Robert Gates Sets New Global War... Paulson Didn't Save US Economy

Robert Gates Sets New Global War

Wednesday, February 03, 2010 - by Staff Report

Robert Gates / Getty Images

Defense Secretary Robert Gates (pictured left) is urging Congress to approve the Obama administration's $768.2 billion Pentagon budget request, saying America needs "a broad portfolio of military capabilities." Gates joined Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, in outlining fiscal 2011 budget proposals to the Senate Armed Services Committee. Gates said the United States must "prepare for a much broader range of security challenges on the horizon." He said a continuing threat of terrorism from "nonstate groups," is among the challenges. And Gates added that such 21st century threats "transcend the familiar contingencies that dominated U.S. planning after the Cold War." He said the proposed budget justifiably exempts defense from spending freezes President Barack Obama is seeking for other government agencies and activities. - Washington Post

Dominant Social Theme: Sadly, the new Cold War is upon us.

Free-Market Analysis: Wow, this is news. Maybe Gates has said this before, but we're not aware of it, or not like this. His speech seems to be positioning nonstate terrorism as a definitive fulcrum of a new cold war. That's some budget request!

But let us begin at the beginning - especially as we have already analyzed the dominant social theme of terrorism in several recent articles. You can see Scott Smith's analysis here, at the end of the Simon interview, click here.
In fact it is a kind of twofer.

First there is the "uniqueness of state military protection" - one of the longest-lived and most pernicious dominant social themes in the arsenal of the powers-that-be. It makes use of humankind's instinct, millions of years old, to band together to defend against the "other." In fact, it is a tribal instinct that was most useful when there were fewer humans and more lions and tigers. Today, all over the world, especially in the West, power elites (in our opinion) do whatever it takes to frighten their OWN populations in order to provide the necessary military and policing services that then justify their services, privileges and powers.

Then there is the meme of nonstate terrorism - that "terrorism can strike from anywhere." Starting with the "anarchist" promotion of the early 20th century, Western elites have been busily inculcating the meme that terror is entirely unpredictable and that sustained campaigns of violence can be initiated and carried forth by a few dedicated individuals.

For a long time, Israel served as a good example of this promotion. Shadowy bands of terrorists were reported attacking Israeli citizens on a regular basis, yet one was never really given to understand how these terrorists banded together, where they came from or how they received their support. Israel seemed to be afflicted by modern terrorism - by a peculiar aspect of modernity, the "stateless terrorist."

And now here is Gates speaking of a ...

"CONTINUING THREAT OF TERRORISM FROM ‘NONSTATE GROUPS ... [THAT] "TRANSCENDS THE FAMILIAR CONTINGENCIES THAT DOMINATED U.S. PLANNING AFTER THE COLD WAR."'

Do you see? Here is the BIFURCATED meme in its all its glory being trotted out. This is a historical moment folks. You are in on the ground floor. You are looking at liftoff. Right now, just this minute, Gates has declared a NEW GLOBAL COLD WAR. That's right - he's saying that the DANGER posed by the stateless terrorist "transcends" the threats, and therefore the contingencies or solutions, generated by Pentagon Cold War planning. And that the danger of the stateless terrorist is even bigger than the threat of the Soviet Union (and to a lesser extent China), which spawned the last cold war.

From our point of view (humble as it is) this is THE MOTHER OF ALL PROMOTIONS. In fact, a terrorist without a state is as much of a danger, long term, as a toaster without power, a flashlight without a battery or an agenda of religious violence without state backing. We have come to believe this because we are students of free-market economics. Absent the coercion of the state, there is competition - and people are free to choose whether or not to support a "terrorist."

A group of terrorists banding together will likely always seek to live off what the local populace can provide (and almost inevitably, therefore, they will have to be domestically acculturated - not from somewhere else). If the local populace (representing a kind of statist entity itself) does not wish to support the "terrorists" in their midst, the likelihood of the terrorist movement succeeding is slim, long term. (Certainly they're not going to be in a position to project their agendas worldwide with any ease.) Not only that, but the larger, established government is likely to come to the aid of the citizens that are being oppressed by the terrorists. Absent the support of citizens and attacked by the larger government, the terrorist movement will either disband or seek a more supportive environment.

This is how we know that Al Qaeda is a myth as well - a kind of phantasmagoria. The idea that Bin Laden is leading a band of stateless terrorists from Afghanistan to Pakistan to Iraq to Yemen, etc. is economically unfeasible. And in fact if one peers behind the curtain, the allegations of Al Qaeda fade away. Turns out that the stateless terrorist is actually a Pashtun, an Iranian, Pakistani, etc. In fact, the Bin Laden sleeper cells in America and Britain never materialized. His fabulous Afghan mountain fortresses never turned up. His broadcasts are likely faked (as he is probably dead). The "fighters" that were filmed with him prior to 9/11 - according to the BBC - were hired day-to-day and told to bring their weapons. There is little doubt that Bin Laden and others around him were at one point CIA assets, trained and aimed at the Russians who were then invading Afghanistan.

Conclusion: It is most unfortunate that when one looks closely at many strands of the terror meme that Gates is seeking to promote, one finds in too many instances the fine hand of Anglo-American intel involvement. It is true that the appearance of stateless terrorism can be enhanced by third party funding. (Then terrorists don't have to depend on the host state or local populace for supplies, etc.) But free-floating, endless, nonstate (stateless) terrorism, unfunded and illogically destructive, is not economically feasible, let alone sensible. It is a fairytale, a Hollywood movie. It is a lie. There is always the backing of some sort of state or a significant number of citizens within a state when it comes to terrorism. And if people are going to blow themselves up, they usually have a damn good reason. No one straps on a bomb just to make a loud noise. Gates can proclaim a new cold war based on nonstate terrorism, but that doesn't make it so.


Paulson Didn't Save US Economy

Wednesday, February 03, 2010 - by Staff Report

Henry Paulson / Getty Images

The U.S. economy came "very close" to collapsing into a second Great Depression and the government had no alternative to bailing out financial firms, former Treasury Secretary Henry Paulson (pictured left) said. "There was a time when the credit markets had essentially frozen and when blue chip industrial companies were having trouble raising money," Paulson said in an interview today on Bloomberg Television. "I knew then we were on the brink." "We easily could have had unemployment of 20 percent," he said. "That would have meant millions of additional jobs lost, millions of additional homes lost, trillions more lost in savings. It would have been terrible." Paulson, who has just published his memoir, "On The Brink," said he understands the criticisms of the bailouts of financial institutions such as Bear Stearns Cos. and American International Group Inc. "In this country, none of us like bailouts," he said. "I hated the things we had to do. But they were far better than the alternative." The former secretary said it was harder for policy makers and legislators to deal with the crisis, which deepened after Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008, because it came just before the election. - Bloomberg

Dominant Social Theme: He needed to do what he did.

Free-Market Analysis: What exactly did Paulson save? From our point of view, he purports to have saved a financial system that is driven by fiat money and distorted by central banking surges. Not a real financial system in other words, but a false-mimic of one that has gradually been put in place decade by decade by subterfuge over the past 100 years. Call it a fiat money economic system. Or a central banking economy. It is not the same as real market-driven one using money stuff with real value dug from the ground.

Once a society has adopted a central bank, it is never the same. It changes, and not for the better. Our Brownian friends will argue that a public central bank under the control entirely of the state (and directly responsible to citizens) is better than a central bank run by a private banking cartel. But ultimately giving any entity the power to print money without end must lead to corruption, inefficiency and eventually distortion of all elements and instrumentalities of the state. It cannot be otherwise. Power corrupts and absolute power corrupts absolutely. (It just may take a little longer).

Here at the Bell, we are proponents of free-banking. We believe in any and every non-state solution to the creation and circulation of money. Yet we are proponents of honest money as well. Historically, when free-banking is implemented, it is accompanied by a private gold and silver standard. In fact, this sort of solution was the one that was adopted by citizens of the initial "united States." We would argue that it worked fairly well in many cases, despite the inevitable distortions inflicted on it by states and municipalities.

Before the advent of an American central bank, and certainly before the Civil War, America had a much different - and far more private - economy than it does today. Schools and healthcare were private, aged individuals were supported by their families, small farms were prevalent, entrepreneurialism was welcomed, taxes and regulation were low or non existent and even large industrial efforts were easily identifiable as family owned. Even the military was considered a communal element, not to be usurped by the federal government with a standing army - volunteer or not. This profile, in fact, can still be seen here in Switzerland which values small farms so much that it actually has passed legislation favorable to their survival.

But America has moved far away from its republican roots. Today, schools and increasingly healthcare are publicly funded and controlled by the federal government. Farming is in the hands of large conglomerates as are industrial enterprises - increasingly globalized - and taxes and regulation are almost at a point where the larger society is paralyzed. Increasingly Americans operate in a gray "cash only" market where regulations are avoided whenever possible, along with taxes. Central banking has funded a huge military industrial complex that has allowed the Anglo-American empire to project its power and corporate interests far abroad. Central banking has also contributed to the rise of the casino economy in which individuals attempt to get wealthy, or prepare for retirement, by timing the booms and busts of the stock market.

The most grievous cost is not to America's collective health care, education or even its finances - but to American internal life. And this could be said of citizens throughout the West. The jobs that are available are those that the state itself allows to exist. Inventions are suppressed - if possible - if they pose a threat to the existing order. Individuals' interior life, the ability to plan and prosper within the ambit of one's own society and culture, is severely restricted.

The Internet itself has provided a much different perspective on how the world works - or can work, within a republican environment that is actually implemented rather than merely paid lip service to. In a free-market society with common (private) law, utilizing private solutions for education and health care and other human services, entrepreneurialism would once again flourish and familial enterprise - as opposed to corporatism - would likely become the preferred model. Taxes would not be needed for the most part - as industrial solutions would be private - and regulations would not be necessary as disputes would be settled personally or through private justice.

Paulson did not save the "American" economy. He saved an economic enterprise that is a direct result of a central banking distortion. The booms of central banking money printing have empowered government solutions, allowed for the creation of a military industrial complex and continually squeezed out the vital American private sector that was responsible for the American miracle in the first place. Paulson saved a system of banking mercantilism, dependent on fiat money and cronyism.

It is an increasingly jobless system. And many of the jobs it throws up during the "boom" part of the boom/bust cycle are as insubstantial as the bubbles themselves. It is, in fact, a sad comment on the state of affairs in America especially that more do not understand that the economy they have is in a slow motion collapse. Paulson did the average man and woman no favor by salvaging the trembling remnants of central banking and fiat money. It is a false system based on inordinate money stimulation but not much else. There are more crises to come.

Conclusion: The wreckage of such a system would, in fact, provide the foundation and nutrients for a re-establishment of the kind of free-market-oriented economy that the West enjoyed (to some degree) before the advent of the central banking era. The Internet is gradually revealing this truth to a surprised and grateful populace. As it does, more and more realize they are living a lie and that there is a reason that their dreams have shriveled and their professional and personal lives have been distorted by the exegeses of modern life. This is the true cost of fiat money and central banking - the endless, silent agony it inflicts on those who continue to suffer under its terrible, merciless regime.