Trump lacks ‘mental capacities,’ Iran says after US pulls out of nuclear deal – By RT

Trump lacks ‘mental capacities,’ Iran says after US pulls out of nuclear deal
The speaker of Iran’s parliament has offered a particularly scathing review of US President Donald Trump’s decision to pull the US out of the Iran nuclear deal, saying Trump does not have the “mental capacity” for his job.

Trump announced that he was withdrawing the United States from the landmark deal on Tuesday, sparking an avalanche of criticism from both sides of the political divide in America and also upsetting the international community, including US allies and Russia.

The speaker of Iran’s parliament, Ali Larijani, took a particularly dim view of the decision telling the Iranian assembly that: “Trump does not have the mental capacity to deal with issues.”

“Trump’s abandoning of the nuclear deal was a diplomatic show… Iran has no obligation to honor its commitments under the current situation,” Larijani said. “It is obvious that Trump only understands the language of force.”

Members of parliament also chanted “Death to America,” and burned a US flag and a symbolic copy of the nuclear pact, known officially as the Joint Comprehensive Plan of Action (JCPOA), Reuters reports.

President Hassan Rouhani said Iran would remain committed to the deal despite Washington’s decision to withdraw from it. “If we achieve the deal’s goals in cooperation with other members of the deal, it will remain in place… By exiting the deal, America has officially undermined its commitment to an international treaty,” Rouhani said in a televised speech.

Rouhani added that he has ordered the foreign ministry to negotiate with European countries, China, and Russia in coming weeks. “If at the end of this short period we conclude that we can fully benefit from the JCPOA with the cooperation of all countries, the deal would remain,” he said.

Iran’s Supreme Leader Ayatollah Ali Khamenei said Trump’s announcement was “silly and superficial.” He went on: “He had maybe more than 10 lies in his comments. Mr. Trump, I tell you, on behalf of the Iranian people: You’ve made a mistake.”

Reaction at home and abroad

The 2015 agreement lifted sanctions on Iran in exchange for Tehran limiting its nuclear program. Trump’s decision to back out of it has been met with a chorus of disapproval at home and abroad.

The Senate’s second-ranking Democrat, Dick Durbin, labelled it “a mistake of historic proportions” which “isolates the United States from the world.” Several GOP lawmakers also questioned Trump’s decision. “I just don’t think that it’s a wise move,” Arizona Republican Senator Jeff Flake told CNN, adding that it makes the US less reliable in the eyes of both its partners and adversaries.

A host of international powers also condemned the decision and vowed to protect the deal. Russia’s acting foreign minister, Sergey Lavrov, said that Russia remains committed to the pact, while France’s foreign minister, Jean-Yves Le Drian, insisted the deal was not dead.

“The deal is not dead. There’s an American withdrawal from the deal but the deal is still there,” he said. “The region deserves better than further destabilization provoked by American withdrawal. So we want to adhere to it and see to it that Iran does too, that Iran behaves with restraint.”

On Wednesday, China said it regrets the decision because it raises the risk of conflict in the Middle East. The Asian power said it will safeguard the deal and called on all relevant parties to assume a responsible attitude. Turkish President Recep Tayyip Erdogan said the United States will be the loser from President Trump’s decision.

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‘Creating Wealth’ Through Debt: How Parasitic Finance Capitalism Hijacked Productive Industrial Capitalism – By Michael Hudson (counterpunch) (SOTT)

This is the text of a speech Michael Hudson presented at Peking University’s School of Marxist Studies, May 5-6, 2018.

finance economy

Volumes II and III of Marx’s Capital describe how debt grows exponentially, burdening the economy with carrying charges. This overhead is subjecting today’s Western finance-capitalist economies to austerity, shrinking living standards and capital investment while increasing their cost of living and doing business. That is the main reason why they are losing their export markets and becoming de-industrialized.

What policies are best suited for China to avoid this neo-rentier disease while raising living standards in a fair and efficient low-cost economy? The most pressing policy challenge is to keep down the cost of housing. Rising housing prices mean larger and larger debts extracting interest out of the economy. The strongest way to prevent this is to tax away the rise in land prices, collecting the rental value for the government instead of letting it be pledged to the banks as mortgage interest.

The same logic applies to public collection of natural resource and monopoly rents. Failure to tax them away will enable banks to create debt against these rents, building financial and other rentier charges into the pricing of basic needs.

U.S. and European business schools are part of the problem, not part of the solution. They teach the tactics of asset stripping and how to replace industrial engineering with financial engineering, as if financialization creates wealth faster than the debt burden. Having rapidly pulled ahead over the past three decades, China must remain free of rentier ideology that imagines wealth to be created by debt-leveraged inflation of real-estate and financial asset prices.

Western capitalism has not turned out the way that Marx expected. He was optimistic in forecasting that industrial capitalists would gain control of government to free economies from unnecessary costs of production in the form of rent and interest that increase the cost of living (and hence, the break-even wage level). Along with most other economists of his day, he expected rentier income and the ownership of land, natural resources and banking to be taken out of the hands of the hereditary aristocracies that had held them since Europe’s feudal epoch. Socialism was seen as the logical extension of classical political economy, whose main policy was to abolish rent paid to landlords and interest paid to banks and bondholders.

A century ago there was an almost universal belief in mixed economies. Governments were expected to tax away land rent and natural resource rent, regulate monopolies to bring prices in line with actual cost value, and create basic infrastructure with money created by their own treasury or central bank. Socializing land rent was the core of Physiocracy and the economics of Adam Smith, whose logic was refined by Alfred Marshall, Simon Patten and other bourgeois economists of the late 19thcentury. That was the path that European and American capitalism seemed to be following in the decades leading up to World War I. That logic sought to use the government to support industry instead of the landlord and financial classes.

China is progressing along this “mixed economy” road to socialism, but Western economies are suffering from a resurgence of the pre-capitalist rentier classes. Their slogan of “small government” means a shift in planning to finance, real estate and monopolies. This economic philosophy is reversing the logic of industrial capitalism, replacing public investment and subsidy with privatization and rent extraction. The Western economies’ tax shift favoring finance and real estate is a case in point. It reverses John Stuart Mill’s “Ricardian socialism” based on public collection of the land’s rental value and the “unearned increment” of rising land prices.

Defining economic rent as the unnecessary margin of prices over intrinsic cost value, classical economists through Marx described rentiers as being economically parasitic, not productive. Rentiers do not “earn” their land rent, interest or monopoly rent, because it has no basis in real cost-value (ultimately reducible to labor costs). The political, fiscal and regulatory reforms that followed from this value and rent theory were an important factor leading to Marx’s value theory and historical materialism. The political thrust of this theory explains why it is no longer being taught.

By the late 19thcentury the rentiers fought back, sponsoring reaction against the socialist implications of classical value and rent theory. In America, John Bates Clark denied that economic rent was unearned. He redefined it as payment for the landlords’ labor and enterprise, not as accruing “in their sleep,” as J. S. Mill had characterized it. Interest was depicted as payment for the “service” of lending productively, not as exploitation. Everyone’s income and wealth was held to represent payment for their contribution to production. The thrust of this approach was epitomized by Milton Friedman’s Chicago School claim that “there is no such thing as a free lunch” – in contrast to classical economics saying that feudalism’s legacy of privatized land ownership, bank credit and monopolies was all about how to get a free lunch, by exploitation.

The other major reaction against classical and Marxist theory was English and Austrian “utility” theory. Focusing on consumer psychology instead of production costs, it claimed that there is no difference between value and price. A price is whatever consumers “choose” to pay for commodities, based on the “utility” that these provide – defined by circular reasoning as being equal to the price they pay. Producers are assumed to invest and produce goods to “satisfy consumer demand,” as if consumers are the driving force of economies, not capitalists, property owners or financial managers.

Using junk-psychology, interest was portrayed as what bankers or bondholders “abstain” from consuming, lending their self-denial of spending to “impatient” consumers and “credit-worthy” entrepreneurs. This view opposed the idea of interest as a predatory charge levied by hereditary wealth and the privatized monopoly right to create bank credit. Marx quipped that in this view, the Rothschilds must be Europe’s most self-depriving and abstaining family, not as suffering from wealth-addiction.

These theories that all income is earned and that consumers (the bourgeois term for wage-earners) instead of capitalists determine economic policy were a reaction against the classical value and rent theory that paved the way for Marx’s analysis. After analyzing industrial business cycles in terms of under-consumption or over-production in Volume I of Capital, Volume III dealt with the precapitalist financial problem inherited from feudalism and the earlier “ancient” mode of production: the tendency of an economy’s debts to grow by the “purely mathematical law” of compound interest.

Any rate of interest may be thought of as a doubling time. What doubles is not real growth, but the parasitic financial burden on this growth. The more the debt burden grows, the less income is left for spending on goods and services. More than any of his contemporaries, Marx emphasized the tendency for debt to grow exponentially, at compound interest, extracting more and more income from the economy at large as debts double and redouble, beyond the ability of debtors to pay. This slows investment in new means of production, because it shrinks domestic markets for output.

Marx explained that the credit system is external to the means of production. It existed in ancient times, feudal Europe, and has survived industrial capitalism to exist even in socialist economies. At issue in all these economic systems is how to prevent the growth of debt and its interest charge from shrinking economies. Marx believed that the natural thrust of industrial capitalism was to replace private banking and money creation with public money and credit. He distinguished interest-bearing debt under industrial capitalism as, for the first time, a means of financing capital investment. It thus was potentially productive by funding capital to produce a profit that was sufficient to pay off the debt.

Industrial banking was expected to finance industrial capital formation, as was occurring in Germany in Marx’s day. Marx’s examples of industrial balance sheets accordingly assumed debt. In contrast to Ricardo’s analysis of capitalism’s Armageddon resulting from rising land-rent, Marx expected capitalism to free itself from political dominance by the landlord class, as well as from the precapitalist legacy of usury.

This kind of classical free market viewed capitalism’s historical role as being to free the economy from the overhead of unproductive “usury” debt, along with the problem of absentee landownership and private ownership of monopolies – what Lenin called the economy’s “commanding heights” in the form of basic infrastructure. Governments would make industries competitive by providing basic needs freely or at least at much lower public prices than privatized economies could match.

This reform program of industrial capitalism was beginning to occur in Germany and the United States, but Marx recognized that such evolution would not be smooth and automatic. Managing economies in the interest of the wage earners who formed the majority of the population would require revolution where reactionary interests fought to prevent society from going beyond the “bourgeois socialism” that stopped short of nationalizing the land, monopolies and banking.

World War I untracked even this path of “bourgeois socialism.” Rentier forces fought to prevent reform, and banks focused on lending against collateral already in place, not on financing new means of production. The result of this return to pre-industrial bank credit is that some 80 percent of bank lending in the United States and Britain now takes the form of real estate mortgages. The effect is to turn the land’s rental yield into interest.

That rent-into-interest transformation gives bankers a strong motive to oppose taxing land rent, knowing that they will end up with whatever the tax collector relinquishes. Most of the remaining bank lending is concentrated in loans for corporate takeovers, mergers and acquisitions, and consumer loans. Corporate capital investment in today’s West is not financed by bank credit, but almost entirely out of retained corporate earnings, and secondarily out of stock issues.

The stock market itself has become extractive. Corporate earnings are used for stock buybacks and higher dividend payouts, not for new tangible investment. This financial strategy was made explicit by Harvard Business School Professor Michael Jensen, who advocated that salaries and bonuses for corporate managers should be based on how much they can increase the price of their companies’ stock, not on how much they increased or production and/or business size. Some 92 percent of corporate profits in recent years have been spent on stock buyback programs and dividend payouts. That leaves only about 8 percent available to be re-invested in new means of production and hiring. Corporate America’s financial managers are turning financialized companies into debt-ridden corporate shells.

A major advantage of a government as chief banker and credit creator is that when debts come to outstrip the means to pay, the government can write down the debt. That is how China’s banks have operated. It is a prerequisite for saving companies from bankruptcy and preventing their ownership from being transferred to foreigners, raiders or vultures.

Classical tax and banking policies were expected to streamline industrial economies, lowering their cost structures as governments replaced landlords as owner of the land and natural resources (as in China today) and creating their own money and credit. But despite Marx’s understanding that this would have been the most logical way for industrial capitalism to evolve, finance capitalism has failed to fund capital formation. Finance capitalism has hijacked industrial capitalism, and neoliberalism is its anti-classical ideology.

The result of today’s alliance of the Finance, Insurance and Real Estate (FIRE) sector with natural resource and infrastructure monopolies has been to reverse that the 20thcentury’s reforms promoting progressive taxation of wealth and income. Industrial capitalism in the West has been detoured along the road to rent-extracting privatization, austerity and debt serfdom.

The result is a double-crisis: austerity stemming from debt deflation, while public health, communications, information technology, transportation and other basic infrastructure are privatized by corporate monopolies that raise prices charged to labor and industry. The debt crisis spans government debt (state and local as well as national), corporate debt, real estate mortgage debt and personal debt, causing austerity that shrinks the “real” economy as its assets and income are stripped away to service the exponentially growing debt overhead. The economy polarizes as income and wealth ownership are shifted to the neo-rentier alliance headed by the financial sector.

This veritable counter-revolution has inverted the classical concept of free markets. Instead of advocating a public role to lower the cost structure of business and labor, the neoliberal ideal excludes public infrastructure and government ownership of natural monopolies, not to speak of industrial production. Led by bank lobbyists, neoliberalism even opposes public regulation of finance and monopolies to keep their prices in line with socially necessary cost of production.

To defend this economic counter-revolution, the National Income and Product Accounts (NIPA) and Gross Domestic Product (GDP) measures now used throughout the world were inspired by opposition to progressive taxation and public ownership of land and banks. These statistical measures depicting finance, insurance and real estate as the leaders of wealth creation, not the creators merely of debt and rentier overhead.

What is China’s “Real” GDP and “real wealth creation”?

Rejection of classical value theory’s focus on economic rent – the excess of market price over intrinsic labor cost – underlies the post-classical concept of GDP. Classical rent theory warned against the FIRE sector siphoning off nominal growth in wealth and income. The economics of Adam Smith, David Ricardo, J.S. Mill and Marx share in common the view that this rentier revenue should be treated as an overhead charge and, as such, subtracted from national income and product because it is not production-related. Being extraneous to the production process, this rentier overhead is responsible for today’s debt deflation and economically extractive privatization that is imposing austerity and shrinking markets from North America to Europe.

The West’s debt crisis is aggravated by privatizing monopolies (on credit) that historically have belonged to the public sector. Instead of recognizing the virtues of a mixed economy, Frederick Hayek and his followers from Ayn Rand to Margaret Thatcher, Ronald Reagan, the Chicago School and libertarian Republicans have claimed that any public ownership or regulation is, ipso facto, a step toward totalitarian politics.

Following this ideology, Alan Greenspan aborted economic regulation and decriminalized financial fraud. He believed that in principle, the massive bank fraud, junk-mortgage lending and corporate raiding that led up to the 2008 crisis was more efficient than regulating such activities or prosecuting fraudsters.

This is the neoliberal ideology taught in U.S. and European business schools. It assumes that whatever increases financial wealth most quickly is the most efficient for society as a whole. It also assumes that bankers will find honest dealing to be more in their economic self-interest than fraud, because customers would shun fraudulent bankers. But along with the mathematics of compound interest, the inherent dynamic of finance capitalism is to establish a monopoly and capture government regulatory agencies, the justice system, central bank and Treasury to prevent any alternative policy and the prosecution of fraud.

The aim is to get rich by purely financial means – by increasing stock-market prices, not by tangible capital formation. That is the opposite of the industrial logic of expanding the economy and its markets. Instead of creating a more productive economy and raising living standards, finance capitalism is imposing austerity by diverting wage income and also corporate income to pay rising debt service, health insurance and payments to privatized monopolies. Progressive income and wealth taxation has been reversed, siphoning off wages to subsidize privatization by the rentier class.

This combination of debt overgrowth and regressive fiscal policy has produced two results. First, combining debt deflation with fiscal deflation leaves only about a third of wage income available to be spent on the products of labor. Paying interest, rents and taxes – and monopoly prices – shrinks the domestic market for goods and services.

Second, adding debt service, monopoly prices and a tax shift to the cost of living and doing business renders neo-rentier economies high-cost. That is why the U.S. economy has been deindustrialized and its Midwest turned into a Rust Belt.

How Marx’s economic schema explains the West’s neo-rentier problem

In Volume I of Capital, Marx described the dynamics and “law of motion” of industrial capitalism and its periodic crises. The basic internal contradiction that capitalism has to solve is the inability of wage earners to be paid enough to buy the commodities they produce. This has been called overproduction or underconsumption, but Marx believed that the problem was in principle only temporary, not permanent.

Volumes II and III of Marx’s Capital described a pre-capitalist form of crisis, independent of the industrial economy: Debt grows exponentially, burdening the economy and finally bringing its expansion to an end with a financial crash. That descent into bankruptcy, foreclosure and the transfer of property from debtors to creditors is the dynamic of Western finance capitalism. Subjecting economies to austerity, economic shrinkage, emigration, shorter life spans and hence depopulation, is at the root of the 2008 debt legacy and the fate of the Baltic states, Ireland, Greece and the rest of southern Europe, as it was earlier the financial dynamic of Third World countries in the 1960s through 1990s under IMF austerity programs. When public policy is turned over to creditors, they use their power for asset stripping, insisting that all debts must be paid without regard for how this destroys the economy at large.

China has managed to avoid this dynamic. But to the extent that it sends its students to study in U.S. and European business schools, they are taught the tactics of asset stripping instead of capital formation – how to be extractive, not productive. They are taught that privatization is more desirable than public ownership, and that financialization creates wealth faster than it creates a debt burden. The product of such education therefore is not knowledge but ignorance and a distortion of good policy analysis. Baltic austerity is applauded as the “Baltic Miracle,” not as demographic collapse and economic shrinkage.

The experience of post-Soviet economies when neoliberals were given a free hand after 1991 provides an object lesson. Much the same fate has befallen Greece, along with the rising indebtedness of other economies to foreign bondholders and to their own rentier class operating out of capital-flight centers. Economies are obliged to suspend democratic government policy in favor of emergency creditor control.

The slow economic crash and debt deflation of these economies is depicted as a result of “market choice.” It turns out to be a “choice” for economic stagnation. All this is rationalized by the economic theory taught in Western economics departments and business schools. Such education is an indoctrination in stupidity – the kind of tunnel vision that Thorstein Veblen called the “trained incapacity” to understand how economies really work.

Most private fortunes in the West have stemmed from housing and other real estate financed by debt. Until the 2008 crisis the magnitude of this property wealth was expanded largely by asset-price inflation, aggravated by the reluctance of governments to do what Adams Smith, John Stuart Mill, Alfred Marshall and nearly all 19th-century classical economists recommended: to keep land rent out of private hands, and to make the rise in land’s rental value serve as the tax base.

Failure to tax the land leaves its rental value “free” to be pledged as interest to banks – which make larger and larger loans by lending against rising debt ratios. This “easy credit” raises the price of obtaining home ownership. Sellers celebrate the result as “wealth creation,” and the mainstream media depict the middle class as growing richer by higher prices for the homes its members have bought. But the debt-financed rise in housing prices ultimately creates wealth mainly for banks and their bondholders.

Americans now have to pay up to 43 percent of their income for mortgage debt service, federally guaranteed. This imposes such high costs for home ownership that it is pricing the products of U.S. labor out of world markets. The pretense is that using bank credit (that is, homebuyers’ mortgage debt) to inflate the price of housing makes U.S. workers and the middle class prosperous by enabling them to sell their homes to a new generation of buyers at higher and higher prices each generation. This certainly does not make the buyers more prosperous. It diverts their income away from buying the products of labor to pay interest to banks for housing prices inflated on bank credit.

Consumer spending throughout most of the world aims above all at achieving status. In the West this status rests largely on one’s home and neighborhood, its schools, transportation and other public investment. Land-price gains resulting from public investment in transportation, parks and schools, other urban amenities and infrastructure, and from re-zoning land use. In the West this rising rental value is turned into a cost, falling on homebuyers, who must borrow more from the banks. The result is that public spending ultimately enriches the banks – at the tax collector’s expense.

Debt is the great threat to modern China’s development. Burdening economies with a rentier overhead imposes the quasi-feudal charges from which classical 19thcentury economists hoped to free industrial capitalism. The best protection against this rentier burden is simple: first, tax away the land’s rising rental valuation to prevent it from being paid out for bank loans; and second, keep control of banks in public hands. Credit is necessary, but should be directed productively and debts written down when paying them threatens to create financial Armageddon.

Marx’s views on the broad dynamics of economic history

Plato and Aristotle described a grand pattern of history. In their minds, this pattern was eternally recurrent. Looking over three centuries of Greek experience, Aristotle found a perpetual triangular sequence of democracy turning into oligarchy, whose members made themselves into a hereditary aristocracy – and then some families sought to take the demos into their own camp by sponsoring democracy, which in turn led to wealthy families replacing it with an oligarchy, and so on.

The medieval Islamic philosopher Ibn Khaldun saw history as a rise and fall. Societies rose to prosperity and power when leaders mobilized the ethic of mutual aid to gain broad support as a communal spirit raised all members. But prosperity tended to breed selfishness, especially in ruling dynasties, which Ibn Khaldun thought had a life cycle of only about 120 years. By the 19thcentury, Scottish Enlightenment philosophers elaborated this rise-and-fall theory, applying it to regimes whose success bred arrogance and oligarchy.

Marx saw the long sweep of history as following a steady upward secular trend, from the ancient slavery-and-usury mode of production through feudalism to industrial capitalism. And not only Marx but nearly all 19thcentury classical economists assumed that socialism in one form or another would be the stage following industrial capitalism in this upward technological and economic trajectory.

Instead, Western industrial capitalism turned into finance capitalism. In Aristotelian terms the shift was from proto-democracy to oligarchy. Instead of freeing industrial capitalism from landlords, natural resource owners and monopolists, Western banks and bondholders joined forces with them, seeing them as major customers for as much interest-bearing credit as would absorb the economic rent that governments would refrain from taxing. Their success has enabled banks and bondholders to replace landlords as the major rentier class. Antithetical to socialism, this retrogression towards feudal rentier privilege let real estate, financial interests and monopolists exploit the economy by creating an expanding debt wedge.

Marx’s Theories of Surplus Value (German: Mehrwert), his history of classical political economy, poked fun at David Ricardo’s warning of economic Armageddon if economies let landlords siphon off of all industrial profits to pay land rent. Profits and hence capital investment would grind to a halt. But as matters have turned out, Ricardo’s rentier Armageddon is being created by his own banking class. Corporate profits are being devoured by interest payments for corporate takeover debts and related financial charges to reward bondholders and raiders, and by financial engineering using stock buybacks and higher dividend payouts to create “capital” gains at the expense of tangible capital formation. Profits also are reduced by firms having to pay higher wages to cover the cost of debt-financed housing, education and other basic expenses for workers.

This financial dynamic has hijacked industrial capitalism. It is leading economies to polarize and ultimately collapse under the weight of their debt burden. That is the inherent dynamic of finance capitalism. The debt overhead leads to a financial crisis that becomes an opportunity to impose emergency rule to replace democratic lawmaking. So, contrary to Hayek’s anti-government “free enterprise” warnings, “slippery slope” to totalitarianism is not by socialist reforms limiting the rentier class’s extraction of economic rent and interest, but just the opposite: the failure of society to check the rentier extraction of income vesting a hereditary autocracy whose financial and rent-seeking business plan impoverishes the economy at large.

Greece’s debt crisis has all but abolished its democracy as foreign creditors have taken control, superseding the authority of elected officials. From New York City’s bankruptcy to Puerto Rico’s insolvency and Third World debtors subjected to IMF “austerity programs,” national bankruptcies shift control to centralized financial planners in what Naomi Klein has called Crisis Capitalism. Planning ends up centralized not in the hands of elected government but in financial centers, which become the de facto government.

England and America set their economic path on this road under Margaret Thatcher and Ronald Reagan by 1980. They were followed by even more pro-financial privatization leaders in Tony Blair’s New Labour Party and Bill Clinton’s New Democrats seeking to roll back a century of classical reforms and policies that gradually were moving capitalism toward socialism. Instead, these countries are suffering a rollback to neofeudalism, whose neo-rentier economic and political ideology has become mainstream throughout the West. Despite seeing that this policy has led to North America and Europe losing their former economic lead, the financial power elite is simply taking its money and running.

So we are brought back to the question of what this means for China’s educational policy and also how it depicts economic statistics to distinguish between wealth and overhead. The great advantage of such a distinction is to help steer economic growth along productive lines favoring tangible capital formation instead of policies to get rich by taking on more and more debt and by prying property away from the public domain.

If China’s main social objective is to increase real output to raise living standards for its population – while minimizing unproductive overhead and economic inequality – then it is time to consider developing its own accounting format to trace its progress (or shortcomings) along these lines. Measuring how its income and wealth are being obtained would track how the economy is moving closer toward what Marx called socialism.

Of special importance, such an accounting format would revive Marx’s classical distinction between earned and unearned income. Its statistics would show how much of the rise in wealth (and expenditure) in China – or any other nation – is a result of new tangible capital formation as compared to higher rents, lending and interest, or the stock market.

These statistics would isolate income and fortunes obtained by zero-sum transfer payments such as the rising rental value of land sites, natural resources and basic infrastructure monopolies. National accounts also would trace overhead charges for interest and related financial charges, as well as the economy’s evolving credit and debt structure. That would enable China to measure the economic effects of the banking privileges and other property rights given to some people.

That is not the aim of Western national income statistics. In fact, applying the accounting structure described above would track how Western economies are polarizing as a result of their higher economic rent and interest payments crowding out spending on actual goods and services. This kind of contrast would help explain global trends in pricing and competitiveness. Distinguishing the FIRE sector from the rest of the economy would enable China to compare its economic cost trends and overhead relative to those of other nations. I believe that these statistics would show that its progress toward socialism also will explain the remarkable economic advantage it has obtained. If China does indeed make this change, it will help people both in and out of China see even more clearly what your government is doing on behalf of the majority of its people. This may help other governments – including my own – learn from your example and praise it instead of fearing it.

About the author

Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet). His new book is J is For Junk Economics. He can be reached at mh@michael-hudson.com

Comment: Lots of food for thought here. The left-right socialism vs capitalism debaters would do well to look up and observe the parasitic ultra-liberals devouring everything. And we’re certainly in dire need of new indices of economic health: Western leaders would have everyone believe all’s hunky-dory when in fact all’s in dire straits.

See Also:

Is Israel Readying for War? – ByAlastair CROOKE ( STRATEGIC CULTURE FOUNDATION)

Is Israel Readying for War?

Last Thursday, General Mattis told the US Senate Armed Forces Committee that he believes a military confrontation between Israel and Iran in Syria is becoming increasingly likely: “I can see how it might start, but I am not sure when or where”.

This should not come as any surprise. Anyone who can peer out through the gossamer liquid membrane of the western bubble, can see major dynamics ‘filling and strengthening’ in such a way, to close inexorably on Israel. It becomes ‘inexorable’: Not so much because Middle Eastern states desire war (they do not); but because Israel feels culturally compelled to tie itself to President Trump and his hawkish team, which effectively places Israel as prime collaborator in the US ‘war’ to put the China-Russia-Iran political, and trade project, on a diet, and to shrink it into an uncompetitive, starved, and enfeebled body.

The hawkish rhetoric of Pompeo and Bolton may seem like a heady elixir to some Israelis; but simply: The Middle East is not the place to be a collaborator in this American new hybrid ‘war’ against these new emerging dynamics. China, Russia and Iran are absolutely resolute. It is ‘inexorable’. Israel will be fighting against the grain of events, and ultimately, in being wholly at odds with the Middle East world, Israel will try to strike at it, and weaken it (just as we have seen last week with the attacks in Syria) – and ultimately, will be striked at: in return. And then we may see a wider war.

Whether one looks at the bold, red, East-West swath of China’s massive ‘Road and Corridor’ sprawling across Eurasia (see here); or, look at Russia’s vertical, ‘McKinderesque’, heartland of energy producers (see here), stretching from the Arctic, through Russia to the Middle East, supplying the consumers to the East on one side and to the west, on the other, one thing stands out clearly: Iran, and the northern tier of the Middle East, lie smack in the middle of both maps. But just to be clear: these may be articulated as mainly trade and energy projects – but they are primordially political-cultural projects too.

These two visions – the Chinese map and the Russian – are complementary. One highlights resource influence, and the other, its flows and the concomitant economic fecundity likely to arise from the flow of energy and the ebb of manufactured goods along this corridor. In this northern sphere of the Middle East, it is Russia that has diplomatic and security ‘heft’ – and not America. In this northern tier, it is China that has economic and influence ‘heft’ – and not America.

And ‘no’, this is not smoke and mirrors resulting from some imaginary ‘void’ created by America’s serial failures in the Middle East. These are real, transformative, dynamics at work here.

For some self-absorbed westerners (and Israelis), nothing of significance is to be seen at all. We are told, by Politico, for example, that:

‘… the new Cold War is not like the original Cold War because it lacks an ideological dimension … the current tension between the United States and Russia is a Seinfeldian fight about nothing: Putin has no ideological goal beyond the elevation of the Russian state, ruled by him and his clan; he is not seeking adherents in the West, and therefore has brought about no great contest between two systems … After all, Putin does not preach worldwide revolution, which was a key doctrinal element of Soviet communism.’

How come the West is somehow ‘culturally blind’ to the major changes underway? It is true that what is occurring in parts of the Middle East and Russia is not ‘ideology’ in the sense of one coercive utopian project, one global order, ordained to correct human flaws, pitted against another, seeking to reform the whole of humanity in some other coercive way. But what is afoot, is not ‘nothing’: It seems, because precisely they deny and run counter to the very notion of a single, global, cultural human rules-based order, these projects have become wholly invisible to the West.

In the case of Israel, we cannot be surprised. Theodor Herzl, the father of modern Zionism, in his book Der Judenstaat, the founding document of Zionism wrote: “For Europe we [the Jewish State] would constitute a part of the wall against Asia: We would serve as an outpost of Culture against Barbarism.” In short, Israel was specifically founded as an European Enlightenment ‘Utopia’, and consequently, and understandably therefore, Israelis find it hard to imagine that others can culturally, or technologically ever challenge European Enlightenment ‘Culture and Science’. Hence Ehud Barak cancharacterise Israel as a ‘Villa in the Jungle’, with a clear deprecatory tone for the inhabitants of the jungle.

China, however, under Xi is portraying the Chinese Communist Party as the inheritor and successor to a 5,000-year-old Chinese empire, brought low by the marauding West, and seeking to define a Chinese identity fundamentally at odds with American modernity. The world which Xi envisions is wholly incompatible with Washington’s priorities – and therefore with those of Israel (on its present trajectory). 

Russia, too, is trying to define a ‘way of being’ that is culturally Russian, in its own individual way – and not one that apes western European models, but rather one that tends to its opposite cultural and moral pole. Iran and Syria (and possibly Iraq as well) no longer look to the western model of politics, or morals, for emulation – or gives them much esteem.

The point here, is that in the upper tier at least of the Middle East (including Iraq), the ‘Wahhabi head-choppers’ that western, Israeli and Saudi intelligence services, have either facilitated or empowered against Assad, are not just discredited – they are loathed (by Sunnis as much as anyone). There is taking shape a slow detonation of ‘blow-back’ to these policies (still being pursued incidentally, by the US giving ISIS safe-haven, along the Syria-Iraqi border). This region ultimately is lost to western influence. The Russia-China-Iran axis is already the go-to power in the area, even for Gulf States.

And Iran will be a major player. The West has pushed Russia and Iran closer strategically and militarily, and – for Beijing – Iran is an absolutely key hub of the Road and Corridor. And, as Pepe Escobar notes:

“faithful to the slowly evolving Eurasia integration roadmap, Russia and China are at the forefront of supporting Iran. China is Iran’s top trading partner – especially because of its energy imports. Iran for its part is a major food importer. Russia aims to cover this front …”

“Chinese companies are developing massive oil fields in Yadavaran and North Azadegan. China National Petroleum Corporation (CNPC) took a significant 30% stake in a project to develop South Pars – the largest natural gas field in the world. A $3 billion deal is upgrading Iran’s oil refineries, including a contract between Sinopec and the National Iranian Oil Company (NIOC) to expand the decades-old Abadan oil refinery.”

In short, there are powerful forces arising in parts of the Middle East that are no longer sympathetic to western ‘priorities’ (nor are they particularly sympathetic to Israeli proxy-hegemony, which they see as disruptive of regional stability). These forces are already powerful, and seem destined to become more powerful yet. But America, under Trump’s MAGA vision, has declared these emerging forces as ‘revisionist powers’ or ‘rogue states’, and the US Establishment regards them as major ‘threats’ in their ‘forever war’.

It is an open question whether the US ultimately will find the means to accede to these emergent forces, or will conflict with them. This is ‘the’ question of our era. In the case of the US – if conflict be the outcome – that conflict may still remain hybrid; but for Israel, that option is unlikely: it can only move to ‘hot’ conflict.

But what is bringing the Israeli-Iranian conflict to a possibly imminent head is another major shift – one that potentially transforms Israel’s position in the Middle East. Not only is the region changing in a way that is incrementally incompatible with Washington’s ‘priorities’, but, the one quality which seemed to set the West apart – making it ‘exceptional’ – was its possession of technology — and that too now seems to be slipping away.

America’s quarrel with China is essentially about this issue: Trump asserts that China ‘stole’ America’s technology (together with American manufacturing jobs). Some technology may have been ‘lifted’, but the reality is that both jobs and technology were voluntarily off-shored to China in the interests of inflating US corporate profits. 

In any event, China, Russia (and Iran) have made technology their own – and are now are either at the cusp of surpassing western defence technology – or already, are superseding it. The US will not succeed in its project to contain, or repress, China’s technological innovation, or that of Russia’s defence technology revolution.

So, as Israel looks out upon its neighbourhood, it does perceive the US incrementally disengaging from the Middle East, and the ‘revisionist’ and ‘rogue’ powers conversely, incrementally engaging in it — “a major strategic failure with far-reaching implications” asserts leading Israeli security expert, Ehud Yaari. And it knows that the western defence technology ‘lead’ has been slipping away, like sand, through western fingers.

No wonder those on the Israeli Right are saying that Israel’s situation, its ability to respond to its new situation, will only worsen with time: That there will never be a more unreflectively supportive White House; nor will Israel’s air superiority ever again be what it once was – as more, and more widespread, and better air defences deny Israel the air space it once took for granted Carpe Diem – Seize the moment, these politicians urge, find the pretext for escalation, and the US will follow behind – on our coat-tails.

But it is not a straight-forward affair: there are those within the Israeli security and intelligence echelon who are cautious: Israel cannot sustain a conflict for more than six days (General Golan’s estimate), particularly if it involves multiple fronts. Could Israel today repeat the Six-Day war experience (in which it destroyed the Egyptian air force within the first four hours)? It is by no means certain. Iran and Hizbullah have been contriving an asymmetrical answer to Israeli air power for the last twenty years, and trialled its elements successfully in Lebanon in the 2006 war. But today, there are new missiles in the north. Can Israel be certain that it still dominates the skies? Doubtful.

So where are we today? Secretary Pompeo visited Tel Aviv last week. It seems he authorised Israel to use the smaller dimension bunker-busting bombs (GBu-39s) against Iranian armaments on 30 April, that Obama gave to Israel. It seems that he also supported Israel unilaterally widening the latter’s ‘war’ to any Iranians, anywhere, in Syria. Israel is daring Iran – or Syria or Russia – to respond to these provocations, believing that they will not – at least until after 12 May (when Trump must decide whether to waive sanctions on Iran under JCPOA, once more).

President Putin is trying to keep the lid on war, but Pompeo’s green light to Tel Aviv is pushing the Russian President to the limits of patience. His military advisors are pressing him to activate the S-300 batteries against Israeli aircraft and missiles.

And after 12 May, and Trump’s decision (whatever it will be) … Well, Iran has already promised retaliation for the T4 missile attack of 9 April – timing and method yet to be determined.

The prospect for war is finely balanced: The Israeli Right want to seize the moment (and – probably – intend to go on, to annex the West Bank, in the fog of war). The Israeli military echelon (like their US military counterparts) is cautious. They are ones to pay the price.

And Trump? Ah … the domestic pressures grow. He must take Congress in the mid-terms (or, in his own words, the “Democrats will impeach him”). There will be few domestic electoral goodies now, waiting on the electoral conveyor belt for November (for the most part, the domestic goodies are behind him). Foreign Policy is where the mid-terms might be won (or lost). A lot hangs in the balance of American domestic politics. 

Israel’s Netanyahu to be guest of honour at Russia’s Victory Day Celebration – By Alexander Mercouris ( The Duran )

Major summit meeting between Russian and Israeli leaders against background of Russia’s 9th May Victory Day Celebration is planned

 

The Russian government has confirmed that Prime Minister Netanyahu of Israel has been invited to attend Russia’s forthcoming 9th May Victory Day Celebration as the guest of honour.  He will also hold high level talks with the Russian government and with President Putin.

The Kremlin’s website has published a statement to that effect

Prime Minister of Israel Benjamin Netanyahu will make a working visit to Moscow on May 9. He has been invited to attend a military parade marking the 73rd anniversary of Victory in the Great Patriotic War.

Mr Netanyahu will also hold talks with President Vladimir Putin.

Israel for its part has confirmed that Netanyahu has accepted Russia’s invitation.

The 9th May Victory Day Celebration is not only a festive day in Russia.  It is also a high point in Russia’s diplomatic calendar.

Foreign leaders who get invited to attend the Celebration are invariably persons in whom Russia takes a special interest, with an invitation being treated as a special honour.

Suffice to say that guests who have previously been invited to attend the Celebration include President Xi Jinping of China (who attended the crucially important 70th anniversary celebration in 2015), Chancellor Angela Merkel of Germany, President Nazarbayev of Kazakhstan and Prime Minister Tsipras of Greece (the latter caused serious offence by failing to turn up).

Russia’s invitation to the Israeli leader will come as a surprise to many people given the recent tensions between Russia and Israel over Syria and Iran.

In reality an invitation to Israel’s leader is an obvious gesture in a celebration of Russia’s Victory over Nazism, with Russia and the Jewish State having not only a shared history of suffering and struggle against Nazism, but also a commonality of interest in opposing Nazism’s recurring manifestations today.

Relations between Russia and Israel continue to be the subject of much misunderstanding.  There continues for example to be a constant drumbeat of criticism against Russia because it is not “defending Syria” from any and every Israeli air strike, even though Russia has never said it would.

I have previously discussed all this at length, and have explained that so long as Israel does not cross Russia’s red lines by launching strikes against Syria which call into question the existence of the Syrian government or which interfere in the conduct of the Syrian army’s operations against the Jihadi terrorists the Syrian government is fighting, then Russia – which is not a party to the Arab-Israeli conflict or to the state of war between Israel and Syria which has existed since 1948 – will not involve itself in them.

All this was hammered out and agreed between Russia and Israel over the course of a summit meeting between President Putin and Prime Minister Netanyahu and their respective military chiefs in Moscow on 21st September 2015, shortly after Russian military operations in Syria began.

Since then, though there have been occasional frictions, the agreement Putin and Netanyahu reached with each other on 21st September 2015 has held, and all the indications are that both the Russian and the Israeli leaders remain committed to it.

Russia and Israel also disagree about Iran, with Netanyahu seeing Iran as the greatest threat to Israel and determined to destroy the Joint Comprehensive Plan of Action agreed between Iran and the world community, whereas Russia is committed to improving its relations with Iran and wishes to preserve the Joint Comprehensive Plan of Action.

On this subject the Russians and the Israelis have agreed to disagree.

In all other respects relations between Russia and Israel are excellent, and the governments of the two countries are determined that they should remain that way.

Israel is not a Russian ally – it is a US ally – but it follows a determinedly independent foreign policy and has no interest in making an enemy of Russia.

Russia for its part learnt its lesson after the 1967 Six Day War that there is no benefit to Russia from making an enemy of Israel.  I have discussed this previously

When following the 1967 Six Days War the Russians did commit themselves wholeheartedly to one side in the Arab-Israeli conflict – backing the Arabs diplomatically, arming the Arabs intensively, sending a strong military force to defend Egypt in 1970 from Israeli air attacks, and breaking off diplomatic relations with Israel – the result for Moscow was a catastrophe.

The USSR’s large Jewish community became alienated, the USSR found that by making an enemy of Israel it had further poisoned its relations with the Western powers at precisely the time when it was seeking detente with them, and the USSR quickly discovered that its Arab ‘allies’ in whom it had invested so much were both ungrateful and treacherous, so that by 1980 the USSR’s entire position in the Middle East had completely collapsed.

The final straw came after the Soviet intervention in Afghanistan in 1979, when volunteers from across the Arab world rushed to fight the Russians in Afghanistan, in a way that they had never shown the slightest indication of wanting to do against Israel on behalf of the Palestinians.

Not surprisingly, the Russians have therefore since the mid-1980s been determined never to become directly involved in any part of the Arab-Israel conflict again.

Thus whilst Russia maintains good relations with the Arab states, and whilst Russia continues to voice support for the Palestinians, Russia has always striven to maintain good relations with Israel as well, and has forged significant economic links with Israel.

Recently there has been some discussion in the media about the possibility of Russia supplying S-300 anti aircraft systems to Syria by way of response to the recent US missile strike on Syria.

Precisely because the supply of S-300 anti aircraft systems to Syria has the potential to disrupt Russia’s otherwise excellent relations with Israel – and given that the US strike on Syria was completely ineffective – I personally doubt the supply of S-300 anti aircraft systems to Syria will take place.

However if it does take place then I expect the Russians to be at pains to assure the Israelis that Russia will maintain operation control over the S-300 in order to ensure that they are not used to threaten Israel’s air force or to affect its operations.

Since it has recently become clear that Syria’s air defence system depends on Russian radar data that should not be difficult to do.

Possibly this will be one of the subjects that Putin and Netanyahu plan to discuss with each other when Netanyahu comes to Moscow on 9th May 2018, though Netanyahu has made clear that for him the biggest issue he will raise with Putin is the extent of Iran’s presence in Syria

Meetings with the Russian president are always important for security of Israel and coordination between the Israeli and the Russian army.  But next week’s talks are especially important in the light of Iran’s growing efforts to create military bases in Syria aimed against Israel.

We [Israel] are resolute to stop Iranian aggression against us, even if it necessitates battle action. It is better to do this sooner than later, as the countries that had demonstrated unwillingness to act against aggression targeting them, had to pay a much higher price later.

[Israel] does not seek escalation, but is ready for any development of the events…..over the recent months, the Islamic Revolutionary Guard Corps has been redeploying to Syria advanced weapons, including ground-to-ground missiles and Iranian air defense weapons posing a threat to Israeli warplanes.

(bold italics added)

Perhaps the trade-off will be Israel’s agreement to the supply by Russia of S-300 anti aircraft systems to Syria in return for assurances by Russia that Russia will take steps (1) to ensure that these systems are not used against Israeli aircraft; and (2) that it will rein in the deployment of Iranian air defence systems in Syria which Netanyahu says are posing a threat to Israel’s aircraft.

As for the general state of relations between Russia and Israel, these were recently described in fulsome but nonetheless essentially accurate terms by Israel’s hawkish Defence Minister Avigdor Lieberman in an interview with the Russian newspaper Kommersant

Israel reveres its relationship with Russia, which has flourished into efficient and transparent cooperation over the past couple of decades, even against the background of tough pressure from its closest partners, Israeli Defense Minister Avigdor Lieberman said in an interview with Kommersant.

“For example, as far as the anti-Russia sanctions go, we flatly refused to join them. Many states expelled Russian diplomats not long ago, all due to the standoff regarding the use or non-use of nerve gas and so on. Israel did not join this action. We have a normal relationship with Russia and we comprehend its interests,” he said, adding that Tel Aviv also expects Moscow to “take into consideration our interests in the Middle East.”

Asked why the positions of Russia and Israel vary widely on such issues as the Syrian crisis, he said that Tel Aviv does not seek to pursue tensions with Russia. “On the contrary, we have established a very clear and frank, transparent dialogue with Russia over the past years, whenever we share opinions and even when we do not share opinions,” the minister said. “We do not interfere in Syria’s domestic affairs. In my viewpoint, Assad is a war criminal responsible for killing over half a million of his own citizens. Assad, the Islamic State, Al Qaeda (outlawed in Russia – TASS), all radicals, Hezbollah are no different in essence. Nevertheless, we do not intend to interfere in Syria’s domestic affairs. What we are not going to accept are any efforts taken by Iran to turn Syria into a foothold targeting us,” he added.

Lieberman acknowledged that Russian and Israeli actions are coordinated in Syria. “There is a phone hotline between Israel’s Defense Forces and the Russian contingent deployed in Syria. We always take into account Russia’s interests in Syria and hope very much that Russia will take into account Israel’s interests related to its security” he stressed.

According to the minister, Israel also bears no threat to Syria’s integrity. “There has been a murderous war for many years there, with at least half a million people dead, hundreds of thousands wounded, and I think the sooner it ends the sooner all of us could breathe easier,” he noted.

Lieberman is of course being utterly disingenuous when he says that Israel is not interfering in Syria’s internal affairs.

However his description of the state of Israel’s relations with Russia is accurate enough.

The Duran
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48 years ago US troops massacred Ohio students and covered it up (VIDEO) – By Matt Agorist (The Free Thought Project) (SOTT)

troops Ohio campus 1970 massacre

© The Free Thought Project

Despite overwhelming evidence of US troops being given orders to open fire on peaceful antiwar protesters at Kent State, not a single person has ever been held accountable.

On May 4, 1970, members of the Ohio National Guard descended on the campus of Kent State University in Ohio to quash and antiwar protest. During the protest, soldiers opened fire on an unarmed group of students-firing 67 rounds in 13 seconds-killing four and injuring nine others. To this date, not a single person has been held accountable and the government still refuses to admit that it participated in the murder of its own citizens.

As the Free Thought Project reported in 2016, Kent State is the one school shooting that the US government wants you to forget.

It has been 48 years since that day and there has yet to be a credible and impartial investigation into the massacre. Also, no group or individual has faced a single consequence for opening fire on innocent students and killing them. Although eight of the National Guardsmen who opened fire that day were indicted by a grand jury, all of their charges were eventually dismissed.

The families of the victims were given $15,000, a statement of regret, and essentially told to get on with their lives.

For decades after the killings, the US government did their best to cover up the shooting. As an in depth explanation from Counter Punch points out, “the US government took complete control of the narrative in the press and ensuing lawsuits. Over the next ten years, authorities claimed there had not been a command-to-fire at Kent State, that the ONG had been under attack, and that their gunfire had been prompted by the “sound of sniper fire.” Instead of investigating Kent State, the American leadership obstructed justice, obscured accountability, tampered with evidence, and buried the truth. The result of these efforts has been a very complicated government cover-up that has remained intact for more than forty years.”

Not until 2010, after undeniable forensic evidence was dug up by independent and private researchers did the real truth of that day begin to surface.

Aurel Krause and Emily Kunstler founded the Kent State Truth Tribunal (KSTT), which helped to expose the sheer lies fed to the American public about what really happened that fateful day.

In spite of this overwhelming and indisputable evidence, in 2012, the US government, once again, refused to reopen the case. However, the truth still came out.

A crucial piece of the conspiracy was apparently uncovered in 2010 that played a pivotal role in exposing the crimes of the US government. Audio recordings were analyzed and subsequently found to record the Guardsmen being given orders to murder the protesters.

The Cleveland Plain Dealer reported on this revelation in 2010:

“Guard!” says a male voice on the recording, which two forensic audio experts enhanced and evaluated at the request of The Plain Dealer. Several seconds pass. Then, “All right, prepare to fire!”

“Get down!” someone shouts urgently, presumably in the crowd. Finally, “Guard! . . . ” followed two seconds later by a long, booming volley of gunshots. The entire spoken sequence lasts 17 seconds.

According to the reports, the review was done by Stuart Allen and Tom Owen, two nationally respected forensic audio experts with decades of experience working with government and law enforcement agencies and private clients to decipher recorded information.

Despite the troops’ claims of protesters throwing rocks at them, the shots were fired from 60 feet away. What’s more, as Allen and Owen point out, there is no audio indicating that the troops who opened fire were getting hit with rocks.

There is undeniable evidence, however, that the US government killed innocent civilians for protesting war and yet still, no one was held accountable and the government refuses to acknowledge it.

As Krause explains, “Kent State remains a glaring example of government impunity, it sends a message that protestors can be killed by the state for expressing their political beliefs. This lack of accountability and hostility towards peaceful expression flies in the face not only of our Constitution, but also our international human rights commitments.”

Indeed, the idea that one’s government can kill them for peaceful protest is chilling, which is why the establishment wants you to forget about it.

Below is a video of what oppression looks like. Americans would do well to remember this did not take place in some tyrannical other country, but right in their own backyard.

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US will face ‘regret like never before’ if it pulls out of Iran nuclear deal – Rouhani – By RT

US will face 'regret like never before' if it pulls out of Iran nuclear deal – Rouhani
The US will be faced with regret if it decides to pull out of the nuclear deal agreed with Tehran, Iranian President Hassan Rouhani has warned, adding that his government has “plans to resist” the move.

“If the United States leaves the nuclear agreement, you will soon see that they will regret it like never before in history,” Rouhani said in a televised speech on Sunday, as quoted by Reuters.

Rouhani went on to state that Tehran has “plans to resist any decision by Trump on the nuclear accord,” and that “orders have been issued to our atomic energy organization… and to the economic sector to confront America’s plots against our country.

“America is making a mistake if it leaves the nuclear accord.”

His remarks come in the lead-up to May 12, a deadline by which US President Donald Trump says America’s European allies must rectify “flaws” in the nuclear agreement. If that isn’t done to Trump’s satisfaction, he says he will refuse to extend US sanctions relief for Iran.

The European allies – Britain, France, and Germany – are committed to sticking to the deal which was signed in 2015, with a recent statement from Downing Street saying they agree it is “the best way of neutralizing the threat of a nuclear-armed Iran.” 

However, in an effort to keep Washington involved, the three nations are seeking to open talks on Iran’s ballistic missile program, its nuclear activities beyond 2025 – when the key provisions of the deal expire – and its role in Middle East crises including Syria and Yemen.

That notion was slammed by Rouhani on Sunday. “We will not negotiate with anyone about our weapons and defenses, and we will make and store as many weapons, facilities and missiles as we need,” he said, stressing the rejection by Iranian leaders to hold talks on Iran’s missile program, which it claims is purely for defensive purposes.

Just a few hours earlier, Trump attorney Rudy Giuliani implied that the president would be nixing Washington’s commitment to the agreement. Trump has called the accord, which was signed under the Obama administration, the “worst deal ever negotiated.”

Trump has also said that he has the power to cancel US participation in the agreement “at any time,” and refused to certify Iran’s compliance with the deal in October, despite confirmation from the International Atomic Energy Agency (IAEA) that Tehran was in compliance with the deal.

Meanwhile, in a controversial television slideshow at the end of last month, Israeli Prime Minister Benjamin Netanyahu claimed that Iran lied about its nuclear program, which makes the 2015 deal invalid. While the US says the slideshow proves that Iran had a “robust, clandestine nuclear weapons program,” the presentation was slammed by Iranian Foreign Minister Javad Zarif as a “coordinated timing of alleged intelligence revelation by the boy who cries wolf.”

Analysts told RT that the timing of the seemingly well-rehearsed presentation was indeed crucial. Dr. Maged Botros, the head of the political science department at Helwan University in Egypt, said that Netanyahu’s presentation was “a setup for Trump,” suggesting it could be a solution for the US president to tear up the deal. 

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Military and non-military escalation into nuclear war. – by R.Lesnoix for The Saker blog

wp-1517041909713..jpg

by R.Lesnoix for The Saker blog

Recent events have put the prospect of nuclear war back into the limelight. We believed we had left this behind when the cold war ended. We were wrong. Not only is it back, it is back with a vengeance. We now face the real possibility of non-military confrontations escalating into all-out nuclear war. This worries me as it seems that the thresholds for these are both lower and more obfuscated. What’s worse is that at least some of the people who may trigger this appear to be both ignorant of these risks and have a less than desirable level of competence.

Nuclear war was typically associated with one of two scenario’s: either a gradual escalation of conventional warfare into (total) nuclear war or an all-out first strike. A first strike could be launched in the hope (or expectation) of destroying enough of the enemies nuclear firepower to make the counterstrike ‘survivable’ or it could be launched to preempt such a first strike by the enemy. If a side feels that it’s own counterstrike capabilities are vulnerable to a first strike, the chance of them launching a preemptive strike go up considerably should they feel threatened.

Still, the second scenario typically also involves an initial conventional military engagement. This would likely be a relatively small scale confrontation. Instead of the gradual escalation of the first scenario in this case one side skips the intermediate steps and goes straight for the jugular. This can be either the side who considers themselves strong enough to get away with a first strike or the side that feels it’s weaker and needs to use-it-or-lose-it.

The risk of the opponent opting for a first strike scenario is why sane people avoid any military confrontation between nuclear powers, especially between nuclear superpowers. Those with even a modest amount of military expertise or insight realize how easily even a small confrontation can get out of hand. During the Cuba-crisis in the 60’s a US warship dropped depth charges to force a Soviet submarine that was stalking the task-force to the surface, not to actually sink it. The Soviet crew thought otherwise. The commander and the XO wanted to fire their nuclear torpedo’s in response to what they felt was a genuine attack. The political officer wasn’t so sure and refused to consent to a launch. All three had to agree before the weapons could be fired. The world was spared nuclear war by what amounts to a ‘minority report’.

Did something similar happen a few weeks ago? Were there dissenting voices within the US government that managed to ‘de-escalate’ the confrontation into a mutually face-saving ‘non-event’? Maybe we’ll find out some day what exactly happened, maybe we won’t. Some give credit to Mattis and Dunford for being the ‘sane’ ones. If they did intervene I’m not so sure ‘sane’ is the right description for their motivation in doing so. See, you don’t get to their level in the US military without being a ‘political’ general with all the baggage that comes with it.

As you know the level of corruption in the DoD is quite large. But what does that really mean? Most think of current and former generals consulting in some way for big business and steering procurements but not much else. The implications of the corruption go much further. If most or all of the the top echelons are corrupt and expect to continue this as private consultants once they leave the military they’ll need to have successors who will let them. While still on active duty they need to make sure their colleagues and subordinates won’t rat them out either. So it is in their interest to ensure promotions of the corrupt(able) and stall the careers of the more conscientious. The same applies at lower levels of the hierarchy. It’s unavoidable. The armed forces are therefor filled with officers who owe their careers not to their military competencies but to either their corruptibility or to being too stupid to notice.

It goes further. When corruption is so incorporated into an organization it becomes dysfunctional. Which means it still functions, just not how it is supposed to. It will malfunction unexpectedly and unpredictably. And often. It will regularly fail to meet even minimum standards of performance. Severe underperformance will be standard. Trying to ascertain the cause of specific failures will be illusive and ‘fuzzy’. Fixes don’t work and no-one tends to be held accountable. This also applies to the corporations on the other side of the corruption. Their organizations are likely to be dysfunctional too in varying degrees. If you doubt it, how about the development issues of these: the F35, the Zumwalt, the LCS, the FCS, the Ford, etc.? They are not surprising if you understand the deeper effects of widespread systemic corruption on organizations.

Mattis an Dunford made their careers during this period of endemic corruption. What does that tell you about them? At the very least they had to know and look away. The difference between them and many of their colleagues looks to be that they do have enough military competence to see what’s going on and what it means for the ability of the US armed forces to wage war. I believe that they know all too well how the decades of ever growing corruption have turned the US military into a force incapable of confronting a (near) peer without unacceptable, even catastrophic, losses. So even if they would win, it would be a Pyrrhic victory.

So if Mattis and Dunford did intervene, don’t ascribe them the virtues of saints just yet. It’s more likely they wanted a scenario they could sell as a success without publicly exposing just how overrated the US armed force are. In a way they are tightrope walkers. They must ‘sell’ US supremacy to the rest of the world on the one hand and on the other hand they need to contain those in their own government (and behind the screens) who actually believe the propaganda and require from the military things they can’t deliver. The Pentagon can’t exactly go around telling all of those in the margins of power what the true state of affairs is. So they juggle and scheme to keep up appearances. Their job is to maintain the perceptions (and not risk their exposure) that allow the Empire to continue to cow and subdue around the world.

They also need to keep the ‘small’ wars going off course. Those are what justifies the Pentagons insane budgets. Because the higher this budget the more money is available for graft and other sorts of corruption. The US DoD has become in large part a financial scam to transfer public funds (tax dollars) into private pockets. These private pockets include current and former military officers, politicians, lobbyists and of course corporate America. A real war with an opponent that can actually fight back and inflict losses too serious to hide might ruin this very profitable scam. Lots of people in influential positions don’t want this to end. People like Mattis and Dunford make sure it doesn’t.

The US DoD is now a front for embezzlements and fraud on a scale counted in trillions (over the decades). In this regard the ability to wage war is mostly relevant in as far as its perception allows for greater sums of tax-payer money to be transferred to the Pentagon. Real capability comes second. With all the funds that are being bled off there has to be a significant difference between stated capabilities and actual capabilities. The stated capabilities are based on the official budgets while the actual capabilities are based on a much smaller amount (due to corruption) and has to take the dysfunctionality of both the military and its suppliers/contractors into account. It’s the logical conclusion of accepting the notion that they are thoroughly corrupt and have been for decades.

So far they have only been fighting colonial wars against opponents with very limited military capabilities of their own. The discrepancy between perceived and actual US military power is not obvious from those wars (although you can tell some things are off if you look really close). The perceived ‘size’ of the ability to wage war justifies inflated operating costs. So more tax dollars that can be diverted into private pockets. From this perspective it doesn’t really matter if a warship is operational or not. It’s mere existence justifies more budget for upkeep. If it is kept fully operational that means less money spent on graft and corruption and more or maintenance, training and functional upgrades. That’s not how the scam works.

Again it’s tightrope walking for the top brass. They need to project power to cow and subdue abroad but they also need to find justifications for increased spending (not to be confused with budget for existing operating costs). Those two tasks clash. Are you all-powerful already or aren’t you? So they’ve been looking for enemies to scare the domestic audience with fanciful what-if’s into forking over more and more of their hard earned dollars. It worked well for a long time. But not now. Russia is a whole other kettle of fish. Russia pushes back in many ways including military. Which is why people like Mattis and Dunford say one thing domestically but do other things behind the screens like having their underlings coordinate with the Russians in Syria. I believe they have a vested interest in steering away from any (near) peer military confrontation. It risks the scam and their careers.

Don’t get me wrong, there are elements in the US armed forces that are quite good at what they do. Some weapon systems are impressive and among the best in the world. There are plenty of capable soldiers and officers (who are unlikely to advance past the rank of major and are typically found in the field, not in staff positions). And overall they are still quite powerful, possibly even number one although I personally doubt it. It’s just that they’re not nearly as strong as they want us to believe. Nor is it anywhere near the level that the huge sums spent on it would warrant. And while elements might perform well on their own, together they don’t.

So when I say overrated that is exactly what I mean, overrated. It does not equal non-existent or absent even though the term is all too often misinterpreted as such. US military power is much less than is commonly believed it is. In other words, it’s overrated. Maybe it’s me but I’m just not impressed. Sure, they have the numbers, but quality wise? I don’t think so. Add in the lack of proper training, deferred maintenance, effectively untested systems (‘tests’, if conducted at all, are highly scripted and performed under ideal conditions to get desired outcomes) and a continued reliance in peacetime on contractor representatives to keep critical systems running (especially in the Navy) and I can’t help but wonder how bad they really are.

It comes down to this, you cannot have it both ways. Either they are quite corrupt indeed which means they are also significantly overrated as a military force or they are as strong as they claim they are which means they can’t be as corrupt as commonly viewed. Which one do you pick?

The title of this piece talks about ‘escalation into nuclear war’. Let’s apply what I mentioned above to that. I tried to make clear in the first part that the risk of such an escalation due to purely military events, while very real, is also seriously overrated. The US military is a lot more vulnerable than commonly believed. This vulnerability will make it hard, if not impossible, for the Americans to keep a war against (near) peers conventional. Especially given their reliance on the Navy and Air Force for force projection and the current level of anti-ship and anti-air missiles (and EW) available to potential adversaries, catastrophic losses seem unavoidable for the Americans in a conventional peer-to-peer setting. Then what?

People like Mattis know this. They cannot afford a military conflict with a (near) peer because it is highly likely it would lead to a situation where they would either have to use nukes tactically or admit defeat. Defeat would not just mean losing the specific engagement or conflict, it would also jeopardize the scam and publicly expose the Empire as much weaker than perceived. Their ability to cow and subdue would suffer or even disappear. So they actively work to prevent such a scenario by avoiding (near) peer conflicts even if they need to work around the White House to do so. While it could still happen, there are plenty of idiots in Washington after all, I am more worried about the risks of non-military escalation into nuclear war, given those same idiots.

As I mentioned in the second and third paragraph, escalation into nuclear war is commonly associated with military confrontation. The public perception is that such an escalation only becomes an issue if there is some kind of military on military incident first. Unfortunately this perception is false. There are several non-military escalatory roads that can lead to that same destination. It starts with a misconception of what war is, or what acts of war are. These are not limited to military confrontations or acts by armed forces of one country.

Those of you familiar with this blog will know that you can make the case that the US and Russia are already at war. At the moment most of it is informational, a big chunk is economic and a small portion is ‘kinetic’. In addition to these categories you could also include covert operations (including assassinations and sabotage), cyber-warfare and diplomacy as non-military means through which war can be waged. All of these have the potential to escalate dramatically, even into nuclear war. Keep in mind though that these are unlikely to be used on their own but probably in some sort of combination with each other. This can create synergistic effects that may be hard to contain.

Let’s look closer at informational warfare. Words have power. Words can have enormous power. Words can also trap you. When the fake video’s out of Douma were published a tweet from the White House promised retribution. That made it very difficult for the Americans not to attack Syria. Not doing so would now look weak. And in American politics looking weak is a mortal sin. So even though they must have had at least serious doubts about the validity of the claims they went ahead. If they had said, “sorry our bad, we were fooled by the video’s” they would have looked only a little bit foolish. Now that it’s glaringly obvious that the chemical attack was faked they look much worse. And they have to stick to their story now. They can’t go back without major loss of face. They hope it will blow over without too much backlash. Worse, they may feel they need a bigger incident (Iran?) to cover this one.

Words can have unforeseen consequences. In the context of international relations it takes smart and calculating people to know what to say and what not to say and when to say it and when not to say it. It takes even smarter people to know when to take something back in order to prevent greater harm to oneself. Diplomacy is an art. There’s a very good reason why it has been so important throughout history. These days I see those smart and calculating people in Moscow. I don’t see them in Washington. One of the most important diplomatic posts in a country these days is that of permanent representative at the UN. If like me you thought it couldn’t get worse than Samantha Power, now we have Nikki Haley for the US. We’ll get back to her later.

Words can also twist peoples perception of reality, especially when repeated again and again. Take the blind fanaticism of the Hitler Jugend in the end phase of the second world war. They had grown up with the constant indoctrination and didn’t know anything else. They became zealots. An indoctrinated populace can be dangerous to yourself. They can force you into directions you never intended to go. This makes the constant accusations against Russia of interfering in and undermining of US democracy very dangerous. Be very, very wary if the Democrats come back to power in the near future. Just like Trump had to act on his Tweet about Douma, the Democrats will have to act on their vilification of Russia. Given how strained US-Russian relations already are that will come with considerable risk to all of us.

The most dangerous of the non-military means to wage war would in my opinion be cyber-warfare and economic warfare. Cyber-warfare is so dangerous because it is all to easy to attribute attacks to the wrong party. These can be false-flag attacks where the ‘victim’ attacks itself and uses these as justification for their own agenda. It can also be mistakenly attributed to the wrong party. Damaging cyberattacks by non-state actors for example could be blamed on Russia, Iran, China or North Korea. Any retaliation against them would in fact not be retaliatory but the opening salvo against an innocent party. They in turn would see it as an unprovoked attack on them and be justified to respond in kind. Enter a cycle of escalations. With cyber-attacks you could also deliberately try to shift the blame on someone else for exactly this reason. There are numerous ways how this could go very wrong unless handled delicately and wisely.

The biggest risk would have to come from economic warfare though. We rarely mention or even think of economic measures as a form of warfare but we should. If an economic measure by one or more governments leads directly or indirectly to the deaths of many people in another country, let’s say more than a million, would the suffering country be right as considering it an act of war? Off course they would. Well, the economic sanctions imposed on Iraq between 1991 and 2003 are thought to have caused around 1.5 million deaths. Iraq was off course to weak to do something about it. Well Russia isn’t. Do you seriously believe they would not retaliate if they where in Iraq’s shoes?

We also tend to make the mistake to think of these spheres as separate. In our minds economic sanctions don’t justify a military response or cyberattacks but why wouldn’t they? If sanctions threaten the lives of millions? A threat to the nation is a threat to the nation and you hit the enemy back where it hurts. If that means switching to different types of actions why not? When the US cut off Japans supply of oil from the East-Indies in 1941 that constituted an existential threat to the Japanese nation. Their economy and armed forces needed that oil or face ruin. It was a de-facto declaration of war against Japan. I’m pretty sure they felt it was. And that’s all that matters. You may disagree or it may not have been your intention but if the aggrieved party considers it to be an act of war and responds on that basis your disagreement is moot.

We wrongly tend to think of non-military measures against countries as relatively harmless. We certainly consider them to be far below any sort of direct military act on the ladder of escalatory steps. Just look at the history books on who started a given war. We blame the one who fired first, not the ones who cut the economic lifeblood of the other. See where that kind of thinking, that as long as you don’t ‘shoot’ it’s not really war, can get us in a lot of trouble? Type ‘economic genocide’ in your favorite search engine and see what you get. It’s a thing.

Unfortunately it’s not just all theory. Recently Nikki Haley had stated that new sanctions against Russia were to be announced the following Monday. Instead of announcing these new sanctions however the White House stated, through Larry Kudlow, that she had been ‘confused’ and ‘mistaken’. You may recall her public rebuttal that she was ‘not confused’. Talk about someone who can’t read between the lines and who can’t put her ego aside for the greater good. But she was probably right. New sanctions were most likely on the table. But then those plans were cancelled. Given Haley’s response this was likely something serious. So what happened? Why were the new sanctions scrapped?

Maybe it’s a coincidence but between Haley’s announcement and the White House backpedalling something interesting happened. The Russian foreign minister had an interview with the BBC. He said a lot things in that interview. One little quote has received less attention than it deserves:

Question: Do you feel you are in a new Cold War?

Sergey Lavrov: I think it’s worse.

Question: Worse?

Sergey Lavrov: Because during the Cold War there were channels of communication; and there was no obsession with Russophobia which looks like, you know, genocide by sanctions.

Genocide by sanctions. Words uttered by the Russian foreign minister. Someone who is not known for hyperbole or exaggeration. Someone who’s words matter. A lot.

Now let’s get back to Putins Presidential address of March 1st 2018 for another quote:

“I should note that our military doctrine says Russia reserves the right to use nuclear weapons solely in response to a nuclear attack, or an attack with other weapons of mass destruction against the country or its allies, or an act of aggression against us with the use of conventional weapons that threaten the very existence of the state. This all is very clear and specific.”

Putin mentions ‘an act of aggression against us with the use of conventional weapons that threaten the very existence of the state’. While not conducted with conventional weapons ‘genocide by sanctions’ would certainly qualify as an ‘act of aggression that threatens the very existence of the state’. That puts it awfully close to what the Russians themselves publicly state is a valid reason for responding with nuclear weapons. You could in fact make a case that economic sanctions are a form of ‘conventional weapons’.

It would go too far to state that Russia would likely respond with an nuclear first strike. It is likely though that they would respond with measures unacceptable to the US. These could be economic measures or something else entirely. What if the undersea cables that connect the US internet to the rest of the world would cease to function? Or what if the domestic energy network in the US would suddenly suffer major failures plunging large parts of the country in the dark? There are numerous non-military ways that they could use to try to ‘pull the plug’ on each other. Now if one were to get convinced the other is about to do just that who knows what action they might take? They might skip conventional military operations altogether.

Russia made it clear that they may use nuclear weapons first should the situation warrant it in their opinion. This year the US published its Nuclear Posture Review 2018. Like the Russians, they do not exclude first use. What’s also worrying is that their respective postures leave ambiguity over where they draw the line. This ambiguity may lead either side to seriously miscalculate the others likely response. Given the sort of people in Washington that would need to do the ‘calculating’ would you trust them to get the answer right? Please, let’s not get even close to that point.

The US main stream media is full of politicians, both Democrats and Republicans, accusing Russia of an ‘attack on the USA’ either because of alleged interference in the elections or unproven cyberattacks. While these are mainly for domestic consumption they also call for retaliatory measures such as more and more severe sanctions. Given the power of words and how hard it can be to take back earlier rhetoric that’s scary stuff. I can actually see the idiots in Washington talk themselves into a corner they can’t or won’t get out off and cross that line.

With regards to military escalation into nuclear war we have people like Mattis and Dunford to run interference no matter what their motivation is. When it comes to non-military acts of aggression against Russia (or China, Iran or North Korea) who do we have? Nikki Haley? John Bolton? Mike Pompeo? So yeah, I do worry a bit about getting into a nuclear war through non-military escalation.

R.Lesnoix is a concerned citizen who grew up during the Cold War under the constant fear of nuclear weapons. He is dismayed with the direction the western democracies are going in.

As US Military Effectiveness and Diplomatic Efforts Fade into Irrelevance Many Countries Start Ignoring Washington – By Federico PIERACCINI (Strategic Culture Foundation)

As US Military Effectiveness and Diplomatic Efforts Fade into Irrelevance Many Countries Start Ignoring Washington

Diplomatic work continues in some of the areas with the highest geopolitical tensions in the world. In recent days there have been high-level meetings and contacts between Turkey, Iran and Russia over the situation in Syria; meetings between Modi and Xi Jinping to ease tensions between India and China; and finally, the historic meeting between Moon Jae-in and Kim Jong-un. The common component in all these meetings is the absence of the United States, which may explain the excellent progress that has been seen.

The last seven days have brought a note of optimism to international relations. The meeting between Modi and Xi Jinping in China offered a regional example, confirmed by the words of Wang Yi, member of the State Counsel of the People’s Republic of China:

“Our [India and China] common interests outweigh our differences. The summit will go a long way towards deepening the mutual trust between the two great neighbors. We will make sure that the informal summit will be a complete success and a new milestone in the history of China-India relations”.

Given the tensions in August 2017 in the Himalayan border area between the two countries, the progress achieved in the last nine months bodes well for a further increase in cooperation between the two nations. Bilateral trade stands at around $85 billion a year, with China as India’s largest trading partner. The meeting between Modi and Xi also serves to deepen the already existing framework between the two countries in international organizations like BRICS, the Asian Infrastructure Investment Bank (AIIB), and the Shanghai Cooperation Organization (SCO), in which they are integral participants. It is imaginable that negotiations on the Belt and Road Initiative (BRI) will be in full swing, with Beijing keen to involve New Delhi more in the project. Such a prospect is particularly helped by three very powerful investment vehicles put in place by Beijing, namely, the New Development Bank (formerly the BRICS Development Bank), the AIIB, and the Silk Road Fund.

Xi Jinping will be seeking to ​​progressively entice India closer to the BRI project through attractive and mutually beneficial commercial arrangements. However, this objective remains complicated and difficult to implement. Beijing is aware of this and has already expressed its intention not to impose the BRI on the neighboring country. With much of the future global and regional architecture depending on these two countries, the good understanding shown between Xi Jinping and Modi bodes well, especially given the commonly aligned objectives represented by the multitude of international organizations and frameworks on which China and India sit side by side.

Another bit of important news for the Asian region has been the meeting between Moon Jae-in and Kim Jong-un, which was recently examined in an article published in Strategic Culture Foundation. As discussed in that article, the intention of the two leaders is to reunite the two Koreas, to denuclearize the peninsula, and to sign a peace treaty between the North and South, whose unprecedented implications entail such questions as whether there is a future role of for the United States on the peninsula. As stated before, the rapprochement between the two Koreas does not play into Washington’s favor, which relies on the South as a strategic foothold to contain China, justifying its presence on the purported need to confront North Korea. With an all-encompassing peace agreement, this justification would cease to exist. It seems that the goal for US policy-makers will be to find an opportunity to sabotage the North-South agreement and blame Kim Jong-un for its failure. Without engaging in a diplomatic tiff with its South Korean ally, the deep state in Washington does not intend to surrender one inch of its military presence on the peninsula, and would even look favorably on the negotiations failing to further damage Trump and his administration.

This is an internal deep-state war that has been going on for years. Obama wanted to abandon the Middle East in order to focus on containing China, altering the military’s structure accordingly to return to a more Cold War stance. This explains the agreement with Iran in order to free the US from its Middle East involvement so as to be able to focus mainly on Asia and to promote it as the most important region for the United States. This strategic intention has met with enormous opposition from two of the most influential lobbies in the American political system, the Israeli and Saudi Arabian. Without the United States, these two countries would be unable to stop Iran’s peaceful but impressive ascent in the region.

Listening to four-star generals like Robert Neller (Commandant of the Marine Corps) and others less distinguished, one comes to appreciate the extent to which the US military is in strategic chaos. The military has been the victim of epochal changes with each presidency. Pentagon planners would like to simultaneously confront countries like Russia, China and Iran, but in the process only decrease effectiveness due to imperial overstretch. Other politicians, especially from the neocon area, argue for the need to transform the US armed forces from a force suitable for fighting small countries (Iraq, Afghanistan, Syria), Middle Eastern insurgencies, or terrorist groups (a pretext originating from the 1990’s and the first Gulf War), to a military able to face its peer competitors with all weapons available. Such a realignment does not occur over a short period of time and requires an enormous amount of money to reorganize the armed forces.

In this struggle between components of the deep state, Trump lumbers into a policy that stems from his electoral campaign rather than a considered strategy. Trump showed himself in his campaign to be strongly pro-Israel and strongly pro-armed forces, which has had the practical result of increasing military spending. Tens of billions of dollars worth of agreements have been realized with the richest country in the Middle East, Saudi Arabia, for arms purchases, and the Joint Comprehensive Plan of Action (JCPOA) is viewed negatively. Trump’s interventions in Syria confirm that he is under the strong influence of that part of the deep state that is adamant that the United States should always be present in the Middle East, should openly oppose Iran, and, above all, should prevent the Shiite arc from extending its influence to cover Iraq, Syria and Lebanon.

The reasoning employed by Trump and his administration confirms this direction in Washington’s strategy, involving greater cooperation with Beijing to solve the Korean issue; less of an effort to decrease Moscow’s influence in Syria and in the Middle East in general; and greater belligerence towards Iran, with a general shift away from Asia and towards the Middle East, backtracking away from Obama’s pivot to Asia.

Trump seems to give the impression of wanting to face China from an unprecedented direction, with a trade war that would inevitably end up damaging all sides.

In this ad hoc strategy, the European allies play an important role in Washington’s intention to cancel or modify the Iranian nuclear agreement. Following the meetings in Washington between Trump and Macron, and then with Merkel, both European leaders seem more or less open to a modification of the JCPOA, provided that Trump backs away from placing tariffs on European countries, an appeal to which the English premier Theresa May adds her name. It seems a desperate tactic, given that one of the issues Trump is pinning his 2020 campaign on is being able to fix the trade imbalances between the US and the EU, without which he will be unable to claim to have kept his promises.

The United States has many cards to play, but none is decisive. In Korea, the peace process depends very little on Trump’s intentions and more on the willingness of the two key parties to reach a historic agreement to improve the lives of all citizens of the peninsula. I predict the deep state will try to blame the DPRK for a failure of the negotiations, thereby bringing to Asia the chaos in international relations that the US has successfully brought to other parts of the world. The People’s Republic of China will therefore try to replace the United States in negotiations in order to bring the two negotiating parties closer together.

In the same way, an attempt to sabotage the JCPOA will only drive Russia, China and Iran into a strategic triangle, about which I was writing more than a year ago. A unilateral exit from the nuclear agreement will help delegitimize Washington’s international role, together with the sabotage by the deep state of the peace agreement in Korea. It will be a pincer effect resulting from the chaos and the internal struggle of North American and European elites.

Success in the negotiations in Korea could pave the way for a protection umbrella for the DPRK guaranteed by China and Russia, in the same way the two could grant Iran all the diplomatic support necessary to resist the American and European pressure to cancel the JCPOA. Ultimately, the rapprochement between India and China, in view of important agreements on the BRI, could seal comity and cooperation between the two giants, leading the Eurasian area under the definitive influence of India, China, Russia and Iran, and guaranteeing a future of peaceful economic development to the most important area of ​​the globe.

The United States finds itself divided by a war within the elite, where Trump’s presidency is continually attacked and de-legitimized, while the coordinated assault on the dollar continues apace through gold, the petroyuan, and blockchain technology. US military power is showing itself to be a paper tiger unable to change the course of events on the ground, as seen recently in Syria. The loss of diplomatic credibility resulting from the sabotage of the JCPOA, and Washington’s inability to sit down and sincerely negotiate with the DPRK, will deliver the final coup de grace to a country that is struggling to even remain friendship with her European allies (sanctions imposed on Russia, sanctions on European companies participating in the North Stream 2, and tariffs in a new trade war).

The US deep state remains on this path of self-destruction, perennially torn between opposing strategies, which only accelerates Washington’s unipolar decline and the emergence in its place of a multipolar world order, with New Delhi, Moscow, Beijing and Tehran as new poles over an immense area  comprising the Middle east and all of Eurasia.

Why the Deep State Hates Putin – ByChris Kanthan (Sott.net)

cold war nuke hysteria

Russophobia in America today is as intense as it was at the height of Cold War when terrified school kids had “Duck and Cover” drills and the public was obsessed with bomb shelters. However, all the drama hides the real conflict: geopolitical power struggle for world domination, which involves hundreds of trillions of dollars, massive egos of Machiavellian elites, and nations driven by memory of the past and visions of the future.

Here’s the big picture: it’s a geopolitical battle of USA + EU versus Russia + China. The US and EU are governed by the same banking and military-industrial overlords, while Russia and China – two independent countries – have made an alliance out of necessity. Why? If Russia falls, China will be the next.

Get the bear, you get the dragon, and thus you get the world.

But here is the kicker: the globalists did trap the bear in 1991 when the USSR collapsed. However, rather than befriending the bear, they caged it and then starved, tortured and humiliated it for the next eight years. That’s when the bear tore down the cage and fought back.

Betrayal in the 1990’s

The biggest theft of the century happened in Russia in the 1990’s, and the perpetrators were Wall Street shysters who promised miracles of capitalism, but instead dismantled the entire country. In the name of privatization, Russia was put up for fire sale. A handful of Russian oligarchs, carefully selected by the US, ended up with assets worth hundreds of billions of dollars. In exchange, each Russian citizen got a “share” worth $7. The US taxpayers even subsidized this disgusting racket.

Under this shock therapy administered by American vulture capitalists, Russia’s GDP fell 40%. The country was loaded up with crushing debt from the IMF and World Bank, and poverty and suicide soared.

yeltsin

The Russian military was decimated, demoralized and was badly losing wars to Islamic terrorists in Chechnya and Dagestan. Oh, these terrorists were the same Mujahideen from Afghanistan and were still funded by Saudi Arabia and armed by the US.

Most Russian politicians, including President Yeltsin, were bought off and controlled by Washington, as Bill Clinton bragged to Tony Blair.

Putin’s Empire

Under these dreadful circumstances, Putin became the Acting President of Russia on Dec 31, 1999. Over the next few years, he took on the powerful oligarchs, corrupt politicians and the elites who formed the fifth column. Putin was helped by rising oil prices, but he used the new wealth wisely. He grew the Russian economy, built up gold and foreign reserves, and significantly reduced the national debt.

  1. Between 1999 and 2014, Russia’s GDP grew 10-fold and it’s world rank surged from 22nd to 8th
  2. Russia’s debt-to-GDP ratio fell from 100% in 1999 to 17% in 2016
  3. Foreign reserves grew from virtually nothing to the 6th largest in the world
  4. Gold reserves grew to become the 5th largest in the world

Putin started RT – Russia’s own global news channel, banned GMO, turned Russia into the #1 exporter of wheat, kicked out George Soros, and fought Cultural Marxism. He built over 15,000 churches, encouraged families to have more children, and banned transgender/gay propaganda to children.

putin patriarch

Finally, Putin rebuilt Russia’s military, crushed Islamic terrorists in Chechnya and, in a geopolitical stunner that transpired in Syria, prevailed against a mighty coalition of the US, Israel, UK, France, Turkey, Saudi Arabia, Qatar and up to 250,000 jihadists. Also, rather than getting into an arms race, Putin has developed hypersonic missiles which have made the former ability of US defense systems and aircraft carriers to attack other nations with impunity moot.

Putin’s diplomacy has also been remarkable. After the 2014 US sanctions and the precipitous fall in oil prices, every pundit and politician predicted the isolation of Putin and the demise of Russia’s economy. However, leaders around the world continued to work with Putin.

putin leaders

In other words, Putin made Russia great again. This is why his approval rating is still over 80% and he easily won the reelection in 2018.

Russia under attack

However, the globalists have had their own victories as well. In 2003-2004, pro-Russia governments in Georgia and Ukraine were overthrown by George Soros’ color revolutions. In 2014, the US staged a violent coup in Ukraine, overthrew a democratically elected leader, and replaced him with an unelected billionaire and a coterie of neo-Nazis.

Ukraine has been a CIA target for decades. As Brzezinski wrote in his book, The Grand Chessboard, Russia will be paralyzed without access to Crimea and the Black Sea – the only Russian gateway to the Mediterranean Sea. Sensing danger after the 2013 coup, Putin quickly held a referendum in Crimea and solved the issue.

Another area where Russia was backstabbed: NATO expansion. Contrary to the promises made during the dissolution of USSR, NATO has added 13 new European countries, which are all potential hosts for US/NATO military bases. Many of these countries are now part of the missile defense system. What this means is that the US could first launch a nuclear attack against Russia and then, theoretically, shoot down the missiles that Russia fires in response. The entire situation is extremely volatile and dangerous – Russia has 6,800 nuclear weapons.

All this bullying is just a symptom of the wounded egos of globalists who have failed in their attempts to conquer Russia definitively. In fact, they tried to do so six times in the last 200 years -1812, 1856, 1905, World War I, World War II, and the Wall Street takeover of Russia in the 1990’s.

Rothschilds, Bolshevism and Hitler

In 1812, funded by the Rothschilds, Napoleon invaded Russia. In 1856, Britain and France attacked and took over Crimea-for the same reason that the US staged a coup in Ukraine in 2013.

In 1905, banksters on Wall Street – Jacob Schiff and others – funded Japan to attack Russia. In the midst of the war, the banksters tried to foment a revolution and overthrow the Czar. The guy who lead the revolution was Leon Trotsky. He failed in 1905 and fled Russia, but came back in 1917 using the same playbook, using Germany instead of Japan.

Before World War I, Trotsky and Lenin raised millions of dollars from international banksters. Trotsky visited New York and got an American passport so he could sneak back into Russia. Flush with cash from capitalists, the communists (Bolsheviks) killed the Czar during World War I and quickly signed a peace treaty with Germany. Danke Schoen!

soviet posters

Thus the evil empire of Soviet Union was a creation of America and Europe – a fact that is erased from Western history books. The Soviet Union was the result of a civil war fomented by outside forces – a civil war in which the bad guys won. Bolshevism was a foreign virus that invaded Russia, killed tens of millions of Russians and tried to destroy Christianity – Russian’s religion for over 1000 years. However, when Americans think of “Russians,” they are only taught to think of the Soviet Union.

Fast forward to World War II, it was again Europe (Germany) that attacked Russia. 20 million Russians died fighting the Nazis, two million just in the city of Leningrad. Russia fought the Nazis for four years and destroyed 70% of Hitler’s army. However, the US came at the end of the game (in 1944) and got all the accolade for “defeating the Nazis.”

Moving Forward

Knowing all this, an honest person would not cast Russia as the enemy of the West. Russia will be an enemy only if we demand its subservience. Russia and China are determined to preserve their sovereignty. They are also trying to break free from the petrodollar system, which lets the US borrow trillions without repercussions.

Global conflicts and wars are very addictive for the military-industrial complex, which holds 800 military bases around the world, a $700 billion a year budget and $35 billion/year of weapons exports. Wars also mean massive debts for nations, which is exactly what the international banksters want. Global corporations are drawn to a unipolar world because that guarantees them monopoly, cheap labor and raw materials and access to customers. Social engineers rely on monolithic corporate media to spread the same propaganda all over the world. Will the confluence of these forces refuse to accept a multipolar world? Will they push us into disastrous wars, potentially even a nuclear war?

Let’s remember JFK’s “Peace Speech” from 1963:

jfk peace quote
Avatar

Chris Kanthan (Profile)

Chris Kanthan is the author of a new book, Deconstructing the Syrian war.. Chris lives in the San Francisco Bay Area, has traveled to 35 countries, and writes about world affairs, politics, economy and health. His other book is Deconstructing Monsanto.. Follow him on Twitter: @GMOChannel

Actually, Iran is Complying With the Nuclear Agreement but the U.S. Isn’t – by Darius Shahtahmasebi (MINT PRESS)

Targeting Iran by Carlos Latuff for MintPress News

U.S. (and its allies) ‘to prevent interference with the realisation of the full benefit by Iran of the sanctions lifting specified’ in the deal. Section 29 commits the U.S. and Europe to ‘refrain from any policy specifically intended to directly and adversely affect the normalisation of trade and economic relations with Iran.’ Section 33 commits them to ‘agree on steps to ensure Iran’s access in areas of trade, technology, finance and energy.’”

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