ISRAEL NOT A FREE MARKET ECONOMY

A student in one of my classes got quite angry when I mentioned that  Israel cannot be classified as a free market economy. Israel continues to receive the most aid of any country in the world, from the US and currently receives $3. billion a year. Given that there only 6 million approx Israelis...you can do the maths and see how much Israeli citizens are being subsidized by the American taxpayer..

This explains US aid to Israel: http://www.fas.org/sgp/crs/mideast/RL33222.pdf

Here is an opinion piece
http://www.huffingtonpost.com/steven-strauss/us-aid-israel_b_4251742.html

US military aid to Israel isn't just about Israel's defense, but is helping to subsidize its defense industry.
The US sends military aid and technology to Israel, which helps to subsidize its thriving weapons industry. In turn, Israel sells weapons to China (which doesn't sit well with the US) and many other countries. Israel is the world's sixth largest weapons exporter.
http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_08_05_2013_p76-600058.xml

Aid money from the US is used to develop Israeli industries which in turn compete with American businesses.
 

While Israel does have some free trade agreements, its defense sector is largely protected by US aid paid for by US taxpayers. The irony is, Israel has been under fire for selling its weapons to China.

For an account from 2002 of Israel's protective tariffs , see this:

http://www.iasps.org/policystudies/ps53eng.pdf

There is no reason to suppose this has changed much since then. There have been massive protests in Israel due to poverty and financial restrictions. Here is a blog that explains Israel's LACK of competition, and you can check out the facts yourself:

"The main reason why it is so hard for Israelis to earn a decent living is that the Israeli economy is strangled by anti-competitive behavior by business in cooperation with government bureaucracy. It wouldn’t cost money for the government to stop doing the things it is doing that enable Israeli businesses to make undeserved profits while operating inefficiently and charging excessive prices. :

http://blogs.timesofisrael.com/from-crony-capitalism-to-a-free-market/

LEBANON, THE PLO AND THE US

To deal with the huge influx of Palestinian refugees into Lebanon, the 1969 Cairo Agreement was crafted which gave the precursor PLO jurisdiction over camps of Palestinian refugees previously under the rule of the Lebanese government. It also gave the right to Palestinians to pursue an armed struggle against Israel. Thus the refugee camps became the base of the PLO and there developed a 'state within a state' situation in S Lebanon. The Sunni Palestinians in their hundreds of thousands caused an imbalance in the Confessional domestic political system which exists in Lebanon. The presence of the PLO contributed to national tensions and triggered the Israeli occupations/ attacks on Lebanon in the 1970s and 80s. The Cairo Agreement was repealed by the Lebanese government in 1987. A good book about this is:
Cobban, Helena (1984). The Palestinian Liberation Organisation: People, Power, and Politics. Cambridge: Cambridge University Press.

US-Lebanese relations
 Israel was at war in Lebanon during the 1970s  causing high civilian death toll and damage to Lebanon’s economy, particularly in the largely Shiite southern part of the country, where there were PLO camps.  Israel had attacked Lebanon because it had PLO fighters on its territory. The PLO had been formed as a resistance army and political party against Israeli occupation of Palestinian territories. President Carter in 1978 backed a UNSC resolution condemning the Israeli attack. In 1981, after Israel had bombed a heavily populated neighborhood in Beirut, President Reagan brokered a cease fire. However, in 1982, Israel continued to bomb Beirut and the US reversed its position and backed Israel. In 1982, the US brokered an agreement in which the PLO had to evacuate to Tunisia. The US then withdrew. Right wing Lebanese  Phalangists took advantage of this withdrawal, and  massacred over 1,000 civilians under the watch of Israeli occupation forces in 2 refugee camps.

The Hezbollah (Party of God) emerged in the early 1980s as a Shia Islamic militant organization that was formed as an armed resistance to Israeli occupations and attacks in Lebanon. Today, there are Hezbollah members in the Lebanese Parliament.

The US had supported the Phalangists and the  Israeli invasion in 1982, after Carter. In April 1983, suicide bombers struck the U.S. Embassy in Beirut, killing 63 people. US forces returned and the fighting between the Lebanese resistance to the Israeli occupation, and US forces continued. US forces finally withdrew in 1984.

The historian Stephen Zunes (U of San Francisco) quotes  Jimmy Carter in an interview with the New York Times, in regard to Lebanon, “We bombed and shelled and unmercifully killed totally innocent villagers, women and children and farmers and housewives, in those villages around Beirut. As a result, we have become a kind of Satan in the minds of those who are deeply resentful. That is what precipitated the taking of hostages and that is what has precipitated some terrorist attacks.”

I havn't been able to find the original interview..

CONVERSION BY THE BOOK OR BY THE SWORD

The Western media tends to support the claim that Islam was spread by the sword not  voluntary conversion. Here is what one student wrote in my INTL 5265 Middle East Studies class: "I understand that it is a contentious point in the west, but only in public and media spheres, not so much in academic ones. Those who are familiar with the history of Islam know that Muslim armies never reached Indonesia, east and West Africa for examples. The existence of Christian and Jewish communities (their numbers started dwindling only in recent history) in predominantly Muslim countries also denotes coexistence between Abrahamic communities was congenial. From a theological perspective, one of the most important tenets of Islam, as you know, is the notion of “intention;” no act – prayer, charity, fasting, hajj, etc - is accepted in Islam without a firm announced intent behind it. No one can forcibly be converted to Islam. With that said, I do agree that Muslim soldiers, much like any other armies, were guilty of atrocious transgressions during wars, to include forcible conversion. Those transgressions – labeled “war crimes” today - were condemned by Islamic scholars and jurists. There is plenty in the Coran and Hadith to support that condemnation. "

WHERE IS GERMANY'S GOLD

Germany wants its gold bullion back from the Federal Reserve, but it's been told to wait seven years.
One should ask, why does Germany keep its gold in a vault in New York City? Why not in its homeland? 
Short answer...faith in the American dollar as reserve currency since end of WWII and fear of takeover by USSR.
Gold at the Feds is basically collateral for quick loans of American dollars. But if American dollars aren't wanted as much...countries ask to repatriate gold. 
Nixon took the dollar off the gold standard. Today, gold is being hoarded in many countries, including China, which has sold off a lot of its US bonds and is instead buying gold. This shows overall a lack of confidence in the US dollar and a growing confidence in gold. 
Also failing the confidence test, is the World Bank, mainly funded by the US, which is now refusing to allow the US Government Accounting Office to conduct an audit. We will be seeing a lot of scandals involving US directed financial institutions...but turning to BRIC economies won't necessarily be any better for the world economy, in my view. 
Yes, this is a public relations disaster for the Feds...really a laughing stock right now. But Germany wants to downplay everything, since it doesn't want to look like it 'lost' its gold!
 
BTW, I really like Max Kaiser for financial info ... outrageous but really intriguing. The National Taxpayers Union is a very good source.
 

GLOBAL RULING ELITES AND TRANSNATIONAL CAPITALISTS

Please look at this list below of the top 25 of 147 ‘super connected companies’. What do you suppose are their countries of origin, or where they are based, legally? Ask yourself if they can be characterized as ‘transnational’.
Randal wrote “With this reference point in mind the authors of "The Global 1%" utilize data from Orbis 2007, a database listing thirty-seven million companies and investors, the Swiss researchers applied mathematical models—usually used to model natural systems—to the world economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership between them. The research created a “map” of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a “super entity” within this map, controlling some 40 percent of its wealth. The top twenty-five of the 147 super-connected companies includes:
1. Barclays PLC*
2. Capital Group Companies Inc.
3. FMR Corporation
4. AXA
5. State Street Corporation
6. J. P. Morgan Chase & Co.*
7. Legal & General Group PLC
8. Vanguard Group Inc.
9. UBS AG
10. Merrill Lynch & Co. Inc.*
11. Wellington Management Co. LLP
12. Deutsche Bank AG
13. Franklin Resources Inc.
14. Credit Suisse Group*
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc.*
19. T Rowe Price Group Inc.
20. Legg Mason Inc.
21. Morgan Stanley*
22. Mitsubishi UFJ Financial Group Inc.
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation*
* BlackRock Directors

I wrote to Randal:
Note the nationality of these corporations...mainly US and Japanese based. No wonder Business English is one of the most sought after classes around the world.  I think this term 'transnational' is a misnomer. Maybe it will become so in the future, but this list bears out Sklair's research that 60% of so called 'transnational' wealth is in legally housed in either Japan and the US. What's also interesting is how many banks are in this list.

Sarah found an article in  the Economist on the global ruling class, which she writes, is a simplified term for the transnational class. “This article attempts to define a typical global class ruler as someone who attends either Harvard, Stanford, or the University of Chicago. They work at Goldman Sachs, and sit on the same direction boards. It is a revision of old money or WASP society redefined global style.”
Note here also, the preponderance of American universities, mostly Ivy League.
Global ruling class to me is a more accurate term than ‘transnational capital’ which implies that capital is being transferred around the world. Clearly it’s not, if you compare national GDPs:
USA=$15 trillion out of $70 trillion world GDP…approx.. figures according to the CIA Factbook. That’s 1/6^th of global GDP. Compare to ratio of population: US=350 million. World=7 billion, roughly 5%. That means that 5% of the world’s population accounts for 22% of the world’s wealth.
 Compare to Russia: $2 trillion,  UK (a tiny island, but remember the City of London is the global center of banking) at $2 trillion; China : $8 trillion …an official figure that the CIA disputes and believes is higher…
See: https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html
To say that US wealth is bound by a ‘transnational state’ , as claimed by Robinson and Sklair…doesn’t make sense. Of course, there are offshore banks and islands, where corporations can siphon off profits in order to avoid taxation. President Obama is trying to call a halt to this.
Corporate loopholes don’t necessarily mean sheltering profits in the Cayman Islands. Lucrative legal headquarters exist in the US. Here is an example about Starbucks:
“Starbucks had already mastered the art of doing business on multiple continents as it grew from a niche coffee retailer in Seattle into a global brand with thousands of outlets from Saudi Arabia to Peru. Now the company smelled a fresh opportunity that required a presence in mysterious territory with its own unique culture: Washington, D.C.
It was 2004 and Congress was considering a law that would provide substantial tax breaks to nearly any company engaged in manufacturing. Though this term conjured images of textile factories and steel mills, Starbucks argued that the definition of manufacturing should -- for purposes of calculating its tax bill -- be stretched to include the roasting of coffee beans.
Starbucks hired an outside lobbyist, Michael Evans of the Washington powerhouse K&L Gates, paying his firm $60,000 that year, according to lobbying reports. Evans was only a year removed from his previous incarnation as a top lawyer on the Senate Finance Committee, the panel that writes the nitty-gritty of tax law. At his urging, lawmakers soon delivered what became known as "the Starbucks footnote," a clause added to a 243-page tax bill called the American Jobs Creation Act.
The provision enabled Starbucks to claim something called a "domestic production activities" tax deduction on each cup of coffee sold in one of its American retail stores. The measure has since saved Starbucks $88 million, according to the company.
Starbucks asserts that its tax savings are entirely legitimate. “
Source: http://www.huffingtonpost.com/2013/02/15/obama-corporate-tax-reform_n_2680880.html

GLOBALIZATION AND THE GLOBAL INCOME GAP: FOR RICHER OR POORER?

A student wrote in my INTL 5400 class:

"The Organization for Economic Cooperation and Development (OECD) found that the “poorest country in 2011 was poorer than the poorest country in 1980.  And much of humankind continues to live on less than $1 a day” (Jaura, 2013).  OECD believes that globalization is actually creating a larger gap between the rich and the poor instead of helping the entire world develop as a collective.  A series of studies by the OECD highlight both sides of globalization: in Brazil, a young professional manicurist left her rural home and moved to Sao Paulo and due to the economic growth in Brazil the future is looking very bright with a new car, health insurance and other commodities; on the other hand in Mali, a farmer is making less money for his cotton crops because of the additional charges from the state-run textile development company.  The inequality between the rising standard of living and declining wages are a big piece in the argument against globalization.  Pilger and his crew interviewed several families in Indonesia who were afraid they would not be able to pay for medication for their children and have to reduce their daily food intake from 3 meals a day to 2 meals day.  The article from Arab news highlights those same fears in other developing countries.
Jaura’s article also claims that China is somewhat of an exception to progress and growth from the developing world and that its good results distort the statistics from decreasing world poverty.  An OECD study shows that “in the last 20 years, rapid globalization has occurred alongside a worldwide decrease in extreme poverty.  Since 1990, the number of people surviving on under $1 a day has dropped by 25 percent” (Jaura, 2013).  China’s per capita income is increasing faster than most other developing countries and the large population means that a larger number of people move out of the $1 a day standard of living than in smaller countries.
I do not completely agree with Pilger’s perspective and the “hard data” from the Arab News article.  Statistics can always be drawn and manipulated to create the results a study wants to produce.  I believe the saying is, “there are three kinds of lies: lies, damned lies, and statistics.”  Certainly there continues to be inequality between the rich and the poor and in some place the gap is actually growing wider.  However, a lot of the statistics pulled for the antiglobalization argument are misleading.  An economist from Columbia, Xavier Sala-i-Martin, said many of the statistics from the 1999 United Nations Human Development Report depart from “standard economic procedures, like not correcting for price levels from country to country” (Postrel, 2002).  Some of the stats only included a selective number of countries.  The biggest error Sala found was that the report “looked at gaps in income of the richest and poorest countries—not rich and poor individuals” (Postrel, 2002).  Comparing small populations like Grenada to large populations like China and giving them equal weight in a report does not seem like an accurate way to describe wealth inequality.  With China’s (and India) rising economy during globalization, billions of people have increased their standard of living.  “From the point of view of individuals, economic liberalization has been a huge success.  ‘You have to look at people,’ says Professor Sala-i-Martin. ‘Because if you look at countries, we do have lots and lots of little countries that are doing very poorly, namely Africa’’ (Postrel, 2002).  The entire population of the continent of Africa is about half the population of China, so despite the continued poverty in Africa individuals have increased their wealth and standard of living.
WORKS CITED:
Jaura, Ramesh.  “Globalization Makes Poor More Vulnerable.”  Arab News.  25 Apr 2013.  http://www.arabnews.com/news/449339.  Accessed 6 Jul 2013.
Pilger, John. The New Rulers of the World.  Dir. John Pilger.  2001.  Accessed 6 Jul 2013.

THE EUROPEAN UNION - WHO BENEFITS?

The question is, who has the EU benefited so far? One student in my Summer 2013  INTL 5400 class has provided some promising statistics for the Eastern European countries, but that is not the whole story.
I was born in the UK, and go back there often. The media consensus there is the following. The EU:
1) Created a layer of EU politicians and members of the EU Parliament  who are making decisions unilaterally in Belgium, home of the EU parliament (and living high off the hog in Brussels!) Political integration has not followed economic integration.
2) The British don't want to adopt the Euro  and are confused by European measurements. Dealing with two different measurements...the lb (pound) and the kilo...has created a huge headache for retailers.
3) French cheese has flooded the British market, undercutting British cheese producers - applies to other products as well. Upset occurs when British food products are said not to achieve EU standards.
4) Floods of Romanian gypsies have arrived in Britain, begging on the streets. Britain's welfare programs have attracted many impoverished Eastern Europeans.
On the upside:
1) Cheap labor from Eastern Europe in  British restaurants, shops etc. Of course that's not great for the workers, and British workers' pay is being undercut.
2) Another human rights court (the  European Court of Human Rights) that supersedes British human rights courts (which some might think is not an advantage).
In countries like Italy and Spain, there is huge resentment against Germany, which is basically managing the Euro. If Turkey does join the Euro, ironically one would see the old WWI alliance of Turkey and Germany, BTW. Germany, being the strongest country in the EU, effectively runs it, and has imposed strict austerity measures on countries like Greece and Cyprus. This in turn triggered mass deprivations and then protests.

COLLATERAL DAMAGE OR WAR CRIME?

Obviously, wars will result in collateral damage…but the question is,  how to distinguish  collateral damage from  a war crime?

Collateral damage is damage to humans, animals and other things different to  the intended target.

A war crime is an action carried out during the conduct of a war that violates accepted international rules of war.

What are ‘accepted international rules of war’?

The Geneva Conventions are the principle rules. The first Geneva Convention was developed in 1864.  It called on the warring parties to respect the right of medical personnel assisting soldiers in the field.   The 1949 Conventions, which are the current rules, were a response to the atrocities of WW2.  The  four conventions protect combatants in the field, combatants at sea, prisoners of war and civilians.   The protection for civilians  includes the provision of humanitarian aid to noncombatants and wounded combatants.

But this is a vague proposition…’protecting’ civilians, to use no more force than is ‘necessary’,   raises the question of ‘how many’ civilians should be protected (and how)?  One theory is that the difference between collateral damage and a war crime might break down into differences in political values. What your personal values are…determines definitions. This is just a theory, without a hard data set to substantiate it, but it's  a good starting point for discussion.

Those on the left-liberal side of the political spectrum, would have a strict definition of a war crime to include ANY type of collateral damage, if it was foreseeable. This would include deaths of innocents under economic sanctions as well as in wartime. Often it is argued on the liberal side, that the ends are not justified by the means.

Those more in the middle of the political spectrum, would allow for a moderate amount of foreseeable civilian deaths and damage, as long as it was not perceived of as excessive. But what is ‘excessive’ is left up to personal opinion. One person may think that 20 innocent deaths are excessive, others would put it at 200. Again, there are not set rules anywhere to make that determination.

Those on the right side of the political spectrum, denounce anyone who is close to an attack as either being used by the designated enemy as a shield, or in collusion with them, thus justifying an indeterminate number of innocent deaths.

One thing is clear. This as students pointed out this week, is an issue of morality. There is a profound lack of consensus on the morality of war and this is reflected in the vagueness we see in international law regarding collateral damage.

CHINA'S ECONOMIC GROWTH: HOW IS IT MEASURED?

The North American economist Milton Friedman said n 2004 that because China is improving its civil rights, this means that that its political rights will improve. If political rights improve, he argues, then economic growth and success will follow. 

How to define 'economic growth' or 'economic success' in a class on political-economy?
The mainstream way (the way of the mainstream mass media like CBS or CNN) is to define economic growth through GROSS DOMESTIC PRODUCT ,or GDP, and working age population.  GDP growth is what PricewaterhouseCoopers bases its conclusions when it refers to the success of emerging economies.

"The world's largest tax advisory, audit and consultancy services provider, PricewaterhouseCoopers (PwC) has suggested that the emerging markets like India and China is fast becoming the hub of global economic activity with China likely to outpace the US by 2025. " Vietnam is also considered an emerging economy."
 Source: http://www.ibtimes.com/china-likely-outpace-us-2025-217155. 

Will this economic growth be hampered by lack of political freedoms?  On the contrary, there is an argument to be made that a state like China which controls the 'commanding heights' of an economy without a focus on Western style freedoms, is giving it a lead over Western democratic economies. It is noted that China did not suffer as much from the 2008 economic crisis as countries such as US, Iceland, Greece, Italy and Spain -- all Western style democracies.

The report by PricewaterhouseCoopers does not mention political freedoms as a factor of economic growth. This is what the report says:

"The key to achieving the growth potential, indicated by the report titled The World in 2050: beyond the BRICs, will be establishing and maintaining a macroeconomic, legal and public policy environment conducive to trade, investment, increased education levels and hence economic growth." [BRICs=Brazil, Russia, India, China]. 

China's success is down to a strong state sector and strong state-directed investments, according to experts. China owns its own money supply and sets its own interest rates. The US does not. It has to borrow its money supply at interest from the private banks of the Federal Reserve (a set of private banks. The Fed, despite its name, is NOT  a government agency). 

China's annual average GDP growth since launching its economic reforms in 1978 has been 9.9%. By contrast, in the last four years, the US economy has grown by 1.2%.

CHINA: INCOME GAP ONE OF THE WORLD'S LARGEST

Who are the winners and losers resulting from China's GDP growth?
Growth by GDP isn't the whole story, as a student pointed out in my INTL 5400 class this week. 

"Gini studies suggests that China may now be one of the most economically unequal countries on Earth, and the most unequal outside of sub-Saharan Africa. Compared to World Bank data, China ranks as the world’s fifth most unequal, tied with Botswana. It performs a little better alongside CIA data, which would rank China as the world’s seventh most unequal, between Haiti and the Central African Republic. These comparisons are imperfect, since the Chinese university study may not have used the same measurements as the World Bank or CIA studies, but a rough way of demonstrating the severity of China’s growing class problem."
Source:
Study: Income inequality skyrockets in China, now among world’s highest By Max Fisher, Published: December 11, 2012
http://www.guardian.co.uk/commentisfree/2012/jul/13/china-economic-success-example-world

Political revolutions are spurred by economic distress more than any other issue.

"The world has enough for everyone's need, but not enough for everyone's greed."

This week a student wrote in my INTL 5400 International Political Economy class:  'So, according to Malthus, value is found not in a resource, but rather in its absence." The scarcity theory relates to the supply and demand theory, in which prices are raised when demand exceeds supply.
Are we really living in a world of scarcity?
Mahatma Ghandhi  said that "The world has enough for everyone's need, but not enough for everyone's greed."
According to the UN, 870 million people today don't have enough to eat. Is that because there isn't enough food, or is there something wrong with the food production/distribution system worldwide?
Global average Gross Domestic Product (GDP) has risen dramatically in recent years. It is now at $11,500 per person (http://www.indexmundi.com/g/g.aspx?c=xx&v=67). GDP is defined as a purchasing power parity basis divided by population. Yet, 15% of the planet are facing hunger. There is a massive global income gap between wealthy countries and developing countries. Sub-Sahara Africa is considered amongst the poorest of regions.
The dominant agricultural production model also wastes an astounding amount of food. According to the Food and Agricultural Organization (FAO), over a third of all food produced gets lost in present production and consumption systems.

FAILED SOCIALISM?

Students often write that ''socialism is a failed experiment." Yet the socialist experiment has only occurred in the last 100 years and unfolded against tremendous odds. Surely it's too early to dismiss it as a failure?

Unfortunately, most people's ideas about socialism are derived from the USSR. Yet, there are many models of socialist governments. It's as complex as the different models of democracy. Many countries have claimed to be socialist, but are not.
A good list  of countries past and present that have identified themselves as socialist (but check references) can be found here:
http://en.wikipedia.org/wiki/List_of_socialist_countries
To enter into a discussion about socialism, one must first begin with a definition or at least a set of categories.
In Marxist terms, socialism is a transition from capitalism to communism. The means of production are taken into social ownership and control, via the state. This permits the emergence of common ownership and egalitarian distribution of any ensuing wealth, and eventually the 'withering away' of the state.
But socialism can also be viewed as permanent (not by Marxists). Often, private property is acceptable as long as there is not excessive accumulation of private wealth. Politically, there can be grassroots democracy, for example, in neighborhoods as in Cuba, workers' control in factories, and other types of democratic institutions such as proportional democracy, A key feature is the nationalization of the major resources and industry, such as steel, energy and other manufacturing centers. An equally important key feature is a massive welfare system 'from cradle to grave' to conform with the requirements of the Covenant of Economic, Social and Cultural Rights. http://www.ohchr.org/EN/ProfessionalInterest/Pages/CESCR.aspx
By socialism, I mean at a minimum. state managed and owned resources, and a strong welfare state paid for by these resources. This translates into free health care and education, in other words, a form of domestic wealth sharing that benefits the poor. Political models can range from multi-party elections and a free press (Nicaragua under the Sandinistas during the 1980s) to Stalinist-type dictatorships (USSR).
 The Bolshevik Revolution of 1917 was greeted from Day One with some 13,000 American troops at the borders of the just-born state. Later on, British and French joined the US and engaged the Bolsheviks in a frontier war. The crime of the Bolsheviks was to turn a semi-feudal capitalist system into a socialist society  --an act viewed in the West as an assault against civilization. The 1919 War against the USSR precipitated the latter into a highly centralized, militaristic mode - which found its ultimate expression in the Stalinist era.
It was after World War II, inspired by the defeat of Fascism, that many countries voted in socialist governments in free and fair elections. These countries subsequently  became subject to Western military and CIA interventions, so the experiment was never allowed to stand up on its own merits. From Vietnam to Chile, from Angola to Korea, socialist movements and governments were cut down before they had a chance to mature. Millions of lives were lost in these anti-socialist wars. An excellent book detailing this gory era, is Killing Hope, US Military and C.I.A. interventions since World War II by William Blum.
Why is such a virulent approach taken against an alternative economic model, which has such mass appeal to the poor and impoverished of the world?  Largely because socialist models deprive multinational corporations from accessing cheap labor forces, cheap resources (such as oil) and consumer markets. Today, weaker countries with state-owned resources and comprehensive welfare states, are at risk for interventions: Libya, Iraq, Syria are recent examples. Whereas, countries that open up their borders to corporations, or align themselves with Western interests, are untouched and receive support despite being governed by dictators (Egypt under Mubarak, Pakistan under Zia). Here is a current partial list of US-supported repressive leaders: 

President Ali Abdullah Saleh of Yemen, Sultan Qaboos bin Said Al-Said of Oman, Gurbanguly Berdymukhamedov of Turkmenistan, President Karimov of Uzbekhistan.For more, see this:
http://morallowground.com/2013/01/20/us-supports-brutal-dictators-in-4-of-7-least-free-nations/.

NO UN CHARTER CHAPTER 7 RESOLUTION REGARDING 2003 INVASION OF AFGHANISTAN

There is no UN Security Resolution or mention of Chapter 7 in any UNSC resolution, that legitimizes the invasion of Afghanistan in 2001. Chapter 7 of the UN Charter states that an attack on another country can only be done in self-defense, i.e. if it were attacked. This may seem counter-intuitive in the case of Afghanistan. Please read this legal briefing provided to the UK House of Commons (the UK was one of the occupying countries):

www.parliament.uk/briefing-papers/sn05340.pdf

The reason why, in my view, is a dubious legal precedence that might be set. For example, say Israeli-Americans living in the US, attacked Egypt in a 9/11 type event, would the US be held responsible and attacked under Chapter 7, if for some reason it didn't give up the perpetrators?
See more recently Richard A. Clark, Against All Enemies 24 (2004): “When, later in the discussion {on the evening of Sept. 11, with Bush and his crisis advisors}, Secretary Rumsfeld noted that international law allowed the use of force only to prevent future attacks and not for retribution, Bush nearly bit his head off. ‘No,’ the President yelled in the narrow conference room, ‘I don’t care what the international lawyers say, we are going to kick some ass.”

The Taliban condemned the 9/11 attack, offered to negotiate, but it was clear that President Bush had already made up his mind to go to war, despite the United Nations Charter, which requires the peaceful resolution of disputes. It’s been said that the reason why the Taliban didn't give Al Qaeda over to the US, is that the US wasn't able to provide the Taliban evidence of its culpability for 9/11. There was actually a big debate about this in the ranks of the Taliban, with many wanting to turn over the Al Q, but others wanting evidence. See this article in the New York Times:

A NATION CHALLENGED: THE PRESIDENT; PRESIDENT REJECTS OFFER BY TALIBAN FOR NEGOTIATIONS
By ELISABETH BUMILLER
Published: October 15, 2001
WASHINGTON, Oct. 14— President Bush forcefully rejected another offer from the Taliban today to begin talks about the surrender of Osama bin Laden if the United States stopped bombing Afghanistan…..
Mr. Bush was responding to questions about statements by a Taliban leader who said at a news conference in Jalalabad, Afghanistan, that the Taliban would begin discussions about turning over Mr. bin Laden if the bombing stopped. The Taliban also want evidence from Washington that Mr. bin Laden is responsible for the attacks.

OBESITY AND THE OVERWEIGHT - THE STARTLING STATISTICS

The United States of America has the highest rates in the world of overweight people  (68% of the US population) and obesity (34% of the population). According to a new report by the Organisation for Economic Co-operation and Development (OECD), 1 in 10 people are obese worldwide!

Some countries, such as the UK,  have managed to slow the growth of obesity by increasing taxes of fatty and sugary foods. 

But countries that condition populations to eat such foods (through unlimited advertisements, cheap fast food etc), have increased levels of obesity. In 2 years, the US has increased its levels by 30%, according to this report.

Causes of overweight bodies and obesity include poor diet, lack of exercise, pollution and socio-economic status. The poorest states, such as Alabama, have the highest rates of overweight people. 

See this slideshow from the Huffington Post on worldwide statistics:

http://www.huffingtonpost.com/2012/02/22/obesity-rates-rising-developed-fattest-world_n_1294212.html.

 

According to the US National Cancer Institute:

• Obesity is associated with increased risks of cancers of the esophagus, breast (postmenopausal), endometrium (the lining of the uterus), colon and rectum, kidney, pancreas, thyroid, gallbladder, and possibly other cancer types.

• Obese people are also at higher risk of coronary heart disease, stroke, high blood pressure, diabetes, and a number of other chronic diseases.

“PRAGMATIC” UNITED STATES’ SUPPORT FOR HUMAN RIGHTS ABUSER IN UZBEKISTAN

I am a proponent of ethical foreign policy.  I believe that aid should only be given to leaders with at least a passable human rights record.  Because one thing is clear…giving aid to dictators and gross abusers of human rights, never goes to aiding the needy. All it does, is to buttress the power of the leader.

In the world of realpolitik, aid is another word for bribe or gifts given with the expectation of something in return.

Admirably, Washington had banned aid Uzbekistan in 2003, following reports of 'appalling' human rights crimes by President Karimov.

But American aid was restored to Karimov in in 2012. This was after Pakistan had closed its supply routes to NATO  into Afghanistan, due to NATO attacks which had killed 2 dozen Pakistani guards. Northern supply routes start at Latvia on the Baltic Sea and then go through Uzbekistan and Kazakhstan to the northern border of Afghanistan.

Aid wasn’t restored without a finger wagging from Secretary of State Hillary Clinton.  "Nobody is shying away from having the tough conversation," she said . "That said, we also have other interests and things that we need to protect in our relationship with Uzbekistan."[1]

Hopefully, these ‘things’ will come to an end once the US withdraws from Afghanistan in 2014.

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[1] Radio Free Europe, U.S. Temporarily Lifts Ban On Military Assistance To Uzbekistan

February 01, 2012

http://www.globalsecurity.org/military/library/news/2012/02/mil-120201-rferl06.htm

PETRODOLLARS

Updated 11/13/2016



The rise of the "petrodollar" is a little understood phenomena that plays a great role in the Middle East from the 1970s on, but also, in preventing the dollar from turning into worthless little bits of paper.

The PETRODOLLAR trading system requires all oil sales be transacted in US dollars,a system established in the early 1970s by Kissinger in an agreement with Saudi Arabia. It is believe that when Nixon took the dollar off the gold standard, he and Kissinger decided to tie the dollar to barrels of oil, instead.

By 1975, all of the oil-producing nations of OPEC had agreed to price their oil in dollars and to hold their surplus oil proceeds in U.S. government debt securities.
In exchange, oil producing countries would receive US weapons, military aid and other forms of protection. See this graph, with ''oil exporters'' in 4th position holding US debt:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

Most of the Middle East has aligned itself  militarily with the US. -- see this map of US military bases in the Middle East (note how Iran is surrounded).

http://www.aljazeera.com/indepth/interactive/2012/04/2012417131242767298.html


Countries wanting to purchase oil, have to purchase it in US dollars, either by exchanging a national currency at high bank charges, or by producing and exporting consumers items to the US. For example, Japan must convert its yen in US dollars to buy and import oil. Japan ships Hondas to the US, receives US dollars and uses that to buy oil.Thus, countries that don't want high exchange rate charges, are dependent on an export strategy to grow their economies. In addition, countries take their excess profits and invest in (buy up) US debt, thus every global oil transaction increases the demand for US dollars and the demand for US debt securities (bonds). This allows the US to print money to buy oil, at which point interest is occurred by the Federal Reserve, which increases US debt, which is purchased by other countries.

This allows the US to print money indefinitely without fear of having to pay debt or, to suffer hyper-inflation.
 

Some countries are not happy and want to transact oil transactions on their own or other currencies such as the Euro. China, Iran, Syria, N Korea  and Venezuela are among those countries. Saddam Hussein pegged the Iraqi dinar to the Euro just before the US 2003 invasion. Gaddafi of Libya planned a pan-African gold based currency, before his demise at the hands of a Western-supported insurgency.

Update: In November 2014, China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan. Update: February 2016:
Reuters has reported that Iran is requesting euros for all new and outstanding oil payments

To sum up:
The world today needs dollars to buy oil, global reserve currencies are mainly in dollars, and most countries peg their currency to the dollar and buy up US debt, therefore the US can print as many dollars as it wants. China however in 2012 has started to buy oil in its own currency. China wants to be Iran's number 1 oil client and pay with the Yuan currency. This is the type of move that may one day remove US monetary hegemony and its ties to the Middle East.Sanctions against Russia may be a shortsighted policy because it will force Russia to deal bilaterally with China and create their own petro financing system.

DOES THE US ECONOMY BENEFIT FROM DEFENSE SPENDING?

Updated July 17, 2013

This week in my INTL 5400 class, students discussed whether US defense spending, the highest in the world, was benefiting the US economy.

The problem with ascertaining defense expenditures is the need to keep some defense budgets away from the public eye, due to national security. One student thought the ratio of US military defense spending to GDP, was 4% (which although the student didn't cite the source, is from the World Bank) , another cited 20% of the US national budget, which is different from GDP. One statistic sounds low, another sounds high.

Here is another conclusion, entirely, which puts defense spending at 22% of the GDP:
"In fiscal year 2014, the federal government will spend around $3.8 trillion. These trillions of dollars make up a considerable chunk – around 22 percent – of the US. economy, as measured by Gross Domestic Product (GDP). That means that federal government spending makes up a sizable share of all money spent in the United States each year."

http://nationalpriorities.org/en/budget-basics/federal-budget-101/spending/

Another student wrote about how military budgets are difficult to ascertain and sometimes don't include  the costs of actual warfighting. "According to Shea the United States spent $380 billion dollars in 1956 based on 2012 adjusted numbers.  For the Fiscal Year 2013 defense budget, President Obama requested $523 billion. This is approximately a 37% increase in spending when comparing the adjusted numbers.  Shea provides a staggering statistic, however, as he explains the $1 trillion dollars spent to fight in Afghanistan and Iraq (over the life of the wars) were never part of the budget and that those funds were in addition to the normal operating budget.  In addition to the $1 trillion, the cost of maintaining the nuclear arsenal and providing our allies with arms are also not included in the defense budget."

See: Shea, Joe.  “Campaign 2012:  The Gingrich Turn.”  American Reporter Online.  January 22, 2011.  http://www.american-reporter.com/4,771W/146.html  Accessed July 13, 2013.

Personally, I have tried to research the defense budget in all its complexities and found it difficult.
Students have pointed out the high costs of the War on Terror. Obama is trying to scale back costs by using Special Forces, drones etc, instead of costly boots on the ground wars.

Today, the chances of an American being made a casualty of a foreign terrorist attack are very very low.
1 in 20 million — Chance of dying in a terrorist attack in the United States from 2007 to 2011, according to Richard Barrett, coordinator of the United Nations al Qaeda/Taliban Monitoring Team.

Read more: http://swampland.time.com/2013/05/06/chances-of-dying-in-a-terrorist-attack-number/#ixzz2ZKEpoid5

 

This raises the issue...how necessary is a large military budget  today?

According to a 2007 US Chamber of Commerce report, “The more than $70 billion in aerospace and defense sales overseas is important to U.S. national security and the economy because it supports high-quality, high-paying U.S. employment; advances U.S.technology in critical national security areas; improves interoperability with allied forces; and holds down the costs of

equipment purchased by the U.S. military.This study shows that the defense and aerospace industry supports 3.6 million American private sector jobs and requires a supply of the nation’s best and brightest technically trained and skilled talent.”

See: http://www.uschamber.com/sites/default/files/issues/defense/files/defensetrade.pdf

A 2007 study by the University of Massachusets found that US taxpayer is paying 4.4 percent of the GDP for defense spending  - $600 billion, “eight times the amount of U.S. federal spending on education…The $600 billion military budget creates approximately five million jobs, both within the military itself and in all the civilian industries connected to the military

(Are these two reports consistent? Here students should always do the maths. Could it be that 1.4 million Americans are employed directly by the military?  I’ll let those who are interested do the research…perhaps as a final paper topic.)

The U of Massachusets study found that “by addressing social needs in the areas of health care, education, education, mass transit, home weatherization and infrastructure repairs, we would also create more jobs and, depending on the specifics of how such a reallocation is pursued, both an overall higher level of compensation for working people in the U.S. and a better average quality of jobs.

See: http://www.ips-dc.org/reports/071001-jobcreation.pdf