Friday, August 02, 2013
Paul Craig Roberts: "Washington, having turned the US into a lawless state, no longer has any conception of legal procedure. Law is whatever serves Washington. As Washington sees it, law is nothing but Washington’s will. Any person or country that interferes with Washington’s will is behaving unlawfully."
Triple-Feature: “America Discredited,” “Bradley Manning Verdict Convicts Washington,” and “Hiding Economic Depression With Spin” — Paul Craig Roberts
August 1, 2013 | Original Here Go here to sign up to receive email notice of this news letter
Paul Craig Roberts
As Washington loses its grip on the world, defied by Venezuela, Bolivia, Ecuador, and now Russia, the US government resorts to public temper tantrums. The constant demonstration of childishness on the part of the White House and Congress embarrasses every American.
Washington’s latest outburst of childish behavior is a response to the Russian Immigration Service granting US whistleblower Edward Snowden asylum in Russia for one year while his request for permanent asylum is considered. Washington, having turned the US into a lawless state, no longer has any conception of legal procedure. Law is whatever serves Washington. As Washington sees it, law is nothing but Washington’s will. Any person or country that interferes with Washington’s will is behaving unlawfully.
Because Obama, like Bush before him, routinely disobeys US law and the US Constitution, the White House actually thinks that Russian President Putin should disobey Russian and international law, overturn the Russian Immigration Service’s asylum decision, and hand over Snowden to Washington.
Washington expected Russia to hand over Snowden simply because Washington demanded it. Like a two-year old, Washington cannot conceive that its demands don’t take precedence over international law and the internal legal procedures of every country. How dare Russia stand up for law against “the indispensable nation.”
The White House spokesman, who is so unimpressive that I cannot remember his/her name/gender, declared that the White House moron might punish Putin by not going to visit him in Moscow next month. I doubt Putin cares whether the WH moron shows up.
The WH moron’s term of office is close to an end, but Putin, unless the CIA assassinates him, will be there for another decade. Moreover, every Russian leader has learned that a US president’s word means nothing. Clinton, the two Bushes and the current WH moron violated every agreement that Reagan made with Gorbachev. Why would the president of Russia, a nation ruled by law, want to meet with a tyrant?
Not to be outdone by the WH in childish behavior, members of the House and Senate added their two-bits to America’s embarrassment. Congressional morons “reacted furiously,” according to news reports, and warned “of serious repercussions in US-Russian relations.” Here we have another extraordinary demonstration of Washington’s hubris. Only Russia has to worry about repercussions in the relationship. Washington doesn’t have to worry. His Imperial Majesty will simply deny Putin an audience.
Congress seems unaware of its schizophrenia. On the one hand Congress is outraged about the National Stasi Agency’s illegal and unconstitutional spying–especially on Congress–and is attempting to defund the Stasi Agency’s surveillance program. The amendment to the military spending bill by Justin Amash, a Republican from Michigan, almost passed. The amendment was barely defeated by votes purchased by the spy industry.
On the other hand, despite its outrage over being spied upon, Congress wants the scalp of the brave hero, Edward Snowden, who informed them that they were being spied upon. Here we have a demonstration of the historical stupidity of government–shoot the messenger.
Only a few right-wing crazies believe that universal surveillance of every American is necessary to US security. The National Stasi Agency will fight hard and blackmail every member of the House and Senate, but the blackmail itself will lead to the National Stasi Agency’s wings being clipped, or so we can hope. If it is not done soon, the Stasi Agency will have time to organize a false flag event that will terrify the sheeple and bring an end to the attempts to rein in the rogue agency.
The United States is on the verge of economic collapse. The alleged “superpower,” a bankrupt entity, was unable after 8 years of efforts to occupy Iraq and had to give up. After 11 years the “superpower” has been defeated in Afghanistan by a few thousand lightly armed Taliban, and is now running for cover with its tail between its legs.
Washington compensates for its military impotency by committing war crimes against civilians. The US military is a great killer of women, children, village elders, and aid workers. All the mighty “superpower” can do is to lob missiles shot from pilotless drones into farm houses, mud huts, schools, and medical centers.
The schizophrenic denizens of Washington have made Americans a hated people. Those with the foresight to know to escape from the growing tyranny also know that wherever they might seek refuge, they will be seen as vermin from the most hated nation and subjected to being scapegoated as spies and evil influences, and at risk of being decimated in reprisals against Washington’s latest atrocity.
Washington has destroyed the prospects of Americans both at home and abroad.
Bradley Manning Verdict Convicts Washington
Paul Craig Roberts
Bradley Manning’s conviction is more conclusive evidence that the US government is illegitimate. Manning’s “trial” was equivalent to Joseph Stalin’s “trial” of Nikolai Bukharin. It did not take place in a real court with a real jury. The military officer who served as a “judge” was not impartial. Manning was convicted for obeying the US Military Code and doing his sworn duty to report war crimes. There is no difference between Manning’s “conviction” and the “conviction” of Bukharin as a capitalist spy. Both trials were political trials.
The absurdity and injustice of these two convictions tells you all you need to know about the governments behind the convictions. The governments are tyrannical. Imagine the US government accusing Manning of aiding the enemy when the US government itself is supporting al Qaeda’s attempt to overthrow the Syrian government! And Bloomberg reports that al Qaeda backers in Afghanistan are receiving US military contracts! http://www.bloomberg.com/news/2013-07-30/al-qaeda-backers-found-with-u-s-contracts-in-afghanistan.html
Americans are a gullible people. They do not understand that the “justice system” is corrupted. Prosecutors and judges have no interest in innocence or guilt. For them conviction alone is the mark of career success. The more people a prosecutor can put in prison, the more successful his career. The more judges bend justice to serve the success of the government’s case, the greater the probability of promotion to higher judicial office. American “justice” has degenerated. Willingness to corrupt the law has become the highest qualification for appointment to a judgeship or as a US Attorney.
If Manning had been permitted a real trial, possibly jurors might have weighed the evidence. Did Manning obey the Military Code or disobey it? Did Manning serve the public interest or harm it? But, of course, nothing relevant was part of the trial. In American courts today, exculpatory evidence is not allowed into the courtroom.
If a poor person steals a loaf of bread, the government can turn the case into an act of terrorist sabotage. That’s more or less what the government did to Bradley Manning.
Hiding Economic Depression With Spin
Paul Craig Roberts
Time is running out for the US economy and the American people. The financial press and economic commentators, with few exceptions, do a good job of keeping this fact from the public.
Consider for example the spin put on the “advance estimate” of the real GDP growth rate for the second quarter announced on July 31. The annual rate of 1.7 percent real GDP growth for the second quarter of 2013 was presented optimistically as an acceleration in real GDP from the first quarter’s 1.1 percent growth rate. However, the reason for the “acceleration” in growth is that the first quarter’s estimate was revised down from 1.8 percent to 1.1 percent. The second quarter GDP growth rate is also subject to revised estimates. Most likely, the final number will be lower.
Consider also that the reason that real GDP is positive is that nominal GDP is deflated with an understated measure of inflation. The measure of inflation has been manipulated in order to deny Social Security recipients cost of living adjustments. Statistician John Williams (shadowstats.com) reports that if deflated by previous official methodology, GDP growth has been negative since the downturn in 2007. In other words, the “recovery” is just another government hoax.
Another failure of the financial press and economic commentators is the interpretation of the Federal Reserve’s policy of Quantitative Easing. The Fed is said to be keeping interest rates low in order to stimulate business investment and the housing market. This explanation is nothing but cover for the real purpose of QE, which is to drive up and keep high the debt related derivatives on the books of the banks too big too fail. Low interest rates pull up the prices of all debt instruments, and the higher prices raise the values on the banks’ balance sheets, making the banks look more solvent or less insolvent.
The Fed has continued QE for years, despite the policy’s failure to revive the economy, in order to hold the banks’ collapse at bay in the hopes that the banks would succeed in boosting their earnings sufficiently to get out of trouble.
The Fed’s QE policy has been costly for important areas of the economy. Retirees have been denied interest income. This has reduced consumer expenditures and, thereby, GDP growth, and it has forced retirees to draw down their savings in order to pay their bills.
The Fed’s QE policy has also jeopardized the US dollar because of the several-fold increase in the number of dollars over the last few years. In order to support bond prices, the Fed has created 1,000 billion new dollars annually over the last several years. The supply of dollars has out grown the demand for dollars, putting the dollar’s exchange value under pressure. To protect the dollar from QE, the Fed and its dependent bullion banks have engaged in ruthless shorting of gold in order to suppress the price of gold. The rapidly rising gold price indicated falling confidence in the dollar, and the Fed feared that this lack of confidence would spread into the currency markets.
By printing dollars to support the banks, the Fed has created a bond market bubble, a stock market bubble, and a dollar bubble. If the Fed stops printing money, not only will the banks’ balance sheets take a hit, but so will the bond, stock, and real estate markets. Wealth would be wiped out. No one could any longer pretend that there is an economic recovery.
The impact on the dollar is less clear. On the one hand, curtailment of the dollar’s rapid increase in supply would help the currency. On the other hand, the drop in values of dollar-denominated assets, such as stocks, bonds, and real estate could cause the demand for dollars to decrease. Foreigners for example who sell dollar-based assets might also convert their dollar proceeds into their domestic currencies.
The failures of the financial press require the explanation that I have provided of QE, the bubble economy, and the manipulated measures of real GDP, inflation, and unemployment. However, although these explanations are necessary, they are themselves a diversion.
The real reason that the US economy cannot recover is that it has been moved offshore. Millions of US manufacturing and tradable professional service jobs such as software engineering have been moved to China, India and other countries where wages and salaries are a fraction of those in the US. Using “free trade” as a cloak, corporations have turned labor costs into a profits center. The drop in labor costs raises profits, which are then distributed to executives as “performance bonuses” and to shareholders as capital gains. The impact on US employment can be seen from the BLS monthly payroll jobs data and from the declining US labor force participation rate. The participation rate is not falling because consumer incomes are rising and fewer family members are needed in the work force. The rate is falling because discouraged workers have given up looking for employment and have left the work force.
The use of foreign labor in place of US labor is beneficial to executives and shareholders in the short-run, but it is detrimental in the longer-run. The long-run effect is to destroy the US consumer market.
When jobs offshoring halted the rise in US consumer income, in order to keep the economy going the Federal Reserve substituted a growth in consumer debt for the missing growth in consumer income. For example, the housing bubble created by Federal Reserve chairman Alan Greenspan allowed home owners to spend the inflated equity in their homes by refinancing their mortgages. The substitution of consumer debt for the missing growth in real wages and salaries is limited by the burden of debt on households. Unlike the government, American citizens cannot print the money with which to pay their bills. Once consumers were unable to take on more debt, the consumer economy ceased to expand.
The government can print money with which to pay its bills, but if history is a guide, governments cannot forever print money without serious consequences. The real economic crisis will hit when the bubble economy can no longer be supported by the printing press.
It should be obvious to economists, but apparently is not, that Walmart-type jobs of the “New Economy” do not pay sufficiently to support a consumer-dependent economy. As Obamacare is phased in, consumer purchasing power will suffer another blow. Even the subsidized premiums are expensive, and the cost of using the policies in terms of deductions and co-pays will be prohibitive for most. As employer-provided benefits and Medicare are cut back, the health care crisis will worsen in the midst of an economic crisis.
The scary part of the pending economic crisis occurs when the federal budget deficit widens as the economy contracts and the Fed finds itself in a situation where it cannot print yet more dollars without causing a loss in confidence in the dollar and US Treasury bonds. What does a desperate government do in such a situation? It confiscates what remains of private pensions, piles on taxes, and drives the people and the economy deeper into the ground.
This is the path that US economic policy is on. What is the solution?
Capitalism could be allowed to work and the banks to fail. It is cheaper to bail out depositors than to bail out the banks.
Corporations could be taxed on the basis of the geographical location at which value is added to their product. If corporations create the goods abroad that they market to Americans, they would have a high tax rate. If they create value domestically with US labor, they would have a low tax rate. The tax difference could be used to offset the labor cost advantage of offshored production.
It would take time, but jobs would come back to the US. Cities, states, and the federal government would slowly see their tax bases rebuilt. Consumer incomes would again rise with productivity, and the economy could be put back together.
As for the federal deficit, it could be significantly reduced by ending Washington’s wars. As various experts have established, these wars are extremely expensive, adding trillions of dollars to the financing needs of the US government. As other experts have shown, the wars do not benefit anyone but a narrow clique of military/security industries. Obviously, it is not democratic to destroy a people’s future for the sake of special interests.
Can these solutions be implemented or are the entrenched special interests too strong and too short-sighted?
There is no prospect of finding out as long as the financial press and economic commentators are immune to reality. Until the real situation is understood, nothing can be done. It is difficult to sell a solution when the problem is not recognized and understood. That is why I focus on explaining the problems.