energy independence

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Time to Get Out of the Middle East

It takes a lot of time and effort to try to understand American counter-terrorism policy today.

Personally, I think the status quo is like trying to treat a cocaine overdose with methamphetamine. It’s like trying to cure chlamydia by having sex with multiple random strangers in a park. It’s like trying to cure a broken nose by punching oneself in the face.

Or, as Glenn Greenwald puts it:

I absolutely believe that another 9/11 is possible. And the reason I believe it’s so possible is that people like Andrew Sullivan — and George Packer — have spent the last decade publicly cheering for American violence brought to the Muslim world, and they continue to do so (now more than ever under Obama). Far from believing that another 9/11 can’t happen, I’m amazed that it hasn’t already, and am quite confident that at some point it will. How could any rational person expect their government to spend a full decade (and counting) invading, droning, cluster-bombing, occupying, detaining without charges, and indiscriminately shooting huge numbers of innocent children, women and men in multiple countries and not have its victims and their compatriots be increasingly eager to return the violence?

Isn’t it painfully obvious? The interventionist policies — occupation, drone strikes, cluster-bombing, indefinitely detention, false vaccination programs and so forth — in the middle east advocated by both “liberal” and “conservative” hawks that are supposed to prevent terrorism are creating anger, creating enemies, and creating terrorists. I too am amazed another 9/11 hasn’t happened. I despise jihadism and Islamism. It is contrary to everything I stand for. That’s exactly why I oppose a foreign policy that serves as a hugely effective recruiting tool for the totalitarian jihadists. 

Yemeni lawyer Haykal Bafana explained the rationale last month:

Dear Obama, when a U.S. drone missile kills a child in Yemen, the father will go to war with you, guaranteed. Nothing to do with Al Qaeda.

Or as convicted terrorist Faisal Shahzad put it:

Well, the drone hits in Afghanistan and Iraq, they don’t see children, they don’t see anybody. They kill women, children, they kill everybody. I am part of the answer to the U.S. terrorizing the Muslim nations and the Muslim people.  And, on behalf of that, I’m avenging the attack.  Living in the United States, Americans only care about their own people, but they don’t care about the people elsewhere in the world when they die.

Or as former CIA counter-terrorism expert Michael Scheuer noted:

The idea that has been pushed by President Clinton and President Bush and Mr. Cheney and Barack Obama and Senator McCain, that America is being attacked [for its freedom] is a disservice to the population of the United States. This war is not against Americans because we’re Americans, it’s motivated by the activities of our government and its allies in the Muslim world.

So why do we keep doing this? Two reasons: hubris and greed.

First, the hubris. We know Ron Paul was booed in South Carolina for advocating that we should do to others as we would like done to us:

My point is if another country does to us what we do others, we’re not going to like it very much. So I would say that maybe we ought to consider a golden rule in — in foreign policy. Don’t do to other nation what we don’t want to have them do to us.

But that’s just the propagandistic nature of being a superpower. Years of prosperity, military supremacy and pro-war propaganda have made it normal to believe strongly in the idea that America is intrinsically better, and wherever America goes America brings freedom, and anyone who doesn’t agree with that needs to be waterboarded until they do.

Yet however many times as the phrase “they hate us because we are free” is repeated, mantra-like by a Rick Santorum or a Newt Gingrich, it does not become truer. It is just an illusion, just a fantasy. While the jihadis were always anti-American, anti-democratic and anti-capitalistic, Osama bin Laden, Ayman al-Zawahiri and Sayyid al-Qutb — the fathers and grandfathers of modern Wahhabism, jihadism and al-Qaeda — became anti-American militants because of America’s role in the middle east.

As bin Laden himself said:

Those who kill our women and innocent, we kill their women and innocent, until they refrain.

And even more clearly:

Free men do not forfeit their security, contrary to Bush’s claim that we hate freedom. If so, then let him explain to us why we don’t strike Sweden, for example.

Second, the greed. America is in the middle east because America likes cheap energy. That myth of America as liberators flourished first as a justification for America’s petrodollar foreign policy.

And people get rich from America being at war — so far in the region of $4 trillion has gone to fighting since 9/11. A lot of weapons contractors are happy with the status quo.

So the military-industrial complex — the lobbyists, the weapons makers, the media — may accept it if Obama kills 14 women and 21 children to get one suspected terrorist. More terrorism means more weapons spending. For the lucky few it’s a self-perpetuating stairway to riches. Yet for wider society it means spending time, money and effort on war, instead of on domestic prosperity. It means the constant threat of terrorism. And it means the loss of our liberty, as the security state adopts increasingly paranoid anti-terrorism measures.

We should do to others as we would have done to ourselves. That means — unless we are comfortable with the idea of ourselves living under military occupation and drone strikes — getting out of the middle east, and letting that region solve its own problems — forget another costly and destructive occupation in Syria. Slash the war and occupation spending, and redirect the money to making America independent of middle eastern energy and resources.

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There is No Such Thing as a Service Economy

It is often said that prostitution is the oldest profession. This is not true, and I know this with a very high degree of certainty. For a prostitute to subsist, there must be  a medium of exchange, and for a medium of exchange to exist — even in terms of barter — there must be a surplus of production (i.e. a person is producing more than they can consume). Thus, there must be pre-existing productivity, for example food that has been hunted, or gathered or grown, tools that have been created, etc.

The truth is that prostitution (or perhaps soldiery) is probably the oldest service profession.

What is a service profession? Well broadly there are two kinds of professions: goods-producing, and services-producing. Goods-producing professions produce things. Services-producing professions do things without producing any definable goods. Prostitution is a very good example. So is legal work, consulting, lobbying, graphic design, sales work, soldiery, musicianship, acting, etc. And yes — while I feel that writing creates a good — it too is widely considered a service.

At present, the Western economies are dominated by services.

From the World Bank:

Joe Sitglitz’s article in Vanity Fair late last year argued that we need to move even further into a service-led economy:

What we need to do instead is embark on a massive investment program—as we did, virtually by accident, 80 years ago—that will increase our productivity for years to come, and will also increase employment now. This public investment, and the resultant restoration in G.D.P., increases the returns to private investment. Public investments could be directed at improving the quality of life and real productivity—unlike the private-sector investments in financial innovations, which turned out to be more akin to financial weapons of mass destruction.

The private sector by itself won’t, and can’t, undertake structural transformation of the magnitude needed—even if the Fed were to keep interest rates at zero for years to come. The only way it will happen is through a government stimulus designed not to preserve the old economy but to focus instead on creating a new one. We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality.

Now I’m not accusing Stiglitz of anything other than a misplaced zeal for fixing the American economy. His suggestion is merely emblematic of a wider misconception.

Service jobs come into existence as there are bigger surpluses of production. In an isolated national economy, the services sector will only grow if the productive sector grows in proportion. But in a global economy, with flows of trade and goods, illusions are possible.

The truth is that there is no such thing as a service economy. Our economy today (other than in places like, say, North Korea) is truly global. All of those service workers — and every cent of “services” GDP — is supported by real-world productivity, much of which takes place outside the West — the productivity of the transport system, the productivity of manufacturers, the productivity of agriculture.

The continued prosperity of the West is dependent on the continued flow of goods and services into the West.

This is an intentionally zany example (but certainly no less zany than Krugman’s babysitting co-op) of how moving to a “service-based” (pun-intended, you’ll see) economy can prove detrimental:

Imagine the centrally-planned society of War-is-Peace-Land, occupying one half of a large island, and led by an absolute King. The kingdom is very successful in warfare, and maintains a great advantage over its sole neighbour. 50% of its working subjects are conscripted into the military, in various roles — soldiery, tactics, smithing, horsemanship, etc. Of the other half of the population 30% work in collective agriculture, 10% work in light industry (e.g. making candles) and 10% are personal servants to the King (or in the case of females part of his large harem). Now, the King does not like the fact that his harem is not as large as it could be; he does not like that there are women and girls toiling the fields when they could be in his harem. Nor does he like that there are men toiling in the fields when they could instead be conscripted into the military.

Fortunately in the neighbouring kingdom of Productivity Land, they have huge surpluses of agriculture and productivity, as only 30% of their population is conscripted into the military, while 40% work in agriculture, and 20% in light industry. As they make such huge surpluses, they are willing to make up for any shortfall in War-is-Peace-Land. As a result of this, more and more workers in War-is-Peace-Land can be moved from agriculture to serving the King, either as a manservant (carrying his Royal chair, beating up anyone who insults him, tending to his elaborate gardens) or as a member of his harem. In return for this, the King sends promissory notes — which are often promptly lent back —  from Productivity Land to pay for their products. Productivity Land uses this money to acquire natural resources from other islands.

Eventually, the King decides that his pleasure gardens need to be greatly expanded, and so he moves the entire non-military workforce out of agriculture, and into manufacture terra cotta and bronze statues, to decorate his pleasure gardens. Of course, War-is-Peace Land has built up a humungous debt over the years, and Productivity Land feels short-changed in sending its productive output across to the other half of the island in exchange for increasingly-devalued pieces of fiat paper that buy increasingly less and less resources. But the King of Productivity Land is very smart. He recognises that winning a military confrontation with War-is-Peace Land will still be difficult, so he agrees to continue this arrangement so as to make War-is-Peace Land even more deeply dependent upon the produce of Productivity Land. 

One day, the King of War-is-Peace Land was out frolicking gaily in his pleasure gardens, smoking his pipe and contemplating a lazy afternoon molesting his harem. Alas, no. A messenger from Productivity Land arrived at the Palace to inform him that Productivity Land was sick of his devalued fiat currency, and so would no longer send agricultural products or other produce. That was it — War-is-Peace Land had no intent to pay back their debt, so they were out in the cold.

“Nonsense!” cried the King, and promptly had the messenger arrested, tortured and killed. He rallied his generals, and declared war against Productivity Land. Alas, they did not get very far. It took three days for the army to be rallied together into a fighting force, and by that time War-is-Peace Land was running low on food and fuel. Armies — no matter how well-equipped — cannot march on an empty stomach. The tired and weary soldiers of War-is-Peace Land were more numerous and better equipped, but their hunger and subsequent tiredness got the better of them and they were massacred and beaten back. The King tried to escape, but was captured by Productivity Land’s forces and promptly executed.

Readers can read whatever they like into the above story; it is purely fictitious, and of course massively simplified. But I think it captures the essence of the problem of  outsourcing your productivity to foreign lands who might not always be as friendly as they appear to be today.

The bottom line here is that any proposals regarding transitioning to an economy even more dependent on services assumes that goods and productivity will keep flowing into the West, even though there is no guarantee of such a thing.

Governments in the West would do better to worry about the West’s (lack of) energy and resource independence.

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The New Cold War

The United States is turning our attention to the vast potential of the Asia-Pacific region.

— Barack H. Obama

From al-Jazeera:

When it comes to China policy, is the Obama administration leaping from the frying pan directly into the fire? In an attempt to turn the page on two disastrous wars in the greater Middle East, it may have just launched a new Cold War in Asia – once again, viewing oil as the key to global supremacy.

The new policy was signalled by President Obama himself on November 17 in an address to the Australian Parliament in which he laid out an audacious – and extremely dangerous – geopolitical vision. Instead of focusing on the greater Middle East, as has been the case for the last decade, the United States will now concentrate its power in Asia and the Pacific.

“My guidance is clear,” he declared in Canberra. “As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region.”

Given that a proliferation of American military hardware and components — including crucial semiconductors — are now made in China, the notion of America truly asserting itself on the Asia-Pacific region is absurd. If relations with China breaks down then trade with China breaks down, and America loses the ability to manufacture and import certain military hardware. Furthermore, it loses the free lunch of Chinese goods that furnish the heartland of American consumerism, and placate an American people whose real incomes and purchasing power have consistently fallen since the 1980s. Worst of all, it jeopardises the global energy infrastructure upon which America’s agribusiness and infrastructure depends. While America is moving closer to being able to exploit “tough oil” hotspots in North Dakota, Alaska and the Gulf of Mexico, those oil production capacities cannot be brought online overnight.

Not only this, but America funds her military adventurism through unsustainable debt acquisition (a huge part of which is Chinese-held) rather than productive output. The strange reality is that American assertiveness against China can be cut off by China refusing to buy America’s increasingly debased debt. Unsurprisingly, China is already reducing her American debt holdings.

Simply, American attempts to assert itself on China risks alienating a nation upon which America is totally and inexorably dependent. While this is difficult to recognise for blustering “national security” neo-conservatives like Mitt Romney — the archangel of American imperial decline — or Obama, it is as inescapable and undeniable as the sunrise.

The remedy is not more American imperialism. It is not more debt. It is not more bravado or self-aggrandizement. It is an open and honest commitment to the truth — America’s imperial strategy, based on oil supremacy and the petrodollar — is an anachronism. Its time has come and gone. To get over this hump America needs to commit to a greater degree of energy, and manufacturing independence. American imperial policy acts as a humungous subsidy on the price of oil. Ending such a subsidy will allow the free market to do its work, and make all kinds of alternative energy — from solar, to hydro-electric, to synthetic oil, to thorium – far more competitive.

Only by accepting the changing realities of geopolitics can America prepare herself for the coming realities of the 21st Century.

Further Reading:

The Only Chinese Hard Landing will be on America’s Head 

America’s Eurasian Endgame

Huntsman Cable: China and US Trade War Heating Up

Team America: World Police

The Problem with Military Keynesianism

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America’s Military Weakness?

Regular readers will know that I believe that the global debt picture makes conflict — proxy or direct — between America (the world’s great debtor) and its creditors highly likely in the next century. Already America and Eurasia are engaged in media, cyber, and information warfare. Recent Iranian threats to close the Straits of Hormuz — an arterial shipping channel — could give America and Israel an excuse to directly engage the Iranian state.

Alas, it seems America has a chink in her armour, one demonstrated perfectly by Iran’s retrieval of an intact American spy drone. That drone didn’t crash: its intact appearance suggests one thing — that it was landed.

How could that be possible?

From VeteransToday:


The national insecurity stakes just went up once again.

Being in the armed forces of any country, at any time, has always been a hazardous occupation.

But thanks to the gross incompetence, malfeasance and short sightedness of our current and former elected officials it just became much, much, deadlier to be a US Serviceman.

“Surprise, Surprise, Surprise”,  to quote Gomer Pyle. The secret spy mission to create photographic proof of Iranian nuclear intentions has gone horribly wrong.

China is the country of origin for many, many of the semiconductors used by the US Military. It was most likely that China provided the hardware with the secret backdoor that allowed the Iranians to seize control of the Stealth drone while the drone was on a secret CIA mission over Iran.

Working together, they captured a state of the art US Military stealth aircraft.

What this means to all US Military personnel serving anywhere in the world? It means that control of any electronics system in any type of platform, can be seized and used against the military that launched it.

So what can America do about such security holes?

No electronics system within any platform is safe as long as there is any non-domestic electronics content.

Components from China are OK for a flat-screen TV, but not for critical weapons systems. Chinese components simply cannot be trusted.

Every system down to the component level must be recalled.

Any and all suspect components must be replaced, immediately before we actually place our fighting men and women in harm’s way with compromised systems.

As a country we need certain strategic industries. In this computer age, we need a strong and vibrate semiconductor industry we cannot safely or prudently outsource this to China.

In the interim, the Pentagon should stand down all weapons systems activated since 1998, and re-activate the older, but trustworthy systems.

If this is true, there can be no war against Iran or Syria in the near future.

Pakistan, Iran, Russia and China will be free to stampede over American interests in Eurasia.