- Signs of the Times for Mon, 20 Nov 2006 -

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Editorial: John F. Kennedy and the Pigs of War

Laura Knight-Jadczyk

President Kennedy receives the flag of the cuba exiles (Brigade 2506) in Miami in Dec. 29, 1962 and declares: "I promise to return this flag in a free Havana." Kennedy had been misinformed about the exact details of the planned Cuban invasion.

On November 18th, 1963, John F. Kennedy predicted that the month of April, 1964, would bring "the longest and strongest peacetime economic expansion in our Nation's entire history." And he added: "The steady conquest of the surely yielding enemies of misery and hopelessness, hunger, and injustice is the central task for the Americas in our time . . . 'Nothing is true except a man or men adhere to it -- to live for it, to spend themselves on it, to die for it . . . '"

Time was slipping through his hands . . . he had four days to live.

And today - we are so far from his dream that most American citizens cannot even imagine that he almost made it happen. Never before in the written history of mankind, have we been so precariously poised on the brink of total, global war - a war from which humanity may not emerge alive - that we can only think that those forces that brought John Kennedy's life to a horrifying end intended the result. But, we will come to that soon enough.

John Kennedy's prediction - his hopes for the April to come, the April he never saw - may have related in an indirect way to certain remarks he had made on a previous April day in 1961. The title of the speech was "The President and the Press" and it was delivered to the American Newspaper Publishers Association at the Waldorf-Astoria Hotel in New York. It's a curious speech for several reasons and I have transcribed part of it though you can download listen to the whole talk, in his own voice, here. I think you will be able to detect in his voice the deadly serious maneuver he was making in this speech, that he was saying things that had to be said very carefully, because the message was being delivered on several levels.

After some cleverly humorous opening remarks, John Kennedy gets down to brass tacks; he identifies not only the "enemy," but the way to defeat that enemy:

Our way of life is under attack. Those who make themselves our enemy are advancing around the globe. The survival of our friends is in danger. And yet no war has been declared; no borders have been crossed by marching troops; no missiles have been fired.

If the press is awaiting a declaration of war before it imposes the self-discipline of combat conditions, then I can only say that no war ever posed a greater threat to our security. If you are awaiting a finding of clear and present danger, then I can only say that the danger has never been more clear, and its presence has never been more imminent. It requires a change in outlook, a change in tactics, a change in missions, by the government, by the people, by every businessman, every labor leader, and by every newspaper.

For we are opposed, around the world, by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence; in infiltration instead of invasion; on subversion instead of elections, on intimidation instead of free choice; on guerillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific, and political operations. Its preparations are concealed not published. Its mistakes are buried, not headlined, its dissenters are silenced, not praised; no expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the cold war, in short, with a wartime discipline no democracy would ever hope to wish to match. ...

Perhaps there is no answer to the dilemma faced by a free and open society in a cold and secret war. In times of peace, any discussion of this subject and any action that results are both painful and without precedent. But this is a time of peace and peril which knows no precedent in history.

It is the unprecedented nature of this that also gives rise to your second obligation, an obligation which I share and that is our obligation to inform and alert the American people, to make certain that they possess all the facts that they need and understand them as well; the peril, the prospects, the purposes of our program and the choices that we face.

No president should fear public scrutiny of his program, for from that scrutiny comes understanding, and from that understanding comes support or opposition; and both are necessary.

I'm not asking your newspapers to support an administration, but I am asking your help in the tremendous task of informing and alerting the American people, For I have complete confidence in the response and dedication of our citizens whenever they are fully informed. I not only could not stifle controversy among your readers, I welcome it. This administration intends to be candid about its errors for, as a wise man once said, "an error doesn't become a mistake until you refuse to correct it. We intend to accept full responsibility for our errors, and we expect you to point them out when we miss them.

Without debate, without criticism, no administration and no country can succeed, and no republic can survive. That is why the Athenian law makers once decreed it a crime for any citizen to shrink from controversy. And that is why our press is protected by the First Amendment.

The only business in America specifically protected by the Constitution, not primarily to amuse and entertain, not to emphasize the trivial and the sentimental, not to simply give the public what it wants, but to inform, to arouse, to reflect, to state our dangers, our opportunities, to indicate our crises and our choices, to lead, mold, educate, and sometimes even anger public opinion. This means greater coverage and analysis of international news. For it is no longer far away and foreign, but close at hand and local. It means greater attention to improved understanding of the news as well as improved transmission. And it means finally, that government at all levels must meet its obligation to provide you with the fullest possible information outside the narrow limits of national security. And we intend to do it.

It was early in the 17th century that Francis Bacon remarked on three recent inventions already transforming the world: the compass, gunpowder and the printing press. Now the links between the nations first forged by the compass have made us all citizens of the world, the hopes and threats of one becoming the hopes and threats of us all.

In that one-world effort to live together, the evolution of gunpowder to its ultimate limit has warned mankind of the terrible consequences of failure.

And so it is to the printing press, the recorder of mans deeds, the keeper of his conscience, the courier of his news, that we look for strength and assistance, confident that with your help man will be what he was born to be: Free and Independent.

Now, the above speech was made on April 27th, 1961, some ten days after the Bay of Pigs fiasco that has been reported in retrospect as the major "embarrassment" of the Kennedy Administration. This "Bay of Pigs" thing has almost become some sort of "slogan." Just the other day, some ignorant net-troll whipped it out as the final word on John Kennedy. "Remember the Bay of Pigs!" Say what?! Only a fascist supporter of the Bush Reich - the same gang that was behind the Bay of Pigs - would say something like that.

Wikipedia tells us about the Bay of Pigs::

As a result of the failure, CIA director Allen Dulles, deputy CIA director Charles Cabell, and Deputy Director of Operations Richard Bissell were all forced to resign. All three were held responsible for the planning of the operation at the CIA. Responsibility of the Kennedy Administration and the US State Department for modifications of the plans were not apparent until later. ...

That is, the alleged responsibility of Kennedy for the Bay of Pigs disaster was not manufactured until later. The fact is, both the Mafia and the CIA faced the loss of millions upon millions of dollars after Castro kicked them and their gambling, drugs and white slavery trade out of Cuba. Up to the time of Castro, Cuba had been virtually a "client state" of the Mob and the CIA, and they wanted it back! That's what the Bay of Pigs was really all about.

Zack Shelton, retired FBI agent and Kennedy assassination investigator says: "The mob was in bed with the CIA."

The operation to kill Castro and re-take Cuba was a joint Mafia/CIA operation. An apologist for the Mafia/CIA, and obvious disinformation vector, John Hughes said in an interview:

And then we have the Bay of Pigs. The Bay of pigs - of course, it was a disaster - It was a disaster thanks to John Kennedy who, at 1:30 on April the 16th, had okayed the flight of airplanes out of Nicaragua to take care of the Bay of Pigs invasion. And then, at 9:30 that night, he rescinded it.

Hughes is effetely horrified by this mentioning the number of anti-Castro fighters that were captured or killed. It doesn't seem to affect him at all to think of the fate of the Cuban people once the CIA/Mafia regime was re-installed.

An interesting question is: What did John Kennedy learn in that period of time between authorizing the Bay of Pigs invasion, and then pulling the plug on it? And do we have some indications in the speech he gave to the press ten days later as to what it was he learned? If you carefully re-read the excerpt from the speech, and then compare it to the following from Wikipedia, I think you might realize that Kennedy understood that the Bay of Pigs was a trap that had been set for the U.S., designed to involve it in the beginnings of a global war:

Wikipedia: The CIA's near certainty that the Cuban people would rise up and join them was based on the agency's extremely weak presence on the ground in Cuba. Castro's counterintelligence, trained by Soviet Bloc specialists including Enrique Lister, had infiltrated most resistance groups. Because of this, almost all the information that came from exiles and defectors was "contaminated." CIA operative E. Howard Hunt had interviewed Cubans in Havana prior to the invasion; in a future interview with CNN, he said, "...all I could find was a lot of enthusiasm for Fidel Castro."

An April 29, 2000 Washington Post article, "Soviets Knew Date of Cuba Attack", reported that the CIA had information indicating that the Soviet Union knew the invasion was going to take place and did not inform Kennedy. Radio Moscow actually broadcast an English-language newscast on April 13, 1961 predicting the invasion "in a plot hatched by the CIA" using paid "criminals" within a week. The invasion took place four days later. According to British minister David Ormsby-Gore, British intelligence estimates, which had been made available to the CIA, showed that the Cuban people were predominantly behind Castro and that there was no likelihood of mass defections or insurrections following the invasion.

Apparently, Kennedy was doing some fast work behind the scenes and getting up to speed on this thing that had been sprung on him as almost a fait accompli. The clues are in what he said about it 10 days later:

For we are opposed, around the world, by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence; in infiltration instead of invasion; on subversion instead of elections, on intimidation instead of free choice; on guerillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific, and political operations. Its preparations are concealed not published. Its mistakes are buried, not headlined, its dissenters are silenced, not praised; no expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the cold war, in short, with a wartime discipline no democracy would ever hope to wish to match.

I believe that John Kennedy was selecting his words with great care in order to convey his message, his declaration of war on this "monolithic and ruthless conspiracy." I have also suggested in an earlier chapter of this series that John and Bobby Kennedy had a plan to use the system that was in place to get into office and then clean it up; they knew that there was no other way to do it. And, as noted above, there are plenty of apologists for the system of corruption in this country, such as John Hughes who opines:

Joseph Kennedy taught his kids that they could get away with anything, and no matter what they could always get away with it. And therefore, we have drug addiction in some of the Kennedy kids - well, we can get away with it, we'll solve everything. But Bobby Kennedy - oh, many, many instance where he thought he could get away with anything; John Kennedy believing that he could have intercourse with any woman in the world and get away with it; and so, I think that there was absolutely on feeling amongst the entire Kennedy clan that whatever we want to do, we can do, and we will get away with it. I think this was the Kennedy attitude.

And, if Bobby were really smart, he would have known - and I'm sure he did know - about the promise that his father made to the Mob - if he were really smart he wouldn't go after the Mob the way he did. But it was very selfish on his part - he was gonna make his name - to get rid of the mob. Of course, it is said that Bobby Kennedy did realize that he - in an interesting way - was the reason his brother got killed.

The above is just the type of slimy, psychopathic garbage that gets propagated by skilled defamation artists who are deviants to the core. What poverty of soul must exist in a person to take such a view, to twist and distort reality that way!

But it was true that the Mob helped Kennedy get elected. It's also possible that John and Bobby Kennedy did not know about any deal their father cut with the Mob, that John honestly believed that it was his own hard campaign work that helped him into office. In any event, it is typically psychopathic to accuse the victim of being responsible for their own death. "You should have known that if you stood up against evil that evil was gonna go after you so you deserve what you got!" That is exactly what Hughes is saying.

Retired FBI agent, Zack Shelton confirms the Mob connection:

Basically, Joe Kennedy promised the Mob the White House: "elect my son and the White House is yours."

So, what did they do? They thought they had elected his son because Illinois is the [state] that flipped [the election] (and West Virginia). They felt like they got Kennedy elected. So, when Bobby steps in, they felt betrayed.

Author David Scheim adds to the legend of the Mob being behind the Kennedy assassinations:

In the Spring and Summer of 1963, according to credible federal witnesses, 3 major Mafia figures were all discussing thoughts to kill John and Robert Kennedy. (Marcello, Trafficante, Hoffa.)

And we can't forget that the Mob was in bed with the CIA. Zack Shelton remarks:

The CIA didn't answer to anybody and Kennedy was about to disband it. He wasn't happy with the Bay of Pigs, he wasn't happy with all the operations they had going on to kill Castro. He was rather embarrassed by some of the operations they had going. He fired Dulles, he fired General Cabell and, strangely enough, the mayor of Dallas Texas was General Cabell's brother.

But obviously, even though he had fired some of the ringleaders and was preparing to go after others and put decent men into administrative positions, something was still afoot.

In 1962, the Chairman of the Joint Chiefs of Staff, General Lyman Lemnitzer, endorsed Operation Northwoods, a plot to gather public support for military intervention in Cuba. The plot called for acts of terrorism against the United States, including the development of a "terror campaign". We begin to realize that Kennedy wasn't just talking about Communists "over there" when he said we face a "monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence; in infiltration instead of invasion; on subversion instead of elections, on intimidation instead of free choice; on guerillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific, and political operations."

Many people have died to keep the secrets of the Kennedy assassination including military men, Mobsters and CIA agents at the highest levels, so it is clear that the apex of this pyramid of power is not to be found either within the military, the Mob or the CIA. All of them are just tools for the "monolithic and ruthless conspiracy." Certainly it is likely that the CIA and the Mob both had teams of shooters in Dallas that day. It is also obvious that the FBI turned a blind eye to the matter indicating Hoover's tacit approval of the assassination even if the FBI was not directly involved. But there is more to this than meets the eye.

As John Kennedy noted in his speech quoted above, he believed that an error was not a mistake until you refused to correct it and he was finding a lot of errors in American Foreign policy and set about correcting them. This, in itself, became "acts of war" against the conspirators Kennedy had identified. Among those errors was the war in Viet Nam. Soon after taking office he had been confronted with a crisis in Laos where the Communists were fighting against a CIA supported opposition force. As in the Bay of Pigs situation, the Joint Chiefs of Staff advised him to "send more troops."

Kennedy declined.

It was becoming clearer and clearer that John Kennedy did not take the loss of American lives as lightly as did those who ran the wars and the corporations that profited and the conspirators that pulled the strings behind the scenes.

Just prior to his death, John Kennedy signed National Security Memorandum 263 which effectively called for the return of all U.S. troops from Viet Nam by the end of 1965. His order to bring back the troops was countermanded only days after his assassination by National Security Memorandum 273, authorized by Lyndon B. Johnson. What is most peculiar is that the initial draft of this order signed by Johnson was dated November 21st, 1963 - the day before John Kennedy met his fate in Dallas. If nothing else, that is almost smoking gun evidence that LBJ was privy to the conspiracy.

So, not only were things getting tight for the CIA and the Mafia under John Kennedy, things were getting uncomfortable for the Military-Industrial Complex whose main business was war and death.

The question is: who was Kennedy really talking about when he said: "a "monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence." Today, we want to look at one face of that beast in another chapter from Farewell America.

"There is little in the education, training or experience of most military officers to equip them with the balance of judgment necessary to put their own ultimate solutions . . . into proper perspective in the President's total strategy for the nuclear age." Senator J. William Fulbright

Three days before Kennedy entered the White House, on January 17, 1961, President Eisenhower, in his farewell address to the nation, issued a warning to the American people:

"Threats, new in kind or degree, constantly arise . . . Our military establishment today bears little relation to that known by any of my predecessors in peacetime . . . Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.(1)

"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economical, political, even spiritual -- is felt in every city, every State House, every office of the Federal government . . .

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist . . .

"We must never let the weight of this combination endanger our liberties or democratic processes . . ."

During Eisenhower's two terms in office, federal military expenditures reached a high of $350 billion, $182 billion more than defense expenditures under Truman, despite the fact that his term coincided with the end the Second World War and the Korean conflict.(2) If the cost of veterans' benefits and the portion of the national debt attributable to military expenses are added to this figure, it can be said that 77% of the United States budget in 1960 was devoted to paying for the wars of the past and preparing those of the future.

The Pentagon was not only the most important buyer of arms in the world, but also the world's largest corporation. In 1960, the Pentagon had assets totaling $60 billion.(3) It owned more than 32 million acres of land in the United States, and 2.5 million overseas. Its holdings were twice as large as those of General Motors, US Steel, AT and T, Metropolitan Life, and Standard Oil of New Jersey combined. Few states in the union -- and few countries in the world -- have a budget as large as that of the Defense Department, and one-third have a smaller population.(4)

In 1941, Secretary of Defense Charles Wilson had declared that the war economy should be a permanent institution, and not the result of an emergency situation. Defense industries, he said, should not have their activities restricted by political witch-hunts, nor sacrificed to the handful of isolationists who had dubbed them "dealers in death." With the return of peace in 1945, James W. Forrestal, Secretary of the Navy in 1944, founded the "Association of Industry for National Security."

The 1960 military budget included $21 billion for the purchase of goods. Three-fourths of this amount went to less than one hundred corporations. The Pentagon's largest contractors at that time were General Dynamics ($1.26 billion in 1960),(5) Lockheed and Boeing ($1 billion each), General Electric and North Aviation ($900 million each). Eighty-six percent of these defense contracts were not awarded on bids. The Boards of Directors of the most favored contractors included several high-ranking retired military officers. General Dynamics, the Army's top contractor, counted 187 retired military officers, including 27 Generals and Admirals, among its personnel.

The public relations activities of the arms manufacturers were particularly agreeable to the Pentagon. In 1959, the Public Relations Department of Martin Aviation of Baltimore offered a "long weekend of relaxation" with appropriate recreational activities (known as Operation 3B, for Bathing, Blondes and Bars) to 27 high-ranking officers, including General Nathan F. Twining, Chairman of the Joint Chiefs of Staff. In 1960, Martin Aviation was awarded $800 million worth of defense contracts. Companies like Hughes Aircraft, Sperry Gyroscope, and Chesapeake and Potomac Telephone employed similar techniques.

Since the end of the Korean War, the existence and the expansion of the arms industry in general and the aeronautical industry in particular had been closely connected with the continuation of the Cold War, which was vital to numerous industrial concerns.(6) Vice-President Nixon had declared: "Rather than allow the Communists to nibble us to death in little wars all over the world, in the future we shall rely on our power of massive and mobile retaliation "The Pentagon was prepared for all contingencies. It had even made a detailed study on "how to preserve a viable society after a nuclear conflict"

In the course of his electoral campaign, John Kennedy had promised an increase in military expenditures. The Democratic candidate declared after his election to the Presidency that he had been ill-informed at the time about the actual ratio of American and Soviet forces. He had believed the fanciful information put out by the Air Force and the Pentagon and reprinted in the newspapers that the Soviet Union possessed 500 to 1,000 intercontinental nuclear missiles (in actual fact, it had 50). Once he was in the White House and had access to the more accurate (but still inflated) estimates of the Central Intelligence Agency, he discovered that Soviet strength had been exaggerated, but that this exaggeration was part of the strategy of the Pentagon.

On March 28, 1961, Kennedy declared before Congress,

"In January, while ordering certain immediately-needed changes, I instructed the Secretary of Defense to reappraise our entire defense strategy, capacity, commitments and needs in the light of present and future dangers. The Secretary of State and others have been consulted in this reappraisal, and I have myself carefully reviewed their reports and advice."

This new policy required the cooperation and control of the men responsible for carrying it out. Kennedy's new Defense Secretary, Robert McNamara, had just completed a successful reorganization of the Ford Motor Company. "America produces few men of McNamara's caliber . . . A man of diamond-hard will and titanium physique," Time wrote about him. McNamara was 45, seldom socialized, took an interest in racial problems and urbanism, and enjoyed mountain climbing and poetry (Yates, Frost and Yevtochenko). He arrived at his office at 7:15 am and worked until after 8 in the evening. At the Pentagon he had "an almost Calvinist horror of emotion, an almost mystical reverence for reason. He was the first Secretary of Defense with the ability, experience, and just plain guts to bring the vast, sprawling, hideously bureaucratic US Defense establishment under effective civilian control."(7)

As early as January 21, 1961, the Joint Chiefs of Staff understood that henceforth they were to be ruled. In his first week at the Pentagon he asked 96 basic questions. He let it be clearly understood that from that time forward, basic strategy would be defined by the President and himself. He abolished 500 committees (out of 4,000) and coordinated the activities of those that he maintained. He overcame inertia and incompetence with the aid of computers, contingency planners, and coordinators. His aim was to relieve the military men of the need to be intelligent. He and his deputies would provide the intelligence, at the necessary times and places. "War is a simple art, and everything is in the execution," Napoleon had said. The military officers and even the high-ranking civilians in the Pentagon were obliged to learn a new three-dimensional language for which they were not at all prepared.

The new Defense Secretary substituted revolution for evolution. The concept and practice of systems analysis was introduced. The goal: scientific evaluation of major weapons developments and other expensive projects to determine as objectively as possible the return on a proposed investment, a compared with its alternative. McNamara wasn't interested in the opinions, the recommendations, or the conclusions of the officers in the Pentagon. He demanded written answers to specific questions. Concerning any administrative problem with political or financial repercussions, he asked only one thing: "What is the alternative? What are the choices?" He forbade the Generals to attend meetings in uniform (a two-star General is somewhat cowed before a three-star General, especially when he is wearing his stars). In 1961 he drew up a list of 131 urgent measures and presented it to his subordinates. By the end of the year, 112 of his suggestions had been carried out. Never before had the Generals been called upon to answer so many questions. The Pentagon stood behind the Air Force postulate, "The extermination of the Soviet system must be our primary national objective, our obligation to the free people of the world. We must begin the battle at once."

After the Bay of Pigs disaster, McNamara let it be known that the Pentagon would no longer play the role of passive accomplice of the CIA and the State Department. He had appointed Charles J. Hitch and Paul H. Nitze as his deputies. In 1960, Hitch had written a book entitled The Economics of Defense in the Nuclear Age, which introduced a new concept of military strategy. He suggested that the army and defense requirements should be subordinated to the national economy on a long and short-term basis. Paul H. Nitze, former director of the Policy Planning Staff at the Department of State, felt that the President should consider his Secretary of State as the managing director of a foreign policy "where diplomatic, military, economic, and psychological aspects need to be pulled together under a basically political concept."

This theory became the basis of Kennedy's policy. He intended to replace John Foster Dulles' strategy of massive retaliation with a strategy of flexible response. He ordered a review of all existing plans and all the sacrosanct strategic concepts. Kennedy felt that the strategy of nuclear warfare should be based on something more than intuition. He told Congress:

"Our arms must be subject to ultimate civilian control and command at all times, in war as well as peace. The basic decisions on our participation in any conflict and our response to any threat -- indeed all decisions relating to the use of nuclear weapons, or the escalation of a small war into a large one -- will be made by the regularly constituted civilian authorities. This requires effective and protected organization, procedures, facilities and communications in the event of attack directed toward this objective, as well as defensive measures designed to insure thoughtful and selective decisions by the civilian authorities. This message and budget also reflect this basic principle . . .

"The primary purpose of our arms is peace, not war -- to make certain that they will never have to be used -- to deter all wars, general or limited, nuclear or conventional, large or small - to convince all potential aggressors that any attack would be futile -- to provide backing for diplomatic settlement of disputes -- to insure the adequacy of our bargaining power for an end to the arms race. The basic problems facing the world today are not susceptible to a military solution. Neither our strategy nor our psychology as a nation -- and certainly not our economy -- must become dependent upon the permanent maintenance of a large military establishment. Our military posture must be sufficiently flexible and under control to be consistent with our efforts to explore all possibilities and take every step to lessen tensions, to obtain peaceful solutions and to secure arms limitations. Diplomacy and defense are no longer distinct alternatives, one must be used where the other fails -- both must complement each other . . .

"Our arms will never be used to strike the first blow in any attack. This is not a confession of weakness but a statement of strength. It is our national tradition. We must offset whatever advantage this may appear to hand an aggressor by so increasing the capability of our forces to respond swiftly and effectively to any aggressive move as to convince any would-be aggressor that such a movement would be too futile and costly to undertake."

Kennedy proposed an increase of $650 million in military expenditures, but his new budget was tailored to eliminate "waste, duplication, and outmoded or unjustifiable expenditure items." The President justified his thinking in the following words:

"This is a long and arduous undertaking, resisted by special arguments and by interests from economic, military, technical and other special groups. There are hundreds of ways, most of them with some merit, for spending billions of dollars on defense, and it is understandable that every critic of this Budget will have a strong preference for economy on some expenditure other than those that affect his branch of the service, or his plant, or his community.

"But hard decisions must de made. Unneeded facilities or projects must be phased out. The defense establishment must be lean and fit, efficient and effective, always adjusting to new opportunities and advances, and planning for the future. The national interest must be weighed against special or local interests."(8)

Nevertheless, Kennedy asked Congress to approve the construction of ten more nuclear submarines, and he requested considerable expansion of the Polaris program, which he described as "a wise investment for the future." He also recommended the development of the Minuteman strategic missile, the continuation of the Skybolt airborne missile, an increase in the budget of the Strategic Air Command, the expansion of military research projects and aerial transportation to abolish obsolete equipment (the Titan, the B 47, the Snark), and he requested the cancellation of the projects for the B70 intercontinental bomber and the Eagle naval missile. Both programs were already out-of-date, but their manufacturers as well as the Pentagon had reasons for wanting them continued.(9)

The Pentagon was in favor of the Nike-Zeus anti-missile missile program, which was to be carried out by Western Electric. The Eisenhower administration had already ordered a freeze on the funds voted by Congress, and when they were voted again the Kennedy administration did the same. He also froze the funds for the B70 bomber.(10) But the Pentagon had already spent $1 billion on this project, and the most cautious estimates at the time placed the total cost at something close to $10 billion.(11)

These Presidential policies, and the intelligence and efficiency with which McNamara and his team intended to carry them out, constituted a revolution at the Pentagon. "In establishing civilian control of the Pentagon as a fact of life as well as a theory, McNamara perhaps went too far in alienating service officers. He not only out-thought and outmaneuvered such potentates as General Curtis LeMay, but he sometimes humiliated them as well," wrote Time.

"With a computer's mind and a martinet's will power, McNamara remolded the US war machine from the spasmic rigidity of massive nuclear retaliation to the exquisite calibration of flexible response. He cut costs, knocked heads beneath brass hats, bullied allies into line, cowed Congressional satraps, made enemies nearly everywhere," added Newsweek.

The days and the months passed feverishly. Faced with imperious orders from the top, the Generals and the Admirals yielded at first, then revolted. A sort of guerrilla warfare broke out among the 7,000 offices, 18 miles of corridors and 150 staircases of the Pentagon. Anti-administration declarations by high-ranking officers multiplied in the spring of 1961. General Edwin Walker declared, "We must throw out the traitors, and if that is not possible, we must organize armed resistance to defeat the designs of the usurpers and contribute to the return of a constitutional government."(12) He was backed by General P. A. del Valle and Admiral Arthur Radford.

"Some of the advisers now surrounding the President have philosophies regarding foreign affairs which would chill the average American," declared Admiral Chester Ward (retired). "World War III has already begun and we are deeply engaged in it," stated Admiral Felix B. Stunny. Admiral Ward accused the White House advisers of giving priority "not to freedom, but to peace " and added, "I am not in favor of preventive warfare, but I am in favor of a preventive strike" (sic).

General White, chairman of the Air Force Chiefs of Staff, declared,

"I am profoundly apprehensive of the pipe-smoking, tree-full-of-owls type of so-called professional defense intellectuals who have been brought into this Nation's capital. I don't believe a lot of these over-confident, sometimes arrogant young professors, mathematicians and other theorists have sufficient worldliness or motivation to stand up to the kind of enemy we face."

The New York Times(13) wrote,

"The Pentagon is having its troubles with right-wingers in uniform. A number of officers of high and middle rank are indoctrinating their commands and the civilian population near their bases with political theories resembling those of the John Birch Society. They are also holding up to criticism and ridicule some official policies of the US Government. The most conspicuous example of some of these officers is Maj. Gen. Edwin A. Walker . . ."

Senator Stuart Symington of Missouri rose in the Senate to condemn the extra-curricular activities of certain military officers, and Senator J. William Fulbright of Arkansas declared that by proclaiming that the United States was engaged in a desperate struggle and that its sole objective in the Cold War should be not peaceful coexistence, but total victory, the military leaders were giving support to the most irresponsible elements of the Far Right. As a result of these denunciations, General Walker was relieved of his duties for extremism and propaganda in the Army.

McNamara was strong enough to resist the combined pressures of his military advisers and Congress. With Kennedy's approval, he opted for the expansion of the intercontinental ballistic missile program at the expense of the conventional bombers so dear to military and industrial circles.

The Pentagon had been its own master for twenty years -- in the aftermath of World War II, during the Korean Conflict, and finally under the sympathetic administration of General Ike. The warriors realized now that the good years were gone. Not only did they fear for their privileges, but they considered it their duty to try and "save the nation."

During the Korean War, the Army had been shaken by the success of the brainwashing techniques applied to American prisoners of war. With Eisenhower's benediction, the National Security Council had set up a civilian education program to arouse the public to "the menace of the Cold War" and the necessity for nuclear survival. Feeling persecuted by the President and his Secretary of Defense, the warriors decided to avail themselves of this forum to inform the civilian public about the anti-American conspiracy of the men of the New Frontier.

In the spring of 1961, the "public alerts," the "freedom forums," the "strategy for survival conferences" and the "fourth dimensional warfare seminars" proliferated. The stated aims of these programs were "to alert all in attendance to the specific objectives of international communism," "to reveal areas of Communist influence upon American youth," "to re-orient American thinking toward un-American ideas," and to "identify public officials and policies displaying a 'softness' toward communism." The featured addresses bore titles like "What You Can Do in the Fight Against Communism," and "No Wonder We Are Losing." In short, Psy-ops.

Admiral Ward was the featured speaker at a fourth dimensional warfare seminar held on April 15 in Pittsburgh. On April 14 and 15, "Strategy for Survival" conferences sponsored by Major General William C. Bullock, the area commander, were held in several cities in Arkansas. The invitations to an "Education for American Security" seminar in Illinois were sent out in officially franked envelopes! "Project Alert" in Pensacola, Florida was endorsed by local Navy headquarters, and out-of-town participants in "Project Action," held on April 28-29 in Minneapolis, were offered overnight accommodation at the Naval Air Station. A seminar organized by anti-Communist crusader Dr. Fred Schwarz was sponsored in New Orleans by Rear Admiral W. S. Schindler, and at Corpus Christi Admiral Louis J. Kirn, Chief of Naval Air Advanced Training, sat on the platform.

Senator Fulbright charged that

"the content no doubt has varied from program to program, but running through all of them is a central theme that the primary, if not exclusive, danger to this country is internal Communist infiltration. The thesis of the nature of the Communist threat often is developed by equating social legislation with socialism, and the latter with communism. Much of the administration's domestic legislative program, including continuation of the graduated income tax, expansion of social security (particularly medical care under social security), Federal aid to education, etc., under this philosophy would be characterized as steps toward Communism.

"This view of the communist menace renders foreign aid, cultural exchanges, disarmament negotiations, and other international programs, as extremely wasteful, if not actually subversive . . .

There are many indications that the philosophy of the programs is representative of a substantial element of military thought, and has great appeal to the military mind ...

There is little in the education, training, or experience of most military officers to equip them with the balance of judgment necessary to put their own ultimate solutions . . . into proper perspective in the President's total strategy for a nuclear age . . ."

And he concluded with a warning:

"The radicalism of the right can be expected to have great mass appeal. It offers the simple solution, easily understood, scourging of the devils within the body politic, or, in the extreme, lashing out at the enemy.

"If the military is infected with this virus of right-wing radicalism, the danger is worthy of attention. If it believes the public is, the danger is enhanced. If, by the process of the military educating the public, the fevers of both groups are raised, the danger is great indeed.

"Perhaps it is farfetched to call forth the revolt of the French Generals(14) as an example of the ultimate danger. Nevertheless, military officers, French or American, have some common characteristics arising from their profession and there are numerous military 'fingers on the trigger' throughout the world."

In July, a Defense Department order went out restricting the right of military officers to express their political opinions in public and participate in such information programs.(15) There was a violent reaction from the conservatives. Senator J. Strom Thurmond, a North Carolina Republican and General in the Army Reserve, attacked the move as an "infamous attempt to intimidate the leaders of the United States Armed Force: and prevent them from informing their troops about the exact nature of the communist menace."(16)

On July 8, Khrushchev announced that the government of the USSR was obliged to postpone the reduction of its armed forces. Kennedy was sufficiently concerned by the information he received from the CIA to make a televised address on July 25, 1961 asking the country to be prepared to defend freedom in Berlin and elsewhere. He announced a supplementary defense build-up that included doubling and tripling the draft calls and calling up reservists to active duty. Finally, he recommended the construction of atomic shelters.

These pessimistic declarations raised the spirits of the military men, but frightened the American people.

The federal government printed pamphlets describing how to build a family-sized atomic shelter. The newspapers and television discussed the consequences of a nuclear attack. Atomic scientist Dr. Edward Teller stated, "If we don't prepare, 100 million Americans could die in the first days of an all-out nuclear war. Thirty to 40 million more could die from starvation and disease. The United States would cease to exist . . ." A Jesuit priest, Father McHugh, declared for his part that shelter owners had the moral right to keep out their panicked neighbors. A brochure published by the Office of Civil Defense advised all boat owners to head for the open sea as soon as the alert was sounded.

Congress demanded an expanded arms program, the money for which was to come from the aberrant projects of the welfare state. Senators Jackson and Keating declared that Congress would grant the President and the armed forces all the money they requested, and in particular $500 million for the Boeing B 70. The Pentagon was once again optimistic. The Generals and the Admirals multiplied their inflammatory statements. But on August 2, Senator Fulbright again spoke out:

"Military officers are not elected by the people and they have no responsibility for the formulation of policies other than military policies. Their function is to carry out policies formulated by officials who are responsible to the electorate. This tradition is rooted in the constitutional principle that the President is the Commander in Chief of the Armed Forces and that, therefore, military personnel are not to participate in activities which undermine his policies."

On November 16, 1961 in Seattle, President Kennedy declared,

"We must face the fact that the United States is neither omnipotent nor omniscient -- that we cannot impose our will upon the other 94 percent of mankind -- that we cannot right every wrong or reverse each adversity -- and that therefore there cannot be an American solution to every world problem."

For the first time in the history of the United States, a President had dared to attack the myth of the national infallibility. Three days later, at a Democratic Party banquet in Los Angeles, Kennedy continued,

"Let us concentrate more on keeping enemy bombers and missiles away from our shores, and concentrate less on keeping neighbors away from our shelters. Let us devote more energy to organizing the free and friendly nations of the world . . . and devote less energy to organizing armed bands of civilian guerrillas that are more likely to supply local vigilantes than national vigilance."

This remark was aimed at the paramilitary organizations such as the John Birch Society, the Minutemen and the Ku Klux Klan.(17) At the time that Kennedy spoke, these extremist groups were made up largely of visionaries, profiteers, and fanatics. But General Walker and other high-ranking officers began training new leaders in 1962. The organizations gained strength, and by 1963 they and other groups such as the Friends of General Walker and the Patrick Henry Association had become forces to reckon with.

The Far Rightists dreamed of a world without communism, without foreign imbroglios, without the United Nations, without the federal government, without trade unions, and without Negroes. Their goal was an America with no Supreme Court which would invade or destroy Cuba, abolish the graduated income tax and stop importing Polish hams. For these people, even Eisenhower was an active agent of the Marxist conspiracy. When Kennedy moved into the White House, they were certain the Russians had landed. "God, I miss Ike. I even miss Harry," one man from Cincinnati told US News and World Report in 1962.

The rightist movements not only had the benefit of military leadership, but also of important private funds. Harding University in Arkansas(18) furnished most of the speakers for the extremist forums. Its President, Dr. George S. Benson,(19) had the financial backing of companies like Lockheed, Boeing, US Steel, Lone Star Cement, Olin Mathison Chemical, American Iron and Steel Institute, and Acme Steel. In 1961, these companies contributed more than $6 million to Harding. General Electric and the CIA were among its most important benefactors.

Nevertheless, the international situation continued to deteriorate. In August, the Berlin Wall was constructed, and in September, the Soviets first, and then the United States began nuclear testing again. On October 28, the very day the UN General Assembly requested it not to, the Soviet Union exploded a 50-megaton bomb. On October 31, Senator Jackson criticized Kennedy for taking risks in national defense by delaying construction of the Boeing B 70, rebaptized the RS 70 to enhance its image. That same month, the Army sponsored a "Project Alert" in San Francisco, and in December the Navy did the same.

Kennedy attempted to thaw the Cold War by diplomacy,(20) but the exaggerated statements of the warriors of the Pentagon were hardly calculated to help him. McNamara, who was now "constantly scrapping" and who was loathed by Congress, which found him "arrogant and even supercilious," continued to wield his authoritarian power, to demonstrate his aversion to favoritism,(21) and to construct a rational system of defense. He declared,

"Technology has now circumscribed us all with a conceivable horizon of horror that could dwarf any catastrophe that has befallen man in his more than a million years on earth.

"Man has lived for more than 20 years in what we have come to call the atomic age. What we sometimes overlook is that every future age of man will be an atomic age.

"If, then, man is to have a future at all, it will have to be a future overshadowed with the permanent possibility of thermonuclear holocaust. About that fact, we are no longer free.

"Our freedom in this question consists rather in facing the matter rationally and realistically and discussing action to minimize the danger. No sane citizen; no sane political leader; no sane nation wants thermonuclear war. But merely not wanting it is not enough.

"We must understand the difference between actions which increase its risk, those which reduce it, and those which, while costly, have little influence one way or another. Nuclear strategy is exceptionally complex in its technical aspects. Unless these complexities are well understood, rational discussion and decision-making are simply not possible."

The Cuban missile crisis of October 1962 was the turning point in the Cold War. On October 22, Kennedy declared,

"I call upon Chairman Khrushchev to halt and eliminate this clandestine, reckless and provocative threat to world peace and to stable relations between our two nations. I call upon him further to abandon this course of world domination, and to join in an historic effort to end the perilous arms race and to transform the history of man . . .

"We will not prematurely or unnecessarily risk the costs of worldwide nuclear war in which even the fruits of victory would be ashes in our mouth -- but neither will we shrink from that risk at any time it must be faced . . .

"The path we have chosen for the present is full of hazards, as all paths are -- but it is the one most consistent with our character and courage as a nation and our commitments around the world. The cost of freedom is always high -- but Americans have always paid it. And one path we shall never choose, and that is the path of surrender or submission.

"Our goal is not the victory of might, but the vindication of right -- not peace at the expense of freedom, but both peace and freedom here in this hemisphere, and, we hope, around the world. God willing, that goal will be achieved."

The Soviets backed down.

By 1963 the detente had become a reality, and the Pentagon knew it had lost the game. That spring, the Navy Chief of Staff, Admiral George W. Anderson, handed in his resignation.(22) President Kennedy declared on March 1 that the Admiral would continue to serve the country in an important post.(23) On July 26, 1963, the President announced the imminent signature of the Treaty of Moscow:

"This treaty is not the millennium. It will not resolve all conflicts, or cause the Communists to forego their ambitions, or eliminate the danger of war. It will not reduce our need for arms or allies or programs of assistance to others. But it is an important first step -- a step towards reason -- a step away from war."

Noting the public's satisfaction, the Pentagon switched its tactics. It employed retired Generals such as ex-Major General Johnson to express its point of view in new and softer terms. General Johnson foresaw no other issue than "retreat or defeat" until the leaders of the administration had "determined their goals."

He noted that the United States had treaty obligations to defend 45 nations(24) around the world, and that the country needed not only to continue the Cold War, but to "win the hot war" if it should occur. He expressed his regret that at no spot in the world was the nation taking the initiative, not even in Cuba, where every month that passed saw Castro more deeply entrenched in power. He remarked that the size of the army had decreased by more than a million men since the end of the Korean War. He estimated that an invasion of Cuba alone would require 22 divisions, more than there were stationed on US soil, and concluded that the United States was not prepared for either a very limited (such as Vietnam) (25) or a limited war (such as Cuba or Berlin). He acknowledged that the United States was relatively well "covered" for a total war, with stocks of 40,000 nuclear weapons of 30 different types which were very costly to maintain, but that as the "civilians in government continue to place their faith in talk," the utility of this atomic arsenal was yet to be proved. The ex-Major General frankly admitted that he was afraid the industrialists "would not be satisfied with the indefinite maintenance of this atomic stockpile."

To the latter, the Kennedy administration replied that disarmament would be limited and progressive, and that the reductions would be partially compensated by civilian uses for the atom and the space programs of NASA. It added that it planned to fight the consequences of too rapid a conversion of the economy by reinforcing unemployment insurance, increasing information about new employment opportunities, organizing vocational retraining programs, establishing new industries, and re-orienting research programs towards chemistry, space exploration, illness, urban transportation, construction, education, water purification, population control, tropical diseases and the exploitation of ocean resources.

But this program would be long in getting started, and it would not be enough. The critics of the administration predicted a recession: consumers were burdened by their credit obligations, international competition was becoming tougher, and the dollar remained weak. Peace brought with it the risk of serious perturbations, if not a reversal, of the economy.(26) Already in 1962, when Republic Aviation threatened to close its Long Island plant, putting 20,000 people out of work, the President had released $1.3 billion of the defense funds voted by Congress, although the Air Force and the House Armed Forces Committee had requested $10 billion.

On March 30, 1963, McNamara decided to close 52 military installations located in 25 different states, plus 21 bases overseas. This reorganization was to be spread over a three- year period. His announcement had important repercussions throughout the country. The merchants of Del Rio, Texas contributed $50 apiece to send a delegation to Washington to protest the closure of Laughlin Air Force Base. The delegates pointed out that the base was the only important industry in Del Rio (18,612 inhabitants), that the military and civilian salaries paid by the base totaled $10.5 million per year, and that 1,700 families from the base did their shopping in Del Rio.

At Benecia, California (6000 inhabitants), the town council learned that the military depot there was to be closed. It estimated that the town stood to lose more than $200 000 a year in sales taxes, gasoline and liquor sales, as well as the business of the 2,400 employees of the depot, while the sewage system had just been renovated at a cost of $1.6 million. Representative John Baldwin (Republican) protested to Washington, pointing out that the Benecia depot was the very type of military installation that the country needed if it was to have (as Kennedy had promised) a trained army capable of facing up to any situation.

At Tacoma, Washington, a shoe salesman had just sold a pair of shoes. The customer handed him a $20 bill and a leaflet that stated, "You have just made a sale to an employee of the Mount Rainier depot. How much money will you lose when the $14 million in salaries paid by the depot is transferred to Utah? Write to your Congressman, to your Senator, to your Governor." And America wrote.

In addition to the three and a half million people directly employed by the Defense Department,(27) seven and a half million others owed their jobs to defense contracts. The consequences of disarmament would affect the entire country. Studies made by the US Disarmament Control Commission revealed that national defense industries accounted for more than 10% of the total national product, and employed nearly 10% of all the workers in the country. An annual reduction of $5 billion in the military program might slow down the national economy by $10 or $12 billion a year.(28)

The President of Standard Oil of California, the company most directly concerned by the Korean War, had declared in 1953:

"Two kinds of peace can be envisaged. One would enable the United States to continue its rearmament and to maintain important military forces in the Far East; it would have very little effect on industry, since the maintenance of a peace-time army requires almost as much oil as in time of war. But if there should be a great improvement in the relations between the United States and the Soviet Union, and in particular a disarmament agreement, the blow to the oil industry and the rest of the economy would be terrific."

Neither the industrialists nor the military were prepared in 1963 to bow before political, or simple reasonable, decisions. The Generals realized that the test ban treaty constituted a step towards general disarmament.

General Thomas D. White, former head of the Army chiefs of Staff, remarked,

"True security lies in unlimited nuclear superiority."

Admiral Lewis Strauss added,

"I'm not sure it's necessarily a good thing to cut down on tensions."

Admiral Radford, former head of the Joint Chiefs of Staff, declared,

"I join with all my former colleagues in expressing my anxiety concerning our future security."

General Thomas Power, Commander of the Strategic Air Command, even attacked the test ban treaty before the Senate Armed Services Committee.

On April 4, 1962, General Walker testified before the committee. As he left the hearing room, journalist Tom Kelly of the Washington Daily News asked if he had any comment. The General's reply was a punch in the nose.


1. In 1957, Fortune wrote: "We must obtain a reduction in the amount spent on highways, aid to the Negro community, and other non-military extravagances."

2. On July 1, 1944, the United States military budget totaled $81.3 billion. Three years later it had dropped $11.8 billion, but private industry was expanding rapidly to supply the needs of the civilian sector of the economy -- automobiles, home, household appliances, and all sorts of gadgets. The Korean War took up the slack, and in 1953 the military budget swelled to $50.4 billion. By 1954, this figure had dropped to $40.7 billion, but tax cuts provided another boom in 1955, which marked a record demand for new cars and a record high in buying. Since the beginning of the recession in 1960, the military budget had risen from $47.5 billion (1960-1961) to $51.1 (1961-1962) and $52.7 (1962-1963).

3. General Motors' assets in 1966 totaled $12.9 billion.

4. In December 1967, the Defense Department controlled a budget of $76 billion, and employed 4,500,000 people.

5. In the first nine months of 1967, General Dynamics did $1.57 billion worth of business, an increase of 24% over 1966. This rise is indicative of the boom in the aviation industry resulting from the Vietnamese War.

6. After the failure of the Kennedy-Khrushchev meeting in Vienna in the spring of 1961, the Los Angeles Mirror News ran a full-page advertisement that began, "The summit meeting has failed. What does that mean for you? A fantastic electronics boom. Billions of dollars, a healthy industry in Southern California employing 110,000 people."

7. Stewart Alsop.

8. March 29, 1961.

9. In 1967, 17 top military experts estimated that the nuclear forces of the United States and the Soviet Union would evolve in the following manner in the coming decade:

United States Soviet Union
1962: 25 to 50,000 megatons 1962: 6 to 12,000 megatons
1971: 6 to 15,000 megatons 1971: 30 to 50,000 megatons

The experts used these figures to back up their plea for an increase in the American nuclear potential, but they also noted that under Kennedy American nuclear superiority was on the order of 4 to 1.

10. On February 25, 1962, the Air Force and the Boeing Corporation presented the B 70 bomber to the press once again, although Kennedy persisted in his refusal to release the blocked funds.

11. This system would be obsolete before it was operational, as has been the case up to now with all the anti-missile missile programs.

In 1967, identical arguments and industrial pressure led the Pentagon to reinstate a project for the construction of ABM antiballistic missiles. McNamara tried to reduce this program, knowing that the Russians themselves admitted that their Tallin system of Galosh and Griffon antiballistic missiles was already obsolete. Due to progress in electronics and the techniques of ultra-miniaturized microcircuits, the American system, which will not be operational until 1974, and which the Pentagon considers insufficient, is also already obsolete. The new LSI (for large-scale integrated circuits) technique makes possible an assemblage ten times more dense and multiplies the sensitivity (reaction speed) of missiles by five. Electronics writes that "the radars and computers that will guide our anti-missile missiles will be as old-fashioned as a Ford next to the latest Ferrari."

12. General Walker began his political career in the Arie Crown Theatre in Chicago on February 9, 1962 before a crowd of 5,000 people. He had spent three decades in uniform, and had been decorated as a hero of the Korean War. In 1959 he joined the John Birch Society. Walker liked to say, "In patriotism, loyalty and combat, there are no moderates." He advised his audience to "attack on all fronts" and to "man your weapons and speak boldly."

13. June 18, 1961.

14. A reference to the French Generals' putsch of April 1961 in Algiers.

15. McNamara was called before the Senate Armed Services Committee to explain his action. When he arrived at the Capitol, he was greeted by 70 housewives wearing John Birch Society buttons.

16. Senator Barry Goldwater wrote:

"There exists today a new literature of military strategy which is in no manner the work of career officers, but of nuclear philosophers, as they have recently begun to call themselves, and who expose their humanitarian dislike for the bomb in all their writings.

"Today's Generals and Admirals are not bloodthirsty pirates with black patches over their eyes and cutlasses between their teeth. They are intelligent, competent, well-educated men who are trying as hard as our diplomats to find peaceful solutions to international problems. Our Generals and our Admirals are strategists of peace as well as experts on military questions.

"I believe that something both new and old is happening in our country, and that the great traditions of American history will find their true place.

17. The John Birch Society, founded by Robert Henry Winborne Welch, Jr., born in 1899, an alumnus of the Annapolis Naval Academy and Harvard Law School, vice-president of a candy factory in Belmont, Mass., favors, among other things, the immediate liberation of Cuba, the abolition of foreign aid, and the reinstitution of generalized segregation. In 1961, the society claimed a membership of 100,000. It kept files on "Comsymps" (anyone whose ideas were considered too liberal) and attempted to infiltrate universities and the government. It had genuine influence in the army.

The society is named after Captain John Morrison Birch, a young missionary who was killed at the age of 27 by the Chinese Communists while on a mission in Northern China 10 days after the end of World War II. According to Welch, Birch was the first victim of World War III.

The Minutemen, a clandestine combat militia, is headed by Robert Bolivar DePugh, who runs a $400,000 a year pharmaceutical business. Its 25,000 members hold daily drills with everything from pistols to antitank guns to be ready to check a Communist invasion, and organize guerrilla warfare seminars throughout the country. Although it is loosely organized, several hundred of its groups are armed and dangerous and capable of doing anything in support of their ideology or the interests of their leaders. Their motto is "Action Now" and their program calls for the assassination of dangerous Communists.

The KKK, headed by Robert Shelton, a former air-conditioner salesman, accepts as members only "loyal citizens born in the United States, Christian, white, with high morals, of the Protestant faith, believing in Americanism and the supremacy of the white race." But behind this relatively moderate creed lies a plethora of folklore and a group of savage people.

18. Which received its first gift, $300,000 from General Motors, in 1949. The decision was made by Alfred P. Sloan, who was President of GMC at the time.

19. Dr. Benson once declared, "If you want to force Washington to do what needs to be done, you must first reach public opinion. My goal is to strike it deep down in the roots so as to orient it towards piety and patriotism."

He also proclaimed that "Any American who loves freedom and is willing to work, work, work to protect it can find intelligent direction and companionship in a John Birch Society group."

20. On November 25, Kennedy granted an interview to Aleksei Adzhubei, editor in-chief of Izvestia, who told him, "Your election brought great hope to the people of our country." On November 28, the nuclear test ban conference, which had been adjourned since September 9, re-opened in Geneva. On December 21, Kennedy met with MacMillan at Bermuda to examine Western relations with the USSR.

21. In October 1963, Secretary of the Navy Fred Korth was asked to resign by McNamara. He was accused of showing favoritism towards the Continental National Bank of Fort Worth, of which he had been President prior to his appointment in 1961. (The Continental National Bank was one of 20 banks that had lent $200 million to General Dynamics to enable it to begin construction of the TFX, now the F 111.)

22. Mainly because McNamara had gone over his head to enter into direct communication with the commanders of US naval units during the Cuban crisis. In addition, the Admiral disapproved of the fact that the Defense Secretary had gone against the advice of the Navy and Air Force and awarded the TFX contract to General Dynamics rather than Hoeing. The Air Force was also highly displeased with the cancellation of the Skybolt project in May 1962. Eisenhower had signed an agreement to supply 100 Skybolt air-to-air missiles to Great Britain, but as a result of the NATO crisis, Kennedy decided to cancel this project, which he considered too costly and superfluous.

23. On July 30, Admiral Anderson was named Ambassador to Portugal, "a maritime country, a country of great importance in the year 1963 and the years to come," in the words of the President. Before he took up his post, the Admiral made the headlines again by declaring that things were going badly at the Pentagon and recommending that the members of the Joint Chiefs of Staff be appointed for a period of 4 years rather than 2. Kennedy refused, and the Admiral departed for Lisbon, where Lyndon Johnson left him.

24. Canada, Iceland, Denmark, Norway, West Germany, Belgium, Netherlands, Luxembourg, United Kingdom, France, Portugal, Italy, Greece, Turkey, Iran, Pakistan, Haiti, Costa Rica; Dominican Republic, Panama, Venezuela, Ecuador, Colombia, Peru, Bolivia, Paraguay, Brazil, Chile, Argentina, Uruguay, Nicaragua, El Salvador, Guatemala, Mexico, Honduras, Australia, New Zealand, Philippines, Thailand, Formosa, Japan, South Korea, Cambodia, Laos, South Vietnam, etc.

25. This, of course, was in 1962. At that time General Harkins was predicting that the Vietnam war would be won by the end of the following year and described the local opposition as made up of "neutralist intellectuals and a few members of the Vietcong."

26. Eight months earlier, the US Arms Control and Disarmament Agency had published its predictions of what would happen to the economy if the Cold War should end. It forecast an increase in military expenditures until 1965, followed by a progressive but important reduction until 1977:

1962-63: $52.7 1963-64: $54.0 1964-65: $56.1 1968-69: $38.9 1971-72: $27.0 1974-75: $17.3 1977-78: $10.2

(in billions of dollars per fiscal year)

In 17 years, the share of the budget devoted to airplane construction would drop from $6.9 to $0.5 billion. The amount spent for missiles would drop from $5.1 to $0.1 billion, the military space program would be reduced from $0.5 to $0.0 billion, naval construction would drop from $1.9 to $0.2 billion, and the amount spent on various other equipment would decrease from $3.6 to $0.7 billion (Economic Impact of Disarmament, 1962).

In February 1962, the magazine US News and World Report published a chart showing the percentage of military contracts in industrial sales. For aviation and aeronautical equipment, this percentage was 94% , for naval construction 61% , for radio and telecommunications equipment 38% , for electrical equipment 21%, for iron and steel 10%, and for oil 10%.

27. 4,600,000 in 1968.

28. California, Texas, Florida, Alaska, Hawaii, the District of Columbia, New Mexico, New Hampshire, Georgia, Alabama, Oklahoma, Maryland, New York State, Ohio, New Jersey and Massachusetts would not be the only states to suffer. Defense manufacturing accounted for 30% of all factory jobs in Kansas, 28% in the District of Columbia, 24% in New Mexico, 23% in California, 21% in Connecticut and Arizona, 20% in Utah, 18% in Colorado, 14% in Florida, 12% in Maryland, and 10% in Missouri and Texas. Ten states accounted for two-thirds of all military contracts (for a total of $17 billion): California $5.8 billion, New York $2.5 billion, Ohio $1.3 billion, New Jersey $1.2 billion, Massachusetts, Texas, Washington and Connecticut $1.1 billion each, Pennsylvania $0.9 billion, and Missouri $0.7 billion.

And a thank you to Marianne K. for the link to the Kennedy speech of April 1961.
Comment on this Editorial

Editorial: John F. Kennedy and the Titans

Laura Knight-Jadczyk
19 November 2006

On November 19, 1963, 43 years ago today, at a ceremony in the White House Flower Garden, John F. Kennedy welcomed officers of state education associations of the National Education Association. he remarked: "I realize once again in a very personal way what a tremendous flood of children are coming into our schools..."

He was always concerned about children, his own as well as the children of all Americans and the world.

Later that same day, President Kennedy sent a message to the rededication ceremonies of the national cemetery at Gettysburg, Pennsylvania writing:

"The goals of liberty and freedom, the obligations of keeping ours a government of and for the people are never-ending."

Still later, President Kennedy signed into law a bill (HR1989) allowing the legislature of the Virgin Islands to issue general obligation bonds. (PL88-180). He then pocket vetoed a bill (S1201) for the relief of James T. Maddux.

Between 4:30 and 5:00 p.m. Kennedy met with Dean Rusk and Phillips Talbott

It was John F. Kennedy's 1,033rd day in office.

There were three days left for the world to hope for peace in our lifetime; a hope that was snuffed out in 6 seconds on a Sunny afternoon in Dallas Texas by the very Consortium that now holds the world hostage in an iron grip of terror and degradation of humanity: Corporate Government otherwise known as Fascism; totalitarianism by any name, but conducted under the guise of "Democracy."

Allow me to divert for a few moments to talk about ideologies and how easy it is for something that is begun as a great and noble cause to be subverted and turned to its opposite purpose under the very noses of those who still believe in the ideal.

In the history of humanity, there have always been social commentators, pundits, and philosophers of a certain type - as distinct from true philosophers - who have a certain personality that induces them to become fascinated by their own "great ideas", which might, sometimes, even be true or partially true, but more often are merely doctrinaire and simplistic answers to very complex social problems. Careful examination of these ideas based on a healthy awareness of human nature and history would quickly reveal that such ideas are constricted or contain the taint of pathological thought processes. Nevertheless, such people have always tried to impose pedagogical methods - essentially brainwashing - which twist and deform the normal development of human beings in psychological and social ways. These types of theorists inflict permanent harm upon societies, depriving them of universally tried and tested values by claiming to act in the name of high ideal. The American public education system - based, supposedly, on "democracy" and the theories of John Dewey - is just such a case in point.

Where are the Copernicus', Brunos, Kants, DeCartes, Spinozas, Goethes, Newtons, Beethovens, Chopins and Mozarts of the modern day? (And that's just the short list!) Why does it seem that the great talents, the great geniuses, the great thoughts and revelations belong to another time? (Excepting, of course, Einstein who essentially gave us nuclear war.) Have we nothing left but mediocre technical extrapolations or, worse, cultural and spiritual regression? What did the years of the Renaissance have that we haven't got? Better to ask what we have that they hadn't! The answer cannot long elude an astute mind --we have Dewey and compulsory American education.

Dewey wrote:

"I believe that ... the school is primarily a social institution. Education, therefore, is a process of living and not a preparation for future living. Education is the fundamental method of social progress and reform. All education proceeds by the participation of the individual in the social consciousness of the race ... education is a regulation of the process of coming to share in the social consciousness ... "

In short, to Dewey, education was a process of brain-washing children so that they would be fodder for his ideas of "social reform.". We know this because Dewey also said:

"Every thinker puts some portion of an apparently stable world in peril."

In other words, Dewey - and many other "theorists" just like him - actually end up undermining the values they claim and open the door for destructive ideologies to take hold across societies.

At the same time, as I have already mentioned, each society contains a small but very active minority of persons with various deviant worldviews, especially in the areas treated above, which are caused either by psychological anomalies and pathologies, or by the long-term influence of such mental distortions upon their personalities, especially during childhood. Such people exert a particularly strong and pernicious influence upon the formative process of the psychological world view in society, whether by direct activity or by means of written or spoken words, especially if they are engaged in the service of some ideology or other.

Ideologies are generally created by groups that have joined together to right a wrong - perceived or actual - and because such conditions are generally those of oppression, there is a great deal of emotion imbued into the ideology. This emotion can blind the theorists to the realities of human nature.

For example, the ideology of the proletariat, the class of wage laborers, which aimed at revolutionary restructuring of the world, was contaminated at the beginning by pathological deficits in the understanding of, and trust for, human nature and therefore, was easily taken over by totalitarians with a lust for power as the Communist experiment in Russia has demonstrated.

It is also clear from observation of socialist and capitalist systems that, again, they do not take into account the true range and variety of human natures, as well as those elements of the instinctive substratum that are common to all normal humans.

Nevertheless, the fact that one ideology or another was taken over and co-opted, along with its corollary social movement, later serving goals which the originators of the ideology would have abhorred, does not prove that the idea was worthless, false, and fallacious from the start. The fact is, under certain historical conditions, the ideology of any social movement or religion, can be taken over and subverted. Just look at the Republican Party in the U.S. for another prime example!

An ideology is taken over and co-opted by gradual adaptation of the primary ideology to functions and goals other than the original formative ones. A kind of layering takes place with the outer layer remaining closest to the original content. This continues to be used for the group's propaganda purposes, especially in their relations to the outside world, although it is also used inside with regard to older members. But gradually, the second layer forms and the controllers of the organization are, by now, in control, gradually steering the ship of ideology to a different destination. At this level, the use of "doubletalk" is clearly understood by the top members: it is more hermetic, generally composed by slipping a different meaning into the same names. Since identical names signify different contents depending on the layer of the organization in question, understanding this "doubletalk" requires simultaneous fluency in both languages.

Average people succumb to the first layer's suggestive insinuations for a long time before they learn to understand the second one as well. Anyone with certain psychological deviations immediately perceives the second layer to be attractive and significant; after all, it was built by people like him.

Comprehending this doubletalk provokes in normal people a quite understandable psychological resistance; this very duality of language, however, is a pathognomonic symptom indicating that the group in question is already co-opted to an advanced degree.

The ideology of unions affected by such degeneration has certain constant factors regardless of their quality, quantity, or scope of action: namely, the motivations of a wronged group toward radical righting of the wrong, and the proclaimed higher values of the "cause" are used by individuals who have joined the organization who consciously understand that it is to be a vehicle to power. For some of them with active pathologies, there is no conscious intent to do ill, however the self-declared idealistic motivations help them to sublimate their personal feelings of being wronged and different, caused by their own psychological failings. More damaging still is the fact that this sublimation then allows them to liberate themselves from the need to abide by uncomfortable moral principles. We see clear examples of this in the present day where Christianity is being used to promote hatred and war.

In a world full of real injustice, the formation of such groups is quite common. And, in the same world, it is also quite common for its membership to be soon packed with social elements that are damaged and twisted or genetic deviants. Such a group easily succumbs to degradation and reversal of intentions under the old ideological names. When this happens, those people with a tendency to accept the original version of the ideology will tend to justify such ideological duality.

A given ideology may have contained original weaknesses that are due, as mentioned above, to errors of human thought and emotion; or it may, during the course of its history, become infiltrated by more primitive foreign material which can contain pathological factors. The source of such infection by foreign ideological material may be the ruling social system with its laws and customs based on a more primitive tradition, or an imperialistic system of rule. It may be, of course, simply another philosophical movement often contaminated by the eccentricities of its founder, who considers that reality must be blamed for not conforming to his theories.

One important thing to note is that just because an ideology is great and true, it is not therefore better able to withstand co-opting and degradation. The fact is, the greater and truer the original ideology, the longer it may be capable of nourishing and hiding from view the fact that it has been completely co-opted to the core. In a great and valuable ideology, the danger lies in the fact that the external ideology is still intact, as the first layer, and weaker minds become the tools of the corrupt inner layer all the while believing that they are acting in the true spirit of the original ideals.

Thus, if we intend to understand how a group of psychological deviants could assassinate a sitting president of the United States and get away with it, and subsequently bring the U.S. to the point where it is teetering at the abyss of total destruction, we must take great care to separate the original ideology of Democracy from its counterpart, or even caricature, created by the co-opting and degradation conceived and promoted by the monolithic and ruthless conspiracy identified by John F. Kennedy in those hours between the time he authorized the Bay of Pigs Invasion and then rescinded the order. Remember that he told us that this conspiracy "relies primarily on covert means for expanding its sphere of influence; in infiltration instead of invasion; on subversion instead of elections, on intimidation instead of free choice; on guerillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific, and political operations. Its preparations are concealed not published. Its mistakes are buried, not headlined, its dissenters are silenced, not praised; no expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the cold war, in short, with a wartime discipline no democracy would ever hope to wish to match."

And so, today, in our excerpt from Farewell America, we take a closer look at Capitalism which has come to be equated with Democracy.


. . . the President's action points inevitably to a federal dictatorship over business.

David Lawrence, US News and World Report

The American people will find it hard, as I do, to accept a situation in which a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interests of 185 million Americans.

John F. Kennedy, April 11, 1962

Engraved over the entrance to the Business School of Columbia University is a motto which exhorts the nation's businessmen to a "high sense of duty." Since the death of Roosevelt, whose very name they reviled,(1) the businessmen had been left to their own devices. Truman and Eisenhower had been modest petty bourgeois, and Nixon would certainly have followed in their footsteps. The businessmen were wary of President Kennedy, who as a young Senator from Massachusetts had opposed the Taft-Hartley law and neglected the industrialists of his state. Kennedy did not regard profit-making as the most esteemed of vocations. Brought up in a family of millionaires and a millionaire himself, he was not impressed by other millionaires, nor did he consider the successful businessman the most admirable of beings. He liked to quote from Dr. Johnson:

"A merchant's desire is not of glory but of gain; not of public wealth, but of private emolument; he is therefore rarely to be consulted on questions of war or peace, or any designs of wide extent and distant consequence."

He was well aware of their power, but he did not trust the Titans. When he became President he declared,

"Taken individually, labor leaders are often mediocre and egotistical, but labor as a whole generally adopts intelligent positions on important problems. On the other hand, businessmen are often individually enlightened but collectively hopeless in the field of national policy."

Eisenhower sought out the Titans, respected their advice, and treated them as they thought they deserved to be treated -- in other words, as representatives of the most influential body in the nation. Kennedy kept his distance. Prior to his election he had had little contact with industrial circles, and once he was in the White House he saw even less of them. Businessmen were generally excluded from the Kennedys' private parties. Not only did he "snub" them (in the words of Ralph Cordiner, President of General Electric), he also attacked them. Kennedy did not consult the business world before making his appointments. The men he placed at the head of the federal regulatory agencies were entirely new.(2) Since the end of the war, the businessmen had become accustomed to considering these bodies as adjuncts of their own professional associations. They were more indignant than surprised. They attempted to intervene, but in vain. The President had a mind of his own.

In January 1961, the nation seemed stable and prosperous. The economy was suffering from a slight recession, but the level of unemployment was considered acceptable.(3) But in his first State of the Union Message on January 30, Kennedy spoke of the changes needed in terms that seemed to echo the words of Franklin D. Roosevelt as he inaugurated the New Deal, at a time when the economy of the United States had struck bottom and the Titans were nearly asphyxiated. "The present state of our national economy is disturbing," he began. He called for "urgent increases in federal expenditures in the fields of housing, urban renewal, school construction, medical research, and juvenile delinquency." He proposed a new plan for the economic, social and cultural development of foreign countries.

The President's policy towards Latin America alarmed the businessmen even more than it worried the Pentagon and the diplomatists. The business world foresaw the economic consequences of the President's foreign policies. In Strategy of Peace, he had written:

"Just as we must recall our own revolutionary past in order to understand the spirit and the significance of the anti-colonialist uprisings in Asia and Africa, we should now reread the life of Simon Bolivar, the great 'Liberator' of South America . . . in order to comprehend the new contagion for liberty and reform now spreading south of our borders . . .

"Fidel Castro is part of the legacy of Bolivar, who led his men over the Andes Mountains, vowing 'war to the death' against Spanish rule, saying, 'Where a goat can pass, so can an army.' Castro is also part of the frustration of that earlier revolution which won its war against Spain but left largely untouched the indigenous feudal order . .

"But Cuba is not an isolated case. We can still show our concern for liberty and our opposition to the status quo in our relations with the other Latin American dictators who now, or in the future, try to suppress their people's aspirations."

Later he added, "Our differences with Cuba do not concern the impulse that drives the people of this country toward a better life. The economic and social reforms undertaken in Cuba must be encouraged."

One of his closest advisers, historian Arthur Schlesinger, wrote:

"All across Latin America the ancient oligarchies -- landholders, Church and Army -- are losing their grip. There is a groundswell of inarticulate mass dissatisfaction on the part of peons, Indians, miners, plantation workers, factory hands, classes held down past all endurance and now approaching a state of revolt."

Near Recife, Schlesinger had seen poverty-stricken villages full of starving children covered with scabs. He recalled that before Castro came to power Havana had been nothing but a giant casino and brothel for American businessmen over for a big weekend. "My fellow countrymen reeled through the streets, picking up fourteen-year-old Cuban girls and tossing coins to make men scramble in the gutter,"(4) he wrote.

The policies of the President and his advisers were certain to have economic repercussions. In April 1962, a year after the inauguration of the Alliance for Progress, Latin America, in the eyes of the conservatives, appeared headed for chaos. In Argentina, President Frondizi had just been overthrown by a military coup, and rioting had broken out in Guatemala and Ecuador. There was no country to the South that could be considered politically and economically stable.(5) Capital flowed back into the United States, frightened by the specter of Castroist revolution.

But the effect on the American economy threatened to be even worse. The businessmen could not accept concepts like those of Schlesinger, who declared that the essential thing was not, as Nixon had suggested, to stimulate the cosmetics industry,(6) but to build hospitals and to invest in sectors that affected the strength of the nation and the welfare of the people.

Kennedy and his team called themselves "liberals," but the most intelligent of their adversaries, like economist Milton Friedman, questioned their right to use this term. "As a supreme, if unintended compliment, the enemies of the system of private enterprise have thought it wise to appropriate its label," Friedman wrote.

To his adversaries, President Kennedy's economic policies appeared to be inspired entirely by a concern for public welfare to which they were fundamentally opposed. They quoted the words of Jefferson, "The government is best which governs least." Many of them preferred the freedom to make a million or go bankrupt to the governmental planning and regulation that diminished the range of these alternatives. Senator Barry Goldwater was a good example of this mentality. The little people considered the cowboy-grocer as one of their own, and the big men knew that, regardless of his political destiny, they had nothing to fear from him. For Goldwater, a General in the Air Force Reserve, intelligence was nothing but the "extremism of imbeciles." Turning his back on this kind of extremism, Goldwater expressed himself in vague definitions of the great problems of the day, asserting that unemployment was but "an excuse for the lazy," and the government "the end of individualism." But he turned serious when he wrote:

"Welfare is a private concern . . . The current instrument of collectivism is the Welfare State. The collectivists have finally realized that it is possible to institute socialism through a policy of welfare as well as by nationalization. Welfare socialism is much more difficult to combat. It takes an individual and changes him from a spiritual creature, proud, hardworking and independent, into a dependent and animal creature.

"We must reject this false notion that Communism is brought about by poverty, illness, and other similar social or economic conditions. Communism is brought about by the communists, and by them alone. Communism is international conspiracy, and its goal is to re-establish slavery throughout the earth.

"The advent of a reign of freedom, justice, peace and prosperity is impossible until Communism has been defeated. The victory over Communism must be the principal and immediate goal of American policy. All other objectives are secondary. We must take the offensive. American civilization is man's greatest achievement in the history of the world . . .

"In Strategy of Peace, Kennedy actually described Fidel Castro as the 'heir of Bolivar, the great liberator of South America' . .. the same Bolivar who led his men across the Andes after declaring all-out war on Spain. We must fight Communist subversion throughout the Western Hemisphere, within our borders as well as in Central and South America, with all the weapons at our disposal. It is inconceivable that Castro, that show-off puppet, that lackey of Kennedy be allowed to make fun of us and jeer at our freedom only a few minutes' flying time from our closest city . . . Financial circles have been deeply disturbed by the recent events in Guatemala, Bolivia, and particularly in Cuba . . .

"In the last analysis, the choice is not between surrender or nuclear war. It is between winning or fighting a nuclear war. We must cut out extravagant and useless domestic programs and stop wasting our money on utopian foreign aid projects."

It never seems to have occurred to Goldwater that the system of screwing the governed public out of their tax money in order to hand it over to the rich who kept getting richer, including the industrialists that benefited from congressional favoritism, was, itself, a form of welfare. For if Welfare can be defined as giving money or help to those that do not earn it, what then is the system of paying Congressmen who do not actually represent the interests of their people?

As if in answer, Kennedy declared on March 13:

"For the first time we have the capacity to strike off the remaining bonds of poverty and ignorance -- to free our people for the spiritual and intellectual fulfillment which has always been the goal of our civilization . . .

"This political freedom must be accompanied by social change. For unless necessary social reforms, including land and tax reform, are freely made -unless we broaden the opportunities for all our people -- unless the great mass of Americans share in increasing prosperity -- then our alliance, our revolution, our dream, and our freedom will fail. But we call for social change by free men -- change in the spirit of Washington and Jefferson, of Bolivar and San Martin and Martin -- not change which seeks to impose on men tyrannies which we cast out a century and a half ago. Our motto is what it has always been -- progress yes, tyranny no -- progreso si, tirania no!"

Caracas(7) and then Bogota gave the President of the United States a warm welcome. In Mexico in June 1962, he paid tribute to the Mexican revolution, and in March 1963 in Costa Rica he defended the rights of the peasants to land and an education and called for an end to "the ancient institutions that perpetuate privileges." His enemies saw the Kennedy Administration as the ally of the "agitating popular forces" of the continent south of the border, "working towards progress and a better life for the masses by evolution if possible, or by revolution if that is the price that must be paid.(8)

Revolution! Many people thought that it had already invested the White House, despite the reassurances of the President. On February 13, 1961, he told the National Industrial Conference Board:

"There is no inevitable clash between the public and private sectors -- or between investment and consumption -- nor, as I have said, between Government and business. All elements in our national economic growth are interdependent. Each must play its proper role -- and that is the hope and the aim of this administration . . .

"We will not discriminate for or against any segment of our society, or any segment of the business community. We are vigorously opposed to corruption and monopoly and human exploitation -- but we are not opposed to business. We know that your success and ours are intertwined -- that you have facts and knowledge that we need. Whatever past differences may have existed, we seek more than an attitude of truce, more than a treaty -- we seek the spirit of a full- fledged alliance."

His tone annoyed his business audience, who thought they perceived a hint of paternalism, and who were somewhat less than eager to cooperate with the federal government. The Business Advisory Council discontinued its meetings and decided to break off relations with the Commerce Department. The members of the Council noted uneasily that the Kennedy virus had spread to Commerce Secretary Luther Hodges, a man they had thought they could count on.

The Democrats had inherited a rather mediocre economic situation from the Eisenhower Administration. 1961 was not a very good year. True, the national income had increased 19.6% between 1958-1961 as compared with its 1954-1957 level, corporate sales had risen 18.7%, and salaries had climbed 18.9%. But the prosperity of an economy is written in the balance sheet, and during the same period business profits had risen only 3.3% after taxes.(9) Critics also noted that the federal and state governments were steadily expanding, and that their expenditures equaled one-third of the gross national product.(10) Retail prices had remained stable, and wholesale prices had dropped 1%,(11) but the personal incomes of some of the Titans had also dropped.(12)

Things looked better at the beginning of 1962. The automobile industry, the economic thermometer of the nation, predicted an annual sales figure of 7 million cars, an increase of 1,500,000 over the previous year.(13) 1962 promised more than a recovery and less than a boom. In January Bradford B. Smith, an economist for US Steel, told the National Industrial Conference Board, "I have said to this group many times that as the nation goes, so goes the steel industry, only twice as fast. I would say the steel production in the first half of 1962 could look pretty good."

A month later, however, Roger Blough, Chairman of US Steel,(14) noted that overall industrial profits, which should have reached the figure of $35 billion in 1961,(15) were only $23 billion, and added that over the past three years hourly salaries in the steel industry had increased 40 cents (between 12 and 13%), while profits had been the poorest ever recorded in the history of steel. In 1961, 85% of these profits, he claimed, had been used to pay dividends. He declared that an economy should not be judged solely by its prices, which always depend on costs, but rather by the comparative level of costs and profits. Blough told US News and World Report that the President might understand businessmen, but that he certainly didn't like them. He recalled that President Kennedy had sent a letter to steel industry leaders in September 1961 warning them against any increase in prices. "The steel industry, in short, can look forward to good profits, without an increase in prices. Since 1947, iron and steel common stock prices have risen 397%; this is much better performance than common stock prices in general," the President had written.

On April 6, 1962, the Steelworkers Union agreed, at the request of the federal government, to limit its wage demands to a 10-cent-an-hour increase beginning on July 1, 1962.(16) On April 10, the steel industry announced a price increase of $6 a ton,(17) placing the President, the consumers, and the unions before the fait accompli. In the course of its history, the steel industry had often defied American Presidents, but it had forgotten what it was like to be thwarted. The following day at his press conference, the President declared:

". . . the American people will find it hard, as I do, to accept a situation in which a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interests of 185 million Americans."

This denunciation of the Titans stunned the nation. It marked the birth of a legend. The President's remarks made headlines throughout the world and were even quoted in Pravda, which expressed its surprise and satisfaction. The businessmen were disconcerted by the violence of his reaction and by the apparent extent of his public support, but Roger Blough maintained that his decision had been made "in the interest of the stockholders" and that the profits of the largest steel producers were 33% lower in the first quarter of 1962 than they had been in 1959.(18)

The administration replied that the dividends paid to the stockholders of the steel corporations in 1958-61 were 17% higher than those paid in 1954-57. The steel industry rejoined that profits had exceeded $1 billion in 1959, but that they had fallen to $807 million in 1961, endangering investment possibilities, the future of the steel corporations, and consequently the future of American industry. But, faced with FBI investigations, the pressure of public opinion, and the cancellation of government contracts, it yielded and revoked the increase.(19)

On May 7, 1962, US News and World Report wrote: "What happened is frightening not only to steel people but to industry generally . . . President Kennedy had the public interest at heart in acting as he did, but the results may not in the long run be what he intended them to be."

The following day at Atlantic City, speaking before the United Auto Workers Convention, Kennedy declared:

"This administration has not undertaken and will not undertake to fix prices and wages in this economy. We have no intention of intervening in every labor dispute. We can suggest guidelines for the economy, but we cannot fix a single pattern for every plant and every industry . . . This is a competitive economy. We believe it has served us well, the free enterprise system."

The preceding day, May 7, Roger Blough had told the stockholders of US Steel: "this concept is as incomprehensible to me as the belief that Government can ever serve the national interest in peacetime by seeking to control prices in competitive American business, directly or: indirectly through force of law or otherwise." And he added that since 1950 wages had doubled, revenues from taxes on business had increased by 68%, the profits of store owners and farmers had risen by 70% , while corporation profits had only increased by 2%. He remarked that in recent years the prices of many industrial products had increased, and that he did not see why there should be any discrimination against steel.

Replying to President Kennedy's remarks at Atlantic City on May 1, Walter Reuther, President of the United Auto Workers, declared that what the economy needed was "to increase demand, and therefore salaries." That same day Dr . Charles E. Walker, Executive Vice President of the American Bankers Association, made a speech at New Brunswick attacking increased federal expenditures and the concepts of the President's economic advisers.

May 28, 1962 was the blackest day on Wall Street since the 1929 crash. Steel holdings fell to 50% of their 1960 level. "This could become total war," declared Avery C. Adams, Chairman of Jones and Laughlin Steel, to the stockholders of his company. The unions began to wonder whether the consequences of the President's intervention might not prove more serious for them than for the corporations.(20) Allan Sproul, ex-President of the Federal Reserve Bank of New York, declared that "although there was no panic by stock-holders after the stock market crash of May 28, 1962, another May 28 might have different consequences. (21)

In July 1962, the steel industry at Pittsburgh was working at only 55% of capacity, as compared to 70% in April. The steel companies noted that this crisis hit them just when they were faced with competition from foreign producers favored by lower costs and cheaper labor, and from related industries (plastics, aluminum, cement, glass, wood) that were becoming more and more diversified and more and more powerful. One of the paradoxes in the arguments of certain businessmen was the fact that, while rejecting any notion of federal intervention in their affairs, they called for greater protection against foreign competition.(22)

Business reaction was unanimous. Ralph Cordiner, President of General Electric, declared that Kennedy ought to reread his Lincoln,(23) and David Lawrence(24) wrote:

"The heavy hand of government has just won a pyrrhic victory . . . Economic facts cannot be changed merely because politicians dislike them. Nor can America's private enterprise system survive very long if the Federal Government itself engages in the mudslinging of class warfare and, in effect, tells an industry it must disregard profits, disregard dividends, and pay labor whatever the Administration says shall be paid even if, as in this case, it costs the industry an additional $100 million a year.

"Apparently (Mr. Kennedy) believed that the Administration could coerce the industry into submission. For what else was meant by Mr. Kennedy's statement that the 'Department of Justice and the Federal Trade Commission are examining the significance of this action in a free, competitive economy? . . . This implied a threat of criminal prosecution. It was a move designed to terrorize those who disagreed with the Administration . . . While denying any inclination toward state socialism, the President's action on steel prices points inevitably to a federal dictatorship over business."

And he concluded, "Socialism (is) often a forerunner of Communism."

Analyzing the battle underway, Richard E. Neustadt(25) wrote,

"As far as I can observe it from abroad, the steel case was a classic demonstration of two things: of the tenuousness and uncertainty of presidential power -- one might almost say the weakness of the President's position -- coupled with almost incredible political naivete on the part of the US Steel Corporation."

Some months later, Kennedy explained his reaction:

"I think it would have been a serious situation if I had not attempted with all my influence to try to get a rollback, because there was an issue of good faith involved. The steel union had accepted the most limited settlement that they had since the end of the second war . . . in part, I think, because I said that we could not afford another inflationary spiral, that it would affect our competitive position abroad, so they signed up. Then, when their last contract was signed . . . steel put its prices up immediately. It seemed to me that the question of good faith was involved, and that if I had not attempted . . . to use my influence to have the companies hold their prices stable, I think the union could have rightfully felt that they had been misled. In my opinion it would have endangered the whole bargaining between labor and management, which would have made it impossible for us to exert any influence from the public point of view in the future on these great labor-management disputes which do affect the public interest."

In June 1962, at the height of the crisis, business circles in the United States were much more concerned about the President's style and personality than by the decline in the stock market, which it knew to be artificial, or the state of the economy, which it considered hopeful.(26) Kennedy's speech at Yale(27) on June 11 confirmed the worst fears of the businessmen:

"The great enemy of the truth is very often not the lie -- deliberate, contrived, and dishonest -- but the myth -- persistent, persuasive, and unrealistic. Too often we hold fast to the cliches of our forebears. We subject all facts to a prefabricated set of interpretations. We enjoy the comfort of opinion without the discomfort of thought . . .

"We cannot understand and attack our contemporary problems in 1962 if we are touched by traditional labels and worn-out slogans of an earlier era. But the unfortunate fact of the matter is that our rhetoric has not kept pace with the speed of social and economic change. Our political debates, our public discourse - on current domestic and economic issues -- too often bear little or no relation to the actual problems the United States faces . . .

"(These problems) cannot be solved by incantations from the forgotten past. But the example of Western Europe(28) shows that they are capable of solution -- that governments, and many of them conservative governments, prepared to face technical problems without ideological preconceptions, can coordinate the elements of a national economy and bring about growth and prosperity . . .

"Some conversations I have heard in our own country sound like old records, long-playing, left over from the middle thirties. The debate of the thirties had its great significance and produced great results, but it took place in a different world with different needs and different tasks. It is our responsibility to live in our own world, and to identify the needs and discharge the tasks of the 1960's . . .

"Nearly 150 years ago, Thomas Jefferson wrote, 'The new circumstances under which we are placed call for new words, new phrases, and for the transfer of old words to new objects.' New words, new phrases, and for the transfer of old words to new objects -- it is truer today than it was in the time of Jefferson, because the role of this country is so vastly more significant . . . As we work in consonance to meet the authentic problems of our times, we will generate a vision and an energy which will demonstrate anew to the world the superior vitality and the strength of the free society."

This was a serious speech. Not only did he attack the Titans, but also those of his fellow-citizens who took pride in their traditional stereotypes, their worn-out slogans, their old records, their ancestral cliches, their imaginary problems, and their prefabricated interpretations, and of whom Kennedy said that they were 150 years behind and understood nothing of the real problems of their times.

It was already late when he announced on television on August 13 that since he had entered the White House the gross national product had increased by 10%, industrial production had risen 16%, disposable personal income had gone up 8% ($30 billion), the unemployment rate had dropped by 1 million, and that in Carbon County, Pennsylvania, George Demart, aged 52, was finally able to support his family. He added that corporate profits had risen 26%, but those concerned were probably no longer listening when he concluded:

"We have to move ahead, and I know that there are those who oppose all these moves as they opposed moves in other days much as they opposed a ban on child labor and, more recently in the Senate, medical care for the elderly.

"This country would still be in the dark ages economically if we permitted these opponents of progress and defenders of special privileges to veto every forward move. But the president of the United States, I believe, and the Congress and all of us must be committed to action in our time."

The fever fell somewhat in the fall. Business was good, and 1963 looked better still. The increase in federal expenditures, defense contracts, and urban renewal projects acted as a stimulus on the economy. But businessmen remained pessimistic and distrustful. At the American Bankers Association Convention at Atlantic City on September 23-26, 1962, it was predicted that automobile production would drop by 500,000 units in 1963.(29) Most financial experts in New York and Chicago warned of a new recession.

There was no recession. On the contrary, the United States was in the midst of an industrial expansion.(30) But the federal government remained vigilant. In July 1962, it had protested to the banks, which were predicting inflation and deforming the financial market. In November it denounced unjustified price increases in the pharmaceutical industry. In 1963, its antitrust suits multiplied.

The tendency towards corporate mergers was accentuating.(31) Pursuing its traditional anti-trust role, the Justice Department opened investigations into price-fixing conspiracies and other illegal activities. This action brought positive results (prices of electrical equipment dropped 30%), but it infuriated industry." Mergers arouse acute suspicion of the Government's trustbusters," wrote US News and World Report.(32)

In January, the Justice Department asked a federal court to force the General Motors Corporation to dispose of its locomotive business and break up its merger with the Euclid Road Machinery Company. In a third case, it charged General Motors with monopolizing the manufacture and sale of inter-city buses.

In the face of such attacks, businessmen began to ask themselves what would happen when large companies attempted to grow or diversify through mergers. Was this the end of all corporate mergers? The Federal Trade Commission opened an inquiry into the relationships between 1,000 of the nation's largest companies. It was particularly curious about "joint ventures" and "reciprocity," or the extent to which big companies bought from their own best customers. To what extent did a steel company order its machinery from the machinery manufacturer who regularly bought its steel? How far did a truck manufacturer go in favoring a steel company that purchased its trucks?

General Dynamics was ordered to dispose of a division dealing in industrial gases that it had acquired five years before, and a merger of Consolidated Foods with a firm producing dehydrated onions and garlic was broken up after the FTC charged that the food firm had required some of its suppliers to buy the products of its new division. The FTC suggested that any merger might be judged illegal if it tended to promote reciprocal business.

The government brought price-fixing charges against a long list of industries, including milk, baked goods, silver products, copper tubing, pulpwood, brass-mill products, macaroni, sewing machines, etc., and in many instances won easy victories. In 1963, the Justice Department's Antitrust Division won 45 out of 46 cases.

Big business grew more and more concerned about the tendencies of the Kennedy administration, and industrialists aren't the type of people to sit around and chew their fingernails. Employers complained that they were continually placed at a disadvantage in their relations with the labor unions, which were backed by Washington. They felt that the National Labor Relations Board had abandoned the neutral position it had occupied under Eisenhower. "The NLRB is also affected by the spirit of crusade," declared Joseph L. Block, Chairman of Inland Steel. J. Mack Swigert added, "The financial power of the unions is so great that many employers can't risk a strike."(33)

Kennedy stated over and over again that he was opposed to government control of salaries and prices, but his administration intervened more and more often in labor disputes. Washington appointed mediators who stressed the "public interest," which was generally interpreted as favoring the unions. Federal pressure was exerted on numerous corporations, especially in the missile and space industry, which had not yet adopted the union shop. The regulatory commissions available to the President wielded considerable power.(34) The National Labor Relations Board ordered that workers fired for union activities, or who had lost their jobs because their employer refused to negotiate with their union, be reinstated with their back pay plus 6% interest.

The businessmen feared that the federal government would somehow take control of wages, (35) and their fears were voiced at the gatherings of the American Management Association, the National Association of State Labor Relations Boards, and the American Mining Congress. The Vice President for Labor Relations of the Ford Motor Company declared that the Kennedy administration appears to be "seeking some sort of halfway house between private bargaining and Government compulsion that will give it the degree of influence or control over the results that it conceives to be needed . . . it is prepared to go past the point of relying simply on reason and persuasion."

Others went much further. US News and World Report charged that "the machinery for a true socialist economy already exists," and quoted one financier who added, "The pension funds give considerable room for maneuver. By acting in a certain direction, they could be used to destroy the capitalist framework."

1963 could be considered a good year for business. But the businessmen didn't think so. The gross national product, wages, taxes, and prices had progressed satisfactorily, but the steel industry was still working at only 50% of capacity, and profits were lower than what businessmen thought they ought to be, and proportionally lower than what they had been in 1950.(36)

Speaking at the University of Chicago, Henry Ford declared, "How high are profits? By any relative measure, profits are now at about the same level as they were during the 1954 recession. Today, after 3 full years of rising prosperity for the rest of the economy, profits have finally climbed back up until they are as high as they were at their lowest point in the decade after the end of World War II. The reduction of federal income taxes is an important step in the right direction."(37)

Industrialists noted that the growth rate of the American economy in 1963 would be the lowest of all the industrialized countries, and emphasized that this lag could have "dramatic" consequences. They forecast that the Soviet Union would have caught up with the United States in terms of industrial production by 1975-80.

Kennedy responded to these predictions by pointing out that the exceptional growth rate of the Soviet Union was due in large part to its huge crop -three times larger than that of the United States -- of students in all branches of learning, future researchers, and future technicians, and he cited this as one more reason for assuring equal educational opportunities for all students and breaking down the financial barriers surrounding the universities.(38) He was especially concerned about unemployment: in 1963 there were 4,166,000 people out of work, as compared to 4,007,000 in 1962.(39) The businessmen were more concerned about federal deficits and expenditures.(40)

In 1962, Kennedy had elected to pursue a new economic and financial policy based on the potential gross national product.(41) To bring this potential into being, it was necessary to create "fiscal drag" -- in other words, to reduce taxes on individuals and corporations. On December 14, 1962, speaking to the members of the Economic Club at the Waldorf Astoria Hotel in New York, the President upset the traditional economic thinking not only of the businessmen, but also of the members of Congress. Many Congressmen were violently opposed to any increase in federal spending, which they blamed for weakening the dollar, and considered the budget deficit as an evil in itself which should be reduced by all possible means. But Kennedy felt differently.(42) He began by reassuring them: "To increase demand and lift the economy, the Federal Government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures."

But he went on to declare, "Our practical choice is not between a tax-cut deficit and a budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia . . . or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve . . . a budget surplus."

The President planned to apply PPBS, which had been used so successfully at the Defense Department, to the federal budget,(43) but in 1963 the primary problem was that of balancing the budget. Kennedy proposed a Keynesian program of budgetary deficit designed to encourage economic expansion.(44) This classic plan consisted of alleviating fiscal pressure without a corresponding decrease in public expenditures. A tax cut, investment tax credit, and a simultaneous increase in public spending would increase demand and stimulate consumption.

On January 17, 1963, President Kennedy presented both his 1963 budget and his proposals for a tax cut and tax reform to Congress. Senator Harry F. Byrd and Representative Wilbur D. Mills, respectively chairman of the Senate Finance Committee and the House Ways and Means Committee, voiced their opposition to the plan. "Power feeds on power. Big government is too big,"(45) said Senator Byrd, who added that in his opinion confidence was not reassured by expanding federal domination and control, or judicial usurpation of power, or excessive federal spending, and that he was feeling the oppression of all three.

What Kennedy wanted was not simply a temporary tax cut, but a thorough revision of the American fiscal system. The tax reform sealed his fate.

Some Americans were opposed to it on principal, like the Florida businessman who found himself in the same plane with Douglas Dillon one day in 1962. The Treasury Secretary spent some time explaining the tax reform in terms of this man's corporate outlook and income, and the businessman was most impressed. Finally, as the plane landed at Miami, he turned to Secretary Dillon and said, "I am grateful to you for explaining the bill. Now tell me just once more: why is it I am against it?"(46)

The answer came from Barry Goldwater:

"We have been persuaded that the government has an unlimited right to appropriate the wealth of the people. The government has the right to demand an equal percentage of the wealth of every man, and no more. This is as valid for incomes as it is for gifts and inheritances. Taxes should be the same for everyone, as they are for cigarettes. Progressive taxation is a confiscation.

"It is scandalous that a man who earns $100,000 a year contributes 90% of his revenue to the national budget, while a man who earns only $10,000 contributes only 20% . It is a penalty for success."

But taxes weren't the same for everyone. The President was astounded to learn that of the 19 Americans whose income exceeded $5 million a year, 5 paid no income tax at all in 1959, and none of the 14 others had been taxed in the $5 million a year bracket, and that in 1954 one American with an income of $20 million a year had not paid a cent of taxes. Similar examples abounded. In most cases, these scandalous exemptions were the result of the multiple deductions and loopholes that the tax system offered to certain corporations, notably in the oil industry.(47)

Kennedy was determined to put an end to these abuses. Already, on April 20, 1961, the day he learned of the failure of the Bay of Pigs invasion, he declared before Congress:

"A strong and sound Federal tax system is essential to America's future . . . The elimination of certain defects and inequities as proposed below will provide revenue gains to offset the tax reductions offered to stimulate the economy . . . Special provisions have developed into an increasing source of preferential treatment to various groups. Whenever one taxpayer is permitted to pay less, someone else must be asked to pay more. The uniform distribution of the tax burden is thereby disturbed and higher rates are made necessary by the narrowing of the tax base. Of course: some departures from uniformity are needed to promote desirable social or economic objectives. But many of the preferences which have developed do not meet such a test and need to be reevaluated in our tax reform program."

And he added, "The war on poverty is not over. It has just begun."

The 1963 tax reform was aimed at: 1) relieving the hardships of low-income taxpayers and older people, and encouraging economic growth; 2) revising the tax treatment of capital gains to provide a freer and fuller flow of capital funds; and 3) broadening the base of individual and corporate income taxes so as to remove special privileges, correct defects in the tax law, and provide more equal treatment of taxpayers.

But the most important aspect of this reform focused on the tax provisions which "artificially distort the use of resources." The President declared that "no one industry should be permitted to obtain an undue tax advantage over all others" and called for the correction of defects in the tax privileges granted the mineral industries, the oil industry first of all.

As they read through the 24 pages of Document No. 43, the President's Tax Message to Congress, certain businessmen had good reason to be against it.(48) They were far less interested in the health of the American economy(49) than in the rate of their profits.

On November 18, 1963, three days before his death, President Kennedy presented his economic report to the Florida Chamber of Commerce:

"For the first time in many years, in the last 18 months, our growth rate exceeds that of France and Germany. It is because, as Fortune magazine recently pointed out, corporate profits in America are now rising much faster than corporate profits overseas . . .

"By next April, with the indispensable help of the pending tax cut bill, the United States will be sailing with the winds of the longest and strongest peacetime economic expansion in our Nation's entire history."

And he concluded:

"I realize that there are some businessmen who feel they only want to be left alone, that government and politics are none of their affairs, that the balance sheet and profit rate of their own Corporation are of more importance than the worldwide balance of power or the nationwide rate of unemployment. But I hope it is not rushing the season to recall to you the passage from Dickens' 'Christmas Carol' in which Ebenezer Scrooge is terrified by the ghost of his former partner, Jacob Marley, and Scrooge, appalled by Marley's story of ceaseless wandering, cries out, 'But you were always a good man of business, Jacob.' And the ghost of Marley, his legs bound by a chain of ledger books and cash boxes, replies, 'Business? Mankind was my business. The common welfare was my business. Charity, mercy, forbearance and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business.'

"Members and guests of the Florida Chamber of Commerce, whether we work in the White House or the State House or in a house of industry or commerce, mankind is our business. And if we work in harmony, if we understand the problems of each other, and the responsibilities that each of us bears, then surely the business of mankind will prosper. And your children and mine will move ahead in a securer world, and one in which there is opportunity for them all . . ."

But many businessmen were indifferent to harmony, the problems of mankind, the future of their children, and Charles Dickens. Four days later, President Kennedy landed at Dallas. There is no stronger hate than that of the robber barons.

On February 26, 1964, under President Lyndon Johnson, Congress approved Public Law 88- 272, which amended the Internal Revenue Code of 1954. Nowhere in the 128 pages of this act, however, will you find the provisions concerning the "removal of certain inequities" requested by President Kennedy.

In April, 1964, now that they had a President "who understands business," in the words of W. B. Murphy, President of the Campbell Soup Company, the businessmen interviewed by US News and World Report declared, "All the business news is good -- profits up, sales climbing, output rising. Everything is breaking out on the upside."

The Great Society had begun.

It was at the height of its glory when, on July 4, 1967, President Johnson told a cheering crowd:

"We own almost a third of the world's railroad tracks, almost two-thirds of the world's automobiles, half the trucks, half of all its radios, a third of all the electricity, a fourth of all the steel . . . half of its wealth."

"And bear in mind," continued the President (who had forgotten to include half the world's oil) "that the rest of the world would like to exchange places with us."


1. In 1902, Teddy Roosevelt had designated the Administration (later to become the Pentagon), the lobbyists, and organized finance as "public enemies of the nation." Franklin D. Roosevelt declared that "Private enterprise is a public service."

2. William Cary was appointed to head the Securities and Exchange Commission, Newton Minow as Chairman of the Federal Communications Commission, Frank McGulloch to the National Labor Relations Board, Joseph Swidler to the Federal Power Commission, and Paul R. Dixon as Chairman of the Federal Trade Commission.

3. 3.9 million unemployed in 1960; 4 million in 1961.

4. On August 16. 1961, Richard Goodwin, another of Kennedy's advisers, met at Montevideo with Ernest "Che" Guevara, then "czar" of the Cuban economy.

The late journalist Lisa Howard was in the process of arranging a meeting between Bob Kennedy and Guevara at the time of President Kennedy's assassination.

5. In April of 1962, US News and World Report published a round-up of the Latin American situation which concluded, "Clearly, after one year of the Alliance for Progress, Latin America is in worse trouble than it was before the program started. Experts warn that the situation will get worse before it gets better.

6. Since 1964, the cosmetics industry has expanded rapidly. Between 1964 and 1967, Avon Products, with 190 different branches, tripled its international sales. In 1966, the combined profits of its American and International Divisions totaled $55.5 million, or 13.5% of its turnover ($408 million).

7. Where rocks and tomatoes had been thrown at Nixon in 1958.

8. On November 16, 1963, Argentinean President Illia canceled the agreements signed with foreign oil companies in 1958 and 1959.

9. In 1961 the gross national product, which had grown by 4% in 1960, increased by only 3.3%, but rose to 68% in 1962.

10. In 1963, one out of every six workers was employed by Washington or the state governments. These governments absorbed 35% of the gross national product (but Kennedy's critics forgot to add that there were 2,548,000 federal employees, as compared to 7,889,000 in the state and local governments).

11. Retail Price Index:

1960: 100.7
1961: 100.3
1962: 100.6
1963 : 100.3

12. A comparison between the earnings of 515 top businessmen in 1960 and 1961 revealed an increase in income for 243 and a decrease for 161. 71 reported no change. Frederick G . Donner, Chairman of General Motors, with gross earnings of $557.725 (including $405.324 in taxes) earned $16,300 less (before taxes). J. W. Schwab, Chairman of United Merchants and Manufacturers Textile, earned $384,505 in 1960 and $324,400 in 1961. In the steel industry, Thomas E. Millsop, President (later Chairman) of National Steel, earned $285, 100 in 1960 and $260,100 in 1961. Roger W. Blough, Chairman of US Steel, earned $283,333 in 1960 and $300,000 in 1961. (All of these figures indicate income before taxes. Mr. Blough received $3,000 of his 1960-1 increase; the remaining $13,000 went for taxes.

13. Automobile sales:

1960: 6,675,000
1961: 5,543,000
1962: 6,933, 000

14. The largest steel corporation in the world. In 1966 it produced 29 million tons of steel.

15. Mr. Blough based this figure on 1947 statistics, a questionable procedure at best. He might also have noted that profits during the Eisenhower administration had hardly moved at all: $22.8 billion in 1950, $23.0 billion in 1955, $22.7 billion in 1960, $23.3 billion in 1961, and that they had climbed to $25.9 billion the first year the results of the Kennedy administration were felt.

16. David McDonald, President of the Steelworkers Union, declared that the cost of steel production had decreased by 1% since 1958.

17. This represented an increase of 3.5%, while the 10-cent-an-hour wage increase represented a rise of only 2.4% .The administration claimed that the price increase would cost the Pentagon $1 billion. (Mr. Blough lowered this figure to $20 million.) Blough added that profits per ton of steel had dropped from $12.19 in 1958 to $79.70 in 1961.

18. Effects of the crisis on the revenue and the number of persons employed by US Steel from 1960 to 1965:

Employees Revenue
1960: 225,081 $600,500,000
1961: 199,243 $387,096,059
1962: 199,044 $337,403,081
1963: 187,721 $410,069,357
1964: 199,979 $493,388,130
1965: 208,838 $550,384,380

19. Comparative profits of American industry as a whole and the steel industry were as follows:
1947 1950 1955 1959 1961
Industry as a whole 15.1% 15% 12.3% 10.2% 8.7%
Steel Industry 11.7% 13.8% 13.1% 8.0% 6.1%

20. In 1961, there had already been 64,500 job cuts in the steel industry.

21. On December 26, 1962, the stock market situation was as follows (as compared with the preceding year):

Greatest rise

international oil (up 13.2%)
shipping (up 12.3%)

Greatest drop

vending machines (down 50.6%)
cigarettes (down 43.3%)
specialty machinery (down [figure omitted due to typographical error]) steel (down 35.9%)

Other notable drops

motion pictures (down 33.0%) food chains (down 30.9%)
publishing (down 0.8%)
tires, rubber goods (down 27.3%)
electronics (down 25.7%)

22. A true market economy, as defined by Milton Friedman, suffers as much from the interior and exterior protectionism of many industrial leaders as from governmental controls and restrictions. But, as Galbraith notes, Friedman is a romantic, and his concepts are far removed from those of the true conservatives.

23. Lincoln had declared before Congress on December 3, 1861:

"Labor is prior to and independent of capital. Capital is only the fruit of labor and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights."

24. Editor of US News and World Report, April 23, 1962.

25. Columbia University professor and author of the book Presidential Power, the Politics of Leadership.

26. The expansion had resumed in March 1962, then slowed down in the second quarter and stopped in the third, but a new expansion was forecast for the month of October, and the forecasts proved correct.

27. When Kennedy returned to New Haven on October 19, 1962, at the height of the Cuban crisis, a group of Yale students greeted him with a sign that read, "Be more courageous and less photogenic."

28. Here, the President was praising the interventionism and even the state socialism of European countries such as Great Britain, France, Italy and Sweden.

29. Instead, it rose by 705,000.

30. In 1960, the gross national product was $502.6 billion. In 1961 it rose to $518.7 billion, in 1962 to $556.2 billion, and by 1963 it had reached $583.9 billion.

The incomes of most of the nation's top businessmen rose in 1962: F. G. Donner climbed to $643.975 a year and J. W. Schwab to $367,613, but steel industry leaders weren't so fortunate. Roger Blough remained at $300,000, and Thomas E. Millsop dropped from the list of those earning more than 250,000 a year.

31. There were 1,400 mergers in the first half of 1967.

John Kenneth Galbraith believes that anti-trust procedures should be invoked not only against General Motors (which controls 54.5% of the market), but also against the Ford Motor Company, the big oil companies, U.S. Steel, General Electric, and several other large corporations.

32. April 1, 1963.

33. The percentage of working time lost during the three years of the Kennedy administration was the lowest in a decade:

Eisenhower Kennedy Johnson
1958: 0.22% 1961: 0.14% 1964: 0.18%
1959: 0.61% 1962: 0.16% 1965: 0.18%
1960: 0.17% 1963: 0.13% 1966: 0.19%
1967: 0.30%, or 41
million man days

34. The Interstate Commerce Commission is the oldest of these bodies, followed by the Atomic Energy Commission, the Federal Reserve System, the Export-Import Bank, the Federal Housing Administration, the Securities and Exchange Commission, the National Labor Relations Board, the Federal Trade Commission, the Federal Power Commission, the Federal Communications Commission, etc.

The Securities and Exchange Commission, which regulates the stock exchange and overseas stock market transactions, went into action on the day of President Kennedy's death. That afternoon, 6 million shares changed hands on Wall Street, In 30 minutes, the Dow Jones average fell 21.16 points (on May 28, 1962, it had fallen 35.95 points). At 2:09 pm the Stock Exchange was closed (which didn't prevent some people from making a killing).

35. When, in December 1967, US Steel, followed by other producers, announced a price increase of $5 a ton, President Johnson stated simply that steel industry leaders had been informed of "his feelings" on the matter, and that he did not exclude the idea of government control of prices and salaries in the future. Industrial circles took this threat calmly.

At the end of July 1968, he again permitted the steel industry to raise its prices.

36. Between 1950 and 1955, profits averaged 3.6% of sales. From 1955 to 1959, they averaged only 3.1% (a drop of 14%), and between 1960 and 1963, 2.6% (a further drop of 16%).

Since 1950, while the gross national product had increased 106% , employees' and workers' wages 70%, investments 90%, taxes 56%, prices 33% and federal expenditures 179% , profits (which totaled $23 billion in 1950) were only $27 billion in 1963, or $20.5 billion in terms of 1950 values, 10% less than in 1950.

The dividends paid by American industrial corporations had averaged 11.4% from 1955 to 1959. Between 1960 and 1963, they averaged only 9.4% (a decline of 18%).

37. The Ford Motor Company had been prosecuted in November 1961 under the Clayton Antitrust Act for having absorbed the Electric Autolite Co. in April. The Justice Department claimed that this merger would reduce competition in the production and sales of spark plugs, noting that in 1960 Electric Autolite and General Motors had produced 90% of the spark plugs sold in the United States.

Ford expressed its surprise and retorted that its principal competitor, General Motors, manufactured spark plugs and batteries through its subsidiary company, AC Sparkplugs.

38. In 1967, there were 4,000 universities or higher technical institutes in the USSR. Four million Soviet citizens attended college. Five million young workers and farmers took university correspondence courses. There were approximately 400,000 young researchers working in Soviet research centers, and the nation had nearly ten million engineers, five times more than the United States.

39. The Council of Economic Advisers (Walter Heller, John P. Lewis and Gardner Ackley) did not believe that unemployment was structural (the result of technological advances), and could therefore be cured by adapting the workers to changing job conditions. Instead, they felt that it was necessary to increase the level of demand.

40. Since 1950, federal expenditures had increased by 179%. The 1960 budget (the last of the Eisenhower administration) included a deficit of $1.2 billion. In 1961 (in the first year of the Kennedy administration), the budget deficit was $3.9 billion. In 1962, it was $6.4 billion. The 1963 deficit was estimated at $6.8 billion in July 1963.

41. This formula has been employed in Europe for many years, but the term often covers unorthodox financial manipulations.

42. David Brinkley reported on September 9: "Harry Truman was out for his walk this morning and he said he did not think we should have a tax cut until we get the budget balanced, and the other day Senator Humphrey was saying in the Senate that what the American people think is true is very often more important than what is actually true."

43. In 1968, the increasing use of the Planning, Programming, Budgeting System, or PPBS, has proved President Kennedy's foresight correct. This system, which has already been instituted in New York State and Wisconsin, and which is under study by Colorado, Michigan and Vermont, was developed by the Defense Department in 1961.

PPBS, which constitutes a first step in public planning, is an overall examination (on the national, state or local level) of the objectives, the available resources and the basic principles of public spending, which were formerly dealt with in separate studies.

44. Milton Friedman claims that Keynes is as out-of-date as Marx, and that his doctrine is based on the situation in Great Britain after the 1929 crash, when the nation was faced with falling prices and underemployment. Friedman does not believe that the Keynesian serum can be applied to an expanding economy, as it speeds up inflation.

45. The budget for fiscal year 1960 will be around $150 billion ($190 billion using the new method of calculation). In President Johnson's defense, however, it should be noted that around $40 billion of this is accounted for by exceptional Defense costs.

46. Quoted by Kennedy at Tampa on November 18, 1963.

47. See Chapter 10, "Oilmen."

48. The tax reform favored the 450,000 businesses (out of 585,000 in the country) with a net revenue of $25,000 per year, and which benefited from a 27% reduction in their taxes.

Other proposals favored: child care deductions, older people, contributions to charity and medical facilities, and research and development activities. An amendment defining certain medical and drug expenses was designed to prevent abuses in tax deductions.

49. On January 21, 1963, President Kennedy informed Congress that during the 1961-62 expansion:

1) Private income had increased by $46 billion to reach a high of $450 billion, or 12% more than the maximum attained during the previous expansion. The net revenue per farm had increased by $330, while the net income of the farmers from agricultural activities had increased overall by $800 million. The total income of American consumers, after taxes, had risen by 8%, which represented an annual increase of $400 in the standard of living (in terms of 1962 prices) for a family of four;

2) The number of civilian non-agricultural jobs had increased by 2 million, while the average work week in the factories had risen from 39.3 to 40.3 hours;

3) Company profits had attained a record high of $51 billion in 1962;

4) Wholesale prices had remained remarkably stable, while consumer prices had risen by only 1.1% a year (the best record of price stability attained by any important industrial nation with the exception of Canada);

5) The improving competitive situation had led to a marked improvement in the balance of payments deficit, which had dropped from $3.9 billion in 1960 to $2.5 billion in 1961, and to around $2 billion in 1962.

The President added that prospects for continued moderate expansion in 1963 were favorable.

Comment on this Editorial

Editorial: John F. Kennedy, Oil, and the War on Terror

Laura Knight-Jadczyk
20 November 2006

On November 20th, 1963, between 11:30 - 11:40 a.m., President John F. Kennedy met with Lena Horne, Carol Lawrence, DNC chairman John M. Bailey, and others.

Later that day, he issued a statement on the Extraordinary Administrative Radio Conference to Allocate Frequency Bands for Space Radio Communication Purposes, held in Geneva, Switzerland from October 7 to November 8, 1963. He invited other nations to participate in setting up a global communication satellite system. He spoke of "a peace system worldwide in scope."

Following that, John Kennedy sent to the Congress the 17th annual report on U.S. participation in the United Nations, and then he signed into law bill (HR2073) to allow the conveyance of submerged and tidal lands to Guam, the Virgin Islands, and American Samoa if they are needed for economic development or other compelling reason. The John F. Kennedy Presidential Library Archives

At the end of the day, he had less than two days left...

Early today, 43 years later, a member of our forum posted a link to an article carried by the U.K. Guardian:

War on terror 'could last 30 years'

There is "every prospect" of the "War on Terror" lasting for 30 years or more, a global security think tank has said.

The Oxford Research Group report said recent political changes in the US would make "very little difference" to the conflicts in Iraq and Afghanistan.

In the US midterm elections, the Democrats seized control of both house of Congress from the Republicans. The report said the United States was now faced with a dilemma. If it withdraws from Iraq, jihadist groups could operate "without restraint" in this "important oil-bearing region".

But if it decided to stay, US soldiers could become an increasing "magnet" for radical groups, with Iraq turning into a training ground for new generations of paramilitaries.

Written by Professor Paul Rogers, ORG's global security consultant and professor of Peace Studies at the University of Bradford, the report analysed the past year of events in Iraq and the Middle East, looking at how the war on terror had transformed into what has been called the "Long War" by the Bush Administration. [...]

What was needed was a complete reassessment of current policies, the report said. However, Prof Rogers' said this was unlikely to happen, because even with the Democrats now controlling both houses, there was virtually no commitment to full withdrawal from Iraq.

Instead, Prof Rogers' report found that while there were various moves to modify policy, such as withdrawing from the cities and maintaining a presence in a few bases, nothing amounted to substantial change.

Commenting on the changes needed, Prof Rogers said: "Most people believe that the recent elections mark the beginning of the end of the Bush era, but that does not apply to the war on terror. In reality there will be little change until the United States faces up to the need for a fundamental rethink of its policies. So far, even with the election results, there is no real sign of that."

In short, what I wrote several days ago in my article Post Election Reality Check, seems to be right on target: "Meet the New Boss, same as the Old Boss."

But it didn't have to be this way. As the reader is probably thinking by now, having read this present series of articles on John Kennedy and his plans to steer the ship of American State into peaceful waters, "Oh, what a different world we would be living in today if John F. Kennedy had lived and had finished his work!"

And it's true. Because the same cabal that was responsible for his death is the cabal that that is running the planet today via the puppet regime in the United States, and with hooked tentacles in nearly every other government on the planet. We are, indeed, facing 30 years of War Without End from which few of us will emerge alive. We are living in a virtual police state planet, with terror around every corner, a terror that is not due to some mad Muslim hating us because of our "freedoms" - what a joke - but is due to all of the machinations and manipulations of evil people in high places whose greed for money and power knows no bounds.

And that is what the monied elite wanted: War and more war to make money and more money. And their controllers - those pulling the strings behind the scenes only wanted power and more power and used the greed of the Business Titans, the Mob and the Oil Empire to achieve their ends. But, we will come to that soon enough.

It seems to be a certainty that if John F. Kennedy's life had not been brutally ended 43 years ago, there would be no so-called terrorists (of either the Islamic or Monied Elite variety), now would there be a War on Terror. What a tragedy that we don't see another John F. Kennedy on the horizon with the brains and savvy to haul our buns out of the fire now.

Nowadays, just about everyone knows that it is about oil. But what a lot of people don't know is exactly how it all got started. So, today's excerpt from Farewell America is going to take us back to the beginnings of the Oil Issue.


"The American Beauty Rose can only be coaxed to that degree of splendor and fragrance that enchants us by sacrificing the other buds growing around it. In the business world, the same operation is the result not of an unhealthy trend, but simply of a law of nature and of God." John D. Rockefeller, Jr.

Oil is the lifeblood of modern civilization. It provides the fuel for our planes, our ships, our trucks, and our 180 million automobiles, and it is the source of some 300,000 petro-chemical products. Oil accounts for more than half of the maritime freight tonnage, and furnishes more than 60% of the world's energy. It is the number one industry in the world today.

The budget of the oil industry is larger than the budget of the United States government. The annual revenue of the largest oil company in the world, Standard Oil of New Jersey, is greater than the revenue of the government of Canada. Directly or indirectly, through American domestic production (1) as well as overseas holdings, the American oil industry controls 80% of the world market. (2)

Through their overseas domination and the steady growth of the oil market in the past fifty years, the big companies have grown increasingly bigger.(3) Their interests, however, do not always coincide with those of the continents and the peoples they control. Europe, which consumes 25% of the oil produced in the world today, accounts for only 0.7% of world reserves, and for only 1.4% of world production. In the coming decade and probably until the end of the century, Western Europe's major problem will be how to obtain enough oil.(4)

Oil is no longer an exclusive capitalist commodity. The International (mainly American) Consortium that dominates the world market, after attempting unsuccessfully following World War I to gain control of Russian resources, saw them pass under Soviet control. In 1962 the Soviet Union (with an annual production of 1.3 billion barrels) had little surplus oil to export, but since then the situation has changed. Soviet production in 1968 is estimated at more than 2.1 billion barrels. Simultaneously with its ideological and political transformation, the USSR is converting its coal-burning industry (including its armaments industry) into an oil-burning consumer industry. In a few years it will have the same proportion of consumer to heavy industry as the countries of Western Europe. Its desire for international commercial expansion and its need for foreign currency have led the Soviet Union to abandon its socialistic oil policy. The consequences of this change are these:

- an increase in production, in order to export more oil;

- the creation of a distribution network which, because the USSR has relatively few tankers, is largely dependent on the COMECOM pipeline which runs to the heart of Western Europe;(5)

- the adjustment, with certain exceptions (barters such as that practiced with Italy, or agreements based on political considerations, as with Cuba) of Soviet prices to bring them into line with the prices of the Consortium.

At the present time, the USSR is feeling its way into the world petroleum market. This has led to a change in its Middle East policy following a series of instructive failures in the area. The neo-Soviets have come to understand the ground rules of the petroleum industry, and Soviet influence in the Middle East is steadily rising. By 1980, Soviet oil production is expected to exceed 3.5 billion barrels. Through the pipeline, it will provide an increasing percentage of Western European consumption. But before that date the conflict of interests between the Soviet Union and the International Consortium will either be resolved or will come to a head. In the latter event, there will be economic warfare; in the former, the United States and the Soviet Union will set revolutionary principles aside to carve up the world oil market among themselves.

If Soviet expansion continues at its present rate, the oil market in the 1980's will be dominated by a Communist-capitalist cartel that will swallow up Western Europe while continuing to juggle with the Middle East. For beneath the golden sands of the Persian Gulf lie the most important oil reserves on the globe, $300 billion worth (in terms of current prices), on which the Consortium hopes to earn $75 billion at its usual rate of commission.

About one-fourth of the price of refined oil goes to the companies of the Consortium in the form of clear profits. In the Middle East, another fourth goes to the countries that own the concessions. The remaining half not only covers the cost of production, transportation and refining, but provides profits comparable to those earned in other industries.

Oil as an industry is in a class by itself. No other economic activity offers such high profits, to the detriment of the consumers and the producing countries. In the Middle East, the people gain nothing from the riches extracted from their soil. The royalties paid by the Consortium go to the rulers and their relatives, the ruling classes, high government officials, and a few local businessmen. By supporting the emirates of the Persian Gulf and protecting their rulers, Great Britain, now supplanted by the United States, has contributed to the preservation of archaic social structures and paved the way for revolution.(6)

In 1968, the overseas investments of American oil companies total more than $30 billion (nearly 40% of all American investments abroad.(7) The giants of the oil industry not only control the world market, but governments and foreign and military policy as well. In the United States, the Republican and a portion of the Democratic Party get much of their financial backing from the oil industry. The State Department and the White House and a substantial portion of the press give systematic support to the industry. Even college graduates in quest of jobs are warned of the danger of opposing it.(8)

Four oil companies were classed in 1966 among the ten largest American corporations: Standard Oil of New Jersey, which ranked third (after General Motors and Ford), Socony Mobil, fourth, Texaco, seventh, and Gulf Oil. which ranked tenth. But this list is open to question. It fails to take account of the most important factor in economics, profits.

Although the combined personnel of these four oil companies totaled only 346,846 (388,016 persons are employed by General Motors alone), their net profits, $2,661,684,000, exceeded those of the entire automobile industry ($2,603,638,000) -- in other words, the combined profits of General Motors, Ford, and Chrysler, which together employ four times as many people. But General Motors, Chrysler, and Ford, together with deficit-ridden American Motors, comprise almost the entire American automobile industry . The fourteenth, fifteenth, and sixteenth places on the list of the top 500 companies are held by Shell Oil, Standard Oil of Indiana, and Standard Oil of California, whose combined net profits exceed $1 billion, and further down the list are 15 other oil companies whose profits add another million to industry profits. It can be said that the combined profits of the American oil industry (which in addition to these 22 top companies include several thousand smaller ones) are greater than the annual turnover of General Motors.(9)

Standard Oil of New Jersey is symbolic of the oil industry. It is also its moral leader. At first glance, it looks like just another corporation. In theory, it is what is left of the empire created by John D. Rockefeller, which was broken up by anti-trust legislation in 1911.(10) But half a century later Jersey Standard, which theoretically neither produces nor refines nor transports nor sells any oil, controls one-fifth of the world market. It owns the largest private tanker fleet in the world (126 ships totaling 5,096,000 tons), ranking 12th in 1967 on the world list of fleets, along with the national fleets of Panama, Sweden, Denmark and Spain. It has a security department eight times larger than the security department of General Electric, employing about 30 special agents who are graduates of the CIA or the FBI. Its 14 top executives control more than 300 subsidiary companies, one-third of which rank among the largest corporations in the world.(11)

The history of Standard Oil is the history of the oil industry, which was born a little more than a century ago at Titusville, Pennsylvania in 1859.(12) Oil, however, has always existed. In ancient times it was used for eternal flames and torches, but no one ever thought of commercializing it. Until the 19th Century commerce was based on grain, and it was there that personal fortunes were made and power won.

Standard Oil was founded in 1860, and for nearly half a century the oil industry and the life story of John D. Rockefeller were one. During 51 years Standard eliminated its competitors by every means at its disposal, corrupting public officials and violating or getting around the laws, until it was dissolved in 1911.

Around 1890, its world monopoly began to slip. The Russo-Swedish Nobel group inaugurated operations in the Caucasus, and between 1891 and 1901 Russian production actually exceeded that of the United States. The British Rothschilds, realizing the future possibilities of oil, in particular with regard to modern shipping, aided the Royal Dutch Company to escape the control of Standard and conquer some of Rockefeller's markets in the Far East.(13) In 1907 Royal Dutch merged with the Shell Transport and Trade Company, which until then had specialized in mother-of-pearl. With the backing of the Foreign Office and the privileges it enjoyed in the British and Dutch colonies overseas, the Anglo-Dutch company, headed by Henry Deterding, expanded rapidly. Contrary to Standard, which had patterned its commercial policies after the isolationist principles of Theodore Roosevelt and Taft and sought only markets abroad, Royal Dutch Shell carried out explorations and extended its operations throughout the world.(14) In 1912 it began operating in the United States and soon controlled half of American production. It also forced its way into Mexico, where it bought out the Pearson group that owned the No. 4 well at Potrero del Llano, with a production of 91 million barrels. By 1921 Mexican production equaled 40% of United States production, but foreign companies (British and American) sacrificed everything to the present and devastated the Mexican reserves. Gas pressure was wasted and the Golden Way oil field near Tampico was invaded by salt water. By 1930 Mexican production had dropped far behind, and she was soon eclipsed by her neighbor to the south, Venezuela. In 1963, Mexican production equaled only 4% of American and 20% of Iranian production.

In the Middle East, where oil reserves are at least 100 times greater than those of the United States, a British adventurer, William Knox d'Arcy , obtained a concession from the Shah of Persia in 1901 covering five-sixth of his lands. In 1908 the Anglo-Persian Oil Company (later the Anglo-Iranian Oil Company, and later still British Petroleum or BP) was founded. The British Navy had just switched to oil-burning ships, and Winston Churchill, First Lord of the Admiralty, persuaded His Majesty's government to purchase a majority share in the new company.(15) At that very moment, America and Europe discovered the automobile. In 1908 Henry Ford began producing his famous Model T. The rush was on. In 1911 there were 619,000 automobiles. By 1914 there were 2 million, and by 1924 there were 18 million cars on the road, 16 million of them in the United States. That year the United States alone consumed more oil than Europe consumed in 1960.

The war revealed the strategic importance of oil. Not only did it contribute heavily to the allied victory, but it became part of the stakes of the game. Wilhelm II wished to destroy British oil domination and give Germany a share in Mesopotamian oil. He built the Berlin-Bassorah railway (via Constantinople and Baghdad) to compete with the route of the Indies. Once Germany had been defeated, the British and the French divided up the oil of the former Turkish Empire.(16) In 1920, Royal Dutch Shell circled the globe. It had subsidiaries in the United States, Mexico, Venezuela, Trinidad, the Dutch East Indies, Ceylon, Romania, Egypt, the Malay Peninsula, North and South China, Siam, the Philippines, and Burma. In association with other British companies it acquired concessions in Colombia and Central America, and it was trying to establish itself along the Panama Canal. Soon it would extend its activities to Honduras, Nicaragua, and Costa Rica. It also bought out the Rothschild holdings in Russia for far less than they were worth. Banker Sir Edward Mackay declared that "..all of the known, probable or possible oil fields outside the territory of the United States were either British property, under British direction or control, or financed by British capital," and added that "the world was solidly barricaded against an attack from American interests."(17)

Jersey Standard realized that Woodrow Wilson's policy of isolationism and pacifism represented a threat to its future. A. C. Bedford, President of Jersey Standard, declared, "What we need is an aggressive foreign policy," and the Interstate Commerce Commission recommended that the United States give diplomatic support to the acquisition and exploitation by American companies of oil properties overseas. The State Department dispatched a series of diplomatic notes, the tone of which grew more and more violent, demanding that the United States be given a share in the Turkish and German holdings.

In 1922 talks opened between Bedford and Sir Charles Greenway, President of Anglo-Iranian. They dragged on for six long years, but Gulf in the meanwhile had obtained a concession on the island of Bahrain (which it later ceded to Standard of California) which the British geologists had somehow overlooked. At the same time Socony Mobil (which when Standard Oil was dissolved in 1911 had inherited most of its Asian interests) and Shell were engaged in a struggle to the death in India. Their price war brought prices down all over the world. In 1928 Sir Henry Deterding (founder and promoter of Royal Dutch Shell) invited Sir John Cadman of Anglo-Iranian and Walter C. Teagle, new President of Jersey Standard, to his home in Scotland. At the conclusion of what has since been known as the Achnacarry Conference, it was agreed that outright competition had resulted in excessive overproduction. The Big Three decided:

1. to maintain the status quo of 1928 (in other words their respective positions) on the world market;

2. to fight overproduction and the waste of new, non-competitive installations;

3. to fix uniform production prices;

4. to supply markets from their closest source of supply through a series of reciprocal agreements between companies;

5. to avoid producing in excess of demand.

The companies signing the agreement explained that these measures were designed to protect the consumers from price hikes resulting from a multiplicity of separate operations. In actual fact, they laid the foundations for an arrangement by which the members of the international cartel would cooperate in the most profitable exploitation of world oil reserves. They brought the war between Shell and Socony to an end by making it possible to fix prices in India, and prevented a new price war in Mexico. A sort of line of demarcation was drawn between the British and American zones of influence. It was nothing short of a monopoly.

American anti-trust legislation was no problem. It was expressly stipulated that the Achnaccary Agreement did not apply within the United States. But in 1929, 17 companies joined to form the Oil Exporters Association, which set quotas and established prices, which were aligned with the highest costs in the country, those prevailing in Texas and the Gulf of Mexico. The British had no objection to this arrangement, as it enabled them to make high profits on their low-cost crude from Iran and Iraq. As for the American companies, which were already making good profits from domestic production, they intensified their overseas explorations, which would earn them even higher profits.

The "Red Line" agreement concluded in 1929 consecrated America's entry into the Middle East. The holdings of Turkish Petroleum were divided up again, this time between four partners which joined to form the Iraq Petroleum Company: Anglo-Iranian (still controlled by the British government), Royal Dutch Shell, the Compagnie Francaise des Petroles, and Standard Oil of New Jersey (in association with Socony Mobil). Each was given a 23.75% share in the venture.(18) The Red Line agreement stipulated that the four associates undertook to maintain the same percentages in all of the countries that lay within a red line on the map. The red line ran all the way around the Middle East.

At the time that the Iraq Petroleum Company was founded, Iraq was the only oil-producing country in the region. But Standard of California discovered oil at the edge of the sea on the concession it had acquired from Gulf at Bahrain. As it had no distribution network in the Orient, it signed an agreement with the Texas Company (becoming Caltex in 1936). Standard of California also began operating in Saudi Arabia, on the territory of El Hasa which King Saud had seized from the bedouin princes. With Texaco it formed the Arabian American Oil Company (Aramco).

Caltex and Aramco soon proved to Standard and Socony that the reserves on their concessions far exceeded those of Iraq. The latter two companies regretted having signed an agreement to share their future discoveries with the French and the British. But American solidarity and Jersey's power soon overcame that obstacle. Jersey Standard, Caltex and Socony joined with Aramco, excluding Royal Dutch Shell, Anglo-Iranian and the Compagnie Francaise des petroles. Great Britain already controlled sufficient resources in Iran, Venezuela, the Malay Peninsula, and Burma. France was traditionally a non-commercial country, and she had no petroleum policy. Like Gulbenkian, she was given an indemnity.

The Iraq Petroleum Company faced the difficult problem of income taxes. In order to benefit to the maximum from American and British tax provisions that favored the overseas activities of their companies, it was decided that any profits earned would not go to IPC, but would appear instead on the balance sheets of the constituent companies. Obviously, this was contrary to the interests of the government of Iraq. IPC sold oil to Iraqi consumers at its usual Texas-based prices, and the company was not eager (or perhaps unable) to calculate its actual net cost, which would have brought its excessive profits to the attention of the Iraqi government.(19)

By the time of the Second World War, the world had been divided up between the Big Seven (Jersey Standard, Royal Dutch Shell, Socony, Texaco, Gulf Oil, Standard of California, and BP). The war caused a few minor annoyances, and there was concern as the Germans neared the Caucasus and Egypt, but the oil business was booming.(20)

The requirements of the war nevertheless led the Allies to impose quotas on raw commodities throughout the world, and even the distribution of oil was controlled. The experts on the War Production Board demanded that the United Nations be given the power to administer world stocks of raw materials, and in Britain the Labour Party proposed a similar plan. In 1945 at the Washington Conference, Sir Anthony Eden and Secretary of State Cordell Hull legalized and completed the old Achnacarry Agreement that divided up the world's oil reserves between Great Britain and the United States. Highly displeased, the Soviet Union that same year signed the Moscow Agreement with France.

In 1947 the International Cooperative Alliance proposed that the petroleum industry in the Middle East be nationalized in order to eliminate the nascent rivalry between Russia and the West, raise the living standards of the Arabs, and diminish the price of oil to the consumer. It proposed that the United Nations create a special agency to control the petroleum resources of the Middle East and admit all buyers on an equal footing, in accordance with the Atlantic Charter. But when the United Nations Economic and Social Council voted on the measure on August 12, 1949, only Norway and Colombia supported it. Eight member countries abstained (including the Communist states), and eight others voted against it, including the United States, Great Britain and the Netherlands.(21)

The international oil cartel was in greater danger when, in December 1952, the Economic and Financial Commission of the UN approved a joint Iranian-Bolivian resolution in favor of the right of nationalization. The United States was the only country to vote against it.

Iran was Britain's private preserve. Sinclair (42nd largest American corporation in 1966, with $1,377 billion in sales) and Standard had carried out some explorations there, but had withdrawn at London's insistence. In 1959 Iranian Prime Minister Mossadegh demanded an increase in royalties, the rate of which had remained unchanged since before the war, as well as a 50-50 split in profits. Anglo-Iranian refused, whereupon Mossadegh nationalized the company,(22) and the crisis was on. The American firms profited from the operation. Aramco's production rose from 196 to 280 barrels, that of Kuwait from 126 to 266 million. In 1955 Iran began to export oil in small quantities and at reduced prices to non-producing countries such as Italy and Japan. But the Consortium regarded Iran as an ominous sign. To its great relief, the CIA went into action, and Mossadegh was replaced by Zahedi.(23)

The American intervention aroused a storm of ill-feeling against the United States that has not yet been dissipated. The Iranians claimed they had been exploited by Anglo-Iranian for forty years.(24) John Foster Dulles turned the Iranian problem over to Herbert Hoover, Jr., who formed an alliance of five big companies (Jersey Standard, Socony, Texaco, Gulf, and Standard of California) which formed a common front in the interminable negotiations with the British and demanded that the Iranian holdings be divided equally between Anglo-Iranian and themselves. The new company was called Iranian Oil Participants, Ltd. The British (who received an indemnity of $510 million) kept their majority with 54% of the shares (40% went to Anglo-Iranian, now BP, and 14% to Shell), while the five American concerns got 8% each.(25) The new agreement was signed on October 21, 1954 and ratified by the Iranian Parliament, which recognized the validity of the new Consortium for a period of 40 years.(26)

But the American independent companies were annoyed. They felt the Big Five were deliberately shutting them out from their overseas treasure chests, while continuing to benefit from domestic sales prices for their low-cost crude from the Middle East and Venezuela.(27) The Consortium, however, was more concerned about the reaction of the other oil-rich states, which were carefully scrutinizing every clause of the agreement signed with Iran. The latter country had obtained nothing more than a 50% share of the profits, the same accorded the other producing states, plus the promise of a gradual increase in production. This new agreement raised the American share in the oil production of the Persian Gulf to 55% in 1955 (as compared to 14% in 1938). The British and the Dutch were declining in power.

In 1956 came the Suez crisis. On July 26, Egypt nationalized the canal. Since that date, the Middle East has become a battleground of vested interests(28) where the member countries of the Consortium, the United States, Britain and France, struggle for predominance under the interested gaze of the Russians, whose problems are simpler because, unlike the French, they have enough oil for their own needs, unlike the British their power does not depend on their position in the Persian Gulf, and unlike the United States they are not subjected to private industrial pressures.

The USSR is content to sit back and watch as the cracks grow wider between the Western powers, between the Western powers and the Arab states, and between the Arab states themselves. In 1956 half the oil consumed in Europe was imported from the Persian Gulf, and 60% of it was shipped through the Suez Canal.(29) Britain and France risked a war to ensure control of their oil supplies, and only the intervention of the United States stopped them. During the winter of 1956- 1957, American companies took advantage of the European shortage to raise the price of fuel oil $1.50 a ton, and the price of crude $2 a ton. The price hikes affected American consumers as well. They cost the Americans $1.25 billion and the Europeans $500 million. Suez brought Jersey standard $100 million in additional profits. The Big Five beat all records for profits during the first quarter of 1957. Jersey Standard's profits rose 16% (compared to the last quarter of 1956), Texaco's 24% and Gulf Oil's 30%.(30)

The Persian Gulf brought the Consortium more than $1 billion a year. Continuing the policy followed by the Department of State since 1920, John Foster Dulles lent his support to the big American oil companies, and when necessary the intelligence services and the military backed him up. The Middle East was almost completely encircled, and Britain was losing her foothold. In 1957 the King of Jordan, hitherto subsidized by the British, switched his allegiance to the Americans. Saudi Arabia's King Saud renewed his country's agreement with the US Air Force and the Strategic Air Command in exchange for $10 million in weapons. The London Times wrote, somewhat maliciously, that "The bizarre combination of a large American company (Aramco) and an ancient feudal kingdom constitutes a real threat to Anglo-American cooperation in the Middle East."

The growing demands of the Saudi Arabian King were not the only problem the Consortium had to face. It had managed to gain a foothold in the Sahara,(31) but it was deeply concerned when the Italian firm ENI (Ente Nazionale Idrocarburi) proposed an agreement giving the government of Iran a 75% share of profits (at a time when a 50-50 split was still the rule in the Middle East).(32) ENI's President, Enrico Mattei, had the courage to defy the Consortium. He declared: "The oil companies have built their power by concentrating control of production and distribution in a few hands, by maintaining a relationship of supplier to client with the consumers in a closed and rigid market, by refusing to grant compensation other than tax revenues to the countries owning the reserves, by excluding all agreements and arrangements between states for a more rational organization of the market, but they have also created the conditions for a breaking up of the system or its transformation under the pressure of new forces and new problems . . . The price of crude oil is based not on production costs in the Middle East, but on the much higher costs in the United States . . . As a result of the rivalry between the various nations and the Western oil companies, oil has become an element of disorder and instability that gives rise to nationalist demands in the oil-rich countries and arouses the jealousy of those states that have none.

"Italy, France, Belgium, Germany and Japan are anxious to free themselves from their subservience and that of the consumers to the traditional organization of the oil industry . . . For the first time in a century we have the possibility of substituting a buyers' market for a sellers' market. An orderly market is necessary if we are to change the order established by the big international companies. The supremacy of what is known as the international cartel is not 'taboo,' and Italy is not obliged to respect it when this supremacy is breached on all sides by public and private initiatives.

"Oil is a political resource par excellence. What must be done now is to see that it is made to serve a good policy which is free, in so far as possible, from all imperialist and colonialist reminiscences, devoted to the preservation of peace, to the welfare of those whom nature has provided with this resource, and of those who make use of it in their industry." A short time later, in 1962, Enrico Mattei was killed in the crash of his private plane.(33)

At the beginning of the Sixties, the Consortium's problems multiplied. The evolution of the market revealed growing competition,(34) but what was even more serious was the wave of popular revolts. Fortunately, for every Mexico(35) there were two or three Venezuelas,(36) but nations all over the world were suddenly becoming conscious of the importance of the minerals in their soil. Those that had been bypassed by nature realized that the balance of their economy depended on the security of their supplies. The Consortium knew that the Italian ENI, the French ERAP, the Mexican Pemex, and the Argentinean YFP could easily be copied elsewhere. It began to pay special attention to its sources of supply in the Middle East and to its principal clients in Western Europe.(37) Their hatred of the foreigners who depleted their soil, however, was not strong enough to forge the peoples of the Middle East into a powerful and united community.

In January, 1968, the principal oil-exporting countries of the Middle East -- Saudi Arabia, Kuwait, Iran, Iraq, Qatar, Syria and Libya -- joined with Indonesia and Venezuela to form an organization to commercialize the oil of its member states, to defend their economic and commercial interests, and to examine ways to develop the oil industry and its derivatives. The principal object of this agreement was to raise prices and create a fleet of tankers and a petrochemical industry under the control of the producing countries themselves.

The Consortium is fighting every foot of the way, but it is beginning to realize that its days in the Middle East are numbered. On the other hand, it has sufficient political power to maintain its position for the moment in Venezuela. Caution, however, has led it to concentrate its exploration efforts in South America and Africa, where the oil fields of Libya, the Sahara, Nigeria, and Gabon produce more than 700 million barrels. For Jersey Standard, the future lies in Africa.

The Consortium also had problems in Europe. In 1966 Western Europe consumed 2.9 billion barrels of oil, only 126 million of which came from her own soil. Britain is a member of the Consortium. Her oil policy is patterned after that of the United States, and despite the promise of important oil discoveries in the North Sea, she remains dependent on her concessions in the Persian Gulf and has not yet resolved her coal problem.(38) The Common Market is a bigger headache for the Consortium. Germany produces only 56 million barrels of oil a year, plus an additional 14 million barrels in Libya, but the distribution networks in Germany are almost entirely controlled by American concerns. (Texaco was able to buyout DEA, an important Germany company, with only one-fourth of its annual profits.)

Italy is less aggressive but just as realistic as France. Her oil policy is that defined by Enrico Mattei, and she is linked to the Soviet COMECOM pipeline at Trieste. The Italians have undertaken explorations in the Adriatic, Somalia, the Sinai, the Gulf of Suez, Tunisia, and the Persian Gulf. In December, 1967 they obtained a 12,000 square kilometer concession at Rub El Khali in Saudi Arabia, together with permission to construct a petrochemical complex.

In France the present Minister of Agriculture and former Prime Minister, Edgar Faure, wrote in 1939 that "If the government has an oil policy, the leaders of the oil industry will have a policy in the government." Until 1939 France too was dominated by the Consortium. Since De Gaulle's accession to power in 1958, and in particular since 1963, France has stood in direct opposition to the interests of the American oil industry. The French government already controlled a portion of the third-largest non-American company in the world, the Compagnie Francaise des Petroles, and it spent several billion dollars drilling for oil in the Sahara. When political considerations forced De Gaulle to give the Sahara back to the Algerians, the government, desirous of obtaining oil independence, began looking in other directions. A state oil company, ERAP, was created which today ranks 17th in the world, and whose activities and policies in the Middle East (notably in Iraq and Iran) run contrary to the methods and interests of the International Consortium.(39) Today, France is the most active supporter of the idea of a Common Market oil organization. Such a body is indispensable to Europe, but it is contrary to the interests of the Consortium in other words, to the interests of the big American companies.(40)

In November 1966, Walter J. Levy, an American expert, submitted a 52-page confidential report to the European Economic Community (Common Market). Levy noted that "eighteen percent of the oil importations of the Common Market are controlled by the companies of the Common Market.(41) As things stand now, this figure is destined to drop." Levy recommended the adoption throughout the Common Market of fiscal measures of the type already existing in France, which are aimed at stimulating oil explorations. These measures are specifically directed at the oil industry and are nearly as favorable as the tax privileges granted oil companies in the United States, with the difference that in France any amount deductible from taxes must be reinvested within five years in explorations or related activities. Levy suggested that this provision be included in any fiscal measures adopted by the Common Market countries.

This report, which was submitted to Dr. Walter Hallstein, was an indication of the Common Market's preoccupation with the development of the oil industry of its member states in order to be able to compete with the Consortium.(42)

This orientation of the oil policy of the Common Market was hardly welcomed by the Consortium. The battle was on.(43) The measures proposed by France and Walter J. Levy to enable the Common Market to regain its oil independence were identical to those that had enabled the United States to gain control of the market.

The oil industry has dominated the American economy formerly 40 years.(44) The 1930 crisis enabled it to eliminate the independent prospectors and made possible the establishment of federal and especially state controls the likes of which existed in no other industry, and which had the effect of maintaining artificially high prices for petroleum products. You will find no mention of price fluctuations for crude oil and gas in any financial publication. Almost all of the world's raw commodities are quoted on the stock exchange, with the exception of oil.(45)

The oil market is no freer in the United States than it is in the rest of the world.(46) The rules that govern the activities of the Oil Empire within the United States are particularly advantageous for prospectors and land owners,(47) which explains why there are more than a million oil wells on US territory, and why 400,000 of them produce, or are permitted to produce, only 10 barrels a day (while one well in Mexico has an annual production of 7 million barrels, and several wells in Iraq produce more than 500,000 barrels a year).

Mackay, the British oilman, once remarked, "The Americans are plundering their natural resources." Under the rules that have governed the American oil industry for nearly 40 years, two-thirds of the United States reserves have been wasted. Henry M. Bates, Dean of the University of Michigan Law School, remarked in 1935 that "the losses resulting from the rule that any oil discovered belongs to the property owner can be evaluated at several billion dollars and constitute the most ruthless and the most unjustifiable destruction of our natural resources ever perpetrated by the American people."

Nevertheless, the oil industry justifies its privileged position by pointing to the need to conserve American oil reserves, a major part of the wealth of the nation and a strategic necessity in time of war. But, as Harvey O'Connor remarks, the word "conservation" must be taken with a grain of salt. When oilmen talk about conservation, they are speaking of the conservation of their profits.

The problem emerged for the first time in 1930, when the immense reserves of the East Texas oil fields upset the balance of the market. It was decided that production quotas would be established each month in accordance with the demand. A national quota was set, and in each oil-producing state a special body was established to see that it was respected.(48) In Texas, this task was assigned to the Texas Railroad commission, which had been created in 1891 to regulate the railroads. In 1919 its authority was extended to the oil industry. Given the dominant position of the state of Texas in the Oil Empire, the Texas Railroad Commission serves as a model for the other state regulatory bodies. The annual variations in the quota bear no relation to scientific conservation techniques.(49) Nor are the consumers represented on these commissions. The system is, in effect, a monopoly, and it enables the oil industry to top all other American industries in sales per employee(50) and to maintain a steady rate of profits regardless of the national economic situation and international events.(51)

The system of "posted prices" is one of the pillars of the industry. These prices do not represent the net cost increased by a normal margin of profit. Instead, they are fixed by the Consortium. While it is difficult to determine the actual net cost of crude oil, it can be estimated at one-tenth the wholesale sales price. The companies of the Consortium and the company-backed local rulers (in Venezuela as in the Middle East) pocket most of the difference.(52) The Consortium's profits were and are excessive when calculated on production costs in Texas, but the latter, which already include profits for the local operators, are four or five times higher than net costs in the Middle East, and three times higher than net costs in Venezuela.

The American independent producers are constantly urging higher production quotas for themselves. In 1954 twenty-nine companies were forced to lower production as a result of competition from foreign oil. Even Standard of Indiana complained that imports had increased by 35% between 1951 and 1954, while at the same time its Texas production had been ordered cut by 35%. (It was as a result of these complaints that the members of the Consortium agreed to sell the independents 5% of the shares in their Iranian operations}. But the independents' protests had little effect. The big corporations had friends in Washington. In 1952 a commercial treaty concluded with Venezuela set the import duty for Venezuela oil at 2% of its value, rather than the 20% requested by the American producers. The National Security Resources Board, backed by the Mutual Security Agency, recommended that import duties be abolished altogether "if necessary."

In 1955 the government considered limiting oil imports to 10% of national production, but the big corporations promised not to exceed their importation level of the preceding year, and this apparently satisfied Eisenhower. Actually, Jersey Standard and the other members of the Consortium had little to fear from any restrictions imposed by Congress. Their foreign market was growing steadily, and they had diversified interests within the United States. Their importations of foreign oil brought them super-profits, but they made money from their integrated operations in Texas, Oklahoma, and Louisiana as well.

Conflicting interests can rarely be reconciled. Texas and Venezuela seemed destined to clash, but the men from Jersey Standard were well versed in the art of the most profitable compromise. The big integrated corporations make profits on all four sectors of their activities: extraction, transportation, refining, and retail sales. Distribution is sometimes run at a loss and pipeline profits are largely fictitious. Refining is an indispensable intermediate operation of which the independents are purposely deprived. Extraction is the main source of revenue, but it is the interlocking operations as a whole that provide the profits.(53)

The profit margins of small, strictly producing companies are extremely precarious, particularly in the case of the independent refineries, which are at the mercy of a slight increase in the cost of crude or a slight drop in the price of gasoline.(54)

The independent, integrated producers and the small producers of crude are in a somewhat better position. They benefit not only from the posted prices, but also from the special tax privileges accorded the oil industry as a whole. These fiscal privileges enable the Big Five to earn colossal profits while guaranteeing super-profits to the big independent and integrated companies. They also provide large profits for the medium-sized concerns, particularly the producers, and it is to them that the small producers, which in any other sector of the American economy would have been swallowed up long ago, owe their survival.(55)

A booklet entitled "An Appraisal of the Petroleum Industry of the United States," published in 1965 by the Office of Oil and Gas (headed by Rear Admiral Onnie P. Lattu) devotes only one line in 96 pages to the depletion allowance.(56) But Milton Friedman, who can hardly be accused of being a socialist, wrote a whole article on the subject in the June 26, 1967 issue of Newsweek:

"Few US industries sing the praises of free enterprise more loudly than the oil industry. Yet few industries rely so heavily on special governmental favors. These favors are defended in the name of national security. A strong domestic oil industry, it is said, is needed because international disturbances can so readily interfere with the supply of foreign oil. The Israeli-Arab war has produced just such a disturbance, and the oil industry is certain to point to it as confirmation of the need for special favors. Are they right? I believe not.

"The main special favors are:

"1. Percentage depletion. This is a special provision of the Federal income tax under which oil producers can treat up to 27.5% of their income as exempt from income tax -- supposedly to compensate for the depletion of oil reserves. This name is a misnomer. In effect, this provision simply gives the oil industry (and a few others to which similar treatment has been extended) a lower tax rate than other industries.

"2. Limitation of oil production. Texas, Oklahoma, and some other oil-producing states limit the number of days a month that oil wells may operate or the amount that they may produce. The purpose of these limitations is said to be 'conservation.' In practice, they have led to the wasteful drilling of multiple wells draining the same field. And the amount of production permitted has been determined primarily by estimates of market demand, not by the needs of conservation. The state regulatory authorities have simply been running a producers' cartel to keep up the price of oil.

"3. Oil import quotas. The high domestic prices enforced by restriction of production were threatened by imports from abroad. So, in 1959, President Eisenhower imposed a quota on imports by sea. This quota is still in effect. Currently it is slightly more than 1 million barrels a day (under one-fifth of our total consumption).

"Foreign oil can be landed at East Coast refineries for about $1 to $1.50 a barrel less than the cost of domestic oil. The companies fortunate enough to be granted import permits are therefore in effect getting a Federal subsidy of this amount per barrel -- or a total of about $400 million a year .

"These special favors cost US consumers of oil products something over $3.5 billion a year. (Gibert Burck, Fortune, April, 1965). This staggering cost cannot be justified by its contribution to national security.

"The following points indicate the basis for this judgment:

"1. Restricting imports may promote the domestic industry, but why pay a $400 million subsidy to oil importers? A tariff of $1.25 a barrel would restrict imports just as much -- and the US Government rather than the oil importers would get the revenue. (I do not favor such a tariff but it would be less bad than a quota).

"2. Oil from Venezuela -- after the U.S., the largest oil producer in the world -- is most unlikely to be cut off by international disturbances threatening our national security. Yet it too is covered by the import quota.

"3. Restrictions on domestic oil production at least have the virtue that domestic production could be expanded rapidly in case of need. But such restrictions are an incredibly expensive way to achieve flexibility.

"4. The world oil industry is highly competitive and far-flung and getting more so. The Mideast crisis has let large oil-producing areas undisturbed. Moreover, the Arabian countries themselves cannot afford to refuse to sell for long. Only World War III is likely to produce severe disruptions of supply -- and then the emergency is likely to be brief.

"5. If all the special favors to the oil industry were abandoned, prices to the consumer would decline sharply. Domestic production also might decline -- but then again, if the industry were freed of all the artificial props that raise costs and stifle initiative, production might rise rather than decline. In either event, a vigorous and extensive domestic industry would remain, protected by the natural barrier of transportation costs.

"If domestic production did decline, we might want to insure against an emergency by stockpiling oil, paying for holding reserve wells in readiness, making plans for sharp reductions in nonessential consumption, or in other ways. Measures such as these could provide insurance at a small fraction of the $3.5 billion a year the US consumer is now paying.

"The political power of the oil industry, not national security, is the reason for the present subsidies to the industry. International disturbances simply offer a convenient excuse.(57) Indeed, the American oil industry enjoys extraordinary political power.

When Kennedy entered the White House, the American fiscal system, and in particular the system of the depletion allowance, had enabled a few operators in the oil industry like H. L. Hunt to amass in only a few years the kind of fortune it had taken Rockefeller a half-century and a great deal of patience to accumulate.

If a person had enough capital, speculation in oil operations carried virtually no risk. He could take capital which normally would have been taxed at the rate of 90% and invest it in new oil wells. A speculator with $900,000 in this tax bracket could drill nine wells (at an average cost of $10,000). The odds were that one well out of nine would be productive. The eight dry wells would have cost him $10,000 each, all tax-free, and the ninth would earn him a fortune. With a little perseverance, any speculator could make a million.

Pools or joint ventures enabled citizens with more modest revenues, but whose income was still partly taxed in the 90% bracket, to do the same thing. These persons would purchase fractional interests in an oil well. Some of them never even got to see "their" well, but every tax dollar they invested represented a gain of approximately 25% on their capital. In the war and immediate post-war period, investment in the petroleum industry was one of the most obvious and attractive ways of reducing personal income tax liability. For the non-professionals this system was still, to a certain extent, a speculation, but the same was not true of the big companies, which employed experienced geologists and commanded unlimited capital.(58)

These special privileges constituted an international anomaly, and they cost the nation several billion dollars every year.(59) It has been estimated that the abolition of these favors would have enabled the government to avoid the 1951 tax increase that applied to taxpayers earning as little as $4,000 a year. The oilmen, conscious of the importance of these privileges, have always claimed that their abolition would hinder new explorations. But the fantastic number of wells drilled in the United States represents a waste of natural resources.

In 1963, the oilmen advanced other arguments.(60) They noted that the market for American crude had grown from 1 billion barrels in 1930 to nearly 2 billion in 1950 and almost 3 billion in 1963, and they made known their "concern" about a future shortage. Their cautious and seemingly pessimistic prognostics, however, were not confirmed by more independent-minded experts. Professor A. I. Levorsen of Stanford University had declared in 1949 that world oil reserves were sufficient to cover the world's needs for the next five centuries, and other scientists estimated that only l/1,000th of the surface of the earth and sea had been explored thus far.(61)

The oilmen also complained that it was becoming harder and harder to find oil in sufficient quantity to make it as easily extractable and as profitable as in the past. Between 1956 and 1967, it took twice the number of new field wildcats to make one profitable discovery compared with 10 years earlier.

These arguments became the theme song of the National Petroleum Council, the only lobby representing private interests that enjoys official standing. The NPC was founded in 1946 and is composed of representatives of the front offices of the big companies. It elects its own President. In reality, it is the NPC that defines the oil policy of the federal government, in the spirit of John Jay's maxim: "The country should be governed by those who own it."(62) The President of the United States has no business interfering.

A half-century ago, the oilmen lacked the influence in the White House that they had over Congress. They regarded the President with suspicion. For them, the country had been going to the dogs since McKinley. The power of the oil lobby was a concern to every President who entered the White House after the accession to power of Jersey Standard and its little brothers and sisters. In 1920 President Harding was elected with the massive backing of the oil industry. Two members of his Cabinet were oilmen (Hughes of Standard and Fall, an associate of Sinclair). Coolidge, and after him Hoover, did nothing to displease the oil magnates. On the day of Franklin D. Roosevelt's death, a San Antonio oilman threw a huge party to celebrate. Roosevelt, nevertheless, had not been particularly aggressive towards the oil industry. The pre-war climate was hardly favorable, and the war, which was still going on at the time of his death, had brought a boom in the oil business.

In 1950 President Truman examined the depletion allowance system, and the oilmen learned that the President felt that an exoneration that withheld such amounts from the Treasury was not equitable. That same year Hubert H. Humphrey, then a political neophyte and regarded as a liberal, introduced an amendment to the tax bill that would reduce the depletion allowance. The amendment was rejected. It was re-introduced in 1951 but rejected again by a margin of 71 to 9. In 1952 President Truman turned again to the problem, but any decision he might make was at the mercy of Congress, and Harry Truman liked the quiet life. Nevertheless, during his last days in office he adopted one of Roosevelt's ideas and declared that the continental shelf (an extension of the American coastline) was part of the national reserves and should be placed under the control of the Department of Defense. The value of the oil beneath the sea had been estimated at $250 billion, and Truman felt it would be madness to let this oil, which was vital for national defense, fall into private hands, obliging the government to buy it back at high prices.

In 1952 Eisenhower received heavy financial backing from the oil industry in his campaign against Adlai Stevenson. Ike knew how say thanks. When Truman's bill came up before Congress, the House rejected it in favor of a measure recognizing the property rights of the states over any oil discovered within ten and a half miles (twelve for Texas and Florida) of their coastline. The federal government was left with only a right of preemption over the resources of its former territory. The bill was later voted into law by the Senate.(63)

In 1954 Senator Humphrey's timid offensive was taken up by Senators Douglas (Illinois) and Williams (Delaware), both of whom introduced amendments concerning the depletion allowance. Senator Douglas noted that in 1953 one company with a net income of $4 million had paid only $404 in taxes, that another had paid nothing on a revenue of $5 million, and that a third company with profits of $12 million had received a $500,000 subsidy. The amendments were rejected.

On March 27, 1957, Senator Williams again introduced an amendment that would reduce the depletion allowance from 27.5% to 20%. He explained to Congress that this privilege had been instated during the First World War, when it amounted to only 5%. Later it had been increased to 12.5%, then to 25%, and finally to 27.5%. Originally it had been a discovery depletion, permitting the recovery of the investment, "but the present 27.5% oil depletion rate obviously gives a special tax advantage to the oil industry above that enjoyed by other taxpayers." He added that when the present rate of 27.5% had been adopted in 1926, the corporate tax rate had been approximately 14% .The depletion allowance therefore did not represent a huge sum of money. But in 1957, "with our present corporation rate, this 27.5% gross sales deduction, or depletion allowance, represents a tremendous tax-free bonanza.(64)

"The importance of percentage depletion is more glaringly emphasized in connection with the operations of foreign companies," he continued. "The Treasury Department has submitted three examples as to how this works. Corporation A with total earnings of approximately $200 million reported a United States tax liability of $103,887,000. They paid foreign taxes which are deductible from United States taxes in the amount of $103,323,000, leaving a United States tax liability of $564,000. This company has a total allowable depletion allowance of $91,879,000.

"Corporation B reported an income of approximately $150 million. Their total allowable depletion was $123,977,000, and they reported a United States tax liability of $78,961,000. The taxes reported as paid to foreign countries by Company B amounted to $98,319,000, and the credit allowed for foreign taxes paid was $77,087,000, leaving a United States tax liability after foreign tax credit of $1,874,000. Corporation C reported an income of approximately $33 million. The total allowable depletion of Corporation C was $44,895,000. The United States tax liability of this company was $17,325,000, and foreign taxes paid were of the same amount, with credit being given for the full total, leaving Company C with no United States tax liability."

Senator Williams cited and inserted in the Congressional Record the testimony of Mr. Paul E. Hadlick, general counsel of the National Oil Marketers Association, to the Senate Finance Committee. Mr. Hadlick had prepared a list of the incomes and taxes paid by the 23 largest oil companies. His figures indicated that Humble Oil had paid $30 million in federal income taxes on a net income of $145 million, that Socony Vaccuum Oil had paid $51 million on a net income of $171 million, that Standard Oil of California had paid $40 million on an income of $174 million, and that the Texas Company had paid $47 million in taxes on an income of $181 million.

Senator Barrett (Wyoming) retorted that "the depletion allowance is based upon the great risk involved in drilling and discovering oil," and he drew Senator Williams' attention to the fact that "our first line of defense will rest in air power, but the planes will not be able to deliver the bombs without high octane gasoline and plenty of it, I might say."(65) Senator Carlson (Kansas) declared: "Those of us who are familiar with the reserves in the stripper well are in a position to know that the producers must have the 27.5% depletion allowance and any other encouragement they can get, or the United States will lose millions of barrels of oil, which will never come out of the ground." Senators Monroney (Oklahoma) and Martin (Pennsylvania) joined in the chorus. Senator Williams quoted a statement by the Secretary of the Treasury in 1937: "This is the most glaring loophole in our present revenue law." Nevertheless, he noted, depletion had not been discussed during the 1937 hearings, and the committee had made no recommendation in its report on the subject "because of lack of time."

"Mr. President," Senator Williams continued, "today we hear the same argument: lack of time." Senator Williams spoke for another 15 minutes and then called for a vote. Senator Johnson (Texas) suggested the absence of a quorum. But there was a quorum, the vote was held, and the amendment was rejected.

Senator Douglas of Illinois then introduced his amendment, which maintained the percentage of 27.5% on revenues not exceeding $1 million, but lowered it to 21% for revenues of between $1 and $5 million, and to 15% for revenues exceeding $5 million. Senator Aiken (Vermont) supported the Douglas amendment. "I believe that when these enormous depletion allowances are given to one segment of our economy, it means that other people must dig into their pockets to make up for them," he said, adding that in 1955, "the total depletion deductions were approximately $2,800,000,000. Since the corporate tax would have been 52%, this resulted in a tax saving of $1,500,000,000 to the oil companies. "My amendment," he continued, "would save approximately $700 million for the Treasury. I wish to emphasize again that it would not hit the small driller. The weight would fall almost entirely upon the big companies." He went on to cite examples of oil companies that didn't pay a cent of taxes (on $7 million in income), or 1% of taxes (on $1,800,000 in income), or 6% (on $95 million in income), while in other industries companies were taxed at the rate of 52%.

The parade of lobbyists for the oil industry began. Senator Long (Louisiana) declared: "I must oppose this amendment. I submit that in many respects it works out to be the absolute epitome of unfairness and injustice. This is an amendment which proposes to say: Oilman Rich can earn and receive $1 million a year and still retain the 27.5% depletion allowance. On the other hand, Grandma Jones who does not have the importance or prominence of an independent oil and gas man owns $200 worth of stock in an oil company, and she receives an income of $20 a year from that ownership . . . I would like to protect Grandma Jones' little $20 dividend."

Senator Johnson (Texas) again suggested the absence of a quorum. The legislative clerk called the roll. Eighty-seven Senators were present. There was a quorum. Senator Douglas then asked for the yeas and nays, but his request was not sufficiently seconded. The yeas and the nays were not ordered, and the amendment was rejected. The Senate turned to the examination of an amendment concerning transportation taxes, which were considered too high for the Western states.

The following year, on August 11, 1958, Senator Williams introduced his amendment once again. He was obliged to wait for four hours until there were enough Senators present. He reminded them of what Senator La Follette had said in 1942: "In my opinion this percentage depletion is one of the worst features of the bill, and now it is being extended. We are vesting interests which will come back to plague us. If we are to include all these things, why do we not put in sand and gravel; why do we not provide for the depletion the farmer suffers through erosion of the soil of his farm?"

Senator Taft had followed up Senator La Follette's remark with one of his own: "I think with the Senator from Wisconsin that the percentage depletion is to a large extent a gift . . . a special privilege beyond what anyone else can get." Senator Dirksen (Illinois) made a long speech declaring that the problem of national defense needs and the precarity of oil supplies in the Middle East "is worth infinitely more than a question of whether the oil companies get a few million dollars more or a few million dollars less . . . the oil companies," he added, "which have given their best to the country."

Senator Williams acknowledged that "it is always popular to defend the little fellow, but what is small about a man with a million dollar income?" He noted that in 1955 depletion deductions for all corporations had totaled $2,805,500,000, and that 67% of these deductions had benefited companies with net assets of more than $100 million. He asked why the deduction for oil depletion wasn't the same as that for metal (15%) or coal (5%). He concluded: "One of the really major loopholes in the tax code is the method by which capital gains may be applied to oil and gas properties," and he produced a document which explained exactly why the leaders of the oil and natural gas industry were opposed to a reduction in the tax rate for the highest income brackets.(66) Such a reduction, which was supported by the majority of the nation's corporations and taxpayers, would mean a decrease in the incomes of the oilmen.

Senator Williams' amendment was put to a vote and defeated by a margin of 63 to 26. A similar but less liberal amendment introduced by Senator Proxmire (Wisconsin) was also defeated, this time by a majority of 58 to 43. Senator John Kennedy (Massachusetts) voted against the Williams amendment and in favor of Senator Proxmire's amendment. When the vote on the second amendment was announced, Senator Johnson (Texas) remarked, "Mr. President, I do not think we should ask the Senate to stay any later this evening."

The oilmen and their representatives in the Senate were all the more concerned about these amendments because 1957 had been a record year for oil production in the Middle East, and everything indicated that the expansion would continue. (In fact, Middle East production rose from 6 billion barrels in 1958 to 9.7 billion barrels in 1963.) In 1959 President Eisenhower imposed import quotas on foreign oil. The sales price of domestic American oil, which had been steadily rising since the end of the Depression and had dropped in 1959, held steady in 1960.(67)

On June 18, 1960 Senator Douglas re-introduced his amendment. He noted that the total depletion allowances taken could amount to $4 billion that year. He presented his Congressional colleagues with 20 pages of documents, remarking that if the other Senators were unable to hear him (for there were only three other people on the floor), they could perhaps read them. The following day, June 20, his audience was larger. Senator Douglas described his amendment as "a very moderate attempt to reduce the greatest tax racket in the entire American revenue system. It is probably safe to say," he continued, "that the depletion allowances given to the gas and oil industry now amount to well over $2.5 billion a year. I have put into the Record time and time again the records of 28 oil companies -- which I do not name, and which I identify only by letter, but which I could name -- that show that there was one company which in 5 years had net profits of $65 million and not only paid no taxes, but received $145,000 back from the Government. There are many other corporations which have a similar favored record.

"My proposal is a modest one. I do not propose to abolish the depletion allowance. I do not propose to reduce it across the board. I merely propose to introduce a moderate, graduated reduction. On the first $1 million of gross revenue there would be no reduction whatsoever. That would remain at 27.5%. On gross income from $1 million to $5 million, the depletion allowance would be 21 percent. On gross income in excess of $5 million, the depletion allowance would be 15 percent. This is a very moderate proposal.

"Mr. President, this issue has faced the Senate and the Nation for at least a decade. It is now before us again. We must make our decision as to what we shall do. It is time that we put our fiscal system in order. In our fiscal system some people pay too much because others pay too little. The time has come when we should deal with this issue. The depletion allowance can continue without any time limit. It occurs after depreciation has been allowed and fully taken account of. As long as the oil and the gas run, the depletion allowance can continue to be taken. There are cases in which the amount of the depletion is many, many times the total original cost, which bear in mind has already been deducted under the depreciation practice. I think the Senators are aware of the issues at stake. I wish to say to the gas and oil industry, which has been fighting this amendment for years, that if they are once again successful in beating this amendment, as they may well be, there is likely to arise in the country a storm of indignation."

But indignation is not a common emotion in the Senate. Senator Douglas' amendment would have resulted in a $350,000,000 loss to the oil industry. A vote was held, and the amendment was defeated by 56 to 30.(68) Senator John Kennedy (Massachusetts) voted in favor of it.(69)

At the 1960 Democratic Convention, the representatives of the oil states, headed by Sam Rayburn, supported the candidacy of Lyndon Johnson, but Kennedy won the nomination. In the spring of 1961, Mr. Morgan Davis(70) remarked during a private luncheon, "It's impossible to get along with that man."

As a Senator, John Kennedy had not been popular with the oilmen, but they weren't afraid of him. They knew that his father Joseph had invested a large part of his fortune in the oil business, and they couldn't conceive that his son, even if he were to become President, would dare take a position that would go against his own and his family's financial interests.(71) H. L. Hunt expressed the same opinion when he confided to Playboy in 1966, "Catholics are known for being anti-Communist, and I had never seen any evidence of fiscal irresponsibility in the Kennedy family."

The oilmen were wrong. The new President decided to broach the issue. Although he didn't go as far as John Ise,(72) he felt, like Roosevelt, that the control of the national economy should not be allowed to continue in the hands of the few, but should be enlarged to include millions of citizens or be taken over by the government, which in a democracy is responsible to the people. But he knew also that any re-examination of the principles of profit-making and free enterprise from the moral, social or even national point of view would be rejected not only by the oilmen, but also by a good many other citizens as an attack on the American way of life. In the past, such attacks by the administration and the Justice Department had been defeated.(73)

The only chance for a modification of the structures of the Oil Empire lay in a major crisis, internal or external -- an economic crisis or a war. But President Kennedy was working for peace and economic expansion, and he knew that his objectives could not be attained unless the principles of the American autarchy were re-examined and their destructive action brought progressively to a halt.

A year after he entered the White House, in 1962, the new President studied the reports of his advisers and decided to act. He had reacted with violence to the dictates of the steel industry; in the case of oil, he laid his plans more cautiously. On October 16, 1962, a law known as the Kennedy Act removed the distinction between repatriated profits and profits re-invested abroad in the case of American companies with overseas operations. Both were henceforth subject to American taxation. The law also sought to distinguish between "good" earnings resulting from normal commercial operations, and "suspicious" revenues siphoned off at some point in the commercial circuit by subsidiary companies located in tax havens abroad.

This measure was aimed at American industry as a whole, but it particularly affected the oil companies, which had the largest and most diversified overseas activities.(74) At the end of 1962, the oilmen were estimating that their earnings on foreign invested capital, which in 1955 had equaled 30%, would fall to 15% as result of these measures.

But Kennedy's second measure was far more important and infinitely more dangerous. It affected not only the companies with overseas investments, but all companies which, in one way or another, benefited from the privileged status of the oil industry. It called into question both the principle and the rates of the fiscal privileges, the improper use of tax dollars, and the depletion allowance. If adopted, it would undermine the entire system upon which the Oil Empire was based.

On January 24, 1963, in presenting his bill to Congress, President Kennedy declared, "Now is the time to act. We cannot afford to be timid or slow." For him, the fact that it was going to be difficult made it all the more necessary to act. But the Oil Empire wasn't the steel industry. Its leaders were of a different mettle. Ludwell Denny had said, "We fight for oil." By tangling with the oilmen, Kennedy was commencing the last year of his life. He considered his fiscal measures as the first step in a vast national reform.

As George Washington said to Henry Lee on October 31, 1786, "Precedents are dangerous things." The oilmen thought so too. "Think" is the motto of the businessman. Once they had determined what had to be done, they set about choosing their battleground and meticulously laying their plans.


1. The evolution of world oil production between 1860 and 1966 was as follows:

1860 1930 1966
USA 476,000 b 861 million b 2.9 billion b
USSR 135 million b 1.9 billion b
Venezuela 140 million b 1.2 billion b
Middle East 42 million b 3.3 billion b
Rest of the world 21,000 b 2.2 billion b

2. Of the 20 largest oil companies in the world with an annual turnover in the neighborhood of $57 billion, 14 are American ($42 billion), one is Anglo-Dutch and another British ($1 billion), and one is Belgian ($700 million). But American influence extends even to these foreign companies.

Company Country Turnover
(in millions of dollars)
Standard Oil (NJ) USA $12, 191
Royal Dutch Shell GB-Holland 7,711
Mobil Oil USA 5,253
Texaco USA 4,427
Gulf Oil USA 3,781
Shell Oil USA 2,789
Standard Oil (Ind.) USA 2,708
Standard Oil (Calif.) USA 2,698
BP GB 2,543
Continental Oil USA 1,749
Phillips Petroleum USA 1,686
Sinclair Oil USA 1,377
Union Oil California USA 1,364
CFP France 1,140
ENI Italy 1,093
Signal Oil and Gas USA 847
ERAP France 806
Petrofina Belgium 704
Ashled Oil and Refining USA 699
Industry Oil USA 695

3. In the period between 1930 and 1966, energy consumption doubled every 15 years, and oil consumption rose from 19 to 60%.

In 1938, the world consumed only 2.1 billion barrels of petroleum products. By 1971 it will be consuming 14 billion barrels per year, and by 1980 28 billion barrels.

4. In Europe, despite the increasing use of natural gas (which in 1965 provided 4% of all the energy consumed, as compared with 0% in 1950) and the advent of atomic energy (0.4% in 1966), oil consumption has risen steadily (from 10% in 1945 to 45% in 1965), while coal consumption has steadily dropped (38% in 1965, as compared with 75% in 1945).

5. The temporary outlets of the COMECOM pipeline are located at Neutspils and Klaipeda in the Baltic states, East Berlin, Most (Czechoslovakia), Vienna, Budapest, and Trieste (Italy).

6. 95% of the population of Saudi Arabia is still illiterate. The country has 750,000 slaves. Trade unions are prohibited by law, and the death penalty is inflicted with the bastinado.

If the royalties paid to the Sultan of Kuwait were divided equally among his people, each Kuwaiti citizen would have an annual income of more than $1,500, giving Kuwait one of the highest standards of living of any underdeveloped country. Instead, the average annual income in Kuwait is $100. 98% of the population is illiterate, and 85% suffers from tuberculosis.

An exception to this rule is the Sultan of Bahrain, who contributes a large portion of his royalties to the state treasury. In his territory, most dwellings have running water, sanitary conditions are satisfactory, and public education is developing rapidly. Nevertheless, the Sultan of Bahrain is the poorest of the Middle East rulers. In 1955 he received only $8.5 million in royalties, as compared to $36 million paid to Qatar, $84 million to Iran, $223 to Iraq, and $280 each to Saudi Arabia and Kuwait. Iran is relatively prosperous, but Iraq is continually shaken by corruption, political intrigue and assassinations.

7. American investments abroad rose from $1.4 billion in 1943 to $10 billion in 1958 ($5.1 billion of which was reported) and to $28 billion in 1967 ($15 billion of which was reported). In 1967, American investments in Europe totaled $10 million in the mining industry, $290 million in miscellaneous industries, $640 million in the chemical industry, $795 million in the machinery industry, and $1,200 million in the oil industry.

8. Frank W. Abrams, past President of Jersey Standard, jointed with General Motors, US Steel and several other corporations to form a committee for economic aid to education in an effort to stave off what he considered a future threat to industrial investments.

In 1955 Senator Fulbright cited a brochure edited by Socony Mobil for job-hunting students which warned them that their "personal opinions" could cause them difficulties in their career. His criticism, together with a protest from the Princeton Alumni magazine, caused the brochure to be withdrawn, but the paternalistic and totalitarian attitude of the oil companies continued unchanged.

9. Figures released by the Chase Manhattan Bank show that between 1934 and 1950, the 30 largest oil companies moved more than $121 billion, with net profits of $12 billion and taxes of $4 billion. These companies had taken out so few loans that only $700 was paid out in interest. $12 billion appeared on the balance sheets in the form of stock depreciations, amortizations, and reserves. Of the $12 billion in profits, $7 billion was reinvested and $5 distributed to stockholders.

10. The Rockefeller family's holdings are now limited to 15%, but the 100 most important stockholders (out of a total of 300,000), most of whom are descendants of John D. Rockefeller and his partners, own more than 40% of the shares.

11. One of its "little sisters," Socony Mobil (actually Standard Oil of New York) has assets of nearly $5 billion, and Standard Oil of Indiana has nearly $4 billion in assets. In 1966 Jersey Standard earned $1,090,944,000 in profits, two-thirds of which came from its overseas subsidiaries. Of the latter, Creole of Venezuela, for example, generally earns profits of around 30% . Creole and Lago, Standard's second Venezuelan subsidiary, together with Imperial of Canada, Imperial Petroleum in Latin America, Esso Standard, and its other foreign subsidiaries, earned more than $800 million in profits in 1966.

12. The first oil well was drilled by Edwin Laurentine Drake. better known as Colonel Drake, who discovered oil at 69 feet at Titusville on September 8, 1859. Nevertheless, he was fired in 1864 by his employer, Seneca Oil, and given the paltry sum of $731 in compensation. The state of Pennsylvania showed its gratitude by granting him an annual pension of $1,500.

13. Today, Royal Dutch Shell is the most important private industrial concern in Western Europe, and perhaps in the world (with the exception of the United States).

14. Shell has a policy of forming a national company in every country where it operates.

15. The British government invested approximately two and a half million pounds, and got back several billion pounds on its investment. It was represented on the Board by two administrators and exercised its veto only on political and naval questions, never interfering with commercial policies.

16. The Turkish Petroleum Company (which wasn't Turkish at all) owned oil fields in Mesopotamia. Before World War I it was divided up between Anglo-Iranian (50%), Royal Dutch (20%), and the Deutsche Bank, whose share of 25% was seized by the British at the start of the war. For having allied itself with Germany, Turkey was dismembered in 1918, and Britain appointed the rulers of the former Ottoman colonies. But the war booty was divided up under the cover of the League of Nations mandates. Germany's share of 25% was handed over to the Compagnie Francaise des Petroles in exchange for an indemnity and French permission to install a pipeline across its Syrian and Lebanese mandates.

17. It is difficult for us today to imagine a time when United States foreign policy was based on the rivalry between Shell and Standard, when Shell was refused the right to participate in bids for federally-owned concessions, and when writers prophesied war between Great Britain and the Union.

18. The remaining 5% went to the broker, Gulbenkian.

19. Moreover, the companies mixed the Iraqi oil with oil from Iran and Saudi Arabia, making it difficult to determine the actual cost.

In 1939 Jersey Standard felt that it had gotten back all of its original Iraqi investment. Nevertheless, Iraqi production was held back in favor of production in Saudi Arabia and Iran, where the royalties paid were very low (4 shillings per ton of crude in Iran, plus 20% of the profits).

20. At the beginning of the war, the difficult position of the Allies in the Middle East led Roosevelt to consider government participation in Aramco, in the same way that the British government had held a majority in Anglo-Iranian since 1914. But Standard of California and Texaco kept delaying the talks, and once Rommel was defeated, the two companies even refused to consider admitting the government as a minority stockholder. They felt, and there was little evidence to contradict them, that they already enjoyed government protection.

The companies of the Aramco-Caltex group managed to avoid American taxes on their wartime profits by founding new companies in the Bahamas and Canada.

21. Dutch Shell is richer and more influential than the l of the Netherlands. Two other Dutch companies, Phillips and Unilever, have international standing. These three it difficult for the government of the Netherlands to independent economic policy.

22. Iranian assets of Anglo-Iranian have been estimated at $1 billion.

23. The CIA's action is accounted for not only by the singular nature of the American intelligence agency (see Chapter 15, Spies), but also by the fact that the Pentagon and the ion in Washington feared that with the Abadan refinery closed down, the Air Force might run short of fuel in the event of World War III. Such a shortage had already occurred during the Korean War.

24. They estimated Anglo-Iranian's gross profits since 1914 at $5 billion, $500 million of which had gone to the Admiralty in the form of low-cost fuel oil, $350 million to the stockholders, $1.5 million to the British treasury, and $2.7 million to the corporation for depreciations and new investments.

To these sums they compared the royalties paid to Iran: before 1920, none; from 1921 to 1930, $60 million; between 1931 and 1941, $125 million, mainly in the form of military equipment which was later used against them by the British and the Russians.

In 1951, Iran received 18 cents on every barrel of oil (a barrel equals 42 gallons and weighs an average of 306.6 pounds). In comparison, Bahrain received 35 cents, Saudi Arabia 36 cents, and Iraq 60 cents.

The Iranians also complained that nearly all the gas from their wells was burned by Anglo-Iranian, when it could have been put to the benefit of the population.

25. The Compagnie Francaise des Petroles, which by the terms of the Red Line agreement had a right to its share, was granted 6%.

26. In 1966 the Consortium was forced to yield to new demands from the government of Iran and surrender one-fourth of its concessions (the 1954 agreement provided for the surrender of one-fifth in 1979). It was also obliged to increase production by 13% in 1967 and 1968. The Arab blockade in June, 1967 enabled it to go well over this figure.

27. The Big Five managed to pacify the most voracious of the independents by each sacrificing 1% of their shares. The 5% distributed was sold in April 1955 to the following companies: Atlantic Richfield, Tidewater Oil, Aminoil, Atlantic Refining, Getty Oil, Continental Oil, Signal Oil and Gas, Standard Oil (Ohio), and American Independent Oil. Harvey O'Connor states that each company paid $1 million for its shares, which few years later were earning them $850,000 a year. Such a good investment was also a kind of indemnity, but the independents continued to demand a share for themselves in the Middle East.

In 1947 Aminoil (American Independent Oil Company), an association of independents made up of Phillips Petroleum, Hancock, Signal, Ashland, Deep Rock, Sunray, Globe, J. S. Abercrombie and the promoter, Ralph K. Davies, had been given a bone to gnaw in the form of a neutral zone between Arabia and Kuwait theoretically reserved for the nomads. But the Sultan demanded high royalties, and 10 years later the reserves were estimated at only 50 million tons. It looked like the independents were stuck with the leftovers, but in 1966 the neutral zone was producing 133 million barrels.

28. Biafra is the latest battleground of the oil companies -- American, British and French.

29. Twelve years later, giant tankers of up to 1 million tons designed to detour around the Cape have apparently condemned the Suez Canal to a position of minor importance.

30. Gulf and Jersey Standard increased their Venezuelan production, while Texaco expanded its operations in Indonesia and Canada. In this way, they were able to sell their oil at higher prices while maintaining stable production costs.

31. Jersey Standard was admitted to the Sahara, then French territory, following a request from French Premier Guy Mollet for a $100 million loan from Washington which was eventually granted by the Chase Manhattan Bank. (Jersey Standard is a member of the Chase group.)

32. On the surface, ENI continued to respect the 50-50 rule, but by associating with an Iranian company, INOC, it actually granted 75% of the profits to Iran. In the midst of the negotiations concerning ENI's concession in the rich Koum basin, the Iranian Prime Minister was overthrown.

33. In 1932 Andre Maginot, a French Minister who had founded the Union Petroliere Latine, was poisoned. His death was also the death of the UPL.

34. Between 1950 and 1962, the American share in world production dropped from 69.8% to 57.9%, and its share in refining from 65% to 52.1%. Jersey Standard, which in 1958 accounted for 10.8% of all production, had dropped to 10.3% in 1961.

35. In 1938 Mexico expropriated Royal Dutch Shell, Standard Oil, and several other foreign companies which refused to grant wage increases demanded by the oil workers union (which amounted to $1.7 million per year). Mexican President Cardenas founded Pemex, a state company which was boycotted at first by its powerful neighbors. The British government even broke diplomatic relations with Mexico. It was not until the Second World War that the Consortium forgave the Mexicans. Today Pemex pays the Mexican government nearly a billion pesos a year in taxes, while before the nationalization the amount paid by private companies operating in Mexico never exceeded 44 million.

In 1963 Mexico, once considered incapable of exploiting her own resources, was producing 115 million barrels (16 million tons), and oil was her most important source of revenue. These expropriations ensured her prosperity if not her economic independence for the Mexican economy is still closely bound to that of the United States.

36. Shell was the first oil company to operate in Venezuela. In 1922 it was joined by Standard of Indiana, followed by Gulf. In 1932 Standard of New Jersey took over Standard of Indiana's operations at Maracaibo and began offshore drilling. In 1937 Venezuela accounted for 40% of world production. Gulf was obliged to make concessions to Jersey, whose local subsidiary Creole became the giant of Venezuela. In 1938 Jersey, Gulf and Shell formed a pool to exploit their reserves and naturally applied Texas prices. In 1943 the companies were obliged to split their profits 50-50 with the Venezuelan government. In 1948 the "Democratic Action" government that had come to power in 1945 demanded a revision of this agreement, but was overthrown by a military junta backed by the United States. Between 1949 and 1954, Creole reduced its personnel from 20,500 to 14,400 persons while increasing its production by 35%. In 1949 the company earned net profits of $336 million.

The revenue paid by the oil companies covered three-quarters of the Venezuelan national budget (the government's revenues from other sources were lower in 1956 than Creole's profits). But Venezuela produces only half the grain, milk and meat, and only one-third of the vegetables, that she consumes. The wide plains of Orinico support fewer cattle today than during the revolution of 1812. From their mountain conucos or their huts on the latifundia, nine-tenths of the Venezuelan population can watch the distant lights of fabulous Caracas.

37. In January, 1957, Anthony Nutting, a member of the British Cabinet, suggested a form of internationalization -- a kind of "Schuman plan" for Middle East oil.

In March, 1957, Walter J. Levy wrote in Foreign Affairs:

". . . The demands and responsibilities which have devolved on our international oil companies go far beyond the normal concerns of commercial operations. Public and private responsibilities become increasingly intertwined. Our existing arrangements for government-industry relationships in this new uncharted area appear to be inadequate to cope with the broad range of new problems."

On April 10, 1957, Lord Henderson suggested before the House of Lords that her Majesty's Government "take the initiative, through the United Nations, to get an International Oil Convention for the Middle East which would ensure a just distribution of oil to consumer countries, as well as a fair deal for the oil-producing countries. 'Oil politics' have been a disturbing factor in the Middle East situation over many years," the British peer added.

And Walter Lippman wrote in November of the same year:

"We should, it seems to me, have it clearly in mind that we are on the threshold of a new situation in regard to the oil in the Middle East. This is often taken to mean that the Arab countries, infiltrated by the Soviet Union, may attempt to ruin Western Europe by depriving it of access to the oil.

"Theoretically, that could happen if we take the simple view that Russia may conquer and occupy the oil countries. But in fact, this is not likely to happen, since it would precipitate a world war. What is likely to happen is that the Arab countries, using Soviet influence as a lever, will attempt to force the Western oil companies to a radical revision of the existing contracts. The Middle Eastern countries have no interest in cutting off the export of oil to Europe. On the contrary, it is their vital interest that the trade should continue. What they will seek, both the oil-bearing countries around the Persian Gulf and the transit countries like Syria and Egypt, is a bigger share of the profits of the oil business.

38. The British continue to work the unprofitable coal mines of Wales, the Midlands, Yorkshire, Nottinghamshire, and Lancashire, immobilizing some 700,000 workers, and British explorations in the North Sea area are carried out in collaboration with the big American firms.

British fiscal legislation is far less favorable to the oil industry than American legislation. Britain's energy policy consist of penalizing the use of oil in order to protect her coal industry. British tax legislation does not appear to have contributed significantly to the overseas expansion of British oil companies, and it offers no special privileges designed to stimulate new explorations by British firms.

39. On February 4, 1968, ERAP signed an agreement with the Iraq National Oil Company (INOC) giving the French company onshore and offshore exploration rights on a 10,000 square kilometer concession along the Persian Gulf. Mr. Jean Blancard, Vice-President of ERAP, declared that the agreement "follows in the footsteps of history. The era of traditional concessions, when the oil power established their hegemony over huge areas, is a thing of the past."

At the same time. another French company. the Societe Nationaledes petroles d'Aquitaine, was competing with the Freeport Co. for the right to work an Iraqi sulfur deposit which would make it the second largest producer of sulfur in the world.

Also in Iraq, the Compagnie Francaise des Petroles was negotiating for the North Rumeila concession which the Iraqi government had seized from the Iraq Petroleum Company.

The economic and political differences between France and the United States are partly the result of French oil policy.

40. The only company producing any significant quantity of oil in France thus far has been an American firm, Esso Rep, which is 90% controlled by Jersey Standard (Esso Standard 89%; Finarep 1%). Esso Rep has an annual production of 21 million barrels.

The most important French oil company, the Compagnie Francaise des Petroles, founded by Raymond Poincare, is not a state concern. Mr. Jeanneney, French Minister of Industry, declared in 1960 that "state control of the CFP is extremely theoretical" and that "the interests of the 'oil franc' are not always given priority." In actual fact, according to well-informed sources, control is held by a number of different companies acting for Royal Dutch Shell.

ERAP, the state-owned company, has not quite caught up with the CFP, but it already holds first place among the state-owned companies in continental Europe, and it is evident that the French government is anxious to see it expand.

41. The European companies concerned by this report were: Ente Nazionale Idrocarburi (ENI, Rome), Entreprise de Recherches et d'Activite Petrolieres (ERAP, Paris), and several German companies belonging to the Deutsche Mineraloel-Explorations-gesellschaft MBH (DEMINEX).

42. Ten European companies (ERAP, ENI, C. Deilman Bergbau GmbH, Preussag AG, Deutsche Schachtbau und Tiefbohr GmbH, Saarbergwerke AG, Schlolven Chemie AG, Union Rheinische Braunkohlen Kraftstoff AG, Wintershall AG and Gelsen- kirchener Bergwerks AG) followed up this report with one of their own that was nothing less than a declaration of war on the Consortium. It concluded:

"If the Common Market is to have an energy policy, the oil and natural gas sector, which constitutes the most important element in this policy, must not escape the action of the Common Market. To prevent this from happening, the Common Market must create conditions which enable this policy to exist through legislation and regulations adapted to the circumstances, and it must safeguard the instruments of this policy, in other words the companies of the Common Market."

43. A German, firm, Saarwerke, and an Italian company, ENI, have received permission from the French government to install a distribution network in France. Other measures and agreements are currently under discussion.

This new European energy policy explains a great deal, and in particular De Gaulle's position with regard to the Israeli-Arab conflict of 1967. De Gaulle is neither pro-Arab nor pro-Zionist; he is merely a realist.

44. Twenty-two companies account for 65% of all the oil produced and 87% of all the oil refined in the United States. Nine thousand other companies account for the rest.

In 1963, oil and natural gas provided 75% of all the power consumed in the United States (as compared with 60% in 1950). Their combined value was eight times that of all the ferrous and non-ferrous metals (iron, copper, lead, zinc, gold, silver, bauxite, manganese, tungsten, titanium, and uranium) mined in the United States.

45. An Oil Exchange did exist in the 19th Century, but in 1895 Standard Oil of New Jersey announced that henceforth it would set its prices itself. At that time, Jersey Standard was buying 80% of all the oil produced in Pennsylvania and controlled all of the pipelines (which enabled the companies to enforce their production quotas and the quotas set by the states).

46. There are 200,000 sales outlets for petroleum products in the United States, mainly service stations. To all appearances there is open competition, but actually the big oil corporations control 85% of the market. Service station managers are bound by contract to the big companies, which supply their gasoline and cover their operating and advertising expenses.

47. Contrary to what is true in Europe, in the United States any oil discovered belongs to the owner of the land on which it is found. Generally, the owners lease their rights to the companies. In 1963 the oil companies paid nearly $2 billion in leasing rights to property owners spread over one-tenth of the area of the United States, principally in Texas. Since 1859 these leases have cost the companies an estimated $40 billion.

48. Ninety percent of the American Oil Empire is concentrated in only seven states: Texas, Louisiana, California, Oklahoma, Wyoming, New Mexico, and Kansas. The combined production of Texas and Louisiana alone accounted for 55% of American domestic production in 1963. Most of the oil companies based in Texas have important investments in Louisiana, which is closer to the Eastern market: Louisiana, where the most important oil fields since Spraberry Fields in the 1930s were discovered in 1956, is also favored by a larger "acreage-to-well" ratio than Texas. The average well in Louisiana is currently allowed 79% more oil daily than the average well in Texas.

Most of these oil wells produce only two or three weeks per month. In Texas, the number of production days was reduced from 171 in 1957 to 104 in 1960. During the second quarter of 1960, the oil wells in Texas were worked an average of only 9 days per month, and during these 9 days they were limited to two-thirds of their maximum output. The producers estimated their losses at $6 million per year, but prices remained stable. On the other hand, the number of people employed was reduced by 25% (from 164,904 in 1958 to 124,922 in 1963) and the corresponding expenses dropped from $967 million to $880 million Nevertheless, despite this reduction in output, nearly 200 new wells are drilled every day (43,300 in 1950, 58,200 in 1956, and 43,600 in 1963).

49. Petroleum engineers have their own techniques of conservation, which can be resumed as follows:

1) the elimination of gushers and uncontrolled flows that waste gas pressure

2) the limitation of the number of wells to the minimum required by the geological structure of the oil field. Too many wells reduce the gas and water pressure, while too few result in the loss of a certain amount of oil

3) the regulation of the output of each well so as to maintain a uniform pressure throughout the oil field

4) the maintenance in each well of a sufficient proportion of gas to oil to ensure a continuous flow (Harvey O'Connor, The Empire of Oil)

50. The figures given by Fortune for the year 1967 are:

Oil: $64,943
Mining: $54,023
Automobiles: $25,016
Aviation: $19,179
Textiles: $18,404

51. Standard Oil of New Jersey earned $758 million in 1961 and $840 million in 1962; Gulf Oil earned $338 million in 1961 and $340 million in 1962; Socony Mobil earned $210 million in 1961 and $242 million in 1962; Standard Oil of Indiana earned $153 million in 1961 and $162 million in 1962.

52. The net cost of oil as it comes out of the well in the Middle East is around 20 to 30 cents per barrel. The same oil is sold by the Consortium at between $2 and $3 a barrel.

Oil in Kuwait costs approximately 5 cents a barrel (0.12 cents a gallon); oil in Saudi Arabia costs 10 cents a barrel (0.24 cents a gallon); and oil in Libya costs 40 cents a barrel (1 cent a gallon). In March, 1965, Consortium prices for oil leaving these countries was as follows:

Kuwait: $1.59 a barrel
Iran: $1.78 a barrel
Saudi Arabia: $1.80 a barrel
Iraq: $1.95 a barrel
Sidon: $2.17 a barrel
Libya: $2.21 a barrel
Sahara: $2.30 a barrel

The companies charge 60 to 70 cents a barrel for transportation. The considerable increase in the tonnage of today's oil tankers (100,000 and 200,000 tons, and soon even more) ensure even greater profits than those earned by the oilmen in the Fifties and Sixties (a 100,000 ton tanker earns approximately $500,000 gross per cargo).

Excluding these transportation charges (the companies generally use their own fleets of tankers), the profits per barrel of oil are 3 to 4 times higher for overseas than for domestic production.

The net cost to the companies of the Consortium has remained relatively stable since 1954. The retail sales price for gasoline in American service stations in November, 1967 was $9.51 a barrel (plus tax). This gasoline was sold at an average price of 33.33 cents a gallon (which included 10.68 cents in taxes). The break-down of this final price was as follows:

Retails profits: approximately 20%

Taxes: approximately 30%

Transportation, refining, refinery labor, miscellaneous costs and refining costs, transportation from the Gulf to the refinery, delivery to the retailer, storage, and wholesale profits: 20%

Price of the crude: 20%

(But the latter price already included the company's profits on production and transportation.)

The United States is the only important industrial nation in the world where the oil industry makes more on a gallon of gasoline than the government (70% as opposed to 30%). In Europe in particular , these proportions are generally the reverse, to the benefit of the countries concerned.

53. Beneath the Big Five and the twenty-odd large companies are a multitude of independent producers. Concentration has been the rule in the oil industry for the past ten years. Between 1959 and 1963, the big corporations of the Chase Manhattan Group increased their production by 526,000 barrels per day, while the production of other companies dropped by 37,000 barrels.

In 1956 the ten largest companies in Texas produced 41% of all the oil in the state; by 1963 they were producing 51%. The decline of the small producers was due in part to the quota system (proration) imposed by the States (actually by the big companies). In addition, a number of independent producers were bought out by larger companies.

The independents still accounted for half of national production, but pipeline fees considerably reduced their independence.

54. Oil cooperatives are virtually unknown in the United States. The first was the Consumers Cooperative Association of Kansas City, Missouri, founded in 1929 with a capital of $3,000. In 1962, however, the total production of the cooperatives equaled only 200,000 barrels, while a single unit at Baytown, Texas belonging to Humble Oil produced 300,000. The cooperatives own less than 1% of the wells in the United States, and their refiners can handle only a fifth of the oil they produce. Nor do they have a pipeline or other organized means of transportation.

Cooperatives do not aspire to control the market, but in countries where they are sufficiently powerful (such as Sweden, where they account for 12% of the market), they serve as a restraint on the conduct of the other companies.

55. As Walter J. Levy notes: "The companies which are integrated from the well to the service station have obvious competitive advantages over the strictly producing companies, for they can temporarily do without their profits from one sector of their operations."

Standard Oil of New Jersey, for example, is apparently content with a profit rate of approximately 17% which, taking into account its super-profits from its foreign operations, necessarily reduces its profits from its domestic operations and, given its nearly complete control of the market, the profit margins of the independent producers as well.

But the big oil companies conceal some of their profits in companies incorporated in privileged territories. Jersey Standard, for example, uses the International Corporation registered in Liechtenstein. (In the United States, the tax haven for H. L. Hunt and many other oilmen is the state of Delaware.)

56. The depletion allowance is based on the notion that the more oil has been extracted from a well, the less there is left. This, of course, is nothing more than a special version of what is known in industry as depreciation.

If a $100,000 factory operates for ten years, its owner is entitled to deduct $10,000 a year from his gross profits for plant depreciation. In the oil industry, on the contrary, the rate of depreciation applied has nothing to do with the cost of running a well. A well which costs $100,000 and produces $500,000 worth of oil each year for ten years until it runs dry would normally justify a depreciation of $10,000 a year.

An oil company, however, is entitled to deduct 27.5% per year from its gross income, which amounts, in the case cited above, to $137,500 per year, or to $1,375,000 in ten years, on an investment of only $100,000.

The Common Market has considered applying this system to its own industry, but with certain basic differences. Europe, contrary to the United States, needs first to find oil in her own soil. As a result, the Common Market measures would grant a tax reduction to companies carrying out explorations, on the condition that the amount of this deduction be re-invested within five years in new explorations (French PRG system).

57. Not only did the activities of the Consortium hurt the American consumer and the American taxpayer; they also had serious repercussions in underdeveloped countries and affected the international monetary situation.

The Consortium sold its oil from Venezuela, Colombia, Kuwait, Saudi Arabia, Iraq, Iran, etc. exclusively in dollars and pounds sterling. (Even the internal operations of the members of the Consortium were carried out in dollars or in pounds.) As a result, the sales made in "oil dollars" and "oil sterling" swelled the treasuries of the United States and Great Britain, to the detriment of the currencies of the producing and consumer countries, in particular, and to the world financial situation in general.

This system contributed to the disequilibrium in the British balance of payments which led to the November, 1967 devaluation, and has forced the United States to take measures to protect the dollar. The financial difficulties besetting both countries today are symptoms of 20 years of abusive business practices, particularly. in the marketing of raw commodities.

58. The Humble Oil and Refining Co. declared that in 40 years it had sunk $500 million (a figure which represents less than half of its present capital) in deep, dry wells. But although these dry wells cost it $62 million in 1957, the same wells cost the federal government more than half a million in lost revenues, and Humble Oil that year earned $175 million in profits.

59. In Britain, oil companies are not permitted to deduct their losses from unsuccessful explorations from their income from sources other than oil production. If the explorations are successful, the entire cost of the original installation can be written off, but may not be deducted as expenses, and there is no provision for a percentage depletion allowance deductible from revenue from current production.

60. In 1965 the oil industry claimed that American reserves were no more than 31 billion barrels. The Office of Oil and Gas of the Department of the Interior commented, however, that "Reserves so defined are probably on the conservative side" and added:

>"A study compiled in late 1964 by the US Geological Survey puts the amount of crude oil originally in place in known deposits as of January 1, 1964, at over 400 billion barrels. The study goes further to conclude that an additional 2 billion feet of exploratory drilling in favorable but as yet unexplored areas would yield an additional 600 billion barrels of crude oil in place. Of this, 73 billion had actually been withdrawn as of the end of 1963. On the basis of these cold figures, it would appear that the US is in no danger of running out of oil for many years."

Additionally, it is now possible to extract oil from deposits of bituminous shale (a ton of bituminous shale yields 30 gallons of oil). The bituminous shale reserves of the United States have been estimated by the UN at 320 billion tons.

61. The average depth of the wells drilled increased from 3.900 ft. in 1950 to 5,000 ft. in 1963 (an increase of 29%).

62. In 1948, the oil shortage revealed the need for a national oil policy. The Secretary of the Interior, J .A. Krug, and his successor, Chapman, wanted to preclude a future shortage by the development of synthetic motor fuels, if necessary with government backing. The N PC opposed this plan. It assured the government that private industry would produce substitutes if the need arose, but insisted that there was no need to constitute stocks of synthetics for the present. The plan was dropped, and protests about the waste engendered by industry production method were stifled.

63. The states of Rhode Island and Alabama contested the validity of this law in the Supreme Court, claiming that Congress had no right to hand over a part of the national wealth to a few privileged states without their consent. They lost the case.

In the meantime, Senator Butler (Nebraska) was already preparing a bill that would recognize state ownership of the bituminous shale deposits in the Rockies.

64. "The tax laws since 1926 have authorized an oil or gas company to deduct 27.5% from the gross income from any property producing oil or gas. This 27.5% depletion allowance or deduction is computed as a percentage of the investment or of the amount of prior depletion deductions. One saving condition was attached, namely: In no case may the deduction exceed 50% of the net income from the property -- something that 1 do not believe happens very often.

"Obviously, over the life of an oil or gas-producing property the depletion allowance will not only exceed the investment or cost, but it will go on and on and possibly exceed the value on date of discovery.

"The committee can, no doubt, secure accurate up-to-date figures from the Treasury Department on what the 27.5% depletion allowance means to every company or individual taking this on tax returns. However, there is in existence some few pieces of information denoting its tremendous size. Recently I tried to secure from Standard & Poor's Corp. reports the amount of Federal income-tax paid by Amerada Petroleum Corp., but I find this item is buried in a classification reading: ' Operational, general expenses, taxes, etc. It is quite obvious that Amerada pays little, if any, Federal income taxes, though in the year 1952 this company made net profits of $16,296,652. In the January 1946 issue of Fortune magazine there appeared a long article on Amerada Petroleum Corp., which is a crude-oil producing company. The article stated in part, 'Amerada's tax situation is a businessman's dream. The corporation quite literally does not have to pay any Federal income tax it does not want to. This is due to the highly reasonable provisions of the internal revenue law designed for producers of crude oil. Amerada pays so little in Federal income taxes that it does not even segregate the tax item in its annual reports. In wartime, though Amerada's profits soared, it made no provision for excess-profits taxes, and from 1943 until 1944 its normal Federal income tax actually declined. In 1944, on a gross of $26 million, a gross profit of $17 million, and a net after all charges of $5 million, Amerada's allowance for its Federal income tax was only $200,000.'

"It is among these strictly producing companies that one can get an idea of the magnitude of the twin subsidy of depletion and write-off of drilling and development costs. The major integrated companies benefit to the degree that they produce oil and gas, though they have other operations upon which taxes are paid.

"In addition to Amerada Petroleum Corp. referred to above, here are a few other examples of companies producing oil and gas:

"Argo Oil Corp. for the year 1952 made net profits after taxes of $3,496,477 and paid Federal income taxes of $91,660.

"Kerr-McGee Oil Industries, Inc. for the year ended June 30, 1952 had net income after taxes of $2,234,688 and paid Federal income taxes of $78,032. For that same period the 27.5% depletion allowance for this one company amounted to $607,611. For the year ended June 30, 1953, this company had net income after taxes of $3,072,723. But in Standard & Poor's there is just a line where the amount of tax is usually indicated, so I do not know what Federal income taxes this company paid for that period. During this latter year its depletion allowance was $858,795.

"The Superior Oil Co. (California) for the year ended August 31.1952 had net income of $11,900,165 and paid Federal income taxes of $200,000."

65. In 1963 the Department of Defense purchased 278 million barrels of oil (1963 production equaled 2.75 billion barrels).

66. This was a paper written by Paul Haber, JD, Ph. D, entitled, "Write-offs, Cost Depletion and Percentage Depletion -- An Appraisal." It said in part:

"Our Federal tax system is supposed to be based on the principle of progressive taxation or 'ability to pay' -- the higher the net income, the higher the rate of tax. In the case of taxpayers who engage in the business of crude oil, however, this principle is made to work in reverse -- the higher the net income from the production and sale of crude oil, the lower the rate of tax . . .

"Drilling for oil is like playing dice with the Treasury: 'Heads I win, tails you lose,' with the Treasury always on the losing end. As a matter of fact, high tax rates are a boon to the crude oil industry rather than a burden, because the higher the rate of tax the lower the net cost (the after-tax cost) of the drilling operation. This explains why the American Petroleum Institute does not support the National Association of Manufacturers in its fight to reduce the top tax bracket from 90 percent to 40 percent. If the rate were reduced to 40 percent, the search for crude oil would falloff tremendously, because the taxpayer's share of the cost of the search would have been increased from 10 percent (100 percent less 90 percent) to 60 percent (100 percent less 40 percent). As a matter of fact, the phenomenal growth of the crude oil industry dates back to the year 1940, the year in which the wartime rates were first brought into the statute."

67. It dropped again during President Kennedy's last year in office. The evolution of domestic prices (per barrel) was as follows:

1958: $3.07
1959, 1960, 1961 and 1962: $2.97
1963: $2.93

(A barrel of oil cost $1.02 in 1939, $1.37 in 1946, $1.90 in 1947, and $2.57 in 1948.)

68. The vote was as follows:

Yeas -- 30

Aiken Carroll Case (NJ) Clark Dodd Douglas Ervin Gore Hart Jackson Javits Keating Kennedy Lausche Long (Hawaii) McCarthy McNamara Morse Muskie Pastore Proxmire Russell Smathers Smith Symington Wiley Williams (Del.) Young (Ohio)

Nays -- 56

Allott Anderson Bartlett Beall Bennett Bible Brunsdale Bush Butler Byrd (W. Va.) Byrd (Va.) Cannon Capehart Carlson Case (S. Dak.) Chavez Cooper Cotton Curtis Dirksen Dworshak Ellender Engle Fong Frear Fulbright Gruening Hayden Hickenlooper Hill Holland Hruska Johnson (Tex.) Johnson (SC) Jordan Kerr Kuchel Long (La.) McClellan McGee Mansfield Martin Monroney Morton Mundt Randolph Robertson Saltonstall Schoeppel Scott Stennis Talmadge Thurmond Williams (NJ) Yarborough Young (N. Dak.)

Not Voting -- 14

Bridges Church Eastland Goldwater Green Hartke Hennings Kefauver Lusk Magnuson Murray O'Mahoney Sparkman

69. In 1964, the depletion allowance issue came up before the Senate again. On February 3 Senator Lausche (Ohio) offered an amendment that would diminish the depletion allowance privileges by $850 million, which sum could be used to compensate the revenues lost to the government by a tax credit granted to needy families with children in college proposed by Senator Ribicoff (New York). But Senator Lausche's amendment was considered not germane.

On February 6, Senator Williams re-introduced his traditional amendment and was defeated again (by 61 to 33). As Senator Javits was to remark, "This is the sacred cow of sacred cows."

70. Chairman of the Board of Directors of Humble Oil and Refining Co. (1961-63), Director of the First National City Bank of Houston, member of the National Petroleum Council and the American Petroleum Institute.

71. In January 1968, Senators Robert F. Kennedy (New York) and Edward M. Kennedy (Massachusetts) joined with several other Congressmen in urging that import limits be eased for home-heating oil. They were concerned about a threatened shortage and high prices.

72. John Ise, a professor of economics at the University of Kansas and author of The United States Oil Policy, recommended in 1929 the nationalization of all natural resources, including oil. "Private property has undoubtedly brought about more unfortunate consequences in the case of oil and natural gas than in any other domain. It has resulted in overproduction, instability, incessant price fluctuations, a waste of natural resources, capital, and labor, speculation, fraud, foolish extravagances and flagrant social injustice, and, finally, in the establishment of a monopoly," he wrote.

73. Since the Clayton Antitrust Act of 1914 (which outlawed Drice discrimination and exclusive contracts between wholesaler and retailer) and the National Recovery Act of 1933 (which eliminated unfair trade practices and destructive price cutting and established fair codes of competition), the Justice Department had tried unsuccessfully on several occasions to break down the oil monopoly by halting mergers and opposing exclusive contracts, price, fixing, and production restrictions. Congress, and on occasion the Supreme Court, had defeated all its attempts.

74. Previously, while the profits earned abroad by American firms were subject to American taxation, the profits of subsidiary companies which were subject to local taxation (except in the tax havens) were only taxed in the United States when their dividends were distributed to the head companies in the United States. The Kennedy Act abolished this regime for the subsidiaries registered in tax haven countries, which were henceforth subject to American taxation whether or not their dividends were distributed to the head companies in the United States.

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Editorial: Swedish human rights worker viciously attacked by Jewish extremists in Hebron

Int. Solidarity Movement

A 19-year old Swedish human rights worker had her cheekbone broken by a Jewish extremist in Hebron today. Earlier the same day at least five Palestinians, including a 3-year-old child, were injured by the settler-supporting extremists, who rampaged through Tel Rumeida hurling stones and bottles at local residents. Palestinian schoolchildren on their way home were also attacked. The Israeli army, which was intensively deployed in the area, did not intervene to stop the attacks.

Tove Johansson from Stockholm walked through the Tel Rumeida checkpoint with a small group of human rights workers (HRWs) to accompany Palestinian schoolchildren to their homes. They were confronted by about 100 Jewish extremists in small groups. They started chanting in Hebrew "We killed Jesus, we'll kill you too!" - a refrain the settlers had been repeating to internationals in Tel Rumeida all day.

After about thirty seconds of waiting, a small group of very aggressive male Jewish extremists surrounded the international volunteers and began spitting at them, so much so that the internationals described it as "like rain." Then settler men from the back of the crowd began jumping up and spitting, while others from the back and side of the crowd kicked the volunteers.

The soldiers, who were standing at the checkpoint just a few feet behind the HRWs, looked on as the they were being attacked.

One settler then hit Tove on the left side of her face with an empty bottle, breaking it on her face and leaving her with a broken cheekbone. She immediately fell to the ground and the group of Jewish extremists who were watching began to clap, cheer, and chant. The soldiers, who had only watched until this point, then came forward and motioned at the settlers, in a manner which the internationals described as "ok... that's enough guys."

The extremists, however, were allowed to stay in the area and continued watching and clapping as the HRWs tried to stop the flow of blood from the young woman's face. Some, who were coming down the hill even tried to take photos of themselves next to her bleeding face, giving the camera a "thumbs-up" sign.

At this point, a HRW was taken into a police van and asked to identify who had attacked the group. The HRW did this, pointing out three Jewish extremists who the police took into their police vehicles. However, the extremists were all driven to different areas of the neighborhood and released nearly immediately. When one of the three was released on Shuhada Street, the crowd that was still celebrating the woman's injuries applauded and cheered.

A settler medic came to the scene about 15 minutes after the attack and immediately began interrogating the internationals who had been attacked about why they were in Hebron. He refused to help the bleeding woman lying on the street in any way.

Five minutes after the settler medic arrived, the army medic arrived and began treating the injured woman. When she was later put on a stretcher, the crowd again clapped and cheered.

Police officers at the scene then began threatening to arrest the remaining HRWs if they did not immediately leave the area, even though they had just been attacked.

The injured woman was taken to Kiryat Arba settlement and then to Hadassah Ein Keren hospital in Jerusalem.

HRWs were later told by the police that they had not even taken the names of those who were identified as having attacked the HRWs and that one of the main assailants had simply told the police that he was due at the airport in two hours to fly back to France.

The incident was the latest attack by extremist Jews in Hebron. The small group of Khannist settlers in Tel Rumeida regularly attack and harass Palestinians in the area. The violence sometimes spills over to the international human rights workers who accompany Palestinians in an attempt to protect them from settler attack.

The settlers in Tel Rumeida encourage Jewish tourists to come to support them, as a way of making up for their small numbers. Today, hundreds had come from tours in Israel for a special event - many from overseas: France, England and the United States.

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Editorial: Signs Economic Commentary for 13 Nov 2006

Donald Hunt
Signs of the Times
November 13, 2006

Gold closed at 622.20 dollars an ounce on Friday, down 1.1% from $628.90 at the close of the previous Friday's trading. The dollar closed at 0.7794 euros Friday, up 0.1% from 0.7785 euros for the week. The euro closed at 1.2830 dollars Friday, down from 1.2846 at the end of the week before. Gold in euros would be 484.96 euros an ounce, down 1.0% from 489.57 for the week. Oil closed at 58.92 dollars a barrel Friday, down 1.2% from $59.62 at the close of the previous week. Oil in euros would be 45.92 euros a barrel, down 1.1% from 46.41 for the week. The gold/oil ratio closed at 10.56, up slightly from 10.55 at the end of the week before. In U.S. stocks, the Dow closed at 12,342.56 Friday, up 1.9% from 12,108.43 at the close of the Friday before. The NASDAQ closed at 2,445.86, up 2.3% from 2,389.72 for the week. In U.S. interest rates, the yield on the ten-year U.S. Treasury note closed at 4.60%, up one basis point from 4.59 at the end of the week before.

More bad news on the housing front in the United States:

Housing construction plummets in October

AP Economics Writer

Housing construction plunged to the lowest level in more than six years in October as the nation's once-booming housing market slowed further.

The Commerce Department reported on Friday that construction of new single-family homes and apartments dropped to an annual rate of 1.486 million units last month, down a sharp 14.6 percent from the September level.

The decline, bigger than had been expected, was the largest percentage decline in 19 months and pushed total activity down to the lowest level since July 2000.

Applications for new building permits, seen as a good sign of future plans, fell for a ninth consecutive month, the longest stretch on record. The October drop was 6.3 percent, pushing permits down to an annual rate of 1.535 million units, the slowest pace in nine years.

David Seiders, chief economist for the National Association of Home Builders, said he believed construction would fall by about 13 percent this year as builders scramble to deal with plunging sales.

"We had an unsustainable boom in housing in both 2004 and 2005 and now we have a correction on hour hands," he said.

The sharp slowdown in housing this year stands in stark contrast to the past five years, when the lowest mortgage rates in four decades had powered sales of both new and exiting homes to five consecutive records.

The housing weakness trimmed a full percentage point off economic growth in the July-September quarter, when the economy expanded at a tepid 1.6 percent rate.

Housing is expected to continue acting as a drag over the next year but analysts believe the adverse effects of falling sales and construction cutbacks will not be enough to pull the country into a recession.

There were signs that the steep plunge in housing was beginning to level off. The monthly survey of builder sentiment edged up slightly in early November following another small increase in October. It marked the first back-to-back improvements in builder sentiment since June 2005.

The level of building activity in October was 27.4 percent below activity in October 2005, the biggest year-over-year decline since March 1991.

Construction of single-family homes fell by 15.9 percent in October from the seasonally adjusted September level, dropping to an annual rate of 1.177 million units. Construction of multi-family units dropped by 9.1 percent to an annual rate of 309,000 units.

The drop in construction was led by a 26.4 percent decline in the South. Construction fell by 11.7 percent in the Midwest and was down 2.1 percent in the West.

The only region showing strength was the Northeast, where construction jumped by 31 percent.

As usual there has been a lot of talk about "soft landings" and "corrections." Richard Russell is not buying it:

The verdict is in

Dow Theory Letters
November 9, 2006
Extracted from the Nov 8, 2006 edition of Richard's Remarks

Russell Comment -- November 8, 2006 -- The verdict is in. The majority of the American people by their vote have said "enough" to Bush and the neo-cons. The House went to the Democrats and as I write the Senate is in doubt. Was it Iraq, was it the economy, was it the lies, was it the sleaze, was it the incompetence? It was probably all of these. The vote has rendered President Bush a "lame duck." The nation now faces gridlock. But Iraq will continue, and the deficits will continue.

Much power has now been transferred to the Democrats. They don't deserve it. They went along passively, cowardly, and cluelessly with the Bush caravan. Their real claim to power is not courage or intelligence, their real claim to their new power is simply that they are not Bushies or neo-cons. In all, it's a sad story. But it's a story, less sad than it was a day ago.

...Economically, the big picture will now boil down to four phenomena: (1) Iraq, (2) the continuing massive US deficits, (3) the longer-term effects of the deteriorating housing picture, (4) the incredible disparity between Wall Street and the rich -- and the great mass of struggling Americans.

Iraq will be a continuing cancer. I have no idea how it will be resolved.
The deficits will probably be ignored despite much hand-wringing.

The housing situation (in my opinion) will deteriorate and become a huge problem.

The disparity between the rich and the poor will remain an unsolved cancer -- it will also be a source of anger on the part of most Americans.

The consensus continues to be that housing is due for a "soft landing." In my opinion, the soft landing is a fantasy. I think it will be well into next year before we know what kind of landing housing is headed for. I think it's going to be a very hard landing, one that will work a hardship on the entire nation.

But even the market bears and gold bugs don't seem to be able to grasp the true scale of the calamity. David North just published the text of a two part address entitled "War, Social Inequality and the Crisis of American Democracy" in which he uses history to give proper scale to the calamity, a calamity whose outward expression is the crime that was the invasion of Iraq. According to North, the war, the crime, was the consequence of the takeover of the United States by a two-party dictatorship designed to concentrate wealth and power in the hands of a very few.

...In 1815, two veteran politicians, somewhat past the political wars of their earlier lives, engaged in a lengthy correspondence. One of the pieces of that correspondence was a letter written by one of the parties, John Adams, the second president of the United States and one of the major leaders of the American Revolution. He was writing to an old adversary who, in the last years of the two men, became his closest friend - Thomas Jefferson.

Jefferson had posed the question in an earlier letter: what was the revolution in which we both participated and to which we had dedicated our lives and our sacred honor? Adams said something very interesting. He said the revolution was not the war. The war was a consequence of the revolution.

The real revolution did not take place after 1775. It took place before 1775 - between 1760 and 1775, a period of 15 years marked by an extraordinary growth of political consciousness among the masses of colonials. The revolution took place in the minds of the people. And it was that which made possible the extraordinary development of consciousness which found its most sublime expression in Jefferson's Declaration of Independence and, later on, in the drafting of the Constitution and the Bill of Rights.

Adams actually said that if you want to trace the development of consciousness, read the newspapers, read the pamphlets, read the leaflets which were being circulated by the tens of thousands in the old colonies, and there you will see the real development of revolution.

At a somewhat later period of history, on the eve of the Civil War, the great debates between Lincoln and Douglas took place. Lincoln's contributions remain to this day an extraordinary summation of the issues that led to the abolition of slavery in the United States.

As a matter of fact, Lincoln himself was a candidate whose political life was, to a major extent, dependent upon his ability to articulate and explain the great issues of his age. The turning point in Lincoln's candidacy actually came in February of 1860. The candidate from Illinois was invited to participate in a speaking tour. He went to Massachusetts, Pennsylvania and Connecticut, but the big meeting was to be held in New York, where the lions of the new Republican Party were going to take the measure of the provincial from Illinois.

When Lincoln appeared on stage in an ill-fitting suit - he was hardly the most handsome man in the world and wouldn't pass muster with our media today - there was something of a chuckle. Then he began to speak. He laid out in the next 90 minutes an extraordinarily comprehensive assessment of the constitutional issues posed by the slavery question.

He reviewed the position of all the founders. This was a detailed, concise, brilliant analysis, which almost overnight made it clear to everyone that Lincoln was a major force. And it transformed his candidacy into something that was credible. He became the Republican candidate and, fortunately, the president of the United States.

Look at the situation today. What issues have been discussed? What questions have been raised? Let us put it somewhat differently? What has been suppressed? What can't be discussed?

The bloodbath in Iraq

This morning the media was full of reports of the conviction of Saddam Hussein and the decision that he is to be hanged. He was convicted for putting to death hundreds of Iraqis.

Let us consider another fact that has not been widely reported or discussed. It was briefly mentioned in the press but that was about it. It was a study put out by Johns Hopkins University in October. Johns Hopkins is a major institution, and it presented a study which established, based on the most advanced statistical methods, that the number of Iraqis who have died since March 2003 as a result of the American intervention and occupation is 655,000.

Six hundred fifty-five thousand human beings have perished as a result of this country's invasion of Iraq. Six hundred fifty-five thousand!

I have heard various reports of the crimes committed by Saddam Hussein and the number of people killed. Even if one accepts the highest figure that I've seen, in the area of 150,000 to 200,000, that's less than a third of the number of people who have died in just three years as a result of the American invasion.

Six hundred fifty-five thousand people represent approximately 2.5 percent of the population of Iraq. Two-and-a-half percent of the population! Apply that percentage to the United States. A cataclysm of that scale would have cost the lives of 7.5 million Americans out of a population of 300 million.

Saddam Hussein is to be held accountable for his crimes, though I must make the point that no one can accept, if one is serious about democratic rights, the procedures that were adopted by that court. But he's been given the death penalty - a penalty that we oppose. But what shall be the punishment for those who have carried out a war, based on a violation of international law, resulting in the deaths of 655,000 people? What level of accountability shall there be?

One has an indication in the way the media responded. One would think that the report that 655,000 people had died would produce a massive shock throughout the country. Well, there were brief reports in the press. The day after the report appeared, Bush was asked at a press conference what his response was, and he simply said that the report was not credible. There was no follow-up question, and I haven't seen a single article in the mainstream press - the New York Times, Washington Post, Los Angeles Times - in which the statement by Bush that the Johns Hopkins University report was not credible was subjected to critical investigation.

The editor of the New York Times, Bill Keller, came to the University of Michigan, and one of our reporters asked him to explain the silence of his newspaper. He just brushed it off. The story has been simply dismissed. Yet it should be the subject of the most intense discussion and debate within the United States, especially when one asks oneself: what will be the consequences? What must follow from a nation being implicated in so great a crime? Does one really think that the United States could wipe out two-and-a-half percent of a population of another country and not suffer consequences, not just in Iraq, but in our own country?

During the constitutional debates of 1787 in Philadelphia, one of the delegates, George Mason from Virginia, addressed the question of slavery. He was a slave owner, but an opponent of slavery. He said, in words that sent a chill down the spine of every delegate, "Unlike individuals, the crimes of nations are not punishable in another world, in the hereafter. The crimes of nations are punished in this world, and the form of that punishment is a national calamity."

Seventy-five years later, the nature of that calamity was revealed: the American Civil War. And Lincoln, in his great second inaugural address, invoked the words of Mason when he said that the scourge of the war was the punishment for the crime of slavery, in which both North and South had participated.

The bloodbath orchestrated by the government of the United States, with the full collaboration of the Democratic Party and the media, has definite implications. The state of American democracy, its visible disintegration before our eyes, is one of the forms being taken by the developing national calamity.

North again:

Social inequality in the United States

How did a situation arise where such massive and undemocratic violations of rights take place, and they go unchallenged and even un-discussed in any serious way? Life-and-death questions of democratic rights that resound through our history have emerged, yet an election campaign is conducted where they are not discussed and cannot be examined.

In order to understand this, one has to look at the nature of the society in which we live. What is the real source of these diseases - of war, of dictatorship? They must be symptoms of a deep social ill that exists within the United States.

...What has been the cause of this profound deterioration of the democratic immune system of the United States? We have to look at the nature of our society, and here we see that the most significant feature is the extraordinary level of social polarization, the extraordinary degree of wealth concentration in a very small section of American society.

A study was recently done by two economists from UCLA, Piketty and Saez, entitled "Income Inequality in the United States, 1913-1998." It is based on federal income taxes, and it shows that in 1929, economic inequality, wealth inequality, and income inequality were at their highest levels.

Then came the Great Depression, and there was a sharp decline because of the enormous losses experienced by sections of the elite itself when Wall Street crashed. Later, particularly after World War II when the GIs came home and there was an enormous wave of labor struggles and social struggles, inequality declined and the level of social equality increased. That persisted into the 1970s, and then the process reversed itself. Social inequality accelerated during the Reagan administration. It accelerated with extraordinary rapidity during the Clinton administration, and now it is back at its highest levels since 1929.

If one looks at income distribution in America, one sees certain extraordinary features. First of all there, is a very, very sharp differential between the top 10 percent and the bottom 90 percent. People often use the phrase, "The rich get richer and the poor get poorer." When we talk about the poor getting poorer, we are talking about the lower 90 percent of the American people. That embraces a very substantial population - 270 million out of 300 million, i.e., the vast majority of the American people.

Then, if one examines the top 10 percent, one is struck by the very sharp differential there as well. The social position of those in the top 5 percent is dramatically different than those in the bottom 95 percent. And there is an extraordinary degree of differentiation between the top one percent and the bottom 99 percent. The top one percent receives approximately 19 percent of the entire income paid out every year in the US. The top 0.1 percent, one in a thousand, receives approximately 9 percent. We are dealing with astonishing levels of social inequality.

Similar figures present themselves if one measures not just income, but control of wealth, in the form of share ownership. We live in a society that has become incredibly stratified.

If history teaches us anything, going back to the days of the Roman Republic, it is that the higher the level of wealth concentration, the more eroded and unsustainable the previous democratic forms of rule. If democracy means anything, it embodies the rule of the people. But the people in their broad masses represent a great threat, a danger, to those who control the vast aggregates of wealth.

How would the democratic interests of the masses express themselves? In social policy, in a progressive income tax, in taxes on wealth, in health care programs, educational programs, programs of public works. From the standpoint of the ruling elite, all of these demands of the "grubby masses" subtract from the revenue flowing into their pockets.

What is the secret of political life in America? What is the aim of both parties of corporate America? To remove all constraints - political, economic, legal, moral - on the accumulation of personal wealth. Every social demand is seen as a threat. That is domestic policy.

What is its international expression? Militarism and war.

The ruling elite has global interests. It is striving to establish the supremacy of the United States over all other countries - to control oil, to control raw materials. The United States has a military budget that is a multiple of the combined military budgets of all other country in the world. That only tells you that the American ruling elite, arming itself like Chicago gangsters, is waging its international turf wars to make sure it has its hands on the levers of power - whether in Asia, Africa or South America.

And the American people have to pay for it - in Iraq, billions every month. Immense sums of money are squandered. That is why, when the Iraqi military budget came up last time for a vote in the Senate, it was passed 100-0, without any questions asked. That was less than a month ago.

But these problems are bigger than just American problems. Capitalism itself, that system whose assumptions we simply take for granted now, can be seen as a trick that enables concentration of wealth and power. It did it by separating the accumulation of wealth from any moral or social consideration, from conscience. It is no accident that capitalism has paved the way for a takeover of society by psychopaths.

What seems normal to us can be seen as sick and perverted if we look at it from the point of view of the past, of tribal type organization, or from the point of view of a healthy future. Tribal societies have as their hallmark the deep, systematic prevention of concentration of power. Tribal societies, in a kind of reverse causality, organized themselves toward the prevention of something that hadn't taken place yet but what is taking place now. According to Ran Prieur, one of the ways this is done is by forbidding purely utilitarian relationships, or those we would call economic:

In a tribe, purely utilitarian relationships are forbidden! The economic is a subset of the social, and in a land-based tribe, the fundamental social relationship is between the people and the land. But in civilization, the social and the economic are carefully separated. It's uncool to accept money from your family -- you're supposed to "earn" it through a utilitarian deal with strangers. We don't want to chat with the person behind the counter -- we just want our coffee. We love people we don't depend on, and we depend on people we don't love, or even know.

This is what enables a large-scale domination system! Tribes can be repressive, abusive, even ecologically destructive, but they can't be big, or grow past a certain size, because everyone has to know everyone for them to work. And for a tribe to be mean, everyone in it has to be mean. But you can build a global hell-world out of nice people with just one trick: the purely utilitarian relationship. It's the basic chemical bond of Empire. And we can dissolve Empire, one cell at a time, by befriending the people we exchange money with, and building gift economies on our friendships.

Laura Knight-Jadczyk, in her fascinating series on John Kennedy published in her blog and in the Signs of the Times, approached the subject this way:

Monday's SOTT carried a couple of articles that caught my eye. The first one was The harmless people, an interview with Elizabeth Marshall Thomas.

In 1950, a 19-year-old girl left the elite Smith College in Massachusetts to join her family on an expedition that would change their lives. Prompted by her father's desire to visit unexplored places, the family set off for the Kalahari desert in search of Bushmen living out the "old ways" of hunter-gatherers. The girl, Elizabeth Marshall Thomas, went on to celebrate them in her 1959 book The Harmless People, which became a classic of popular anthropology. Nearly 50 years on, Marshall Thomas's latest book The Old Way revisits the story - and finds that the Bushmen's fate is more complex than it seems.

Marshall Thomas returned to her English degree at Smith College, Massachusetts...

The interviewer asks Marshall Thomas: Westerners mourn the loss of this hunter-gatherer society, but you take a rather different view...

Marshall Thomas responds : Yes, for me they are living in somewhat the same way, but with different economics. The idea that you help your own is still present. This is what kept the human race alive for 150,000 years.

The hunter-gatherers told anthropologists they don't define themselves by how they get food but by how they relate to each other. We saw that. They tried to keep jealousy at a minimum, with nobody more important or owning more things than anyone else. You gave things away rather than keep them. You wanted other people to think of you with a good feeling.

Q: Is that the "old way" of your book title?

A: Yes.

There was a time when the playing field was level and all species lived in this way. How people and their domestic animals live now is profoundly different. [...]

Q: What do you make of the accusations by some academics that your writing is too sentimental?

A: My mother Lorna also wrote about the Bushman culture and we were both accused of overemphasizing the lack of violence in Bushman culture, but we were only reporting what we had seen. In the Bushmen groups we visited, we observed that there was much emphasis on cooperation and on avoiding jealousy. The reason was that life was pretty marginal and one way to get through was to have others who help you in your hour of need. Everything in their culture was oriented to this.

So it isn't that they have a natural "niceness" - I never said that they did. They're just like everybody else. What they have done is recognise the damage one person can do to another and try to put a limit on it.

The second article relates directly to what Marshall Thomas has remarked above about how societies that live on the edge manage to survive: Survival of the nicest
ALTRUISM - helping others at a cost to oneself - has been a stubborn thorn in the side of evolutionary biologists. If natural selection favours genes that produce traits which increase the reproductive success of the individuals in which they reside, then altruism is precisely the sort of behaviour that should disappear.

Darwin was acutely aware of the problem that altruism posed for his theory of natural selection. He was particularly worried about the self-sacrificial behaviour that social insects display: how could natural selection explain why a worker bee will defend its hive by stinging an intruder and dying in the process? In On the Origin of Species, he summarised the topic of social insect altruism as "one special difficulty, which at first appeared to me to be insuperable, and actually fatal to the whole theory". But then he came up with an explanation.

Since worker bees were helping blood relatives - especially their queen - Darwin hypothesised that natural selection might favour altruism at the level of blood kin. [...]

Huxley, also known as "Darwin's bulldog", outlined his thoughts on this topic in an 1888 essay entitled "The struggle for existence":

"From the point of view of the moralist, the animal world is on about the same level as the gladiator's show... Life [for prehistoric people] was a continuous free fight, and beyond the limited and temporary relations of the family, the Hobbesian war of each against all was the normal state of existence."

For Huxley, altruism was rare, but when it occurred, it should be between blood relatives.

Kropotkin, once a page to the tsar of Russia and later a naturalist who spent five years studying natural history in Siberia, thought otherwise. In Siberia he thought that he saw altruism divorced from kinship in every species he came across.

"Don't compete!" Kropotkin wrote in his influential book Mutual Aid: A factor of evolution (1902). "That is the watchword which comes to us from the bush, the forest, the river, the ocean. Therefore combine - practice mutual aid!"

How could two respected scientists come to such radically different conclusions? In addition to being a naturalist, Kropotkin was also the world's most famous anarchist. He believed that if animals could partake in altruism in the absence of government, then civilised society needed no government either, and could live in peace, behaving altruistically. Kropotkin was following what he saw as "the course traced by the modern philosophy of evolution... society as an aggregation of organisms trying to find out the best ways of combining the wants of the individuals with those of co-operation". He saw anarchism as the next phase of evolution.

Huxley was no less affected by events around him. Shortly before he published "The struggle for existence", his daughter, Mady, died of complications related to a mental illness. In his despair over Mady's passing he wrote, "You see a meadow rich in flower... and your memory rests upon it as an image of peaceful beauty. It is a delusion... not a bird twitters but is either slayer or slain... murder and sudden death are the order of the day." It was in the light of nature as the embodiment of struggle and destruction - the antithesis of altruism - that Huxley saw the death of his daughter and it was in that mindset that he penned his essay [...]

A mathematical theory for the evolution of altruism and its relation to blood kinship would come a generation later with Bill Hamilton, who was both a passionate naturalist and a gifted mathematician. While working on his PhD in the early 1960s, he built a complex mathematical model to describe blood kinship and the evolution of altruism. Fortunately, the model boiled down to a simple equation, now known as Hamilton's rule. The equation has only three variables: the cost of altruism to the altruist (c), the benefit that a recipient of altruism receives (b) and their genetic relatedness (r). Hamilton's rule states that natural selection favours altruism when r × b > c.

Hamilton's equation amounts to this: if a gene for altruism is to evolve, then the cost of altruism must be balanced by compensating benefits. In his model, the benefits can be accrued by blood relatives of the altruist because there's a chance (the probability r) that such relatives may also carry that gene for altruism. In other words, a gene for altruism can spread if it helps copies of itself residing in blood kin. [...]

While working with Hamilton on kinship and altruism, the atheist Price underwent a religious epiphany. In an irony that turns the debate about religion and evolution on its head, Price believed that his findings on altruism were the result of divine inspiration. He became a devout Christian, donating most of his money to helping the poor. [...]

Since Hamilton published his model, thousands of experiments have directly or indirectly tested predictions emerging from his rule, and the results are encouraging. Hamilton's rule doesn't explain all the altruism we see but it explains a sizeable chunk of it.

...I don't think I have to spell out the connections between all of the above and the probable forces behind the assassination of John F. Kennedy to my regular readers. But for the sake of those who are not regular readers, let me suggest that you check out my article on Ponerology which tells us that there is a statistical minority of human type beings on our planet that are quite simply not really human. As Professor Robert Hare says, they are an "intraspecies predator." Are they "alien/human" hybrids as might be inferred from the remarks of Padre Freixedo? Anything is possible. But what is important is to remember the above stated rules of Altruism; and to remember that they can apply to genetic pathological deviants as well as normal human beings. That is to say, that networks of deviants, as described by psychologist Andrzej Lobaczewski, can and do act "altruistically" toward each other to some extent, and have done for millennia. Of course, that is only so long as those "others" continue to exist that they can "gang up" against. When they finally achieve dominance, it can be seen that they are quite likely to turn against each other as the recent Neocon abandonment of George W. Bush has shown us. But even with their infighting, they still work to keep a solid front of secrecy imposed between themselves and the majority of humanity, the masses of people whose energy, blood, sweat and tears, keep them on the top of the heap. In short, more than anything else, genetic deviants survive due to their ability to induce altruistic behavior from others - self-sacrifice - by deceiving the others into believing that they are conspecific; they are parasites. And thus it is absolutely crucial for all of us to begin to learn about these matters because the very survival of humanity may depend on it. As Lobaczewski points out, the very fact that there are more normal people than deviants suggests to us that normality, having a conscience and empathy and altruism, are those things that helped humanity to evolve and survive over hundreds of thousands of years. It is going to take a lot of altruism and empathy to get us through the next few years!

Maybe the "altruism" among psychopaths led them, at crucial points in history, to encourage the development of capitalism, a system that, by freeing energies, enabled sufficient concentration of wealth to eliminate freedom for the non-psychopathic.

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Zionists - Murdering The Innocent

Israeli Soldiers Murder Elderly Palestinian man, 9 residents, including children, injured in Israeli air strike in Gaza

IMEMC & Agencies
20 November 2006

Palestinian medical sources in Gaza reported on Sunday evening that the resident who was injured on Sunday evening in an Israeli air-strike in Gaza City is a 75-year old man. Two fighters and seven residents, including three children, were injured in the attack.

The air strike targeted a vehicle carrying Hamas fighters in Al Zeitoun neighborhood in Gaza.
The elderly man was identified as Rabah Hajjaj, 75. Two Hamas fighters and seven bystanders including three children aged 5, 14 and 16 were injured in the attack.

Eyewitnesses reported that the Israeli air force fired at least one missile at the vehicle while it was driving in the a crowded street.

A medical source at Al Shifa hospital in Gaza reported the the injured residents suffered light-to-moderate wounds.

In a separate incident, a UN official stated on Sunday that a UN school in Beit Lahia, in the norther part of the Gaza Strip, was subjected to Israeli military fire; two children aged seven and twelve were mildly injured in the attack.

The shelling came after three Israelis were injured after Palestinian fighters fired homemade shells at the Israeli Negev town of Sderot.

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Two schoolchildren wounded in Israeli shooting at Gaza school

International Herald Tribune

Stray [Ed: really?] Israeli gunfire hit a U.N. school in the northern Gaza Strip, wounding two children, including a 7-year-old boy who was hit in the head as he sat at his desk, United Nations officials said Sunday, but Israel denied involvement.

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25-year-old Palestinian shot for protesting IDF's treatment of women


A critically wounded Palestinian youth is hospitalized at Beilinson, allegedly after Israeli soldiers shot at him for protesting their treatment of women. Heitham Yassin, 25 years old, has been under heavy sedation and on a respirator since the November 4 incident. Yassin's doctors have told a lawyer for the family that he has undergone two abdominal surgeries, and that he also has pelvic injuries and peritonitis.

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Bethlehem invasion ongoing, soldiers force families out of their homes, fire at reporters

20 November 2006

IMEMC correspondent reported that soldiers forced several families out of their homes, near the Manger Square, and took them to a nearby house controlled by the army apparently to interrogate them; one reporter and at least two residents were injured; at least two were taken prisoner.
Earlier on Monday, soldiers invaded Bethlehem and surrounded the house of, Shareef Abu Hadeed, said to be Islamic Jihad operative in the city.

Mohammad, the brother of Shareef, went out of the house to negotiate with the soldiers, but they detained him.

IMEMC correspondent said that the father of Abu Hadeed went out of the house later on to negotiate with the soldiers. It is still unclear if Abu Shareef is in the surrounded home.

Two residents, not members of the family, were detained by the soldiers who also took the wife of Abu Hadeed and his cousin prisoner, apparently to pressure him to surrender.

All residents in nearby homes, including children and elderly, were forced out and are currently held in a nearby house the army controlled and is apparently using it as a temporary interrogation center.

One reporter was mildly injured in his chest after a bullet fired by the army hit him in his bullet-proof vest.

Army invades Bethlehem, surrounds a house and clashes with local youth
Ghassan Bannoura - IMEMC, NOvember 20, 13:46

The Israeli army invaded the West Bank city of Bethlehem, surrounded a house of a wanted resident and clashed with the local youth on Monday afternoon. At least one resident was injured, and one reporter was hit ricocheted bullet into his bullet-proof vest.

Local residents informed the IMEMC that troops stormed the Manger Square located in the city Center, surrounded the house of Sharef Abdul-Qader, said to be Islamic Jihad operative in the city.

Sozens of youth clashed with the invading forces and hurled stones at them, soldiers fired rounds of live ammunition, tear gas and sound bombs.

The invasion and the clashes are ongoing as the military continues the offesnive in the city.

Two weeks ago army invaded the city killed two and injured more than 20 in similar circumstances.

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Israeli Army re-invades the southern part of Beit Hanoun in the Gaza strip

IMEMC & Agencies
20 November 2006

Israeli army tanks and bulldozers have started an invasion of the southern part of Beit Hanoun town north of the Gaza strip on Monday morning, after having partially retreated from the town last week.

The tanks opened fire with heavy machine gun and artillery fire at the homes and cars of local Palestinians creating a lot of damage.
At the same time, Israeli armored bulldozers began razing farming lands and animal sheds belonging to local farmers, eyewitnesses reported.
The invasion started early in the morning, according to local sources, who said there are currently tanks surrounding the southern part of the town and enforcing a total siege on that area of Beit Hanoun. In nearby Jabalia refugee camp, the Abd Al Haleem Al Khudary family survived a certain death when one Israeli tank shell hit the upper floor of their house, during the morning shelling.

Earlier in the morning, Israeli army tanks shelled Izbeit Abd Rabuh, a village to the east of Jabalia refugee camp, in the northern part of the Gaza strip. Palestinian sources said that the tanks fired four shells that landed near residents' houses and farm lands causing damage. Medical sources said that medical teams and ambulances rushed to the area and found no injuries, but reported several cases of shock, especially among the children.

In a related incident, the Israeli army apparently targeted a group of residents standing in the street east of Jabalia refugee camp with one missile, medical sources reported no injures.

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Israel issues an order to annex hundreds of Dunams in the West Bank

Saed Bannoura - IMEMC & Agencies - Saturday, 18 November 2006, 14:27

Jerusalem Legal Aid and Human Right Center (Musaada) demanded the Legal Counselor of the Israeli so-called Civil Administration Office in the occupied West Bank, to cancel a decision that aims at annexing 1238 Dunams of farmlands that belong to residents of Anata town.
The center reported that the Israeli Military Commander did not inform the residents and the Anata local council of the annexation order, which did not give them a chance to appeal against it.

The office only posted the order at a wall in the District Coordination Office (DCO); 31 days later, the residents knew about the decision by chance when some of them headed to the DCO for paper work.

Musaada issued a press release slamming the Israeli procedures and the deception used by the military in order to annex the Palestinian lands.

Lawyer of the Musaada Center, Bassam Karaja, said that the center will follow the case at higher authorities in Israel in an attempt to cancel the order and its consequences on the lands.

Karaja added that if the appeals fail to void the military order, the center will file another appeal to the Israeli High Court of Justice.

"The annexation order is not about security, it is part of settlement expansion plans in the area", Karaja stated, "They want to annex more Palestinian lands in order to expand settlements, and military camps".

Karaja stated that this decision serves the expansion plan of Alon settlement which will also lead to the isolation of twenty-thousands of Dunams of farmlands.

He also said the the Israeli decision include annexing lands for the construction of a section of the Annexation Wall that will extend in the area to surround settlements and military camps.

Anata is already surrounded from the north by the Wall and Pisgot Zeev settlement, settlement road number 70, in addition to a military checkpoint at the entrance of Shu'fat refugee camp and the barbed-wires surrounding Al Z'ayyim area.

Karaja said that if the latest annexation decision is implemented, Anata town which is considered a main link between Jerusalem and the West Bank, will be totally isolated. Anata is inhibited by 18000 residents.

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Olmert orders the killing of Palestinian Government Ministers


In order to stop Kassam rocket attacks launched at Israel from the Gaza Strip, Prime Minister Ehud Olmert has ordered his security chiefs to target the Hamas political leadership, the British Sunday Times newspaper reported on Sunday.

The Times said that according to Israeli security sources, a decision to assassinate leading Hamas officials was made by Olmert and Defense Minister Amir Peretz.

'Israel perpetuating destruction'

According to the report, Israel was determined to ensure that the group's political leadership in Gaza, the West Bank and abroad would "no longer escape responsibility" for the rocket attacks.

Kassam rockets have rained down on Israel on a regular basis even after the IDF withdrew from Gaza, recently prompting Sderot schools to strike and a mass evacuation of youngsters from the town.

Shin Bet (Israel Security Agency) chief Yuval Diskin told the Knesset's Foreign Affairs and Defense Committee last Tuesday that although the number of terror attacks in the year following disengagement had decreased, "the important thing to look at is the amount of weapons being smuggled into the Strip and the significant strengthening of Hamas as a result of disengagement."

Committee members and MKs have been urging more action by the IDF following the Kassam hit on Sderot last week that killed one woman and seriously wounded two other residents of the city.

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Palestinian human shields give Israel pause

By Joshua Mitnick | Correspondent of The Christian Science Monitor

In perhaps the most effective act of nonviolent protest in the six-year Palestinian uprising, hundreds of Gazans forced Israel over the weekend to call off airstrikes on the residence of a militant leader by swarming the house as human shields.
In recent months, Israeli security forces have used telephone calls to warn Palestinian militants and others near alleged militant safe houses and weapons caches, giving them up to a half hour to evacuate. When militia leader Mohammed Baroud got the call Saturday, he enlisted neighbors to protect his house from the Israeli military. They've now set up a system of shifts to protect the house around the clock.

Palestinian leaders are hailing this as a moral victory that will be replicated. If so, it may herald a significant tactical shift from attacks by tiny secretive militant groups to nonviolent civilian protest, a change that will force Israel to adjust its strategy. It also underscores the difficulty of fighting militant groups embedded in a civilian population - whether it be in Iraq, Afghanistan, or Gaza.

"The Palestinians are creative and this is something amazing," says Maher Miqqdad, a Fatah spokesman. "Maybe in the past six years of the intifada, the focus was on military resistance. But we shouldn't deny the importance of peaceful resistance. There is an importance in increasing the peaceful struggle."

An Israeli army spokesman who spoke on condition of anonymity said the attack was scrapped after the military realized that dozens of Palestinians were demonstrating on the roof of Mr. Baroud's home.

Having backed down, Israel's military might have to rethink its methods of striking at militant targets. Israel's army prefers attacking from the air to risking soldiers' lives by sending infantry and armored units on raids. And the advance warning of raids is meant to avoid civilian casualties, the Israeli military says.

But now, less than two weeks after the killing of at least 20 Palestinians in northern Gaza brought a storm of international criticism against Israel, this tactic may have backfired by creating the risk of even more innocent victims.

"This is definitely a problem," says the army spokesman. "The reason why we warn ahead is to avoid innocent injuries. Instead, they are using the warning to do what they did yesterday. We'll see how we can deal with it."

Baroud is a member of the Popular Resistance Committee, a militia which participated in the abduction of Israel Cpl. Gilad Shalit and frequently fires Qassam missiles into southern Israel.

"It's a victory. They forced the army to change direction," says Sliman A-Shafi, a Gaza correspondent for Israel Channel 2 who said the Palestinians protested under the slogan "Either we live together or we die together."

The success of the mass protest is stirring nostalgia for the first Palestinian intifada of the late 1980s and early 1990s, a battle with Israel seen as a popular uprising fought with stones and Molotov cocktails rather than with missiles and suicide bombers.

Palestinians credit the first intifada as winning self-government and international recognition, while the economic hardship and anarchy accompanying the recent uprising has made it much more difficult to celebrate.

"People realize that we might go back to the popular resistance as we had in the first intifada," says Omar Shaban, a Gaza political analyst. "People are becoming convinced that the popular resistance is more effective than the military resistance."

But one human rights activist expressed reservations about the use of human shields to ward off the Israeli army.

"In principle, it's forbidden for militants to draft people to protect them," says Sarit Michaeli, a spokewoman for the Israeli human rights monitor B'tselem. "The idea of citizens coming to protect a house which is a military target is problematic, to say the least."

And yet, Ms. Michaeli says that whether or not the human shield protest constitutes a human rights breach depends on whether the protesters participated willingly or were coerced, whether minors were involved, and whether the house was a genuine military target.

On Sunday, 10 Palestinians were injured in a botched Israeli strike on Hamas operatives accused of being involved in manufacturing rockets. To be sure, under constant pressure from Israel's campaign against militants, many Gazans are unlikely to disavow the role of fighters who retaliate against the attacks.

"This kind of [peaceful] resistance cannot replace the rocket resistance," says Jamila Shanti, a female member of Hamas who helped organize a permanent presence of female human shields around the house. "The popular resistance is to protect the people from the bombing. The rocket resistance is to confront the Israeli machinery."

- Safwat al-Kahlout contributed to this report from Gaza City.

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IDF official: order to cautiously use cluster bomb "explicit"

www.chinaview.cn 2006-11-20 17:59:28

JERUSALEM, Nov. 20 (Xinhua) -- Israel Defense Forces (IDF) Chief of Staff Dan Halutz said on Monday that the order to cautiously and limitedly use cluster bombs during the recent Lebanese war was "explicit", Israel's local newspaper Ha'aretz reported.

Halutz made the comments after he decided to investigate into IDF field commanders' disobedience of his orders.
"There is no question that one of the things that must be investigated is the way in which the orders were given and implemented," Halutz was quoted as saying Monday morning. "Were the orders explicit? I believe that they were," he added.

According to the report, Halutz ordered the IDF to use cluster bombs with extreme caution and not to fire them into populated areas during the war.

Despite of the orders, Israeli forces did so anyway, primarily using artillery batteries and the Multiple Launch Rocket System (MLRS).

These artillery batteries and MLRS are estimated to have delivered thousands of cluster bombs, containing a total of some 4 million bomblets, during the conflict.

Following some media reports and criticism from international organizations, Halutz appointed IDF Brigadier General Mishel Ben Baruch to head a probe into the use of the weapons.

The inquiry's findings were handed over to Halutz and IDF Advocate General Avichai Mendelblit, who will determine whether the case merits court-martial proceedings.

Since the cease-fire went into effect on August 14, at least 22Lebanese civilians, including many children, have been killed and 134 others injured by unexploded bomblets.

Each rocket or shell can contain as many as several hundred bomblets, which are meant to disperse over an area of hundreds of square meters, exploding as they hit the ground.

To date, roughly 58,000 unexploded bomblets have been discovered at about 800 different sites in southern Lebanon. Most of them are near populated areas.

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Gaza Doctors: Israel used a strange weapon against Palestinian victims

IMEMC & Agencies
19 November 2006

Palestinian doctors in the Gaza Strip said that they have been dealing with a strange kind of weapon used against Palestinians.

Doctor Abdulrahman Abu Safia of Al-Shifaa hospital in Gaza Strip said the wounded people are suffering serious burns in differnt parts of their bodies.

Many have been ambutated because the fragments of the Israeli shells almost mutilated their limbs.

He added that when they inspect the body of the wounded, they see dozens of spots hit by shrapnel.

"We see a big number of cuts in the body, and when we X-Ray the wounded, we find no sharpnel of fragments of anything in the body, and they do not exit the body from the opposite side," Safia said.
On Sunday afternoon, the Israeli Air Force fired two missiles at a vehicle driving near Salah Ed Deen Mosque in Al Zeitoun neighborhood, east of Gaza City killing one Palestinian and injuring at least nine others.

Media sources said that Israel refused to allow an medical investigation mission to come to the Gaza Strip.

Recently, the United Nations General Assembly approved sending an investigation mission to the Gaza Strip to investigate the death of 20 Palestinians in an Israeli air strike in the northern Gaza Strip town of Beit Hanoun on November 8.

The General assembly's resolution although not binding, has condenmed the Israeli attack at Beit Hanoun. On the other hand, the United States has vetoed a UN Security Council resolution condemening the attack and calling for opening a probe into it. Israel claimed the attack was a mistake, while the US said it was a self defense and insisted on Israel's right to defend itself.

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The State of America

Thousands of troops guard Bush on quick trip to Indonesia

Last Updated: Monday, November 20, 2006 | 7:34 AM ET
The Associated Press

U.S. President George Bush arrived in Indonesia on Monday for a quick visit amid extremely tight security.

More than 18,000 troops carrying rifles have been deployed in Bogor, on the outskirts of Jakarta, where Bush will spend his entire six-hour visit at a presidential retreat.
Bush plans to meet with Indonesian President Susilo Bambang Yudhoyono and moderate civic leaders.

He'll also be honoured with a state dinner.

Bush's war policy is immensely unpopular in the heavily Muslim nation.

Every day this month, there have been anti-Bush protests staged by everyone from students to housewives and taxi drivers. Thousands of rowdy protesters are in the streets today.

Comment: Bush is so loved around the world that he has to travel with his own stormtroopers, or use rent-a-cops locally. Them terrorists are everywhere, aren't they?

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U.S. plans $125M Gitmo legal compound

Associated Press
Sat Nov 18, 2006

SAN JUAN, Puerto Rico - The U.S. military on Friday said it plans to build a $125 million compound at the Guantanamo Bay Naval Base where it hopes to hold war-crimes trials for terror suspects by the middle of next year.

The compound, designed to accommodate as many as 1,200 people, would include dining areas, work spaces and sleeping accommodations for administrative personnel, lawyers, journalists and others involved in trials at the isolated detention center in southeast Cuba.
It would create a total of three courtrooms on the base to allow for simultaneous trials, and a separate high-security area to house the detainees on trial.

"We need to build more courtrooms, and we want to do multiple trials," said Navy Lt. Cmdr. Chito Peppler, a
Pentagon spokesman. He said the government hopes to begin construction as soon as possible to be ready for trials no later than July 1.

Human rights groups and foreign governments have called on the Bush administration to close Guantanamo, saying detainees are being held illegally, but the planned construction of new facilities underscores its permanence.

"This is a huge waste of taxpayer money," said Michael Ratner, president of the New York-based Center for Constitutional Rights, which represents hundreds of Guantanamo detainees. "They've been trying to try people for five years, and until they try somebody according to the Constitution, nothing's going to happen there."

Larry Cox, executive director of Amnesty International USA, described the compound proposed by the Pentagon as "a permanent homage to its failed experiment in second class justice."

The project, which has not yet been submitted for congressional approval, represents one of the largest upgrades to the detention center since it began taking in suspected enemy combatants in January 2002.

Among the terror suspects expected to face war crimes trials at Guantanamo are 14 "high-value" detainees who were recently transferred from secret CIA custody. They include Khalid Sheik Mohammed, the suspected mastermind of the Sept. 11, 2001, attacks and Abu Zubaydah, believed to be a link between Osama bin Laden and many al-Qaida cells.

Plans for the compound are provided in a "presolicitation notice," dated Nov. 3 and posted on the Internet for potential government contractors. It was first reported by The Miami Herald.

The contractor will be required to complete work by July on the compound including "a secure perimeter," a garage for 100 government vehicles and a closed-circuit video transmission center, according to the notice. The new compound will be located in a field overlooking the bay and near the existing courtroom, which sits on a hill.

The U.S. government is drafting new rules for the trials under the Military Commissions Act, which President Bush signed last month. The Supreme Court had declared that previous efforts to try Guantanamo detainees were unconstitutional.

Previously, 10 detainees were charged with crimes. A total of some 70 detainees are expected to be charged under the new law, military officials have said. There are currently some 430 detainees at Guantanamo.

Defense lawyers have challenged the validity of the new law, which bars detainees from using the civilian court system. If a federal appeals court or the Supreme Court rules in their favor, it could strike down the military trials.

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Senior Democrat renews call for military draft

By Jackie Frank
Sun Nov 19, 2006

WASHINGTON - An influential Democratic lawmaker on Sunday called for reinstatement of the draft as a way to boost U.S. troop levels and draw a broader section of the population into the military or public service.

U.S. Rep. Charles Rangel, the incoming chairman of the House of Representatives' tax-writing committee, said he would introduce legislation to reinstate the draft as soon as the new, Democratic-controlled Congress convenes in January.
Asked on CBS' "Face the Nation" if he was still serious about the proposal for a universal draft he raised a couple of years ago, he said, "You bet your life. Underscore serious."

"If we're going to challenge Iran and challenge North Korea and then, as some people have asked, to send more troops to Iraq, we can't do that without a draft," he said.

Rangel, who opposed the 2003 invasion of Iraq, also said he did not think the United States would have invaded Iraq if the children of members of Congress were sent to fight. He has said the U.S. fighting force is comprised disproportionately of people from low-income families and minorities.

"I don't see how anyone can support the war and not support the draft. I think to do so is hypocritical," he said.

The New York Democrat had introduced legislation to reinstate the draft in January 2003 before the Iraq invasion. The Pentagon has said the all-volunteer army is working well and there is no need for a draft, and the idea had no traction in the Republican-led Congress.

Democrats gained control of both the House and Senate for the first time in 12 years in the November 7 election, and a wholesale change in the leadership of Congress is to be made in January. Rangel is to head the House Ways and Means Committee, which is charged with U.S. tax and trade legislation.

The draft was in place from 1948 to 1973, when the United States converted to an all-volunteer army. But almost all men living in the United States - including most male noncitizens - are required to register with the Selective Service upon reaching 18, and federal benefits, including financial aid for college studies, are contingent on registration.

Rangel said his legislation on the draft would also offer the alternative of a couple of years of public service with educational benefits.

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A Tough Road Ahead for the President's Closest Adviser

The New York Times
November 19, 2006

WASHINGTON - Karl Rove, the top White House political strategist, is coming off the worst election defeat of his career to face a daunting task: saving the president's agenda with a Congress not only controlled by Democrats, but also filled with Republican members resentful of the way he and the White House conducted the losing campaign.

White House officials say President Bush has every intention of keeping Mr. Rove on through the rest of his term. And Mr. Rove's associates say he intends to stay, with the goal of at least salvaging Mr. Bush's legacy and, in the process, his own.
But serious questions remain about how much influence Mr. Rove can wield and how high a profile he can assume in Washington after being so closely identified with this year's Republican losses, not to mention six years of often brutal attacks on the same Democrats in line to control Congress for the remainder of Mr. Bush's presidency.

Things have not gotten off to a great start since the election. Democrats are taking Mr. Rove's continued influence at the White House - as well as some of its recent moves, like nominating conservative judges for the federal bench - as a sign that Mr. Bush's conciliatory pledges of bipartisanship will prove to be fleeting.

"Karl's role has not been to serve as a bridge over troubled waters; he has tried to stir the waters as often as possible," said Senator Richard J. Durbin, the Illinois Democrat who will be the second-most powerful person in the Senate next year. "Maybe he got religion on Nov. 7, but we'll see."

Republicans on Capitol Hill said anger ran deep over Mr. Bush's decision to announce the ouster of Defense Secretary Donald H. Rumsfeld one day after the election instead of weeks before, when some say it could have kept the Senate in their party's hands and limited Democratic gains in the House. Mr. Rove was among those at the White House who had argued that to announce Mr. Rumsfeld's resignation before Election Day would have been tantamount to affirming criticism that the war in Iraq was failing, according to officials familiar with the deliberations.

"There is lingering resentment on that," Representative Jeff Flake, Republican of Arizona, said of the timing of the announcement. Asked if he expected the White House to take as much of a lead in setting the Congressional agenda as it had in the past, Mr. Flake responded flatly, "No, I don't."

More broadly, many Republicans say they blame Mr. Rove for failing to heed warnings that the war was hurting their campaigns, as the president and the vice president continued making the case for it on the stump.

"I would say that brilliant as he is, he was not right," said Senator Arlen Specter of Pennsylvania, who counts himself among those who believe that Mr. Rumsfeld's resignation could have helped the party maintain control of the Senate. "I think Rove misread the anger of the American people about Iraq."

Mr. Specter said the White House should be prepared to step back and concede some power to Congressional leaders.

Mr. Rove declined to be interviewed for this article.

The White House seems aware of the apparently limited influence in Congress of Mr. Rove, the aide most closely identified with Mr. Bush. Joshua B. Bolten, the White House chief of staff, was dispatched to the Hill this week to hold meetings with members, suggesting that he is likely to play a more prominent role.

But Dan Bartlett, the White House counselor, said in an interview this week that Mr. Rove's main job was not emissary to Congress. "That's not the position he played in the past," Mr. Bartlett said.

Rather, administration officials said, Mr. Rove's main role had always been within the White House itself. Mr. Rove has derived his real power from his long and complicated relationship with Mr. Bush, and he has the president's ear on a wide array of political and policy matters.

Mr. Rove's policy oversight duties were taken away after the difficult first two years of Mr. Bush's second term, and he was directed to focus more closely on the midterm elections. Since the outcome, Mr. Bush has given no indication that Mr. Rove's role will change further. But he could not resist a dig at his old friend, telling reporters Mr. Rove was beating him in a book-reading contest because "I obviously was working harder in the campaign than he was."

Officials said afterward that the comment was typical of Mr. Bush's rough teasing of his longtime friend.

And Mr. Bartlett said Mr. Rove would continue to play a central role in Mr. Bush's final two years. "He's going to be an integral player because his value to the president and the White House goes far beyond his political skill set," Mr. Bartlett said. "He has an enormous amount of responsibility to help strategize in our efforts to help get things done."

Republicans close to the White House say Mr. Rove has been arguing that the White House needs to shore up its standing with conservatives, whose support will be crucial to rebuild Mr. Bush's popularity and ultimately give him some leverage.

Reflecting that strategy, Mr. Bush sent Congress a slate of conservative judicial nominees, which was taken as a provocation by Democrats who had previously rejected them. A close associate of Mr. Rove's suggested that the strategy was first to placate conservatives, then tack to the middle to strike deals with Democrats on immigration reform or Social Security.

Grover Norquist, president of Americans for Tax Reform and a close ally of Mr. Rove's, said the best role for Mr. Rove would to be to help Republicans regain the House, the Senate and the presidency in 2008.

"Karl is a key player in that," Mr. Norquist said, adding that he is going to need cooperation from the Republicans taking party leadership roles in Congress.

But Republicans do not seem to be feeling like much of a team right now, let alone one that will look to Mr. Rove as its leader.

White House officials say some of the ire against Mr. Rove in particular and the White House in general will pass.

Mr. Rove has told his associates the party still has a good-size Congressional minority that will assert its influence over the next two years.

And some in that minority expressed confidence. "We've sort of gone through the grieving process," said Senator John Cornyn of Texas, a close Republican ally of Mr. Rove's. "Now we're in the process of coming up with an agenda."

Comment: Somehow, we doubt that Rove is only going to be "salvaging Bush's legacy"...

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White House dismisses Hersh article

Sun Nov 19, 2006

WASHINGTON - The White House dismissed an article about Washington's intentions toward Iran by US journalist Seymour Hersh.

White House spokeswoman Dana Perino derided Hersh's article in the upcoming issue of The New Yorker as "riddled with inaccuracies" and charged that "once again he is creating a story to satisfy his own radical views."
In the article, Hersh reported that Vice President Dick Cheney attended a national-security discussion a month before November 7 congressional elections that touched on the impact of a possible Democratic victory on Iran policy.

"If the Democrats won on November 7th, the vice president said, that victory would not stop the administration from pursuing a military option with Iran," Hersh wrote, citing a source familiar with the discussion.

The Democrats wrested control of both the House of Representatives and the Senate from President George W. Bush's Republican Party in the November 7 vote.

Cheney said the White House would circumvent any restrictions imposed by a Democratic legislature "and thus stop Congress from getting in its way" on Iran, which denies accusations it is seeking to develop nuclear weapons.

In an interview Sunday with CNN, Hersh said the White House had been critical of his reporting for years, adding that the latest spat was "just part of the game."

Hersh defended his portrayal of US Iran policy, saying that "led by Mr. Cheney" the hardliners "are still going be very tough" on Iran.

"Being tough and taking a military step is still very much on the table in this government," he added.

Asked if he thought Cheney had lost some of his power now the Democrats were in control of Congress, Hersh said: "I would never underestimate Mr. Cheney."

In his New Yorker article, Hersh also reported that a classifed draft CIA assessment had found no firm evidence of a secret drive by Iran to develop nuclear weapons, as alleged by the White House.

In his interview, Hersh alluded to a spat between the White House and the Central Intelligence Agency over an alleged Israeli intelligence assessment that puts Iran close to developing a trigger for a nuclear bomb.

"The CIA isn't getting a good look at the Israeli intelligence," Hersh said.

The "internecine" struggle, he added, was "the same fight we had before Iraq," referring to CIA reports on Iraq's lack of weapons of mass destruction that were apparently dismissed by the White House before it launched the Iraq War in 2003.

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Surveillance is really getting under my skin

Henry Porter
Sunday November 19, 2006
The Observer

The most shocking part of Britain's frantic rush towards a fully fledged surveillance society is not so much the threat to personal liberty, although that is important; it is the lack of security in the systems that are confidently held up to be the solution to the problems of 21st-century crime and terrorism.
While each of us is required to give more and more information about ourselves to the government's various centralised databases, and submit to increasing surveillance in our daily lives, almost no one seems to consider the risk to us if these systems are breached.
For some time now, I have been warning about the menace that these systems may come to represent in the hands of future governments, the nature of which we cannot know. But having spent the last few months making a film, Suspect Nation, with the director Neil Ferguson - about the growth of surveillance since 9/11 - I realise that the threat exists in the present. Both of us were astonished at the gaps in security that we found and the insouciance of government.
It is difficult to know whether this comes from ignorance or a failure of imagination, but as the barriers are swept away by science, ministers, few of whom have the slightest technical knowledge, place increasing faith in surveillance technologies.

What they do not grasp is that when you pool records on a national database, you are also creating a very attractive target. And sooner or later, someone will find the unmarked back door.

We spent some time in America investigating these new technologies with a sentence from Jay Stanley of the American Civil liberties Union ringing in our ears. 'There is a lot of room,' he wrote, 'for the United States to become a meaner, less open and less just place without any radical change in government. All that's required is the continued construction of new surveillance technologies and the simultaneous erosion of privacy protections.' That seems to describe perfectly the process that is underway in Britain.

One of these new technologies is RFID (radio frequency identification), which are inexpensive microchips that give out information when activated by a scanner. They are used by shops to track their products and now increasingly in identification of all sorts, from building entry cards to driving licences. The problem is that it is difficult to protect the chip you are carrying from transmitting your personal details.

Take the new passport. Pressed by the US, countries around the world are introducing a passport containing an RFID chip which transmits all the particulars of your passport together with your photograph when it is scanned at a national border. But these new, 21st-century passports may be rather less secure than the 20th-century version.

In an experiment conducted for Suspect Nation, security expert Adam Laurie took just a couple of weeks to write a programme and add a scanner which would read any new British passport without it being open.

The possibility of a passport being read by someone who needs only to brush against you with a version of Laurie's equipment is obviously alarming, yet a Home Office spokesman seemed relaxed about the lack of security. 'It is hard to see why anyone would want to carry out the procedure described. Other than the photograph, which could be obtained easily by other means, they would gain no information that they did not already have, so the whole exercise would be utterly pointless.'

If the Home Office hasn't got the point, authorities in the US have, which is why they have included a metal shield in the design for their new passport. What they probably realise is that the covert reading of passport could represent a considerable threat, especially to those whose nationality terrorists want to target or those who may represent rich pickings for criminals.

The technology used in the ID card is likely to be very similar to that in the new passport. It is true that all the information you will be forced to submit to the government in the ID card scheme will be stored on a central database called the National Identity Register, but our experiment reading passports must at least open up the possibility of ID theft. Once something has been read, it is that much easier to clone it.

Looking through the ID card debates in Hansard, it becomes obvious that most MPs simply didn't understand that the threat comes not just from pooling everyone's information in one database, but from creating a single trusted identifier which is bound to become a irresistible challenge for criminals.

Everywhere you turn in America, there are frantic efforts to make Americans more secure. One solution that is gaining currency in the US is the use of an RFID implant which is shot into the body by means of a large hypodermic needle. The chip can be read when a scanner is passed over the area where it lurks in the fatty tissue below the surface of the skin.

It is promoted by the sinister sounding VeriChip Corporation of America, which is pioneering the implants (originally developed to tag animals) as a way of identifying immigrants, military personnel, casino workers and patients who suffer various degenerative diseases such as Alzheimer's. We attended a surgery run by a Dr J Musher in an anonymous Washington suburb and I was duly injected with a chip bearing a unique number. I am probably now the only living creature in Britain, other than prize cattle and show dachshunds, to be tagged in this way. I have a hint of Blade Runner about me: half-man, half-transmitter.

But it turns out that this futuristic device is rather unimpressive. It took Adam Laurie no time at all to pass a scanner over my arm, extract the information and clone the RFID.

You can see the attraction of such gimmicks. The same instinct is busy consigning us all to centralised databases and promotes the use of number-recognition cameras to track our movements. In the face of the great threats of the modern world, our leaders have become mesmerised by the promise of total and inviolate security.

But there is no such thing. Indeed, there is every reason to suppose that this technology and the huge centralised databases, with their multiple points of access, mean that we will become exposed to the very threats they seek to protect us from.

The truth is that as soon as a piece of security technology is introduced, its existence inspires an equal ingenuity among those who wish to break it. Caught in the middle of this security arms race are you and me, seen as suspects by one side and as fair game by the other.

- Henry Porter and Neil Ferguson's film, Suspect Nation, can be seen on More4 at 9pm tomorrow

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US regime is forcing UK health service to embrace corporate capitalism

UK Guardian

The White House is lobbying British ministers to allow the world's main drug companies [American corporations, many of which have business connections with American politicians, or donate huge sums of money to their election campaigns, blatantly undermining any pretence of genuine "democracy" in this nation] unrestricted access to the NHS as part of a package of free market reforms for the service.

The US government is positioning itself behind the giant pharmaceutical firms, predominantly based in America, which have been piling pressure on the body that approves drugs for use in hospitals and for prescription by GPs.
The drug companies claim that they are being held back by the National Institute for Clinical Excellence and have separately lobbied for it to be reformed.

In a surprising intervention, the US deputy health secretary, Alex Azar, forced the issue in London yesterday, ahead of talks with officials following a trip to the US last week by the health secretary, Patricia Hewitt. He said attempts to use rationing mechanisms such as Nice to cut soaring drugs bills would stifle innovation - an argument that is constantly made by the pharmaceutical industry.

Allowing all new drugs to be used in the NHS would result in the companies "fighting it out" on price, Mr Azar said, which would drive the drug bill down.

He made it clear that he was also in favour of the drug companies being allowed to advertise directly to patients. At the moment they may only advertise to doctors.

He also wanted to share the US experience of offering private insurance packages to people on Medicare - the healthcare scheme provided by the government to the poor and elderly. It might be possible for the UK government to consider something similar, he suggested, so that everyone could choose either a basic healthcare deal or top it up themselves if they wanted to pay for more than the state could afford.

Speaking to the Guardian, Mr Azar said healthcare systems in all wealthy countries were expensive, and costs were increasing at a time when budget constraints were getting more real as the population aged. "On the other side we have to focus on long-term innovation," he said. "How are we making sure that we don't take steps on cost containment that are short-sighted and prevent the investment in long-term biomedical research and development and innovation, so that when my kids are senior citizens we have the next generation and next, next, next generation of drugs?"

The White House arguments will increase the mounting pressure on Nice, which is regularly castigated by patient groups and drug companies when it rejects a new medicine from use in the NHS on cost grounds.

Recently there was an outcry over its ruling that new drugs for Alzheimers should be given only to those with moderate disease, and yesterday cancer charities objected to its preliminary ruling that a new drug, Tarceva, for lung cancer, should not be used in the NHS. Ministers have been directly lobbied by drug companies arguing that its decisions are ill-founded and inappropriate.

Yesterday Mr Azar emphasised the close contact his office has with the Department of Health and with European ministries. The links had been particularly useful in dealing with pandemic influenza preparedness, he said.

He said he had "some great discussions" with Ms Hewitt in the US last week and had followed them up with her officials and the Treasury.

"In all of our systems it is so easy to make the decision to cut costs today by going after drug prices, and to not focus on what will be the impact on long-term innovation," he said.

"I try to remember to advise people first off that we will never balance our budget going after drug prices. They are a relatively small proportion of the entire healthcare budget in our system."

Drugs and devices could keep people out of hospital and allow them to be cared for in their own homes, so saving costs, he said.

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USA Disses UN Human Food Rights

United Nations, Nov 18 (Prensa Latina)

The government of President George W. Bush shamed the United States into international isolation after it rejected a UN resolution defending the human right to food.

After a week of UN debates on humanitarian affairs, US diplomats were the only ones to vote against a resolution supporting the Right to Food.
The related text was sponsored by an unusual majority of 131 countries, and another 44 UN member states yesterday voted in favor.

Diplomats at the debates agreed the US delegation s stance ignored the right of every person to not suffer from hunger.

The approved proposal reaffirms "hunger is an disgrace and violates human dignity," they sustained.

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Ghosts of Dictatorships Past: The School of the Americas and Memory in Latin America

November 18 / 19, 2006

"Nothing that has ever happened should be regarded as lost for history. To be sure, only a redeemed mankind receives the fullness of its past--which is to say, only for a redeemed mankind has its past become citable in all its moments"

--Walter Benjamin, Theses on the Philosophy of History

This November 17-19, for the seventeenth annual time, an estimated 20,000 marchers will convene on Fort Benning, Georgia, home to the infamous school for Latin American military soldiers, the School of the America's (SOA). As part of their protest to shut down the SOA, the marchers will line up at the gate of what critics call the "School of Assassins," and will, as they do every year, perform a ritual: holding small white crosses, one for each of the more than 300,000 estimated victims of SOA-trained soldiers since the School's beginning in Panama in 1946, a march leader will call out the name of each victim (it takes several hours), to which the crowd will shout back, "Presente!" But this November, something will be different: the ghosts of Latin America's dictatorships past, as well as their living descendents, will also shout back, in unison with the voices of the marchers: "Presente!"
History of Brutality

43 year-old Gonzalo Guevara Cerritos looked like your average blue-collar janitor, working for his daily bread along with thousands of other recent Latino immigrants in Los Angeles. His constant nervousness and avoidance of social interaction could have been chalked up to his discomfort living in a foreign land, or to his less-than-perfect English. Or it could have been chalked up to the fact that in 1989, while sub-lieutenant in El Salvador's counterinsurgency Atlacatl Battalion, he had taken part in the massacre of six Jesuit priests, a housekeeper, and her 14-year-old daughter, and was wanted by Salvadoran authorities for these crimes. As it turns out, the latter was the case, and Guevara Cerritos was arrested this October 16 by Los Angeles Immigration and Customs Enforcement agents, tipped off by another Salvadoran who had recognized Guevara Cerritos' face. He is currently awaiting deportation.

As part of Ronald Reagan's Cold War-era Central America policies, throughout the 1980's the White House supported an array of death squads and dictators - such as the Atlacatl Battalion - in the name of "rolling back" communist influence. The US infamously funneled money and guns to the Contras in Nicaragua, as well as to right-wing death squads in Honduras, Guatamala, and El Salvador. As historian Greg Grandin points out in is new book, Empire's Workshop, "U.S allies in Central America during Reagan's two terms killed over 300,000 people, tortured hundreds of thousands, and drove millions into exile." They also supplied Central American forces with instruction manuals in psychological torture, as well as tools such as cattle-prods for torture of the more corporeal kind.

In 1988, one of the instruction manuals, titled Human Resource Exploitation, surfaced during a Congressional hearing sparked by a New York Times allegation that the US had trained Honduran military officers involved in mass torture. It also came out that these manuals were based in part on SOA classroom lesson plans.

But it was the 1989 massacre of six priests, a housekeeper, and her daughter in El Salvador that galvanized US public opposition to the SOA--Gonzalo Guevara Cerritos was trained at the Fort Benning, Georgia School. Also bad for SOA's press was its connection to the 1980 rape and murder of four American Mary Knoll nuns in El Salvador, as well as to Panama's dictator Manuel Noriega and Salvadoran death-squad architect Roberto D'Aubuisson, in addition to the killers of beloved Salvadoran Archibishop Oscar Romero--all SOA graduates. In the end, it is estimated that the 64,000 Latin American troops trained at SOA since the 1960's have been involved in around 75,000 murders in El Salvador, 200,000 in Guatemala, and thousands more in other violence-torn countries such as Columbia.

In response to this laundry list of dirty deeds, in 1990 Roy Bourgeois, an indefatigably spunky Mary Knoll Priest who was kidnapped in Bolivia during Hugo Banzer's 1971- 1978 dictatorship, moved into a tiny apartment in Fort Benning, Georgia, right outside the gates of the SOA, to start School of the America's Watch (SOAW), with the goal of shutting down the SOA.

Since then, SOA-W has expanded from a one-man operation to an international movement with 30,000 unofficial members. Their successes have been numerous: they've tirelessly dragged the School's skeletons out of the closet and into the pages of countless magazines and newspapers; they forced the School, in 2001, to change its name to the Western Hemisphere Institute for Security Cooperation in an attempt to avert negative public attention; they've brought together a diverse coalition of Christian peace advocates and youth social justice activists at the annual marches at Fort Benning, where each year a handful of participants voluntarily go to prison for six to twelve months to raise public awareness about SOA--in 2005, for example, thirty-seven people went to jail, some of them over seventy years-old; and they've provided the steam behind several Congressional bills to pull funding from SOA, one of which, in 1998, lost by only eleven votes--and with recent Democrat victories in the midterm elections, twenty House opponents of the new "close SOA" bill, HR 1217, have lost their seats. Accordingly, SOA-W activists are predicting success.

Getting to the Root of the Problem

However, while SOA-W haven't slowed their demonstrations or lobbying efforts, in the last year organizers have pioneered a new--and dramatically successful--strategy.

The new strategy involves directly working with Latin American social movements and sympathetic governments to get them to agree to stop sending troops to the SOA. To this end, in past months SOA-W activists have traveled to Venezuela, Bolivia, Uruguay, Argentina, Chile, Peru, and Ecuador, meeting with movements and urging governments to deprive SOA of students. "The thinking behind this new Latin America strategy' was simple," writes Lisa Sullivan, one of the key organizers of this new campaign and who, to better coordinate with Latin social movements, has recently opened an SOA-W office in Caracas, Venezuela. "If there were no more students, there would be no more school."

To date, they have made vital steps towards this goal. In recent months, the Defense Ministers of Venezuela, Uruguay, and Argentina have all agreed to stop sending troops to the SOA. In Venezuela, Hugo Chavez had Bourgeois and Sullivan on his weekly television show, "Hello President," to talk about SOA, before announcing Venezuela's boycott of SOA. Uruguay, which has not sent troops since the inauguration of President TabarÚ Vßsquez, made its abstention from sending troops official with a public announcement. Argentina, which has typically sent 10-20 troops a year, made a similar public announcement, timed to coincide with the thirty year anniversary of the 1976 military coup.

In Bolivia, President Evo Morales has promised to dry-up Bolivia's stream of soldiers to the School, 500 of whom have been sent in the last ten years. However, the more than $100 million in US aid money the poor Andean country receives a year has made a total withdrawal difficult.

In Peru and Ecuador, SOA-W has made vital links with activists there who are spearheading movements to force their governments to stop sending troops to the SOA; in Chile several members of Congress have offered to introduce a bill to demand President Michelle Bachelet withdraw troops from the School. "We have been astounded with the success of this new strategy," Roy Bourgeois told me last March in Argentina.

But while props certainly go to SOA-W, the success of their new Latin America strategy has as much to do with the historical moment in Latin America today as with the well-crafting of SOA-W's new program.

From the 1960's to the 1980's, the vast majority of Latin Americans lived under the cloud of brutal dictatorships. When these dictatorships collapsed, with something of a domino effect occurring throughout the 80's, newly elected democratic governments almost unequivocally took a soft approach to punishment for ex-dictators--whether because of remaining ties to these dictatorships, or because of fear or threats of renewed coups, these governments, from Argentina to Guatemala, gave sweeping impunity to ex-dictatorship members--let the past be past, work towards "reconciliation," these governments argued.

Yet, in recent years this has all been changing. Critics in Latin America are arguing that "reconciliation" is just another word for "impunity," and that, in the name of building strong democratic institutions, citizens need to critically engage with their past, especially the legacy of the past in the present. And just what is the legacy of past-dictatorships in present democracies? For many, it is a continued excess of power of the military in civil society.

In an attempt to hold both past and present human rights violators accountable, grassroots social movements from north to south have been successfully demanding past-dictators and present military offenders--often ex-members of authoritarian old guards themselves--be punished. In Argentina, this past September, prosecutors won the first significant conviction of an ex-member of the 1976-1983 dictatorship there when they sentenced ex-Police Chief Miguel Etchecolatz, responsible for the torture and murder of twenty high school students in 1976, to twenty-five years in prison; Pinochet, after years of stalled efforts to bring him to trial, is likely to be judged for crimes against humanity in a Spanish court; in Bolivia, a strong movement has emerged to extradite ex-President Gonzalo Sanchez de Lozada for his role in the 2003 massacre of over sixty protestors in the city of El Alto; in Peru, the National Supreme Court has authorized the extradition of ex-Army Major Telmo Hurtado, who now lives in the US and has confessed to involvement in the 1985 massacre of 74 children, women, and old men, in an Andean village. The message Latin American movements are sending is clear: the era when the military, or anyone else, could torture and kill without fear of justice is over.

And here is where the SOA ties in to the new Latin American movements against impunity. The Latin America strategy of SOA-W has found such success because as Latin American movements fight against and work to build accountable and democratic governments, SOA's role in both dictatorship and democracy-era military violence comes up again and again.

Guevara Cerritos is one example of an SOA-graduate turned human rights violator. Noriega, D'Aubiosson, and Hurtado are others. Leopoldo Galtieri, a chief architect of Argentina's 1976 military coup and close associate of Etchecolatz, is also an SOA graduate. More recently, in the post-dictatorship era, the suspected kidnappers of Julio Lopez, an ex-torture victim who testified against Etchecolatz in Argentina, have ties to SOA; in 2000, a Guatemalan SOA graduate, Colonel Byron Disrael, was arrested for the 1998 murder of Catholic Bishop Juan Gerardi, who was documenting Disrael's and the Guatemalan military's crimes committed during the country's thirty year civil war; and it has just been discovered--SOA keeps its students names confidential--that two officers, Generales Juan Veliz Herrera and Gonzalo Rocabado Mercado, involved in the October 2003 "Gas War" massacres in Bolivia, are also SOA graduates.

In short, SOA-W's new campaign has met such success because of the coalescence between its goals and the anti-impunity mood in Latin America. "Everywhere we've traveledin South America, we've been amazed to realize that people are fully aware of the reality of the School of the America's," says Lisa Sullivan. "They have experienced firsthand the horrors of the tortures, detentions, imprisonments and disappearances' caused by its graduates."

The Dead Shout Back

Of course, not all Latin Americans favor punishment for past human rights violators, least of all those implicated in the violence. These detractors argue that the trials and demonstrations just put salt on old wounds and make it difficult for contemporary society to live together peaceably. They propose "reconciliation" through focusing on the present, charging that anti-impunity movements are living in the past.

Indeed, perhaps the defining characteristic of the new movements against impunity as well as the movement to shut the SOA, is their focus on remembering the victims of state and military violence. After all, what is the SOA "presente" ritual, or the giant tapestries woven with the names of the dead in Chile, or the towers of photographs of those "disappeared" in Argentina made by the Mothers of the Plaza de Mayo, but acts of remembrance? We could even say that the ability of any given civil society to bring ex-human rights violators to justice is directly correlative to the degree of historical consciousness of a regime's victims in the country, that is, the degree to which the history of the victims is not obscured and repressed. Thus, this also points to the importance of grassroots movements focused on creating memory, such as HIJOS, an organization in Argentina made up of the children of people disappeared,' who do street-festival-slash-public-denunciations, called escraches, in front of ex-dictators houses.

This whole politic, I think we could say, is characteristic of these new movements, of what I want to call a "politics of remembrance," the tools of which are the truth commission, the trial, the march and the escrache.

It is possible this politic represents a new type of Latin American social movement. In a January 2002 article by James Petras, the author argues that there have been three waves of social movements in Latin America in recent years. The first were the "new social movements" of the 1970's and 1980's, focused on "challenging the military and civilian authoritarian regimes of the time;" the second are the movements, such as the Zapatistas in Mexico and the Brazilian Landless Workers Movement, running from the 1980's to the present, "united in their opposition to neoliberalism and imperialism;" and the third are the new urban, neighborhood-based social movements, such as the FEJUVES that have come out of the city of El Alto in Bolivia. The new "politics of remembrance," shot through with characteristics of these other movements, can be seen as a sort of "fourth wave."

While this "fourth wave" of movements is clearly focused on the past, far from just being about a narrow idea of punishment, they actually have the potential to reinvigorate and open new possibilities for today's left. Latin America is in a profound moment of self-reflection, interrogating the past to open up the question, what kind of future do we want?' These movements and their "politics of remembrance" have the potential to act as a source of rejuvenation for left politics by virtue of their ability to draw out connections between yesterday's dictatorships and today's dominant economic and political order and by bringing up profoundly new questions and challenges in the present.

It seems clear that here at the "end of history", with state communism de-legitimized on both the right and the left, leftist movements have found themselves profoundly lacking orientation and direction. In an interesting way, looking to the past gives coherence to the kind of future and goals the left pursues. In the first place, the practice of a politics of remembrance is a negative practice. It is about looking at the past--dictatorships, violence, militarism--and saying, we don't want that.'

It is also, more importantly, about locating and rooting out the presence and weight of that history in the present. One example already mentioned is how the legacy of dictatorships has been preserved in the present in the form of impunity and unchecked military violence, and how remembering the victims of these regimes has highlighted the roots of this violence. In fact, the very language activists use to talk about the present-day persistence of rogue military violence demonstrates the importance of the past for understanding this violence--the dictionary defines "impunity [as] exemption from punishment"--we must not preserve impunity, activists say. This points to how today's violence is rooted in the past. Public and collective actions of remembrance bring this relationship between past and present into clear focus.

Another way in which practices of remembrance are challenging the present is by bringing up critical questions about and challenges to neoliberalism and US imperialism in Latin America. In remembering dictatorships, social movements focused on ending impunity have highlighted how neoliberal economic policies were first implemented during dictatorships under protection of military governments--"armed privatization," as Naomi Klein calls it.

This sheds a critical light on the present reality of the Washington Consensus in Latin America by highlighting the undemocratic nature of neoliberal policies; it draws a connect between how they were implemented (un-democratically) and who they benefit (a small elite), between how, as Noam Chomsky says in a recent article, "Latin American elites and economies [have] linked to the imperial powers but not to one another." This historical connection and its invocation has strengthened and legitimized anti-neoliberal movements, and more clearly shown the political reality of neoliberalism--each protest that highlights this connection further popularizes the idea that, as Grandin writes, "the kind of free-market absolutism advocated by the Chicago School [of neoliberal economists] was only possible through repression." Chomsky further explains how the development of this historical consciousness relates to the growth of democratic movements: "the new wave of democratization [in Latin America] coincided with externally mandated economic reforms' that undermine effective democracy." Thus, "to have [historical and political] consciousness," political philosopher Wendy Brown writes, "is to live actively with--indeed, to activate politically--the spirits of the pastthe bearable and unbearable memories of the past."

This drawing out of the connection between dictatorial repression and neoliberalism in Latin America has allowed Latin American social movements to more clearly characterize neoliberalism for what they believe it to be: a new face of the same old imperialism, the "3rd Conquest of Latin America," as historians have phrased it. Thus here, in the way that it is the popular and collective act of remembrance that highlights connections between dictatorships and neoliberalism, we can see how intimately the politics of remembrance are related to what Chomsky says are the continents "new independence movements," to the myriad new movements for sovereignty over natural resources across the hemisphere. Critical historical consciousness, German philosopher and literary critic Walter Benjamin argues, is developed through the cultural work of mourning.

The SOA, of course, figures prominently in all of this. It is tied to Argentina's 1976-1983 dictatorship, where Washington-backed Finance Minister Martinez de Hoz experimented with radical new free-market policies as SOA graduates like Galtieri butchered real, imagined, and potential critics to these policies. It is tied to Chile, where Pinochet's regime, with Washington's full support, overthrew the democratically-elected Salvador Allende and replaced his moderate social-democratic economic policies with a revolutionary new economic free-market program designed by University of Chicago economists, who also directly trained Pinochet's Chilean economists on a US government-funded scholarship; here too, approval of the policies was achieved not through democratic means but through the massacre of critics--SOA and other US-trained soldiers helped achieve consensus for these new economic policies at the barrel of a gun.

Thus, it becomes clear that the murder of a whole generation of activists and labor leaders, Grandin explains, made it possible to implement the first neoliberal economic policies. SOA is of course not any sort of monolithic explanation for all or any of this. Rather, through its very real connection to countless of the murderers, it is accurately and viscerally representative of Washington's role in Latin American neoliberalism, and how the northern neighbor uses its military influence in the Western Hemisphere.

Of course, in concrete terms, the legacy of US imperialism and militarism in Latin America are much bigger and bloodier than just the SOA. As Friday Berrigan writes in "Beyond the School of the Americas," "the scope of [US] military training programs [in Latin America] is extensive--as many as 100,000 foreign police and soldiers receive training from the US government each year. There are more than 150 military institutions that train foreign officers in the United States. In addition, US military officers lead countless training programs in other countries."

And SOA-W is very aware of this. Carol Tyx, an English Professor who participated in the 2006 march in Georgia, is quoted in a recent Z Magazine article saying, in regards to shutting down the SOA, "If we close the School, you know, that wouldn't change Plan ColumbiaNot that closing the School is not important [but] we're trying to change a whole foreign policy, a whole attitude about militarism. And the School almost feels symbolic."

For their part, the main organizers of SOA-W's Latin America strategy also recognize this. In addition to their efforts to get Latin governments to stop sending troops to SOA, Sullivan and company have been mobilizing, alongside Ecuadorian social movements, in opposition to a US military base in the city of Manta, as well as against a US military base, called "Nuevo Horizonte," in Peru, where Southern Command is training Peruvian soldiers. Sullivan characterizes these bases as "different chapters of the same book," and insists upon the need to organize in opposition to all of them. Accordingly, this November 17-19, as US marchers convene on Georgia, there will be simultaneous demonstrations in Manta, Ecuador, San Salvador, El Salvador, Asuncion, Paraguay, and in Columbia. Activists will also gather to protest Arizona's Fort Huachuca, in Colorado. "When [activists] stand at the gates of Fort Benning this November," the SOA Watch website proclaims, "[they'll] be standing together with thousands of people in Central and South America calling for an end to US militarism and intervention and for closure of the School of the America's."

SOA, then, is perhaps best thought of as a window through which to look back into the past in order to make a political demand on the present--an occasion to "activate politically the bearable and unbearable memories of the past." The politics of remembrance--of remembering dictatorships' victims, of remembering SOA's victims--is about bringing the dead back to life, resurrecting them, digging up their bodies so that their once-buried voices can be heard. In this sense, actions of remembrance give the left a sense of values to fight for. Wendy Brown again provides illumination: this kind of "justiceis less institutionalthan temporal: it pertains almost exclusively to a practice of responsible relations between generations. Justice concerns not only our debt to the past but also the pasts legacy in the presentJustice demands that we locate our political identity between what we have inherited and what is not yet born." In this case, what kind of values do the dead have to offer us? Values of tolerance, peace, and justice in opposition to those of violence, militarism and injustice embodied in Latin American dictatorships and US foreign policy. "My daughter," a woman said at an event in Buenos Aires, "fought for economic and political justice, she fought for democracy, and that is why they killed her. I am carrying on her struggle for a peaceful and just tomorrow."

This November 17-19, activists in Georgia will also be carrying on the struggle already taken up by thousands of Latin Americans, the struggle for a peaceful and just tomorrow. When activists in Georgia march, call the names of SOA's victims, and shout back, "presente," they will be echoed in their call by a thundering chorus of Latin Americans--both live and dead. Increasingly, their roar is harder and harder to ignore.

Wes Enzinna is an independent writer, activist, and international man of leisure. Comments are welcomed at wes_enzinna@hotmail.com

Visit the SOA Watch website at www.SOAW.org for more information.

Article originally published by Toward Freedom.

Comment: If Americans (the ones from the US) want to understand why their country is so hated, the history of the School of the Americas is a good place to start. Brutal torture and support for tyrants is the face of the USA for many countries. All those honeyed words about freedom and democracy are seen for what they are: lies and sweet-talking designed for the public at home in the 50 states.

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Cornering The Zionists

Spanish Foreign Minister: "We were afraid Israel would thwart peace plan"


The joint French, Spanish and Italian diplomatic initiative for an Israeli-Palestinian agreement was not coordinated ahead of time with Israel for fear that its government would try to thwart it, Spanish Foreign Minister Miguel Moratinos said.

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Arab League chief says ready to cooperate with Europe on new Mideast peace initiative

China daily

Arab League Secretary General Amr Moussa Saturday said that the AL is ready to cooperate with European nations on a new initiative on holding a Mideast peace conference to end the Israeli-Palestinian conflict, Egypt's official news agency MENA reported.

Comment: Every body wants peace, except Israel, American and the UK. Can we now see where the real cause of the "Middle East [manufactured] crisis" lies?

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Norwegian Trade Union calls for Arms Embargo Against the Israeli Occupation of Palestine


The resolution, passed at the Union's congress last weekend, went through with an overwhelming majority with only 3 votes against. It condemns Israel's "massacre" perpetrated against Lebanon this summer and calls for "strong international pressure upon Israel" stating that "Israel must respect UN resolutions and end the occupation of Palestine, the Sheba farms and the Golan Heights, which is in violation of International Law."

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Hamas calls on UN to impose sanctions on Israel

www.chinaview.cn 2006-11-18 21:00:41

GAZA, Nov. 18 (Xinhua) -- The Hamas-led Palestinian government Saturday called on the United Nations to impose sanctions on Israel, a day after the UN General Assembly adopted a resolution deploring the recent Israeli offensive into Gaza.

"The General Assembly's stance was only condemnation and denunciation," said the cabinet's spokesman Ghazi Hamad, demanding a resolution that was expected to be "more serious by imposing sanctions on Israel."
The United Nations General Assembly on Friday overwhelmingly adopted a resolution deploring the Israeli military offensive in Gaza Strip and calling for its immediate withdrawal from the area.

Palestinian Interior Minister Said Siam of Hamas had slammed the Friday resolution, describing it as an "unjust resolution that equalizes between the victim and the executioner."

Meanwhile, Israeli military raids in Gaza Strip continued. Helicopter gunships fired missiles at two houses and a charity in Gaza city overnight Saturday. There were no casualties in the assaults as the Israeli army warned the owners of the houses in advance.

"The latest military escalation targeting civilian houses and charities are war crimes in violation of the international law," Hamad told reporters in Gaza.

Israel resumed shelling houses in Gaza after the death of an Israeli woman in home-made rocket attack that targeted its southern town of Sderot last Wednesday. The missile attack came a week after the killing of 19 Palestinian civilians in northern Gaza by Israeli artillery shelling.

The UN and international community should have taken binding resolutions to stop Israel from striking at Gaza houses, concluded Hamad.

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Deputy PM: New Palestinian gov't to be formed by end of November

www.chinaview.cn 2006-11-18 23:26:29

RAMALLAH, Nov. 18 (Xinhua) -- Deputy Prime Minister of the Hamas-led Palestinian government Nasser al-Sha'er said on Saturday that a new unity government would be formed by the end of November.

Al-Sha'er told reporters that President Mahmoud Abbas and Prime Minister Ismail Haneya will announce the new government in a public ceremony before the end of November.
Factions "have agreed on most of outstanding points concerning the number of portfolios every party would get," al-Sha'er said.

Meanwhile, independent lawmaker Mustafa al-Barghouti told the Voice of Palestine that talks on national unity government have reached an advanced point, adding a new cabinet would be declared by the end of this month.

Senior officials from Hamas and Fatah will meet again Saturday night in Gaza as part of consultations on the matter.

Al-Sha'er said the meeting is going to be conclusive.

Unlike the current government dominated by Hamas, the new one would not be controlled by political factions, said al-Sha'er.

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Hollow Visions of Palestine's Future: Peace will need more than David Grossman - or Uri Avnery

Jonathan Cook

David Grossman's widely publicized speech at the annual memorial rally for Yitzhak Rabin earlier this month has prompted some fine deconstruction of his "words of peace" from critics.

Grossman, one of Israel's foremost writers and a figurehead for its main peace movement, Peace Now, personifies the caring, tortured face of Zionism that so many of the country's apologists - in Israel and abroad, trenchant and wavering alike - desperately want to believe survives, despite the evidence of the Qanas, Beit Hanouns and other massacres committed by the Israeli army against Arab civilians. Grossman makes it possible to believe, for a moment, that the Ariel Sharons and Ehud Olmerts are not the real upholders of Zionism's legacy, merely a temporary deviation from its true path.
In reality, of course, Grossman draws from the same ideological well-spring as Israel's founders and its greatest warriors. He embodies the same anguished values of Labor Zionism that won Israel international legitimacy just as it was carrying out one of history's great acts of ethnic cleansing: the expulsion of some 750,000 Palestinians, or 80 per cent the native population, from the borders of the newly established Jewish state.

(Even critical historians usually gloss over the fact that the percentage of the Palestinian population expelled by the Israeli army was, in truth, far higher. Many Palestinians forced out during the 1948 war ended up back inside Israel's borders either because under the terms of the 1949 armistice with Jordan they were annexed to Israel, along with a small but densely populated area of the West Bank known as the Little Triangle, or because they managed to slip back across the porous border with Lebanon and Syria in the months following the war and hide inside the few Palestinian villages inside Israel that had not been destroyed.)

Remove the halo with which he has been crowned by the world's liberal media and Grossman is little different from Zionism's most distinguished statesmen, those who also ostentatiously displayed their hand-wringing or peace credentials as, first, they dispossessed the Palestinian people of most of their homeland; then dispossessed them of the rest; then ensured the original act of ethnic cleansing would not unravel; and today are working on the slow genocide of the Palestinians, through a combined strategy of their physical destruction and their dispersion as a people.

David Ben Gurion, for example, masterminded the ethnic cleansing of Palestine in 1948 before very publicly agonizing over the occupation of the West Bank and Gaza - even if only because of the demographic damage that would be done to the Jewish state as a result.

Golda Meir refused to recognize the existence of the Palestinian people as she launched the settlement enterprise in the occupied territories, but did recognize the anguish of Jewish soldiers forced to "shoot and cry" to defend the settlements. Or as she put it: "We can forgive you [the Palestinians] for killing our sons. But we will never forgive you for making us kill yours."

Yitzhak Rabin, Grossman's most direct inspiration, may have initiated a "peace process" at Oslo (even if only the terminally optimistic today believe that peace was really its goal), but as a soldier and politician he also personally oversaw the ethnic cleansing of Palestinian cities like Lid in 1948; he ordered tanks into Arab villages inside Israel during the Land Day protests of 1976, leading to the deaths of half a dozen unarmed Palestinian citizens; and in 1988 he ordered his army to crush the first intifada by "breaking the bones" of Palestinians, including women and children, who threw stones at the occupying troops.

Like them, Grossman conspires in these original war crimes by preferring to hold on to what Israel has, or even extend it further, rather than confront the genuinely painful truth of his responsibility for the fate of the Palestinians, including the hundreds of thousands of refugees and the millions of their descendants.

Every day that Grossman denies a Right of Return for the Palestinians, even as he supports a Law of Return for the Jews, he excuses and maintains the act of ethnic cleansing that dispossessed the Palestinian refugees more than half a century ago.

And every day that he sells a message of peace to Israelis who look to him for moral guidance that fails to offer the Palestinians a just solution - and that takes instead as its moral yardstick the primacy of Israel's survival as a Jewish state - then he perverts the meaning of peace.

Another Israeli peace activist, Uri Avnery, diagnoses the problem posed by Grossman and his ilk with acute insight in a recent article. Although Grossman wants peace in the abstract, Avnery observes, he offers no solutions as to how it might be secured in concrete terms and no clues about what sacrifices he or other Israelis will have to make to achieve it. His "peace" is empty of content, a mere rhetorical device.

Rather than suggest what Israel should talk about to the Palestinians' elected leaders, Grossman argues that Israel should talk over their heads to the "moderates," Palestinians with whom Israel's leaders can do business. The goal is to find Palestinians, any Palestinians, who will agree to Israel's "peace." The Oslo process in new clothes.

Grossman's speech looks like a gesture towards a solution only because Israel's current leaders do not want to speak with anybody on the Palestinian side, whether "moderate" or "fanatic." The only interlocutor is Washington, and a passive one at that.

If Grossman's words are as as "hollow" as those of Ehud Olmert, Avnery offers no clue as to reasons for the author's evasiveness. In truth, Grossman cannot deal in solutions because there is almost no constituency in Israel for the kind of peace plan that might prove acceptable even to the Palestinian "moderates" Grossman so wants his government to talk to.

Were Grossman to set out the terms of his vision of peace, it might become clear to all that the problem is not Palestinian intransigence.

Although surveys regularly show that a majority of Israelis support a Palestinian state, they are conducted by pollsters who never specify to their sampling audience what might be entailed by the creation of the state posited in their question. Equally the pollsters do not require from their Israeli respondents any information about what kind of Palestinian state each envisages. This makes the nature of the Palestinian state being talked about by Israelis almost as empty of content as the alluring word "peace."

After all, according to most Israelis, Gazans are enjoying the fruits of the end of Israel's occupation. And according to Olmert, his proposed "convergence" - a very limited withdrawal from the West Bank - would have established the basis for a Palestinian state there too.

When Israelis are asked about their view of more specific peace plans, their responses are overwhelmingly negative. In 2003, for example, 78 per cent of Israeli Jews said they favored a two-state solution, but when asked if they supported the Geneva Initiative - which envisions a very circumscribed Palestinian state on less than all of the West Bank and Gaza - only a quarter did so. Barely more than half of the supposedly leftwing voters of Labor backed the Geneva Initiative.

This low level of support for a barely viable Palestinian state contrasts with the consistently high levels of support among Israeli Jews for a concrete, but very different, solution to the conflict: "transfer," or ethnic cleansing. In opinion polls, 60 per cent of Israeli Jews regularly favor the emigration of Arab citizens from the as-yet-undetermined borders of the Jewish state.

So when Grossman warns us that "a peace of no choice" is inevitable and that "the land will be divided, a Palestinian state will arise," we should not be lulled into false hopes. Grossman's state is almost certainly as "hollow" as his audience's idea of peace.

Grossman's refusal to confront the lack of sympathy among the Israeli public for the Palestinians, or challenge it with solutions that will require of Israelis that they make real sacrifices for peace, deserves our condemnation. He and the other gurus of Israel's mainstream peace movement, writers like Amos Oz and A B Yehoshua, have failed in their duty to articulate to Israelis a vision of a fair future and a lasting peace.

So what is the way out of the impasse created by the beatification of figures like Grossman? What other routes are open to those of us who refuse to believe that Grossman stands at the very precipice before which any sane peace activist would tremble? Can we look to other members of the Israeli left for inspiration?

Uri Avnery again steps forward. He claims that there are only two peace camps in Israel: a Zionist one, based on a national consensus rooted in the Peace Now of David Grossman; and what he calls a "radical peace camp" led by ... well, himself and his group of a few thousand Israelis known as Gush Shalom.

By this, one might be tempted to infer that Avnery styles his own peace bloc as non-Zionist or even anti-Zionist. Nothing could be further from the truth, however. Avnery and most, though not all, of his supporters in Israel are staunchly in the Zionist camp.

The bottom line in any peace for Avnery is the continued existence and success of Israel as a Jewish state. That rigidly limits his ideas about what sort of peace a "radical" Israeli peace activist ought to be pursuing.

Like Grossman, Avnery supports a two-state solution because, in both their views, the future of the Jewish state cannot be guaranteed without a Palestinian state alongside it. This is why Avnery finds himself agreeing with 90 per cent of Grossman's speech. If the Jews are to prosper as a demographic (and democratic) majority in their state, then the non-Jews must have a state too, one in which they can exercise their own, separate sovereign rights and, consequently, abandon any claims on the Jewish state.

However, unlike Grossman, Avnery not only supports a Palestinian state in the abstract but a "just" Palestinian state in the concrete, meaning for him the evacuation of all the settlers and a full withdrawal by the Israeli army to the 1967 lines. Avnery's peace plan would give back east Jerusalem and the whole of the West Bank and Gaza to the Palestinians.

The difference between Grossman and Avnery on this point can be explained by their different understanding of what is needed to ensure the Jewish state's survival. Avnery believes that a lasting peace will hold only if the Palestinian state meets the minimal aspirations of the Palestinian people. In his view, the Palestinians can be persuaded under the right leadership to settle for 22 per cent of their historic homeland - and in that way the Jewish state will be saved.

Of itself, there is nothing wrong with Avnery's position. It has encouraged him to take a leading and impressive role in the Israeli peace movement for many decades. Bravely he has crossed over national confrontation lines to visit the besieged Palestinian leadership when other Israelis have shied away. He has taken a courageous stand against the separation wall, facing down Israeli soldiers alongside Palestinian, Israeli and foreign peace activists. And through his journalism he has highlighted the Palestinian cause and educated Israelis, Palestinians and outside observers about the conflict. For all these reasons, Avnery should be praised as a genuine peacemaker.

But there is a serious danger that, because Palestinian solidarity movements have misunderstood Avnery's motives, they may continue to be guided by him beyond the point where he is contributing to a peaceful solution or a just future for the Palestinians. In fact, that moment may be upon us.

During the Oslo years, Avnery was desperate to see Israel complete its supposed peace agreement with the Palestinian leader Yasser Arafat. As he often argued, he believed that Arafat alone could unify the Palestinians and persuade them to settle for the only two-state solution on the table: a big Israel, alongside a small Palestine.

In truth, Avnery's position was no so far from that of the distinctly unradical Oslo crowd of Rabin, Peres and Yossi Beilin. All four of them regarded Arafat as the Palestinian strongman who could secure Israel's future: Rabin hoped Arafat would police the Palestinians on Israel's behalf in their ghettoes; while Avnery hoped Arafat would forge a nation, democratic or otherwise, that would contain the Palestinians' ambitions for territory and a just solution to the refugee problem.

Now with Arafat gone, Avnery and Gush Shalom have lost their ready-made solution to the conflict. Today, they still back two states and support engagement with Hamas. They have also not deviated from their long-standing positions on the main issues - Jerusalem, borders, settlements and refugees - even if they no longer have the glue, Arafat, that was supposed to make it all stick together.

But without Arafat as their strongman, Gush Shalom have no idea about how to address the impending issues of factionalism and potential civil war that Israel's meddling in the Palestinian political process are unleashing.

They will also have no response if the tide on the Palestinian street turns against the two-state mirage offered by Oslo. If Palestinians look for other ways out of the current impasse, as they are starting to do, Avnery will quickly become an obstacle to peace rather than its great defender.

In fact, such a development is all but certain. Few knowledgeable observers of the conflict believe the two-state solution based on the 1967 lines is feasible any longer, given Israel's entrenchment of its settlers in Jerusalem and the West Bank, now numbering nearly half a million. Even the Americans have publicly admitted that most of the settlements cannot be undone. It is only a matter of time before Palestinians make the same calculation.

What will Avnery, and the die-hards of Gush Shalom, do in this event? How will they respond if Palestinians start to clamor for a single state embracing both Israelis and Palestinians, for example?

The answer is that the "radical" peaceniks will quickly need to find another solution to protect their Jewish state. There are not too many available:

- There is the "Carry on with the occupation regardless" of Binyamin Netanyahu and Likud;

- There is the "Seal the Palestinians into ghettoes and hope eventually they will leave of their own accord," in its Kadima (hard) and Labor (soft) incarnations;

- And there is the "Expel them all" of Avigdor Lieberman, Olmert's new Minister of Strategic Threats.

Paradoxically, a variation on the last option may be the most appealing to the disillusioned peaceniks of Gush Shalom. Lieberman has his own fanatical and moderate positions, depending on his audience and the current realities. To some he says he wants all Palestinians expelled from Greater Israel so that it is available only for Jews. But to others, particularly in the diplomatic arena, he suggests a formula of territorial and population swaps between Israel and the Palestinians that would create a "Separation of Nations." Israel would get the settlements back in return for handing over some small areas of Israel, like the Little Triangle, densely populated with Palestinians.

A generous version of such an exchange - though a violation of international law - would achieve a similar outcome to Gush Shalom's attempts to create a viable Palestinian state alongside Israel. Even if Avnery is unlikely to be lured down this path himself, there is a real danger that others in the "radical" peace camp will prefer this kind of solution over sacrificing their commitment at any price to the Jewish state.

But fortunately, whatever Avnery claims, his peace camp is not the only alternative to the sham agonizing of Peace Now. Avnery is no more standing at the very edge of the abyss than Grossman. The only abyss Avnery is looking into is the demise of his Jewish state.

Other Zionist Jews, in Israel and abroad, have been grappling with the same kinds of issues as Avnery but begun to move in a different direction, away from the doomed two-state solution towards a binational state. A few prominent intellectuals like Tony Judt, Meron Benvenisti and Jeff Halper have publicly begun to question their commitment to Zionism and consider whether it is not part of the problem rather than the solution.

They are not doing this alone. Small groups of Israelis, smaller than Gush Shalom, are abandoning Zionism and coalescing around new ideas about how Israeli Jews and Palestinians might live peacefully together, including inside a single state. They include Taayush, Anarchists Against the Wall, Zochrot and elements within the Israeli Committee against House Demolitions and Gush Shalom itself.

Avnery hopes that his peace camp may be the small wheel that can push the larger wheel of organizations like Peace Now in a new direction and thereby shift Israeli opinion towards a real two-state solution. Given the realities on the ground, that seems highly unlikely. But one day, wheels currently smaller than Gush Shalom may begin to push Israel in the direction needed for peace.

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Bernard-Henri LÚvy: I believe in America

Published: 19 November 2006
Andrew Mueller
The Independent

He may look like the neocons' idea of a cheese-eating surrender monkey, but, the French intellectual tells Andrew Mueller, the land of George Bush - the subject of his latest book - has much to teach old Europe

Bernard-Henri LÚvy is French in the way that Steve Irwin was Australian: a defiantly bold fulfilment of every popular stereotype of his homeland. He is, for a start, a philosopher. He is married, obviously, to a film star, Arielle Dombasle, into whose arms he journeyed, inevitably, through a famously tumultuous romantic history (she's his third wife). He enjoys an existence of splendid luxury, inheritor of a family fortune that pays for an apartment in Paris and a castle in Marrakesh.
He saunters into the London hotel lobby dressed in an oddly styled dinner suit, under which, it is impossible to avoid noticing, he wears no shirt. His hair gives the impression of arriving at its state of distracted derangement through assiduous attention. He wears sunglasses indoors, possibly forgetting that he is not in France, where he is a superstar of Beckhamesque proportions, known by the brand identity BHL.

He gesticulates, extravagantly, while maintaining a patter of cascading rhetorical questions riddled with grand ideas and arcane references, and punctuated with haughty snorts. One may expect that Bernard-Henri LÚvy would require only a mouthful of brie and a white flag to conform to the resonant American neo-con dismissal of his countryfolk as snivelling, decadent, treacherous, cheese-eating surrender monkeys. One would be wrong.

"I breathe better in America," he declares, "than in a lot of the so-called old Europe, yes."

LÚvy's love for, and faith in, America, and his despondent disgust with those who turn reflexively against it, are crucial themes of his new book, American Vertigo. It is a re-imagining of a previous French quest to take America's pulse - the peregrinations of Alexis de Tocqueville in 1831, which resulted in Democracy In America.

Like his predecessor, LÚvy met people ordinary and extraordinary. Like De Tocqueville, he was appalled by the worst of America - its jails, its inequality - but LÚvy seems to have been more invigorated by its promise. "I know of no country," De Tocqueville harrumphed, "in which there is so little independence of mind and real freedom of discussion." "In the sheer fact of being American," counters LÚvy in American Vertigo, "or at least in expressing yourself like one and wanting to be one, there is a gentleness, a lightness, an element of freedom and, in a word, of civilisation."

The real point of American Vertigo, however, is not LÚvy's critique of America, but his criticism of those who criticise it. He styles himself an "anti-anti-American" and reserves his most formidable fury for those who, especially since 9/11, have proceeded from the assumption that if America does something, then that something must be stupid, devious or evil.

"I was so disgusted," he says, "by this tide of anti-Americanism sweeping across the world, becoming a new religion for our time." Or, to borrow August Bebel's immortal description of anti-Semitism, a new socialism of fools. "Le socialisme des imbÚciles, absolutely. I was looking for the occasion to reply to that, and the best replies are not the ideological ones. The best replies are the replies of reality."

LÚvy radiates especial bewilderment at the behaviour of Noam Chomsky and Harold Pinter. Of the latter, it is not widely enough appreciated that his loathing for America once inspired him to man the corner of a war criminal, as part of the International Committee to Defend Slobodan Milosevic.

"I'm sure he [Pinter] was not in consciousness in favour of genocide. I'm sure he had no personal hate for babies killed in Sarajevo, but Milosevic was the enemy of America," he says. "Harold Pinter is a great writer, but this is pitiful. He dishonours himself, and what induced this dishonour? This red flag, which is the image of America. Like the bull, he went, and he went into the wall."

Does it matter, though? Isn't this just the irrelevant quacking of the same buffoons who used to make excuses for the USSR? "Of course, it matters," says LÚvy, with another sweep of forearm. "Because there are many in England and France who are ready to go into that wall, in tolerance of terrorism and Islamism, for that reason. If I say my main enemy is America, I'm sure I will have a big bunch of people in England and France applauding me. This anti-Americanism makes people blind and deaf."

But LÚvy has little time for George Bush, and opposed the invasion of Iraq - although he qualifies this, almost as if he fears echoing the playground chants of the reactionary America-haters. "America's last four wars," he says, "were against tyrants - in Bosnia, Kosovo, Afghanistan, and whatever you thought about the invasion of Iraq, which I was against, it was against a tyranny. It was morally right, but politically wrong."

For a French philosopher, LÚvy talks a remarkable and bracing amount of common sense.At 56, can he still muster the enthusiasm for confronting mankind's manias? "Appetite I have," he says, "strength I have, occasions I will have. I am a philosopher. There is, as Husserl said, la grande colŔre, the big anger. If you don't make yourself available to hear this anger, you don't understand a lot of the world. For me, philosophy is that."

Comment from Jeff Blankfort: Contrary to the article's comments, Bernard-Henri LÚvy is not the fulfillment of the stereotype of the French intellectual, but is rather, the epitmome of the spoiled, disgusting. self-loving Zionist intellectual.

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Iraq Invasion Rationale Unravels

Blair admits Iraq 'a disaster'


Tony Blair, the British prime minister, has admitted in an interview with Al Jazeera English that events in Iraq since the US-led invasion have been a "disaster".

But he insisted it was right to remove Saddam Hussein, the country's former leader, from power and he blamed al-Qaeda, Sunni fighters and Iran-backed forces for the ongoing violence.

Responding to a suggestion from Sir David Frost that the conflict had been a disaster from the start, Blair replied "it has", before blaming a combination of factors for the crisis.

In a wide-ranging interview, he also said Iran and Syria could play a constructive role in the Middle East.

Blair stressed the importance of progress in the Middle East peace process, and also in winning the US-led "war on terror".

'Deliberate strategy'

Speaking on the Frost Over the World programme, Frost suggested that since the 2003 invasion of Iraq events there had been "pretty much of a disaster".

Read the full transcript of Blair's interview with David Frost here.

Blair replied: "It has, but you see what I say to people is why is it difficult in Iraq?

"It's not difficult because of some accident in planning, it's difficult because there's a deliberate strategy - al-Qaeda with Sunni insurgents on one hand, Iranian-backed elements with Shia militias on the other - to create a situation in which the will of the majority for peace is displaced by the will of the minority for war."

A Downing Street spokesperson later said Blair's views had been misrepresented in the interview, and the UK leader had simply acknowledged the question when he agreed with Frost's suggestion.

"The prime minister does not use the word disaster," the spokesperson said.

"What he does is set out that the violence in Iraq is of course hugely regrettable, tragic and very difficult, but that this violence is a result of malicious external intervention, not some planning error three years ago."

Blair also called for greater involvement of Iran and Syria - once described by George Bush as the "axis of evil" - in resolving the Middle East impasse.

He said: "We have to go out there, ourselves and the Americans, and say we are not against you because we believe we should decide who governs Iran or we should decide who governs Syria.

"What we're saying to you is very clear ... If you are prepared to be part of the solution there is a partnership available to you, but at the moment ... you are behaving in such a way that makes a partnership impossible."

He rejected claims that talking to Iran and Syria amounted to "appeasement".

Blair insisted progress in the Middle East would send a signal that westerners and Christians were not in conflict with Muslims.

"It was a battle between all those who believe in tolerance, in living together in harmony, in a non sectarian future against those who want to divide us."

Blair also urged Iran and Syria to do more to curb the violence in Iraq but said that the two "have different interests in the region."

'Same page'

He said: "We have to go out there, ourselves and the Americans, and say we are not against you because we believe we should decide who governs Iran or we should decide who governs Syria.

"What we're saying to you is very clear ... If you are prepared to be part of the solution there is a partnership available to you, but at the moment ... you are behaving in such a way that makes a partnership impossible."

"[Iraq is] not difficult because of some accident in planning"

Tony Blair, British prime minister

Send us your views

Blair has previously committed himself to bringing peace to the Middle East, but during the interview he did not immediately endorse a new peace proposal initiated by France and Spain.

"It's good to have everyone on the same page but its really about making sure that we make progress to the two-state solution," he said.

He said it was vital that the international community "manages to get into a situation where we are negotiating about the details of peace rather than looking at the appalling consequences of conflict".

The British prime minister has been in office for nine years and is expected to step down within months.

Blair's legacy

Blair has said that he wants a new peace deal in the Middle East to be his legacy and warned that the greatest challenge facing with world now was "religious extremism".

"The fundamental political difference is less to do with the traditional left-right politics ... it is whether countries are open, whether they are tolerant, whether they embrace people of different views and different faiths or whether they are closed societies," he said.

Marwan Qabalan, a political analyst from the University of Damascus in Syria, told Al Jazeera that Tony Blair's interview contained many contradictions and indicated that Britain and the US needed to decide on a common policy towards Syria and Iran.

He said: "It might be in the end that they [Britain and the US] have to decide if Syria and Iran are supporting the insurgency or whether Syria and Iran have real influence in Iraq, so that they can be getting involved in the political process to stabilise that country [Iraq]."

Comment: "The Iraq invasion was a disaster, but it wasn't my fault", says Blair, even though it was Blair and Bush (at the behest of Israeli Zionist politicians) who invaded Iraq, murdered 655,000 Iraqis and destroyed their society. Makes sense to us! How about you?

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War Pimp Kissinger: Iraq military win impossible

Associated Press
Sun Nov 19, 2006

LONDON - Military victory is no longer possible in
Iraq, former Secretary of State Henry Kissinger said in a television interview broadcast Sunday.

Kissinger presented a bleak vision of Iraq, saying the U.S. government must enter into dialogue with Iraq's regional neighbors - including Iran - if progress is to be made in the region.
"If you mean by 'military victory' an Iraqi government that can be established and whose writ runs across the whole country, that gets the civil war under control and sectarian violence under control in a time period that the political processes of the democracies will support, I don't believe that is possible," he told the British Broadcasting Corp.

But Kissinger, an architect of the Vietnam war who has advised President Bush about Iraq, warned against a rapid withdrawal of coalition troops, saying it could destabilize Iraq's neighbors and cause a long-lasting conflict.

"A dramatic collapse of Iraq - whatever we think about how the situation was created - would have disastrous consequences for which we would pay for many years and which would bring us back, one way or another, into the region," he said.

Kissinger, whose views have been sought by the Iraqi Study Group, led by former Secretary of State James Baker III, called for an international conference bringing together the permanent members of the United Nations Security Council, Iraq's neighbors - including Iran - and regional powers like India and Pakistan to work out a way forward for the region.

"I think we have to redefine the course, but I don't think that the alternative is between military victory, as defined previously, or total withdrawal," he said.

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Embittered Insiders Turn Against Bush

By Peter Baker
Washington Post
Sunday, November 19, 2006

The weekend after the statue of Saddam Hussein fell, Kenneth Adelman and a couple of other promoters of the Iraq war gathered at Vice President Cheney's residence to celebrate. The invasion had been the "cakewalk" Adelman predicted. Cheney and his guests raised their glasses, toasting President Bush and victory. "It was a euphoric moment," Adelman recalled.

Forty-three months later, the cakewalk looks more like a death march, and Adelman has broken with the Bush team. He had an angry falling-out with Defense Secretary Donald H. Rumsfeld this fall. He and Cheney are no longer on speaking terms. And he believes that "the president is ultimately responsible" for what Adelman now calls "the debacle that was Iraq."
Adelman, a former Reagan administration official and onetime member of the Iraq war brain trust, is only the latest voice from inside the Bush circle to speak out against the president or his policies. Heading into the final chapter of his presidency, fresh from the sting of a midterm election defeat, Bush finds himself with fewer and fewer friends. Some of the strongest supporters of the war have grown disenchanted, former insiders are registering public dissent and Republicans on Capitol Hill blame him for losing Congress.

A certain weary crankiness sets in with any administration after six years. By this point in Bill Clinton's tenure, bitter Democrats were competing to denounce his behavior with an intern even as they were trying to fight off his impeachment. Ronald Reagan was deep in the throes of the Iran-contra scandal. But Bush's strained relations with erstwhile friends and allies take on an extra edge of bitterness amid the dashed hopes of the Iraq venture.

"There are a lot of lives that are lost," Adelman said in an interview last week. "A country's at stake. A region's at stake. This is a gigantic situation. . . . This didn't have to be managed this bad. It's just awful."

The sense of Bush abandonment accelerated during the final weeks of the campaign with the publication of a former aide's book accusing the White House of moral hypocrisy and with Vanity Fair quoting Adelman, Richard N. Perle and other neoconservatives assailing White House leadership of the war.

Since the Nov. 7 elections, Republicans have pinned their woes on the president.

"People expect a level of performance they are not getting," former House speaker Newt Gingrich (R-Ga.) said in a speech. Many were livid that Bush waited until after the elections to oust Rumsfeld.

"If Rumsfeld had been out, you bet it would have made a difference," Sen. Arlen Specter (R-Pa.) said on television. "I'd still be chairman of the Judiciary Committee."

And so, in what some saw as a rebuke, Senate Republicans restored Trent Lott (Miss.) to their leadership four years after the White House helped orchestrate his ouster, with some saying they could no longer place their faith entirely in Bush.

Some insiders said the White House invited the backlash. "Anytime anyone holds themselves up as holy, they're judged by a different standard," said David Kuo, a former deputy director of the Bush White House's faith-based initiatives who wrote "Tempting Faith," a book that accused the White House of pandering to Christian conservatives. "And at the end of the day, this was a White House that held itself up as holy."

Richard N. Haass, a former top Bush State Department official and now president of the Council on Foreign Relations, said a radically different approach to world affairs naturally generates criticism. "The emphasis on promotion of democracy, the emphasis on regime change, the war of choice in Iraq -- all of these are departures from the traditional approach," he said, "so it's not surprising to me that it generates more reaction."

The willingness to break with Bush also underscores the fact that the president spent little time courting many natural allies in Washington, according to some Republicans. GOP leaders in Congress often bristled at what they perceived to be a do-what-we-say approach by the White House. Some of those who did have more personal relationships with Bush, Cheney or Rumsfeld came to feel the sense of disappointment more acutely because they believed so strongly in the goals the president laid out for his administration.

The arc of Bush's second term has shown that the most powerful criticism originates from the inside. The pragmatist crowd around Colin L. Powell began speaking out nearly two years ago after he was eased out as secretary of state. Powell lieutenants such as Haass, Richard L. Armitage, Carl W. Ford Jr. and Lawrence B. Wilkerson took public the policy debates they lost on the inside. Many who worked in Iraq returned deeply upset and wrote books such as "Squandered Victory" (Larry Diamond) and "Losing Iraq" (David L. Phillips). Military and CIA officials unloaded after leaving government, culminating in the "generals' revolt" last spring when retired flag officers called for Rumsfeld's dismissal.

On the domestic side, Bush allies in Congress, interest groups and the conservative media broke their solidarity with the White House out of irritation over a number of issues, including federal spending, illegal immigration, the Supreme Court nomination of Harriet Miers, the response to Hurricane Katrina and the Dubai Ports World deal.

Most striking lately, though, has been the criticism from neoconservatives who provided the intellectual framework for Bush's presidency. Perle, Adelman and others advocated a robust use of U.S. power to advance the ideals of democracy and freedom, targeting Hussein's Iraq as a threat that could be turned into an opportunity.

In an interview last week, Perle said the administration's big mistake was occupying the country rather than creating an interim Iraqi government led by a coalition of exile groups to take over after Hussein was toppled. "If I had known that the U.S. was going to essentially establish an occupation, then I'd say, 'Let's not do it,' " and instead find another way to target Hussein, Perle said. "It was a foolish thing to do."

Perle, head of the Pentagon's Defense Policy Board at the time of the 2003 invasion, said he still believes the invasion was justified. But he resents being called "the architect of the Iraq war," because "my view was different from the administration's view from the very beginning" about how to conduct it. "I am not critical now of anything about which I was not critical before," he said. "I've said it more publicly."

White House officials tend to brush off each criticism by claiming it was over-interpreted or misguided. "I just fundamentally disagree," Cheney said of the comments by Perle, Adelman and other neoconservatives before the midterm elections. Others close to the White House said the neoconservatives are dealing with their own sense of guilt over how events have turned out and are eager to blame Bush to avoid their own culpability.

Joshua Muravchik, a neoconservative at the American Enterprise Institute, said he is distressed "to see neocons turning on Bush" but said he believes they should admit mistakes and openly discuss what went wrong. "All of us who supported the war have to share some of the blame for that," he said. "There's a question to be sorted out: whether the war was a sound idea but very badly executed. And if that's the case, it appears to me the person most responsible for the bad execution was Rumsfeld, and it means neocons should not get too angry at Bush about that."

It may also be, he said, that the mistake was the idea itself -- that Iraq could serve as a democratic beacon for the Middle East. "That part of our plan is down the drain," Muravchik said, "and we have to think about what we can do about keeping alive the idea of democracy."

Few of the original promoters of the war have grown as disenchanted as Adelman. The chief of Reagan's arms control agency, Adelman has been close to Cheney and Rumsfeld for decades and even worked for Rumsfeld at one point. As a member of the Defense Policy Board, he wrote in The Washington Post before the Iraq war that it would be "a cakewalk."

But in interviews with Vanity Fair, the New Yorker and The Post, Adelman said he became unhappy about the conduct of the war soon after his ebullient night at Cheney's residence in 2003. The failure to find weapons of mass destruction disturbed him. He said he was disgusted by the failure to stop the looting that followed Hussein's fall and by Rumsfeld's casual dismissal of it with the phrase "stuff happens." The breaking point, he said, was Bush's decision to award Medals of Freedom to occupation chief L. Paul Bremer, Gen. Tommy R. Franks and then-CIA Director George J. Tenet.

"The three individuals who got the highest civilian medals the president can give were responsible for a lot of the debacle that was Iraq," Adelman said. All told, he said, the Bush national security team has proved to be "the most incompetent" of the past half-century. But, he added, "Obviously, the president is ultimately responsible."

Adelman said he remained silent for so long out of loyalty. "I didn't want to bad-mouth the administration," he said. In private, though, he spoke out, resulting in a furious confrontation with Rumsfeld, who summoned him to the Pentagon in September and demanded his resignation from the defense board.

"It seemed like nobody was getting it," Adelman said. "It seemed like everything was locked in. It seemed like everything was stuck." He agrees he bears blame as well. "I think that's fair. When you advocate a policy that turns bad, you do have some responsibility."

Most troubling, he said, are his shattered ideals: "The whole philosophy of using American strength for good in the world, for a foreign policy that is really value-based instead of balanced-power-based, I don't think is disproven by Iraq. But it's certainly discredited."

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McCain says more troops needed in Iraq

Associated Press
November 19, 2006

WASHINGTON - Without additional troops to ensure victory in
Iraq, the U.S. could find itself more vulnerable to terrorist attacks at home, Sen. John McCain said Sunday.
Taking the opposite tack, newly empowered Democrats pressed their case for a phased withdrawal of American forces. They hoped a blue-ribbon advisory panel would propose a way ahead for Iraq, while making clear the U.S. military mission shouldn't last indefinitely.

McCain, a front-running GOP presidential hopeful for 2008, said the U.S. must send an overwhelming number of troops to stabilize Iraq or face more attacks - in the region and possibly on American soil.

"I believe the consequences of failure are catastrophic," said McCain, R-Ariz. "It will spread to the region. You will see Iran more emboldened. Eventually, you could see Iran pose a greater threat to the state of Israel."

With about 141,000 U.S. troops in Iraq more than 3 1/2 years into the war, the American military has strained to provide enough forces while allowing for adequate rest and retraining between deployments.

But McCain, who spent 5 1/2 years as a prisoner of war after his Navy plane was shot down in 1967, recalled the Vietnam War's lessons. "We left Vietnam. It was over. We just had to heal the wounds of war," he said. "We leave this place, chaos in the region, and they'll follow us home. So there's a great deal more at stake here in this conflict, in my view, a lot more."

McCain said he based his judgment partly on the writings of Abu Musab al-Zarqawi, the al-Qaida leader in Iraq who was killed in a U.S. air raid, and of Osama bin Laden.

"The consequences of failure are so severe that I will exhaust every possibility to try to fix this situation. Because it's not the end when American troops leave. The battleground shifts, and we'll be fighting them again," McCain said. "You read Zarqawi, and you read bin Laden. ... It's not just Iraq that they're interested in. It's the region, and then us."

Sen. Joseph Biden, the incoming chairman of the Senate Foreign Relations Committee, said he hoped a special commission considering options for the way ahead in Iraq would assert that U.S. troop commitments are not open-ended; propose a clear political road map for Iraq; and recommend engaging Iraq's neighbors in a political solution.

"We are past the point of adding more troops. We are past the point of vague policy prescriptions. It is not an answer just to stay. Nor is it an answer - though it may become a necessity - just to go with no concern for what follows," Biden, D-Del., wrote in Sunday's Washington Post.

"The fundamental question we must answer is whether, as we begin to leave Iraq, there are still concrete steps we can take to avoid leaving chaos behind," said Biden, who plans to run for president in 2008.

Democrats poised to take control of the House and Senate are pressing for a substantial reduction of U.S. troops in Iraq and a timetable for their withdrawal, as a way of forcing the Iraq government to rely more on itself.

"We must tell the Iraqis that we would begin, starting in four to six months, a phased reduction of our troops," said Sen. Carl Levin, D-Mich., the incoming chairman of the Senate Armed Services Committee. "Because if you don't do that, they're going to continue to have the false assumption that we are there in some kind of an open-ended way. And it is that assumption on their part that takes them off the hook."

Incoming House Majority Leader Steny Hoyer, D-Md., agreed. "As a practical matter, there are no troops to increase with," he said. "Our objective was to remove Saddam Hussein and create an environment in which a democracy could be established. That has been done."

But Hoyer said Democrats would continue funding the existing troop levels, for the time being.

"That's not an option, of not supporting our troops in the field and making sure they're as safe as we can make them," he said. "Very frankly, their lack of numbers exposes them on a daily basis to danger and death, unfortunately. But clearly, we're going to have discussions going forward as to how we change this policy and change it in the short term, not the long term."

Gen. John Abizaid, the top U.S. commander for the Middle East, told the Senate Armed Services Committee last week he believes troop levels should remain steady for now. He said it was possible to add 20,000 troops for a short time, but it would be unrealistic to raise troop levels as proposed by McCain and Sen. Lindsey Graham, R-S.C.

Abizaid said the American military in Iraq is stretched too thin already, and sending over a bigger, more permanent presence would undercut efforts to force Iraqis to take on more responsibility.

Sen. John Kerry, D-Mass., said he thinks U.S. generals have been put "in a a very, very difficult position."

"What I don't have confidence in is the policy. And General Abizaid is giving us a diagnosis that is based on the current policy. But that policy has to change, and it can change," said Kerry, who is considering a White House bid in 2008.

Kerry spoke on "Fox News Sunday," while McCain and Hoyer appeared on ABC's "This Week." Levin spoke on CNN's "Late Edition." Graham appeared on "Face the Nation" on CBS.

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Iraqi deputy health minister survives assassination in Baghdad

www.chinaview.cn 2006-11-20 19:03:24

BAGHDAD, Nov. 20 (Xinhua) -- Iraqi deputy Health Minister survived assassination attempt in central Baghdad on Monday, killing two of his bodyguards, a ministry source said.

"Unknown gunmen attacked the convoy of Hakim al-Zamili, deputy of health Ministry, in Bab al-Mu'adham area killing two of his bodyguards, but the minister escaped unhurt," an official from the ministry told Xinhua.
Late on Sunday, Ammar Assafar another health ministry deputy was kidnapped when gunmen wearing police uniforms stormed his house in Baghdad's northern district of Adhamiyah.

Earlier in the day, the Iraqi minister of state, Mohammed Abbas Auraibi, survived a roadside bomb explosion targeted his convoy on a highway in eastern Baghdad, wounding two of his bodyguards.

Insurgents frequently attack Iraqi government senior officials along with Iraqi security forces, accusing them of collaborating with U.S. occupation.

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Hemophilia drug used on GIs labeled risk

Sat Nov 18, 3:24 PM ET

BALTIMORE - A blood-coagulating drug designed to treat rare forms of hemophilia is being used on critically wounded U.S. troops in Iraq despite evidence it can cause clots that lead to strokes, heart attacks and death in other patients, The (Baltimore) Sun reported for Sunday's editions.

Recombinant Activated Factor VII, which is made by Danish pharmaceutical company Novo Nordisk, is approved in the United States for treating forms of hemophilia that affect fewer than 3,000 Americans. It costs $6,000 a dose.
The Food and Drug Administration said in a warning last December that giving Factor VII to patients who don't have the blood disorder could cause strokes and heart attacks. Its researchers published a study in January blaming 43 deaths on clots that developed after injections of Factor VII.

However, the Army medical command considers it a medical breakthrough that gives front-line physicians a way to control deadly bleeding. Physicians in Iraq have injected it into more than 1,000 patients, reported The Sun, which makes its first Sunday edition available Saturday afternoon.

"When it works, it's amazing," said Col. John B. Holcomb, an Army trauma surgeon and commander of the Army's Institute of Surgical Research. "It's one of the most useful new tools we have."

Critics strongly disagree.

"It's a completely irresponsible and inappropriate use of a very, very dangerous drug," said Dr. Jawed Fareed, director of the hemostasis and thrombosis research program at Loyola University in Chicago and a specialist in blood-clotting and blood-thinning medications.

Military doctors said patients requiring transfusions of 10 or more units of blood have a 25 percent to 50 percent chance of dying from their injuries, and there is enough evidence of the drug's effectiveness to continue promoting its use.

"I've seen it with my own eyes," said Air Force Lt. Col. Jeffrey Bailey, a trauma surgeon deployed this summer as senior physician at the American military hospital in Balad, Iraq. "Patients who are hemorrhaging to death, they get the drug and it stops. Factor VII saves their lives."

However, doctors at military hospitals in Germany and the United States have reported unusual and sometimes fatal blood clots in soldiers evacuated from Iraq, including unexplained strokes, heart attacks and pulmonary embolisms, or blood clots in the lungs. And some have begun to suspect Factor VII, The Sun reported.

Contacted Saturday by The Associated Press, an Army spokeswoman, Mary Ann Hodges, declined to comment immediately on the report because she had not seen it.

Doctors say determining the precise cause of blood clots is rarely possible, making it difficult to establish definitively whether Factor VII is responsible for complications. And military doctors caution against drawing any conclusions from individual cases.

Officials at Novo Nordisk said complications don't mean the drug is too dangerous to use.

"It's really not a question of an absolute safety level, but rather a ratio of benefit to risk that has to be established," said Dr. Michael Shalmi, vice president of biopharmaceuticals for Novo Nordisk.

"We're making decisions, in the middle of a war, with the best information we have available to us," said Holcomb at the Army's Institute of Surgical Research.

Comment: It never ceases to amaze me, the countless ways the phamaceutical industry will go to promote expensive drugs! "$6000. a dose"?"

It stops the bloodflow immediately, and then kills the soldiers who don't suffer from the specific form of hemophilia it treats after they leave the country. Another boffo way to keep the official stats on US deaths in Iraq to a minimum.

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The "War On Terror" Is A Farce

CIA analysis finds no Iranian nuclear weapons drive: report

19 November 2006

WASHINGTON - A classified draft CIA assessment has found no firm evidence of a secret drive by Iran to develop nuclear weapons, as alleged by the White House, a top US investigative reporter said on Saturday.

Seymour Hersh, writing in an article for the November 27 issue of the magazine The New Yorker released in advance, reported on whether the administration of Republican President George W. Bush was more, or less, inclined to attack Iran after Democrats won control of Congress last week.
A month before the November 7 legislative elections, Hersh wrote, Vice President Dick Cheney attended a national-security discussion that touched on the impact of Democratic victory in both chambers on Iran policy.

"If the Democrats won on November 7th, the vice president said, that victory would not stop the administration from pursuing a military option with Iran," Hersh wrote, citing a source familiar with the discussion.

Cheney said the White House would circumvent any legislative restrictions "and thus stop Congress from getting in its way," he said.

The Democratic victory unleashed a surge of calls for the Bush administration to begin direct talks with Iran.

But the administration's planning of a military option was made "far more complicated" in recent months by a highly classified draft assessment by the Central Intelligence Agency "challenging the White House's assumptions about how close Iran might be to building a nuclear bomb," he wrote.

"The CIA found no conclusive evidence, as yet, of a secret Iranian nuclear-weapons program running parallel to the civilian operations that Iran has declared to the International Atomic Energy Agency," Hersh wrote, adding the CIA had declined to comment on that story.

A current senior intelligence official confirmed the existence of the CIA analysis and said the White House had been hostile to it, he wrote.

Cheney and his aides had discounted the assessment, the official said.

"They're not looking for a smoking gun," the official was quoted as saying, referring to specific intelligence about Iranian nuclear planning.

"They're looking for the degree of comfort level they think they need to accomplish the mission."

The United States and other major powers believe Iran's uranium enrichment program is ultimately aimed at producing fissile material for nuclear weapons.

Iran insists it will use the enriched uranium only to fuel nuclear power stations, something it is permitted to do as a signatory to the nuclear Non-Proliferation Treaty.

The major powers have been debating a draft United Nations resolution drawn up by Britain, France and Germany that would impose limited sanctions on Iran's nuclear and ballistic missile sectors for Tehran's failure to comply with an earlier UN resolution on halting enrichment.

On Wednesday, Israel's outgoing US ambassador Danny Ayalon said in an interview that Bush would not hesitate to use force against Iran to halt its nuclear program if other options failed.

"US President George W. Bush will not hesitate to use force against Iran in order to halt its nuclear program," Ayalon told the Maariv daily.

Israel, widely considered the Middle East's sole if undeclared nuclear power, views Iran as its arch-foe, pointing to repeated calls by President Mahmoud Ahmadinejad to wipe the Jewish state off the map.

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Former Mossad chief: Iran cannot destroy Israel


Former head of the Mossad, Ephraim Halevy, said on Sunday that Iran would never be able to destroy Israel and that its efforts to develop nuclear capabilities were not an existential threat, Israel Radio reported.

Speaking at an international law convention in Budapest, Halevy said that Israel has a number of ways to deal with an Iranian nuclear threat.

Comment: Emmm....correct us if we are wrong here, but doesn't this pull the rug out from under the whole "Iran is a threat to Israel and the entire Western world"? If Iran does not even have the capability to destroy little Israel, then what threat can it possibly be? Put this together with the next article and we have proof conclusive of the entirely fictitious nature of the "war on terror".

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War on terror 'could last 30 years'

November 20, 2006

There is "every prospect" of the "War on Terror" lasting for 30 years or more, a global security think tank has said.

The Oxford Research Group report said recent political changes in the US would make "very little difference" to the conflicts in Iraq and Afghanistan.

In the US midterm elections, the Democrats seized control of both houses of Congress from the Republicans. The report said the United States was now faced with a dilemma. If it withdraws from Iraq, jihadist groups could operate "without restraint" in this "important oil-bearing region".

But if it decided to stay, US soldiers could become an increasing "magnet" for radical groups, with Iraq turning into a training ground for new generations of paramilitaries.
Written by Professor Paul Rogers, ORG's global security consultant and professor of Peace Studies at the University of Bradford, the report analysed the past year of events in Iraq and the Middle East, looking at how the war on terror had transformed into what has been called the "Long War" by the Bush Administration.

It said the "fundamental mistake" was to rid Iraq of Saddam Hussein's regime by force, as it provided a "gift" to groups such as al Qaida by "inserting 150,000 American troops into the heart of the Arab world as what is seen across the region as an occupying force".

The 2006 International Security Report; Into the Long War, concluded that oil reserves in the Persian Gulf remained of "enduring importance", with the US and China increasingly relying on the region. This meant that it would be "entirely unacceptable for the United States to consider withdrawal from Iraq, no matter how insecure the environment".

What was needed was a complete reassessment of current policies, the report said. However, Prof Rogers' said this was unlikely to happen, because even with the Democrats now controlling both houses, there was virtually no commitment to full withdrawal from Iraq.

Instead, Prof Rogers' report found that while there were various moves to modify policy, such as withdrawing from the cities and maintaining a presence in a few bases, nothing amounted to substantial change.

Commenting on the changes needed, Prof Rogers said: "Most people believe that the recent elections mark the beginning of the end of the Bush era, but that does not apply to the war on terror. In reality there will be little change until the United States faces up to the need for a fundamental rethink of its policies. So far, even with the election results, there is no real sign of that."

Comment: Wow! A think tank that can, at least to some extent, see a little piece of reality. Sadly however, this particular groupings understanding of the reasons for the war on terror are seriously lacking. What logic is there in the claim that the Iraq invasion was based "enduring importance" of oil reserves in the Persian Gulf? Persian Gulf oil had been of enduring importance for the previous 100 years! So what changed? Was some nation state threatening to take control of it and deprive the US? There is no evidence for such a belief. The most reasonable explanation revolves around the concept of power for power's sake. As China and Russia grew in power and influence over the past 15 years, the cabal of psychopaths who control the US government understood that they heyday of US global dominance was coming to an end. Rather than accept this fact and a reduction in American global influence, they decided a preemptive oil grab was in order to ensure that America stayed on top through the use of the threat of turning off the taps. Of course, we cannot discount the other important aspect of an upcoming spate of natural cataclysms that threaten to unpredictably readjust the global power structure. Earthquakes, Volcanoes even Meteors may come and go, but civilisation, or what is left of it, will still be controlled by those who control the oil.

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IRAN ATTACK - more or less likely ?

New Yorker
Issue of 2006-11-27
Posted 2006-11-20

A month before the November elections, Vice-President Dick Cheney was sitting in on a national-security discussion at the Executive Office Building. The talk took a political turn: what if the Democrats won both the Senate and the House? How would that affect policy toward Iran, which is believed to be on the verge of becoming a nuclear power? At that point, according to someone familiar with the discussion, Cheney began reminiscing about his job as a lineman, in the early nineteen-sixties, for a power company in Wyoming. Copper wire was expensive, and the linemen were instructed to return all unused pieces three feet or longer. No one wanted to deal with the paperwork that resulted, Cheney said, so he and his colleagues found a solution: putting "shorteners" on the wire--that is, cutting it into short pieces and tossing the leftovers at the end of the workday. If the Democrats won on November 7th, the Vice-President said, that victory would not stop the Administration from pursuing a military option with Iran. The White House would put "shorteners" on any legislative restrictions, Cheney said, and thus stop Congress from getting in its way.
A month before the November elections, Vice-President Dick Cheney was sitting in on a national-security discussion at the Executive Office Building. The talk took a political turn: what if the Democrats won both the Senate and the House? How would that affect policy toward Iran, which is believed to be on the verge of becoming a nuclear power? At that point, according to someone familiar with the discussion, Cheney began reminiscing about his job as a lineman, in the early nineteen-sixties, for a power company in Wyoming. Copper wire was expensive, and the linemen were instructed to return all unused pieces three feet or longer. No one wanted to deal with the paperwork that resulted, Cheney said, so he and his colleagues found a solution: putting "shorteners" on the wire--that is, cutting it into short pieces and tossing the leftovers at the end of the workday. If the Democrats won on November 7th, the Vice-President said, that victory would not stop the Administration from pursuing a military option with Iran. The White House would put "shorteners" on any legislative restrictions, Cheney said, and thus stop Congress from getting in its way.

The White House's concern was not that the Democrats would cut off funds for the war in Iraq but that future legislation would prohibit it from financing operations targeted at overthrowing or destabilizing the Iranian government, to keep it from getting the bomb. "They're afraid that Congress is going to vote a binding resolution to stop a hit on Iran, Ó la Nicaragua in the Contra war," a former senior intelligence official told me.

In late 1982, Edward P. Boland, a Democratic representative, introduced the first in a series of "Boland amendments," which limited the Reagan Administration's ability to support the Contras, who were working to overthrow Nicaragua's left-wing Sandinista government. The Boland restrictions led White House officials to orchestrate illegal fund-raising activities for the Contras, including the sale of American weapons, via Israel, to Iran. The result was the Iran-Contra scandal of the mid-eighties. Cheney's story, according to the source, was his way of saying that, whatever a Democratic Congress might do next year to limit the President's authority, the Administration would find a way to work around it. (In response to a request for comment, the Vice-President's office said that it had no record of the discussion.)

In interviews, current and former Administration officials returned to one question: whether Cheney would be as influential in the last two years of George W. Bush's Presidency as he was in its first six. Cheney is emphatic about Iraq. In late October, he told Time, "I know what the President thinks," about Iraq. "I know what I think. And we're not looking for an exit strategy. We're looking for victory." He is equally clear that the Administration would, if necessary, use force against Iran. "The United States is keeping all options on the table in addressing the irresponsible conduct of the regime," he told an Israeli lobbying group early this year. "And we join other nations in sending that regime a clear message: we will not allow Iran to have a nuclear weapon."

On November 8th, the day after the Republicans lost both the House and the Senate, Bush announced the resignation of Secretary of Defense Donald Rumsfeld, and the nomination of his successor, Robert Gates, a former director of Central Intelligence. The move was widely seen as an acknowledgment that the Administration was paying a political price for the debacle in Iraq. Gates was a member of the Iraq Study Group--headed by former Secretary of State James Baker and Lee Hamilton, a former Democratic congressman--which has been charged with examining new approaches to Iraq, and he has publicly urged for more than a year that the U.S. begin direct talks with Iran. President Bush's decision to turn to Gates was a sign of the White House's "desperation," a former high-level C.I.A. official, who worked with the White House after September 11th, told me. Cheney's relationship with Rumsfeld was among the closest inside the Administration, and Gates's nomination was seen by some Republicans as a clear signal that the Vice-President's influence in the White House could be challenged. The only reason Gates would take the job, after turning down an earlier offer to serve as the new Director of National Intelligence, the former high-level C.I.A. official said, was that "the President's father, Brent Scowcroft, and James Baker"--former aides of the first President Bush--"piled on, and the President finally had to accept adult supervision."

Critical decisions will be made in the next few months, the former C.I.A. official said. "Bush has followed Cheney's advice for six years, and the story line will be: 'Will he continue to choose Cheney over his father?' We'll know soon." (The White House and the Pentagon declined to respond to detailed requests for comment about this article, other than to say that there were unspecified inaccuracies.)

A retired four-star general who worked closely with the first Bush Administration told me that the Gates nomination means that Scowcroft, Baker, the elder Bush, and his son "are saying that winning the election in 2008 is more important than the individual. The issue for them is how to preserve the Republican agenda. The Old Guard wants to isolate Cheney and give their girl, Condoleezza Rice"--the Secretary of State--"a chance to perform." The combination of Scowcroft, Baker, and the senior Bush working together is, the general added, "tough enough to take on Cheney. One guy can't do it."

Richard Armitage, the Deputy Secretary of State in Bush's first term, told me that he believed the Democratic election victory, followed by Rumsfeld's dismissal, meant that the Administration "has backed off," in terms of the pace of its planning for a military campaign against Iran. Gates and other decision-makers would now have more time to push for a diplomatic solution in Iran and deal with other, arguably more immediate issues. "Iraq is as bad as it looks, and Afghanistan is worse than it looks," Armitage said. "A year ago, the Taliban were fighting us in units of eight to twelve, and now they're sometimes in company-size, and even larger." Bombing Iran and expecting the Iranian public "to rise up" and overthrow the government, as some in the White House believe, Armitage added, "is a fool's errand."

"Iraq is the disaster we have to get rid of, and Iran is the disaster we have to avoid," Joseph Cirincione, the vice-president for national security at the liberal Center for American Progress, said. "Gates will be in favor of talking to Iran and listening to the advice of the Joint Chiefs of Staff, but the neoconservatives are still there"--in the White House--"and still believe that chaos would be a small price for getting rid of the threat. The danger is that Gates could be the new Colin Powell--the one who opposes the policy but ends up briefing the Congress and publicly supporting it."

Other sources close to the Bush family said that the machinations behind Rumsfeld's resignation and the Gates nomination were complex, and the seeming triumph of the Old Guard may be illusory. The former senior intelligence official, who once worked closely with Gates and with the President's father, said that Bush and his immediate advisers in the White House understood by mid-October that Rumsfeld would have to resign if the result of the midterm election was a resounding defeat. Rumsfeld was involved in conversations about the timing of his departure with Cheney, Gates, and the President before the election, the former senior intelligence official said. Critics who asked why Rumsfeld wasn't fired earlier, a move that might have given the Republicans a boost, were missing the point. "A week before the election, the Republicans were saying that a Democratic victory was the seed of American retreat, and now Bush and Cheney are going to change their national-security policies?" the former senior intelligence official said. "Cheney knew this was coming. Dropping Rummy after the election looked like a conciliatory move--'You're right, Democrats. We got a new guy and we're looking at all the options. Nothing is ruled out.' " But the conciliatory gesture would not be accompanied by a significant change in policy; instead, the White House saw Gates as someone who would have the credibility to help it stay the course on Iran and Iraq. Gates would also be an asset before Congress. If the Administration needed to make the case that Iran's weapons program posed an imminent threat, Gates would be a better advocate than someone who had been associated with the flawed intelligence about Iraq. The former official said, "He's not the guy who told us there were weapons of mass destruction in Iraq, and he'll be taken seriously by Congress."

Once Gates is installed at the Pentagon, he will have to contend with Iran, Iraq, Afghanistan, the Rumsfeld legacy--and Dick Cheney. A former senior Bush Administration official, who has also worked with Gates, told me that Gates was well aware of the difficulties of his new job. He added that Gates would not simply endorse the Administration's policies and say, "with a flag waving, 'Go, go' "--especially at the cost of his own reputation. "He does not want to see thirty-five years of government service go out the window," the former official said. However, on the question of whether Gates would actively stand up to Cheney, the former official said, after a pause, "I don't know."

Another critical issue for Gates will be the Pentagon's expanding effort to conduct clandestine and covert intelligence missions overseas. Such activity has traditionally been the C.I.A.'s responsibility, but, as the result of a systematic push by Rumsfeld, military covert actions have been substantially increased. In the past six months, Israel and the United States have also been working together in support of a Kurdish resistance group known as the Party for Free Life in Kurdistan. The group has been conducting clandestine cross-border forays into Iran, I was told by a government consultant with close ties to the Pentagon civilian leadership, as "part of an effort to explore alternative means of applying pressure on Iran." (The Pentagon has established covert relationships with Kurdish, Azeri, and Baluchi tribesmen, and has encouraged their efforts to undermine the regime's authority in northern and southeastern Iran.) The government consultant said that Israel is giving the Kurdish group "equipment and training." The group has also been given "a list of targets inside Iran of interest to the U.S." (An Israeli government spokesman denied that Israel was involved.)

Such activities, if they are considered military rather than intelligence operations, do not require congressional briefings. For a similar C.I.A. operation, the President would, by law, have to issue a formal finding that the mission was necessary, and the Administration would have to brief the senior leadership of the House and the Senate. The lack of such consultation annoyed some Democrats in Congress. This fall, I was told, Representative David Obey, of Wisconsin, the ranking Democrat on the House Appropriations subcommittee that finances classified military activity, pointedly asked, during a closed meeting of House and Senate members, whether "anyone has been briefing on the Administration's plan for military activity in Iran." The answer was no. (A spokesman for Obey confirmed this account.)

The Democratic victories this month led to a surge of calls for the Administration to begin direct talks with Iran, in part to get its help in settling the conflict in Iraq. British Prime Minister Tony Blair broke ranks with President Bush after the election and declared that Iran should be offered "a clear strategic choice" that could include a "new partnership" with the West. But many in the White House and the Pentagon insist that getting tough with Iran is the only way to salvage Iraq. "It's a classic case of 'failure forward,'" a Pentagon consultant said. "They believe that by tipping over Iran they would recover their losses in Iraq--like doubling your bet. It would be an attempt to revive the concept of spreading democracy in the Middle East by creating one new model state."

The view that there is a nexus between Iran and Iraq has been endorsed by Condoleezza Rice, who said last month that Iran "does need to understand that it is not going to improve its own situation by stirring instability in Iraq," and by the President, who said, in August, that "Iran is backing armed groups in the hope of stopping democracy from taking hold" in Iraq. The government consultant told me, "More and more people see the weakening of Iran as the only way to save Iraq."

The consultant added that, for some advocates of military action, "the goal in Iran is not regime change but a strike that will send a signal that America still can accomplish its goals. Even if it does not destroy Iran's nuclear network, there are many who think that thirty-six hours of bombing is the only way to remind the Iranians of the very high cost of going forward with the bomb--and of supporting Moqtada al-Sadr and his pro-Iran element in Iraq." (Sadr, who commands a Shiite militia, has religious ties to Iran.)

In the current issue of Foreign Policy, Joshua Muravchik, a prominent neoconservative, argued that the Administration had little choice. "Make no mistake: President Bush will need to bomb Iran's nuclear facilities before leaving office," he wrote. The President would be bitterly criticized for a preŰmptive attack on Iran, Muravchik said, and so neoconservatives "need to pave the way intellectually now and be prepared to defend the action when it comes."

The main Middle East expert on the Vice-President's staff is David Wurmser, a neoconservative who was a strident advocate for the invasion of Iraq and the overthrow of Saddam Hussein. Like many in Washington, Wurmser "believes that, so far, there's been no price tag on Iran for its nuclear efforts and for its continuing agitation and intervention inside Iraq," the consultant said. But, unlike those in the Administration who are calling for limited strikes, Wurmser and others in Cheney's office "want to end the regime," the consultant said. "They argue that there can be no settlement of the Iraq war without regime change in Iran."

The Administration's planning for a military attack on Iran was made far more complicated earlier this fall by a highly classified draft assessment by the C.I.A. challenging the White House's assumptions about how close Iran might be to building a nuclear bomb. The C.I.A. found no conclusive evidence, as yet, of a secret Iranian nuclear-weapons program running parallel to the civilian operations that Iran has declared to the International Atomic Energy Agency. (The C.I.A. declined to comment on this story.)

The C.I.A.'s analysis, which has been circulated to other agencies for comment, was based on technical intelligence collected by overhead satellites, and on other empirical evidence, such as measurements of the radioactivity of water samples and smoke plumes from factories and power plants. Additional data have been gathered, intelligence sources told me, by high-tech (and highly classified) radioactivity-detection devices that clandestine American and Israeli agents placed near suspected nuclear-weapons facilities inside Iran in the past year or so. No significant amounts of radioactivity were found.

A current senior intelligence official confirmed the existence of the C.I.A. analysis, and told me that the White House had been hostile to it. The White House's dismissal of the C.I.A. findings on Iran is widely known in the intelligence community. Cheney and his aides discounted the assessment, the former senior intelligence official said. "They're not looking for a smoking gun," the official added, referring to specific intelligence about Iranian nuclear planning. "They're looking for the degree of comfort level they think they need to accomplish the mission." The Pentagon's Defense Intelligence Agency also challenged the C.I.A.'s analysis. "The D.I.A. is fighting the agency's conclusions, and disputing its approach," the former senior intelligence official said. Bush and Cheney, he added, can try to prevent the C.I.A. assessment from being incorporated into a forthcoming National Intelligence Estimate on Iranian nuclear capabilities, "but they can't stop the agency from putting it out for comment inside the intelligence community." The C.I.A. assessment warned the White House that it would be a mistake to conclude that the failure to find a secret nuclear-weapons program in Iran merely meant that the Iranians had done a good job of hiding it. The former senior intelligence official noted that at the height of the Cold War the Soviets were equally skilled at deception and misdirection, yet the American intelligence community was readily able to unravel the details of their long-range-missile and nuclear-weapons programs. But some in the White House, including in Cheney's office, had made just such an assumption -- that "the lack of evidence means they must have it," the former official said.

Iran is a signatory to the non-proliferation treaty, under which it is entitled to conduct nuclear research for peaceful purposes. Despite the offer of trade agreements and the prospect of military action, it defied a demand by the I.A.E.A. and the Security Council, earlier this year, that it stop enriching uranium -- a process that can produce material for nuclear power plants as well as for weapons -- and it has been unable, or unwilling, to account for traces of plutonium and highly enriched uranium that have been detected during I.A.E.A. inspections. The I.A.E.A. has complained about a lack of "transparency," although, like the C.I.A., it has not found unambiguous evidence of a secret weapons program.

Last week, Iran's President, Mahmoud Ahmadinejad, announced that Iran had made further progress in its enrichment research program, and said, "We know that some countries may not be pleased." He insisted that Iran was abiding by international agreements, but said, "Time is now completely on the side of the Iranian people." A diplomat in Vienna, where the I.A.E.A. has its headquarters, told me that the agency was skeptical of the claim, for technical reasons. But Ahmadinejad's defiant tone did nothing to diminish suspicions about Iran's nuclear ambitions.

"There is no evidence of a large-scale covert enrichment program inside Iran," one involved European diplomat said. "But the Iranians would not have launched themselves into a very dangerous confrontation with the West on the basis of a weapons program that they no longer pursue. Their enrichment program makes sense only in terms of wanting nuclear weapons. It would be inconceivable if they weren't cheating to some degree. You don't need a covert program to be concerned about Iran's nuclear ambitions. We have enough information to be concerned without one. It's not a slam dunk, but it's close to it."

There are, however, other possible reasons for Iran's obstinacy. The nuclear program -- peaceful or not -- is a source of great national pride, and President Ahmadinejad's support for it has helped to propel him to enormous popularity. (Saddam Hussein created confusion for years, inside and outside his country, about whether Iraq had weapons of mass destruction, in part to project an image of strength.) According to the former senior intelligence official, the C.I.A.'s assessment suggested that Iran might even see some benefits in a limited military strike -- especially one that did not succeed in fully destroying its nuclear program -- in that an attack might enhance its position in the Islamic world. "They learned that in the Iraqi experience, and relearned it in southern Lebanon," the former senior official said. In both cases, a more powerful military force had trouble achieving its military or political goals; in Lebanon, Israel's war against Hezbollah did not destroy the group's entire arsenal of rockets, and increased the popularity of its leader, Hassan Nasrallah.

The former senior intelligence official added that the C.I.A. assessment raised the possibility that an American attack on Iran could end up serving as a rallying point to unite Sunni and Shiite populations. "An American attack will paper over any differences in the Arab world, and we'll have Syrians, Iranians, Hamas, and Hezbollah fighting against us -- and the Saudis and the Egyptians questioning their ties to the West. It's an analyst's worst nightmare -- for the first time since the caliphate there will be common cause in the Middle East." (An Islamic caliphate ruled the Middle East for over six hundred years, until the thirteenth century.)

According to the Pentagon consultant, "The C.I.A.'s view is that, without more intelligence, a large-scale bombing attack would not stop Iran's nuclear program. And a low-end campaign of subversion and sabotage would play into Iran's hands -- bolstering support for the religious leadership and deepening anti-American Muslim rage."

The Pentagon consultant said that he and many of his colleagues in the military believe that Iran is intent on developing nuclear-weapons capability. But he added that the Bush Administration's options for dealing with that threat are diminished, because of a lack of good intelligence and also because "we've cried wolf" before.

As the C.I.A.'s assessment was making its way through the government, late this summer, current and former military officers and consultants told me, a new element suddenly emerged: intelligence from Israeli spies operating inside Iran claimed that Iran has developed and tested a trigger device for a nuclear bomb. The provenance and significance of the human intelligence, or HUMINT, are controversial. "The problem is that no one can verify it," the former senior intelligence official told me. "We don't know who the Israeli source is. The briefing says the Iranians are testing trigger mechanisms" -- simulating a zero-yield nuclear explosion without any weapons-grade materials -- "but there are no diagrams, no significant facts. Where is the test site? How often have they done it? How big is the warhead -- a breadbox or a refrigerator? They don't have that." And yet, he said, the report was being used by White House hawks within the Administration to "prove the White House's theory that the Iranians are on track. And tests leave no radioactive track, which is why we can't find it." Still, he said, "The agency is standing its ground."

The Pentagon consultant, however, told me that he and other intelligence professionals believe that the Israeli intelligence should be taken more seriously. "We live in an era when national technical intelligence" -- data from satellites and on-the-ground sensors -- "will not get us what we need. HUMINT may not be hard evidence by that standard, but very often it's the best intelligence we can get." He added, with obvious exasperation, that within the intelligence community "we're going to be fighting over the quality of the information for the next year." One reason for the dispute, he said, was that the White House had asked to see the "raw" -- the original, unanalyzed and unvetted -- Israeli intelligence. Such "stovepiping" of intelligence had led to faulty conclusions about nonexistent weapons of mass destruction during the buildup to the 2003 Iraq war. "Many Presidents in the past have done the same thing," the consultant said, "but intelligence professionals are always aghast when Presidents ask for stuff in the raw. They see it as asking a second grader to read 'Ulysses.' "

HUMINT can be difficult to assess. Some of the most politically significant -- and most inaccurate -- intelligence about Iraq's alleged weapons of mass destruction came from an operative, known as Curveball, who was initially supplied to the C.I.A. by German intelligence. But the Pentagon consultant insisted that, in this case, "the Israeli intelligence is apparently very strong." He said that the information about the trigger device had been buttressed by another form of highly classified data, known as MASINT, for "measuring and signature" intelligence. The Defense Intelligence Agency is the central processing and dissemination point for such intelligence, which includes radar, radio, nuclear, and electro-optical data. The consultant said that the MASINT indicated activities that "are not consistent with the programs" Iran has declared to the I.A.E.A. "The intelligence suggests far greater sophistication and more advanced development," the consultant said. "The indications don't make sense, unless they're farther along in some aspects of their nuclear-weapons program than we know."

In early 2004, John Bolton, who was then the Under-Secretary of State for Arms Control (he is now the United Nations Ambassador), privately conveyed to the I.A.E.A. suspicions that Iran was conducting research into the intricately timed detonation of conventional explosives needed to trigger a nuclear warhead at Parchin, a sensitive facility twenty miles southeast of Tehran that serves as the center of Iran's Defense Industries Organization. A wide array of chemical munitions and fuels, as well as advanced antitank and ground-to-air missiles, are manufactured there, and satellite imagery appeared to show a bunker suitable for testing very large explosions.

A senior diplomat in Vienna told me that, in response to the allegations, I.A.E.A. inspectors went to Parchin in November of 2005, after months of negotiation. An inspection team was allowed to single out a specific site at the base, and then was granted access to a few buildings there. "We found no evidence of nuclear materials," the diplomat said. The inspectors looked hard at an underground explosive-testing pit that, he said, "resembled what South Africa had when it developed its nuclear weapons," three decades ago. The pit could have been used for the kind of kinetic research needed to test a nuclear trigger. But, like so many military facilities with dual-use potential, "it also could be used for other things," such as testing fuel for rockets, which routinely takes place at Parchin. "The Iranians have demonstrated that they can enrich uranium," the diplomat added, "and trigger tests without nuclear yield can be done. But it's a very sophisticated process -- it's also known as hydrodynamic testing -- and only countries with suitably advanced nuclear testing facilities as well as the necessary scientific expertise can do it. I'd be very skeptical that Iran could do it."

Earlier this month, the allegations about Parchin re'merged when Yediot Ahronot, Israel's largest newspaper, reported that recent satellite imagery showed new "massive construction" at Parchin, suggesting an expansion of underground tunnels and chambers. The newspaper sharply criticized the I.A.E.A.'s inspection process and its director, Dr. Mohamed ElBaradei, for his insistence on "using very neutral wording for his findings and his conclusions."

Patrick Clawson, an expert on Iran who is the deputy director for research at the Washington Institute for Near East Policy, a conservative think tank, told me that the "biggest moment" of tension has yet to arrive: "How does the United States keep an Israeli decision point -- one that may come sooner than we want -- from being reached?" Clawson noted that there is evidence that Iran has been slowed by technical problems in the construction and operation of two small centrifuge cascades, which are essential for the pilot production of enriched uranium. Both are now under I.A.E.A. supervision. "Why were they so slow in getting the second cascade up and running?" Clawson asked. "And why haven't they run the first one as much as they said they would? Do we have more time?

"Why talk about war?" he said. "We're not talking about going to war with North Korea or Venezuela. It's not necessarily the case that Iran has started a weapons program, and it's conceivable -- just conceivable -- that Iran does not have a nuclear-weapons program yet. We can slow them down -- force them to reinvent the wheel -- without bombing, especially if the international conditions get better."

Clawson added that Secretary of State Rice has "staked her reputation on diplomacy, and she will not risk her career without evidence. Her team is saying, 'What's the rush?' The President wants to solve the Iranian issue before leaving office, but he may have to say, 'Darn, I wish I could have solved it.' "

Earlier this year, the government of Israeli Prime Minister Ehud Olmert created a task force to coÜrdinate all the available intelligence on Iran. The task force, which is led by Major General Eliezer Shkedi, the head of the Israeli Air Force, reports directly to the Prime Minister. In late October, Olmert appointed Ephraim Sneh, a Labor Party member of the Knesset, to serve as Deputy Defense Minister. Sneh, who served previously in that position under Ehud Barak, has for years insisted that action be taken to prevent Iran from getting the bomb. In an interview this month with the Jerusalem Post, Sneh expressed skepticism about the effectiveness of diplomacy or international sanctions in curbing Iran:

The danger isn't as much Ahmadinejad's deciding to launch an attack but Israel's living under a dark cloud of fear from a leader committed to its destruction. . . . Most Israelis would prefer not to live here; most Jews would prefer not to come here with families, and Israelis who can live abroad will . . . I am afraid Ahmadinejad will be able to kill the Zionist dream without pushing a button. That's why we must prevent this regime from obtaining nuclear capability at all costs.

A similar message was delivered by Benjamin Netanyahu, the Likud leader, in a speech in Los Angeles last week. "It's 1938 and Iran is Germany. And Iran is racing to arm itself with atomic bombs," he said, adding that there was "still time" to stop the Iranians.

The Pentagon consultant told me that, while there may be pressure from the Israelis, "they won't do anything on their own without our green light." That assurance, he said, "comes from the Cheney shop. It's Cheney himself who is saying, 'We're not going to leave you high and dry, but don't go without us.' " A senior European diplomat agreed: "For Israel, it is a question of life or death. The United States does not want to go into Iran, but, if Israel feels more and more cornered, there may be no other choice."

A nuclear-armed Iran would not only threaten Israel. It could trigger a strategic-arms race throughout the Middle East, as Saudi Arabia, Jordan, and Egypt -- all led by Sunni governments -- would be compelled to take steps to defend themselves. The Bush Administration, if it does take military action against Iran, would have support from Democrats as well as Republicans. Senators Hillary Clinton, of New York, and Evan Bayh, of Indiana, who are potential Democratic Presidential candidates, have warned that Iran cannot be permitted to build a bomb and that -- as Clinton said earlier this year -- "we cannot take any option off the table." Howard Dean, the chairman of the Democratic National Committee, has also endorsed this view. Last May, Olmert was given a rousing reception when he addressed a joint session of Congress and declared, "A nuclear Iran means a terrorist state could achieve the primary mission for which terrorists live and die -- the mass destruction of innocent human life. This challenge, which I believe is the test of our time, is one the West cannot afford to fail."

Despite such rhetoric, Leslie Gelb, a former State Department official who is a president emeritus of the Council on Foreign Relations, said he believes that, "when push comes to shove, the Israelis will have a hard time selling the idea that an Iranian nuclear capability is imminent. The military and the State Department will be flat against a pre'mptive bombing campaign." Gelb said he hoped that Gates's appointment would add weight to America's most pressing issue -- "to get some level of Iranian restraint inside Iraq. In the next year or two, we're much more likely to be negotiating with Iran than bombing it."

The Bush Administration remains publicly committed to a diplomatic solution to the Iranian nuclear impasse, and has been working with China, Russia, France, Germany, and Britain to get negotiations under way. So far, that effort has foundered; the most recent round of talks broke up early in November, amid growing disagreements with Russia and China about the necessity of imposing harsh United Nations sanctions on the Iranian regime. President Bush is adamant that Iran must stop all of its enrichment programs before any direct talks involving the United States can begin.

The senior European diplomat told me that the French President, Jacques Chirac, and President Bush met in New York on September 19th, as the new U.N. session was beginning, and agreed on what the French called the "Big Bang" approach to breaking the deadlock with Iran. A scenario was presented to Ali Larijani, the chief Iranian negotiator on nuclear issues. The Western delegation would sit down at a negotiating table with Iran. The diplomat told me, "We would say, 'We're beginning the negotiations without preconditions,' and the Iranians would respond, 'We will suspend.' Our side would register great satisfaction, and the Iranians would agree to accept I.A.E.A. inspection of their enrichment facilities. And then the West would announce, in return, that they would suspend any U.N. sanctions." The United States would not be at the table when the talks began but would join later. Larijani took the offer to Tehran; the answer, as relayed by Larijani, was no, the diplomat said. "We were trying to compromise, for all sides, but Ahmadinejad did not want to save face," the diplomat said. "The beautiful scenario has gone nowhere."

Last week, there was a heightened expectation that the Iraq Study Group would produce a set of recommendations that could win bipartisan approval and guide America out of the quagmire in Iraq. Sources with direct knowledge of the panel's proceedings have told me that the group, as of mid-November, had ruled out calling for an immediate and complete American withdrawal but would recommend focussing on the improved training of Iraqi forces and on redeploying American troops. In the most significant recommendation, Baker and Hamilton were expected to urge President Bush to do what he has thus far refused to do -- bring Syria and Iran into a regional conference to help stabilize Iraq.

It is not clear whether the Administration will be receptive. In August, according to the former senior intelligence official, Rumsfeld asked the Joint Chiefs to quietly devise alternative plans for Iraq, to pre'mpt new proposals, whether they come from the new Democratic majority or from the Iraq Study Group. "The option of last resort is to move American forces out of the cities and relocate them along the Syrian and Iranian border," the former official said. "Civilians would be hired to train the Iraqi police, with the eventual goal of separating the local police from the Iraqi military. The White House believes that if American troops stay in Iraq long enough -- with enough troops -- the bad guys will end up killing each other, and Iraqi citizens, fed up with internal strife, will come up with a solution. It'll take a long time to move the troops and train the police. It's a time line to infinity."

In a subsequent interview, the former senior Bush Administration official said that he had also been told that the Pentagon has been at work on a plan in Iraq that called for a military withdrawal from the major urban areas to a series of fortified bases near the borders. The working assumption was that, with the American troops gone from the most heavily populated places, the sectarian violence would "burn out." "The White House is saying it's going to stabilize," the former senior Administration official said, "but it may stabilize the wrong way."

One problem with the proposal that the Administration enlist Iran in reaching a settlement of the conflict in Iraq is that it's not clear that Iran would be interested, especially if the goal is to help the Bush Administration extricate itself from a bad situation.

"Iran is emerging as a dominant power in the Middle East," I was told by a Middle East expert and former senior Administration official. "With a nuclear program, and an ability to interfere throughout the region, it's basically calling the shots. Why should they coÜperate with us over Iraq?" He recounted a recent meeting with Mahmoud Ahmadinejad, who challenged Bush's right to tell Iran that it could not enrich uranium. "Why doesn't America stop enriching uranium?" the Iranian President asked. He laughed, and added, "We'll enrich it for you and sell it to you at a fifty-per-cent discount."

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Israel and NATO: Combined Missions

Stefano Chiarini
Translated by Mary Rizzo and revised by Nancy Harb Almendras
from Italyĺs Il Manifesto, 26/10/2006

A bilateral cooperation agreement has been reached in Brussels between Israel and the NATO. The Navy of Tel Aviv will participate in the "anti-terrorism" naval patrol operations along the Lebanese and Syrian coasts

Israel, protagonist of 34 days of cruel bombardments against Lebanon with phosphorous bombs and "cluster bombs," of the violations of airspace of the "Cedar Republic" of the occupation of the Sheeba Farms, of the Palestinian territories and of the Syrian Golan, of the production of more than 200 atomic bombs, of the programs of bacteriological and chemical warfare, will now participate fully in the operations of naval patrol that are known as "anti-terrorism" of the NATO under the umbrella of the "Active Endeavour" mission. And NATO, on its part, will end up in that way "absolving" the Israeli violations of the UN resolutions, of the Non-proliferation Treaty and of the Geneva Conventions, identifying itself, in the eyes of millions of Arabs and Muslims, with the brutal Israeli politics in the region.
This authentic turning point in the relationship between the Atlantic Alliance and Israel, headed towards a very dangerous symbiosis, has developed in the past few days between Brussels and Tel Aviv. It took place in almost total silence. Last October 16, in the Belgian capital, where there is still the headquarters of the NATO command (two years ago the Alliance had threatened to move itself to Warsaw if the Belgian government would not block the trial for war crimes against Ariel Sharon) a cooperation agreement with Israel was stipulated that foresees the participation of the Jewish State in the anti-terrorism operations in the Mediterranean, and in the end, an actual bilateral cooperation agreement was finalised. The agreement was then celebrated two days ago during a visit to Tel Aviv of the Deputy Secretary General of the NATO, Alessandro Minuto Rizzo, during a conference held in the town of Herzlya, on "The NATO-Israel relationship and the Mediterranean dialogue" in a climate of great euphoria and satisfaction. "If we look carefully at the Mediterranean Dialogue and in particular to the cooperation between NATO and Israel, we can not but be stuck by how many steps ahead have been made and by how quickly the process is moving," said the Ambassador Minuto Rizzo, who then continued, "We have recently come to a cooperation program. The first of this sort in the Mediterranean Dialogue that covers many areas of common interest, such as the fight against terrorism and unified military exercitations.... An agreement that itself should give new energy to our cooperation." The Deputy Secretary General of NATO then mentioned how "the fact that an officer of Israeli connection has been assigned to the NATO command at Naples is also another indication of the vitality of our cooperation, in the same way as... the participation of Israel in two important NATO exercitations in Romania and the Ukraine." He added, "a new chapter in the cooperation between Israel and the NATO has been opened."

At the convention, which saw the participation of top level "opinion leaders," Israeli politicians, exponents of the Industrial-Military complex, officials and functionaries of the NATO and the Israeli Foreign Affairs Minister, Ms Tzipi Livni, the "philosophy" of the new partnership between Israel-NATO was illustrated. It is a philosophy aligned with the positions of the Bush administration, in sharp contrast with the positions on the Palestinian-Israeli and Arab-Israeli conflicts that have been brought forth by the European countries, Italy in the forefront. "Israel and the NATO are natural partners," the exponent from Tel Aviv had sustained, from the moment that "the nationalist tendencies and aspirations" are no longer at the core of the conflict. The "tension in the Middle East" - Livni had therefore declared - is no longer "due to local territorial or border disputes" but rather is due to "extremist ideologies" and to the "States founded on these ideologies." For this reason, it would be necessary to see to the creation, with the agreement with the NATO, of a common defence of the States that "share our values and principles." Perhaps the Israeli minister is referring to the principle of the acquisition of territory by the force of arms? Or is she referring to the oppression of another people, refusing to allow them to build their own State on just 22% of their own territory? Or maybe she is referring to the principles of a racist government that has made Apartheid in the West Bank and the proliferation of weapons of mass destruction the pillars of their own policies?

Translated from Italian by Mary Rizzo and revised by Nancy Harb Almendras, members of Tlaxcala www.tlaxcala.es, the network of translators for linguistic diversity. This translation is on Copyleft, and may be reproduced without permission by citing the sources, author and translator.

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Iranian parliament approves bill to fingerprint Americans

www.chinaview.cn 2006-11-19 18:15:16

TEHRAN, Nov. 19 (Xinhua) -- Iranian Majlis (parliament) approved on Sunday a bill that is to fingerprint U.S. citizens upon arrival to Iran, despite President Mahmoud Ahmadinejad's opposition to it, the state radio reported.

According to the bill, the related governmental departments should inspect and fingerprint all U.S. nationals upon arrival to Iran. However, President Ahmadinejad and his administration opposed the bill, saying his government was not against the ordinary Americans.
This bill was considered as a retaliation to the U.S. requirement that Iranian visitors be fingerprinted. After the Sept.11, 2001 terrorist attacks, the United States has implemented the measures on nationals of Iran and some other countries. "The United States will become more daring if we withdraw," said legislator Morteza Tammadon, who voted for the bill.

Iran's Foreign Minister Manouchehr Mottaki was also against the bill, saying the Bush administration "wanted to humiliate the Iranian nation, but American people during the U.S. midterm elections opposed the administration's policy by their votes". This was a proof its policy to fingerprint visiting Iranians had failed, he said.

However, the measure of Iranian Majlis still needs approval from the Guardian Council, the country's constitutional watchdog, before it can become law.

Now it was unclear if the Guardian Council would approve it, the council usually approves most bills sent by Majlis but would reject if it determines the bill violates the constitution.

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9/11 The Ultimate Truth

Global Hawk to Fly 1st Mission Over U.S.

Nov 19, 2006

They've become a fixture in the skies over Iraq and Afghanistan, a new breed of unmanned aircraft operated with remote controls by "pilots" sitting in virtual cockpits many miles away.

But the Air Force's Global Hawk has never flown a mission over the United States.

That is set to change Monday, when the first Global Hawk is scheduled to land at Beale Air Force Base in northern California.
"This landmark flight has historic implications since it's the first time a Global Hawk has not only flown from Beale, but anywhere in the United States on an official Air Combat Command mission," base spokesman Capt. Michael Andrews said in a statement.

Beale-based pilots are flying the drones daily on combat missions in the Middle East, Andrews said. The planes are operated by four-person crews from virtual cockpits the size of shipping containers.

The planes are designed to fly at high altitudes for 40 hour-missions covering as much as 10,000 miles, mostly providing aerial surveillance. The aircraft, which can cost more than $80 million each, can reach an altitude of 65,000 feet and send back high-resolution imagery.

The Hawks are among a growing fleet of unmanned aircraft that also includes the missile-carrying Predators and five-pound Ravens that are small enough to be carried in soldiers' backpacks.

Beale is to have seven Global Hawks by 2009. It is currently the only U.S. base with the drones. Eventually the Air Force's fleet will include 54 of the Global Hawks, but most will be based overseas.

Comment: While this may be the first "official" flight of the global hawk over American skies, it will certainly not be the first time it has done so. The global hawk has been available since the late 1990's and a modified version was used in the attack on the Pentagon on 9/11 in place of Flight 77. See our groundbreaking book 9/11: The Ultimate Truth
global hawk, pentagon, 9/11

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9/11 autopsy guidelines plan abandoned

Associated Press
Sat Nov 18, 2006

NEW YORK - An effort to create standard autopsy guidelines that could document a link between toxic air at ground zero and deaths of 9/11 rescue workers has been abandoned by the federal government amid concerns the information collected could be misinterpreted.

The National Institute for Occupational Safety and Health, in a note posted Friday on its Web site, said the agency "instead will pursue other avenues for documenting long-term health effects from exposure to air contaminants from the World Trade Center disaster."
Outside medical experts who reviewed the plan suggested focusing on monitoring epidemiological patterns of disease in those exposed.

In a Sept. 15 draft, the institute proposed examining specific sections of the lungs and creating a "tissue bank" to preserve certain organs and bodily fluids for later testing.

The institute said reviewers had raised several questions, including concerns that "the draft document could be misinterpreted or misapplied, hindering rather than furthering progress in addressing WTC health concerns."

"This study has many insurmountable barriers to overcome," wrote Dr. David J. Prezant, chief medical officer for the city Fire Department. Prezant, whose review was posted on the Web site, said one of those barriers was the "politics of causality," a reference to pending lawsuits filed against the city by injured workers.

Because autopsy results are often used in civil lawsuits, the results collected by the institute - while intended as a scientific study - could be used as a trial tool for lawyers and others with an "undeniable self-interest" in the cause of death, Prezant said.

The collapse of the twin towers sent thick plumes of concrete dust, fiberglass, asbestos and lead into the air in lower Manhattan. The tainted air was taken in by thousands of ground zero workers in the weeks after the terrorist attack that killed 2,749 people.

The guidelines were intended to be used nationwide in cases such as the death of New York City police detective James Zadroga, who died last January. Zadroga spent 470 hours working amid the toxic fumes, and fell ill within weeks.

An autopsy found the 34-year-old detective died as a result of ground zero exposure, finding that there was material "consistent with dust" found in his lungs.

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Student acquitted in 9/11 perjury case

Last Updated: Friday, November 17, 2006 | 9:02 PM ET
CBC News

A second jury has found a San Diego college student linked to two of the Sept. 11 hijackers not guilty on all counts of perjury, ending a legal battle that began just 10 days after the attacks.

Osama Awadallah, 26, broke out in a broad smile as the verdict was read Friday in Manhattan federal court, then turned and beamed at his father crying in the audience. Jurors had begun deliberating Thursday.

"I knew that justice would prevail," he said to reporters. "My goal will be to continue to be a very good citizen in this country."
Awadallah would have been convicted last spring had a lone juror not held out for acquittal, forcing a mistrial.

The 21-year-old college student showed up on investigators' radar just days after the 9/11 attacks. His first name and a phone number were found on a scrap of paper in a car parked at Dulles Airport near Washington, a car that had been driven there by Nawaf al Hazmi, one of the 19 hijackers.

The phone number was traced to Awadallah's residence in San Diego, a city in which al Hazmi and fellow hijacker Khalid al Mihdhar lived for several months beginning in early 2000.

Pair helped hijack jet

Al Hazmi and al Mihdhar helped hijack American Airlines 77, which crashed into the Pentagon.

Awadallah, a Venezuela-born Jordanian citizen, has lived in the U.S. since 1999. His father is a U.S. citizen.

He told investigators he worked at the same gas station and prayed at the same mosque as Hazmi, but repeatedly denied knowing al Mihdhar, even when shown photos of him.

Awadallah was detained as a material witness on Sept. 21.

At a grand jury hearing that October, he was confronted with a school examination booklet in which he appeared to have written about meeting men named Nawaf and Khalid. Awadallah initially claimed it was not his handwriting, but later changed his testimony.

While prosecutors concluded Awadallah was just an acquaintance with no knowledge of the attack, they said the contradictory statements about al Mihdhar had hampered the grand jury investigation, leading to charges of perjury.

His attorneys argued that their client, exhausted, confused and frightened after being detained for weeks in solitary confinement, simply had a memory lapse.

Perjury indictment tossed

In early 2002, a federal judge threw out a perjury indictment against him, citing errors made when investigators applied for an arrest warrant.

The judge also ruled that Awadallah had been the victim of coercion by investigators and threw out evidence seized after he was taken into custody, including videotapes and a picture of Osama bin Laden.

The case was later reinstated by an appeals court.

Some of the jurors said Friday after the verdict they were appalled at the way Awadallah had been treated by the government, and believed the statements he made during his grand jury session were prompted by fear and confusion.

"The treatment he received as a witness, a material witness, was really unconscionable, and it had to affect his testimony," said juror Nancy Sosnow, 64, of the Bronx.

Federal prosecutors declined to comment.

Intense scrutiny

The movements of al Hazmi and al Mihdhar in the two years leading up 9/11 have been the subject of intense scrutiny and examination of the lack of information sharing within the U.S. intelligence community.

The two Saudis rented a room in the San Diego home of a longtime FBI informant, and also befriended Omar al-Bayoumi, a Saudi who had drawn FBI scrutiny in the past.

The FBI were not made aware by the CIA that al Hazmi and al Mihdhar were in the U.S. until mid-2001, but a report later found the investigation of al Mihdhar had been ''given to a single, inexperienced agent.''

Awadallah said after the verdict Friday that he had no plans to leave San Diego and the U.S.

"There's no better place to be," he said, smiling.

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Planet Earth And Humanity - A Match Made In Hell?

Dutch bask in warmest autumn in three centuries

Nov 19, 2006

The autumn of 2006 has been the warmest in the Netherlands for over 300 years, 12.5 percent hotter than the previous year which was already a record, meteorologists said.

"Beating the record by more than one degree centigrade, that is exceptional," the Royal Netherlands Meteorological Institute said in a statement.
The average temperature for the months leading up to November 17 was up to 13.5 degrees (56 degrees F), as compared to 12 degrees last year, which was already the hottest autumn on record.

The average over the last three centuries for this period of the year has been 9.9 degrees.

At least three factors are responsible for the increased temperatures, the Institute said: global warming, winds from the south that have blown over the Netherlands more than in most years, and a slower cooling down after an exceptionally hot summer, especially in July.

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Flames reached 90 feet in Calif. blaze

November 19, 2006

RIVERSIDE, Calif. - Five firefighters who died battling an arson wildfire last month faced 90-foot-tall walls of flame that advanced at 40 mph in a terrifying firestorm fueled by howling winds and tinder-dry manzanita and chaparral, according to a new preliminary report.
The six-page report, released late last week by the California Department of Forestry and Fire Protection, indicates that the combination of the wind, the slope of the terrain and the type of ground cover created an explosive fire situation.

Temperatures at the fire's leading edge reached 1,220 degrees and a column of gas and smoke from the blaze rose to 18,000 feet in the air, the report said.

The fire swept through the mountains about 90 miles east of Los Angeles. It destroyed 34 homes and charred more than 60 square miles before being contained.

Firefighters Jason McKay, 27; Jess McLean, 27; Daniel Hoover-Najera, 20; Mark Loutzenhiser, 43; and Pablo Cerda, 23, were overrun by flames on Oct. 26 while protecting a home in Twin Pines.

Authorities have charged a 36-year-old auto mechanic, Raymond Lee Oyler, with arson and murder in the case. He has pleaded not guilty to all charges.

CDF spokesman Daniel Berlant said the report will be used as a teaching tool for future firefighters. He declined to comment further, citing an ongoing internal investigation and the criminal case against Oyler.

The report details the firefighters' actions in the hour leading up to their deaths, including that they were overrun by flames less than an hour after discussing strategies, conditions and safety measures with a superior.

The fire front, fueled by the wind gusts of 50 mph, traveled at almost the exact angle of the slopes below the firefighters, adding to the blaze's spread and intensity.

"It creates erratic, very quick-moving fire behavior," said Rose Davis, spokeswoman for the National Interagency Fire Center in Boise, Idaho. "You have all of the things needed to accelerate the fire - wind, slope and fuel."

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Europeans 'would accept climate change curbs'

By Ed Crooks in London
Financial Times
November 19, 2006

Europeans are overwhelmingly convinced that human activity is contributing to global warming, and a majority would be prepared to accept restrictions on their lifestyle to combat it, according to a poll for the Financial Times.

Research carried out this month by Harris Interactive in Germany, France, the UK, Italy and Spain found that 86 per cent of people believed humans were contributing to climate change, and 45 per cent thought it would be a threat to them and their families within their lifetimes.
More than two-thirds - 68 per cent - said they would either strongly or somewhat support restrictions on their behaviour and purchases in order to reduce the threat.

Climate change has been rising up the political agenda in Europe. The recent British government report by Sir Nicholas Stern, former chief economist of the World Bank, argued that the economic costs of global warming could be far greater than the costs of acting to limit it.

The poll also found Europeans were more willing to accept curbs on their lifestyles in principle than to endorse specific additional burdens.

Less than half - 43 per cent - either strongly or somewhat supported a charge on airline passengers to pay for environmental damage, while 36 per cent opposed it, either strongly or somewhat. Support was weakest in Italy and Spain, possibly because of fears about the effect on their tourist industries.

Only a minority were prepared to make significant financial sacrifices to eliminate the threat of global warming. A quarter said they would pay one week's wages or more - roughly the 2 per cent of national income figure that Sir Nicholas Stern suggested rich countries might need to pay - but a third said they would not pay anything at all.

However, concerns about climate change and energy security have not translated into majority support for investment in new nuclear power stations.

Only 12 per cent of Europeans polled were strongly in favour of investment in new nuclear capacity, while a further 18 per cent were somewhat in favour - a total of 30 per cent. Almost as many - 29 per cent - strongly opposed new nuclear construction, with a further 17 per cent somewhat opposed.

There is also a remarkably deep gender divide, with a balance of men in favour of new nuclear building in France, Italy and the UK, but a majority of women opposed everywhere except the UK, where there is a large number neither for nor against.

Public opinion need not stand in the way of nuclear development. France is pressing ahead with a new reactor, which will go into construction next year, even though the poll shows just 29 per cent of the population supports it. But in Spain and Germany, where some in the industry hope government policy can be turned away from its official anti-nuclear stance, the high level of public opposition will provide a significant obstacle to a U-turn: 53 per cent of Germans and 62 per cent of Spaniards are against new nuclear building.

The answer, Europeans think, is renewables: 85 per cent believe their governments should spend more on renewable energy, while only a handful believe they should spend less. In France and Spain, more than 90 per cent backed more investment in renewables. The potential problem is the cost of that renewable energy.

Ahead of a summit of the leaders of the European Union and Russia at the end of this week, the poll also found widespread mistrust of Russia as an energy supplier. Only 21 per cent of Europeans believed Russia would be a reliable source of oil and gas in the future, while 35 thought it would not be.

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Unearthed relics reveal corruption 2800 years ago

www.chinaview.cn 2006-11-19 15:53:09

XI'AN, Nov. 19 (Xinhua) -- Much has been made of the corruption that has tarnished the image of Chinese local government officials, but it seems bribery among the country's authoritative ranks was in full swing more than 2,800 years ago.

The inscriptions on two bronze urns unearthed recently in northwest China's Shaanxi province tell the story of how, in 873 B.C., a noble man managed to bribe the judiciary in order to dodge charges of appropriating farmland and slaves.
The inscriptions on each urn contain 111 ancient Chinese characters, which detail the story, narrated in the first person by Zhou Sheng, who was taken to court by disgruntled civilians, according to Wu Zhenfeng, archaeologist of Shaanxi Institute of Archaeology.

A legal investigator named Shao Bohu was sent to Zhou's manor but Zhou managed to bribe Shao's mother with a bronze pot and Shao's father with a large jade instrument. Zhou received no punishment and in return for Shao's "kindness", Zhou presented him with a jade Gui, an elongated pointed tablet which was held by ancient rulers on ceremonial occasions.

"It is rare to find 'bribery stories' in Chinese ancient inscriptions. Usually only heroic stories, wars, evidence of a king's largess, covenants and policies are seen on relics," said Zhang Enxian, curator of Zhouyuan Museum in Baoji City, northwest China's Shaanxi.

The urns were among the 27 relics discovered by six peasants on Nov. 9 in their fields in Fufeng town in Baoji City, 110 kilometers west of Xi'an, according to Zhang Enxian, curator of Zhouyuan museum in Baoji city in Shaanxi province.

"As the story was interpreted by archaeologists, it doesn't mean it is necessarily correct," said Zhang.

"Some verbs have been abraded over time, which has made it hard for people to verify if Zhou was really guilty," he added.

Professor Ding Li, with the Law Department of Sun Yat-sen University, does not subscribe to the view that Zhou's actions constituted bribery in its modern-day form.

"According to China's current criminal law, Shao would have been convicted of judicial corruption. But Zhou Sheng and Shao Bohu were probably innocent at that time as laws for nobles during the Zhou Dynasty were much more lenient," Professor Ding said.

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Socially deviant owner, deviant dog

www.chinaview.cn 2006-11-18 16:53:00

BEIJING, Nov. 18 (Xinhuanet) -- A study of 355 dog owners in Ohio reveals that vicious dogs are often owned by vicious people.

Researchersáfound people who own vicious dogs such as pit bulls have significantly more criminal convictions -- including crimes against children -- then owners with licensed, gentler dogs.
The study showed that every owner of a high-risk breed known for aggression had at least one run-in with the police, from traffic citations to serious criminal convictions.

"Owners of vicious dogs who have been cited for failing to register a dog (or) failing to keep a dog confined on the premises ... are more than nine times more likely to have been convicted for a crime involving children, three times more likely to have been convicted of domestic violence ... and nearly eight times more likely to be charged with drug (crimes) than owners of low-risk licensed dogs," said Jaclyn Barnes of Cincinnati Children's Hospital Medical Center.

Aggressive breeds identified by the Society for the Prevention of Cruelty to Animals and some insurance companies include pit bulls, rottweilers, akitas and chows. The definition excludes dogs used in law enforcement or dogs protecting an owner or property.

"A 'vicious dog" means a dog that, without provocation, has killed or caused serious injury to any person, has killed another dog, or belongs to a breed that is commonly known as a pit bull dog," they wrote in their report.

"One can argue that choosing to own a vicious dog is a marker of social deviance because a vicious dog is, by definition, a socially deviant animal," said Barbara Boat, director of The Childhood Trust at the University of Cincinnati, who worked on the study.

Of the people studied who owned an aggressive breed of dog and who also had been cited at least once for failure to register it, 30 percent had at least five criminal convictions or traffic citations. Barnes and colleagues used public records to check on the criminal pasts of dog owners.

This compared to 1 percent of owners of low-risk, licensed dogs such as poodles, beagles or collies, the researchers reported in the Journal of Interpersonal Violence.

The researchers said their findings could be useful for social and law enforcement workers.

"We suggest, regardless of dog breed, that failure to license a dog is a potential warning sign of other deviant behavior," they wrote.

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Nuns' Canned-Food Offer Isn't up to Prosecutor's Palate

Published on Thursday, November 16, 2006
Denver Post (Colorado)
by Diane Carman

As a stand-up comic, Robert Brown makes a great deputy U.S. attorney. Then again, for everyone but a prosecutor, the threat of federal prison is usually not very funny.

On Wednesday, Brown met on the sidewalk outside his Denver office with the three media darlings who have haunted him for four years - the anti-nuke nuns.

"You look great," he teased. "Prison was good for you."
The Dominican sisters, Ardeth Platte, 70, Carol Gilbert, 59, and Jackie Hudson, 72, had come to town in yet another attempt to fulfill the gnarliest part of the sentences imposed on them by U.S. District Judge Robert Blackburn when they were convicted of damaging government property and obstructing the national defense in 2003.

They are trying to pay off $3,082 in restitution to the U.S. Air Force - in canned goods.

They are collecting food for military families on public assistance.

Now, all this is about as funny as a cluster bomb, but the sisters have kept their spirits high through trials, prison terms and travel bans, and they're not about to lose their sense of humor now.

When they arrived at Brown's office, they delivered cans of food, and, as with every aspect of their lives, their choices were rich with symbolism.

Hudson brought pork and beans to represent the pork-barrel nature of the military-industrial complex, and a can of corn "because this case has been so corny from the beginning."

Platte delivered canned clams - saying the American people have "clammed up long enough. It's time to speak truth to power" - and a tin of beef stew. "With the massive numbers of people who have been killed in this war, I don't want to stew over this any longer."

Gilbert selected sweet peas - "To give peas a chance" - and cream of mushroom soup, representing the radiation cloud from a nuclear bomb, a weapon that has been used by only one country in the world, she said - the U.S.

The sisters put the word out about the food drive via the Internet, enlisting help from around the world. The way they calculate it, they would need about 4,000 cans of food to fulfill the required restitution.

Boxes of food began arriving Wednesday morning, and the prosecutors were none too happy when the office decorum was insulted with cans of beans for indigent soldiers' families. "Take it four blocks down to the Catholic mission," said an exasperated Brown, who insisted the only way the restitution will be accepted is in cash.

"We're not rich. You know that," said Gilbert.

Moments later a written statement was delivered to the nuns on the sidewalk. "The U.S. Attorney's Office cannot accept food in lieu of restitution in this case," it said. The food drive is "a tremendously thoughtful act," but the nuns were directed to send assistance to a military facility or charitable agency.

Not ones to be discouraged - especially when they've got government officials looking like heartless cheapskates - the nuns held their ground, rallying antiwar groups to coordinate food collection and delivery to military bases.

They remain hopeful that Blackburn can be persuaded to accept the canned-food payment plan even though last month he rejected their first attempt at making restitution. That one offered hundreds of hours of community service as well as $600,000 raised in their names for literacy programs, soup kitchens and victims of disasters.

"This is a grace-filled holy action," said Gilbert. "Our conscience doesn't allow us to participate in war by providing any money for bombs or violence."

Brown told the nuns to take it up with the judge. Then he leaned back, took a long look at the gray-haired women in their long underwear, wool scarves, heavy socks and thick gloves, and smiled. "I have more fun with you guys," he said.

As he turned to walk toward his office, Gilbert called to him one last time. "We'll keep you in our prayers," she said.

It was not a joke. Diane Carman's column appears Sunday, Tuesday and Thursday.

Copyright 2006 The Denver Post

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Traces of antibiotic found in fish-dish favorite

2006-11-19 08:59:02

BEIJING, Nov. 19 -- Shanghai's food safety watchdog issued a warning over a popular fish dish after small amounts of a cancer-causing antibiotic were found in samples of turbot.
In the wake of the warning, one seafood market said it would tell vendors not to replenish stocks of the fish, while city restaurants said they would continue to serve turbot to customers unless there was an official ban.

Shanghai Food and Drug Administration officials said tests on 30 turbot samples taken from wholesale markets, supermarkets and restaurants showed low levels of AOZ, a carcinogenic antibiotic, in all of them.

Some samples contained other antibiotic residue, the officials said, adding that some fish farms use antibiotics to boost the low immune systems of turbot.

"All the antibiotics are forbidden fishery medicines," said Gu Zhenhua, director of the Shanghai Food and Drug Supervision Agency. "Though they won't cause immediate harm to people's health, there is a hidden danger if people eat small amounts of antibiotics over long periods."

The highest amount of AOZ residue found in a sample was one milligram per kilogram.

Administration officials said the levels were not high enough to cause cancer, and were only about 0.3 percent of the recommended dosage when AOZ is used to treat diarrhea.

National standards stipulate no antibiotics should be found.

About 40,000 tons of turbot is farmed in China every year.

Gu said the administration would decide in a few days how to punish farms that sell turbot with traces of antibiotics.

After hearing the news, Huxi Aquatic Products Wholesale Market told vendors to stop restocking turbot until the administration issued further instructions.

"We believe the measure will help our vendors reduce their losses," said Zhao Yuan, a manager of the market. "If some vendors insist on selling turbot, we will ask them to provide qualified test reports."

In the nearby Tongchuan Road Aquatic Products Wholesale Market, the city's largest seafood market, turbot was still for sale.

"So far we haven't received any notice from the administration to ban turbot," said Yang Jihua, manager of the marketing department of the market.

One fish vendor surnamed Zhang at Huxi market said the different reactions of market managers were confusing.

"But I don't dare to buy a lot of turbot now in case the demand decreases after the news is released," Zhang said.

Turbot was still available at city hotels and restaurants.

"The fish is still on our menu," said an unidentified member of staff at the Jinjiang Hotel. "But we will discuss with our chief chef whether to continue to serve the dish."

The Equatorial Hotel and Mei Lin Ge Restaurant both said they would serve the fish unless there was an official ban.

Turbot is a popular dish in China, partly because its Chinese name translates as "many treasures."

Most stocks come from Shandong Province.

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European Cities Do Away with Traffic Signs

By Matthias Schulz
Spiegel Online
November 16, 2006

Are streets without traffic signs conceivable? Seven cities and regions in Europe are giving it a try -- with good results.

"We reject every form of legislation," the Russian aristocrat and "father of anarchism" Mikhail Bakunin once thundered. The czar banished him to Siberia. But now it seems his ideas are being rediscovered.

European traffic planners are dreaming of streets free of rules and directives. They want drivers and pedestrians to interact in a free and humane way, as brethren -- by means of friendly gestures, nods of the head and eye contact, without the harassment of prohibitions, restrictions and warning signs.
A project implemented by the European Union is currently seeing seven cities and regions clear-cutting their forest of traffic signs. Ejby, in Denmark, is participating in the experiment, as are Ipswich in England and the Belgian town of Ostende.

The utopia has already become a reality in Makkinga, in the Dutch province of Western Frisia. A sign by the entrance to the small town (population 1,000) reads "Verkeersbordvrij" -- "free of traffic signs." Cars bumble unhurriedly over precision-trimmed granite cobblestones. Stop signs and direction signs are nowhere to be seen. There are neither parking meters nor stopping restrictions. There aren't even any lines painted on the streets.

"The many rules strip us of the most important thing: the ability to be considerate. We're losing our capacity for socially responsible behavior," says Dutch traffic guru Hans Monderman, one of the project's co-founders. "The greater the number of prescriptions, the more people's sense of personal responsibility dwindles."

Monderman could be on to something. Germany has 648 valid traffic symbols. The inner cities are crowded with a colorful thicket of metal signs. Don't park over here, watch out for passing deer over there, make sure you don't skid. The forest of signs is growing ever denser. Some 20 million traffic signs have already been set up all over the country.

Psychologists have long revealed the senselessness of such exaggerated regulation. About 70 percent of traffic signs are ignored by drivers. What's more, the glut of prohibitions is tantamount to treating the driver like a child and it also foments resentment. He may stop in front of the crosswalk, but that only makes him feel justified in preventing pedestrians from crossing the street on every other occasion. Every traffic light baits him with the promise of making it over the crossing while the light is still yellow.

"Unsafe is safe"

The result is that drivers find themselves enclosed by a corset of prescriptions, so that they develop a kind of tunnel vision: They're constantly in search of their own advantage, and their good manners go out the window.

The new traffic model's advocates believe the only way out of this vicious circle is to give drivers more liberty and encourage them to take responsibility for themselves. They demand streets like those during the Middle Ages, when horse-drawn chariots, handcarts and people scurried about in a completely unregulated fashion. The new model's proponents envision today's drivers and pedestrians blending into a colorful and peaceful traffic stream.

It may sound like chaos, but it's only the lesson drawn from one of the insights of traffic psychology: Drivers will force the accelerator down ruthlessly only in situations where everything has been fully regulated. Where the situation is unclear, they're forced to drive more carefully and cautiously.

Indeed, "Unsafe is safe" was the motto of a conference where proponents of the new roadside philosophy met in Frankfurt in mid-October.

True, many of them aren't convinced of the new approach. "German drivers are used to rules," says Michael Schreckenberg of Duisburg University. If clear directives are abandoned, domestic rush-hour traffic will turn into an Oriental-style bazaar, he warns. He believes the new vision of drivers and pedestrians interacting in a cozy, relaxed way will work, at best, only for small towns.

But one German borough is already daring to take the step into lawlessness. The town of Bohmte in Lower Saxony has 13,500 inhabitants. It's traversed by a country road and a main road. Cars approach speedily, delivery trucks stop to unload their cargo and pedestrians scurry by on elevated sidewalks.

The road will be re-furbished in early 2007, using EU funds. "The sidewalks are going to go, and the asphalt too. Everything will be covered in cobblestones," Klaus Goedejohann, the mayor, explains. "We're getting rid of the division between cars and pedestrians."

The plans derive inspiration and motivation from a large-scale experiment in the town of Drachten in the Netherlands, which has 45,000 inhabitants. There, cars have already been driving over red natural stone for years. Cyclists dutifully raise their arm when they want to make a turn, and drivers communicate by hand signs, nods and waving.

"More than half of our signs have already been scrapped," says traffic planner Koop Kerkstra. "Only two out of our original 18 traffic light crossings are left, and we've converted them to roundabouts." Now traffic is regulated by only two rules in Drachten: "Yield to the right" and "Get in someone's way and you'll be towed."

Strange as it may seem, the number of accidents has declined dramatically. Experts from Argentina and the United States have visited Drachten. Even London has expressed an interest in this new example of automobile anarchy. And the model is being tested in the British capital's Kensington neighborhood.

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Curiouser and Curiouser

Russia, U.S. sign agreement on WTO deal in Vietnam

www.chinaview.cn 2006-11-19 17:00:40

HANOI, Nov. 19 (Xinhua) -- Russia and the United States signed here Sunday a bilateral agreement on Russia's accession to the World Trade Organization (WTO) on the sidelines of the ongoing Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting.
The agreement, signed by U.S. Trade Representative Susan Schwab and Russian Minister of Trade and Economic Development German Gref, paved the way for Russia to become a full member of the WTO.

Describing it as an important milestone in Russia's bid to join the WTO, Schwab said the document signed will be subject to approval through legal procedures in their respective countries.

"I'm pleased that we have concluded this important agreement with Russia's WTO accession negotiations. This is a strong and far-reaching agreement that meets the high standards of President Bush's market-opening trade agenda and moves Russia closer to full integration into the global, rules-based trading system," Schwab said.

She said that the United States will grant permanent normal trade relations (PNTR) to Russia, and U.S. business people will benefit much once Russia becomes a full WTO member.

Russian Trade Minister Gref said "The signing of the agreement is a historic event and a milestone for Russia to integrate into the global economy," adding that tremendous work had been done by both sides to conclude the agreement.

According to Schwab, Russia's tariff commitments include participation in the Information Technology Agreement, which will result in the duty-free entry of IT products such as computers and semiconductors.

Russia has also agreed to substantially reduce its tariffs on both wide body and narrow body of civil aircraft and parts, and the country's overall bound tariff rate on industrial and consumer products will average around eight percent.

With respect to other non-tariff barriers, the agreement sets out an understanding on procedures for importing technology products with encryption. And Russia will reduce export duties on ferrous (steel) scrape and eliminate its export duty on copper cathode.

The bilateral market access agreement also includes important provisions that will strengthen intellectual property rights (IPR) protection in Russia.

Gref said that Russia had been committed to IPR protection, which is in the interest of the country, adding that Russia will implement what has been agreed in the document.

Russia has been negotiating its terms of accession to the WTO, and previously the General Agreement on Tariffs and Trade, since 1993. The next step in Russia's accession process is completion of multilateral negotiations.

"I am pleased to work with the Russian side on the last stage of the journey," Schwab said.

Comment: So, we wonder what concessions and secret agreements were made between Russia and the US in order to achieve this deal? Will Russia change its course on Iran, or is it elsewhere?

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Russian ex-spy fighting for life after poisoning in London

Sun Nov 19, 2006

LONDON - A former Russian spy and fierce critic of Russian President Vladimir Putin was fighting for his life in a London hospital after an apparent bid to kill him by poisoning.

Alexander Litvinenko, a former lieutenant colonel in Russia's Federal Security Service (FSB) -- successor to the Soviet KGB -- fell ill after a November 1 meeting in a London sushi bar with a contact who purportedly had information on the murder of Russian journalist Anna Politkovskaya, said the Mail on Sunday newspaper.
Specialist detectives launched an investigation as the 43-year-old lay in bed in the central University College Hospital in a serious but stable condition, fighting what an expert said was poisoning by thallium, a toxic metal.

Friends of Litvinenko said they were in no doubt that the FSB was out to get the outspoken defector, who was granted political asylum in Britain in 2001.

A spokesman for London's Metropolitan Police told AFP: "Officers from the specialist crime directorate are investigating a suspicious poisoning.

"The inquiry is continuing and there's no arrest at this stage."

If Russia's security services were behind the alleged poisoning, it would not be the first time that they have tried to silence critics on the streets of London.

In 1978, Bulgarian dissident Georgi Markov was stabbed in the leg while walking across London's Waterloo Bridge by a man with an umbrella which fired a ricin pellet. Markov died in hospital three days later.

KGB defectors including Oleg Gordievsky have since confirmed that the Soviet intelligence agency was behind the killing.

More recently, Ukrainian prosecutors said in September that the dioxin which poisoned Ukrainian President Viktor Yushchenko during 2004 elections was made in the United States, Britain or Russia.

Yushchenko still bears facial disfigurement after falling ill during his presidential election campaign in September 2004, the day after he had dined with officials from the Ukrainian security services.

Litvinenko fled to Britain after blowing the whistle on an alleged FSB plot to assassinate Russian business oligarch Boris Berezovsky, who is also now living in Britain.

Litvinenko reportedly fell out with Putin when the president was head of the FSB in the late 1990s.

He claimed the agency was linked to apartment bombings in 1999 which killed around 300 people and were blamed on the Chechens, one of the reasons then-prime minister Putin sent Russian troops back into Chechnya, a popular war that propelled him into the presidency in 2000.

Politkovskaya, a long-term thorn in the Kremlin's side over the war, who was shot dead in her apartment in October, prompting an international outcry, was reportedly a friend of Litvinenko.

The Sunday Times said the former agent had met an Italian called Mario at the sushi restaurant.

"I ordered lunch but he ate nothing," the weekly quoted Litvinenko as saying, without stating how or when he had spoken to the paper.

"He appeared to be very nervous," he added. "He handed me a four-page document which he said he wanted me to read right away.

"It contained a list of names of people, including FSB officers, who were purported to be connected with the journalist's murder."

But Litvinenko added he was not in a position to accuse Mario of involvement in the poisoning, the paper said.

The Mail on Sunday said Litvinenko was in hospital under armed guard, was struggling to speak and had only a 50 percent chance of survival.

He had kidney damage, was constantly vomiting and suffered an almost total loss of white blood cells, The Sunday Times added.

The paper quoted a medical report which showed he had three times the maximum safe limit of thallium in his body.

Clinical toxicologist John Henry, who examined Litvinenko on Saturday, said the former spy was "quite seriously sick".

"There's no doubt that he's been poisoned by thallium, and it probably dates back to 1 November, when he first started to get ill," he told the BBC.

"It is tasteless, colourless, odourless. It takes about a gram... to kill you."

A friend of Litvinenko, Alex Goldfarb, said outside the hospital: "He looks terrible. He looks like a ghost actually. He lost all his hair. He hasn't eaten for 18 days."

He added: "I think this is the work of the Russian secret service."

A leading Chechen separatist in London, Akhmed Zakayev, told Sky News television he believed Litvinenko's illness was due to "the condoning and lacklustre attitude of the Western governments to the state terrorism policy perpetrated by Russia". He described what had happened as a "terrorist attack".

The Russian embassy in London was unavailable for comment.

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Gunman wounds 8 at German high school

Last Updated: Monday, November 20, 2006 | 6:50 AM ET
CBC News

A shooting at a high school in northwestern Germany left eight people wounded and the masked gunman dead on Monday, according to police.

Police said the wounded included students, a female teacher and the head caretaker. Police did not yet release details on how the gunman died.
Police spokesman Josef Brinker said the gunman went into Geschwister Scholl school in Emsdetten, near the Dutch border, at about 9:30 a.m., shortly after morning classes started, and opened fire.

Police cleared the school and ensured all students in the building were taken to safety.

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Air Force One has mechanical problem; Bush shifts to backup

November 19, 2006

HO CHI MINH CITY, Vietnam - Air Force One has suffered a mechanical problem, forcing President Bush to shift to a smaller backup jet as he continues his Asian trip.

The White House isn't specifying the problem that grounded the Boeing 747 which usually serves as the presidential aircraft.
It happened in Ho Chi Minh City in Vietnam before the president was to fly to Jakarta, Indonesia.

The glitch left officials scrambling to accommodate dozens of traveling staffers. Most were getting seats on a press charter aircraft.

The White House is hopeful the 747 will be repaired before the next leg -- from Jakarta to Hawaii. If it isn't, Bush's Boeing 757 may have to make refueling stops along the way.

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Stricken cruise ship docks for cleaning

Associated Press
Sun Nov 19, 2006

FORT LAUDERDALE, Fla. - A thorough scrubbing of the Carnival Liberty began Sunday as the ship docked after a virus sickened nearly 700 passengers on a trans-Atlantic cruise.

Fourteen guests and five crew remained ill and in isolation when the ship arrived at Port Everglades, according to a statement released by Carnival Cruise Lines, a brand of Carnival Corp. Some passengers were escorted off the ship in wheelchairs by crew wearing blue gloves.
Preliminary tests identified the source of the outbreak as the highly contagious norovirus, which had struck several guests just before they boarded the cruise Nov. 3 in Rome, Carnival officials said. More than 530 guests and 140 crew reported to the ship's infirmary with similar symptoms during the 16-day voyage.

Passengers who fell ill during the cruise said they received over-the-counter anti-diarrheal medication and pills or an injection to ward off nausea in the ship's infirmary, and had been quarantined in their cabins.

"They brought us 7-Up, bottled water, ice and a diet of rice, though you didn't feel like eating," said Jim Lankes, 48, of Phoenix. Lankes and his 45-year-old brother both got sick when the ship was docked in Barcelona, Spain.

Crews scrubbed the ship's handrails and utensils, offered disinfecting hand gel and halted the self-serve buffets after the outbreak started. Even plastic menus were wiped clean, said Pedro Carreras, 51, of McDonough, Ga.

Most cruise activities and excursions continued as scheduled, passengers said, though the crew's illness disrupted some personal services.

"Our cabin steward was struck, and we didn't have anybody to clean our cabin for five days," said Pamela Stupnik of Pueblo, Colo. She said she and her husband spent two days vomiting in their cabin.

A team from the U.S. Centers for Disease Control boarded the cruise when it docked in St. Maarten to oversee the cleaning operation and try to determine what caused the outbreak, Carnival said.

Norovirus is a group of viruses that cause stomach flu symptoms such as diarrhea, vomiting and stomach cramps, according to the CDC. The illness usually lasts one to two days without any long-term health effects. It spreads through contaminated food or liquids, by touching contaminated surfaces or objects and then placing that hand in one's mouth, or through direct contact with someone who is infected and showing symptoms.

The Liberty, which has room for 2,974 travelers, had been scheduled to set sail again Sunday afternoon on a six-day Caribbean voyage, but Miami-based Carnival delayed its next departure until Tuesday so crews could have extra time to disinfect the ship.

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Monetary Manipulations

Nasdaq makes $5.1 bln bid for LSE

By Louise Heavens and Mark Potter
November 20, 2006

LONDON - U.S. stock exchange Nasdaq launched a 2.7 billion pound ($5.1 billion) offer for the London Stock Exchange on Monday in a bid to become the world's first transatlantic bourse.

Nasdaq, which had built up a 25 percent stake after a previous bid was rebuffed, said it was offering to pay 1,243 pence a share in cash for the rest of the company, Europe's biggest stock market.
The second-biggest U.S. stock exchange also said it had increased its stake to 28.75 percent by buying a further 7 million LSE shares at 1,243 pence apiece, at a cost of 87.8 million pounds, strengthening its hand against any possible counter-bid.

The move comes as the world's stock markets are rushing to consolidate, under pressure from customers to cut fees and offer global services, and a group of banks added to the pressure last week by announcing plans to create their own pan-European equity trading platform next year.

Competition between established exchanges and alternative platforms will be made possible by the European Union's Markets in Financial Instruments Directive (MiFID), which comes into effect next year.

"The banks' initiative has undermined the LSE's value and Nasdaq is using this weakness to strike a deal," said one analyst who declined to be named.

Shares in the LSE were up 6.2 percent at 1,293 pence in midday trade, valuing it at around 3.2 billion pounds.

Dealers said the shares were rising on expectations that the LSE may find a 'white knight' to rival Nasdaq's offer or that the LSE board may agree to a higher offer now that increased competition to its exchange is on the cards.

"Clara Furse (the LSE's Chief Executive) will be rushing around to find a white knight, maybe OMX or Deutsche Boerse. Or maybe the board will agree to a higher offer, say around 1,300 pence," said one senior dealer in London.

The LSE declined to comment, but is expected to release a statement via the Regulatory News Service later today.


The race has been on to create the first trans-Atlantic stock exchange. Both Nasdaq and archrival NYSE Group Inc., the world's largest stock exchange, have been pushing for overseas expansion in an effort to boost their product offerings and geographical reach in an increasingly competitive and commoditized industry.

While Nasdaq has been building its stake in the LSE, NYSE has been pursuing Paris-based exchange Euronext, a deal it struck earlier this year which is awaiting shareholder approval.

A source familiar with the matter said Nasdaq took advantage of recent falls in the LSE's valuation to make an offer today.

The source added that the New York-based exchange decided against waiting until April, when it could have bid less, because this would have seen it fall behind rivals such as NYSE in the current wave of exchange consolidation.

Nasdaq's new bid is 40 percent above its previous offer in March, but close to the level at which the second biggest U.S. stock market paid for most of its stake.

Nasdaq said the deal would create the world's biggest exchange by number of listings, including over 6,400 companies with a market value of $11.8 trillion, as well as the most active exchange with an average daily volume of 7.4 billion shares traded.

UK Treasury minister Ed Balls said Britain will not stand in the way of Nasdaq's bid.

Nasdaq's Chief Executive Bob Greifeld said the combined enterprise will have a breadth of products to compete effectively with any threat from the banks.

"We've always operated in a competitive environment. The fact that you will have competition in the London market is something we respect," Greifeld told journalists on a conference call.

The LSE has long been viewed as a takeover target because it is a relatively small company, compared with many of its rivals which have branched into other trading platforms. However, the firm has rejected approaches from all of its suitors to date.

"Given that the (LSE) shares were trading above 1300 pence in the middle of last week, we expect the exchange will reject this renewed advance," said Bridegwell Securities analyst Katrina Preston.

Nasdaq said it would retain the LSE brand and that the London exchange would continue to be regulated solely by the UK's Financial Services Authority.

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Bank of America to buy U.S. Trust: WSJ

November 20, 2006

NEW YORK - Bank of America Corp. is expected to announce on Monday that it is paying $3.3 billion for U.S. Trust, the private-banking arm of Charles Schwab Corp., The Wall Street Journal reported on its Web site, citing people familiar with the situation.
The planned purchase would vault the giant consumer bank to the top tier of private banks, creating a new leader in the increasingly lucrative business of managing rich people's money, the paper said.

Schwab and Bank of America were not immediately available for comment.

Bank of America, whose 5,800 branches stretch from coast to coast, has been trying to leverage its size and distribution network to gain market share in areas where it has been weak, the Wall Street Journal said.

Last month, Bank of America announced free stock trades for many customers in an attempt to beef up its brokerage business and persuade customers to centralize their assets.

Buying U.S. Trust solves one of the company's longstanding problems -- trying to break into the elite world of wealth management. With U.S. Trust, Bank of America gets one of the most vaunted names in the wealth-management world.

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Venezuela's Economy Grew By 10.2% in 3rd Quarter

Friday, Nov 17, 2006By: Steven Mather - Venezuelanalysis.com

Caracas, November 17, 2006-Venezuela's economy grew by 10.2% in the 3rd quarter of this year, compared with the same period last year. The driving force behind the growth is the non-oil sector of the economy, the Venezuelan Central Bank said yesterday.
The oil sector overall growth in the oil sector actually fell. Public sector oil growth was at 0.9%, while the private oil sector fell by 11.2%. This was partly due to maintenance activities, but private companies blame the down time due to the renegotiation of their operating contracts early this year. The combined growth figure for the oil sector compared with last year was down 1.8%.

Contrary to the image of the Venezuelan government and its president, overall private sector growth eclipsed the public sector figure. The private sector grew by 12.3%, while the public sector grew by only 2.7%. Private sector investment in high value added activities of the manufacturing process was 11%, which accounts for a large chunk of the private sector growth. Government spending on the building trade was up 35% relative to last year's figures.

In fact, the communication, retail, construction, and manufacturing industries all posted double-digit growth figures. The bank said this was due to the continuing high levels of liquidity in the economy.

These figures suggest the bank may have underestimated the annual growth figure of 9% for this year.

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Yahoo internal memo urges major shake-up, job cuts

By Eric Auchard
Sat Nov 18, 2006

BERKELEY, California - Yahoo Inc. needs a dramatic organizational shake-up and cuts in its work force of up to 20 percent, according to an internal memo written last month by Senior Vice President Brad Garlinghouse.
Garlinghouse, a second-tier Yahoo executive who has taken increasing powerful roles in the company since joining 3 1/2 years ago, argues that Yahoo suffers from a lack of consistent leadership, business focus and a "single cohesive strategy."

"We lack a focused, cohesive vision for our company," Garlinghouse writes. "We want to do everything and be everything -- to everyone."

The document was published in the Saturday edition of the Wall Street Journal. A Yahoo spokesman confirmed the authenticity of the memo, but declined to comment directly on details contained in the memo or in the newspaper story.

The Journal story also describes rumors that Chief Operating Officer Dan Rosensweig and Chief Financial Officer Sue Decker could be elevated to become co-presidents, in preparation for the retirement of Chairman and Chief Executive Terry Semel, age 64, who joined Yahoo five years ago.

The call for restructuring follows a series of embarrassments that have caused Yahoo shares to lose 31.5 percent of their value so far this year. It is struggling with a slowdown in parts of its advertising business while racing to keep pace with far-faster growing rival Google Inc..

The memo -- known as "The Peanut Butter Manifesto" because it argues that Yahoo's investment strategy is like spreading peanut butter too thinly on bread -- argues for a "radical reorganization" of the 12-year-old Internet media giant.


"I hate peanut butter," Garlinghouse writes.

The Yahoo executive said the company should cut its work force by 15 percent to 20 percent as part of a plan to reshape the current business unit structure and eliminate the bureaucratic duplication of functions that exist across Yahoo.

The Sunnyvale, California-based company has nearly 10,000 employees worldwide.

"There are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge."

"I believe we must embrace our problems and challenges and that we must take decisive action," the memo states bluntly.

Garlinghouse names a variety of duplicative groups that pit established business units against new initiatives, including music, photos, search, applications, social networks, global strategy and even who controls the Yahoo home page.

In a statement, Yahoo's leadership has defined three areas of focus for its business.

During its quarterly financial conference call last month, Semel described efforts to close the gap with rival Google Inc. in how much revenue it generates from its search business, increase its lead in brand advertising and get a jump on emerging markets like video, mobile and social networks.

"The memo itself highlights that we have an open, collaborative culture and a senior management team that is intensely committed to helping Yahoo! fulfill its potential as an Internet leader," the Yahoo statement said.

The Journal said the memo has received support from Yahoo senior management and that Garlinghouse had been asked to head an internal committee to investigate the issues he raises.

"All is not well," Garlinghouse writes. The memo itself was written in response to an October 11 New York Times article that he describes as "a painful public flogging."

"While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call," the Yahoo executive writes. "It's time for us to get back up."

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