Sections Included News Brief + The Dig + Hot off the Presses A Break with History + Institutionalized Minds

The End of Growth

By Richard Beinberg
February 11, 2012; 22nd Edition

News Brief
Three Separate Incidents of Violent Intimidation of Dems by Republican Extremists in One Single Week. . . .By Brad Friedman; From The Brad Blog The Obamas vs The Romneys: The Republican Mind and Visions of Whiteness and Race Suicide on Dr. Kings Holiday. . . .From the Respectable Negroes Blog FBI: cyber threat Might Surpass Terror Threat. . . .By Alicia Budic; From Face the Nation (CBS News) Freedom Socialist Party launches Presidential Write-In Campaign Centered on Bold Working-Class Solutions. . . .From the Freedom Socialist Party Website Hi-de-hi Patients, its a Private NHS. . . .By Louise Nousratpour; From the Morning Star A New Declaration. . . .From the Occupy Wall Street Journal Weapon of Choice. . . .By Dr. Stephen Londe; From an Unknown Source Dictatorship of the Market. . . .By Jose Goulao; From the Journal de Angola Romney the Vulture test for U.S Voters. . . .By Paul Thomas; From the New Zealand Herald

The Dig
Occupy Wall Street: Black Voices for Economic Justice Must Be Heard. . . .By Ron Daniels; From the Institute of the Black World Shell Game. . . .By Thomas Vincent; From the Ethical Spectacle

Hot off the Presses

Bush & Obama? Israeli Assassinations and U.S Presidents. . . .By Alison Weir; From Antiwar.com

A Break with History

Bretton Woods System. . . .From Polsci.edu

Institutionalized Minds
The End of Growth. . . .By Richard Beinberg; From the Muselett

News Brief
Three Separate Incidents of Violent Intimidation of Dems by Republican Extremists in One Single Week
By Brad Friedman; 1/27/2012; From the Brad Blog
Violent Republican extremism?! What violent Republican extremism?! Oh, this violent Republican extremism...from just the past one week alone... A campaign manager for a Democratic congressional candidate in Arkansas came home to find his family's cat killed, with the word "LIBERAL" painted on it. His 5year old son made the gruesome discovery. Five Democratic Missouri state Senators --- four of them African-American women --- discovered rifle crosshair stickers placed on the door of their capitol offices. (Maybe they're just "surveyor's marks" though. Right Sarah Palin?) A veteran 14-year police sergeant from Peoria, Arizona (near Phoenix), proudly posted a photo he took of a bunch of guys with automatic rifles holding a bullet riddled t-shirt featuring an image of Barack Obama on it. No, we didn't go looking for these stories, just happened to come across them. So perhaps there are others out there that we missed this week. Perhaps there is evidence of Democratic extremists similarly targeting Republicans with brutal violence and threats of brutal violence. If so, we haven't seen it. This all takes place on the very same week function after being shot in the head and nearly killed just over one year ago this month in Tucson, AZ (Not far from where the cop near Phoenix proudly posted the bullet-ridden photo of Obama). While six others were killed during the same incident in Tucson, as the shooter used a legal weapon allowing him to get off some 30 shots per clip, federal and state lawmakers have failed to do a damned thing about any of it. And the election year is just beginning.

in which Arizona's Democratic Congresswoman Gabby Giffords was finally forced to resign from the U.S. House of Representatives while she attempts to continue recovering her brain

The Obamas vs the Romneys: The Republican Mind and Visions of Whiteness and Race Suicide on Dr. King's Holiday
Monday, January 16, 2012; From The We Are Respectable Negroes Blog
http://wearerespectablenegroes.blogspot.com/2012/01/obamas-vs-romneys-republican-mind-and.html The road to the world imagined by Dr. King turn America into a "Socialist-Communistremains long. Fascist European welfare state," the signals to Some four decades after his murder, and white racism are beyond dog whistles. They are the inauguration of the Southern Strategy, the blaring air raid sirens. sweet appeals of racial code words, and the Dog whistles can also be subtle; they can succor offered by white racial resentment be visual cues which speak to the faithful. remain undeniable to the Republican Party. For example, some Americans see Mitt When Santorum, Gingrich, and Romney talk Romney's much publicized family photo as one about lazy, parasitic African Americans who of homogeneous whiteness and WASP glory. should pick up mops to learn about hard work, Whether in rust belt towns, gated communities, and where "the blacks'" exalted leader wants to poor white rural America, or the nondescript

suburbs, this is the America of "Nixonland" that so many yearn for. This is real America; the best of us; a country that they/we should die to protect. Of course, this is a memory steeped in false nostalgia. It is whiteopian dreaming. Nevertheless, such illusions are both compelling and compulsive to many Americans of a certain age, hue, ideology, and experience. Other folks see the family photo of Barack Obama and his kin as the future. Americans are a cosmopolitan people. While there exists a deep and historic nativist impulse, as well as a fear of the Other, the country's greatness has been its ability to include all folks that want to belong-- what is an all embracing sense of pluralism and "we the people" that is flexible, accommodating, and inclusive. Citizens use heuristics, memes, cues, and slogans to make sense of politics, and to work through their own political decision-making. As such, for many, the photo of Mitt Romney's family is that of "real America," and to deviate from this approved model is hazardous to the Common Good, a decision that is perverse, and one that is "unAmerican." By implication, for the collective consciousness of the white Tea Party GOP populist electorate--and although they may lack the vocabulary to express this cogently--there is something inherently wrong with the interracial, international, and "diverse" nature of Barack Obama's family. In all, the Obama way is "race suicide": it is a path of destruction for the United States, as to be American is to be quintessentially and unquestionably "white." Folks like Pat Buchanan are honest enough to voice such sentiments, feelings which are the rotten, beating heart of the Tea Party GOP. Others who share Buchanan's anxieties and loyalties are not as courageous; they play around with his themes while not owning their substance. Ironically, their need to couch such wickedness in race neutral talk is "progress." However, the concerns of reactionary white populists are centuries-old, near and dear to Whiteness and a country originated as a White Republic. For them the question remains unresolved (even in the year 2012): how much racial equality is "enough?" The challenge here is that to be wholly inclusive, and to really create a radically democratic society, is to risk the privileges of Whiteness. It is to create a world in keeping with Brother King's vision where white people are forced to compete on an equal playing ground with people of color. Some of us are more than ready for that world. Others, those White Dreamers, who foreground whiteness as "real and "idolized" America, are scared to death of a multiracial, multicultural, pluralistic 21st century. Whiteness is such a valuable currency, one whose rewards have been outsized for so long,

that to consider further reductions in its returns is terrifying to many White Americans. On Dr. Martin Luther King Jr's birthday, conservatives will mouth breath about his legacy as they spin an empty story of racial equality, racist Southern Democrats, and white victimhood in the Age of Obama. These contortions are to be expected. The joke is--and has long been--that the real Dr. King, the radical visionary and not the deracialized, apolitical panderer for gross consumerism and empty politics, would be hated by conservatives, Red State America, and many others fearful of his progressive vision, if he lived in the present. This fact is a signal to Dr. King's greatness.

All Americans should be reflective on this day. Sadly, many conservatives, and others who hold a deep disdain for people of color, the poor, unions, the working class, immigrants, and the disadvantaged, will try to find a way to steal Dr. King's vision. The time is long past for such antics to be made obsolete. In the year 2012, those on the Right who bastardize and rape Dr. King's legacy, should finally stop such foolishness. Brother Martin does not belong to you. Sorry. He belongs to us. It is about time that his legacy and vision were taken back--without apology--by those who would stand shoulder to shoulder with him in the present, and that are the offspring of his struggle and martyrdom. And Tea Party U.S.A. is not part of that vision. They never were and could not possibly be today.

FBI: Cyber threat might surpass terror threat

By: Alicia Budic; Face the Nation (CBS News); February 2, 2012 3:22 PM http://www.cbsnews.com/8301-3460_162-57370682/fbi-cyber-threat-might-surpassterror-threat/
Today, FBI Director Robert Mueller told the U.S. House Permanent Select Committee on Intelligence that he believes "the cyber threat will equal or surpass the threat from counter terrorism in the foreseeable future." He elaborated on the breadth of the threat, saying "there is very little we do in this day and age that is not on or somehow associated with the internet. The theft of intellectual property, the theft of research and development, the theft of the plans and programs of a corporation for the future, of all which are vulnerable to being exploited by attackers." On Tuesday, Mueller testified at the Senate Select Intelligence committee's hearing on worldwide threats. He had similar warnings about cyber security, and elaborated on three ways the FBI and intelligence agencies need to address the concern. He said that within the FBI, they have to change their organizational structure "in the same way we changed to address terrorism." Secondly, he noted that intelligence agencies "have to share information" in the same way "we had to share intelligence in the wake of September 11th...we have to build up the collective addressing of that threat, in the same way that we did so and broke down the walls in the wake of September 11th." Finally, there is legislation the FBI would like passed to help combat the cyber threat. He said there has to be a national reporting requirement for data breaches, and that "we should be the recipients of that reporting." Built in that legislation he thinks there needs to be "the ability to share the information indicative of a crime with the bureau and others who have that responsibility." This comes just over a month after CBS Justice and Homeland Correspondent Bob Orr predicted "cyber security catches terrorism -- maybe even passes terrorism -- as our top domestic security concern. And I think we're about due for the first true cyber-attack on a piece of critical infrastructure, so we should watch for that." Orr made this prediction on the Dec. 25 edition of Face the Nation during the show's annual CBS Correspondents end-of-year roundtable. National Security Correspondent David Martin, Senior Business Correspondent Anthony Mason, Congressional Correspondent Nancy Cordes, Chief White House Correspondent Norah O'Donnell, Political Director John Dickerson and Correspondent Elizabeth Palmer all made predictions as well - some of which might just be on their way to coming true. Read theirs. And, for the record, Orr is now two-for-two in his year-end predictions on Face the Nation. On the January 3, 2010 edition he predicted the rise of homegrown terror threats from radicals in the United States reaching out to known operatives.

Freedom Socialist Party launches presidential writein campaign centered on bold working-class solutions
January 31, 2012; From the Freedom Socialist Party Website http://www.socialism.com/drupal-6.8/?q=node/1839
This election year, the Freedom Socialist Party (FSP) is running New Yorker Stephen Durham for U.S. president and Seattleite Christina Lpez for vice president in an energetic national write-in campaign. Says Durham, 64, The FSP ticket is a chance for people to vote not only against something, but for something. The campaign is thrilled to be giving people a way to send a strong protest message, find new kindred souls, and strengthen organizing efforts for a future all workers deserve. Over the past three years, charges Durham, The Democratic and Republican parties have done nothing but cooperate in forcing workers and the poor to pay the costs of the Great Recession caused by the banks and Wall Street. President Obama may play to the crowd by criticizing bad apple corporations, as he did in his State of the Union address. But the facts show that the program of corporate coddling, which creates austerity for the masses, is completely bipartisan. Vice presidential candidate Lpez, 43, explains the campaigns goals: We are encouraging people to register a protest against both the unjust economic system and the rigged electoral process that keeps it in place. And we want to generate discussion and action around solutions for peoples immediate survival and for changing the system for good. We know it can be done! But it means creating a grassroots, multiracial movement one that prioritizes the issues of people who are hurting most, for example immigrants, single mothers and their children, and Black teens trying to enter a dismal job market. We have great momentum from last years spirit of rebellion to build on. The FSP campaign platform calls for taxing corporate wealth, ending all U.S. military involvement abroad, creating full employment through a massive public jobs program and reducing the standard workweek to 30 hours with no cut in pay. The campaign also stands for bringing back and expanding social services, restoring civil liberties, and a host of other measures designed to eliminate poverty and discrimination and raise workers standard of living. Durham and Lpez are respected activists with a wealth of experience gained fighting for reforms like these while popularizing socialist ideas and the need for radical change. Durham, organizer of FSPs New York City branch based in Harlem, is a gay rights pioneer with a strong union background. A student and analyst of international affairs, he has traveled extensively in Latin America. Lpez is an immigrant rights champion and the organizer for Seattle Radical Women. As organizer, she has helped lead a feminist campaign of women and men against budget cuts in Washington state for the last three years. According to campaign manager Doug Barnes, the socialist feminist FSP is taking the unconventional route of a writein campaign because corporate funding of the two major parties and restrictive ballot access laws stack the deck against minor parties. These hurdles, he notes, are compounded by mainstream media dismissal of alternative candidates, resulting in presidential debates that almost entirely avoid topics like the social costs of war or increasing repression against political dissenters. In one state, California, where the Peace and Freedom Party (PFP) electoral alliance already has ballot status, Durham will compete to be PFPs presidential candidate. The Durham/Lpez campaign launches this week with a candidate Web video, position statements, Facebook at www.facebook.com/VoteSocialism2012, Twitter @VoteSocialism, and featured articles in the Freedom Socialist newspaper. With the help of volunteers, the FSP will be spreading the news and ideas of the campaign widely. The Freedom Socialist 2012 Presidential Campaign Committee is planning for college and other speaking engagements, Skype presentations, fundraisers, and more activities around the country.

Hi-de-hi patients, it's a private NHS

February 1, 2012; by Louise Nousratpour; From the Morning Star http://www.morningstaronline.co.uk/news/conte nt/view/full/114922
Tax-dodging bosses at the first ever NHS hospital to be privatised set out their plans for its future today, prioritising "value for money" and "patient experience" but failing to commit to spending on quality public care. Circle executives made the remarks as they officially started managing Hinchingbrooke Hospital in Cambridgeshire. The firm won the management contract in November after the government decided to sell Hinchingbrooke rather than meet its 40m debt - a fraction of the billions authorised for bailing out the banks. Circle chief executive and former Goldman Sachs banker Ali Parsa today unveiled plans to turn the "basket case" hospital into "one of the top 10" in the country - but made it sound more like a cut-price holiday camp than a quality institution. He said that following "unprecedented sessions" with staff he had set four priorities - patient safety, patient experience, staff engagement and value for money. "Like John Lewis, Circle are employee coowned, and have a track record of creating best-inclass hospitals," Mr Parsa boasted. But in reality Circle is a joint venture between Circle Partnership and hedge fund firm Circle Holdings, both registered in the tax havens of the British Virgin Islands and Jersey respectively. Health campaigners and unions condemned the takeover as a sign of things to come under government plans to shred the NHS into easy prey for profiteers. Unison assistant general secretary Karen Jennings said patients and staff were rightly worried that an inexperienced profit-making company taking over could turn the local hospital. "Circle has never run an A&E or maternity ward, and its only other hospital has just 16 beds, and provides non-urgent surgery," she noted. "In health care patients must always come first, but private companies will always have profits and shareholders at the top of the list." Shadow health minister Liz Kendall questioned why Circle - which has "close links" with the Tory Party and no experience of running A&E or maternity services - was selected in the first place. "Patients and the public have seen this government's true vision for the future of our NHS, with the wholesale transfer to the private sector," she added. Health Emergency campaigns director Geoff Martin added: "With many other hospitals up and down the country on the brink of financial ruin as a result of government policy the vultures are hovering looking to feed on the carcass of what used to be the jewel in the crown of the welfare state. "We have to fight back before the Circles and their like are running the show from top to bottom in the name of private greed." And TUC deputy general secretary Frances O'Grady urged the public to join the All Together for the NHS campaign on March 7 to stop Andrew Lansley's damaging NHS Bill, currently being debated in the Lords. "We have seen a private company taking over an NHS hospital for the first time. This will be the future the NHS has to look forward to if the Bill stays in its current form," she warned.

Freedom Socialist 2012 Presidential Campaign Committee 4710 University Way NE, Ste. 100 Seattle, WA 98105 206-985-4621 VoteSocialism@gmail.com

A New Declaration
February 1, 2012; Derrick Jensen, From The Occupy Wall Street Journal http://occupiedmedia.us/2012/02/a-newdeclaration/ We hold these truths to be self-evident: That the real, physical world is the source of our own lives, and the lives of others. A weakened planet is less capable of supporting life, human or otherwise. Thus the health of the real world is primary, more important than any social or economic system, because all social or economic systems are dependent upon a living planet. It is self-evident that to value a social system that harms the planets capacity to support life over life itself is to be out of touch with physical reality. That any way of life based on the use of nonrenewable resources is by definition not sustainable. That any way of life based on the hyper-exploitation of renewable resources is by definition not sustainable: if, for example, fewer salmon return every year, eventually there will be none. This means that for a way of life to be sustainable, it must not harm native communities: native prairies, native forests, native fisheries, and so on. That the real world is interdependent, such that harm done to rivers harms those humans and nonhumans whose lives depend on these rivers, harms forests and prairies and wetlands surrounding these rivers, harms the oceans into which these rivers flow. Harm done to mountains harms the rivers flowing through them. Harm done to oceans harms everyone directly or indirectly connected to them. That you cannot argue with physics. If you burn carbon-based fuels, this carbon will go into the air, and have effects in the real world. That creating and releasing poisons into the world will poison humans and nonhumans. That no one, no matter how rich or powerful, should be allowed to create poisons for which there is no antidote. That no one, no matter how rich or powerful, should be allowed to create messes that cannot be cleaned up. That no one, no matter how rich or powerful, should be allowed to destroy places humans or nonhumans need to survive. That no one, no matter how rich or powerful, should be allowed to drive human cultures or nonhuman species extinct. That reality trumps all belief systems: what you believe is not nearly so important as what is real. That on a finite planet you cannot have an economy based on or requiring growth. At least you cannot have one and expect to either have a planet or a future. That the current way of life is not sustainable, and will collapse. The only real questions are what will be left of the world after that collapse, and how bad things will be

Weapon of Choice
By Dr. Stephen Londe; From an Unknown Source We are used to the excuses and dissembling of politicians such as Mayors Michael Bloomberg of New York City, Mike McGinn of Seattle, Sam Adams of Portland, Ore., Jean Quan of Oakland and now L.A. Mayor Antonio Villaraigosa as they collude to use false claims of health and safety to suppress the right of free speech. But we in academia are charged with teaching and fostering critical thinking, academic rigor and honesty. So what are we to think of UC Berkeley Chancellor Robert Birgeneau and UC Davis Chancellor Linda Katehi, who do not seem to grasp the basic principle of academic freedom as they unleash repression and violence in response to reasoned dissent and peaceful protestprotest that represents some of the finest traditions of academic contribution? The images of university police and sheriffs deputies pepper spraying nonviolent students voicing their opinions on campus grounds, or brutally jabbing them with batons or dragging them away by the hair, plainly demonstrate these administrators attitude toward critical thinking. Is this the America we want? As a physician, I too am concerned about health and safety. Yet I can find no articles online about the relationship of tents and public health, nor of fires and protest tent camps, nor of disease outbreak and unsanitary conditions for lack of waste disposal in public protest encampmentseven encampments 10 times larger than those just disbanded by chemical weapons, force and arrest. But in an instant, I find more than 39,000 references to health concerns about the use of socalled pepper spray (Oleoresin capsicum). Of significant concern to health professionals are: in-custody deaths after the use of pepper spray, corneal abrasions, conjunctivitis, eye epithelial and nerve damage, respiratory failure, asthma, exacerbated congestive heart failure, myocardial infarction, pulmonary edema, pregnancy miscarriage, and short- and long-term psychological damage caused by the force perpetrated by those who are supposed to protect us and our right to dissent. Make no mistake, pepper spray is not a food product, as a Fox newscaster recently described it. It is a chemical weapon described in military manuals that attacks sensory nerves and mucous membranes. The police use of this weapon against peaceful protesters fits the definition of torture: The deliberate application of severe pain. It is not benign. When you watch armored police spray the faces of protesters in Philadelphia, Oakland, Davis and New York, remember they are using torture to silence someone who committed the crime of speaking out. Again, I am sensitive to health concerns. And, in fact, there are health problems to be found among the 99 percent protesters. Volunteer doctors, nurses and other health care workers find untreated hypertension, diabetes and other chronic illnesses among the protesters. They also find seizure disorders in people unable to afford their medications. Most of the health problems in this population are due to the lack of health insurance, inability to pay for expensive medications and lack of proper health care facilities. If our mayors were honestly interested in the health of their constituents, they would set up facilities where volunteer health professionals could care for our citizens. Perhaps they could set up medication and lab diagnostic funds into which their corporate backers could donate like good citizens, instead of using their wealth to buy political influence. If we are to encourage education and critical thinking, we must value our students in dissent. Punishing them with batons and pepper spray, torturing them, martyring them is to produce a society of evil and repression. It is anathema to education. Dissent and peaceful assembly are the hallmarks of democracy. What has happened to ours? Our abused students are showing us the way, and I salute them. for the humans and nonhumans who come after. We hold it as self-evident that we should do all that we can to make sure that as much of the real, physical world remains intact until the collapse of the current system, and that humans and nonhumans should be as prepared as possible for this collapse. That the health of local economies are more important than the health of a global economy. That a global economy should not be allowed to harm local economies or land bases. That corporations are not living beings. They are certainly not human beings. That corporations do not in any real sense exist. They are legal fictions. Limited liability corporations are institutions created explicitly to separate humans from the effects of their actionsmaking them, by definition, inhuman and inhumane. To the degree that we desire to live in a human and humane worldand, really, to the degree that we wish to survive limited liability corporations need to be eliminated. That the health of human and nonhuman communities is more important than the profits of corporations. We hold it as self-evident, as the Declaration of Independence states, That whenever any Form of Government becomes destructive of these ends [Life, Liberty, and the Pursuit of Happiness], it is the Right of the People to alter or abolish it. . . . Further, we hold it as self-evident that it would be more

Dictatorship of the Market

Perhaps it seems excessive to say that decisions of rating agencies interfere directly in people's lives. But this is exactly what happens.
January 18, 2012; By Jos Goulo; Jornal de Angola, Angola Translated By Jane Dorwart; Edited by Laurie Henneman There are situations which, when described, cannot be spared by beating around the bush or mincing words. Why try to sweeten the word "dictatorship" with another when it is based exactly on a determined fact? And the fact is that the decisions of those so-called ratings agencies represent interventions into the lives of people: taking away rights, lowering salaries, forcing layoffs. Who gave power to these rating agencies? Citizens? Were they elected? Did they present any plans? Who are they? Do they have faces? Are they accountable to anyone? Do they even pay taxes? All of the answers that each one of us could give to these questions will be enough to realize that we are facing an opaque phenomenon which, with absolute certainty, has nothing to do with any democratic mechanism. Perhaps it seems excessive to say that decisions of these rating agencies interfere directly in people's lives. But this is exactly what happens. The agencies rate the debts of countries, which determines the treatment that the market will give these debts, and which then requires that governments to alter their countries' economies. As many know, during the current crisis, these changes fall directly on the most vulnerable sectors of the population. Most people don't know there are many rating agencies. This is understandable as we only speak of three: Standard and Poor's, Moody's and Fitch, all of them American, and whose importance appears to be a etched in stone. Last Friday Standard and Poor's downgraded the ratings of nine countries of the European Union, even removing the highest (AAA) assessment of France and Austria. Europe was in a state of shock two weeks before a summit about a treaty which will place drastic limits on public deficits, institutionalize austerity and wound the same as always. Such a treaty will represent the end of the ability of the states to realize investments and to maintain the social rights of citizens. Then, in the middle of the general panic, rose the voice of Merkel, spared by the assessors, saying that the best answer to give Standard and Poor's would be to approve and rapidly and vigorously put into effect a new treaty. This is saying in plain language, "Let's not waste time with doubts and discussions, let's go forward with the treaty," which as we already can see is a creation of Merkel. There is no thought of submitting the treaty to a referendum of the populace, as if by doing so time would be lost and and it would become unviable. However, faced with rising criticism, Standard and Poor's assures people that it is not acting capriciously. They are in the right; the power of money hates whim and only knows greed. We would do well to notice that between the downgrading of debt ratings and the sonorous proclamation of Merkel, there is a relationship of cause and effect, which is not of course either whimsical or coincidental, given that the German chancellor is the greatest proponent of neoliberal orthodoxy in the European Union universe. The ratings agencies the American "three sisters," understand are pillars of a neoliberal order which imposes absolute power over the markets: markets of speculation, usury, and of the economy of the casino. They are not elected or chosen by us, but given to us. I have no doubt that the word "dictatorship" is the best one to describe the situation as it is. Who used the term "vulture capitalism" to describe the activities of one of America's most successful venture capital firms and elaborated as follows: "They sit there until they see a distressed company, then they swoop in, pick the carcass clean, and then fly away." Was it: A. Sue Bradford; B. Hone Harawira; C. Fidel Castro; D. Barack Obama; E. Rick Perry The correct answer is Perry, the Texas governor who was briefly the frontrunner in the race to become the Republican candidate in this year's presidential election. He was talking about Bain Capital, the company co-founded by Mitt Romney, the firm favourite for the Republican nomination following his victory in the Florida primary this week. Romney was chief executive of Bain for 15 years, during which time he amassed a fortune estimated at more than a quarter of a billion dollars. When he left in 1999, he became a passive partner in some Bain entities, an arrangement that gives him about $16 million a year. (Notwithstanding his wealth and the fact that he has, to all intents and purposes, been running for president for the better part of a decade, Romney has been known to joke that he's unemployed.) A venture capital firm provides funding to companies that need investment for expansion or product development in return for a share of the risks and rewards. A vulture capital firm does pretty much what Perry said. Bain under Romney seems to have been both.

precise to say that it is not the Right of the People, nor even their responsibility, but instead something more like breathing something that if we fail to do we die. If we as a People fail to rid our communities of destructive institutions, those institutions will destroy our communities. And if we in our communities cannot provide meaningful and nondestructive ways for people to gain food, clothing, and shelter then we must recognize its not just specific destructive institutions but the entire economic system that is pushing the natural world past breaking points. Capitalism is killing the planet. Industrial civilization is killing the planet. Once weve recognized the destructiveness of capitalism and industrial civilizationboth of which are based on systematically converting a living planet into dead commoditiesweve no choice, unless we wish to sign our own and our childrens death warrants, but to fight for all were worth and in every way we can to overturn it.

Romney the vulture test for US voters

A win for Mitt would show America is OK about hard-edge capitalism
February 4, 2012; By Paul Thomas via Watching America; From The New Zealand Herald http://www.nzherald.co.nz/opinion/news/article. cfm?c_id=466&objectid=10783269 Romney claims to have created 100,000 jobs by revitalising companies and putting them on the path to prosperity. At other times Bain executed leveraged buyouts, forced the company concerned to take over its debt and, having extracted huge dividends and consultancy fees, let it go bankrupt. Some defenders of slash-and-burn capitalism call this "creative destruction", arguing that over time it has a positive, Darwinian effect. You might expect Perry, as a rock-ribbed Republican and champion of the free enterprise system, to take that tack; instead he came at it from the perspective that "I don't believe capitalism is making a buck under any circumstances". Perry's now out of the race, but this torch will be carried by the increasingly feral Newt Gingrich, who describes Bain's modus operandi as "rich people figuring out clever legal ways to loot companies and lay off people". His supporters have put together a 30minute film of Bain's greatest hits. Assuming Romney wins the nomination, it will then be the turn of Obama and the Democratic Party. The Republicans have been calling Obama a socialist for the past four years, so they shouldn't be surprised when he bashes their

candidate with the cudgel so enthusiastically wielded by leading figures in their own party. You may shrug and say "Well, that's American politics for you" - but it might go a bit further than that. First, it suggests that even the Republican Party, the spiritual home of Gordon Gekko-style capitalism, is immune to the resentment against Wall Street and its counterparts that has been gathering steam since the 2008 global financial crisis. Manifestations of this backlash range from the Occupy Wall Street movement and its many off-shoots and imitators to the British Government's decision this week to strip a knighthood from the man who presided over the greatest banking failure in UK history. Second, Romney's candidacy will in effect be a referendum on "new" capitalism, which rationalises and restructures

and plays computer games with other people's money, as opposed to benign and paternalistic "old" capitalism which employed people to make things. Romney may look and sound like another in the long line of privileged Americans who believe God wants them to buy their way into the White House, but he's more than that - he's a standard-bearer for new capitalism. As a profile in New York magazine put it: "Romney was a business revolutionary ... pioneering the use of takeovers to change the way a business functioned, remaking it in the name of efficiency. "What emerged from the process when Wall Street reclaimed American business and remade it in its own image was a system that was more productive, nimble and efficient

than the one it replaced. It is also less equal, less stable and more brutal." How apt that he has was endorsed yesterday by Donald Trump, America's celebrity arch-capitalist famed for his catchphrase "You're fired!" If Romney becomes president having had his corporate history dissected and debated throughout the nominating process and election, it will demonstrate that the mindset and methods he represents aren't a spent force or an anathema to the American people. And where America goes, the world still tends to follow. Or perhaps New Zealand's the trailblazer. After all, it would mean that the US had followed our example by electing a financier who will be the country's richest-ever leader.

The Dig
Occupy Wall Street: Black Voices for Economic Justice Must Be Heard
By Dr. Ron Daniels; From The Institute of the Black World Dr. Ron Daniels is President of the Institute of the Black World 21st Century and Distinguished Lecturer at York College City University of New York. His articles and essays also appear on the IBW website www.ibw21.org and www.northstarnews.com . To send a message, arrange media interviews or speaking engagements, Dr. Daniels can be reached via email at info@ibw21.org

http://ibw21.org/commentary_and_news/vantage-point/occupy-wall-street-blackvoices-for-economic-justice-must-be-heard
Struggling to come up for air from a brutal schedule, for several weeks I had been planning to write an article about the necessity of those affected by the Great Recession to take to the streets to express their outrage. Before I could put pen to paper it happened. A disparate band of mostly young protesters from around the country, disgusted with the rapacious behavior of 21st century Robber Barons, marched on Wall Street and set up a camp called Occupy Wall Street. As an organizer one never knows what event, what incident or action will be the spark that galvanizes a movement for change. In the face of a Great Recession, precipitated by the greed-driven and reckless behavior of the bandits on Wall Street, there has been growing discontent among the American people, but with rare exception (mass actions by labor and allies in Wisconsin and Ohio) there has been a noticeable absence of mass action, particularly on the left. Indeed, over the past couple of years, it has been the Tea Party Patriots who have captured media attention and dominated the national discourse with their caravans and protest demonstrations calling for deep spending cuts, deficit and debt reduction, lower taxes and limited government. Purportedly born out of outrage over the bail-out of Wall Street, curiously the Tea Party has leveled its fire at big government as opposed to the bandits on Wall Street who committed the crime. On the left, President Obama has been the primary target of outrage for his failure to articulate and fight for more progressive policies, including bailing out the victims of the sub-prime mortgage scam and more aggressively reining in, even investigating and prosecuting those who caused the crisis. In a recent series of articles on strategy for the progressive movement in 2012 and beyond, I suggested that rather than focus exclusively on Obama, progressives need to act boldly to galvanize a movement around the vision, values and principles of a socially responsible economy where the needs, interests and aspirations of the people take precedent over profit and property as dictated by corporations and financial institutions Wall Street. In a political environment where a timid President is hampered by the noise and obstructionist tactics of the reactionaries, we who believe in a different definition of freedom and democracy than the conservatives must take to the streets and mobilize to march on ballot boxes to articulate and advance our vision and agenda. We must work to unite the many to defeat the few! What has now become the Occupy Wall Street movement that is spreading across the nation like wildfire is potentially a game changer, a turning point, a social movement with the potential to impact the political discourse by refocusing on the urgent need to preserve and expand the budding culture of rights fought for by generations of progressives. It is Wall Street that embodies the evils of unbridled Capitalism with its insatiable appetite for profits at any costs and any means, including scamming millions of Americans through the subprime mortgage fiasco and slicing/dicing/packaging paper to make obscene fortunes from exotic schemes outside the view of the American public; it is Wall Street that pays its executives exorbitant salaries, in many instances hundreds of times more than the average worker and provides multi-million dollar severance packages when vaulted corporations fail; it is Wall Street which expends millions of dollars on lobbyists to purchase policies in Washington favorable to its interests and vigorously and viciously fights against regulations, no matter how mild (like the Dodd-Frank bill) to rein in the practices/behavior harmful to people and the nation. It has been government policies favorable to Wall Street coupled with the incremental shredding of the social safety net and relentless assault on labor/unions that have led to the greatest level of inequality or gap between rich and poor since the Great Depression. According to a recent New York Times Editorial, the top 1% now accounts for nearly 24% of the nations income, the highest since 1928. And still Wall Street craves more.

It was this craving, the inexhaustible quest for more and more profit by corporations and financial institutions grown too big to fail with the tacit if not explicit approval of the government, that led to an economic collapse, the Great Recession which brought the U.S. and the world to the brink of catastrophe. Occupy Wall Street has exploded onto the scene in this moment of grave crisis in the economic and political life of the nation, providing a much needed outlet and target for the pervasive rage rampant among millions ravished by joblessness, mortgage foreclosures and financial institutions shamelessly eager to rape them with fees calculated to evade the constraints imposed by the newly created Consumer Protection Agency. But, thus far Occupy Wall Street is a self-proclaimed leaderless, politically non-aligned movement with a multiplicity of messages, grievances and righteous slogans but no coherent set of goals/demands. And, there are scant numbers of Blacks and other people of color in the ranks of the protesters. The movement is overwhelmingly White. There are some who argue that crafting a specific set of goals or demands on corporations or the government would sap the movement of its creativity, vitality and energy by creating divisions among the protesters who may have differing views on specific goals or policy recommendations. It may be that the myriad issues encapsulated in Occupy Wall Street

will be sufficient to produce an unspecified positive outcome. The mass protests in Arab Spring, which apparently inspired the leaderless revolt against Wall Street, had a broad objective ridding their nations of tyrants/despots and working to create more democratic societies. The prolonged hunger strike by Gandhi protg Anna Hazare in India that provoked mass movement in the streets was directed at corruption in the government. It resulted in the passage of an anti-corruption bill by the Indian Parliament. The March on Washington produced the Civil Rights Act of 1964 and the Selma to Montgomery March led to the adoption of the historic Voting Rights Act of 1965. Hoovervilles and protests in the streets by armies of the unemployed helped to create the political space for Franklin D. Roosevelt to launch ambitious public works programs that put millions of people to work as part of the New Deal. Im not certain that anger and outrage without a message and agenda will ultimately transform Wall Street or break the gridlock in Washington that is tantamount to fiddling while countless millions suffer. Perhaps labor or other organized progressive forces, including the Progressive Caucus in the Congress, will leverage the mass movement in the streets to outline a short term agenda for jobs and justice that will put millions of people back to work, provide massive relief for the victims of mortgage foreclosures and beat back the attempt of reactionaries to stifle the regulation of Wall Street. The unemployed/jobless, the legions whose homes are underwater or have been foreclosed because of the sub-prime mortgage scam and students whose career paths are in jeopardy because of mounting debt from college loans or escalating tuition costs, the affected and disaffected of all races and ethnicities should be flocking to the Occupy Wall Street sites in droves. But, there is also a special need for Black people to seize upon the momentum created by Occupy Wall Street to identify with and mobilize our forces to add fuel to the fire. The Great Recession precipitated by the unconscionable behavior of Wall Street did not just ruin the lives of White people; it was an equal opportunity destroyer that disproportionately wreaked havoc on Black people and Black communities. Already plagued by a wealth gap that has persisted for generations, the sub-prime mortgage scam that targeted Black consumers wiped out billions of dollars in wealth, liquidating decades of gains by the Black middle class. George Fraser, President/CEO of FraserNet, estimates that it may take a century to recoup the wealth lost by Black America as a consequence of a scam that preyed on victims yearning to realize the American dream. As Vernon Jordon, former President of the National Urban League once put it, when White America gets a cold, Black America gets pneumonia. Nothing is more illustrative of this dictum than the Great Recession. Most political economists concede that the employment rate in

Black America is at least twice the official rate of 9.1% and perhaps triple when one takes into account the unemployed who have simply given up the search for work. By some estimates 4050% of Black youth/young people between the ages of 16-30 are jobless! Moreover, the dramatic rise in poverty attributed to the Great Recession has disproportionately impacted Black people. White America is experiencing a Great Recession Black America is in the throes of a debilitating social and economic Depression borne of decades of benign and blatant neglect, exacerbated by racist and criminal behavior of the barracudas on Wall Street. Black Voices for Economic Justice have every reason and right to be heard. The fact that White protesters initiated and have led Occupy Wall Street should not be a deterrent to Black engagement. We should view the current conflagration as an opening to raise our specific issues and demands, as we add our voices to the growing amorphous movement to confront and change Americas capitalist political economy as symbolized by Wall Street. As a people whose leaders and organizations have often been the conscience of the nation and the vanguard of major social movements, Africans in America should seize every opportunity to expose the hypocrisy and contradictions of an unjust system as we struggle to create a just and humane society. The challenge is to find our own voice to express issues of particular interest to Black people within the context of the broader struggle for reform and transformation. By organizing Black Voices for Peace and Justice, our late beloved Brother Damu Smith developed a principled and creative avenue to meet this challenge. Damu recognized that issues of concern to Black people may be ignored or avoided as divisive even among White liberals and progressive. He also recognized that Blacks might not be equitably included in the planning and leadership of protests and demonstrations initiated by Whites. As opposition to the War in Iraq grew, Damu organized Black Voices for Peace and Justice to ensure that the push to end the war would relate to the urgent need for resources to address the ongoing crises in Black America. Rather than dismiss the anti-war movement as a white initiative, Damu created a vehicle for Black people to add their voices to a just struggle while simultaneously insisting that Black issues be addressed. In one memorable instance Black Voices for Peace organized a parallel march through Black neighborhoods in Washington, D.C. that called attention to Black issues. After completing the route through the Black neighborhoods, the March merged with a massive anti-war demonstration across from the White House where Damu was one of the speakers. We should adopt a similar approach as it relates to Occupy Wall Street. First, as an expression of solidarity and acknowledgment of the harm inflicted on Black people by Wall Street, we should encourage Black people to attend Occupy protests in New York and

cities across the country. A number of Black leaders, activists and organizers have already made a conscious commitment to visit Occupy sites to express support for rallies and demonstrations. Equally important, however, in New York and around the country, Black leaders, activists and organizers should mobilize broad based coalitions of Black people to conduct parallel marches and/or have organized Black contingents within Occupy protests. This is important because Blacks must utilize the media glare of the moment to shine a light on specific issues and concerns of importance to Black people. Since Bank foreclosures have disproportionately devastated Black families and communities as a result of the sub-prime mortgage scam and the onslaught of the Great Recession, Black Voices for Economic Justice should demand a Moratorium on Home Foreclosures and a massive federal and bank industry sponsored program to Bail Out Homeowners. We should demand that the Attorney General investigate and prosecute the criminals whose reckless behavior created the crises Jail the Criminals on Wall Street. We should demand that the banks most responsible for perpetrating the sub-prime mortgage scam on Black people create Investment Funds to provide grants and low interest loans for business/economic development in Black neighborhoods Rebuild Black Neighborhoods. We should demand a Bailout for Students burdened by loans to pay for the escalating cost of a college education. Black voices should be heard loud and clear demanding a Massive Jobs program to immediately put at least 2 million people to work hired directly by the federal government to perform public sector jobs (something similar to Congresswoman Jan Schakowskys Emergency Jobs to Restore the American Dream Act) with an emphasis on targeting neighborhoods/communities with the highest levels of joblessness. And, Black voices should also be sounding the clarion call for a Millionaires Tax to finance the jobs bill and compel Wall Street to shoulder major responsibility for helping Americans to heal from wounds inflicted by the injurious behavior of the Robber Barons. This is not a time for people of African descent to sit on the sidelines. Black folks who have lost their homes to foreclosure or are underwater because of the sub-prime mortgage scam, Black students who are drowning in debt from student loans and the Black joblessness should mount parallel but supportive Occupy marches and rallies all across the nation. Africans in America should heed the admonition of the Gary Black Political Agenda; our voices must be heard because it is our people who are most deeply hurt and ravaged by the present systems of society. Black Voices for Economic Justice should gear up to Occupy Wall Street and march on ballot boxes with a vengeance in 2012 to vigorously advance an agenda for reform and fundamental change!

Shell Game
By Thomas Vincent; From The Ethical Spectacle Interested readers are invited to check out Tom's Political Blog "Certain Doubt" http://www.spectacle.org/0911/vincent.html In an August 14, 2011 New York Times But Buffett had more than $12,000 to his analysis of Buffetts recent investment editorial entitled: Stop Coddling the Superinvest. He had $5 billion. So he negotiated a into Bank of America: Rich, Warren Buffett called on Congress much better deal. He bought preferred stock that Now Buffett is investing in beleaguered pleaded actually to raise taxes on the mega came with a special dividend. Instead of 1 Bank of America. He invested $5 billion in a wealthy: percent, he negotiated a 10 percent dividend. So special preferred stock and will be getting a 6 While the poor and middle class fight for now every year he receives a check for $500 percent dividend, while the regular stock you us in Afghanistan, and while most Americans million. Then, only after he gets paid, do can buy pays less than 1 percent. Now I don't struggle to make ends meet, we mega-rich common stockholders get their paltry 1 percent. know whether Bank of America is a good deal continue to get our extraordinary tax breaks. This is the real secret to the success of at current prices. Maybe it is. But the point is, if Some of us are investment managers who earn investors like Warren Buffett. With billions of you buy now, you're not getting the same terms billions from our daily labors but are allowed to dollars to throw around, they are able to as Buffett. You're just pumping money into his classify our income as carried interest, negotiate sweetheart deals that not only dividend payment and hoping for the best. thereby getting a bargain 15 percent tax rate. guarantee them a high rate of return, it also Think about that the next time you open Others own stock index futures for 10 minutes guarantees that they will get paid before the financial pages. If youre fortunate enough and have 60 percent of their gain taxed at 15 ordinary folks see a dime in dividends. to own stock in Bank of America, the fact that percent, as if theyd been long-term investors. Its almost as though you are playing Warren Buffett pays a lower tax rate than his While on the surface this might seem like Monopoly and as soon as one player begins to secretary should not be nearly as galling as the an admirable piece of altruism, Buffets call for amass a fortune, the game board begins to fact that he gets a 6 times higher rate of return higher taxes on the rich, as noble as it may be, actually tilt such that money, houses, and as you do and is guaranteed to receive his does nothing to address the real problem in our property deeds actually physically slide into money before you see a dime. Still having society today: the inequities in our economic their lap. trouble with this? Consider the numbers in the system that allow billionaires like Buffett to So now, three years later, how have we BOA deal. The math here is not difficult. $5 amass their phenomenal wealth in the first done? Goldman is selling at roughly $110 a billion at 6% means Warren is getting place. Raising taxes on the super rich, though it share, slightly below its 2008 price. If you had $300,000,000. If you invest even $10,000 at 1% would help raise revenue and reduce the deficit, invested with Buffett, you would have lost youll only receive a whopping $100.00! Even does nothing to change the rules of the game about $1,000. Buffett's lost some capital too, but after taxes (15%) Warren gets $255,000,000 to that give those same billionaires huge he's collected $500 million a year in his special your rather pitiful $85 bucks! advantages over the average American. dividend. This is not to say that Buffets plea for In an August 30th 2011 piece in US News Raising taxes on the super rich is itself a higher taxes on the rich is not valid. But where and World Report, Tom Sightings presents as red herring. The real secret, the real scam is Buffetts call for fairness in the game of clear a summation as you will find of what Im behind modern Capitalism, is not whether the making money itself? It is certainly not fair that, talking about. In examining Warren Buffets tax rate on capital gains is 15% or 20% (or even as he has noted, his secretary pays a higher tax investment in Goldman Sachs for example, zero% as one republican presidential candidate rate - and a higher percentage of her income Sightings notes: has proposed). The real crime is that once you than he does. But I dont hear Buffett or any You, too, could have invested in Goldman get to a certain level of capital accumulation, other billionaire complaining about the fact Sachs in 2008. But here's the difference between you are almost assured of amassing an even that they are able to command six times the rate you and Buffett. If you had an extra $12,000, more staggering fortune by virtue of the fact of return that ordinary investors receive and you could have purchased 100 shares of that your vast wealth allows you to not only even less complaints that they get paid before Goldman common stock at $120 a share. dictate to banks and corporations what your rate everyone else. Considering that Goldman had been worth over of return will be, but also to demand that you Thus Warren Buffett, while he may seem $200 a share the year before, you might have will be paid before ordinary shareholders thus altruistic, is really not saying a word about thought you were getting a pretty good discount. reducing your risk to practically nothing. changing the rules of the game which give him You also would be receiving the Goldman The rigged nature of the game is even more an unfair advantage to amass a vast fortune in dividend of $1.40 a share, a rate of just over 1 insidious than it appears. As Sightings shows in the first place. percent.

Hot Off the Presses

Bush & Obama? Israeli assassinations and US Presidents
There is evidence that in 1991 an Israeli undercover team planned to assassinate a U.S. President. The intended victim was George Herbert Walker Bush. The first person to write of the plot was a former 11-term Republican Congressman from Illinois, Paul Findley. In a 1992 article in the Washington Report for Middle East Affairs.
January 27, 2012, Alison Weir; From Antiwar.com

http://mycatbirdseat.com/2012/01/bush-obama-israeli-assassinations-and-uspresidents/
On January 13th the Atlanta Jewish Times featured a column by its owner-publisher suggesting that Israel might someday need to order a hit on the president of the United States. In the column, publisher Andrew Adler describes a scenario in which Israeli Prime Minister Netanyahu would need to give the goahead for U.S. based Mossad agents to take out a president deemed unfriendly to Israel. The purpose? So that the vice president could then take office and dictate U.S. policies that would help the Jewish state obliterate its enemies. Adler writes that it is highly likely that the idea has been discussed in Israels most inner circles. Numerous Jewish leaders quickly condemned Adler, who has now apologized for the column, resigned, and there are some reports that he plans to put the newspaper up for sale. An Israeli columnist noted that the hatred being stirred up against Obama is similar to conditions in Israel that led to the murder of Israeli Prime Minister Yitzhak Rabin by a Jewish extremist. Many of those criticizing Adler claim that he had defamed Israel by suggesting that it would ever do such a thing. Abe Foxman, head of the Jewish Anti-Defamation League (ADL) proclaimed: There is absolutely no excuse, no justification, no rationalization for this kind of rhetoric. It doesnt even belong in fiction. In reality, however, Adlers expectation that Israels inner circles have explored such a course of action, and would be willing to undertake it, may be entirely accurate. The fact is that Israel has killed and plotted to assassinate people throughout the world; a number have been Americans. One alleged plot was chillingly similar to Adlers suggestion. Secret Service warned of Israeli assassination plans There is evidence that in 1991 an Israeli undercover team planned to assassinate a U.S. President. The intended victim was George Herbert Walker Bush. The first person to write of the plot was a former 11-term Republican Congressman from Illinois, Paul Findley. In a 1992 article in the Washington Report for Middle East Affairs, Findley described the alleged scheme and how it was revealed. Findley writes that the U.S. Secret Service had received a warning that elements of Israels spy agency might target Bush when he went to Madrid for the opening day of the peace conference to be held that year. According to Findley, a former Mossad agent named Victor Ostrovsky who had written a book exposing Israels spy agency told a group of Canadian parliamentarians that he had received secret intelligence suggesting that the the Mossad's hatred of Bush and support for Vice President Dan Quayle might lead to an attempt on the president's life. Israel considered Quayle much closer to Israel than Bush. Bush had particularly angered Israel by attempting to pressure Israel into ending its illegal settlement expansion on confiscated Palestinian land by withholding loan guarantees until Israel ended this practice. Findley writes that Ostrovskys statements were relayed to Findleys friend and former colleague Paul Pete McCloskey, a prominent former Republican Congressman from California who had recently been named by Bush to the National and Community Service Commission.

McCloskey, a decorated Marine veteran and graduate of Stanford law school who had at one time been considered a presidential contender, flew to Ottawa to debrief Ostrovsky in person and evaluate his information. Findley reports that Ostrovsky told McCloskey that the Mossad wanted "to do everything possible to preserve a state of war between Israel and its neighbors, assassinating President Bush, if necessary." Ostrovsky said that a PR campaign was already underway in both Israel and the United States to "prepare public acceptance of Dan Quayle as president." Convinced that Ostrovsky was legitimate and his information significant, McCloskey jumped on the next flight to Washington, where he reported Ostrovskys intelligence to the Secret Service and State Department. The apparent plot never went forward, perhaps because Ostrovsky and McCloskey had given it away. Ostrovsky gave more details about the plot two years later in his 1994 book, The Other Side of Deception: A Rogue Agent Exposes the Mossad's Secret Agenda, published by HarperCollins. In the book Ostrovsky writes that an extremist group within Mossad was responsible for the plan. He says they kept the plan secret

from then Israeli Prime Minister Yitzhak Shamir, though they believed that Shamir would have ordered such a hit himself if he hadnt been constrained by politics. In the lead-up to Israels 1948 founding war, Shamir had headed up a terrorist group known for its assassinations. In his review of Ostrovskys book, Ambassador Andrew Killgore, a retired career foreign service officer and publisher of the Washington Report, called the book an insider's probing expos of some Middle East realities that have been hidden too long from all but Israeli eyes. Ostrovsky writes that the Israelis planned a false flag operation in which they would pin the assassination on Palestinians. They kidnapped three Palestinian militants from Beirut who were to be the scapegoats, took them to Israel's Negev desert, and held them incommunicado. Meanwhile, Killgore writes, Mossadgenerated threats on the president's life, seemingly from Palestinians, were leaked. These were designed to throw suspicion on the organization of rogue Palestinian terrorist Abu Nidal. Names and descriptions of the three terrorists were leaked to Spanish police so that, if the plot was successful, blame would automatically fall on them. Ostrovsky reports that after the assassination plot was eventually cancelled, the three Palestinian prisoners were terminated. Targeting Americans If the plot had gone forward, this would not have been the first time that Israel targeted Americans for death. Nor would it be the first false flag operation. In 1954 the Mossad planned to firebomb American installations, libraries, and other gathering places in Egypt. The Muslim Brotherhood was to be blamed for the attacks, thus causing American animosity toward Egypt. An accidental early detonation of one of the devices caused the plot, known as the Lavon Affair, to unravel before it could kill or mutilate the intended Americans. In 1967 Israeli air and sea forces perpetrated an almost two-hour assault in which they tried to sink a US Navy ship with a crew of 294. While the attack failed to sink the ship, it succeeded in killing 34 Americans and injuring 174. Some analysts have conjectured that this was also a false-flag operation; it is highly likely that Egypt would have been blamed for the attack if the ship had gone down. In 1973 Israeli fighter pilots were ordered to shoot down an unarmed U.S. reconnaissance plane (at the time the U.S. was delivering massive weaponry to Israel to prevent it from losing the Yom Kippur war with Egypt and Syria). While the Israelis were unable to reach the altitude of the U.S. plane, they did manage that same year to shoot down a civilian Libyan airliner that had strayed over Israeli territory, killing 104 men, women, and children. One was an American. In 1990 a Canadian-American scientist and father of seven, Gerald Bull, was assassinated in Belgium. All indications are that it was an

Israeli Mossad hit team that drilled five bullets into the back of his head and neck. (Israel has assassinated a number of scientists of various nationalities. The most recent is a 32-year-old Iranian father with a young son.) In 2003 it came out that Israeli leaders had officially decided to undertake assassination operations on U.S. soil. An FBI spokesman, queried about the Israeli plans, said only: "This is a policy matter. We only enforce federal laws." In recent years a growing number of American peace activists have been intentionally killed, maimed, and injured by Israeli forces, including 23-year-old Rachel Corrie, 21-year-old Brian Avery, 37-year-old Tristan Anderson, 21-year-old Emily Henoschowitz, and 21-year-old Furkan Dogan. All of this has been minimally reported in the U.S. press. While major news media from England to Israel to Australia covered the Jewish Times apparent endorsement of a possible Israeli assassination of a U.S. President, the scandal has been largely missing from U.S. media. Even Atlantas AP bureau inexplicably initially decided not to write a report on it, only finally sending out a story many days later. Such news omissions concerning Israeli partisans are not rare. In 2004 a fanatic Israel loyalist wrote a letter saying that he was going to burn down Presbyterian churches while worshippers were inside (he was furious at the Presbyterian Churchs decision to divest from companies profiting from the illegal Israeli occupation of Palestinian land). This grisly threat also received minimal media play. Despite Israeli violence against Americans (even while American taxpayers have given Israel far more of our tax money than to any other nation) American presidential candidates, with the exception of Ron Paul, continue to vie over who is most devoted to Israel. It is ironic that Adler considers Obama so bad for Israel, given that Israeli analysts have rated him second only to Mitt Romney in his fidelity to Israel. And Obama has now released a seven-minute video that may catapult our first African-American president into first place in pandering to an apartheid nation. But perhaps hell be safe from assassins. References Adler, Andrew. "What Would You Do?" Atlanta Jewish Times 13 Jan. 2012: 3. Print. Online at https://www.documentcloud.org/documents/284 979-ajt.html "Jewish Times Publisher Resigns over Obama Assassination Column." Atlanta Journal Constitution. 23 Jan. 2012. Web. 23 Jan. 2012. <http://www.ajc.com/news/atlanta/jewishtimes-publisher-resigns-1313944.html>. "Jewish Publisher Is an Idiot but His Hatred Is Shared by Many." Haaretz (blog). 21 Jan. 2012. Accessed 22 Jan. 2012.http://www.haaretz.com/blogs/west-ofeden/jewish-publisher-is-an-idiot-but-hishatred-is-shared-by-many-1.408466

Anti-Defamation League. ADL Condemns 'Outrageous' Column By Atlanta Jewish Times Publisher. 20 Jan. 2012. Web. <http://adl.org/PresRele/Extremism_72/6224_7 2>. "List of Israeli Assassinations." Wikipedia, the Free Encyclopedia. Web. Accessed 22 Jan. 2012. <http://en.wikipedia.org/wiki/List_of_Israeli_as sassinations>. While the Wikipedia entry appeared on the day it was accessed to contain an accurate list, it is important to remember that anyone can edit Wikipedia at any moment and inaccurate changes can be made. Israeli partisans have consistently attempted to promote an Israeli agenda on the Internet. See http://www.councilforthenationalinterest.org/ne ws/israellobby/item/1300-israeli-students-toget-$2000-to-spread-state-propaganda-onfacebook and http://www.israelnationalnews.com/News/News .aspx/142374 and http://www.ifamericansknew.org/media/wikip.h tml Findley, Paul. "Special Report: Peril in Being President." Washington Report for Middle East Affairs (February 1992): 10. Print. Online at http://www.wrmea.com/component/content/arti cle/137/6255-special-report-peril-in-beingpresident.html Ostrovsky, Victor, and Claire Hoy. By Way of Deception. New York: St. Martin's, 1990. Print. http://books.google.com/books/about/By_way_ of_deception.html?id=nKJBF8RS2LMC Murphy, Dan. "US Says No Plan to Cut Israel Loan Guarantees, but It's Been Tried before." Christian Science Monitor [Boston] 11 Jan. 2010, Global News Blog ed.http://www.csmonitor.com/World/GlobalNews/2010/0111/US-says-no-plan-to-cut-Israelloan-guarantees-but-it-s-been-tried-before Pete McCloskey Leading from the Front. Dir. Robert Caughlan. Perf. Narrated by Paul Newman. The Video Project, 2009. Film. Web. <http://petemccloskeymovie.com/>. Nakhleh, Issa. "Chapter Seven: Zionist Crimes and Terrorism in Palestine 1948." Encyclopedia of the Palestine Problem. Intercontinental, 1991. Online at http://www.palestineencyclopedia.com/EPP/Chapter07_1of7.htm MacIntyre, Donald. "Israel's Forgotten Hero: The Assassination of Count Bernadotte and the Death of Peace." The Independent [London] 18 Sept. 2008. Print. Online at http://www.independent.co.uk/news/world/midd le-east/israels-forgotten-hero-the-assassinationof-count-bernadotteand-the-death-of-peace934094.html Killgore, Andrew. "The Other Side of Deception: A Rogue Agent Exposes the Mossad's Secret Agenda." Washington Report on Middle East Affairs April-May (1995): 5881. Print. Online at http://www.wrmea.com/component/content/arti cle/161-1995-april-may/7775-the-other-side-of-

deception-a-rogue-agent-exposes-the-mossadssecret-agenda.html Melman, Yossi. "Targeted Killings a Retro Fashion Very Much in Vogue." Ha'aretz [Israel] 24 Mar. 2004. Print. Online at http://www.haaretz.com/printedition/features/targeted-killings-a-retrofashion-very-much-in-vogue-1.117714 "Iran's Nuclear Scientists Are Not Being Assassinated. They Are Being Murdered." The Guardian. 16 Jan. 2012. <http://www.guardian.co.uk/commentisfree/201 2/jan/16/iran-scientists-state-sponsoredmurder?newsfeed=true>. Curtiss, Richard H. "The Lavon Affair: When Israel Firebombed U.S. Installations Print." Washington Report on Middle East Affairs July (1992). Print. Online at http://www.wrmea.com/component/content/arti cle/141/6852-the-lavon-affair-when-israelfirebombed-us-installations.html Moorer, Admiral Thomas H., General Raymond G. Davis, Rear Admiral Merlin Staring, and Ambassador James Akins. "Findings of the Independent Commission of Inquiry into the Israeli Attack on the USS Liberty, the Recall of Military Rescue Support Aircraft While the Ship Was Under Attack, and the Subsequent Cover-up by the United States Government." Congressional Record October 11 (2004): E1886-1889. Print. Online at http://ifamericansknew.org/us_ints/ulcommfindings.html "The USS Liberty Compilation of Articles." If Americans Knew. Web. <http://ifamericansknew.org/us_ints/ussliberty.h tml>. Sharon Pattern from of Old. United Press International, 17 Apr. 2002. Online at http://rense.com/general30/down.htm "Who Remembers LAA Flight 114?" Washington Report on Middle East Affairs (September 19, 1983): 3. Print. Online at http://www.wrmea.com/component/content/arti cle/56-september-1983/278-who-rememberslaa-flight-114.html Redford, John. "Gerald Bull, Gunsmith." Apr. 1992. Web. 21 Apr. 2012. <http://world.std.com/~jlr/doom/bull.htm>. "The Man Who Made the Supergun." FRONTLINE. PBS. 12 Feb. 1991. Television.

Transcript. Online at http://www.pbs.org/wgbh/pages/frontline/progra ms/transcripts/911.html "Think of the Prestige." The Magazine of Fantasy and Science Fiction (Sept, 1992). Print. Online at http://wwwspof.gsfc.nasa.gov/stargaze/SGbull.htm Sale, Richard. "Israel to Kill in U.S., Allied Nations." United Press International 15 Jan. 2003. Print. online at http://www.rense.com/general33/trarg.htm Some researchers suspect earlier operations on U.S. soil, one presenting evidence suggesting an Israeli connection to the strange 1949 death of U.S. Secretary of Defense James Forrestal:: Martin, David. "New Forrestal Document Exposes Cover-up." 17 Sept. 2004. Web. 2012. <http://dcdave.com/article4/040927.html>. Sheehan-Miles, Charles. "Israel Goes Too Far." Alternet.com. Alternet, 27 Jan. 2003. Web. 21 Jan. 2012. <http://www.alternet.org/story/15028/israel_goe s_too_far/?page=entire>. Weir, Alison. "The Manufactured Controversy Over Former Senior White House Correspondent Helen Thomas." CounterPunch June 9 (2010). Web. 2012. <http://ifamericansknew.org/media/thomas.html >. Porter, Gareth. "UN Report: American Citizen Executed By Israelis During Mavi Marmara Raid." Alternet (September 27, 2010). online at http://www.alternet.org/investigations/148314/u n_report:_american_citizen_executed_by_israel is_during_mavi_marmara_raid/ "Atlanta Jewish Times Owner 'very Sorry' for Obama Column." Atlanta Journal Constitution. 20 Jan. 2012. Web. 22 Jan. 2012. <http://www.ajc.com/news/atlanta-jewishtimes-owner-1310454.html>. "Atlanta Jewish Times Owner Says Sorry for Obama 'hit' Column." The Guardian. 20 Jan. 2012. http://www.guardian.co.uk/world/2012/jan/20/n

ewspaper-owner-sorry-obama-hitcolumn?newsfeed=true. Shalev, Chemi. "Uproar after Jewish American Newspaper Publisher Suggests Israel Assassinate " Haaretz. 20 Jan. 2012. Web. 24 Jan. 2012. http://www.haaretz.com/news/international/upro ar-after-jewish-newspaper-publisher-suggestsisrael-assassinate-barack-obama-1.408429 . "Editor Laments Column's Call to Assassinate Obama." Sydney Morning Herald. 23 Jan. 2012. http://www.smh.com.au/world/editor-lamentscolumns-call-to-assassinate-obama-201201231qdul.html. Chang, Pauline J. "Arsonist ''Promises Violence'' Against Presbyterian Church over Divestment Policy." The Christian Post (Nov. 12, 2004). Print. Online at http://www.christianpost.com/news/arsonistpromises-violence-against-presbyterian-churchover-divestment-policy-3180/ "U.S. Military Aid and the Israel/Palestine Conflict." If Americans Knew. Web.<http://ifamericansknew.org/stats/usaid.ht ml>. Contains Congressional Research Service report. Rosner, Shmuel. "Israel Factor: Only Romney Better than Obama." Jerusalem Post 11 Nov. 2011. Online at http://www.jpost.com/Features/InThespotlight/ Article.aspx?id=244925 Abunimah, Ali. "In Scandalous New Campaign Video, Obama Takes Israel Pandering to Dangerous Levels." Electonic Intifada Blog. 21 Jan. 2012. Web. <http://electronicintifada.net/blogs/aliabunimah/scandalous-new-campaign-videoobama-takes-israel-pandering-dangerouslevels> ReMillard, Frances H. "Is Israel an Apartheid State?" ICAHD-USA. 6 Mar. 2010. Web. 24 Jan. 2012. http://icahdusa.org/2010/03/is-israel-anapartheid-state/.

A Break with History

Bretton Woods System
Unknown Author http://www.polsci.ucsb.edu/faculty/cohen/inpress/bretton.html The Bretton Woods system is commonly conclusively demonstrated the fundamental create new reserves at will (which Keynes understood to refer to the international monetary disadvantages of unrestrained flexibility of thought might be called *bancor); or a more regime that prevailed from the end of World *exchange rates. The floating rates of the 1930s limited borrowing mechanism, as preferred by War II until the early 1970s. Taking its name were seen as having discouraged trade and White. from the site of the 1944 conference that created investment and to have encouraged destabilizing What emerged largely reflected U.S. the *International Monetary Fund (IMF) and speculation and competitive depreciations. Yet preferences: a system of subscriptions and *World Bank, the Bretton Woods system was in an era of more activist economic policy, quotas embedded in the IMF, which itself was history's first example of a fully negotiated governments were at the same time reluctant to to be no more than a fixed pool of national monetary order intended to govern currency return to permanently fixed rates on the model currencies and gold subscribed by each country. relations among sovereign states. In principle, of the classical *gold standard of the nineteenth Members were assigned quotas, roughly the regime was designed to combine binding century. Policy-makers understandably wished reflecting each state's relative economic legal obligations with multilateral decisionto retain the right to revise currency values on importance, and were obligated to pay into the making conducted through an international occasion as circumstances warranted. Hence a Fund a subscription of equal amount. The organization, the IMF, endowed with limited compromise was sought between the polar subscription was to be paid 25 per cent in gold supranational authority. In practice the initial alternatives of either freely floating or or currency convertible into gold (effectively scheme, as well as its subsequent development irrevocably fixed rates - some arrangement that the dollar, which was the only currency then and ultimate demise, were directly dependent on might gain the advantages of both without still directly gold convertible for central banks) the preferences and policies of its most powerful suffering the disadvantages of either. and 75 per cent in the member's own money. member, the United States. What emerged was the 'pegged rate' or Each member was then entitled, when short of Design of the Bretton Woods system 'adjustable peg' currency regime, also known as reserves, to borrow needed foreign currency in The conference that gave birth to the the par value system. Members were obligated amounts determined by the size of its quota. system, held in the Amrican resort village of to declare a par value (a 'peg') for their national A third point on which all governments Bretton Woods, New Hampshire, was the money and to intervene in currency markets to agreed was that it was necessary to avoid culmination of some two and a half years of limit exchange rate fluctuations within recurrence of the kind of economic warfare that planning for postwar monetary reconstruction maximum margins (a 'band') one per cent above had characterized the decade of the 1930s. by the Treasuries of the United Kingdom and or below parity; but they also retained the right, Some binding framework of rules was needed to the United States. Although attended by all forty whenever necessary and in accordance with ensure that states would remove existing four allied nations, plus one neutral government agreed procedures, to alter their par value to *exchange controls limiting *currency (Argentina), conference discussion was correct a 'fundamental disequilibrium' in their convertibility and return to a system of free dominated by two rival plans developed, *balance of payments. Regrettably the notion of multilateral payments. Hence members were in respectively, by Harry Dexter White of the U.S. fundamental disequilibrium, though key to the principle forbidden to engage in discriminatory Treasury and by *John Maynard Keynes of operation of the par value system, was never currency practices or exchange regulation, with Britain. The compromise that ultimately spelled out in any detail - a notorious omission only two practical exceptions. First, emerged was much closer to White's plan than that would eventually come back to haunt the convertibility obligations were extended to to that of Keynes, reflecting the overwhelming regime in later years. current international transactions only. *power of the United States as World War II Second, all governments generally agreed Governments were to refrain from regulating was drawing to a close. that if exchange rates were not to float freely, purchases and sales of currency for trade in Athough, at the time, gaps between the states would also require assurance of an goods or services. But they were not obligated White and Keynes plans seemed enormous adequate supply of monetary reserves. to refrain from regulation of capital-account especially with respect to the issue of future Negotiators did not think it necessary to alter in transactions. Indeed, they were formally access to international *liquidity - in retrospect any fundamental way the *gold exchange encouraged to make use of *capital controls to it is their similarities rather than their standard that had been inherited from the maintain external balance in the face of differences that appear most striking. In fact, interwar years. International liquidity would still potentially destabilizing 'hot money' flows. there was much common ground among all the consist primarily of national stocks of gold or Second, convertibility obligations could be participating governments at Bretton Woods. currencies convertible, directly or indirectly, deferred if a member so chose during a postwar All agreed that the monetary chaos of the into gold ('gold exchange'). The United States, 'transitional period.' Members deferring their interwar period had yielded several valuable in particular, was loth to alter either the central convertibility obligations were known as Article lessons. All were determined to avoid repeating role of the dollar or the value of its gold XIV countries; members accepting them had sowhat they perceived to be the errors of the past. reserves, which at the time amounted to three called Article VIII status. One of the Their consensus of judgment was reflected quarters of all central bank gold in the world. responsibilities assigned to the IMF was to directly in the Articles of Agreement of the Negotiators, did concur, however, on the oversee this legal code governing currency IMF. desirability of some supplementary source of convertibility. Four points in particular stand out. First, liquidity for deficit countries. The big question Finally, negotiators agreed that there was a negotiators generally agreed that as far as they was whether that source should, as proposed by need for an institutional forum for international were concerned, the interwar period had Keynes, be akin to a world central bank able to cooperation on monetary matters. Currency

troubles in the interwar years, it was felt, had been greatly exacerbated by the absence of any established procedure or machinery for intergovernmental consultation. In the postwar era, the Fund itself would provide such a forum - in fact, an achievement of truly historic proportions. Never before had international monetary cooperation been attempted on a permanent institutional basis. Even more pathbreaking was the decision to allocate voting rights among governments not on a one-state, one-vote basis but rather in proportion to quotas. With one-third of all IMF quotas at the outset, the United States assured itself an effective veto over future decision-making. Together these four points defined the Bretton Woods system - a monetary regime joining an essentially unchanged gold exchange standard, supplemented only by a centralized pool of gold and national currencies, with an entirely new exchange rate system of adjustable pegs. At the center of the regime was to be the IMF, which was expected to perform three important functions: regulatory (administering the rules governing currency values and convertibility), financial (supplying supplementary liquidity), and consultative (providing a forum for cooperation among governments). Structurally, the regime combined a respect for the traditional principle of national *sovereignty - especially, of course, that of the United States - with a new commitment to collective responsibility for management of monetary relations, expressed both in mutually agreed rules and in the powers of the Fund. The implicit bargain Negotiators at Bretton Woods betrayed a remarkable optimism regarding prospects for monetary stability after the war's end. Underlying their choice of exchange rate system, for example, seemed a clear expectation that beyond the postwar transitional period (itself expected to be brief) payments imbalances would not be excessive or require sacrifice of domestic stability for the sake of external equilibrium. The pegged rate regime was manifestly biased against frequent changes of currency values, since states had to demonstrate the existence of a fundamental disequilibrium before they could alter their par values; yet governments were left with few other instruments, other than capital controls, to deal with payments disturbances. Negotiators evidently felt that major future threats to stability were more likely to come from private speculation than from basic price or income developments. They also presumably believed that the IMF's centralized pool of liquidity, though limited, would suffice to cope with any financing problems that might emerge. As matters turned out, their optimism proved utterly Panglossian. Monetary relations after the war were anything but stable, the transitional period anything but brief, the Fund's initial resources anything but sufficient to cope with emerging payments difficulties. Hence after a short burst of activity during its first two years, IMF lending shrank to an extremely small

scale for over a decade. Instead, the burden was shifted to the one actor at the time with the financial and economic resources needed to shoulder responsibility for global monetary stabilization - namely, the United States. Fortunately, for reasons of its own, the United States was not only able but willing to take on that responsibility, in effect assuming the role of global monetary hegemon: money manager of the world. *American hegemony was exercised principally in three ways. First, a relatively open market was maintained for imports of foreign goods. Second, a generous flow of long-term loans and grants was initiated, first through the *Marshall Plan and other related aid programs, then through the reopened New York capital market. Third, a liberal lending policy was eventually established for provision of shorter term funds in time of crisis. Since the reserves of most countries were near exhaustion and the Fund's pool of liquidity was manifestly inadequate, the rest of the world was more than willing to accumulate dollars. Given the scarcity of central bank gold outside the United States and limited prospects for new gold production, America became the residual source of global liquidity growth through the deficits in its own balance of payments. Other governments with payments surpluses stabilized their exchange rates by buying dollars. The United States pledged convertibility of its dollars into gold at a fixed price, thus making the greenback a near perfect substitute for gold. Though multilateral in formal design, therefore, the Bretton Woods system in practice quickly became synonymous with a hegemonic monetary regime centered on the dollar, much in the same manner as the classical gold standard of the nineteenth century had come to be centered on Britain's pound sterling. For gold exchange standard, many said, read dollar exchange standard. Like the British in the nineteenth century, the United States did not actively seek global monetary leadership. Indeed, during the interwar period the responsibilities of hegemony had been deliberately evaded. On the other hand, unlike the British, once the Americans found themselves in the role, they soon came to welcome it, for reasons that were a mixture of altruism and self-interest. Being money manager of the world fit in well with America's newfound leadership role in the *Cold War with the Soviet Union. U.S. policy-makers perceived a need to promote the economic recovery of important allies in Europe and Japan, as well as to maintain a sizable and potent military establishment overseas. All this cost money. The privilege of financing deficits with its own currency ('liability financing') meant that America was effectively freed from external payments constraints to spend as freely as its leaders thought necessary to promote objectives believed to be in the national interest. The United States could issue the world's principal reserve currency in amounts presumed to be consistent with its own priorities - not necessarily those of foreign dollar holders.

Foreign dollar holders, for their part, conceded this policy autonomy to the United States because it also directly contributed to their own economic rehabilitation. America accepted the necessity, for example, of preferential trade and payments arrangements in Europe, despite their inherent discrimination against U.S. exports; likewise, America accepted the necessity of granting Japanese exporters access to the U.S. market at a time when most other countries remained closed to goods labeled 'Made in Japan.' In effect, an implicit bargain was struck. America's allies acquiesced in a hegemonic system that accorded the United States special privileges to act abroad unilaterally to promote U.S. or collective interests. The United States, in turn, condoned its allies' use of the system to promote their own prosperity, even if this happened to come largely at the short term expense of the United States. The subsequent evolution of the Bretton Woods system may be read as the history of that implicit bargain. The system's eventual breakdown in the early 1970s may be read as the bargain's final collapse. From dollar shortage to dollar glut The chronology of the Bretton Woods system can be divided into two periods: the period of *'dollar shortage," lasting roughly until 1958; and the period of 'dollar glut,' covering the remaining decade and a half. The period of the dollar shortage was the heyday of America's monetary hegemony. The term 'dollar shortage,' universally used at the time, was simply a shorthand expression for the fact that only the United States was then capable of assuring some degree of global monetary stability; only the United States could help other governments avoid a mutually destructive scramble for gold by promoting an outflow of dollars instead. Dollar deficits began in 1950, following a round of devaluations of European currencies, at American insistence, in 1949. In ensuing years, shortfalls in the U.S. balance of payments (as conventionally measured) averaged roughly $1.5 billion a year. But for these deficits, other governments would have been compelled by their reserve shortages to resort to competitive devaluations or domestic deflation to keep their payments in equilibrium; they would certainly not have been able to make as much progress as they did toward dismantling wartime exchange controls and trade barriers. Persistent dollar deficits thus actually served to avoid destabilizing policy conflict. The period up to 1958 was rightly called one of 'beneficial disequilibrium.' After 1958, however, America's persistent deficits began to take on a different coloration. Following a brief surplus in 1957, owing to special circumstances, the U.S. balance of payments plunged to a $3.5 billion gap in 1958 and to even larger deficits in 1959 and 1960. This was the turning point. Instead of talking about a dollar shortage, observers began to speak of a dollar glut. In 1958 Europe's currencies returned to convertibility. Subsequently, the former eagerness of European governments to obtain dollar reserves was

transformed into what seemed an equally fervent desire to avoid excess dollar accumulations. Before 1958, less than 10 per cent of America's deficits had been financed by calls on the U.S. gold stock (the rest being financed with dollars). During the next decade, almost two thirds of America's cumulative deficit was transferred in the form of gold, mostly to Europe. Bretton Woods was clearly coming under strain. The Triffin dilemma One source of strain, inherent in the structure of the postwar gold exchange standard, was first illuminated by economist Robert Triffin in his influential 1960 book Gold and the Dollar Crisis. A gold exchange standard, Triffin argued, is fundamentally flawed by its reliance on the pledge of convertibility of some national currency, such as the dollar, into gold. The Bretton Woods system had come to rely on U.S. deficits to avert a world liquidity shortage. But already by the time Triffin wrote, America's *'dollar overhang' was growing larger than its gold stock. The resulting erosion of America's net reserve position was bound in time to undermine confidence in the dollar's continued covertibility. In effect, therefore, states found themselves caught on the horns of a dilemma what came to be known as the *Triffin dilemma. To forestall speculation against the dollar, U.S. deficits would have to cease. But this would confront the system with a liquidity problem. To forestall the liquidity problem, U.S. deficits would have to continue. But this would confront the system with a confidence problem. Governments could not have their cake and eat it too. Not that governments were unwilling to try. By the mid-1960s, negotiations were begun to establish a substitute source of liquidity growth in order to reduce systemic reliance on dollar deficits, culminating in agreement to create the *Special Drawing Right (SDR), an entirely new type of international reserve asset. Governments hoped that with SDRs in place, any future threat of world liquidity shortage could be successfully averted. On the other hand, they were totally unprepared for the opposite threat - a reserve surfeit - which is in fact what eventually emerged in the late 1960s. Earlier in the decade a variety of defensive measures were initiated in an effort to contain mounting speculative pressures against the dollar. These included a network of reciprocal short-term credit facilities (*swaps) among central banks as well as enlarged lending authority for the IMF. But in the end none proved sufficient to avert a decisive loss of confidence in the dollar. Exchange-rate rigidity A second source of strain was inherent in the structure of the par value system: the ambiguity of the key notion of fundamental disequilibrium. How could governments be expected to change their exchange rates if they could not even tell when a fundamental disequilibrium existed? And if they were inhibited from repegging rates, then how would international payments equilibrium be

maintained? In practice, governments began to go to enormous lengths to avoid the "defeat" of an altered par value. The resulting rigidity of exchange rates not only aggravated fears of a potential world liquidity shortage. It also created irresistible incentives for speculative currency shifts, greatly adding to the global confidence problem as well. The heaviest weight on exchange rates at the time was of course the dollar glut - more accurately, the persistent payments imbalance between the United States and the surplus countries of Europe and Japan. Each side blamed the other for the disequilibrium. America felt its erstwhile allies could do more to reduce their surpluses by inflating or revaluing their currencies; the Europeans and Japanese, conversely, contended that it was the responsibility of the United States, with the world's biggest deficit, to take the first steps to correct the situation. Both sides felt discriminated against. The surplus countries argued that America's privilege of liability financing deficits created an asymmetry in the regime favorable to the United States. None of them, after all, enjoyed such a degree of policy autonomy. America, on the other hand, believed that use of the dollar by other governments as their principal intervention medium to support par values created an asymmetry more favorable to Europe and Japan, since it left the United States itself with no effective control over its own exchange rate. America controlled only the price of its currency in terms of gold; it had no direct means to influence the rates at which other countries bought or sold dollars. The bargain comes unstuck In fact, the debate over asymmetries masked a deeper political conflict. The postwar bargain was coming unstuck. In the United States, concern was growing about the competitive commercial threat from Europe and Japan. The cost of subordinating domestic interests to help strengthen foreign allies was becoming ever more intolerable. Conversely, concern was growing in Europe and Japan about America's use of its privilege of liability financing - the 'exorbitant privilege,' as France's Charles de Gaulle called it. The Europeans and Japanese had just one major weapon they could use to curb America's policy autonomy: their right to demand conversion of accumulated dollar balances into gold. But as the dollar overhang continued to grow, making the Triffin dilemma ever more acute, it was a weapon most governments became increasingly reluctant to deploy. At bottom, the Bretton Woods system rested on one simple assumption - that economic policy in the United States would be stabilizing. The absence of an effective external discipline on U.S. policy could not threaten the regime so long as that assumption held, as it generally did prior to 1965. During the first half of the 1960s, America's foreign deficit actually shrank as a result of a variety of corrective measures adopted at home. After 1965, however, U.S. behavior became increasingly destabilizing, mostly as a result of increased

government spending on social programs at home and an escalating war in Vietnam. America's economy began to overheat and inflation began to gain momentum, causing deficits to widen once again. Yet Washington pointedly declined to undertake any new ameliorative actions under a calculated policy of *'benign neglect.' With governments elsewhere committed to defending their pegged rates by buying the growing surfeit of dollars, a huge reserve base was created for global monetary expansion. Inflation everywhere began to accelerate, exposing all the latent problems of Bretton Woods. The pegged rate system was incapable of coping with widening payments imbalances, and the confidence problem was worsening as speculators were encouraged to bet on devaluation of the dollar or revaluations of the currencies of Europe or Japan. Ultimately it was the United States, still the leading member of the system, that brought the drama to its denouement. Concerned about America's rapidly deteriorating payments situation, as well as rising protectionist sentiment in the U.S. Congress, President Richard Nixon was determined to force the Europeans and Japanese to accept a mutual adjustment of exchange rates. The U.S. might lack effective control over the dollar exchange rate under the prevailing rule of the game. But it did still have the power, alone among governments, to unilaterally change the rules themselves should U.S. policy-makers see fit. Accordingly, on 15 August 1971, the convertibility of the dollar into gold was suspended, freeing the greenback to find its own level in currency markets. Eighteen months later, in February 1973, after new waves of speculation against a realigned structure of par values negotiated in late 1971 -- the so-called *Smithsonian Agreement -- the monies of all the industrial countries were set free to float independently. With these decisions, both the par value system and the gold exchange standard, the two central elements of the postwar monetary regime, were effectively terminated. The Bretton Woods system passed into history. Significance for international political economy For students of international political economy, the significance of the Bretton Woods system lies primarily in the inspiration it gave to the later development of formal *regime theory. International regimes, which act as a sort of governance mechanism among sovereign states, are conventionally defined as sets of implicit or explicit principles, norms, rules and decisionmaking procedures around which actors' expectations converge in a given issue area. The Bretton Woods system was an especially well articulated regime, formally negotiated and concretely embodied in a multilateral organization, the IMF. The circumstances of the system's birth and life cycle offered scholars invaluable material for assessing the relative importance of diverse variables in promoting or inhibiting economic cooperation among governments.

Most obviously, Bretton Woods provided evidence of the key role of power in shaping the design and evolution of international regimes, giving rise to so-called *hegemonic stability theory. The dominance of the United States in the negotiations at the wartime conference seemed to confirm the vital importance of hegemonic leadership in the initial formation of international regimes; even more critically, America's assumption of responsibility for stabilization after the war appeared to affirm the subsequent and continuing need for hegemony in order to preserve economic order. Conversely, the malign effect of less disciplined use of power could be seen in the destabilizing impact of America's benign neglect of its balance of payments toward the end of the Bretton Woods era. Less obviously, Bretton Woods also provided evidence of the lasting effectiveness of regimes themselves even after shifts in the distribution of inter-state power associated with their origins or early operation. Though the managerial role of the United States in the postwar period was eventually undermined by the emergence of economic and political rivals, leading ultimately to the spectacular breakdown of both the gold exchange standard and par value system in the early 1970s, monetary relations did not collapse in chaos as they had in similar circumstances during the 1930s. Rather a significant degree of cooperation was preserved under the auspices of the IMF, which continued to perform its assigned regulatory, financial, and consultative functions; the regime's underlying principles and norms continued to exercise influence over the behavior of national governments. That demonstration of the possibility of durability in a social order at the international level, seemingly at variance with the predictions of

hegemonic stability theory, may well be the most significant of all the Bretton Woods system's germinal implications for IPE theory. Further reading Bloch, F.L. (1977) The Origins of International Economic Disorder, Berkeley and Los Angeles: University of California Press. A radical-revisionist perspective on the Bretton Woods system, emphasizing the role of economic and political power in relations among the leading capitalist countries. Bordo, M.D. and Eichengreen, B. (eds.) (1993) A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, Chicago: University of Chicago Press. Diverse perspectives on the postwar monetary regime by ranking economists and political scientists, written to mark the fiftieth anniversary of the Bretton Woods conference. Calleo, D.P. and Rowland, B.M. (1973) America and the World Political Economy, Bloomington, IN: Indiana University Press. A highly critical appraisal of American hegemony during the Bretton Woods era by two specialists in U.S.-European relations. De Vries, M.G. (1976) The International Monetary Fund, 1966-1971, Washington: International Monetary Fund. The IMF's authorized version of the last years of the Bretton Woods system, by a former Fund historian. Eichengreen, B. (1996) Globalizing Capital: A History of the International Monetary System, Princeton, NJ: Princeton University Press. An insightful review of the life and death of the Bretton Woods system by a prominent international economist, set in a broader interpretation of the evolving international monetary system. Gowa, J. (1983) Closing the Gold Window: Domestic Politics and the End of

Bretton Woods, Ithaca, NY: Cornell University Press. A blow-by-blow analysis, incorporating both economic and political variables, of the Nixon administration's decision to suspend the gold convertibility of the dollar in 1971. Horsefield, J.K. (1969) The International Monetary Fund, 1945-1965, Washington: International Monetary Fund. The IMF's own official history of its first two decades, by a former Fund historian. James, H. (1996) International Monetary Cooperation since Bretton Woods, New York and Oxford: Oxford University Press. A comprehensive survey of the Bretton Woods era by a distinguished historian, authorized and supported by the International Monetary Fund. Odell, J.S. (1982) U.S. International Monetary Policy: Markets, Power, and Ideas as Sources of Change, Princeton, NJ: Princeton University Press. A meticulous politicaleconomy analysis of U.S. policy during the turbulent later years of the Bretton Woods system. Solomon, R. (1982) The International Monetary System, 1945-1981: An Insider's View, New York: Harper and Row. The informed views of the one-time top international economist at the Federal Reserve, America's central bank. Strange, S. (1976) International Economic Relations of the Western World 1959-1971, Vol. 2: International Monetary Relations, London and New York: Oxford University Press. A detailed history of the decline and fall of the Bretton Woods system by a leading specialist in international political economy, commissioned by the Royal Institute of International Affairs. Triffin, R. (1988) Gold and the Dollar Crisis, New Haven, CN: Yale University Press. The original statement of the Triffin dilemma.

Institutionalized Minds
The End of Growth
November 2010; By Richard Beinberg; From The Museletter This is the second Museletter containing an excerpt from my upcoming book which has the working title 'The End of Growth'. The book is set for publication by New Society Publishers in July 2011. Additionally, Richard will be offering live peeks at the events and information that inform his writing process through Facebook and Twitter accounts created expressly for this publication. http://richardheinberg.com/222-the-end-of-growth 1. The depletion of important resources will no doubt make future blowout disasters less Introduction: The New Normal The central assertion of this book is both including fossil fuels and minerals; likely, but they add to the cost of doing business simple and startling: Economic growth as we 2. The proliferation of environmental and therefore to the already high cost of oil. have known it is over and done with. impacts arising from both the The Deepwater Horizon incident also The growth we are talking about consists extraction and use of resources illustrates to some degree the knock-on effects of the expansion of the overall size of the (including the burning of fossil of depletion and environmental damage upon economy (with more people being served and fuels)leading to snowballing costs financial institutions. Insurance companies have more money changing hands) and of the from both these impacts themselves been forced to raise premiums on deepwater quantities of energy and material goods flowing and from efforts to avert them and drilling operations, and impacts to regional through it. clean them up; and fisheries have hit the Gulf Coast economy hard. The economic crisis that began in 20073. Financial disruptions due to the While economic costs to the Gulf region were 2008 was both foreseeable and inevitable, and it inability of our existing monetary, partly made up for by payments from BP, those marks a permanent, fundamental break from banking, and investment systems to payments forced the company to reorganize and past decadesa period during which most adjust to both resource scarcity and resulted in lower stock values and returns to economists adopted the unrealistic view that soaring environmental costsand investors. BPs financial woes in turn impacted perpetual economic growth is necessary and their inability (in the context of a British pension funds that were invested in the also possible to achieve. There are now shrinking economy) to service the company. fundamental barriers to ongoing economic enormous piles of government and This is just one eventadmittedly a expansion, and the world is colliding with those private debt that have been generated spectacular one. If it were an isolated problem, barriers. over the past couple of decades. the economy could recover and move on. But This is not to say the U.S. or the world as a Despite the tendency of financial we are, and will be, seeing a cavalcade of whole will never see another quarter or year of commentators to focus only on the last of these environmental and economic disasters, not growth relative to the previous quarter or year. factors, it is possible to point to literally obviously related to one another, that will However, when the bumps are averaged out, the thousands of events in recent years that illustrate stymie economic growth in more and more general trend-line of the economy (measured in how all three are interacting, and are hitting ways. These will include but are not limited to: terms of production and consumption of real home with ever more force. 1. Climate change leading to regional goods) will be level or downward rather than Consider just one: the Deepwater Horizon droughts, floods, and even famines; upward from now on. oil catastrophe of 2010 in the U.S. Gulf of 2. Shortages of water and energy; and Nor will it be impossible for any region, Mexico. 3. Waves of bank failures, company nation, or business to continue growing for a The fact that BP was drilling for oil in deep bankruptcies, and house foreclosures. while. Some will. In the final analysis, however, water in the Gulf of Mexico illustrates a global Each will be typically treated as a special this growth will have been achieved at the trend: while the world is not in danger of case, a problem to be solved so that we can get expense of other regions, nations, or businesses. running out of oil anytime soon, there is very From now on, only relative growth is possible: little new oil to be found in onshore areas the global economy is playing a zero-sum game, where drilling is cheap. Those areas have with an ever-shrinking pot to be divided among already been explored and their rich pools the winners. of hydrocarbons are being depleted. According to the International Energy Why Is Growth Ending? Many financial pundits point to profound Agency, by 2020 almost 40 percent of problems internal to the economyincluding world oil production will come from overwhelming, un-repayable levels of public deepwater regions. So even though its and private debt, and the bursting of the real hard, dangerous, and expensive to operate a estate bubbleas immediate threats to the drilling rig in a mile or two of ocean water, resumption of economic growth. The thats what the oil industry must do if it is assumption generally is that eventually, once to continue supplying its product. That these problems are dealt with, growth can and means more expensive oil. will pick up again. But the pundits generally Obviously, the environmental costs of miss factors external to the financial economy the Deepwater Horizon blowout and spill that make a resumption of conventional were ruinous. Neither the U.S. nor the oil economic growth a near-impossibility. This is industry can afford another accident of that not a temporary condition; it is essentially magnitude. So, in 2010 the Obama permanent. administration instituted a deepwater Altogether, as we will see in the following drilling moratorium in the Gulf of Mexico chapters, there are three primary factors that while preparing new drilling regulations. stand firmly in the way of further economic Other nations began revising their own growth: deepwater oil exploration guidelines. These

back to normal. But in the final analysis, they are all related, in that they are consequences of growing human population striving for higher per-capita consumption of limited resources (including non-renewable, climate-altering fossil fuels), all on a finite and fragile planet. Meanwhile, the unwinding of decades of buildup in debt has created the conditions for a once-in-a-century financial crashwhich is unfolding around us, and which on its own has the potential to generate substantial political unrest and human misery. The result: we are seeing a perfect storm of converging crises that together represent a watershed moment in the history of our species. We are witnesses to, and participants in, the transition from decades of economic growth to decades of economic contraction. Why Is Growth So Important? During the last couple of centuries, growth became virtually the sole index of economic well-being. When an economy grew, jobs appeared and investments yielded high returns. When the economy stopped growing temporarily, as it did during the Great Depression, financial bloodletting ensued. Throughout this period, world population increased from fewer than two billion humans on planet Earth in 1900 to nearly seven billion today; we are adding about 70 million new consumers each year. That makes further growth even more crucial: if the economy stagnates, there will be fewer goods and services per capita to go around. We have relied on economic growth for the development of the worlds poorest economies; without growth, we must seriously entertain the possibility that hundreds of millions perhaps billionsof people will never achieve even a rudimentary version of the consumer lifestyle enjoyed by people in the worlds industrialized nations. Finally, we have created monetary and financial systems that require growth. As long as the economy is growing, that means more money and credit are available, expectations are high, people buy more goods, businesses take out more loans, and interest on existing loans can easily be repaid. But if more new money isnt entering the system, the interest on existing loans cannot be paid; as a result, defaults snowball, jobs are lost, incomes fall, and consumer spending contractswhich leads businesses to take out fewer loans, causing still less new money to enter the economy. This is a self-reinforcing destructive feedback loop that is very difficult to stop once it gets going. In other words, the economy has no stable or neutral setting: there is only growth or contraction. And contraction is just a nicer name for Depressiona long period of

cascading job losses, foreclosures, defaults, and bankruptcies. We have become so accustomed to growth that its hard to remember that it is actually is a fairly recent phenomenon. During the past few millennia, as empires rose and fell, local economies advanced and retreatedbut world economic activity expanded only slowly, and with periodic reversals. However, with the fossil fuel revolution of the past two centuries, we have seen growth at a speed and scale unprecedented in all of human history. We harnessed the energies of coal, oil, and natural gas to build and operate cars, trucks, highways, airports, airplanes, and electric gridsall the essential features of modern industrial society. Through the one-time-only process of extracting and burning hundreds of millions of years worth of chemically stored sunlight, we built what appeared (for a brief, shining moment) to be a perpetual-growth machine. We learned to take what was in fact an extraordinary situation for

As a result, what could have been a painful but endurable process of adaptation could become historys greatest tragedy. We can survive the end of growth, but only if we recognize it for what it is and act accordingly. But Isnt Growth Normal? Economies are systems, and as such they (to a certain extent at least) follow rules analogous to those that govern biological systems. Plants and animals tend to grow quickly when they are young, but then they reach a more or less stable mature size. In organisms, growth rates are largely controlled by genes, but also by availability of food. In economies, growth seems tied to economic planning, and also to the availability of resourceschiefly energy resources (food for the industrial system), as well as credit (oxygen for the economy). During the 19th and 20th centuries, expanding access to cheap and abundant fossil fuels enabled rapid economic expansion; economic planners began to take this situation for granted. Financial systems internalized the expectation of growth as a promise of returns on investments. But just as organisms cease growing, economies must do so too. Even if planners (societys equivalent of regulatory DNA) dictate more growth, at some point increasing amounts of food and oxygen may cease to be available. It is also possible for industrial wastes to accumulate to the point that the biological systems that underpin economic activity (such as forests, crops, and human bodies) are smothered and poisoned. But many economists dont see things this way. Thats probably because current economic theories were granted. It became normal. formulated during the anomalous historical But as the era of cheap, abundant fossil fuels period of sustained growth that is now ending. comes to an end, our assumptions about Economists are merely generalizing from their continued expansion are being be shaken to experience: they can point to decades of steady their core. growth in the recent past, and they simply The end of growth is a very big deal indeed. project that experience into the future. It means the end of an era, and of our current Moreover, they have ways to explain why ways of organizing economies, politics, and modern market economies are immune to the daily life. Without growth, we will have to kinds of limits that constrain natural systems: virtually reinvent human life on Earth. the two main ones have to do with substitution It is essential that we recognize and and efficiency. understand the significance of this historic If a useful resource becomes scarce, its price moment: if we have in fact reached the end of will rise, and this creates an incentive for users the era of fossil-fueled economic expansion, of the resource to find a substitute. For example, then efforts by policy makers to continue if oil gets expensive enough, energy companies pursuing elusive growth really amount to a might start making liquid fuels from coal. Or flight from reality. World leaders, if they are they might develop other energy sources deluded about our actual situation, are likely to undreamed of today. Many economists theorize delay putting in place the support services that that this process of substitution can go on can make life in a non-growing economy forever. Its part of the magic of the free market. survivable, and they will almost certainly fail to Increasing efficiency means doing more make needed, fundamental changes to with less. In the U.S., the number of inflationmonetary, financial, food, and transport adjusted dollars generated in the economy for systems.

every unit of energy consumed has increased steadily over recent decades (the amount of energy, in British Thermal Units, required to produce a dollar of GDP dropped from close to 20,000 BTU per dollar in 1949 to 8,500 BTU in 2008). Part of this increasing efficiency has come about as a result of the outsourcing of manufacturing to other nationswhich burn the coal, oil, or natural gas to make our goods (if we were making our own running shoes and LCD TVs, wed be burning that energy domestically). Economists also point to another, related form of efficiency that has less to do with energy (in a direct way, at least): the process of identifying the cheapest sources of materials, and the places where workers will be most productive and work for the lowest wages. As we increase efficiency, we use lessof energy, resources, labor, or moneyto do more. That enables more growth. Finding substitutes for depleting resources and upping efficiency are undeniably effective adaptive strategies of market economies. Nevertheless, the question remains as to how long these strategies can continue to work in the real worldwhich is governed less by economic theories than by the laws of physics. In the real world, some things dont have substitutes, or the substitutes are too expensive, or dont work as well, or cant be produced fast enough. And efficiency follows a law of diminishing returns: the first gains in efficiency are usually cheap, but every further incremental gain tends to cost more, until further gains become prohibitively expensive. In the end, we cant outsource more than 100 percent of manufacturing, we cant transport goods with zero energy, and we cant enlist the efforts of workers and count on their buying our products while paying them nothing. Unlike most economists, most physical scientists recognize that growth within any functioning, bounded system has to stop sometime. The Simple Math of Compounded Growth In principle, the argument for an eventual end to growth is a slam-dunk. If any quantity grows steadily by a certain fixed percentage per year, this implies that it will double in size every so-many years; the higher the percentage growth rate, the quicker the doubling. A rough method of figuring doubling times is known as the rule of 70: dividing the percentage growth rate into 70 gives the approximate time required for the initial quantity to double. If a quantity is growing at 1 percent per year, it will double in 70 years; at 2 percent per year growth, it will double in 35 years; at 5 percent growth, it will double in only 14 years, and so on. If you want to be more precise, you can use the Y^x button on a scientific calculator, but the rule of 70 works fine for most purposes. Heres a real-world example: Over the past two centuries, human population has grown at rates ranging from less than one percent to more

than two percent per year. In 1800, world population stood at about one billion; by 1930 it had doubled to two billion. Only 30 years later (in 1960) it had doubled again to four billion; currently we are on track to achieve a third doubling, to eight billion humans, around 2025. No one seriously expects human population to continue growing for centuries into the future. But imagine if it didat just 1.3 percent per year (its growth rate in the year 2000). By the year 2780 there would be 148 trillion humans on Earthone person for each square meter of land on the planets surface. It wont happen, of course. In nature, growth always slams up against non-negotiable constraints sooner or later. If a species finds that its food source has expanded, its numbers will increase to take advantage of those surplus caloriesbut then its food source will become depleted as more mouths consume it, and its predators will likewise become more numerous (more tasty meals for them!). Population blooms (or periods of rapid growth) are always followed by crashes and dieoffs. Always. Heres another real-world example. In recent years Chinas economy has been growing

titled Limits to Growth made headlines and went on to become the best-selling environmental book of all time. That book, which reported on the first attempts to use computers to model the likely interactions between trends in resources, consumption, and population, was also the first major scientific study to question the assumption that economic growth can and will continue more or less uninterrupted into the foreseeable future. The idea was heretical at the timeand still is. The notion that growth cannot and will not continue beyond a certain point proved profoundly upsetting in some quarters, and soon Limits to Growth was prominently debunked by pro-growth business interests. In reality, this debunking merely amounted to taking a few numbers in the book completely out of context, citing them as predictions (which they explicitly were not), and then claiming that these predictions had failed. The ruse was quickly exposed, but rebuttals often dont gain nearly as much publicity as accusations, and so today millions of people mistakenly believe that the book was long ago discredited. In fact, the original Limits to Growth scenarios have held up quite well. (A recent study by Australian Commonwealth Scientific and Industrial Research Organization (CSIRO) concluded, [Our] analysis shows that 30 years of historical data compares favorably with key features of [the Limits to Growth] business-asusual scenario). The authors fed in data for world population growth, consumption trends, and the abundance of various important resources, ran their computer program, and concluded that the end of growth would probably arrive between 2010 and 2050. Industrial output and food production at eight percent or more per year; that means it would then fall, leading to a decline in is more than doubling in size every ten years. population. Indeed, China consumes more than twice as The Limits to Growth scenario study has much coal as it did a decade agothe same been re-run repeatedly in the years since the with iron ore and oil. The nation now has four original publication, using more sophisticated times as many highways as it did, and almost software and updated input data. The results five times as many cars. How long can this go have been similar each time. (See Limits to on? How many more doublings can occur Growth: The 30-Year Update.) before China has used up its key resourcesor The Peak Oil Scenario has simply decided that enough is enough and As mentioned, this book will argue that has stopped growing? The question is hard to growth is over because of a convergence of answer with a specific date, but it must be three factorsresource depletion, asked. environmental impacts, and systemic financial This discussion has very real implications, and monetary failures. However, a single factor because the economy is not just an abstract may be playing a key role in bringing the age of concept; it is what determines whether we live expansion to a close. That factor is oil. in luxury or poverty, whether we eat or starve. If Petroleum has a pivotal place in the economic growth ends, everyone will be modern worldin transportation, agriculture, impacted, and it will take society years to adapt and the chemicals and materials industries. The to this new condition. Therefore it is important Industrial Revolution was really the Fossil Fuel to know whether that moment is close at hand Revolution, and the entire phenomenon of or distant in time. continuous economic growthincluding the The End of Growth Should Come as No development of the financial institutions that Surprise facilitate growth, such as fractional reserve The idea that growth will stall out at some bankingis ultimately based on ever-increasing point this century is hardly new. In 1972, a book supplies of cheap energy. Growth requires more

manufacturing, more trade, and more transport, and those all in turn require more energy. This means that if energy supplies cant expand and energy therefore becomes significantly more expensive, economic growth will falter and financial systems built on expectations of perpetual growth will fail. As early as 1998, petroleum geologists Colin Campbell and Jean Laherrre were discussing a Peak Oil impact scenario that went like this. Sometime around the year 2010, they theorized, stagnant or falling oil supplies would lead to soaring and more volatile petroleum prices, which would precipitate a global economic crash. This rapid economic contraction would in turn lead to sharply curtailed energy demand, so oil prices would then fall; but as soon as the economy regained strength, demand for oil would recover, prices would again soar, and as a result of that the economy would relapse. This cycle would continue, with each recovery phase being shorter and weaker, and each crash deeper and harder, until the economy was in ruins. Financial systems based on the assumption of continued growth would implode, causing more social havoc than the oil price spikes would themselves generate. Meanwhile, volatile oil prices would frustrate investments in energy alternatives: one year, oil would be so expensive that almost any other energy source would look cheap by comparison; the next year, the price of oil would have fallen far enough that energy users would be flocking back to it, with investments in other energy sources looking foolish. But low oil prices would discourage exploration for more petroleum, leading to even worse fuel shortages later on. Investment capital would be in short supply in any case because the banks would be insolvent due to the crash, and governments would be broke due to declining tax revenues. Meanwhile, international competition for dwindling oil supplies might lead to wars between petroleum importing nations, between importers and exporters, and between rival factions within exporting nations. In the years following Campbell and Laherrres initial publication, many pundits claimed that new technologies for crude oil extraction would increase the amount of oil that can be obtained from each well drilled, and that enormous reserves of alternative hydrocarbon resources (principally tar sands and oil shale) would be developed to seamlessly replace conventional oil, thus delaying the inevitable peak for decades. There were also those who said that Peak Oil wouldnt be much of a problem even if it happened soon, because the market would find other energy sources or transport options as quickly as needed whether electric cars, hydrogen, or liquid fuel made from coal. In succeeding years, events appeared to be supporting the Peak Oil thesis and undercutting the views of the oil optimists. Oil prices trended steeply upwardand for entirely foreseeable reasons: discoveries of new oilfields were continuing to dwindle, with most new fields

being much more difficult and expensive to develop than ones found in previous years. More oil-producing countries were seeing their extraction rates peaking and beginning to decline despite efforts to maintain production growth using high-tech, expensive secondary and tertiary extraction methods like the injection of water, nitrogen, or CO2 to force more oil out of the ground. Production decline rates in the worlds old, super-giant oilfields, which are responsible for the lions share of the global petroleum supply, were accelerating. Production of liquid fuels from tar sands was expanding only slowly, while the development of oil shale remained a hollow promise for the distant future. From Scary Theory to Scarier Reality Then in 2008, the Peak Oil scenario became all too real. Global oil production had been stagnant since 2005 and petroleum prices had been soaring upward. In July 2008, the perbarrel price shot up nearly to $150half again higher (in inflation-adjusted terms) than the price spikes of the 1970s that had triggered the worst recession since World War II. By summer 2008, the auto industry, the trucking industry, international shipping, agriculture, and the airlines were all reeling. But what happened next riveted the worlds attention to such a degree that the oil price spike was all but forgotten: in September 2008, the global financial system nearly collapsed. The reasons for this sudden, gripping crisis apparently had to do with housing bubbles, lack of proper regulation of the banking industry, and the over-use of bizarre financial products that almost nobody understood. However, the oil price spike had played a critical (if largely overlooked) role in initiating the economic meltdown (see Temporary Recession or the End of Growth?). In the immediate aftermath of that global financial near-death experience, both the Peak Oil impact scenario proposed a decade earlier and the Limits to Growth standard-run scenario of 1972 seemed to be confirmed with uncanny and frightening accuracy. Global trade was falling. The worlds largest auto companies were on life support. The U.S. airline industry had shrunk by almost a quarter. Food riots were erupting in poor nations around the world. Lingering wars in Iraq (the nation with the worlds second-largest crude oil reserves) and Afghanistan (the site of disputed oil and gas pipeline projects) continued to bleed the coffers of the worlds foremost oil-importing nation. Meanwhile, the debate about what to do to rein in global climate change exemplified the political inertia that had kept the world on track for calamity since the early 70s. It had by now become obvious to nearly every person of modest education and intellect that the world has two urgent, incontrovertible reasons to rapidly end its reliance on fossil fuels: the twin threats of climate catastrophe and impending constraints to fuel supplies. Yet at the Copenhagen climate conference in December, 2009, the priorities of the most fuel-dependent nations were clear: carbon emissions should be

cut, and fossil fuel dependency reduced, but only if doing so does not threaten economic growth. The Financial Component of Economic Contraction If limits on resources and environmental sinks were closing the spigots on growth, the palpable pain that ordinary citizens were directly experiencing seemed to be coming mostly from another direction entirely: loss of jobs and collapsing real estate prices. As we will see in Chapters 1 and 2, expectations of continuing growth had in the previous decades been translated into enormous amounts of consumer and government debt. Americans were no longer getting rich by inventing new technologies and making consumer goods, but merely by buying and selling houses, or by moving money around from one investment to another, or by charging transaction fees as others did so. As a new century dawned, the world economy lurched from one bubble to the next: the emerging-Asian-economies bubble, the dotcom bubble, the real estate bubble. Everyone knew that these would eventually burst, as bubbles always do, but smart investors aimed to get in early and get out quickly enough to profit big and avoid the ensuing mayhem. In the manic days of 2002 to 2006, millions of Americans came to rely on soaring real estate values as a source of income, turning their houses into ATMs (to use once more the phrase heard so often then). As long as prices kept going up, homeowners felt justified in borrowing to remodel a kitchen or bathroom, and banks felt fine making new loans. Meanwhile, the wizards of Wall Street were finding ways of slicing and dicing sub-prime mortgages into tasty collateralized debt obligations that could be sold at a premium to investorswith little or no risk! After all, real estate values were destined to just keep going up. Gods not making any more land, went the truism. Credit and debt expanded in the euphoria of easy money. All this giddy optimism led to a growth of jobs in construction and real estate, masking the underlying ongoing job losses in manufacturing. A few dour financial pundits used terms like house of cards, tinderbox, and stick of dynamite to describe the situation. All that was needed was a metaphoric breeze or rogue spark to produce a catastrophic outcome. Arguably, the oil price spike of mid-2008 was more than enough to do the trick. But the housing bubble was itself merely a larger fuse: in reality, the entire economic system had foolishly come to depend on impossible-to-realize expectations of perpetual growth and was set to detonate. Money was tied to credit, and credit was tied to assumptions about growth. Once growth went sour in 2008, the chain reaction of defaults and bankruptcy began; we were in a slow-motion explosion. The effort of governments since then has been directed toward getting growth started again. But, to very limited degree that this effort

temporarily succeeded in late 2009 and early 2010, it merely masked the underlying contradiction at the heart of our entire economic systemthe assumption that we can have unending growth in a finite world. What Comes After Growth? The realization that we have reached the point where growth cannot continue is undeniably depressing. But once we have passed that psychological hurdle, there is some moderately good news. Not all economists have fallen for the notion that growth will go on forever. There are schools of economic thought that recognize natures limits and, while these schools have been largely marginalized in policy circles, they have developed potentially useful plans that could help society adapt. The basic factors that will inevitably shape whatever replaces the growth economy are knowable.To survive and thrive for long, societies have to operate within the planets budget of sustainably extractable resources. This means that even if we dont know in detail what a desirable post-growth economy and lifestyle will look like, we know enough to begin working toward them. We must convince ourselves that life in a non-growing economy can be fulfilling, interesting, and secure. The absence of growth does not necessarily imply a lack of change or improvement. Within a non-growing or equilibrium economy there can still be continuous development of practical skills, artistic expression, and certain kinds of technology. In fact, some historians and social scientists argue that life in an equilibrium economy can be superior to life in a fastgrowing economy: while growth creates opportunities for some, it also typically intensifies competitionthere are big winners and big losers, and (as in most boom towns) the quality of relations within the community can suffer as a result. Within a non-growing economy it is possible to maximize benefits and reduce factors leading to decay, but doing so will require pursuing appropriate goals: instead of more, we must strive for better; rather than promoting increased economic activity for its own sake, we must emphasize whatever increases quality of life without stoking consumption. One way to do this is to reinvent and redefine growth itself. The transition to a no-growth economy (or one in which growth is defined in a fundamentally different way) is inevitable, but it will go much better if we plan for it rather than simply watching in dismay as institutions we

have come to rely upon fail, and then try to improvise a survival strategy in their absence. In effect, we have to create a desirable new normal that fits the constraints imposed by depleting natural resources. Maintaining the old normal is not an option; if we do not find new goals for ourselves and plan our transition from a growth-based economy to a healthy equilibrium economy, we will by default create a much less desirable new normal whose emergence we are already beginning to see in the forms of persistent high unemployment, a widening gap between rich and poor, and ever more frequent and worsening financial and environmental crisesall of which translate to profound distress for individuals, families, and communities.

There is no serious planning for what to do about this. Then there is the situation of the native villages. On one hand, the indigenous peoples of the north might seem well placed to weather the changes ahead as industrial society succumbs to peak oil, peak coal, and peak gas: they have cultural traditions of self-sufficiency, small populations relative to land area, and access to lots of wild protein on the hoof (moose, caribou). However, as James van Lanen of Alaska Department of Fish and Game wrote to me in an email just the other day: Alaska Native villages are in a very precarious situation. These remote villages are only accessible by motorized travel via air or watercraft. They are entirely dependent upon fossil-fuel systems for goods and services: food, Alaska and Energy heat, health care. They have no contact with the During my recent visit to Anchorage, outside world without fossil fuels. Alaska to speak at that citys Bioneers satellite Some villages obtain more of their food conference, the friendly locals seemed eager to resources from wild sources than others. It educate me about their local energy issues. would be safe to say that on average 80% of the Some of what I learned struck me as important protein consumption in a village is from wild to share with a wider audience. sources. Berries and Plants supplement some Alaska is, of course, a huge energy part of the overall diet but this is small. The two exporter. Crude from the North Slope saved important things to consider are (1) much of the Americas energy bacon back in the 80s, food consumed comes from industrial sources helping to lower world oil prices and bankrupt and is shipped in via small aircraft and (2) wild the evil Soviet empire. Production there has declined from a peak of over two million barrels food harvests are currently almost entirely fossil-fuel dependent (there is a well-embedded per day to only 600,000 or so today. Once the flow drops below 500,000 barrels, there will be 'machine culture' in native villages; I believe that there is no extant ability to obtain problems with icing in the Trans-Alaska significant amounts of wild foods without the Pipeline system. Not good. use of machines) The states economy is based almost Peak Energy will hit Alaska villages entirely on resource extraction. Everyone gets a sooner and more intensely than many other check annually from the Alaska Permanent Fund, set up in 1976 primarily by the efforts of places. Fuel is already up to $9 per gallon in some places. As it becomes uneconomical for then Governor Jay Hammond. High oil prices current supply operations to continue the mean big dividends: in 2008-2009 extra-large industrial resources these villages rely on will payouts made Governor Palin look good to her fizzle out. constituents, though she was in no way Most village people are aware of their responsible. complete dependence upon fossil fuels. Many Alaska has enormous opportunities for elders foresee a future collapse due to increasing renewableswind, microhydro, geothermal, costs and modern dependence. However, there tidal, even solar. But these are far from being is no general awareness of the phenomenon of adequately developed, and progress in that direction will take time and lots of investment Peak Energy in these communities. There is no a dramatically higher pace of investment than is awareness that the entire system may break down. Alaska villages desperately need to currently evident. become educated in what we are facing. Anchorage (by far the largest city in the I came away from my too-brief sojourn in state) faces a particular challenge with natural gas: currently nearly all houses are heated with Anchorage with both a deep appreciation for this land of great natural beauty, contrasts, and gas, but supplies from Cook Inlet will run low extremes, and an equally deep concern for how in two years, even sooner with an abnormally Alaskans will deal with their enormous energy cold winter. Most options to replace current sources (more drilling, LNG, alternative energy) challenges. Some of those challenges are going to present themselves forcibly in the very near will take longer than two years to develop. future.