Obama Doesn’t Understand Blowback

There’s no country on earth that would tolerate missiles raining down on its citizens from outside its borders. So we are fully supportive of Israel’s right to defend itself.

Barack H. Obama

Well, he’s got one thing right. No country would tolerate missiles raining down on its citizens from outside its borders. And that goes for Gaza just as much as it does for Israel. Having lived in what David Cameron referred to as a “prison camp” for all their lives — Israel controls Gaza’s airspace, territorial waters and border crossings — and living under constant threat of Israeli F16 and drone raids, should Israel really find it surprising that young Gazans are fighting back? Hamas may have a counterproductive and dangerous strategy driven by a violent religious ideology that ends up hurting the Palestinians more than anyone else, but that’s not the point. The point is that nations don’t tolerate missiles raining down on citizens. That’s just as true for Palestine as it is Israel.

There are other examples which Obama would do well to consider. In the first twenty four hours after his re-election, Obama ordered yet another drone strike in Yemen — setting the tone for the next four years. During the Obama administration drones — or perhaps more accurately, flying death robots — have rained down missiles across a vast tract of the world. Yemen, Pakistan, Afghanistan, Libya, Somalia. Quite possibly also Iran and Syria. No trial, no hard evidence, just summary execution.

Every drone strike creates blowback. It increases hostility to Americans throughout that part of the world. It drives angry young people into the arms of violent extremists like the Taliban and Hamas. Because — as Obama rightly points out — no country would tolerate missiles raining down on its citizens from outside its borders. That means that in the long run Obama’s drone strikes are probably America’s greatest national security problem.

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Iran’s Insane Rhetoric

Iranian officials are once again firing off belligerent rhetoric.

 

Via the Jerusalem Post:

Hojjat al-Eslam Ali Shirazi, the representative of Iran’s Supreme Leader Ayatollah Ali Khamenei to the Islamic Republic’s Qods Force, said this week that Iran needed just “24 hours and an excuse” to destroy Israel.

In his first public interview in a year, reported in the Persian-language Jahan News, which is close to the regime, Shirazi said if Israel attacked Iran, the Islamic Republic would be able to turn the conflict into a war of attrition that would lead to Israel’s destruction.

“If such a war does happen, it would not be a long war, and it would benefit the entire Islamic umma the global community of Muslims. We have expertise in fighting wars of attrition and Israel cannot fight a war of attrition,” Shirazi said, referring to Iran’s eight-year war of attrition against Iraq.

Such claims are — more or less — inconsequential rubbish. The fact remains that Israel has nuclear weapons and a nuclear second strike, and Iran has no such thing, and the fact remains that the Iranian leadership knows this and are extremely unlikely to start a war where Iran (as Shimon Peres put it) will be the one wiped off the face of the Earth by Israeli plutonium. Yet the facts of military science will do little to stop the hawks of the West sounding off that Iran is irrational and that Iran is cooking up a plan to destroy Israel, and so must face regime change.

To grasp what is really occurring here we must look at how authoritarian Middle Eastern regimes (or, indeed, authoritarian regimes in general)  function. Authoritarian regimes  must maintain a cloak of authority. Tyrants do not attempt to look or sound weak; they try to project an aura of invincibility and indefatigability. We saw this during the last Gulf War, where Iraq’s information minister Muhammad Saeed al-Sahhaf — nicknamed Baghdad Bob in the American media — shot off hundreds of absurd statements during the war about how Iraqi troops were crushing the Americans, quite in contrast to the facts on the ground and right up until American tanks were rolling through the streets of Baghdad.

Baghdad Bob was not deluded. He was merely playing his role, and trying to project an aura of regime invincibility — providing propaganda for domestic consumption to keep the Iraqi population loyal to Saddam Hussein. It was a dog and pony show.

Iran’s belligerent rhetoric in this case is also strictly for domestic consumption — fierce rhetoric to keep the Iranian population fearful of the regime. Just like Baghdad Bob, the Iranian propaganda is far-removed from the real facts of the conflict. Whether the Iranian people really believe the regime’s propaganda — especially as the Iranian economy continues to worsen under sanctions — is dubious.

Yet one group of people — the Western neoconservatives, who are looking for another war — are more than happy to buy into the dog and pony “destroy Israel” bullshit.

As Robert Gates noted this week:

Painting a picture of internal political dysfunction in a dangerous world, former Defense Secretary Robert Gates warned Wednesday night that a U.S. or Israeli attack on Iran would have disastrous consequences.

Neither the United States nor Israel is capable of wiping out Iran’s nuclear capability, he said, and “such an attack would make a nuclear-armed Iran inevitable. They would just bury the program deeper and make it more covert.”

Iran could respond by disrupting world oil traffic and launching a wave of terrorism across the region, Gates said.

“The results of an American or Israeli military strike on Iran could, in my view, prove catastrophic, haunting us for generations in that part of the world.”

And as I wrote last month:

A regional war in the Middle East could result, potentially sucking in the United States and Eurasian powers like China, Pakistan and Russia. China and Pakistan have both hinted that they could defend Iran if Iran were attacked — and for good reason, as Iran supplies significant quantities of energy.

Frustratingly, the Iranian regime keep giving the neoconservatives more rope with which to hang themselves — and the West — on a cross of imperial overstretch, debt and blowback. 

Blowback Works Both Ways

Mahmoud Ahmadinejad knows how to inflame American and Israeli leaders.

He’s claimed 9/11 was an inside job:

Making reference to what he called the “mysterious September 11th incident” and the “slave masters and colonial powers” of the West, Iranian President Mahmoud Ahmadinejad excoriated Western member nations in an address to the United Nations General Assembly in New York

Ahmadinejad said after the speech that as an engineer he’s sure the Twin Towers at the World Trade Center in New York were not brought down by jetliners.

Ahmadinejad, in an interview with The Associated Press, says it would have been impossible for two jetliners to bring down the towers simply by hitting them. He says some kind of planned explosion must have taken place.

(Amusingly, this sparked al-Qaeda to supposedly put out a counter-statement defiantly claiming responsibility and condemning Ahmadinejad, although such disputes have not prevented America from claiming that Iran and al-Qaeda were jointly responsible for 9/11).

He’s claimed that the holocaust may have never happened:

During an interview with CNN, which aired Monday on “Piers Morgan Tonight,”the Iranian president said he will not judge Nazi Germany’s extermination of the Jews during World War II.

“Whatever event has taken place throughout history, or hasn’t taken place, I cannot judge that. Why should I judge that? I say researchers and scholars must be free to conduct research and analysis about any historical event,” Ahmadinejad said.

And today, he claimed that Israel was a “nuclear armed fake regime”, and that Israel will be eliminated:

 Iranian President Mahmoud Ahmadinejad said on Monday Israel has no roots in the Middle East and would be “eliminated,” ignoring a U.N. warning to avoid incendiary rhetoric ahead of the annual General Assembly session.

Ahmadinejad also said he did not take seriously the threat that Israel could launch a military strike on Iran’s nuclear facilities, denied sending arms to Syria, and alluded to Iran’s threats to the life of British author Salman Rushdie.

Ahmadinejad claims that Israel and America are bluffing in their threats to attack Iran:

In a series of combative interviews in New York on the eve of the UN General Assembly, Iran’s political leader said Israel was making a lot of ‘noise’ and encouraging the West to prevent legitimate scientific progress in his country.

Reiterating that he was open to dialogue with the United States on the nuclear issue he also said he was prepared to defend Iran from any external threat.

“Fundamentally, we do not take seriously threats of the Zionists,” he said. “We believe the Zionists see themselves at a dead end and they want to find an adventure to get out of this dead end. While we are fully ready to defend ourselves, we do not take these threats seriously.”

He may be right on that count, because America can ill afford another costly invasion, and nothing less than a full invasion and regime change is likely to in the long run prevent Iran from gaining a nuclear weapon.Yet while I believe that an American or Israeli attack on Iran is an entirely foolish policy that will only serve to weaken America and Israel in the long run, it is foolish and dangerous for Ahmadinejad to needlessly enrage the ferocious neoconservative beast.

Ahmadinejad may well be playing the same long game as Osama bin Laden:

We are continuing this policy in bleeding America to the point of bankruptcy.

Osama bin Laden

And they may succeed (although those who believe that war is a stimulus that can end a depression will surely disagree — as Antal Fekete has noted, Western governments may look to a new hot war in the middle east as an opportunity to exit an economic depression that they cannot control).  But for Ahmadinejad and Iran, it may come at a huge, huge cost — a long painful invasion, ending in death in the street or on the gallows. Neoconservatism — and Obama and Romney are both to lesser and greater degrees neoconservatives — is a violent utopian ideology that seeks to force the entire world — by whatever means and at any cost — to conform to American foreign policy imperatives. As America should have learned a long time ago — and as Ahmadinejad may well soon learn — needlessly pissing off violent utopian ideologues creates blowback.

This is Blowback

The YouTube video depicting Mohammed is nothing more than the straw that broke the camel’s back. This kind of violent uprising against American power and interests in the region has been a long time in the making. It is not just the continuation of drone strikes which often kill civilians in Pakistan, Yemen, Somalia and Afghanistan, either. Nor is it the American invasions and occupations of Iraq and Afghanistan. Nor is it the United States and the West’s support for various deeply unpopular regimes such as the monarchies in Bahrain and Saudi Arabia (and formerly Iran). Nor is it that America has long favoured Israel over the Arab states, condemning, invading and fomenting revolution in Muslim nations for the pursuit of nuclear weapons while turning a blind eye to Israel’s nuclear weapons and its continued expansion into the West Bank.

Mark LeVine, Professor of Middle Eastern history at U.C. Irvine, writes:

Americans and Europeans are no doubt looking at the protests over the “film”, recalling the even more violent protests during the Danish cartoon affair, and shaking their heads one more at the seeming irrationality and backwardness of Muslims, who would let a work of “art”, particularly one as trivial as this, drive them to mass protests and violence.

Yet Muslims in Egypt, Libya and around the world equally look at American actions, from sanctions against and then an invasion of Iraq that killed hundreds of thousands of Iraqis and sent the country back to the Stone Age, to unflinching support for Israel and all the Arab authoritarian regimes (secular and royal alike) and drone strikes that always seem to kill unintended civilians “by mistake”, and wonder with equal bewilderment how “we” can be so barbaric and uncivilised.

All of these things (and many more) have contributed to Muslim and Arab anger toward the United States and the West. Yet the underlying fact of all of these historical threads has been the United States’ oil-driven foreign policy. Very simply, the United States has for over half a century pursued a foreign policy in the region geared toward maintaining the flow of oil out of the region at any cost — even at the cost of inflaming the irrational and psychopathic religious elements that have long existed in the region.

This is not to defend the barbaric elements who resort to violence and aggression as a means of expressing their disappointment with U.S. foreign policy. It is merely to recognise that you do not stir the hornet’s nest and then expect not to get stung. 

And the sad thing is that stirring the hornet’s nest is totally avoidable. There is plenty of oil and energy capacity in the world beyond the middle east. The United States is misallocating capital by spending time, resources, energy and manpower on occupying the middle east and playing world policeman. Every dollar taken out of the economy by the IRS to be spent drone striking the middle east into the stone age is a dollar of lost productivity for the private market. It is a dollar of productivity that the market could have been spent increasing American energy capacity and energy infrastructure in the United States — whether that is in oil, natural gas, solar, wind or hydroelectric.

And this effect can spiral; every dollar spent on arming and training bin Laden and his allies to fight the Soviet Union begot many more thousands of dollars of military spending when bin Laden’s mercenaries turned their firepower onto the United States, and the United States chose to spend over ten years and counting occupying Afghanistan (rightly known as the graveyard of empires). It is likely that the current uprisings will trigger even more U.S. interventionism in the region (indeed it already has as marines have already been dispatched to Yemen) costing billions or even trillions of dollars more money (especially if an invasion of Iran is the ultimate outcome). This in turn is likely to trigger even fiercer resistance to America from the Islamist elements, and so the spiral continues on.

The only way out of this money-sucking, resource-sucking, life-sucking trap that is very literally obliterating the American empire is to swallow pride and get out of the middle east, to stop misallocating American resources and productivity on unwinnable wars.

But neither major Presidential candidate is interested in such a policy. Perhaps it is because war is a great profit source for the military-industrial complex, the force to which both the Democratic and Republican parties are beholden?

In any case, we should expect to see much more of this:

Source: Reuters

The Absurdity of NATO

The whole world knows the name Gavrilo Princip, and that of he man he assassinated, Archduke Franz Ferdinand. Princip’s shot triggered the Austro-Hungarian invasion of Serbia that set in motion the chain of events leading to the Great War of 1914.

After Serbia appealed to Russia for help, Russia began moving towards mobilization of its army, believing that Germany was using the crisis as an excuse to launch war in the Balkans. Upon hearing news of Russia’s general mobilization, Germany declared war on Russia. The German army then launched its attack on Russia’s ally, France, through Belgium, violating Belgian neutrality and bringing Great Britain into the war as well.

Is it possible that a similar chain of events may have already begun unfurling with the Syrian downing of a Turkish F-4 fighter jet? Turkey have already invoked a full meeting of NATO,  claimed that Syria have fired on a second Turkish plane, and vowed that Syria’s actions “won’t go unpunished”.

The vast and sprawling system of national alliances that existed prior to the events 1914 were considered by policy makers of the time to be a counterbalance against excessive tension and the threat of war. The great powers created alliances ostensibly for the purpose of deterring war. The dominant view was that the potential for dragging in allies reduced the chances of an attack. In reality, it just meant that one spark could set the entire world aflame.

This is functionally the same as the interconnecting mesh of derivatives and shadow intermediation that foreshadowed the crash of 2008. As financial parties sold each other more and more “hedges“, the consensus of the time was that this made the system safer, as it allowed risk to be dissipated around the system. The theory was — and there were plenty of inaccurate mathematical models to back this up — that spreading risk around the system made the financial system safer. As it turned out, it didn’t. In the wake of MF Global and the London Whale, we know that the financial system has not learned the lessons of 2008. But it seems even more absurd that the diplomatic system has not really learned the lessons of 1914. 

The NATO system — set up to oppose the Warsaw Pact system, which no longer exists — functions the same way — rather than dissipating risk, it allows for the magnification of international tensions into full-on regional and global wars. In the late 20th century the threat of nuclear war proved a highly-effective deterrent which limited the potential for all-out-war between the great powers, offsetting much of the risk of the hyper-fragile treaty system. Yet the potential for magnifying small regional problems into bigger wars will continue to exist for as long as NATO and similar organisations prevail.

We do not know exactly what arrangements Syria has with Russia and China — there is no formal defensive pact in place (although there is one between Syria and Iran) though it is fair to assume that Russia will be keen to maintain its Syrian naval assets, a view which is supported by the fact Russia heavily subsidises the Syrian military, and has blocked all the UN-led efforts toward intervention in Syria.

After the Cold War, the Warsaw Pact was allowed to disintegrate. Until NATO is similarly allowed to disintegrate, the threat of magnification will remain large. Could a border skirmish between Syria and Turkey trigger a regional or even global war? Under the status quo, anything is possible.

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.

The Treasury Bubble in One Graph

What are the classic signs of an asset bubble? People piling into an asset class to such an extent that it becomes unprofitable to do so.

Treasury bonds are so overbought that they are now producing negative real yields (yield minus inflation):


That’s right, after taking into account inflation, many investors in treasuries are standing over a drain and pouring their money down it. 

And so America’s creditors are now getting slapped quite heavily in the mouth by the Fed’s easy money inflationist policies.

I propose (much, I am sure, to the consternation of the monetarist-Keynesian “print money and watch your problems evaporate” establishment) that this is a very, very, very dangerous position. And I propose that those economists who are calling for even greater inflation are playing with dynamite.

See, while the establishment seems to largely believe that the negative return on treasuries will juice up the American economy — in other words that “hoarders” will stop hoarding and start spending — I believe that negative side-effects from these policies may cause severe harm.

There is the danger of a bursting treasury bubble. What would happen if America’s creditors decide they want to liquidate their positions? After all, they’re getting slapped in the mouth , and the Fed is promising to continue with the zero interest rate policy until at least 2014.

And we know for sure that even before real rates on treasuries turned negative that China were selling:

The Fed has been picking up the slack, and will have to continue to do so for the forseeable future (the private domestic and international markets have no reason to increase purchases assets of with a negative real rate of return).

This means that to keep the Treasury’s interest payments low, the Fed will have to start printing more money, which brings us to the second danger: the danger of runaway inflation.

Bernanke might well believe he can do this without triggering runaway inflation. He might point to his track record of tripling the monetary base without triggering hyperinflation.

But inflation has stayed (relatively) low for one reason: the money he printed isn’t circulating. The primary dealer banks are holding the money as excess reserves. Can this last?

I doubt it. As I noted last month:

So, does the accumulation of excess reserves lead to inflation?

Only so much as the frequentation of brothels leads to chlamydia and syphilis.

Excess reserves are only non-inflationary so long as the banks — the people holding the reserves — play along with the Fed-Treasury game of monetising debt and trying to hide the inflation . The banks don’t have to lend these reserves out, just as having sex with hookers doesn’t have to lead to an infection.

But eventually — so long as you do it enough — the condom will break.

This trend of amassing excess reserves (done, lest we forget, as a stability measure to protect primary dealers against another shadow banking collapse) is closer to going to sleep upon a bed of dynamite. 

But inflation is only the most obvious risk.

The greatest danger is illustrated here:

America — for most of last century exporter and creditor to the world now runs the biggest trade deficits the world has ever seen.

Let’s not forget that these creditors that U.S. monetary policy is now slapping in the face produce most of our consumption, much of our military hardware, and most of our oil

Of course, many neocons seem to believe that this position is sustainable; that America can slap her creditors in the face all she likes because she has thermonuclear weapons and can tell the rest of the world to go and bite the big one.

Not so fast.

As VeteransToday noted in December:

“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.

I don’t doubt America still has great technological and infrastructural advantages over her Eurasian creditor rivals. But do we really want to test the limits of our power? Do we really want to try and provoke a trade war with China and the other Eurasian nations (who of course are testing the petrodollar reserve to its limits by creating their own reserve currency agreements) by obliterating the value of their dollar-denominated assets?

So now we know, beyond a shadow of doubt that U.S. Treasuries are in a historic bubble.

We know that to some degree the Federal Reserve and Ben Bernanke are guilty of stoking up this program by buying U.S. Treasuries (artificial demand) and thus constricting supply. We know that this is screwing America’s creditors who happen to produce a lot of America’s consumption, components, military hardware, energy and resources. We know that these nations are using increasingly violent rhetoric regarding their relationship with the United States (Putin for instance described America as a parasite), and are activating agreements to ditch the dollar as the reserve currency.

Do we really want to continue in this vein? Do we really want to continue screwing our creditors by forcing them to accept negative real rates on their investments? Do we really want to risk the inflationary impact of continuing to print money to monetise debt (and hiding the money in excess reserves, thereby temporarily hiding the inflation). Do we really want to find out if all those Chinese semiconductors in our military hardware have backdoors that allow America’s enemies to shut down American military hardware?

I’d call that playing dice with the devil.