[Peace-discuss] Wall Street: A new Iraq War

[C. G. Estabrook]

"Wall Street relies on credit. Credit relies on the absence of depression.
The military budget makes a depression impossible."

	Wall Street: A new Iraq War
	By Pepe Escobar

...Voters continue to flock to the Obama camp amidst the biggest state 
intervention in United States history. Biggest if we don't count another monster 
state intervention - the soon-to-become trillionaire war in Iraq.

The Wall Street US$810 billion - and counting - bailout is being interpreted by 
millions of angry Americans as no less than a class struggle weapon of mass 
destruction. It may cost US taxpayers over $2 trillion after real interest 
payments are added. Yes, this bailout is a second Iraq war...

So Americans will soon be listening to the sound, not of music, but of over a 
trillion dollars of their future taxpayer earnings being sucked-up by Goldman 
Sachs, Citibank, Bank of America and JP Morgan Chase. The Bank of China will 
also collect. There's absolutely no guarantee any of these banks will put the 
money back into productive US investments.

The US Treasury - that is, Treasury Secretary and former Goldman Sachs CEO Hank 
Paulson - will print money like crazy, just like during the Latin American 
crisis of the 1980s. And who is the Treasury hiring to decide which banks and 
which debts to buy up? Wall Street experts.

So this is a new Iraq war in more ways than one. In Iraq, Washington 
subcontracted the war to private military outfits, like Blackwater. Now it's 
time for Wall Street to pull its own Blackwater.

Did the US Congress make at least an effort to appoint a group of independent 
experts to analyze the whole mess? No, it didn't. The bailout ballet was staged 
to perfection. Representative Marcy Kaptur, Democrat from Ohio, was one of the 
few to denounce the intimidation tactics and the fearmongering atmosphere on the 
House floor. Representative Brad Sherman, Democrat from California, warned that 
martial law would be imposed in the US if the bailout did not pass.

Let's assume, for the sake of argument, Americans would want to vote out all the 
politicians who supported the bailout. They simply can't. Because there are not 
enough third-party candidates - or progressives - to replace them; this is the 
realm of money politics, and they simply cannot compete with the Democratic or 
Republican machines. Not to mention that two-thirds of the Senate - which also 
approved the bailout - are not up for re-election...

Were there other options apart from the biggest redistribution of wealth - this 
one towards the top, not the bottom - since the 1917 October Revolution in 
Russia? Of course there were. One of them was offered on the pages of the 
Washington Post by two respected Yale economists. [1] Essentially, it says "pay 
off all the delinquent mortgages".

John McCain, in a desperate Hail Mary pass trying to stop the bleeding in his 
campaign, came up with more or less the same proposal ("It's my idea, not 
Senator Obama's") at the presidential debate - stunning all the punditocracy.

But he didn't know how to sell it. He didn't explain where the funds - expected 
to be upwards of $300 billion - would come from, he didn't say that the 
bailed-out banks under Bush/Paulson could in fact buy up mortgages, and on top 
of it, he incurred the ire of large sections of his already irate "base"...

Obama, for his part, bought the bailout hook, line and sinker - and has been 
busy trying to justify it on the campaign trail. He may be leading the polls - 
even before the debate - but this has more to do, according to the Washington 
Post, with "negativity about the country's financial prospects" than an Obama 
plan B to deal with the financial crisis. Obama was never pro-active - he was 
reactive to the Bush/Paulson plan, which then became the 
Bush/Paulson/Pelosi/McCain/Obama bailout plan.

Obama could have called dozens of economists to educate him about the financial 
crises in Mexico in 1997, Brazil in 1999 and Argentina in 2001. He could have 
learned how Sweden dealt with its own crisis in 1989 - yes, they pay high taxes 
but have one of the highest standards of living in the world.

All this when Paulson - Mr Goldman Sachs himself - revealed that the first bad 
debts would be bought up only after the November 4 elections. So American voters 
won't even evaluate if the bailout worked (the markets, for their part, have 
already said "no") before they elect Obama or McCain and their new House 
representatives.

So there was no US national debate ... In the words of a McCain strategist, "If 
we keep talking about the economic crisis, we're going to lose."

And why don't they want to keep talking about the economy? Refer, for instance, 
to the new Obama campaign strategy - a 13-minute documentary posted on the net 
about the late 1980s Keating Five savings and loan scandal, a deregulation 
fiasco in which McCain had a starring role.

Both campaigns are not even trying to really debate the pitfalls and the 
seriousness of it all...

Once again, it's up to those pesky Europeans to tell it like it is. Jean-Claude 
Milner, former president of the International College of Philosophy, puts it in 
stark terms. The European bourgeoisie worries about savings security. The 
American bourgeoisie worries about credit security. In Western Europe, credit is 
a means to acquire assets. In America, it's the opposite: an asset is a means to 
obtain credit. The whole thing works, as long as there's no depression.

Then there are the enormous Pentagon budgets. They aren't solely dedicated to 
facilitate "preemptive wars"; they are above all a means of permanent support to 
the economy. So, American capitalism is in fact state capitalism - where the 
state is not an entrepreneur, or an owner, but a larger-than-life client. 
Therefore, this client must intervene in times of crisis. In Milner's lovely 
formulation, the US state is "the invisible hand behind the visible credit".

Milner goes beyond the military-industrial complex. He identifies a 
"military-financial complex". That's how the snake bites its own tail: "Wall 
Street relies on credit. Credit relies on the absence of depression. The 
military budget makes a depression impossible." It's this idea of capitalism, 
based on credit and disconnected from natural resources, that is today on fire. 
And not only because of the subprime crisis. Miller stresses how the US Army is 
above all an economic tool, and much less a traditional army (which the 
neo-cons, drunk with power, imbued with the mission of bringing democracy to the 
Middle East)...

Pepe Escobar is the author of Globalistan: How the Globalized World is 
Dissolving into Liquid War (Nimble Books, 2008). He may be reached at 
pepeasia at yahoo.com.

[Entire article at <http://www.atimes.com/atimes/Middle_East/JJ10Ak01.html>.]