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From Ferguson to Freedom, Part 1: Race, Repression and Resistance in America
By: Andrew Gavin Marshall
11 December 2014
On 9 August 2014, a white cop murdered an unarmed black teen in a predominantly black neighborhood and black city dominated by white police with a history of violence toward poor, black communities, and in a city dominated by white power structures and with a long history of racism and segregation. More than three months later, that white cop was exonerated of any wrongdoing.
The cop, Darren Wilson, was not simply exonerated for the murder, but he was rewarded. The white cop who murdered 18-year-old Michael Brown was rewarded with a crowd-funded amount of more than $400,000 – as racists around the country sought to throw a few dollars in support of murdering unarmed black teens. On October 24, one month to the day before the verdict was announced, as Michael Brown’s family was still coming to terms with his murder, Darren Wilson got married to Barbara Spradling, also a member of the Ferguson Police Department. Since he murdered the unarmed 18-year-old Brown in August, Wilson had been rewarded with being on “paid administrative leave.” After the verdict was delivered, Wilson remained on paid leave. And as Wilson was rewarded for taking the life of an innocent boy, he announced that he and his wife were expecting a child of their own.
On August 10, a candlelight vigil for Michael Brown erupted into an urban rebellion (commonly called “riots”), as people expressed their anger and frustration of the systemic and institutionalized injustice, and were met with overwhelming police force. As the protests continued and further rebellions erupted, the police sent in the SWAT team, already having shot protesters with rubber bullets and engaged in chemical warfare shooting teargas at them. The police were even arresting reporters, from the Huffington Post and Washington Post, and journalists from Al-Jazeera were shot at with rubber bullets and then tear gassed. Protests continued, and police continued to shoot rubber bullets, use excessive amounts of tear gas, flash grenades and smoke bombs against demonstrators, which then had the effect of triggering the rebellions (or ‘riots’). Wearing military fatigues and riot gear, police deployed armored vehicles similar to those in Afghanistan and Iraq, aiming high-powered rifles at American citizens in a town of 20,000 people.
On August 16, a week after Michael Brown was murdered, Missouri Governor Jay Nixon declared a state of emergency and implemented a curfew in Ferguson. The top cop in charge of Ferguson at the time, State Highway Patrol Capt. Ron Johnson, stated that, “We won’t enforce [the curfew] with trucks, we won’t enforce it with tear gar.” The police then used trucks, smoke and tear gas against protesters to enforce the curfew, in what became the fiercest night of violence until that point. Another curfew was announced for the following night. Two hours before the curfew went into effect, police fired tear gas and flash grenades into assembled protesters in order “to disperse the crowd.”
The Governor then deployed the National Guard in Ferguson on August 18. Obama appealed for “calm.” More reporters were arrested. Three days later, the National Guard was removed from Ferguson. The following few days were relatively calm, though police continued to arrest people. The calm followed the convening of a grand jury to investigate Darren Wilson’s murder of Michael Brown. The US Attorney General Eric Holder even flew to Ferguson, and later commented than an FBI investigation into civil rights violations in Ferguson “will take some time.” Throughout this period, police in Ferguson and St. Louis continued to threaten protesters, aim weapons at them, and even murdered another man. The protests largely calmed down, and thousands attended the funeral of Michael Brown on August 25.
Smaller protests continued into September, and in late September the Ferguson Police Chief Thomas Jackson decided to march in civilian clothes with a crowd of people demanding his resignation, hours after he released a “video apology” to the Brown family. In less than 30 seconds of Jackson joining the crowd, agitating many of those assembled, riot cops moved in to ‘protect’ him, prompting a confrontation with the protesters and declaring the protest an “unlawful assembly.” Protests continued for the following few days with police continuing to declare protests as unlawful, threatening to arrest people who stayed in one place for too long or who moved off the sidewalk and onto the street.
However, over a dozen protesters who were assembled on the sidewalk were arrested outside the Ferguson Police Department in early October, after which they were fitted in orange jumpsuits, locked behind bars for several hours with higher bail amounts than usual, some as high as $2700. Their charges included “failure to comply with police, noise ordinance violations and resisting arrest,” when assembled peacefully – and legally – on a sidewalk. Among those arrested was a journalist. Ferguson Police Chief Jackson then handed his responsibility for “managing protests” to the St. Louis County police department. In early October, a St. Louis Symphony Orchestra performance was interrupted by protesters who sang a civil rights song, ‘Which Side Are You On?’
On 11 October, hundreds of people took to the streets for a weekend of protests what they called ‘Ferguson October’. Roughly 43 people were arrested for assembling outside the Ferguson Police Department, including professor and author Cornel West. A Missouri State Senator was also arrested during a protest several days later.
On 17 November, one week before the grand jury decision was to be announced, Governor Jay Nixon declared a state of emergency and authorized the National Guard to again be deployed in Ferguson. At the same time, the St. Louis County police chief Jon Belmar declared that police in Ferguson had not used rubber bullets or force against “peaceful protesters,” but against “criminal activity.” Days prior to the verdict, buildings were being barricaded around Ferguson in anticipation of “unrest.”
The Department of Homeland Security showed up in St. Louis prior to the verdict. As Homeland Security vehicles began to mass near Ferguson, a local Navy veteran was fired from his job and called a ‘terrorist’ after posting pictures of the vehicles on Facebook. Federal officials began arriving in Ferguson and St. Louis a few days before Governor Nixon declared his state of emergency. Despite announcements to “review” the transfer of military equipment to domestic police forces following the earlier social unrest in August, the Pentagon had continued to supply police forces in Missouri with “surplus military gear.”
Police forces in America have been increasingly militarized, starting with the ‘War on Drugs’ (aka: War OF Drugs) and rapidly expanded under the ‘War [on/of] Terror’. Across the country, police forces “have purchased military equipment, adopted military training, and sought to inculcate a ‘soldier’s mentality’ among their ranks,” noted The Atlantic in 2011. Since the 1960s, SWAT teams emerged in cities across the United States, marking the rise of the “warrior cop,” initially prompted by the urban rebellions of the 1960s in predominantly poor black communities. Since 2002, the Department of Homeland Security has handed out over $35 billion in grants to purchase military gear. The Pentagon has distributed more than $4.2 billion of equipment to local law enforcement agencies across the US.
These were the highly militarized police forces originally deployed against protesters in Ferguson in August of 2014, with armored vehicles, sound weapons, shotguns, M4 rifles, rubber bullets and tear gas. At the time, former Army officer and international policing operations analyst, Jason Fritz, was quoted in the Washington Post as saying, “You see the police are standing in line with bulletproof vests and rifles pointed at people’s chests… That’s not controlling the crowd, that’s intimidating them.” The New York Times referred to Ferguson as “a virtual war zone,” warning that if nothing is done to stop the national militarization of police forces by the Department of Homeland Security and the Pentagon, then “the future of law enforcement everywhere will look a lot like Ferguson.”
The verdict on November 24, giving Wilson the gift of freedom for depriving Michael Brown of his own freedom (and life) prompted quick reactions in the streets. Protests started in Ferguson, and quickly erupted into urban rebellion with cars and buildings torched and destroyed. Governor Nixon then deployed more National Guard troops in Ferguson, with more than 2,200 deployed in the town of 22,000 people. Protests spread the following day to 37 different states in over 130 demonstrations, with significant numbers and acts of social disobedience in New York, Boston, Washington D.C., Chicago, Minneapolis and Los Angeles. More than 170 U.S. cities experienced protests on the night of November 25, drawing thousands of people to the streets, “blocking bridges, tunnels and major highways.”
Obama declared that he did “not have any sympathy” with “those who think that what happened in Ferguson is an excuse for violence.” As protests spread, more than 400 people were arrested around the US. In Los Angeles, over 150 people were arrested. Reflecting on the lessons he drew from the rebellions on the night of November 24, St. Louis County police chief Jon Belmar said, “you can never have too many policemen.”
Protests not only spread across the United States, but internationally. Protests spread across cities in Canada, including Toronto, Ottawa, Calgary, and Montreal. Protests also spread to London, where thousands assembled outside the U.S. Embassy, drawing parallels to the case of Mark Duggan, a young black man whose murder by police in August of 2011 prompted the largest riots in recent British history.
One week after the grand jury decision on Darren Wilson prompted nation-wide and international protests, another grand jury decision – this time for one based in Staten Island – was reached regarding the choking death of an unarmed black man (Eric Garner) killed by a white cop. The entire murder was caught on film for all to see, and the officer, Daniel Pantaleo, had no charges laid against him. The verdict was in, and the killer cop was exonerated of any wrongdoing. The announcement prompted protests all across New York, with demonstrators repeating Eric Garner’s last words, “I can’t breathe.”
The protests continued in New York nightly, with several taking place elsewhere across the country, in a continuation from the spark that lit with Ferguson. The day after the New York verdict, an unarmed black man was shot dead by police in Phoenix, Arizona, sparking protests there. In Times Square, several thousand protesters confronted police chanting, ‘Who do you protect?’ Police responded by arresting 200 of those assembled.
The protests in New York were drawing upwards of 10,000 people, and in the first three days alone, the NYPD arrested over 300 demonstrators, with the Police Commissioner declaring that, “the city should be feeling quite proud of itself at this juncture,” because the police were “showing remarkable restraint.”
As with Ferguson, the results in New York sparked protests across the country, with people taking to the streets in Washington, D.C., Boston, Baltimore, San Francisco, Chicago, Pittsburgh, Philadelphia, Atlanta and beyond, blocking bridges and traffic, engaging in ‘sit ins’ or ‘die ins’ in public places, transport hubs, universities and elsewhere. Protests that took place in Berkeley, California, quickly turned violent as police used excessive force, tear gas and batons. The police violence in turn sparked ‘riots’ (urban rebellion) in the streets. Clashes between police and protesters also took place in Seattle, with more peaceful demonstrations continuing in New York, Chicago and Miami.
The protests continued daily, with new groups, new cities and states participating, new sparks, new collective actions, civil disobedience, with every new day. Demonstrators took to the streets, department stores, highways and intersections, to Ivy League universities, basketball games, and train stations. In Chicago, protesters continued well into December, with roughly 200 demonstrators gathering outside of Obama’s family home.
President Obama was holding a series of meetings on the social unrest resulting from Ferguson. He was meeting with Cabinet and Congressional officials, law enforcement and civil rights leaders, and an “unusual” meeting was granted to a group of young black activists from around the country. They held a 45-minute meeting with the president in the Oval Office. They spoke honestly about the problems they see and solutions they advocate, with Obama offering encouragement, though he stressed that, “incremental changes were progress.”
One of the youth organizers present at the meeting, Phillip Agnew, wrote about his experience for an article in the Guardian. Agnew described the assembled group as “representatives from a community in active struggle against state sanctioned killing, violence and repression.” They were not “civil rights leaders,” “activists”, “spokespeople” or “respectable negroes,” they were from Missouri, Ohio, New York and Florida. Agnew wrote of the expectations of those assembled: “We all knew that the White House stood to benefit more from this meeting than we did. We knew that our movement families would fear the almighty co-opt and a political press photo-op. We have been underestimated at every juncture… But this was an invitation that you accept – period.”
The group of youth, as young as 20, with artists, activists, teachers, and organizers, told the president that they were not the “People’s Spokespeople,” and that they “had neither the power, positions, nor desires to stop the eruptions in the streets and that they would continue until a radical change happened in this country,” that they “had no faith in anything, church or state… that the country was on the brink and that nothing short of major capitulations at all levels of the government to the demands of the people could prevent it.” Obama listened, discussed and debated, promoted “gradualism” and “asked for our help.” Agnew commented that, “We did not budge,” walking out of the meeting “unbought and unbowed. We held no punches… no concessions, politicking or posturing. The movement got its meeting. Unrest earned this invite, and we can’t stop. If we don’t get what we came for, we will shut it down. President Obama knows that and we know it. No meeting can stop that.”
History will perhaps view present-day America through the lens of pre-Ferguson and post-Ferguson. The spark which lit the fire was the continuous murder of unarmed black men, women and children by mostly-white police. Police beating, oppressing, and murdering black people in the United States is far from a new phenomenon. It’s a practice which is, in many ways, as old as the country itself (or older, in fact). The fundamental change is this: pre-Ferguson, the murder of unarmed black men, women and children was considered ‘unworthy’ of national attention, it was not news, not an issue, largely continuing unknown and unacknowledged by white America. Post-Ferguson, when black Americans are murdered by police, it starts to make headlines, people start to pay attention, and people increasingly take to the streets in opposition.
Ferguson is not a wake-up call to black America, which has been well aware of the injustices and oppression their communities have faced daily, yearly, and over the course of decades and centuries. Ferguson is a wake-up call for white America, to look and learn from the lived experiences of black America, and to join with their brothers and sisters in active struggle against the system which has made Ferguson the status quo.
Pre-Ferguson, black lives did not matter. At least, they did not matter so far as the national consciousness was concerned. White America could proclaim itself a ‘post-racial society’, feeling good about themselves for voting for a black president, having black friends, and not saying ‘Nigger’. Ferguson has changed the frame through which America views itself, and is viewed by others. White America increasingly looks at the reality of black America and sees great injustice and inequality. The rest of the world looks into America and sees a deeply racist society, repressive and brutal, reflective of the perceptions of America’s actions around the world.
Pre-Ferguson, black America was kept out of sight, black communities were kept under control, and black lives did not matter. Post-Ferguson, black America has taken center stage, black communities are the front-lines of a national struggle for justice and equality, and now, Black Lives Matter.
Debt Dynamite Dominoes: The Coming Financial Catastrophe
Assessing the Illusion of Recovery
Global Research, February 22, 2010
Understanding the Nature of the Global Economic Crisis
The people have been lulled into a false sense of safety under the ruse of a perceived “economic recovery.” Unfortunately, what the majority of people think does not make it so, especially when the people making the key decisions think and act to the contrary. The sovereign debt crises that have been unfolding in the past couple years and more recently in Greece, are canaries in the coal mine for the rest of Western “civilization.” The crisis threatens to spread to Spain, Portugal and Ireland; like dominoes, one country after another will collapse into a debt and currency crisis, all the way to America.
In October 2008, the mainstream media and politicians of the Western world were warning of an impending depression if actions were not taken to quickly prevent this. The problem was that this crisis had been a long-time coming, and what’s worse, is that the actions governments took did not address any of the core, systemic issues and problems with the global economy; they merely set out to save the banking industry from collapse. To do this, governments around the world implemented massive “stimulus” and “bailout” packages, plunging their countries deeper into debt to save the banks from themselves, while charging it to people of the world.
Then an uproar of stock market speculation followed, as money was pumped into the stocks, but not the real economy. This recovery has been nothing but a complete and utter illusion, and within the next two years, the illusion will likely come to a complete collapse.
The governments gave the banks a blank check, charged it to the public, and now it’s time to pay; through drastic tax increases, social spending cuts, privatization of state industries and services, dismantling of any protective tariffs and trade regulations, and raising interest rates. The effect that this will have is to rapidly accelerate, both in the speed and volume, the unemployment rate, globally. The stock market would crash to record lows, where governments would be forced to freeze them altogether.
When the crisis is over, the middle classes of the western world will have been liquidated of their economic, political and social status. The global economy will have gone through the greatest consolidation of industry and banking in world history leading to a system in which only a few corporations and banks control the global economy and its resources; governments will have lost that right. The people of the western world will be treated by the financial oligarchs as they have treated the ‘global South’ and in particular, Africa; they will remove our social structures and foundations so that we become entirely subservient to their dominance over the economic and political structures of our society.
This is where we stand today, and is the road on which we travel.
The western world has been plundered into poverty, a process long underway, but with the unfolding of the crisis, will be rapidly accelerated. As our societies collapse in on themselves, the governments will protect the banks and multinationals. When the people go out into the streets, as they invariably do and will, the government will not come to their aid, but will come with police and military forces to crush the protests and oppress the people. The social foundations will collapse with the economy, and the state will clamp down to prevent the people from constructing a new one.
The road to recovery is far from here. When the crisis has come to an end, the world we know will have changed dramatically. No one ever grows up in the world they were born into; everything is always changing. Now is no exception. The only difference is, that we are about to go through the most rapid changes the world has seen thus far.
Assessing the Illusion of Recovery
In August of 2009, I wrote an article, Entering the Greatest Depression in History, in which I analyzed how there is a deep systemic crisis in the Capitalist system in which we have gone through merely one burst bubble thus far, the housing bubble, but there remains a great many others.
There remains as a significantly larger threat than the housing collapse, a commercial real estate bubble. As the Deutsche Bank CEO said in May of 2009, “It’s either the beginning of the end or the end of the beginning.”
Of even greater significance is what has been termed the “bailout bubble” in which governments have superficially inflated the economies through massive debt-inducing bailout packages. As of July of 2009, the government watchdog and investigator of the US bailout program stated that the U.S. may have put itself at risk of up to $23.7 trillion dollars.
In October of 2009, approximately one year following the “great panic” of 2008, I wrote an article titled, The Economic Recovery is an Illusion, in which I analyzed what the most prestigious and powerful financial institution in the world, the Bank for International Settlements (BIS), had to say about the crisis and “recovery.”
The BIS, as well as its former chief economist, who had both correctly predicted the crisis that unfolded in 2008, were warning of a future crisis in the global economy, citing the fact that none of the key issues and structural problems with the economy had been changed, and that government bailouts may do more harm than good in the long run.
William White, former Chief Economist of the BIS, warned:
Crying Wolf or Castigating Cassandra?
While people were being lulled into a false sense of security, prominent voices warning of the harsh bite of reality to come were, instead of being listened to, berated and pushed aside by the mainstream media. Gerald Celente, who accurately predicted the economic crisis of 2008 and who had been warning of a much larger crisis to come, had been accused by the mainstream media of pushing “pessimism porn.” Celente’s response has been that he isn’t pushing “pessimism porn,” but that he refuses to push “optimism opium” of which the mainstream media does so outstandingly.
So, are these voices of criticism merely “crying wolf” or is it that the media is out to “castigate Cassandra”? Cassandra, in Greek mythology, was the daughter of King Priam and Queen Hecuba of Troy, who was granted by the God Apollo the gift of prophecy. She prophesied and warned the Trojans of the Trojan Horse, the death of Agamemnon and the destruction of Troy. When she warned the Trojans, they simply cast her aside as “mad” and did not heed her warnings.
While those who warn of a future economic crisis may not have been granted the gift of prophecy from Apollo, they certainly have the ability of comprehension.
So what do the Cassandras of the world have to say today? Should we listen?
Empire and Economics
To understand the global economic crisis, we must understand the global causes of the economic crisis. We must first determine how we got to the initial crisis, from there, we can critically assess how governments responded to the outbreak of the crisis, and thus, we can determine where we currently stand, and where we are likely headed.
Africa and much of the developing world was released from the socio-political-economic restraints of the European empires throughout the 1950s and into the 60s. Africans began to try to take their nations into their own hands. At the end of World War II, the United States was the greatest power in the world. It had command of the United Nations, the World Bank and the IMF, as well as setting up the NATO military alliance. The US dollar reigned supreme, and its value was tied to gold.
In 1954, Western European elites worked together to form an international think tank called the Bilderberg Group, which would seek to link the political economies of Western Europe and North America. Every year, roughly 130 of the most powerful people in academia, media, military, industry, banking, and politics would meet to debate and discuss key issues related to the expansion of Western hegemony over the world and the re-shaping of world order. They undertook, as one of their key agendas, the formation of the European Union and the Euro currency unit.
In 1971, Nixon abandoned the dollar’s link to gold, which meant that the dollar no longer had a fixed exchange rate, but would change according to the whims and choices of the Federal Reserve (the central bank of the United States). One key individual that was responsible for this choice was the third highest official in the U.S. Treasury Department at the time, Paul Volcker.
Volcker got his start as a staff economist at the New York Federal Reserve Bank in the early 50s. After five years there, “David Rockefeller’s Chase Bank lured him away.” So in 1957, Volcker went to work at Chase, where Rockefeller “recruited him as his special assistant on a congressional commission on money and credit in America and for help, later, on an advisory commission to the Treasury Department.” In the early 60s, Volcker went to work in the Treasury Department, and returned to Chase in 1965 “as an aide to Rockefeller, this time as vice president dealing with international business.” With Nixon entering the White House, Volcker got the third highest job in the Treasury Department. This put him at the center of the decision making process behind the dissolution of the Bretton Woods agreement by abandoning the dollar’s link to gold in 1971.
In 1973, David Rockefeller, the then-Chairman of Chase Manhattan Bank and President of the Council on Foreign Relations, created the Trilateral Commission, which sought to expand upon the Bilderberg Group. It was an international think tank, which would include elites from Western Europe, North America, and Japan, and was to align a “trilateral” political economic partnership between these regions. It was to further the interests and hegemony of the Western controlled world order.
That same year, the Petri-dish experiment of neoliberalism was undertaken in Chile. While a leftist government was coming to power in Chile, threatening the economic interests of not only David Rockefeller’s bank, but a number of American corporations, David Rockefeller set up meetings between Henry Kissinger, Nixon’s National Security Adviser, and a number of leading corporate industrialists. Kissinger in turn, set up meetings between these individuals and the CIA chief and Nixon himself. Within a short while, the CIA had begun an operation to topple the government of Chile.
On September 11, 1973, a Chilean General, with the help of the CIA, overthrew the government of Chile and installed a military dictatorship that killed thousands. The day following the coup, a plan for an economic restructuring of Chile was on the president’s desk. The economic advisers from the University of Chicago, where the ideas of Milton Freidman poured out, designed the restructuring of Chile along neoliberal lines.
Neoliberalism was thus born in violence.
In 1973, a global oil crisis hit the world. This was the result of the Yom Kippur War, which took place in the Middle East in 1973. However, much more covertly, it was an American strategem. Right when the US dropped the dollar’s peg to gold, the State Department had quietly begun pressuring Saudi Arabia and other OPEC nations to increase the price of oil. At the 1973 Bilderberg meeting, held six months before the oil price rises, a 400% increase in the price of oil was discussed. The discussion was over what to do with the large influx of what would come to be called “petrodollars,” the oil revenues of the OPEC nations.
Henry Kissinger worked behind the scenes in 1973 to ensure a war would take place in the Middle East, which happened in October. Then, the OPEC nations drastically increased the price of oil. Many newly industrializing nations of the developing world, free from the shackles of overt political and economic imperialism, suddenly faced a problem: oil is the lifeblood of an industrial society and it is imperative in the process of development and industrialization. If they were to continue to develop and industrialize, they would need the money to afford to do so.
Concurrently, the oil producing nations of the world were awash with petrodollars, bringing in record surpluses. However, to make a profit, the money would need to be invested. This is where the Western banking system came to the scene. With the loss of the dollar’s link to cold, the US currency could flow around the world at a much faster rate. The price of oil was tied to the price of the US dollar, and so oil was traded in US dollars. OPEC nations thus invested their oil money into Western banks, which in turn, would “recycle” that money by loaning it to the developing nations of the world in need of financing industrialization. It seemed like a win-win situation: the oil nations make money, invest it in the West, which loans it to the South, to be able to develop and build “western” societies.
However, all things do not end as fairy tales, especially when those in power are threatened. An industrialized and developed ‘Global South’ (Latin America, Africa, and parts of Asia) would not be a good thing for the established Western elites. If they wanted to maintain their hegemony over the world, they must prevent the rise of potential rivals, especially in regions so rich in natural resources and the global supplies of energy.
It was at this time that the United States initiated talks with China. The “opening” of China was to be a Western project of expanding Western capital into China. China will be allowed to rise only so much as the West allows it. The Chinese elite were happy to oblige with the prospect of their own growth in political and economic power. India and Brazil also followed suit, but to a smaller degree than that of China. China and India were to brought within the framework of the Trilateral partnership, and in time, both China and India would have officials attending meetings of the Trilateral Commission.
So money flowed around the world, primarily in the form of the US dollar. Foreign central banks would buy US Treasuries (debts) as an investment, which would also show faith in the strength of the US dollar and economy. The hegemony of the US dollar reached around the world.
The Hegemony of Neoliberalism
In 1977, however, a new US administration came to power under the Presidency of Jimmy Carter, who was himself a member of the Trilateral Commission. With his administration, came another roughly two-dozen members of the Trilateral Commission to fill key positions within his government. In 1973, Paul Volcker, the rising star through Chase Manhattan and the Treasury Department became a member of the Trilateral Commission. In 1975, he was made President of the Federal Reserve Bank of New York, the most powerful of the 12 regional Fed banks. In 1979, Jimmy Carter gave the job of Treasury Secretary to the former Governor of the Federal Reserve System, and in turn, David Rockefeller recommended Jimmy Carter appoint Paul Volcker as Governor of the Federal Reserve Board, which Carter quickly did.
In 1979, the price of oil skyrocketed again. This time, Paul Volcker at the Fed was to take a different approach. His response was to drastically increase interest rates. Interest rates went from 2% in the late 70s to 18% in the early 1980s. The effect this had was that the US economy went into recession, and greatly reduced its imports from developing nations. A the same time, developing nations, who had taken on heavy debt burdens to finance industrialization, suddenly found themselves having to pay 18% interest payments on their loans. The idea that they could borrow heavily to build an industrial society, which would in turn pay off their loans, had suddenly come to a halt. As the US dollar had spread around the world in the forms of petrodollars and loans, the decisions that the Fed made would affect the entire world. In 1982, Mexico announced that it could no longer service its debt, and defaulted on its loans. This marked the spread of the 1980s debt crisis, which spread throughout Latin America and across the continent of Africa.
Suddenly, much of the developing world was plunged into crisis. Thus, the IMF and World Bank entered the scene with their newly developed “Structural Adjustment Programs” (SAPs), which would encompass a country in need signing an agreement, the SAP, which would provide the country with a loan from the IMF, as well as “development” projects by the World Bank. In turn, the country would have to undergo a neoliberal restructuring of its country.
Neoliberalism spread out of America and Britain in the 1980s; through their financial empires and instruments – including the World Bank and IMF – they spread the neoliberal ideology around the globe. Countries that resisted neoliberalism were subjected to “regime change”. This would occur through financial manipulation, via currency speculation or the hegemonic monetary policies of the Western nations, primarily the United States; economic sanctions, via the United Nations or simply done on a bilateral basis; covert regime change, through “colour revolutions” or coups, assassinations; and sometimes overt military campaigns and war.
The neoliberal ideology consisted in what has often been termed “free market fundamentalism.” This would entail a massive wave of privatization, in which state assets and industries are privatized in order to become economically “more productive and efficient.” This would have the social effect of leading to the firing of entire areas of the public sector, especially health and education as well as any specially protected national industries, which for many poor nations meant vital natural resources.
Then, the market would be “liberalized” which meant that restrictions and impediments to foreign investments in the nation would diminish by reducing or eliminating trade barriers and tariffs (taxes), and thus foreign capital (Western corporations and banks) would be able to invest in the country easily, while national industries that grow and “compete” would be able to more easily invest in other nations and industries around the world. The Central Bank of the nation would then keep interest rates artificially low, to allow for the easier movement of money in and out of the country. The effect of this would be that foreign multinational corporations and international banks would be able to easily buy up the privatized industries, and thus, buy up the national economy. Simultaneously major national industries may be allowed to grow and work with the global banks and corporations. This would essentially oligopolize the national economy, and bring it within the sphere of influence of the “global economy” controlled by and for the Western elites.
The European empires had imposed upon Africa and many other colonized peoples around the world a system of ‘indirect rule’, in which local governance structures were restructured and reorganized into a system where the local population is governed by locals, but for the western colonial powers. Thus, a local elite is created, and they enrich themselves through the colonial system, so they have no interest in challenging the colonial powers, but instead seek to protect their own interests, which happen to be the interests of the empire.
In the era of globalization, the leaders of the ‘Third World’ have been co-opted and their societies reorganized by and for the interests of the globalized elites. This is a system of indirect rule, and the local elites becoming ‘indirect globalists’; they have been brought within the global system and structures of empire.
Following a Structural Adjustment Program, masses of people would be left unemployed; the prices of essential commodities such as food and fuel would increase, sometimes by hundreds of percentiles, while the currency lost its value. Poverty would spread and entire sectors of the economy would be shut down. In the “developing” world of Asia, Latin America and Africa, these policies were especially damaging. With no social safety nets to fall into, the people would go hungry; the public state was dismantled.
When it came to Africa, the continent so rapidly de-industrialized throughout the 1980s and into the 1990s that poverty increased by incredible degrees. With that, conflict would spread. In the 1990s, as the harsh effects of neoliberal policies were easily and quickly seen on the African continent, the main notion pushed through academia, the media, and policy circles was that the state of Africa was due to the “mismanagement” by Africans. The blame was put solely on the national governments. While national political and economic elites did become complicit in the problems, the problems were imposed from beyond the continent, not from within.
Thus, in the 1990s, the notion of “good governance” became prominent. This was the idea that in return for loans and “help” from the IMF and World Bank, nations would need to undertake reforms not only of the economic sector, but also to create the conditions of what the west perceived as “good governance.” However, in neoliberal parlance, “good governance” implies “minimal governance”, and governments still had to dismantle their public sectors. They simply had to begin applying the illusion of democracy, through the holding of elections and allowing for the formation of a civil society. “Freedom” however, was still to maintain simply an economic concept, in that the nation would be “free” for Western capital to enter into.
While massive poverty and violence spread across the continent, people were given the “gift” of elections. They would elect one leader, who would then be locked into an already pre-determined economic and political structure. The political leaders would enrich themselves at the expense of others, and then be thrown out at the next election, or simply fix the elections. This would continue, back and forth, all the while no real change would be allowed to take place. Western imposed “democracy” had thus failed.
An article in a 2002 edition of International Affairs, the journal of the Royal Institute of International Affairs (the British counter-part to the Council on Foreign Relations), wrote that:
The authors then explained that NGOs have a peculiar evolution in Africa:
The authors examined how with the spread of neoliberalism, the notion of a “minimalist state” spread across the world and across Africa. Thus, they explain, the IMF and World Bank “became the new commanders of post-colonial economies.” However, these efforts were not imposed without resistance, as, “Between 1976 and 1992 there were 146 protests against IMF-supported austerity measures [SAPs] in 39 countries around the world.” Usually, however, governments responded with brute force, violently oppressing demonstrations. However, the widespread opposition to these “reforms” needed to be addressed by major organizations and “aid” agencies in re-evaluating their approach to ‘development’:
The outcome of these deliberations was the ‘good governance’ agenda in the 1990s and the decision to co-opt NGOs and other civil society organizations to a repackaged programme of welfare provision, a social initiative that could be more accurately described as a programme of social control.
The result was to implement the notion of ‘pluralism’ in the form of ‘multipartyism’, which only ended up in bringing “into the public domain the seething divisions between sections of the ruling class competing for control of the state.” As for the ‘welfare initiatives’, the bilateral and multilateral aid agencies set aside significant funds for addressing the “social dimensions of adjustment,” which would “minimize the more glaring inequalities that their policies perpetuated.” This is where the growth of NGOs in Africa rapidly accelerated.
Africa had again, become firmly enraptured in the cold grip of imperialism. Conflicts in Africa would be stirred up by imperial foreign powers, often using ethnic divides to turn the people against each other, using the political leaders of African nations as vassals submissive to Western hegemony. War and conflict would spread, and with it, so too would Western capital and the multinational corporation.
Building a ‘New’ Economy
While the developing world fell under the heavy sword of Western neoliberal hegemony, the Western industrialized societies experienced a rapid growth of their own economic strength. It was the Western banks and multinational corporations that spread into and took control of the economies of Africa, Latin America, Asia, and with the fall of the Soviet Union in 1991, Eastern Europe and Central Asia.
Russia opened itself up to Western finance, and the IMF and World Bank swept in and imposed neoliberal restructuring, which led to a collapse of the Russian economy, and enrichment of a few billionaire oligarchs who own the Russian economy, and who are intricately connected with Western economic interests; again, ‘indirect globalists’.
As the Western financial and commercial sectors took control of the vast majority of the world’s resources and productive industries, amassing incredible profits, they needed new avenues in which to invest. Out of this need for a new road to capital accumulation (making money), the US Federal Reserve stepped in to help out.
The Federal Reserve in the 1990s began to ease interest rates lower and lower to again allow for the easier spread of money. This was the era of ‘globalization,’ where proclamations of a “New World Order” emerged. Regional trading blocs and “free trade” agreements spread rapidly, as world systems of political and economic structure increasingly grew out of the national structure and into a supra-national form. The North American Free Trade Agreement (NAFTA) was implemented in an “economic constitution for North America” as Reagan referred to it.
Regionalism had emerged as the next major phase in the construction of the New World Order, with the European Union being at the forefront. The world economy was ‘globalized’ and so too, would the political structure follow, on both regional and global levels. The World Trade Organization (WTO) was formed to maintain and enshrine global neoliberal constitution for trade. All through this time, a truly global ruling class emerged, the Transnational Capitalist Class (TCC), or global elite, which constituted a singular international class.
However, as the wealth and power of elites grew, everyone else suffered. The middle class had been subjected to a quiet dismantling. In the Western developed nations, industries and factories closed down, relocating to cheap Third World countries to exploit their labour, then sell the products in the Western world cheaply. Our living standards in the West began to fall, but because we could buy products for cheaper, no one seemed to complain. We continued to consume, and we used credit and debt to do so. The middle class existed only in theory, but was in fact, beholden to the shackles of debt.
The Clinton administration used ‘globalization’ as its grand strategy throughout the 1990s, facilitating the decline of productive capital (as in, money that flows into production of goods and services), and implemented the rise finance capital (money made on money). Thus, financial speculation became one of the key tools of economic expansion. This is what was termed the “financialization” of the economy. To allow this to occur, the Clinton administration actively worked to deregulate the banking sector. The Glass-Steagle Act, put in place by FDR in 1933 to prevent commercial banks from merging with investment banks and engaging in speculation, (which in large part caused the Great Depression), was slowly dismantled through the coordinated efforts of America’s largest banks, the Federal Reserve, and the US Treasury Department.
Thus, a massive wave of consolidation took place, as large banks ate smaller banks, corporations merged, where banks and corporations stopped being American or European and became truly global. Some of the key individuals that took part in the dismantling of Glass-Steagle and the expansion of ‘financialization’ were Alan Greenspan at the Federal Reserve and Robert Rubin and Lawrence Summers at the Treasury Department, now key officials in Obama’s economic team.
This era saw the rise of ‘derivatives’ which are ‘complex financial instruments’ that essentially act as short-term insurance policies, betting and speculating that an asset price or commodity would go up or go down in value, allowing money to be made on whether stocks or prices go up or down. However, it wasn’t called ‘insurance’ because ‘insurance’ has to be regulated. Thus, it was referred to as derivatives trade, and organizations called Hedge Funds entered the picture in managing the global trade in derivatives.
The stock market would go up as speculation on future profits drove stocks higher and higher, inflating a massive bubble in what was termed a ‘virtual economy.’ The Federal Reserve facilitated this, as it had previously done in the lead-up to the Great Depression, by keeping interest rates artificially low, and allowing for easy-flowing money into the financial sector. The Federal Reserve thus inflated the ‘dot-com’ bubble of the technology sector. When this bubble burst, the Federal Reserve, with Allen Greenspan at the helm, created the “housing bubble.”
The Federal Reserve maintained low interest rates and actively encouraged and facilitated the flow of money into the housing sector. Banks were given free reign and actually encouraged to make loans to high-risk individuals who would never be able to pay back their debt. Again, the middle class existed only in the myth of the ‘free market’.
Concurrently, throughout the 1990s and into the early 2000s, the role of speculation as a financial instrument of war became apparent. Within the neoliberal global economy, money could flow easily into and out of countries. Thus, when confidence weakens in the prospect of one nation’s economy, there can be a case of ‘capital flight’ where foreign investors sell their assets in that nation’s currency and remove their capital from that country. This results in an inevitable collapse of the nations economy.
This happened to Mexico in 1994, in the midst of joining NAFTA, where international investors speculated against the Mexican peso, betting that it would collapse; they cashed in their pesos for dollars, which devalued the peso and collapsed the Mexican economy. This was followed by the East Asian financial crisis in 1997, where throughout the 1990s, Western capital had penetrated East Asian economies speculating in real estate and the stock markets. However, this resulted in over-investment, as the real economy, (production, manufacturing, etc.) could not keep up with speculative capital. Thus, Western capital feared a crisis, and began speculating against the national currencies of East Asian economies, which triggered devaluation and a financial panic as capital fled from East Asia into Western banking sectors. The economies collapsed and then the IMF came in to ‘restructure’ them accordingly. The same strategy was undertaken with Russia in 1998, and Argentina in 2001.
Throughout the 2000s, the housing bubble was inflated beyond measure, and around the middle of the decade, when the indicators emerged of a crisis in the housing market a commercial real estate bubble was formed. This bubble has yet to burst.
The 2007-2008 Financial Crisis
In 2007, the Bank for International Settlements (BIS), the most prestigious financial institution in the world and the central bank to the world’s central banks, issued a warning that the world is on the verge of another Great Depression, “citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.”
As the housing bubble began to collapse, the commodity bubble was inflated, where money went increasingly into speculation, the stock market, and the price of commodities soared, such as with the massive increases in the price of oil between 2007 and 2008. In September of 2007, a medium-sized British Bank called Northern Rock, a major partaker in the loans of bad mortgages which turned out to be worthless, sought help from the Bank of England, which led to a run on the bank and investor panic. In February of 2008, the British government bought and nationalized Northern Rock.
In March of 2008, Bear Stearns, an American bank that had been a heavy lender in the mortgage real estate market, went into crisis. On March 14, 2008, the Federal Reserve Bank of New York worked with J.P. Morgan Chase (whose CEO is a board member of the NY Fed) to provide Bear Stearns with an emergency loan. However, they quickly changed their mind, and the CEO of JP Morgan Chase, working with the President of the New York Fed, Timothy Geithner, and the Treasury Secretary Henry Paulson (former CEO of Goldman Sachs), forced Bear Stearns to sell itself to JP Morgan Chase for $2 a share, which had previously traded at $172 a share in January of 2007. The merger was paid for by the Federal Reserve of New York, and charged to the US taxpayer.
In June of 2008, the BIS again warned of an impending Great Depression.
In September of 2008, the US government took over Fannie Mae and Freddie Mac, the two major home mortgage corporations. The same month, the global bank Lehman Brothers declared bankruptcy, giving the signal that no one is safe and that the entire economy was on the verge of collapse. Lehman was a major dealer in the US Treasury Securities market and was heavily invested in home mortgages. Lehman filed for bankruptcy on September 15, 2008, marking the largest bankruptcy in US history. A wave of bank consolidation spread across the United States and internationally. The big banks became much bigger as Bank of America swallowed Merrill Lynch, JP Morgan ate Washington Mutual, and Wells Fargo took over Wachovia.
In November of 2008, the US government bailed out the largest insurance company in the world, AIG. The Federal Reserve Bank of New York, with Timothy Geithner at the helm:
As Bloomberg reported, since the New York Fed is quasi-governmental, as in, it is given government authority, but not subject to government oversight, and is owned by the banks that make up its board (such as JP Morgan Chase), “It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.”
In the fall of 2008, the Bush administration sought to implement a bailout package for the economy, designed to save the US banking system. The leaders of the nation went into rabid fear mongering. The President warned:
The head of the Federal Reserve Board, Ben Bernanke, as well as Treasury Secretary Paulson, in late September warned of “recession, layoffs and lost homes if Congress doesn’t quickly approve the Bush administration’s emergency $700 billion financial bailout plan.” Seven months prior, in February of 2008, prior to the collapse of Bear Stearns, both Bernanke and Paulson said “the nation will avoid falling into recession.” In September of 2008, Paulson was saying that people “should be scared.”
The bailout package was made into a massive financial scam, which would plunge the United States into unprecedented levels of debt, while pumping incredible amounts of money into major global banks.
The public was told, as was the Congress, that the bailout was worth $700 billion dollars. However, this was extremely misleading, and a closer reading of the fine print would reveal much more, in that $700 billion is the amount that could be spent “at any one time.” As Chris Martenson wrote:
Further, the proposed bill would “raise the nation’s debt ceiling to $11.315 trillion from $10.615 trillion,” and that the actions taken as a result of the passage of the bill would not be subject to investigation by the nation’s court system, as it would “bar courts from reviewing actions taken under its authority”:
Larisa Alexandrovna, writing with the Huffington Post, warned that the passage of the bailout bill will be the final nails in the coffin of the fascist coup over America, in the form of financial fascists:
At the same time, the US Federal Reserve was bailing out foreign banks of hundreds of billions of dollars, “that are desperate for dollars and can’t access America’s frozen credit markets – a move co-ordinated with central banks in Japan, the Eurozone, Switzerland, Canada and here in the UK.” The moves would have been coordinated through the Bank for International Settlements (BIS) in Basle, Switzerland. As Politico reported, “foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout.” A Treasury Fact Sheet released by the US Department of Treasury stated that:
So, the bailout package would not only allow for the rescue of American banks, but any banks internationally, whether public or private, if the Treasury Secretary deemed it “necessary”, and that none of the Secretary’s decisions could be reviewed or subjected to oversight of any kind. Further, it would mean that the Treasury Secretary would have a blank check, but simply wouldn’t be able to hand out more than $700 billion “at any one time.” In short, the bailout is in fact, a coup d’état by the banks over the government.
Many Congressmen were told that if they failed to pass the bailout package, they were threatened with martial law. Sure enough, Congress passed the bill, and the financial coup had been a profound success.
No wonder then, in early 2009, one Congressman reported that the banks “are still the most powerful lobby on Capitol Hill. And they frankly own the place.” Another Congressman said that “The banks run the place,” and explained, “I will tell you what the problem is – they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”
The Collapse of Iceland
On October 9th, 2008, the government of Iceland took control of the nation’s largest bank, nationalizing it, and halted trading on the Icelandic stock market. Within a single week, “the vast majority of Iceland’s once-proud banking sector has been nationalized.” In early October, it was reported that:
An article in BusinessWeek explained:
This was the grueling situation that faced the government at the time of the global economic crisis. The causes, however, were not Icelandic; they were international. Iceland owed “more than $60 billion overseas, about six times the value of its annual economic output. As a professor at London School of Economics said, ‘No Western country in peacetime has crashed so quickly and so badly’.”
What went wrong?
Iceland followed the path of neoliberalism, deregulated banking and financial sectors and aided in the spread and ease of flow for international capital. When times got tough, Iceland went into crisis, as the Observer reported in early October 2008:
In 2007, the UN had awarded Iceland the “best country to live in”:
As the third of Iceland’s large banks was in trouble, following the government takeover of the previous two, the UK responded by freezing Icelandic assets in the UK. Kaupthing, the last of the three banks standing in early October, had many assets in the UK.
On October 7th, Iceland’s Central Bank governor told the media, “We will not pay for irresponsible debtors and…not for banks who have behaved irresponsibly.” The following day, UK Chancellor of the Exchequer, Alistair Darling, claimed that, “The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here,” although, Arni Mathiesen, the Icelandic minister of finance, said, “nothing in this telephone conversation can support the conclusion that Iceland would not honor its obligation.”
On October 10, 2008, UK Prime Minister Gordon Brown said, “We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money.” Thus:
The UK had more than £840m invested in Icelandic banks, and they were moving in to save their investments, which just so happened to help spur on the collapse of the Icelandic economy.
On October 24, 2008, an agreement between Iceland and the IMF was signed. In late November, the IMF approved a loan to Iceland of $2.1 billion, with an additional $3 billion in loans from Denmark, Finland, Norway, Sweden, Russia, and Poland. Why the agreement to the loan took so long, was because the UK pressured the IMF to delay the loan “until a dispute over the compensation Iceland owes savers in Icesave, one of its collapsed banks, is resolved.”
In January of 2009, the entire Icelandic government was “formally dissolved” as the government collapsed when the Prime Minister and his entire cabinet resigned. This put the opposition part in charge of an interim government. In July of 2009, the new government formally applied for European Union membership, however, “Icelanders have traditionally been skeptical of the benefits of full EU membership, fearing that they would lose some of their independence as a small state within a larger political entity.”
In August of 2009, Iceland’s parliament passed a bill “to repay Britain and the Netherlands more than $5 billion lost in Icelandic deposit accounts”:
Iceland is now in the service of the IMF and its international creditors. The small independent nation that for so long had prided itself on a strong economy and strong sense of independence had been brought to its knees.
In mid-January of 2010, the IMF and Sweden together delayed their loans to Iceland, due to Iceland’s “failure to reach a £2.3bn compensation deal with Britain and the Netherlands over its collapsed Icesave accounts.” Sweden, the UK and the IMF were blackmailing Iceland to save UK assets in return for loans.
In February of 2010, it was reported that the EU would begin negotiations with Iceland to secure Icelandic membership in the EU by 2012. However, Iceland’s “aspirations are now tied partially to a dispute with the Netherlands and Britain over $5 billion in debts lost in the country’s banking collapse in late 2008.”
Iceland stood as a sign of what was to come. The sovereign debt crisis that brought Iceland to its knees had new targets on the horizon.
Dubai Hit By Financial Storm
In February of 2009, the Guardian reported that, “A six-year boom that turned sand dunes into a glittering metropolis, creating the world’s tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt,” as Dubai, one of six states that form the United Arab Emirates (UAE), went into crisis. Further, “the real estate bubble that propelled the frenetic expansion of Dubai on the back of borrowed cash and speculative investment, has burst.”
Months later, in November of 2009, Dubai was plunged into a debt crisis, prompting fears of sparking a double-dip recession and the next wave of the financial crisis. As the Guardian reported:
The neighboring oil-rich state of Abu Dhabi, however, came to the rescue of Dubai with a $10 billion bailout package, leading the Foreign Minister of the UAE to declare Dubai’s financial crisis as over.
In mid-February of 2010, however, renewed fears of a debt crisis in Dubai resurfaced; Morgan Stanley reported that, “the cost to insure against a Dubai default [in mid-February] shot up to the level it was at during the peak of the city-state’s debt crisis in November.” These fears resurfaced as:
Again, the aims that governments seek in the unfolding debt crisis is not to save their people from a collapsing economy and inflated currency, but to save the ‘interests’ of their major banks and corporations within each collapsing economy.
A Sovereign Debt Crisis Hits Greece
In October of 2009, a new Socialist government came to power in Greece on the promise of injecting 3 billion euros to reinvigorate the Greek economy. Greece had suffered particularly hard during the economic crisis; it experienced riots and protests. In December of 2009, Greece said it would not default on its debt, but the government added, “Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state.” As Ambrose Evans-Pritchard wrote for the Telegraph in December of 2009:
Evans-Pritchard wrote that the crisis in Greece had much to do with the European Monetary Union (EMU), which created the Euro, and made all member states subject to the decisions of the European Central Bank, as “Interest rates were too low for Greece, Portugal, Spain, and Ireland, causing them all to be engulfed in a destructive property and wage boom.” Further:
Greece’s debt had soared, by early December 2009, to a spiraling 300-billion euros, as its “financial woes have also weighed on the euro currency, whose long-term value depends on member countries keeping their finances in order.” Further, Ireland, Spain and Portugal were all facing problems with their debt. As it turned out, the previous Greek government had been cooking the books, and when the new government came to power, it inherited twice the federal deficit it had anticipated.
In February of 2010, the New York Times revealed that:
Even back in 2001, when Greece joined the Euro-bloc, Goldman Sachs helped the country “quietly borrow billions” in a deal “hidden from public view because it was treated as a currency trade rather than a loan, [and] helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.” Further, “Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.” Both Goldman Sachs and JP Morgan Chase had undertaken similar efforts in Italy and other countries in Europe as well.
In early February, EU nations led by France and Germany met to discuss a rescue package for Greece, likely with the help of the European Central Bank and possibly the IMF. The issue had plunged the Eurozone into a crisis, as confidence in the Euro fell across the board, and “Germans have become so disillusioned with the euro, many will not accept notes produced outside their homeland.”
Germany was expected to bail out the Greek economy, much to the dismay of the German people. As one German politician stated, “We cannot expect the citizens, whose taxes are already too high, to go along with supporting the erroneous financial and budget policy of other states of the eurozone.” One economist warned that the collapse of Greece could lead to a collapse of the Euro:
However, the Lisbon Treaty had been passed over 2009, which put into effect a European Constitution, giving Brussels enormous powers over its member states. As the Telegraph reported on February 16, 2010, the EU stripped Greece of its right to vote at a crucial meeting to take place in March:
It would appear that the EU is in a troubling position. If they allow the IMF to rescue Greece, it would be a blow to the faith in the Euro currency, whereas if they bailout Greece, it will encourage internal pressures within European countries to abandon the Euro.
In early February, Ambrose Evans-Pritchard wrote in the Telegraph that, “The Greek debt crisis has spread to Spain and Portugal in a dangerous escalation as global markets test whether Europe is willing to shore up monetary union with muscle rather than mere words”:
Fear began to spread in regards to a growing sovereign debt crisis, stretching across Greece, Spain and Portugal, and likely much wider and larger than that.
A Global Debt Crisis
In 2007, the Bank for International Settlements (BIS), “the world’s most prestigious financial body,” warned of a coming great depression, and stated that while in a crisis, central banks may cut interest rates (which they subsequently did). However, as the BIS pointed out, while cutting interest rates may help, in the long run it has the effect of “sowing the seeds for more serious problems further ahead.”
In the summer of 2008, prior to the apex of the 2008 financial crisis in September and October, the BIS again warned of the inherent dangers of a new Great Depression. As Ambrose Evans-Pritchard wrote, “the ultimate bank of central bankers” warned that central banks, such as the Federal Reserve, would not find it so easy to “clean up” the messes they had made in asset-price bubbles.
The BIS report stated that, “It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels.” As Evans-Pritchard explained, “this amounts to a warning that monetary overkill by the Fed, the Bank of England, and above all the European Central Bank could prove dangerous at this juncture.” The BIS report warned that, “Global banks – with loans of $37 trillion in 2007, or 70pc of world GDP – are still in the eye of the storm.” Ultimately, the actions of central banks were designed “to put off the day of reckoning,” not to prevent it.
Seeing how the BIS is not simply a casual observer, but is in fact the most important financial institution in the world, as it is where the world’s central bankers meet and, in secret, decide monetary policy for the world. As central banks have acted as the architects of the financial crisis, the BIS warning of a Great Depression is not simply a case of Cassandra prophesying the Trojan Horse, but is a case where she prophesied the horse, then opened the gates of Troy and pulled the horse in.
It was within this context that the governments of the world took on massive amounts of debt and bailed out the financial sectors from their accumulated risk by buying their bad debts.
In late June of 2009, several months following Western governments implementing bailouts and stimulus packages, the world was in the euphoria of “recovery.” At this time, however, the Bank for International Settlements released another report warning against such complacency in believing in the “recovery.” The BIS warned of only “limited progress” in fixing the financial system. The article is worth quoting at length:
The BIS had thus endorsed the bailout and stimulus packages, which is no surprise, considering that the BIS is owned by the central banks of the world, which in turn are owned by the major global banks that were “bailed out” by the governments. However, the BIS warned that these rescue efforts, “while necessary” for the banks, will likely have deleterious effects for national governments.
The BIS warned that, “there’s a risk central banks will raise interest rates and withdraw emergency liquidity too late, triggering inflation”:
Of enormous significance was the warning from the BIS that, “fiscal stimulus packages may provide no more than a temporary boost to growth, and be followed by an extended period of economic stagnation.” As the Australian reported in late June:
Further, major western countries such as Australia “faced the possibility of a run on the currency, which would force interest rates to rise,” and “Particularly in smaller and more open economies, pressure on the currency could force central banks to follow a tighter policy than would be warranted by domestic economic conditions.” Not surprisingly, the BIS stated that, “government guarantees and asset insurance have exposed taxpayers to potentially large losses,” through the bailouts and stimulus packages, and “stimulus programs will drive up real interest rates and inflation expectations,” as inflation “would intensify as the downturn abated.”
In May of 2009, Simon Johnson, former chief economist of the International Monetary Fund (IMF), warned that Britain faces a major struggle in the next phase of the economic crisis:
However, as dire as things look for Britain, “The UK is likely to be joined by other countries as the full scale of the downturn becomes apparent and more financial skeletons are pulled from the sub-prime closet.”
In September of 2009, the former Chief Economist of the Bank for International Settlements (BIS), William White, who had accurately predicted the previous crisis, warned that, “The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession.” He “also warned that government actions to help the economy in the short run may be sowing the seeds for future crises.” An article in the Financial Times elaborated:
In late September of 2009, the General Manager of the BIS warned governments against complacency, saying that, “the market rebound should not be misinterpreted,” and that, “The profile of the recovery is not clear.”
In September, the Financial Times further reported that William White, former Chief Economist at the BIS, also “argued that after two years of government support for the financial system, we now have a set of banks that are even bigger – and more dangerous – than ever before,” which also, “has been argued by Simon Johnson, former chief economist at the International Monetary Fund,” who “says that the finance industry has in effect captured the US government,” and pointedly stated: “recovery will fail unless we break the financial oligarchy that is blocking essential reform.”
In mid-September, the BIS released a warning about the global financial system, as “The global market for derivatives rebounded to $426 trillion in the second quarter [of 2009] as risk appetite returned, but the system remains unstable and prone to crises.” The derivatives rose by 16% “mostly due to a surge in futures and options contracts on three-month interest rates.” In other words, speculation is back in full force as bailout money to banks in turn fed speculative practices that have not been subjected to reform or regulation. Thus, the problems that created the previous crisis are still present and growing:
In late November of 2009, Morgan Stanley warned that, “Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months.” The Bank of England may have to raise interest rates “before it is ready — risking a double-dip recession, and an incipient compound-debt spiral.” Further:
As Ambrose Evans-Pritchard wrote for the Telegraph, this “is a reminder that countries merely bought time during the crisis by resorting to fiscal stimulus and shunting private losses onto public books,” and, while he endorsed the stimulus packages claiming it was “necessary,” he admitted that the stimulus packages “have not resolved the underlying debt problem. They have storied up a second set of difficulties by degrading sovereign debt across much of the world.” Morgan Stanley said another surprise in 2010 could be a surge in the dollar. However, this would be due to capital flight out of Europe as its economies crumble under their debt burdens and capital seeks a “safe haven” in the US dollar.
In December of 2009, the Wall Street Journal reported on the warnings of some of the nation’s top economists, who feared that following a financial crisis such as the one experienced in the previous two years, “there’s typically a wave of sovereign default crises.” As economist Kenneth Rogoff explained, “If you want to know what’s next on the menu, that’s a good bet,” as “Spiraling government debts around the world, from Washington to Berlin to Tokyo, could set the scene for years of financial troubles.” Apart from the obvious example of Greece, other countries are at risk, as the author of the article wrote:
Rogoff predicted that, “We’re going to be raising taxes sky high,” and that, “we’re probably going to see a lot of inflation, eventually. We will have to. It’s the easiest way to reduce the value of those liabilities in real terms.” Rogoff stated, “The way rich countries default is through inflation.” Further, “even U.S. municipal bonds won’t be safe from trouble. California could be among those facing a default crisis.” Rogoff elaborated, “It wouldn’t surprise me to see the Federal Reserve buying California debt at some point, or some form of bailout.”
The bailouts, particularly that of the United States, handed a blank check to the world’s largest banks. As another favour, the US government put those same banks in charge of ‘reform’ and ‘regulation’ of the banking industry. Naturally, no reform or regulation took place. Thus, the money given to banks by the government can be used in financial speculation. As the sovereign debt crisis unfolds and spreads around the globe, the major international banks will be able to create enormous wealth in speculation, rapidly pulling their money out of one nation in debt crisis, precipitating a collapse, and moving to another, until all the dominoes have fallen, and the banks stand larger, wealthier, and more powerful than any nation or institution on earth (assuming they already aren’t). This is why the bankers were so eager to undertake a financial coup of the United States, to ensure that no actual reform took place, that they could loot the nation of all it has, and profit off of its eventual collapse and the collapse of the global economy. The banks have been saved! Now everyone else must pay.
Edmund Conway, the Economics Editor of the Telegraph, reported in early January of 2010, that throughout the year:
In other words, the ‘recovery’ is an illusion. In mid-January of 2010, the World Economic Forum released a report in which it warned that, “There is now more than a one-in-five chance of another asset price bubble implosion costing the world more than £1 trillion, and similar odds of a full-scale sovereign fiscal crisis.” The report warned of a simultaneous second financial crisis coupled with a major fiscal crisis as countries default on their debts. The report “also warned of the possibility of China’s economy overheating and, instead of helping support global economic growth, preventing a fully-fledged recovery from developing.” Further:
Nouriel Roubini, one of America’s top economists who predicted the financial crisis, wrote an article in Forbes in January of 2010 explaining that, “the severe recession, combined with a financial crisis during 2008-09, worsened the fiscal positions of developed countries due to stimulus spending, lower tax revenues and support to the financial sector.” He warned that the debt burden of major economies, including the US, Japan and Britain, would likely increase. With this, investors will become wary of the sustainability of fiscal markets and will begin to withdraw from debt markets, long considered “safe havens.” Further:
As interest rates rise, which they will have to in a tightening of monetary policy, (which up until now have been kept artificially low so as to encourage the spread of liquidity around the world), interest payments on the debt will increase dramatically. Roubini warned:
Governments will thus need to drastically increase taxes and cut spending. Essentially, this will amount to a global “Structural Adjustment Program” (SAP) in the developed, industrialized nations of the West.
Where SAPs imposed upon ‘Third World’ debtor nations would provide a loan in return for the dismantling of the public state, higher taxes, growing unemployment, total privatization of state industries and deregulation of trade and investment, the loans provided by the IMF and World Bank would ultimately benefit Western multinational corporations and banks. This is what the Western world now faces: we bailed out the banks, and now we must pay for it, through massive unemployment, increased taxes, and the dismantling of the public sphere.
In February of 2010, Niall Ferguson, a prominent British economic historian, wrote an article for the Financial Times entitled, “A Greek Crisis Coming to America.” He starts by explaining that, “It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies.” He explained that this is not a crisis confined to one region, “It is a fiscal crisis of the western world,” and “Its ramifications are far more profound than most investors currently appreciate.” Ferguson writes that, “the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes,” and the US is no small risk:
Ferguson points out that, “The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.” Ferguson explains that debt will hurt major economies:
In late February of 2010, the warning signs were flashing red that interest rates were going to have to rise, taxes increase, and the burden of debt would need to be addressed.
China Begins to Dump US Treasuries
US Treasuries are US government debt that is issued by the US Treasury Department, which are bought by foreign governments as an investment. It is a show of faith in the US economy to buy their debt (i.e., Treasuries). In buying a US Treasury, you are lending money to the US government for a certain period of time.
However, as the United States has taken on excessive debt loads to save the banks from crisis, the prospect of buying US Treasuries has become less appealing, and the threat that they are an unsafe investment is ever-growing. In February of 2009, Hilary Clinton urged China to continue buying US Treasuries in order to finance Obama’s stimulus package. As an article in Bloomberg pointed out:
The following month, the Chinese central bank announced that they would continue buying US Treasuries.
However, in February of 2009, Warren Buffet, one of the world’s richest individuals, warned against buying US Treasuries:
In September of 2009, an article on CNN reported of the dangers if China were to start dumping US Treasuries, which “could cause longer-term interest rates to shoot up since bond prices and yields move in opposite directions,” as a weakening US currency could lead to inflation, which would in turn, reduce the value and worth of China’s holdings in US Treasuries.
It has become a waiting game; an economic catch-22: China holds US debt (Treasuries) which allows the US to spend to “save the economy” (or more accurately, the banks), but all the spending has plunged the US into such abysmal debt from which it will never be able to emerge. The result is that inflation will likely occur, with a possibility of hyperinflation, thus reducing the value of the US currency. China’s economy is entirely dependent upon the US as a consumer economy, while the US is dependent upon China as a buyer and holder of US debt. Both countries are delaying the inevitable. If China doesn’t want to hold worthless investments (US debt) it must stop buying US Treasuries, and then international faith in the US currency would begin to fall, forcing interest rates to rise, which could even precipitate a speculative assault against the US dollar. At the same time, a collapsing US currency and economy would not help China’s economy, which would tumble with it. So, it has become a waiting game.
In February of 2010, the Financial Times reported that China had begun in December of 2009, the process of dumping US Treasuries, and thus falling behind Japan as the largest holder of US debt, selling approximately $38.8 billion of US Treasuries, as “Foreign demand for US Treasury bonds fell by a record amount”:
So, China has given the US a vote of non-confidence. This is evident of the slippery-slide down the road to a collapse of the US economy, and possibly, the US dollar, itself.
Is a Debt Crisis Coming to America?
All the warning signs are there: America is in dire straights when it comes to its total debt, proper actions have not been taken to reform the monetary or financial systems, the same problems remain prevalent, and the bailout and stimulus packages have further exposed the United States to astronomical debt levels. While the dollar will likely continue to go up as confidence in the Eurozone economies tumbles, this is not because the dollar is a good investment, but because the dollar is simply a better investment (for now) than the Euro, which isn’t saying much.
The Chinese moves to begin dumping US Treasuries is a signal that the issue of American debt has already weighed in on the functions and movements of the global financial system. While the day of reckoning may be months if not years away, it is coming nonetheless.
On February 15, it was reported that the Federal Reserve, having pumped $2.2 trillion into the economy, “must start pulling that money back.” As the Fed reportedly bought roughly $2 trillion in bad assets, it is now debating “how and when to sell those assets.” As the Korea Times reported, “The problem: Do it too quickly and the Fed might cut off or curtail the recovery. Wait too long and risk setting off a punishing round of inflation.”
In mid-February, there were reports of dissent within the Federal Reserve System, as Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned that, “The US must fix its growing debt problems or risk a new financial crisis.” He explained, “that rising debt was infringing on the central bank’s ability to fulfill its goals of maintaining price stability and long-term economic growth.” In January, he was the lone voice at a Fed meeting that said interest rates should not remain near zero for an “extended period.” He said the worst case scenario would be for the US government to have to again ask the Fed to print more money, and instead suggested that, “the administration must find ways to cut spending and generate revenue,” admitting that it would be a “painful and politically inconvenient” process.
However, these reports are largely disingenuous, as it has placed focus on a superficial debt level. The United States, even prior to the onset of the economic crisis in 2007 and 2008, had long been a reckless spender. The cost of maintaining an empire is astronomical and beyond the actual means of any nation. Historically, the collapse of empires has as much or more to do with a collapse in their currency and fiscal system than their military defeat or collapse in war. Also important to note is that these processes are not mutually exclusive, but are, in fact, intricately interconnected.
As empires decline, the world order is increasingly marred in economic crises and international conflict. As the crisis in the economy worsens, international conflict and wars spread. As I have amply documented elsewhere, the United States, since the end of World War II, has been the global hegemon: maintaining the largest military force in the world, and not shying away from using it, as well as running the global monetary system. Since the 1970s, the US dollar has acted as a world reserve currency. Following the collapse of the USSR, the grand imperial strategy of America was to dominate Eurasia and control the world militarily and economically.
Throughout the years of the Bush administration, the imperial strategy was given immense new life under the guise of the “war on terror.” Under this banner, the United States declared war on the world and all who oppose its hegemony. All the while, the administration colluded with the big banks and the Federal Reserve to artificially maintain the economic system. In the latter years of the Bush administration, this illusion began to come tumbling down. Never before in history has such a large nation wages multiple major theatre wars around the world without the public at home being fiscally restrained in some manner, either through higher taxes or interest rates. In fact, it was quite the opposite. The trillion dollar wars plunged the United States deeper into debt.
By 2007, the year that Northern Rock collapsed in the UK, signaling the start of the collapse of 2008, the total debt – domestic, commercial and consumer debt – of the United States stood at a shocking $51 trillion.
As if this debt burden was not enough, considering it would be impossible to ever pay back, the past two years has seen the most expansive and rapid debt expansion ever seen in world history – in the form of stimulus and bailout packages around the world. In July of 2009, it was reported that, “U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.”
That is worth noting once again: the “bailout” bill implemented under Bush, and fully supported and sponsored by President-elect Obama, has possibly bailed out the financial sector of up to $23.7 trillion. How could this be? After all, the public was told that the “bailout” was $700 billion.
In fact, the fine print in the bailout bill revealed that $700 billion was not a ceiling, as in, $700 billion was not the maximum amount of money that could be injected into the banks; it was the maximum that could be injected into the financial system “at any one time.” Thus, it became a “rolling amount.” It essentially created a back-door loophole for the major global banks, both domestic and foreign, to plunder the nation and loot it entirely. There was no limit to the money banks could get from the Fed. And none of the actions would be subject to review or oversight by Congress or the Judiciary, i.e., the people.
This is why, as Obama became President in late January of 2009, his administration fully implemented the financial coup over the United States. The man who had been responsible for orchestrating the bailout of AIG, the buyout of Bear Stearns as a gift for JP Morgan Chase, and had been elected to run the Federal Reserve Bank of New York by the major global banks in New York (chief among them, JP Morgan Chase), had suddenly become Treasury Secretary under Obama. The Fed, and thus, the banks were now put directly in charge of the looting.
Obama then took on a team of economic advisers that made any astute economic observer flinch in terror. The titans of economic crisis and catastrophe had become the fox in charge of the chicken coop. Those who were instrumental in creating and constructing the economic crises of the previous decades and building the instruments and infrastructure that led to the current crisis, were with Obama, brought in to “solve” the crisis they created. Paul Volcker, former Chairman of the Federal Reserve and architect of the 1980s debt crisis, was now a top economic adviser to Obama. As well as this, Lawrence Summers joined Obama’s economic team, who had previously been instrumental in Bill Clinton’s Treasury Department in dismantling all banking regulations and creating the market for speculation and derivatives which directly led to the current crisis.
In short, the financial oligarchy is in absolute control of the United States government. Concurrently, the military structure of the American empire has firmly established its grip over foreign policy, as America’s wars are expanded into Pakistan, Yemen, and potentially Iran.
Make no mistake, a crisis is coming to America, it is only a question of when, and how severe.
Imperial Decline and the Rise of the New World Order
The decline of the American empire, an inevitable result of its half-century of exerting its political and economic hegemony around the world, is not an isolated event in the global political economy. The US declines concurrently with the rise of what is termed the “New World Order.”
America has been used by powerful western banking and corporate interests as an engine of empire, expanding their influence across the globe. Banks have no armies, so they must control nations; banks have no products, so they must control industries; banks have only money, and interest earned on it. Thus, they must ensure that industry and governments alike borrow money en masse to the point where they are so indebted, they can never emerge. As a result, governments and industries become subservient to the banking interests. Banks achieved this masterful feat through the construction of the global central banking system.
Bankers took control first of Great Britain through the Bank of England, building up the massive might of the British Empire, and spread into the rest of Europe, creating central banks in the major European empires. In the 20th Century, the central bankers took control of the United States through the creation of the Federal Reserve in 1913, prior to the outbreak of World War I.
Following World War I, a restructuring of the world order was undertaken. In part, these actions paved the way to the Great Depression, which struck in 1929. The Great Depression was created as a result of the major banks engaging in speculation, which was actively encouraged and financed by the Federal Reserve and other major central banks.
As a result of the Great Depression, a new institution was formed, the Bank for International Settlements (BIS), based in Basle, Switzerland. As historian Carroll Quigley explained, the BIS was formed to “remedy the decline of London as the world’s financial center by providing a mechanism by which a world with three chief financial centers in London, New York, and Paris could still operate as one.” He explained:
The new order that is being constructed is not one in which there is another single global power, as many commentators suggest China may become, but rather that a multi-polar world order is constructed, in which the global political economy is restructured into a global governance structure: in short, the new world order is to be marked by the construction of a world government.
This is the context in which the solutions to the global economic crisis are being implemented. In April of 2009, the G20 set into motion the plans to form a global currency, which would presumably replace the US dollar as the world reserve currency. This new currency would either be operated through the IMF or the BIS, and would be a reserve currency whose value is determined as a basket of currencies (such as the dollar, yen, euro, etc), which would play off of one another, and whose value would be fixed to the global currency.
This process is being implemented, through long-term planning, simultaneously as we see the further emergence of regional currencies, as not only the Euro, but plans and discussions for other regional currencies are underway in North America, South America, the Gulf states, Africa and East Asia.
A 1988 article in the Economist foretold of a coming global currency by 2018, in which the author wrote that countries would have to give up monetary and economic sovereignty, however:
To create a global currency, and thus a global system of economic governance, the world would have to be plunged into economic and currency crises to force governments to take the necessary actions in moving towards a global currency.
From 1998 onwards, there have been several calls for the formation of a global central bank, and in the midst of the global economic crisis of 2008, renewed calls and actual actions and efforts undertaken by the G20 have sped up the development of a “global Fed” and world currency. A global central bank is being offered as a solution to prevent a future global economic crisis from occurring.
In March of 2008, closely following the collapse of Bear Stearns, a major financial firm released a report stating that, “Financial firms face a ‘new world order’,” and that major banks would become much larger through mergers and acquisitions. There would be a new world order of banking consolidation.
In November of 2008, The National, a prominent United Arab Emirate newspaper, reported on Baron David de Rothschild accompanying Prime Minister Gordon Brown on a visit to the Middle East, although not as a “part of the official party” accompanying Brown. Following an interview with the Baron, it was reported that, “Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance.”
In February of 2009, the Times Online reported that a “New world order in banking [is] necessary,” and that, “It is increasingly evident that the world needs a new banking system and that it should not bear much resemblance to the one that has failed so spectacularly.” However, what the article fails to point out is that the ‘new world order in banking’ is to be constructed by the bankers.
This process is going hand-in-hand with the formation of a new world order in global political structures, following the economic trends. As regionalism was spurred by economic initiatives, such as regional trading blocs and currency groupings, the political structure of a regional government followed closely behind. Europe was the first to undertake this initiative, with the formation of a European trading bloc, which became an economic union and eventually a currency union, and which, as a result of the recently passed Lisbon Treaty, is being formally established into a political union.
The new world order consists of the formation of regional governance structures, which are themselves submissive to a global governance structure, both economically and politically.
In the construction of a ‘New World Order’, the capitalist system is under intense reform. Capitalism has, since its inception, altered its nature and forms. In the midst of the current global economic crisis, the construction of the ‘New Capitalism’ is based upon the ‘China model’; that is, ‘Totalitarian Capitalism’.
Governments will no longer stand behind the ‘public relations’ – propagandized illusion of ‘protecting the people’. When an economy collapses, the governments throw away their public obligations, and act for the interests of their private owners. Governments will come to the aid of the powerful banks and corporations, not the people, as “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.” During a large economic crisis:
Those who proclaim the actions of western governments ‘socialist’ are misled, as the ‘solutions’ are of a different nature. Daniel Guerin wrote in Fascism and Big Business about the nature of the fascist economies of Italy and Germany in the lead up to World War II. Guerin wrote of the actions of Italian and German governments to bail out big businesses and banks in an economic crisis:
Fascist economic policy:
The bureaucracy of the fascist state becomes much more powerful in directing the economy, and is advised by the ‘capitalist magnates’, who “become the economic high command – no longer concealed, as previously, but official – of the state. Permanent contact is established between them and the bureaucratic apparatus. They dictate, and the bureaucracy executes.” This is exactly the nature of the Treasury Department and Federal Reserve, most especially since the Obama administration took office.
In November of 2008, the National Intelligence Council (NIC) issued a report in collaboration between all sixteen US intelligence agencies and major international foundations and think tanks, in which they assessed and analyzed general trends in the world until 2025. When it reported on trends in ‘democratization’, discussing the spread and nature of democracy in the world, the report warned:
The warning from Daniel Guerin is vital to understanding this trend: “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.” Totalitarianism is on the rise, as David Lyon wrote:
In 2007, the British Defense Ministry released a report in which they analyzed future trends in the world. It stated in regards to social problems, “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.” Interestingly:
The general trend has thus become the reformation of the capitalist system into a system based upon the ‘China model’ of totalitarian capitalism. The capitalist class fear potential revolutionary sentiment among the middle and lower classes of the world. Obama was a well-packaged Wall Street product, sold to the American people and the people of the world on the promise of ‘Hope’ and ‘Change.’ Obama was put in place to pacify resistance.
Prior to Obama becoming President, the American people were becoming united in their opposition against not only the Bush administration, but Congress and the government in general. Both the president and Congress were equally hated; the people were uniting. Since Obama became President, the people have been turned against one another: ‘conservatives’ blame the ‘liberals’ and ‘socialists’ for all the problems, pointing fingers at Obama (who is nothing more than a figurehead), while those on the left point at the Republicans and ‘conservatives’ and Bush, placing all the blame on them. The right defends the Republicans; the left defends Obama. The people have been divided, arguably more so than at any time in recent history.
In dividing the people against each other, those in power have been able to quell resistance against them, and have continued to loot and plunder the nation and people, while using its military might to loot and plunder foreign nations and people. Obama is not to provide hope and change for the American people; his purpose was to provide the illusion of ‘change’ and provide ‘hope’ to the elites in preventing a purposeful and powerful opposition or rebellion among the people. Meanwhile, the government has been preparing for the potentiality of great social and civil unrest following a future collapse or crisis. Instead of coming to the aid of the people, the government is preparing to control and oppress the people.
Could Martial Law Come to America?
Processes undertaken in the American political establishment in previous decades, and rapidly accelerated under the Bush administration and carried on by the Obama administration, have set the course for the imposition of a military government in America. Readily armed with an oppressive state apparatus and backed by the heavy surveillance state apparatus, the ‘Homeland Security’ state is about controlling the population, not protecting them.
In January of 2006, KBR, a subsidiary of the then-Vice President Cheney’s former corporation, Halliburton, received a contract from the Department of Homeland Security:
Put simply, the contract is to develop a system of ‘internment camps’ inside the United States to be used in times of ‘emergency’. Further, as Peter Dale Scott revealed in his book, The Road to 9/11:
As Scott previously wrote, “the contract evoked ominous memories of Oliver North’s controversial Rex-84 ‘readiness exercise’ in 1984. This called for the Federal Emergency Management Agency (FEMA) to round up and detain 400,000 imaginary ‘refugees,’ in the context of ‘uncontrolled population movements’ over the Mexican border into the United States.” However, it was to be a cover for the rounding up of ‘subversives’ and ‘dissenters’. Daniel Ellsberg, who leaked the ‘Pentagon papers’ in 1971, stated that, “Almost certainly this [new contract] is preparation for a roundup after the next 9/11 for Mid-Easterners, Muslims and possibly dissenters.”
In February of 2008, an article in the San Francisco Chronicle, co-authored by a former US Congressman, reported that, “Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.”
Further, in February of 2008, the Vancouver Sun reported that:
Commenting on the Military Commissions Act of 2006, Yale law and political science professor Bruce Ackerman wrote in the Los Angeles Times that the legislation “authorizes the president to seize American citizens as enemy combatants, even if they have never left the United States. And once thrown into military prison, they cannot expect a trial by their peers or any other of the normal protections of the Bill of Rights.” Further, it states that the legislation “grants the president enormous power over citizens and legal residents. They can be designated as enemy combatants if they have contributed money to a Middle Eastern charity, and they can be held indefinitely in a military prison.” Not only that, but, “ordinary Americans would be required to defend themselves before a military tribunal without the constitutional guarantees provided in criminal trials.” Startlingly, “Legal residents who aren’t citizens are treated even more harshly. The bill entirely cuts off their access to federal habeas corpus, leaving them at the mercy of the president’s suspicions.”
Senator Patrick Leahey made a statement on February 2007 in which he discussed the John Warner Defense Authorization Act of 2007, saying:
He added that, “posse comitatus [is] the legal doctrine that bars the use of the military for law enforcement directed at the American people here at home.” The Bill is an amendment to the Insurrection Act, of which Leahey further commented:
On May 9, 2007, the White House issued a press release about the National Security Presidential Directive (NSPD) 51, also known as the “National Security and Homeland Security Presidential Directive.” This directive:
The document defines “catastrophic emergency” as, “any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions.” It explains “Continuity of Government” (COG), as “a coordinated effort within the Federal Government’s executive branch to ensure that National Essential Functions continue to be performed during a Catastrophic Emergency.” [emphasis added]
The directive states that, “The President shall lead the activities of the Federal Government for ensuring constitutional government. In order to advise and assist the President in that function, the Assistant to the President for Homeland Security and Counterterrorism (APHS/CT) is hereby designated as the National Continuity Coordinator.”
Essentially, in time of a “catastrophic emergency”, the President takes over total control of the executive, legislative and judicial branches of government in order to secure “continuity”. In essence, the Presidency would become an “Executive Dictatorship”.
In late September of 2008, in the midst of the financial crisis, the Army Times, an official media outlet of the Pentagon, reported that, “Helping ‘people at home’ may become a permanent part of the active Army,” as the 3rd Infantry Division’s 1st Brigade Combat Team, having spent years patrolling Iraq, are now “training for the same mission — with a twist — at home.” Further:
None of the authorizations, bills, executive orders, or contracts related to the declaration of marital law and suspension of democracy in the event of an ‘emergency’ have been repealed by the Obama administration.
In fact, as the New York Times revealed in July 2009, the Obama administration has decidedly left in place the Bush administration decisions regarding the government response to a national emergency in ‘Continuity of Government’ (COG) plans in establishing a ‘shadow government’:
The Obama administration announced that their continuity plans were ‘settled’ and they “drew no distance between their own policies and those left behind by the Bush administration.” In July of 2009, it was also reported on moves by the Obama administration to implement a system of ‘preventive detention’. With this, any semblance of democratic accountability and freedom have been utterly gutted and disemboweled; the Republic is officially dead:
Society, and with it, any remaining ‘democracy’ is being closed down. In this economic crisis, as Daniel Guerin warned decades ago, the financial oligarchy have chosen to ‘throw democracy overboard’, and have opted for the other option: totalitarian capitalism; fascism.
The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure. A central facet of this is the formation of a global central bank and a global currency.
The people of the world have been lulled into a false sense of security and complacency, living under the illusion of an economic recovery. The fact remains: it is only an illusion, and eventually, it will come tumbling down. The people have been conned into handing their governments over to the banks, and the banks have been looting and pillaging the treasuries and wealth of nations, and all the while, and making the people pay for it.
There never was a story of more woe, than that of human kind, and their monied foe.
Truly, the people of the world do need a new world order, but not one determined and constructed by and for those who have created the past failed world orders. It must be a world order directed and determined by the people of the world, not the powerful. But to do this, the people must take back the power.
The way to achieving a stable economy is along the path of peace. War and economic crises play off of one another, and are systematically linked. Imperialism is the driver of this system, and behind it, the banking establishment as the financier.
Peace is the only way forward, in both political and economic realms. Peace is the pre-requisite for social sustainability and for a truly great civilization.
The people of the world must pursue and work for peace and justice on a global scale: economically, politically, socially, scientifically, artistically, and personally. It’s asking a lot, but it’s our only option. We need to have ‘hope’, a word often strewn around with little intent to the point where it has come to represent failed expectations. We need hope in ourselves, in our ability to throw off the shackles that bind us and in our diversity and creativity construct a new world that will benefit all.
No one knows what this world would look like, or how exactly to get there, least of all myself. What we do know is what it doesn’t look like, and what road to steer clear of. The time has come to retake our rightful place as the commanders of our own lives. It must be freedom for all, or freedom for none. This is our world, and we have been given the gift of the human mind and critical thought, which no other living being can rightfully boast; what a shame it would be to waste it.
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 Councils ‘not reckless with cash’. BBC: October 10, 2008: http://news.bbc.co.uk/1/hi/uk_politics/7660438.stm
 Economic programme in cooperation with IMF. The Icelandic Government Information Centre: October 24, 2008: http://www.iceland.org/info/iceland-imf-program/
 David Ibison, Iceland’s rescue package flounders. The Financial Times: November 12, 2008
 David Blair, Financial crisis causes Iceland’s government to collapse. The Telegraph: January 27, 2009: http://www.telegraph.co.uk/news/worldnews/europe/iceland/4348312/Financial-crisis-causes-Icelands-government-to-collapse.html
 Iceland applies to join European Union. CNN: July 17, 2009: http://www.cnn.com/2009/WORLD/europe/07/17/iceland.eu.application/index.html?iref=newssearch
 Omar Valdimarsson, Iceland parliament approves debt bill. Reuters: August 28, 2009: http://www.reuters.com/article/idUSTRE57R3B920090828
 Rowena Mason, IMF and Sweden to delay Iceland loans. The Telegraph: January 14, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6990795/IMF-and-Sweden-to-delay-Iceland-loans.html
 Justyna Pawlak, EU to recommend start of Iceland talks – EU official. Reuters: February 16, 2010: http://www.reuters.com/article/idUSLDE61F25D20100216
 Paul Lewis, Dubai’s six-year building boom grinds to halt as financial crisis takes hold. The Guardian: February 13, 2009: http://www.guardian.co.uk/world/2009/feb/13/dubai-boom-halt
 Larry Elliott and Heather Stewart, Fears of double-dip recession grow as Dubai crashes. The Guardian: November 26, 2009: http://www.guardian.co.uk/business/2009/nov/26/double-dip-recession-dubai-debt
 Hugh Tomlinson, UAE minister claims Dubai crisis is over. The Times Online: December 17, 2009: http://business.timesonline.co.uk/tol/business/economics/article6960523.ece
 AP, Dubai debt fears resurface as questions linger. Forbes: February 16, 2010: http://www.forbes.com/feeds/ap/2010/02/16/business-financials-ml-dubai-financial-crisis_7359531.html
 Alastair Marsh, Markets hit as fears over Dubai debt rekindled. The Independent: February 16, 2010: http://www.independent.co.uk/news/business/news/markets-hit-as-fears-over-dubai-debt-rekindled-1900730.html
 Ed Harris, Greece turns to Socialists to fight economic crisis. London Evening Standard: October 5, 2009: http://www.thisislondon.co.uk/standard/article-23752278-greece-turns-to-socialists-to-fight-economic-crisis.do
 Ambrose Evans-Pritchard, Greece defies Europe as EMU crisis turns deadly serious. The Telegraph: December 13, 2009: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6804156/Greece-defies-Europe-as-EMU-crisis-turns-deadly-serious.html
 Elena Becatoros, Greece prepares economic crisis plan. The Globe and Mail: December 14, 2009: http://www.theglobeandmail.com/report-on-business/greece-prepares-economic-crisis-plan/article1399496/
 LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ, Wall St. Helped to Mask Debt Fueling Europe’s Crisis. The New York Times: February 13, 2010: http://www.nytimes.com/2010/02/14/business/global/14debt.html?adxnnl=1&adxnnlx=1266501631-XefUT62RSKhWj6xKSCX37Q
 Sam Fleming and Kirsty Walker, The euro? It’s a great success, says Mandy as Greece turmoil sends single currency into worst ever crisis. The UK Daily Mail: February 12, 2010: http://www.dailymail.co.uk/news/article-1250094/Greece-debt-crisis-Britons-pay-3-5bn-bailout.html
 Kate Connolly, Greek debt crisis: the view from Germany. The Guardian: February 11, 2010: http://www.guardian.co.uk/world/2010/feb/11/germany-greece-tax-debt-crisis
 Ambrose Evans-Pritchard, Greece loses EU voting power in blow to sovereignty. The Telegraph: February 16, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7252288/Greece-loses-EU-voting-power-in-blow-to-sovereignty.html
 Ambrose Evans-Pritchard, Fears of ‘Lehman-style’ tsunami as crisis hits Spain and Portugal. The Telegraph: February 4, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7159456/Fears-of-Lehman-style-tsunami-as-crisis-hits-Spain-and-Portugal.html
 Ambrose Evans-Pritchard, BIS warns of Great Depression dangers from credit spree. The Telegraph: June 25, 2007: http://www.telegraph.co.uk/finance/economics/2811081/BIS-warns-of-Great-Depression-dangers-from-credit-spree.html
 Ambrose Evans-Pritchard, BIS slams central banks, warns of worse crunch to come. The Telegraph: June 30, 2008: http://www.telegraph.co.uk/finance/markets/2792450/BIS-slams-central-banks-warns-of-worse-crunch-to-come.html
 Heather Scoffield, Financial repairs must continue: central banks. The Globe and Mail: July 29, 2009: http://v1.theglobeandmail.com/servlet/story/RTGAM.20090629.wcentralbanks0629/BNStory/HEATHER+SCOFFIELD/
 Simone Meier, BIS Sees Risk Central Banks Will Raise Interest Rates Too Late. Bloomberg: June 29, 2009: http://www.bloomberg.com/apps/news?pid=20601068&sid=aOnSy9jXFKaY
 David Uren, Bank for International Settlements warning over stimulus benefits. The Australian: June 30, 2009: http://www.theaustralian.com.au/news/bank-for-international-settlements-warning-over-stimulus-benefits/story-0-1225743622643
 Edmund Conway, S&P’s warning to Britain marks the next stage of this global crisis. The Telegraph: May 23, 2009: http://www.telegraph.co.uk/finance/financetopics/recession/5373334/SandPs-warning-to-Britain-marks-the-next-stage-of-this-global-crisis.html
 Robert Cookson and Sundeep Tucker, Economist warns of double-dip recession. The Financial Times: September 14, 2009: http://www.ft.com/cms/s/0/e6dd31f0-a133-11de-a88d-00144feabdc0.html
 Patrick Jenkins, BIS head worried by complacency. The Financial Times: September 20, 2009: http://www.ft.com/cms/s/0/a7a04972-a60c-11de-8c92-00144feabdc0.html?catid=4&SID=google
 Robert Cookson and Victor Mallet, Societal soul-searching casts shadow over big banks. The Financial Times: September 18, 2009: http://www.ft.com/cms/s/0/7721033c-a3ea-11de-9fed-00144feabdc0.html
 Ambrose Evans-Pritchard, Derivatives still pose huge risk, says BIS. The Telegraph: September 13, 2009: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6184496/Derivatives-still-pose-huge-risk-says-BIS.html
 Ambrose Evans-Pritchard, Morgan Stanley fears UK sovereign debt crisis in 2010. The Telegraph: November 30, 2009: http://www.telegraph.co.uk/finance/economics/6693162/Morgan-Stanley-fears-UK-sovereign-debt-crisis-in-2010.html
 Brett Arends, What a Sovereign-Debt Crisis Could Mean for You. The Wall Street Journal: December 18, 2009: http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html
 Edmund Conway, A 2010 sovereign debt crisis could still cause UK banking chaos. The Telegraph: January 4, 2010: http://www.telegraph.co.uk/finance/economics/6928164/A-2010-sovereign-debt-crisis-could-still-cause-UK-banking-chaos.html
 Edmund Conway, ‘Significant chance’ of second financial crisis, warns World Economic Forum. The Telegraph: January 14, 2010: http://www.telegraph.co.uk/finance/financetopics/davos/6990433/Significant-chance-of-second-financial-crisis-warns-World-Economic-Forum.html
 Nouriel Roubini and Arpitha Bykere, The Coming Sovereign Debt Crisis. Forbes: January 14, 2010: http://www.forbes.com/2010/01/13/sovereign-debt-crisis-opinions-colummnists-nouriel-roubini-arpitha-bykere.html
 Niall Ferguson, A Greek crisis is coming to America. The Financial Times: February 10, 2010: http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html
 Indira A.R. Lakshmanan, Clinton Urges China to Keep Buying U.S. Treasury Securities. Bloomberg: February 22, 2009: http://www.bloomberg.com/apps/news?pid=20601070&sid=apSqGtcNsqSY
 Agencies, China to keep buying US Treasuries: central banker. China Daily: March 23, 2009: http://www.chinadaily.com.cn/bizchina/2009-03/23/content_7606971.htm
 Jonathan Stempel, Buffett says U.S. Treasury bubble one for the ages. Reuters: February 28, 2009: http://uk.reuters.com/article/idUKTRE51R1Q720090228
 Paul R. La Monica, China still likes us … for now. CNN Money: September 16, 2009: http://money.cnn.com/2009/09/16/markets/thebuzz/index.htm
 Alan Rappeport, Foreign demand falls for Treasuries. The Financial Times: February 17, 2010: http://www.ft.com/cms/s/0/f06667d2-1b63-11df-838f-00144feab49a.html
 Barrie McKenna, Fed weighs sale of mortgage securities. CTV: February 17, 2010: http://www.ctv.ca/generic/generated/static/business/article1471824.html
 Dale McFeatters, Fed Plans to Wind Down $2.2 Tril. Stake. Korea Times: February 15, 2010: http://www.koreatimes.co.kr/www/news/opinon/2010/02/160_60822.html
 Alan Rappeport, Lone voice warns of debt threat to Fed. The Financial Times: February 16, 2010: http://www.ft.com/cms/s/0/c918b8dc-1b37-11df-953f-00144feab49a.html
 FIABIC, US home prices the most vital indicator for turnaround. FIABIC Asia Pacific: January 19, 2009: http://www.fiabci-asiapacific.com/index.php?option=com_content&task=view&id=133&Itemid=41
Alexander Green, The National Debt: The Biggest Threat to Your Financial Future. Investment U: August 25, 2008: http://www.investmentu.com/IUEL/2008/August/the-national-debt.html
John Bellamy Foster and Fred Magdoff, Financial Implosion and Stagnation. Global Research: May 20, 2009: http://www.globalresearch.ca/index.php?context=va&aid=13692
 Dawn Kopecki and Catherine Dodge, U.S. Rescue May Reach $23.7 Trillion, Barofsky Says (Update3). Bloomberg: July 20, 2009: http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM
 Chris Martenson, What the latest bailout plan means. ChrisMartenson.com: September 21, 2008: http://www.chrismartenson.com/blog/what-latest-bailout-plan-means/5149
 Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 324-325
 Get ready for the phoenix. The Economist: Vol. 306: January 9, 1988: pages 9-10
 Walden Siew, Banks face “new world order,” consolidation: report. Reuters: March 17, 2008: http://www.reuters.com/article/innovationNews/idUSN1743541720080317
 Rupert Wright, The first barons of banking. The National: November 6, 2008: http://www.thenational.ae/article/20081106/BUSINESS/167536298/1005
 Michael Lafferty, New world order in banking necessary after abject failure of present model. The Times Online: February 24, 2009: http://business.timesonline.co.uk/tol/business/management/article5792585.ece
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 22
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 23
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 215
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 224
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 230
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 239
 NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 87:
 Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 22
 David Lyon, Theorizing surveillance: the panopticon and beyond. Willan Publishing, 2006: page 71
 Richard Norton-Taylor, Revolution, flashmobs, and brain chips. A grim vision of the future. The Guardian: April 9, 2007:
 KBR, KBR Awarded U.S. Department of Homeland Security Contingency Support Project for Emergency Support Services. Press Releases: 2006 Archive, January 24, 2006: http://www.kbr.com/news/2006/govnews_060124.aspx
 Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007, page 240
 Peter Dale Scott, Homeland Security Contracts for Vast New Detention Camps. Pacific News Service: February 8, 2006:
 Lewis Seiler and Dan Hamburg, Rule by Fear or Rule by Law? The San Francisco Chronicle: February 4, 2008:
 David Pugliese, Canada-U.S. pact allows cross-border military activity. The Vancouver Sun: February 23, 2008:
 Bruce Ackerman, The White House Warden. Los Angeles Times: September 28, 2006:
 Patrick Leahy, Statement Of Sen. Patrick Leahy On Legislation To Repeal Changes To The Insurrection Act. February 7, 2007: http://leahy.senate.gov/press/200702/020707.html
 The White House, National Security and Homeland Security Presidential Directive. Office of the Press Secretary: May 9, 2007:
 Gina Cavallaro, Brigade homeland tours start Oct. 1. The Army Times: September 30, 2008: http://www.armytimes.com/news/2008/09/army_homeland_090708w/
 ERIC LICHTBLAU and JAMES RISEN, Power Shifts in Plan for Capital Calamity. The New York Times: July 27, 2009: http://www.nytimes.com/2009/07/28/us/politics/28continuity.html
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Martial Law, Inc.
KBR: A Halliburton Subsidiary
Global Research, March 5, 2008
KBR, or Kellogg Brown & Root, was a subsidiary of the Halliburton Corporation until 2007, when bad publicity and indictments against KBR forced Halliburton to sell its shares in KBR.1
KBR and Vietnam:
KBR, having financed Lyndon Johnson from the 1940s and into the Vice Presidential position, was rewarded after Kennedy’s assassination with lucrative contracts in the escalated Vietnam War. “Johnson, who became president in 1963 after Kennedy’s assassination and who was elected with broad support in 1964, used the Gulf of Tonkin incident,” in order to “justify the sending of ground troops into Vietnam. The result of that move was the need for billions of dollars worth of bases, airstrips, ports, and bridges. Enter Brown & Root.”2
With that, “In 1965, a year after Johnson stepped up America’s participation in Vietnam, Brown & Root joined three other construction and project management behemoths, Raymond International, Morris-Knudsen, and J.A. Jones to form one of the largest civilian-based military construction conglomerates in history.” That team of corporations was known as RMK-BRJ, which, “literally changed the face of Vietnam, clearing out wide swaths of jungle for airplane landing strips, dredging channels for ships, and building American bases from Da Nang to Saigon.”3 KBR, as a member of this joint conglomerate, was also contracted to build new prison cells in Vietnam, replacing the “horribly inhumane prison cells built by the French government 75 years earlier to hold prisoners.”4
KBR and the Rwandan Genocide:
In 1990, the first invasion of Rwanda took place by the Rwandan Patriotic Front (RPF), a militant organization from Uganda, overseen by a man by the name of Paul Kagame. The aim of this Tutsi rebel organization was the overthrow of Rwanda’s then-Hutu President Habyarimana, who was at the time, using World Bank loans to import enormous numbers of machetes under World Bank surveillance of Rwanda’s expenditure.5 This was the offset of the Rwandan civil war, which lasted until 1993, when a peace agreement was being brokered between Rwanda’s president and other neighboring leaders, including the President of Burundi. When the presidents of Rwanda and Burundi were flying back to Rwanda during the time of peace settlements, in 1994, their plane, also carrying on board many French officials, was shot down. This is the event that triggered the Rwandan genocide.
The first invasion of Rwanda by the RPF in 1990 “had the military backing of the first Bush administration [1989-1993], including Secretary of Defense Dick Cheney.”6 In 1992, “then-Defense Secretary Dick Cheney commissioned Brown & Root to produce a classified report examining the benefits of greatly expanding logistics privatization. The report led the Pentagon to solicit bids from thirty-seven firms for an unprecedented five-year contract to provide the bulk of the Army’s overseas logistics needs. Later that year, the Defense Department chose Brown & Root as the first such umbrella logistics contractor.”7
In 1993, newly elected President Bill Clinton continued this policy of supporting the RPF. His trusted allies in the United Nations, Madeline Albright, then US Ambassador to the United Nations and Kofi Annan, then head of the UN’s peacekeeping operations, ensured that the relationship would be concealed from the public. Wayne Madsen reported that both Albright and Annan, “conveniently chose to ignore evidence that a US-trained and supplied guerrilla force – the Tutsi-led Rwandan Patriotic Front (RPF) – was responsible for the fateful April 6, 1994 terrorist missile attack on the aircraft carrying the Hutu presidents of Rwanda and Burundi home from a peace summit in Tanzania.”8
Paul Kagame, leader of the RPF, had been trained at US military bases in the United States in guerilla warfare tactics, and had very close ties to the Pentagon, the US State Department and the CIA.9 It also turns out that the US supplied the RPF with the missiles used to shoot down the plane carrying the two presidents, and that a UN investigation revealed that the warehouse which was used in assembling the missile launchers was leased to a company linked to none other than the CIA. Albright and Annan also ensured that information did not reach the public.10
Madsen revealed that a French investigation in 2004 about the shooting down of the plane, carried out on behalf of the French citizens who were killed on the plane, revealed that there was a startling connection to an organization that goes by the name of the, “International Strategic and Tactical Organization” [ISTO], which represents powerful political and corporate interests, including Armitage and Associates LC, a firm founded by George W. Bush’s first Deputy Secretary of Defense Richard Armitage, and KBR, or Kellogg Brown & Root, then a subsidiary of Halliburton.11 In 1994, KBR was in Rwanda under a $6.3 million contract called “Operation Support Hope.”12
As a result of the Rwandan genocide, many of the key players got handsomely rewarded with promotions. Paul Kagame became President of Rwanda, Kofi Annan became Secretary-General of the United Nations, and Madeline Albright became Bill Clinton’s Secretary of State. A year later, in 1995, Dick Cheney went to become the CEO of Halliburton until the year 2000.
KBR and The Congo Civil War:
Kellogg-Brown & Root, which was connected to the, “International Strategic and Tactical Organization” (ISTO), made another appearance in Africa. This time, it was to do with the Congo civil war, which started in the late 1990s. The Congo was invaded in 1996 by forces from Rwanda under the leadership of Paul Kagame, as well as Burundi and Uganda sending in troops supporting rebel Congolese leader, Laurent Kabila, to overthrow the then-President of Congo [Zaire], Mobutu Sese Seko.13 KBR, “reportedly built a military base on the Congolese/Rwandan border, where the Rwandan army has trained,” and, what’s more, “The Bechtel Corporation provided satellite maps and reconnaissance photos to Kabila so that he could monitor the movements of Mobutu’s troops.”14 Bechtel’s board of directors includes former Secretary of State George Schultz and has former Secretary of Defense, Caspar Wienberger, as a legal counsel, while Dick Cheney was CEO of Halliburton and its subsidiary KBR at this time.
After deposing the former President of Congo, Kabila gave out juicy contracts to big corporations ready to rape the Congo’s resources. American Mineral Fields (AMF) got a huge contract for exploration rights over many rich minerals, and “Mike McMurrough, a friend of US President Bill Clinton, was the chair of AMF.”15 Another big company to profit off the death of millions of Congolese people is Barrick Gold Corporation, a Canadian mining company, with former Canadian Prime Minister Brian Mulroney and Clinton Adviser Vernon Jordan on its board of directors, and George HW Bush as a company adviser.16
KBR in Bosnia and Kosovo:
As economics professor at the University of Ottawa, Michel Chossudovsky, noted, “Throughout the 1990s, the Pakistan Inter Services Intelligence (ISI) was used by the CIA as a go-between — to channel weapons and Mujahideen mercenaries to the Bosnian Muslim Army in the civil war in Yugoslavia.” Quoting a report by the International Media Corporation, Chossudovsky wrote:
Further, a Congressional report issued in 1997, “confirms unequivocally the complicity of the Clinton Administration with several Islamic fundamentalist organisations including Osama bin Laden’s al Qaeda,” and that, “The “Bosnian pattern” described in the 1997 Congressional RPC report was replicated in Kosovo. With the complicity of NATO and the US State Department. Mujahideen mercenaries from the Middle East and Central Asia were recruited to fight in the ranks of the Kosovo Liberation Army (KLA) in 1998-99, largely supporting NATO’s war effort.” It was revealed that, “the task of arming and training of the KLA had been entrusted in 1998 to the US Defence Intelligence Agency (DIA) and Britain’s Secret Intelligence Services MI6.”18
After the US/British instigated conflicts in Bosnia and Kosovo in the 1990s, Halliburton subsidiary KBR got another interesting contract. As the Asia Times reported, KBR’s “big break came in December 1995. Dick Cheney had been the chief executive officer of parent company Halliburton for only two months. KBR was sent to Bosnia-Herzegovina and Kosovo to build two army camps in the middle of two deserted wheat fields. Instead it built two cities, one in Bosnia and one in Kosovo – complete with mail delivery and 24-hour food and laundry. In other words: without KBR, there would be no operating US Army in Bosnia and Kosovo. And the money was great: from 1995-2000, the KBR bill to the US government was more than $2 billion.” On top of this:
As Michel Chossudovsky wrote, “The plans to build Camp Bondsteel under a lucrative multibillion dollar DoD [Department of Defense] contract with Halliburton’s Texas based subsidiary KBR were formulated while Dick Cheney was Halliburton’s CEO,” and that, “The US and NATO had advanced plans to bomb Yugoslavia before 1999, and many European political leaders now believe that the US deliberately used the bombing of Yugoslavia to establish camp Bondsteel in Kosovo. According to Colonel Robert L. McCure, ‘Engineering planning for operations in Kosovo began months before the first bomb was dropped’.” The reasoning behind this was that:
One of the objectives underlying Camp Bondsteel was to protect the Albanian-Macedonian-Bulgarian Oil pipeline project (AMBO), which was to channel Caspian sea oil from the Bulgarian Black Sea port of Burgas to the Adriatic.
Coincidentally, two years prior to the invasion, in 1997, a senior executive of `Brown & Root Energy, a subsidiary of Halliburton, Edward L. (Ted) Ferguson had been appointed to head AMBO. The feasibility plans for the AMBO pipeline were also undertaken by Halliburton’s engineering company, Kellog, Brown & Root Ltd.20
KBR in Afghanistan and Iraq:
As Dan Briody wrote in The Halliburton Agenda, “When troops were deployed to Afghanistan, so was Kellogg Brown & Root. They built US bases in Bagram and Kandahar for $157 million. As it had done in the past, KBR has men on the ground before the first troops even arrived in most locations.”21 It was reported that KBR “was awarded a $100 million contract in 2002 to build a new U.S. embassy in Kabul, Afghanistan, from the State Department.”22
As the Center for Public Integrity reported, “KBR, Inc., the global engineering and construction giant, won more than $16 billion in U.S. government contracts for work in Iraq and Afghanistan from 2004 to 2006—far more than any other company.”23
Indeed, the wars in Afghanistan and Iraq presented Halliburton and its subsidiary, KBR, with an amazing opportunity of war profiteering on a scale never before seen. Not only was the company enriching itself, but its former CEO, Dick Cheney, currently Vice President of the United States, “sold most of his Halliburton shares when he left the company, but retained stock options worth about $8m,” and the Guardian reported in 2003 that KBR “is still making annual payments to its former chief executive, the vice-president Dick Cheney.”24
In December of 2005, the Chicago Tribune reported that, “A proposal prohibiting defense contractor involvement in human trafficking for forced prostitution and labor was drafted by the Pentagon last summer, but five defense lobbying groups oppose key provisions.” The lobbying groups, “say they’re in favor of the idea in principle, but said they believe that implementing key portions of it overseas is unrealistic. They represent thousands of firms, including some of the industry’s biggest names, such as DynCorp International and Halliburton subsidiary KBR, both of which have been linked to trafficking-related concerns.”25 However, human trafficking experts have criticized the move by the lobbying groups, and told “the Pentagon that the policy would merely formalize practices that have allowed contractors working overseas to escape punishment for involvement in trafficking.”
The allegations of human trafficking include, “the alleged involvement of DynCorp employees in buying women and girls as sex slaves in Bosnia during the U.S. military’s deployment there in the late 1990s,” and that, “Middle Eastern firms working under American subcontracts in Iraq, and a chain of human brokers beneath them, engaged in the kind of abuses condemned elsewhere by the U.S. government as human trafficking,” which pertained to KBR. The Chicago Tribune then reported in 2006 that, “some of KBR’s subcontractors, and a chain of human brokers stretching to South and Southeast Asia, allegedly engaged in the same kinds of abuses routinely condemned” as human trafficking.26
In December of 2007, it was reported that, “A Houston, Texas woman says she was gang-raped by Halliburton/KBR coworkers in Baghdad, and the company and the U.S. government are covering up the incident.” The article continued, “Jamie Leigh Jones, now 22, says that after she was raped by multiple men at a KBR camp in the Green Zone, the company put her under guard in a shipping container with a bed and warned her that if she left Iraq for medical treatment, she’d be out of a job.”27 Jones filed a lawsuit against Halliburton and KBR, and “says she was held in the shipping container for at least 24 hours without food or water by KBR, which posted armed security guards outside her door, who would not let her leave. Jones described the container as sparely furnished with a bed, table and lamp.”
KBR and the North American Union:
More recently, KBR has been awarded contracts by Shell Canada, now majority owned by its parent company, Royal Dutch Shell, “to provide field construction and module fabrication services by Shell Canada for the Scotford Upgrader Expansion east of Edmonton, Alberta, Canada.”28 Business Wire reported that, “The Scotford Upgrader Expansion project is part of the Athabasca Oil Sands Project (AOSP) Expansion 1, which will add approximately 100,000 barrels per day of capacity to the AOSP bitumen mining and upgrading facilities. AOSP is a joint venture between Shell Canada, Chevron Canada Limited and Western Oil Sands L.P. The total estimated cost of the project is between Cdn$10 billion and $12.8 billion.”
This is significant because it directly relates to the “deep integration” of Canada, the United States, and Mexico into a North American Union under the auspices of the Security and Prosperity Partnership of North America (SPP). The Independent Task Force on the Future of North America was a joint task force created between the US-based Council on Foreign Relations (CFR), the Mexican Council on Foreign Relations and the Canadian Council of Chief Executives (CCCE). The purpose of this task force was to produce a document, which would serve as a blueprint for the implementation of “integrating” the three countries of North America into a regional block, ultimately into a North American Union. The report was issued 2 months after the leaders of the 3 nations signed the Security and Prosperity Partnership agreement in 2005, and is titled, “Building a North American Community.”
In this document, regarding integrating energy sectors, it stated, “Canada’s vast oilsands, once a high-cost experimental means of extracting oil, now provide a viable new source of energy that is attracting a steady stream of multibillion dollar investments, and interest from countries such as China, and they have catapulted Canada into second place in the world in terms of proved oil reserves. Production from oilsands fields is projected to reach 2 million barrels per day by 2010.”29 The report further stated, “the three governments need to work together to ensure energy security for people in all three countries. Issues to be addressed include the expansion and protection of the North American energy infrastructure.”30
In 2006, the SPP created a new organization with the specific purpose of “advising” and “directing” the three governments on how to integrate properly and to set deadlines for specific programs. This organization is called the North American Competitiveness Council (NACC).
The Canadian membership of the North American Competitiveness Council includes Dominic D’Alessandro, President and CEO of Manulife Financial, who is also Chairman of the Canadian Council of Chief Executives (CCCE), David A. Ganong, President of Ganong Bros. Limited, as well as being a director of the CCCE and a director of Sun Life Financial, Hunter Harrison, President and CEO of Canadian National Railway Company and member of the CCCE, Linda Hasenfratz, CEO of Linamar Corporation who also sits on the board of CIBC, Michael Sabia, President and CEO of Bell Canada Enterprises (BCE), Annette Verschuren, President of The Home Depot Canada and member of the board of the CCCE, Richard E. Waugh, President and CEO of The Bank of Nova Scotia who also is on the board of the Institute for International Finance, is a member of the Chairman’s Advisory Council for the Council of the Americas, and the IMF’s Capital Markets Consultative Group. Further members of the NACC include Richard L. George, President and CEO of Suncor Energy Inc., an American who is Honourary Chair of the CCCE, and Paul Desmarais, Jr., Chairman and Co-CEO of Power Corporation of Canada.
Suncor, one of the Canadian corporations on the NACC, has as a member of its board of directors an American by the name of John Huff. John R. Huff, also happens to be on the board of directors of KBR32, now in a joint project with Shell in developing the oil sands, as recommended by the SPP.
KBR and Concentration Camps:
The New York Times reported in 2003, that, “Since the attacks of Sept. 11, Kellogg Brown & Root has won significant additional business from the federal government and the Pentagon. It has built cells for detainees at Guantánamo Bay in Cuba and is the exclusive logistics supplier for the Navy and the Army, providing services like cooking, construction, power generation and fuel transportation.”33 In 2005, the Independent reported that, “A subsidiary of Halliburton, the oil services group once led by the US Vice-President, Dick Cheney, has won a $30m (£16m) contract to help build a new permanent prison for terror suspects at Guantanamo Bay, Cuba.”34
On January 24, 2006, KBR, which was still a subsidiary of Halliburton at the time, got a contract from the Department of Homeland Security, “to support the Department of Homeland Security’s (DHS) U.S. Immigration and Customs Enforcement (ICE) facilities in the event of an emergency.”35 The press release on KBR’s website further stated that the contract has a “maximum total value of $385 million over a five-year term, consisting of a one-year based period and four one-year options, the competitively awarded contract will be executed by the U.S. Army Corps of Engineers, Fort Worth District. KBR held the previous ICE contract from 2000 through 2005.” The Executive Director of the KBR Government and Infrastructure division was quoted in the release as saying the contract, “builds on our extremely strong track record in the arena of emergency operations support.”
The contract awarded to KBR, a construction firm, “provides for establishing temporary detention and processing capabilities to augment existing ICE Detention and Removal Operations (DRO) Program facilities in the event of an emergency influx of immigrants into the U.S., or to support the rapid development of new programs,” [Emphasis added]. Further, “The contract may also provide migrant detention support to other U.S. Government organizations in the event of an immigration emergency, as well as the development of a plan to react to a national emergency, such as a natural disaster,” [Emphasis added].
As author, professor and former diplomat Peter Dale Scott notes in his book, The Road to 9/11: Wealth, Empire, and the Future of America, “On February 6, 2007, homeland security secretary Michael Chertoff announced that the fiscal year 2007 federal budget would allocate more than $400 million to add sixty-seven hundred additional detention beds (an increase of 32 percent over 2006).” Scott goes on to state that this was “in partial fulfillment of an ambitious ten-year Homeland Security strategic plan, code-named Endgame, authorized in 2003,” whose goal was to “remove all removable aliens,” as well as “potential terrorists.”36
As Scott wrote in an article shortly after the KBR contract was issued in 2006, “the contract evoked ominous memories of Oliver North’s controversial Rex-84 ‘readiness exercise’ in 1984. This called for the Federal Emergency Management Agency (FEMA) to round up and detain 400,000 imaginary ‘refugees,’ in the context of ‘uncontrolled population movements’ over the Mexican border into the United States.” Scott quoted Daniel Ellsberg, who in 1971 as a military analyst leaked the “Pentagon Papers” about the military’s activities in Vietnam, as saying, “Almost certainly this is preparation for a roundup after the next 9/11 for Mid-Easterners, Muslims and possibly dissenters,” and that, “They’ve already done this on a smaller scale, with the ‘special registration’ detentions of immigrant men from Muslim countries, and with Guantanamo.”37
A recent San Francisco Chronicle article, co-authored by a former US Congressman, reported that, “Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.”38
As the preparations of martial law are being put in place, it is of vital important to identify the specific corporations involved in this process. Administrations change, politicians go in and out of power, but the corporation is a consistent powerhouse. In this case, KBR has been a force to be reckoned with since the rise of Lyndon Johnson. Today, it has reached new heights. It was necessary to examine the recent history of this company’s activities, much the same as identifying a person’s own history and experiences to account for their present personality: so as to better understand their actions today. Given KBR’s history related to war and violence, more light should be shed on their current activities with the Department of Homeland Security, as morality is not a concept KBR seems to understand.
1 KBR Splits From Halliburton, Names New Board Members, RigZone, April 9, 2007:
2 Dan Briody, The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons, Inc.: New Jersey, 2004: pages 163-64
3 Dan Briody, The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons, Inc.: New Jersey, 2004: page 164
4 Dan Briody, The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons, Inc.: New Jersey, 2004: page 167
5 Michel Chossudovsky, The Globalization of Poverty and the New World Order, 2nd ed. Global Research: 2003, page 114
6 Wayne Madsen, Jaded Tasks – Brass Plates, Black Ops, & Big Oil: The Blood Politics of Bush & Co. TrineDay: 2006, page 2
7 Habib Moody, Soldiers for Rent. The New Atlantis: No. 17, Summer 2007:
8 Wayne Madsen, Jaded Tasks – Brass Plates, Black Ops, & Big Oil: The Blood Politics of Bush & Co. TrineDay: 2006, page 2
9 Wayne Madsen, Jaded Tasks – Brass Plates, Black Ops, & Big Oil: The Blood Politics of Bush & Co. TrineDay: 2006, pages 2-3
10 Wayne Madsen, Jaded Tasks – Brass Plates, Black Ops, & Big Oil: The Blood Politics of Bush & Co. TrineDay: 2006, page 12
11 Wayne Madsen, Jaded Tasks – Brass Plates, Black Ops, & Big Oil: The Blood Politics of Bush & Co. TrineDay: 2006, page 6-12
12 Dan Briody, The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons, Inc.: New Jersey, 2004: page 186
13 Steven Hiatt, ed., A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. Berrett-Koehler Publishers, Inc: 2007, page 94
14 Steven Hiatt, ed., A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. Berrett-Koehler Publishers, Inc: 2007, page 99
15 Steven Hiatt, ed., A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. Berrett-Koehler Publishers, Inc: 2007, page 99
16 Steven Hiatt, ed., A Game As Old As Empire: The Secret World of Economic Hit Men and the Web of Global Corruption. Berrett-Koehler Publishers, Inc: 2007, pages 99-100
17 Michel Chossudovsky, Osamagate. Global Research: October 9, 2001:
18 Michel Chossudovsky, Osamagate. Global Research: October 9, 2001:
19 ATOL, The Iraq Gold Rush. Asia Times Online: May 14, 2004:
20 Michel Chossudovsky, The Criminalization of the State: “Independent Kosovo”, a Territory under US-NATO Military Rule. Global Research: February 4, 2008:
21 Dan Briody, The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons, Inc.: New Jersey, 2004: page 219
22 Laura Peterson, Kellogg Brown & Root (Halliburton). Center for Public Integrity:
23 John Perry, Baghdad Bonanza. Center for Public Integrity:
24 Robert Bryce and Julian Borger, Cheney is still paid by Pentagon contractor. The Guardian: March 12, 2003:
25 Cam Simpson, US Stalls on Human Trafficking. Chicago Tribune: December 27, 2005:
26 Cam Simpson, U.S. to probe claims of human trafficking. Chicago Tribune: January 19, 2006:
27 Brian Ross, Maddy Sauer and Justin Rood, Victim: Gang-Rape Cover-Up by U.S., Halliburton/KBR. ABC News: December 10, 2007: http://abcnews.go.com/Blotter/story?id=3977702&page=1
28 Business Wire, KBR Awarded Contracts for Construction and Fabrication Services by Shell Canada for Scotford Upgrader Expansion. BNet: May 14, 2007:
29 John Manley, Pedro Aspe, William Weld. “Building a North American Community”.
The Council on Foreign Relations: May 2005, page 25 http://www.cfr.org/publication/8102/
30 Ibid, page 26
31 Embassy Report, Meet the Powerful Business Members of the North American Competitiveness Council. Embassy Magazine: June 13, 2007:
32 KBR, Board of Directors.
33 Elizabeth Becker, A NATION AT WAR: RECONSTRUCTION; Details Given On Contract Halliburton Was Awarded. The New York Times: April 11, 2003:
34 Rupert Cornwell, Halliburton given $30m to expand Guantanamo Bay. The Independent: June 18, 2005: http://www.independent.co.uk/news/world/americas/halliburton-given-30m-to-expand-guantanamo-bay-494530.html
35 KBR, KBR Awarded U.S. Department of Homeland Security Contingency Support Project for Emergency Support Services. Press Releases: 2006 Archive, January 24, 2006:
36 Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007, page 240
37 Peter Dale Scott, Homeland Security Contracts for Vast New Detention Camps. Pacific News Service: February 8, 2006:
38 Lewis Seiler and Dan Hamburg, Rule by Fear or Rule by Law? The San Francisco Chronicle: February 4, 2008: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/04/ED5OUPQJ7.DTL