Friday, 29 June 2012


Syria's history and geography has determined to a large degree its alliances. As a former colony subjected to French imperialism, and a country lacking rich energy resources of its Middle East neighbors, Syria always needed to use whatever diplomatic leverage it had at its disposal to retain as much of its national sovereignty as possible. The question has always been what political system best expresses its national interests and retains its national sovereignty. The situation today is that the US and EU are interested in using Syria as a satellite to counterbalance Iran and gain immense foothold in the Middle East. This explains the reason for the Western-backed uprising that started in spring 2011 and it continues with more than 16,000 casualties, countless refugees, and a broader geopolitical instability that stretches from Turkey and Iran to Lebanon and Israel.

One the one side, there is Iran that has a stake in Syrian stability under Bashar al-Assad, with Russia and China having a long-term close relationship with Damascus. While it is clear that Russia makes billions of dollars in supplying Syria with weapons, the real goal of Moscow, along with Iran and China, is to prevent the US and EU from upsetting the balance of power in the Middle East by gaining a foothold in Syria. The question of what is in the best interests of the Syrian people is not one that either East or West are considering. No matter the inane US and EU rhetoric about freedom and democracy for Syria, something that Western institutions often deny to their own citizens, let alone remain silent about when it comes to allies like Saudi Arabia, the interest in Syria is geopolitical.

Geopolitical leverage is the only thing that Syria has and the current regime under Assad uses that leverage to retain the support of China, Russia and Iran. From 1958 to 1961, Nasser attempted a united Arab states project, but failed as nationalism was a dynamic force precluding alliances even among nations that had common interests and common enemies. Given that Syria was vulnerable after it broke with Nasser's Egypt, given that its neighbors were pro-West, it needed allies to counterbalance its enemies, while retaining the country's unity by satisfying the disparate socioeconomic groups. Syria's alliance with the USSR during the Cold War made geopolitical sense, given the alliances of Syria's neighbors, and given the ideology and political program of the ruling Ba'athist party that was closer to Socialism (heavily statist) than it was to Western-style market capitalism.

That Syria has been one-party state, essentially a dynasty catering to narrow interests at home and abroad is not something that the ruling party can deny, any more than it can hide from its record of favoring certain tribal, sectarian and ethnic groups over others. This is not to say that pro-West Arab regimes manage sectarian, tribal, and ethnic divisions any better than the Assad regime currently under fire from a mass popular uprising. That Syria has enjoyed China's and Russia's backing at the UN, which the US has tried to use to topple the Assad regime, is troubling to relations between East and West. China and Russia seem to dig in their heels on this issue, and will not permit another Western-backed uprising to overthrow a regime they support and see as key to the regional balance of power and stability.

When the US and EU condemned Syria for shooting down a Turkish plane that violated Syria's air space in June 2012, neither Ankara nor Beijing were willing to permit NATO to use the staged incident as a pretext for operations to support Syrian rebels. Turkey has a long-standing record of violating the airspace of neighboring nations. The government in Tehran has sent stern warnings that it will not permit Turkey and NATO to undermine the national sovereignty of Iran. That Turkey wants to become the great power of the Middle East is not a secret, any more than it is a secret that it will do just about anything to undermine its Arab neighbors to secure that preeminent role. As long as there is convergence of US-EU foreign policy goals, Ankara will be permitted to go all out in undermining its former close ally Syria. 

It is true that the Assad regime is a dictatorship and it must assume responsibility for failing to find a solution to the civil war of the past 16 months. It is just as true that Western nations have had a very large role in Syria's political opposition, aiding with weapons, money, intelligence, and massive propaganda - all for the good of democracy and freedom, they claim. Russia is correct to blame the US and its partners for supplying weapons to Syria, just as it is correct to worry about Syria lapsing into some type of an Islamic regime that would be hostile to Russia, which has had its own problems with Islamic rebels. Vladimir Putin wants greater not lesser influence in the Middle East, and Moscow seems determined to carry the contest of wills with Washington as far as it can, short of an open conflict.

Moscow asked for Iranian participation in the Geneva talks (30 June 2012) regarding the UN proposal to end the crisis (civil war) in Syria. Although Moscow proposed Jordanian and Saudi participation along with Iranian, the State Department categorically rejected the Russian proposal of allowing Iran to have any voice on the regional balance of power. It is very clear that Russia recognizes regional players as key to the solution, while Washington merely wants Russia and of course China to stop supporting Syria, thus making it easy to topple Assad. Iran would be one on the major losers if and indeed when Assad goes, but the US containment strategy toward Iran also impacts Russia, because containing Iran is an indirect way of containing Russia. 

The larger question is how far should the reach of the NATO powers extend, and to what extent should the West be permitted to destabilize the Middle East in order to exert hegemonic influence, assuming that would be possible under radical Islamic regimes in the future. Is Syria worth an all-out war between the US and EU on one side, and Russia, China and Iran on the other? Such a scenario is unthinkable and not realistic to contemplate. But where do Russia and China draw the line on Western encroachment in Muslim countries? Besides, what have the US and its partners really achieved that is to the benefit of the occupied nations or the region by military intervention in Iraq and Afghanistan?

Scenarios of a broader regional Middle East war are as numerous as there are analysts, especially those interested in promoting an agenda such as a stronger Israel, stronger US defense sector, war as a stimulus to the contracting economy, etc. War may not be in the cards before the US presidential election in November 2012, and by then Assad may have fallen. But it does not matter either way, because Islamic regimes will flourish out of the ashes of Middle East revolutions, especially now that the Muslim Brotherhood is in power in Egypt. Is a clash of civilizations inevitable and could such a clash lead to future smaller wars or Western-backed uprisings, or can the West live with Islamic regimes not so different in their approach to the West than Iran?

Tuesday, 12 June 2012


Is the US public debt as serious an obstacle to economic growth and development as some strict monetarists (those advocating that government control the amount of money in circulation) contend; was the public debt at current 2012 levels created because of 'generous' government spending on social programs and entitlement programs; did the public debt create the global recession of 2008-present, or was it the private sector debt rooted in speculative - parasitic  or non-productive - enterprises mostly confined to financial institutions and insurance companies (banking crisis vs. fiscal structure crisis, with the former causing crisis in the latter); did the public debt rise owing to sharp rise in defense/intelligence/security, lower taxes for the top ten percent of the richest Americans, and a rise in corporate welfare; a combination of all of the above, with some areas having far greater responsibility than others?

Ever since the LEHMAN BROS failure that triggered the global recession, there been a massive PR effort on the part of corporate America - and corporate Europe, Japan, etc. - along with mainstream politicians, economists, journalists, and self-styled analysts to deceive the public about the nature of public debt vs. private debt in the economy, and to what degree has that deception convinced the general public - minus the Occupy Wall Street and other minority voices engaged in grassroots protests?  A synopsis of US public debt may provide a good background of where we are today and where we are headed.

Representing bankers, merchants and commercial farmers, the Founding Fathers realized the importance of public debt as a matter of both stimulus to the economy as well as national sovereignty. The US made remarkable economic progress in the post-Civil War era, an era that coincided with the vast expansion of railroads, agriculture as part of the 'Westward Movement', as well as mining, manufacturing, and banking. All along, the US was a net debtor nation, borrowing from western Europe to finance its vast infrastructure, as well as the primary, secondary and tertiary sectors of the economy. Such borrowing in the 19th century established the foundations for propelling the US into the preeminent global economic position in the 20th century. Growth and development carried out in part with borrowed money, a point that Harry S. Truman made during his presidency, helped America that was nearly self-sufficient in natural resources and benefited from cheap African-American and immigrant labor costs.

Naturally, it was not just foreign borrowing that laid the foundations for US economic hegemony during the era of the Second Industrial Revolution, which coincided with the era of New Imperialism of 1870-1914. The US aggressively sought markets in its own backyard, Latin America and the Caribbean, as well as in Asia after colonizing the Philippines. The US was producing a surplus that needed foreign markets, otherwise it would suffer periodic contractions as the depression of the 1890s proved. At the same time, the US benefited by the rapid decline of Western Europe as a result of wars of imperialism that led to the Great War and then to the Second World War.

The two wars, the Great Depression, and the rise of Communism left an economic gap in the world market economy that propelled the US into preeminence after 1945. Keynesian policies (New Deal) combined with the enormous stimulus the war provided further helped to strengthen the US in relationship to its global competitors that had to endure fighting wars on their own soil and losing colonies after WWII. It should be noted that the US along with European creditor nations benefited from massive transfers of wealth from underdeveloped countries that were suffering public debt problems and fell under financial control by the advanced countries. In other words, public debt crises have served as a means of capital transferring from the periphery to the metropolis. Finally, the US benefited by the transferring both private and public capital from Europe and its colonies as well as Latin America. Public debt played a monumental role as a growth stimulant during the war, even as the US and the rest of the world had accepted the credit economy as the future.

Enjoying the strongest reserve currency in the world, good as gold and backed by it, the US became the undisputed superpower in a political, military and economic sense during the Truman and Eisenhower administrations, and it established the domestic and international institutional mechanisms to maintain that hegemony. However, by the end of the Eisenhower administration, it was evident that the creditor-based Pax Americana expansion was beginning its long road to economic decline.

Keynesian militarist policies, deficit spending to fund the growing arms race with the Communist bloc as a means of maintaining global hegemony entailed weakening of the civilian economy and slowly becoming a net debtor. No matter L. B. Johnson's claim during the Vietnam War about the country's ability to continue spending to maintain a strong defense sector, while keeping a steady trend toward upward mobility for the middle class and a welfare state, the US was sinking deeper in debt owing largely to its ideological commitment stemming from the Cold War militarism, which was invariably linked to global economic expansion through various methods of government support for the corporate sector - what would eventually become known as corporate welfare capitalism. The Cold War and the commitment to subsidize businesses resulted in rising public debt at a time that government wanted to maintain a welfare state.

The debt-to-GDP ratio began to grow, but it did so significantly when Reagan opted for both massive military spending, tax cuts to the rich, and strengthening the corporate sector through varieties of fiscal measures. Debt-to-GDP ratio almost doubled in the 1980s, leveling off during the growth 'Clinton decade' of the 1990s, and then skyrocketing under George Bush who followed a policy of massive military spending and vast transference of wealth, using the state fiscal system as a conduit, to the corporate sector. Debt-to-GDP ratio rose sharply under Bush, while private debt climbed even faster, causing the global recession in 2008 as much in the US as in Europe currently suffering from public debt crisis because banks needed bailing out. Public debt under Bush has risen at about $500 billion annually since 2003, topping $1 trillion in 2008 and $1.9 trillion in 2009 amid the massive bailouts of financial institutions.
In May 2012, debt held by private investors was $11 trillion, half of which is owned by foreign investors. Non-marketable treasury securities debt was $4.76 trillion - the largest portion of which China and Japan own. Total public debt amounts to $15.77 trillion, or 102% of GDP - roughly half of Japan's debt-to GDP ratio. While public debt was growing at unsustainable levels in the last ten years, it helped the US that China and Japan were buying treasury securities, while the eurozone's public debt problems helped to maintain a relatively stable dollar as a reserve currency. A modest degree of growing debt helped to fuel the world economy, but the massive private debt problem seriously undercut the public debt market. That household debt rose commensurately with business debt and public sector debt entailed a convergence that created a crunch in the money markets.
As private sector debt has been declining, largely because the public sector has poured massive amounts of capital into the financial institutions, the problem now rests with public debt created as a result of speculative 
finance capitalism that was parasitic and failed to create real economic growth. Nevertheless, mainstream politicians, media, economists and self-styled analysts insist that the public sector has the problem, not the private sector that created both the public debt crisis and the global economic contraction. This is not just in the US where politicians are hasty to reach conclusions about the evils of government debt, but throughout Europe as well as other parts of the world that essentially follow the neo-liberal model, the same model that the IMF and World Bank peddle and the one that created the current economic and public debt crisis.

It is amazing that there are still people - politicians, journalists, economists, and other analysts - who still claim that the private sector left to its own devices creates economic growth, and that the only problem is the involvement of government. While it is true that the political class under representative of authoritarian regimes has a major role in determining the course of the economy, the political elites' interests are so intertwined with those of the socioeconomic elites that it is absurd to speak of them separately. Can a politician - US or French, etc. - of modest means be elected in absence of massive amounts of money needed to carry our a political campaign? And even if one succeeds to be elected, can such a politician survive private sector pressures? Can the business world function without the considerable intervention of government on its behalf, something that both European and American politicians recognized in the late 19th century - Progressive Era politics for the US. Given the private sources of public debt, is it sounds politics or mass deception to claim that the problem is government spending on social programs and entitlements?

With the exception of sharp rise in health care costs owing to hikes in pharmaceutical, hospital and health insurance. the cost of social welfare and pensions has remained steady and it is expected to stay so for the decade of the 2010s. By contrast, tax rates for the top ten percent and for corporations, combined with a rise in defense/national security and corporate welfare programs that include outsourcing services to private contractors, often at double the cost of what it would take for government to carry out. (see my article entitled "Outsourcing Secrets"). The obvious question is why are taxpayers asked to carry the burden of public debt that the private sector creates and from which it benefits, with minor benefits accruing to the middle class and workers?
Given that there is convergence of interests between the political and socioeconomic elites, how much of a chance does the rest of society have to make progress, how much hope can there be for a growing middle class or a feeble working class not just amid the era of global economic contraction, but for the next decade as well? It will not be long before more and more people demand a reexamination of the social contract, something that may take place in the next cycle of economic contraction, probably by the end of the 2020s-early 2030s that would mark the 100 year-anniversary of the Great Depression of the 20th century.

Saturday, 9 June 2012


It is very early to arrive at any conclusions about the legacy of Arab Spring, given that the uprising is still unfolding in countries like Syria, and the ongoing sociopolitical dialectic in other countries like Egypt and Libya remains fluid. Although it seems obvious that Arab Spring may have had the seeds for greater freedom, democratic institutions, and social justice, it is not so certain the degree to which those seeds will blossom into anything that different from the authoritarian regimes overthrown. Moreover, let us consider that Western analysts looking at Arab Spring see it from the prism of a market-dominated political economy and NATO-centered perspective, thus terms such as freedom and democracy mean one thing to a New York Times journalist, invariably influenced by US-Israeli interests, and entirely another to a Muslim in North Africa/Middle East.

Arab Spring in 2011 swept across Northern Africa and managed to bring regime change in a number of countries, including Libya, but what kind of change; greater secularization, greater adherence to Islam, greater cooperation with the West, more tilt toward an Iranian-style Islamic regime? The question is whether the Libyan 'uprising' has led to any meaningful reforms to the benefit of the majority of the people belonging to diverse tribes as they define their interests; whether the end of the 40-year dictatorship of colonel Muammar el-Qaddafi has resulted in a more democratic and socially just society as they define it; whether indeed this was a homegrown revolution or merely a case of Western military intervention carried out with the help of al-Qaeda and other rebels whose agenda converged with that of the US and its NATO partners. Did Arab Spring in Libya really mean anything for the improvement in the lives of the people, or was the end result one form of tyranny replacing another? Will Libya become more dependent on the West, thus enjoying less freedom and democracy and much less economic and social justice?

On 17 February 2011, the 'revolt' erupted in Libya, and only ten days later the National Transitional Council was established, which France became the first nation to recognize as legitimate on 10 March 2011, followed by the Western-imposed no-fly zone on 19 March 2011. From March to October 2011, NATO operations in Libya helped to bring the end of Qaddafi, but not the end of turmoil, bloodshed any more than the formation of a democratic regime or social and economic justice. This remarkably rapid course of events - a matter of months for the Libyan revolt to be manufactured with Western help and carried out by Libyan dissidents  - does not appear nearly as spontaneous in retrospect as it did while it was unfolding, especially now that there are numerous reports that a number of Western governments had been working covertly inside Libya to bring down the Qaddafi dictatorship before Arab Spring.

There are many reports indicating that US, French and British intelligence were working with Libyan rebels as early as October 2010 to overthrow Qaddafi, apparently at the same time that al-Qaeda was just as anxious to have Qaddafi removed from power. It is also known that colonel Qaddafi had secret dealings with many western governments from which Libya was purchasing weapons, including the US. The curious secret dealings notwithstanding, the question is why did the US, UK, and France believe it would be best to remove Qaddafi in order to secure greater integration of Libya with the West?  And now that there is no Qaddafi dictatorship, and Libya has been moving toward greater integration with the West under more favorable terms for multinational corporations, has Libya achieved social peace and harmony?

On 9 June 2012, the minority Toubou tribe clashed with government forces in the south, just days after the government in Tripoli had announced that it was firmly in control of the country. The UN has reported ongoing tribal clashes in the south and failure of the government to contain deadly violence. A number of organizations have reported that militia groups that helped bring down the Qaddafi regime have been working in the framework of 'War Lordism' , carrying out executions, torture of prisoners, kidnappings, etc.  Many disparate groups, in this otherwise tribally-divided land, have engaged in protests against the new regime. From Benghazi, the eastern city where the Western-backed rebel movement started to Tripoli where the nine-month revolt ended, popular protests have been seeking transparency from the transitional government that is very weak and unable to unify the country in the manner it had been in the last four decades.

One issue of concern was a draft election law regarding the selection of the 200-member constituent assembly, a process carried out dictatorially without any oversight of consultation, and a law that encouraged Libyans to vote for wealthy and prominent citizens along tribal boundaries. Another issue is the lawlessness, chaotic justice system, and human rights violations that are part of post-Qaddafi society. The interim government acknowledges the chaos and corruption that prevails, but accuses former Qaddafi loyalists for the problems. Libyan legal experts have expressed concern about hundreds of millions and perhaps billions of dollars 'mysteriously missing', while government officials complain that 'there is no money' to deal with all of the problems.

To find closure for both Libyan rebels and the West that was behind the manufactured revolution/military intervention that ended the Qaddafi dictatorship, there is the possible trial of the colonel's son Saif Qaddafi by the ICC. As heir to the colonel, however, Saif probably knows about his father's dirty dealings with former EU leaders like Tony Balir, Nikola Sarkozy, and Silvio Berlusconi. He also knows about dirty dealing of giant energy companies, and above all, he may reveal how the US used Libya in the case of Muslim political prisoners that were tortured and denied due process. The ICC trial may reveal a laundry list of dirty secrets that could expose a number of Western governments as hypocritical, given their extensive dealings with Qaddafi whom they overthrew. Beyond the legitimate merits of the case against Saif about crimes against humanity, beyond the debate about whether the Libyan uprising was in reality a NATO military operation, there is the issue of how the ICC can justify crimes against humanity committed by NATO forces in Afghanistan and by the US in Iraq.

Ultimately, the larger issue in Libya is society's function today and its prospects for the future. Is Libya a society with relative functioning institutions, sociopolitical harmony and stability, and prospects for evolving into a more progressive society, or is it worse off today than it was under colonel Qaddafi and the prospects for the country much worse off, given that Western governments have been waiting in the wings for Qaddafi to fall so they can exploit Lybia's energy resources?

On a number of occasions, I have written that the Arab Spring uprisings were necessary to remove corrupt and oppressive dictatorships. However, their removal will not alter the Islamic nations into oasis of freedom, democracy and social justice, and it seems that the reason for popular uprisings is to put an end to hopelessness and to start a new era of progress filled with optimism. While the jury is still out on hope and optimism for Libya, there are lessons to be learned here for Syria where Russia and China have not permitted Western intervention, owing to the delicate regional balance of power. The case of Libya demonstrated that Western military intervention was rewarded, but were the broad masses of the population? The Arab Spring legacy of Libya so far is that a dictatorship fell only to be replaced with a weak and relatively incompetent and corrupt regime whose fate rests in greater dependence on the West, thus less national sovereignty, freedom, democracy and social justice for the people of Libya.