of companies that in private emails Blodget referred to as "piece of shit." Under the terms of Blodget's settlement with the SEC, he agreed to a lifetime ban from the securities industry, and he paid $4 million in fines and disgorgements. Since he is not barred from the world of business journalism, Blodget was able to post an article last Friday headlined: "HOLD EVERYTHING: The SEC’s Fraud Case Against Goldman Seems VERY Weak."
6). Fraudonomics K-12. If you want your kid to grow up to succeed in a fraud-based economy, you need to teach him the ABC's of cheating starting at a young age. This is one area where America's schools aren't failing their students. Cheating is so rampant in schools that nowadays if the student doesn't cheat on his exam, chances are his teacher or administrator will cheat on his test for him. One in five elementary schools in Georgia are currently being investigated for tampering with the students' standardized test scores--although suspicious patterns of erasing and remarking answers showed up in half of the state's elementary schools. In California, as many as two-thirds of its public schools admitted to fudging its students' standardized test scores. A survey of graduate school students found that 53 percent of business school grad students admitted to cheating, more than any other grad school discipline. Overall, up to 98 percent of college students today admit to cheating, compared to just 20 percent who cheated in 1940.
7). Boardroom Fraud. Corporate America's boardrooms are stacked up these days in tight, intertwined relationships that turn public companies into crime scenes, plundering money from unsuspecting shareholders and divvying up the loot among the directors and top executives. In 2008, Chesapeake Energy's stock price collapsed from $74 per share to $9.84, wiping out $33 billion in shareholder value. The CEO, Aubrey McClendon, gambled and lost 94% of his stock in the company on a margin call, personally losing about $2 billion. So what did the board of directors do? They voted to award McClendon $112 million for 2008, the highest of any CEO in America. Shareholders were outraged, calling it a "bailout," and several pension funds tried suing Chesapeake, but the courts in Oklahoma blocked the lawsuits. That's because Aubrey McClendon is sort of the George Bush of Oklahoma--a spoiled fuck-up with a rich and powerful granddaddy--Robert Kerr, former governor and senator, and founder of Kerr-McGee--meaning plenty of VIP connections for the loser grandkid. So on Chesapeake's board, you had Aubrey's cousin, Breene Kerr; Frank Keating, Republican ex-governor of Oklahoma whose son Chip (and Chip's wife) works for Chesapeake; Don Nickles, Republican ex-Senator of Oklahoma who co-funded with Aubrey the Republican anti-gay marriage campaign in 2004; Richard Davidson, the former head of Union Pacific, whose corrupt board of directors lavished Davidson with tens of millions in bonuses and a $2.7 million per year pension when he retired... Now multiply a board of directors like this by the sum total of "Corporate America" and you get…a corrupt, tin-pot corporate culture masquerading as a civilized First World corporate culture. That's us. (You can read about this problem in an excellent new book Money For Nothing: How The Failure of Corporate Boards is Ruining American Business and Costing Us Trillions.)
8). Corrupt credit rating agencies. The only way big institutional investors like pension funds could justify buying a piece of the Orion Butt Fungus CDO pie was if ratings agencies like S&P or Moody's gave it a top-notch seal of approval: AAA rated, with a little star on the forehead for good behavior. And in the world of fraudonomics, good behavior looks like this email from a Standard & Poor ratings analyst in December 2006:

"Rating agencies continue to create an even bigger monster _ the CDO market. Let’s hope we are all wealthy and retired by the time this house of cards falters."

The happy ending to this story is that a huge percentage of thieving scum like this emailer saw their hopes become reality: they got wealthy and retired before the CDO market crashed in a trillion-plus dollar heap of shit. And if they didn't retire, even better--because bonuses in 2009 were soaring, thanks to the always-gullible American taxpayer.
9). Regulatory Fraud: In the OTS, OCC, Fed, pension benefit guaranty agency and of course the SEC, where whistleblowers were routinely ignored because the regulators were too busy painting their monitors while surfing sites like www.fuck-my-wife.com.
10). Judicial Fraud: Juvenile court judges in Pennsylvania took millions of dollars in kickbacks from privately run prisons in exchange for sentencing thousands of innocent kids to juvenile prison terms. Chronic on-the-bench masturbation is running rampant: an Oklahoma judge was accused of using a penis pump on the bench, while nearby in Texas, a Harris County judge masturbated and ejaculated on a defendant's hand. Speaking of Texas, theentire juvenile prison system there was turned into a sex abuse racket involving Texas state officials–over 750 official complaints about prison administrators molesting or raping underaged inmates in all 13 juvenile facilities had been officially logged between 2000 and 2007.
The list goes on and on. Hell, even our literature was corrupted with fraud: James Frey's addiction "memoir" A Million Little Pieces turned out to be A Million Pieces of Bullshit, the biggest literary fraud of our time. Fooled readers sued, Oprah chewed him out and Frey is now a bestelling "fiction" author.
This is just scratching the surface, but you get the point. We’re way past the point of redemption. No wonder everyone’s dreaming of a violent apocalypse to wipe the slate clean, and take us away to another plane where everything would be better. Anything but this.
_______

About author
Mark Ames was founder and editor of The eXile, the notorious Moscow-based, English-language newspaper shuttered last year after a raid by Russian authorities. He is the author of two books: The eXile: Sex, Drugs and Libel in the New Russia (together with Matt Taibbi), and Going Postal: Rage, Murder and Rebellion: From Reagan’s Workplaces to Clinton’s Columbine and Beyond.

Link: www.smirkingchimp.com/thread/mark-ames/28354/confessions-of-a-wall-st-nihilist-forget-about-goldman-sachs-our-entire-economy-is-built-on-fraud

Who PWNS Whom ?!

By Chas Freeman on April 30, 2010

The other day Stephen Maher published a piece on Electronic Intifada saying that American thirst for hegemony in the region, and not the Israel lobby, is the prime motivator of US policy in Israel and Palestine. What follows is an excerpt of a private email exchange responding to Maher’s post, reprinted by permission of the author, Chas Freeman, a former assistant secretary of defense.

Maher’s account is far from novel on any score but he is describing Japan’s, the UK’s, or Qatar’s role in US strategy, not Israel’s. A few facts to ponder when considering his assertion that Israel is a huge and essential asset for US global and regional strategy:

– the US has no bases or troop presence in Israel and stores only minimal military supplies in the country (and these under terms that allow these supplies to be used essentially at will by the IDF).
– Israeli bases are not available for US use.
– none of Israel’s neighbors will facilitate overflight for military aircraft transiting Israeli territory, let alone taking off from there. Israel is useless for purposes of strategic logistics or power projection.
– Israel is worse than irrelevant to the defense of Middle Eastern energy supplies; the US relationship with Israel has jeopardized these supplies (as in 1973), not contributed to securing them.
– US relations with Israel do not bolster US prestige in Middle Eastern oil-producing countries or assist the US to “dominate” them, they complicate and weaken US influence; they have at times resulted in the suspension of US relations with such countries.
– Israel does not have the diplomatic prestige or capacity to marshal support for US interests or policies globally or in its own region and does not do so; on the contrary, it requires constant American defense against political condemnation and sanctions by the international community.
– Israel does not fund aid programs in third countries to complement and support US foreign or military policy as other allies and strategic partners do.

Japan provides multiple bases and pays “host nation support” for the US presence (though that presence as well as the fact that Japan is paying for a good deal of it are growing political issues in Japan). The air base in Qatar from which the US directs air operations throughout the region (including in both Iraq and Afghanistan) was built and is maintained at host nation expense. So too the ground force and naval facilities we use elsewhere in the Gulf. The US is paid for the weapons and military services it provides to its European and Asian allies as well as its Arab strategic partners. Washington has never had to exercise a veto or pay a similar political price to protect any of them from condemnation or sanctions by the international community. Japan and various Arab countries, as well as European nations, have often paid for US foreign assistance and military programs in third countries or designed their own programs specifically to supplement US activities.
Washington has made Israel our largest recipient of foreign aid, encouraged private transfers to it through unique tax breaks, transferred huge quantities of weapons and munitions to it gratis, directly and indirectly subsidized the Israeli defense industry, allocated military R&D to Israeli rather than US institutions, offered Israeli armaments manufacturers the same status as US manufacturers for purposes of US defense procurement, etc.. Almost all US vetoes at the United Nations and decisions to boycott international conferences and meetings have been on behalf of Israel. Israel treats its ability to command support from Washington as a major tool of diplomatic influence in third countries; it does not exercise its very limited influence abroad in support of US as opposed to its own objectives.
As others have said with greater indirection than I have here, one must look elsewhere than Israel’s strategic utility to the United States for the explanation of its privileged status in US foreign policy, iniquitous as Maher considers that policy to be.

More:  Electronic Intifada and the mudkicker

The Electronic Intifada has on its front page a ludicrous, factually challenged and logically flawed attack on John Mearsheimer and Stephen Walt’s work — work that has been pivotal in shifting the debate on US Middle East policy. It is not clear to me what EI was hoping to achieve with this self-defeating move. But I don’t blame the author of the article — the fellow is clueless, he has cobbled together his screed from arguments and quotes randomly lifted from Noam Chomsky’s writings — I blame EI’s political and editorial judgment. At a time when Israeli colonization is intensifying, with the land in the grip of a neo-Fascist government, one’s priorities must be seriously upside down to spend precious time impugning the invaluable work of allies. It appears for some supporters of Palestine the need to feel self-righteous takes precedence over the imperative to be effective. Now, it is pointless to respond to someone who freely purloins others’ work, misuses sources, and constructs a slipshod argument. But I’ll give two illustrative examples of the kind of deliberate distortions that keep resurfacing in these ideological assaults on M & W (in both cases the specific claims have been ‘borrowed’ from Chomsky):

Chomsky has long maintained that the war in Iraq was for oil. He always adduces the same evidence to support his case. A state department document from 1945, a quotes from Zbigniew Brzezinski and another from George Kennan. Chomsky argues that Middle East oil is ‘a stupendous source of strategic power, and one of the greatest material prizes in world history’ (State Department), and anyone who controls Iraq’s vast oil reserves gains ‘critical leverage’ (Brzezinski), indeed ‘veto power’ (Kennan), over competitors. All of this is indisputable: the United States would no doubt like to control Iraqi oil; it recognizes the ‘critical leverage’ the control affords it; and the critical leverage no doubt would grant it ‘veto power’. Now here is the problem: The State department document Chomsky cites is about Saudi Arabia, not Iraq. And it recommends that, precisely because Saudi oil is so important, US must always maintain friendly relations with the kingdom. Also, it does not follow that regime change is the only means to achieve these goals. Indeed, all of these claims have been just as true the past half century, but they did not necessitate war. The US has long preferred shoring up authoritarian regimes which could ensure its dominance and maintain a stable flow of oil.

Secondly, The Iraqi government was not withholding its oil; it was the US-led sanctions that were preventing it from reaching the markets. There is no evidence that Iraq was unwilling to cede control of its oil to the United States. Indeed, in the months leading up to war Saddam Hussein’s government made several attempts to stave off war by offering the United States exclusive concessions to its oil reserves. If oil was indeed the motivation, then one would expect plentiful evidence of oil interests influencing policy, or at least in selling the war. Chomsky offers none. Nor does he inform readers that Zbigniew Brzezinski, the man whose words he cites as evidence of Iraq as a resource war, was one of its most vocal opponents. Bzrezinski has called the war ‘a historic, strategic, and moral calamity…driven by Manichean impulses and imperial hubris’.

In his peculiar reading of Brzezinski, Chomsky ascribes him a view that is an inversion of what he actually says. Brzezinski, who saw the invasion as an unnecessary war by the pro-Israel neonconservatives, avers:

American and Israeli interests in the region are not entirely congruent. America has major strategic and economic interests in the Middle East that are dictated by the region’s vast energy supplies. Not only does America benefit economically from the relatively low costs of Middle Eastern oil, but America’s security role in the region gives it indirect but politically critical leverage on the European and Asian economies that are also dependent on energy exports from the region. Hence good relations with Saudi Arabia and the United Arab Emirates…is in the U.S. national interest. From Israel’s standpoint, however, the resulting American-Arab ties are disadvantageous: they not only limit the degree to which the United States is prepared to back Israel’s territorial aspirations, they also stimulate American sensitivity to Arab grievances against Israel. (my emphasis)

Since the EI scrivener reproduces Chomsky’s exact interpretation of the ‘critical leverage’ quote along with Kennan’s on ‘veto power’, it is clear that he has never consulted the actual source. The same is true of his other comment about Israel serving as an offshore base for the US (which he mistakenly attributes to Chomsky, who is in fact quoting Alexander Haig). What this fellow doesn’t know is that the comment was uttered in a certain context: i.e., Haig’s bureaucratic struggle against Reagan (whom he saw as an intellectual inferior) in which he was keen to enlist Israel lobby support. (For more on this, see Patrick Tyler’s excellent A World of Trouble or my review of it). So long as the decontextualized quotes fit preconceived notions, who cares what was actually said or done?

The French sociologist Emile Durkheim called this the ‘ideological method’: the use of ‘notions to govern the collation of facts, rather than deriving notions from them’. In the a-historical writings of these analysts-on-the-cheap, one frequently finds that two and two add up to yield twenty-two. If US support for Israel and its interests in the region’s oil have remained constant over the years, it must mean the two are complementary. They aren’t. As I explained elsewhere,

United States Middle East policy has been defined since World War II by the tension between two competing concerns: the strategic interests which require good relations with Arab-Muslim states, and domestic political imperatives which demand unquestioning allegiance to Israel. That the US interest in the region’s energy resources has remained consistent, as well as its support for Israel, leads some to conclude that somehow the two are complementary. They aren’t. US President Harry S. Truman recognized the state of Israel the day of its founding over the strenuous objections of his State Department in order to court the Jewish vote and, more significantly, Jewish money for his re-election campaign. Every president since — with the exception of Lyndon Johnson and George W. Bush, who saw no cause to feign balance — has sought to address this tension with attempts to resolve the Arab-Israeli conflict. All these efforts have so far foundered. A study of US policy in the region over the decades, then, is inevitably a study of the causes of these failures [among which the Israel lobby looms largest].

It is not clear to me why The Electronic Intifada would undermine years of valuable work by giving platform to this discreditable piece of charlatanry. It has certainly made me reconsider any future association with the publication. We are at a juncture that calls for political maturity, to make the most of the openings recently created. This type of reactionary posturing and myopic absolutism merely serves as an alibi for inaction.