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How International Financial Elites Change Governments to Implement Austerity


By ISMAEL HOSSEIN-ZADEH | CounterPunch | February 28, 2014 

Many countries around the world are plagued by all kinds of armed rebellions, economic sanctions, civil wars, “democratic” coup d’états and/or wars of “regime change.” These include Ukraine, Venezuela, Syria, Thailand, Iran, Afghanistan, Iraq, Egypt, Yemen, Somalia and Lebanon. Even in the core capitalist countries the overwhelming majority of citizens are subjected to brutal wars of economic austerity.

While not new, social convulsions seem to have become more numerous in recent years. They have become especially more frequent since the mysterious 9-11 attacks on the World Trade Center in 2001 and the 2008 financial collapse in the United States, which soon led to similar financial implosions and economic crises in Europe and beyond.

Despite their many differences, these social turbulences share two common features. The first is that they are largely induced, nurtured and orchestrated from outside, that is, by the Unites States and its allies—of course, in collaboration with their class allies from inside. And the second is that, contrary to the long-established historical pattern of social revolutions, where the desperate and disenfranchised masses rebelled against the ruing elites, in most of the recent struggles it is the elites that have instigated insurgencies and civil wars against the masses. The two features are, of course, integrally intertwined: essentially reflecting the shared interests and collaborative schemes of the international plutocracies against the global 99%.

Fighting to Make Austerity Economics Universal

The official rationale (offered by the U.S. and its allies) that the goal of supporting anti-government opposition forces in places such as Syria, Ukraine and Venezuela is to spread democracy no longer holds any validity; it can easily be dismissed as a harebrained pretext to export neoliberalism and spread austerity economics. Abundant and irrefutable evidence shows that in places where the majority of citizens voted for and elected governments that were not to the liking of Western powers, these powers mobilized their local allies and hired all kinds of mercenary forces in order to overthrow the duly elected governments, thereby quashing the majority vote.

Such blatant interventions to overturn the elections that resulted from the majority vote include the promotion of the Orange Revolution in Ukraine (2004 and 2014), Rose Revolution in Georgia (2003), Cedar Revolution in Lebanon (2005), Tulip Revolution in Kyrgyzstan (2005) and the Green Revolution in Iran (2009). They also include the relentless agitation against the duly elected governments of the late Hugo Chavez and now his successor Nicolás Maduro in Venezuela, as well as the rejection (and effective annulment) of the duly elected Hamas government in Palestine.

So, the real driving forces behind wars of regime change need to be sought elsewhere; specifically, in the imperatives of expansion and accumulation of capital on a global level. Socialist, social-democratic, populist or nationalist leaders who do not embrace neoliberal economic policies, and who may be wary of having their markets wide open to unbridled foreign capital, would be targeted for replacement with pliant leaders, or client states. This is, of course, not a new explanation of economic imperialism; it is as old as the internationalization of trade and investment.

What is relatively new, and seems to be the main driving force behind the recent wars of regime change, is that, as the U.S. and other major capitalist powers have lately embarked on austerity economic policies at home they also expect and, indeed, demand that other countries follow suit. In other words, it is no longer enough for a country to open its markets to investment and trade with Western economic powers. It seems equally important to these powers that that country also dismantle its public welfare programs and implement austerity measures of neoliberalism.

For example, after resisting imperialist pressures for years, the late Libyan leader Muammar al-Gaddafi eventually relented in 1993, and granted major oil and other transnational corporations of Western powers lucrative investment and trade deals. Under pressure, he even dismantled his country’s nuclear technology altogether in the hope that this would please them to “leave him” alone, so to speak. None of the concessions he made, however, proved satisfactory to the U.S. and its allies, as his regime was violently overthrown in 2011and he was literally butchered by the thuggish gangs that were trained and armed by Western powers.

Why? Because the U.S. and its allies expected more; they wanted him to follow the economic guidelines of the “experts” of global finance, that is, of the U.S. and European economic “advisors,” of the International Monetary Fund and of the World Trade Organization—in short, to dismantle his country’s rather robust state welfare programs and to restructure its economy after the model of neoliberalism.

The criminal treatment of al-Gaddafi can help explain why imperialist powers have also been scheming to overthrow the populist/socialist regimes of the late Hugo Chavez and his successor in Venezuela, of the Castro brothers in Cuba, of Rafael Correa Delgado in Ecuador, of Bashar Al-assad in Syria and of Evo Morales in Bolivia. It also helps explain why they overthrew the popularly elected nationalist governments of Mohammad Mossadeq in Iran, of Jacobo Arbenz in Guatemala, of Kusno Sukarno in Indonesia, of Salvador Allende in Chile, of Sandinistas in Nicaragua, of Jean-Bertrand Aristide in Haiti and of Manuel Zelaya in Honduras.

The imperialist agenda of overthrowing al-Gaddafi and other “insubordinate” proponents of welfare state programs abroad is essentially part of the same evil agenda of dismantling such programs at home. While the form, the context and the means of destruction may be different, the thrust of the relentless attacks on the living conditions of the Libyan, Iranian, Venezuelan or Cuban peoples are essentially the same as the equally brutal attacks on the living conditions of the poor and working people in the US, UK, France and other degenerate capitalist countries. In a subtle way they are all part of an ongoing unilateral class warfare on a global scale. Whether they are carried out by military means and bombardments or through the apparently “non-violent” processes of judicial or legislative means does not make a substantial difference as far as their impact on people’s lives and livelihoods is concerned.

The powerful plutocratic establishment in the core capitalist countries does not seem to feel comfortable to dismantle New Deal economics, Social Democratic reforms and welfare state programs in these countries while people in smaller, less-developed countries such as (al-Gaddafi’s) Libya, Venezuela or Cuba enjoy strong, state-sponsored social safety net programs. Plutocracy’s intolerance of “regimented” economies stems from a fear that strong state-sponsored economic safely net programs elsewhere may serve as “bad” models that could be demanded by citizens in the core capitalist countries.

In a moment of honesty, former U.S. President Harry Truman is reported as having expressed (in 1947) the unstated mission of the United States to globalize its economic system in the following words: “The whole world should adopt the American system. The American system can survive in America only if it becomes a world system” [1].

In a similar fashion, Lord Cecil Rhodes, who conquered much of Africa for the British Empire, is reported to have suggested during the heydays of the Empire that the simplest way to achieve peace was for England to convert and add the rest of the world (except the United States, Germany and few other Western powers of the time) to its colonies.

The Mafia equivalent of Truman’s or Rhodes’ statements would be something like this: “You do it our way, or we break your leg.”

The mindset behind Truman’s blunt statement that the rest of the world “should adopt the American system” has indeed served as something akin to a sacred mission that has guided the foreign policy of the United States ever since it supplanted the British authority as the major world power.

It explains, for example, the real and the main reason behind the Cold War hostilities between the U.S. and its allies, on the one side, and the Soviet Union and its allies, on the other. While the “threat of communism” has been the official rationale for the start and escalation of those hostilities, there is convincing evidence that not only Joseph Stalin and his successors in the Soviet Union had no plans to wage war against the United States or its allies but that, in fact, they played a restraining role to contain independent revolutionary movements worldwide. “It is often forgotten,” points out Sidney Lens, “that for a few years after the war, he [Stalin] assumed an exceedingly moderate posture. . . . His nation had lost 25 million people in the war, was desperately in need of aid for rebuilding, and continued for a long time to nurture hopes of coexistence. Far from being revolutionary, Stalin in those years put the damper on revolution wherever he could” [2]. To accommodate the United States and other Western powers in the hope of peaceful coexistence, Stalin often advised, and sometimes ordered, the pro-Moscow communist/leftist parties in Europe and elsewhere in the world to refrain from revolutionary policies that might jeopardize the hoped-for chances of coexistence.

The goal or mission of converting other economies to the U.S.-style capitalism also helps  explain why the United States has engaged in so many military operations and engineered so many coup d’états and regime changes around the world. The Federation of American Scientists has recorded a list of U.S. foreign military engagements which shows that in the first decade after the collapse of the Berlin Wall (1989-99) the U.S. engaged in 134 such operations, the majority of which are altogether unknown to the American public [3].

Global financial elites change “unaccommodating” regimes not only in the less developed countries but also in the core capitalist countries. They accomplish this not so much by military means as by utilizing two very subtle but powerful means: (a) artificial, money-driven elections, peddled as “democracy in action”; and (b) powerful financial institutions and think tanks such as the International Monetary Fund (IMF), central banks and bond/credit rating agencies like Moody’s, Standard & Poor’s and Fitch Group. An unfavorable rating report by these agencies on the credit status of a country can create havoc on that country’s economic, financial and currency position in world markets, thereby dooming its government to collapse and replacement. This is how during the ongoing financial turbulence of recent years a number of governments have been changed in places like Greece and Italy—no need for the traditional or military style regime change, the “soft-power” financial coup d’état engineered by the IMF and/or rating agencies would serve the purpose even more effectively.

Class War on a Global Scale

As noted, all the schemes and wars of regime change, whether by the traditional military means or by the “soft” power of the global financial juggernaut, essentially represent one thing: a disguised class war on a global level, a relentless worldwide economic war by the one percent financial-economic oligarchy against the rest of the world population.

Class struggle in an economically-tiered society is of course not new. What is relatively new in the recent years’ war of the 1% against the 99% is its escalated pace, its widespread scale and its globally orchestrated character. While neoliberal austerity attacks on the living conditions of the public in the core capitalist countries began (formally) with the supply-side economics of President Ronald Reagan and Prime Minister Margaret Thatcher more than three decades ago, the brutality of such attacks have become much more severe in the context of the current financial/economic crisis, which began with the 2008 financial crash in the United States.

Taking advantage of the crash (as an economic shock therapy, as Naomi Klein put it), the financial oligarchy and their proxies in the governments of the core capitalist countries have been carrying out a systematic economic coup d’état against the people the ravages of which include the following:

• Transfer of tens of trillions of dollars from the public to the financial oligar­chy through merciless austerity cuts;

• Extensive privatization of public assets and services, including irreplaceable historical monuments, priceless cultural landmarks, and vital social services such as healthcare, education and water supply;

• Substitution of corporate/banking welfare policies for people’s welfare programs;

• Allocation of the lion’s share of government’s monetary largesse (and of credit creation in general) to speculative investment instead of real investment;

• Systematic undermining of the retirement security of millions of workers (both white and blue collar) and civil servants;

• Ever more blatant control of economic and/or financial policies by the rep­resentatives of the financial oligarchy.

Combined, these policies have significantly aggravated the already lopsided income/wealth distribution in these countries. The massive cuts in social spending have resulted in an enormous transfer of economic resources from the bottom up. The transfer has, indeed, more than made up for the 2008 losses of the financial speculators. In the U.S., for example, the wealthiest one percent now own 40 percent of the entire country’s wealth; while the bottom 80 percent own only seven percent. Likewise, the richest one percent now take home 24 percent of the country’s total income, compared to only nine percent four decades ago [4].

This shows that, as pointed out earlier, while neoliberal attacks on the 99% in the core capitalist countries may not seem as violent as those raging, for example, in Venezuela, Syria or Ukraine, the financial impact of such attacks on the living conditions of the 99% is not any less devastating.

Plutocrats of the World Are United

Policies of regime change are usually designed and carried out as collaborative schemes by cross-border plutocracies, that is, by the financial oligarchies of the imperialist countries in partnership with their native counterparts in the less-developed countries.

In addition to constant behind-the-scenes strategizing, representatives of transnational capital and their proxies in capitalist governments also routinely meet at international conferences in order to synchronize their cross-border business and financial policies—a major focus of which in recent years has been to implement global austerity measures and entrench neoliberal policies worldwide. These include the World Economic Forum in Davos, Switzerland, the World Bank and IMF annual meetings, the Periodic G20 meetings, the Aspen Institute’s Ideas Festival, The Bilderberg Group annual geopolitics forum, and the Herb Allen’s Sun Valley gathering of media moguls—to name only a handful of the many such international policy gatherings.

Through its global strategies and operations, transnational capital has broken free from national constraints and commitments at home and successfully shifted the correlation of class forces and social alliances worldwide. Today’s elites of global capitalism “are becoming a trans-global community of peers who have more in common with one another than with their countrymen back home,” writes Chrystia Freeland, Global Editor of Reuters, who travels with the elites to many parts of the world. “Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves,” she adds [5].

Implications for Globalization from Below

What conclusions can the 99% draw from this? What can the working people and other grassroots do to protect their jobs, their sources of livelihood, their communities and their environment? What can communities of ordinary people do to undermine the strategies of the global 1% that block life-sustaining progressive social and economic reforms?

In the same fashion that, in their fight against the working people, the elites of the international capitalist class are not bound by territoriality or national boundaries, so does the working class need to coordinate its response internationally.

A logical, first step deterrent to transnational capital’s strategy of blackmailing labor and communities through threats such as destroying or exporting jobs by moving their business elsewhere would be to remove the lures that induce plant relocation, capital flight or outsourcing. Making labor costs of production comparable on an international level would be crucial for this purpose. This would entail taking the necessary steps toward the international establishment of wage and benefits, that is, of labor cost parity within the same company and the same trade, subject to (a) the cost of living, and (b) productivity in each country.

A strategy of this sort would replace the current downward competition between workers in various countries with coordinated bargaining and joint policies for mutual interests and problem-solving on a global level. While this may sound radical, it is not any more radical than what the transnational 1% is doing: coordinating their anti-99% strategies on a global scale. If at an earlier stage of capitalist development “workers of the world unite” seemed an outlandish dream of the leading labor champion Karl Marx, internationalization of capital, the abundance of material resources and developments in technology, which has greatly facilitated cross-border organizing and coordination of actions by the 99%,  has now made that dream an urgent necessity.

As capital and labor are the cornerstones of capitalist production, their respective organizations and institutions evolve more or less apace, over time and space. Thus, when production was local, so was labor: carpenters, shoemakers, bricklayers, and other craftsmen organized primarily in their local communities. But as capitalist production became national, so did trade unions. Now that capitalist production has become global, labor organizations too need to become international in order to safeguard their and their communities’ rights against the profit-driven whims of the footloose and fancy-free transnational capital.

Many would argue that these are not propitious times to speak of radical alternatives to capitalism. The present state of the sociopolitical landscape of our societies appears to support such feelings of pessimism. The high levels of unemployment in most countries of the world and the resulting international labor rivalry, combined with the austerity offensive of neoliberalism on a global level, have thrown the working class and other grassroots on the defensive. The steady drift of the European socialist, Social Democratic, and labor parties/governments toward the U.S.–style market economies and the erosion of their traditional ideology, power, and prestige have led to workers’ confusion there. The collapse of the Soviet Union, however much some socialists have always distanced themselves from that system, haunts the specter of socialism, and is likely to do so for some time to come. These developments have understandably led to workers’ and other grassroots’ confusion and disorientation globally.

None of these, however, mean that there is no way out of the status quo. Capitalism is not only “destructive,” it is also “regenerative,” as Karl Marx put. As it captures world markets, universalizes the reign of capital, and disrupts the living conditions for many, it simultaneously sows the seeds of its own transformation. On the one hand, it creates common problems and shared concerns for the majority of the world population; on the other, it creates the material conditions and the technology that facilitate communication and cooperation among this majority of world citizens for joint actions and alternative solutions.

When the majority of world population, the global 99%, will come to the realization and determination to actually appropriate and utilize the existing technology and material resources for a better organization and management of the world economy, no one can tell. But the potential and the long term trajectory of global socioeconomic developments point in that direction. The distance between now and then, between our immediate frustrations and the superior but elusive civilization of our desire, can be traversed only if we take the necessary steps toward that end [6].

Ismael Hossein-zadeh is Professor Emeritus of Economics, Drake University, Des Moines, Iowa. He is the author of The Political Economy of U.S. Militarism (Palgrave – Macmillan 2007), the Soviet Non-capitalist Development: The Case of Nasser’s Egypt (Praeger Publishers 1989), and most recently, Beyond Mainstream Explanations of the Financial Crisis (forthcoming from Routledge, April 29, 2014).

March 1, 2014 Posted by | Economics, Timeless or most popular | , , , , , , | 2 Comments

The Trans-Pacific Partnership: We Won’t Be Fooled by Rigged Corporate Trade Agreements

By Margaret Flowers and Kevin Zeese | Truthout | October 2, 2013

This week, President Obama will attend the Asia-Pacific Economic Coordination (APEC) meeting in Bali, Indonesia, where he is expected to announce his goal of having the Trans-Pacific Partnership (TPP) signed into law by the end of 2013. Obama will host a meeting of the leaders of the TPP nations during the APEC conference.

The Obama administration has been negotiating the TPP in secret for more than three years. Unlike past trade agreements, the text of the TPP is classified, and members of Congress have restricted access to it. If they do read the text, they are not allowed to copy it or discuss any specifics of it. However, more than 600 corporate advisers have direct access to the text on their computers.

The final formal round of negotiations was held in Brunei this August, and since then, there have been informal meetings to try and finalize sections of the agreement. As far as the president is concerned, the TPP is entering the home stretch. All he needs now is for Congress to vote to grant him fast track, also known as trade promotion authority, and it’s a done deal. The facts show that the president may be deluding himself or trying to fool everyone else.

This is because the TPP goes far beyond a trade deal. Only five of the 29 chapters contain provisions related to trade. The other chapters consist of provisions related to patent protections, investor state rights and finance deregulation, among others. The TPP is a backdoor corporate power grab to advance the stalled WTO agenda. Or as Sachie Mizohata writes in Asia Times, “The TPP is a Trojan horse, branded as a ‘free trade’ agreement, but having nothing to do with fair and equitable treatment. In reality, it is precisely ‘a wish list of the 1% – a worldwide corporate power’.”

We expect the president to return from Bali with increased enthusiasm to push for fast track. To accompany this push will be the usual misinformation campaign coming from supporters of the TPP. To prepare the public for the expected propaganda, we will look at what is being said and provide facts to counter their arguments.

As far as some members of Congress are concerned, as well as hundreds of civil society groups and a growing number of US residents, fast track and the TPP are not going to slide through Congress smoothly. Opposition to the TPP is growing as more people come to understand that the TPP is a rigged corporate trade deal and not fair trade that respects the needs of people and the planet.

What’s Wrong with Fast Track?

For most of the past 200 years, Congress negotiated trade policy and wrote the laws to oversee trade, as required in the Constitution’s Commerce Clause. This power was first transferred to the executive office when Nixon was granted fast track in 1974 as part of his consolidation of presidential power. Fast track expired in 2007. Only 16 trade agreements have been passed using fast track, and some of these were the most unpopular and controversial pacts such as the WTO and NAFTA, signed by President Clinton.

The previous fast track legislation required the president to submit both the trade agreement and implementing legislation to Congress for approval. According to a 2011 report by the Congressional Research Services, “The fast-track authority provides that Congress will consider trade agreement implementing bills within mandatory deadlines, with a limitation on debate and without amendment. . .” In other words, fast track permits the president to negotiate an entire trade agreement over many years and then present it to Congress for an up or down vote within a short time period (60 to 90 days), with debate limited to 20 hours and no amendments.

Fast  track severely undermines the transparent and democratic process required to ensure that the full implications of the agreement are understood and are acceptable. Trade agreements require that laws, even down to the local level, be changed to be in compliance with provisions in them. For example, when the WTO was passed, which was fast tracked despite having been negotiated for over 10 years and containing thousands of pages, most members of Congress did not read or understand it.

Great Recession Connection

One of the requirements of the WTO was that Glass-Steagall had to be repealed. This removed the wall that protected traditional banking from risky investments and is partially responsible for the current economic crisis, which started in 2008. Similarly, NAFTA was 1,700 pages, including annexes and footnotes. NAFTA involved only three countries, the TPP includes 12. Congress cannot digest all of this information and consider its implications in such a short time.

Passage of the Trans-Pacific Partnership and its sister, the Trans-Atlantic Trade and Investment Partnership (known as TAFTA), for which negotiations began in July, will require fast track to become law. Supporters of the TPP such as the US Chamber of Commerce and, of course, the office of the US Trade Representative (USTR) are promoting fast rack with flimsy and false arguments. Basically, they boil down to these points:

1.  The president should have fast track so he can negotiate job-creating agreements and boost trade and the economy.

2. It’s OK to give the president fast track because Congress is going to include negotiating objectives within the fast track law, and Congress must vote on the agreement.

3. The president should have fast track because other presidents have had it.

So, let’s examine the facts. First, despite promises of American jobs, past free trade agreements have actually been huge job losers. NAFTA is responsible for the loss of nearly 700,000 jobs. The recent Korea Free Trade Agreement was promised to bring 70,000 new jobs, but lost 40,000 jobs in the first year alone instead, and Public Citizen estimates that nearly 160,000 jobs will be lost over the first seven years. In total, US free trade agreements over the past two decades have netted a loss of nearly 5 million American jobs.

In addition to the loss of jobs, free trade agreements have contributed to the stagnation of wages in the United States. American workers cannot compete with extremely low wages in countries like China, Malaysia and Vietnam. A recent study predicts that the TPP will cause wages for 90 percent of American workers to decrease while wealth of the top 1% will soar. How can US workers compete with workers in Malaysia, where the minimum wage is $1.24; Peru, where it is $1.37; or Vietnam, where it is 30 cents? The TPP will increase the race to the bottom that will further impoverish US workers.

The same study predicts that the TPP will only boost US Gross Domestic Product (GDP) by 0.1 percent. In fact, free trade agreements do not seem to work at all when it comes to expanding US exports. According to the data, overall the US trade deficit has increased by 440 percent with countries with which we have free trade agreements and has declined by 7 percent with countries with which we do not have agreements. If we look at the outcome of a “21st century trade agreement,” which is how the office of the USTR describes the TPP, like the Korea Free Trade Agreement, we find that “average monthly exports to Korea since the FTA have sunk 11 percent below the average monthly level before the FTA.” TAFTA is expected to increase US GDP by a mere 0.2 to 0.4 percent, which Public Citizen reports, is “a smaller contribution to GDP than was delivered by the latest version of the iPhone.”

Second, let’s look at Congressional oversight under fast track. Carol Guthrie from the office of the US Trade Representative recently wrote an email response to the producer of a video interview of Margaret Flowers in which she said:

“Checking in on your story on TPP – afraid there seems to be some misunderstanding about trade promotion authority, sometimes known as ‘fast track.’ Under such a law, which lays out just how the administration should consult with Congress on trade agreements, and in which Congress sets out negotiating objectives for the United States, there are indeed hearings and an up or down vote in Congress before the agreement can be implemented in law and enter into force. There are rules in TPA about whether or not the implementing legislation for an agreement can be amended, but it does not allow an agreement to become law or enter into force without Congressional approval. Glad to share more information as it’s helpful to you.”

Flowers wrote back immediately and asked if there was fast track legislation available for review; whether there would be full hearings on the content of the TPP and its implications; and whether amendments would be allowed. That was on September 20 and no response has been received.

In the past, fast track has limited hearings and debate and has not allowed amendments. There have also been negotiating objectives in the past, and these have often been ignored. For example, labor rights were required under the WTO, but still were not included. Even when provisions such as worker protections are included in trade agreements, they are not enforced, as is recently demonstrated in Colombia, where deaths of worker advocates have increased and there are massive strikes and protests since passage of the Colombian FTA.

In the case of the TPP, negotiating objectives enacted now, when the negotiation of the entire agreement is concluding, will have absolutely no effect. The negotiating objectives are merely window dressing designed to confuse labor unions, environmental groups and others into supporting the TPP, when in reality, protections will not be enforced.

Members of Congress are overruled by the agreements when they do try to change the provisions. Ray Rogers writes that trade agreements “have nullified the efforts of political leaders like Senator Tom Harkin (D-Iowa), who introduced legislation in 1994 to ban the imports of products produced by brutal child labor. President Clinton’s US Trade Representative informed him that his bill would violate the General Agreement on Tariffs and Trade (GATT), which the United States is obliged to obey.” Thus, trade agreements tie the hands of Congress and undermine US sovereignty.

What is Oversight?

The definition of Congressional oversight by the office of the US Trade Representative falls far short of the degree of oversight necessary if Congress and the public are to have the ability to fully understand what is in the secret TPP and what the economic impact will be on the United States and nations around the world, as well as how it will impact protection of workers, consumers and the environment. What we expect to see under the fast track process are limited hearings in which supporters of the TPP praise it and Congress members are not able to fully question or amend it. How could it be anything else when members of Congress will not even have time to read the agreements?

Lastly, the idea that other presidents had fast track, so President Obama should too, is embarrassing in its lack of logic. Most presidents have not had fast track. And the agreements passed by fast track have caused the loss of US jobs, lowered wages and created higher trade deficits. Congress must serve its Constitutional function as a check and balance to the power of the President and the branch of government responsible for regulating trade and passing legislation. Fast track undermines the constitutional power of Congress and creates an imperial presidency.

Fortunately, the process to grant fast track trade authority this time around has slowed significantly. In February, 2012, then US Trade Representative Ron Kirk, in his testimony before the House Ways and Means Committee, included a request for fast track by the end of 2012 to complete TPP negotiations. Senators Max Baucus and Orrin Hatch urged the White House to request fast track trade authority last April. They expected to have a fast track bill passed in Congress by last June.

President Obama waited until August of this year to formally request fast track and, as of the writing of this article, no fast track bill has been introduced in Congress. A recent report in Politico stated, “Efforts by leaders of Senate Finance and House Ways and Means to craft a bipartisan TPA [Trade Promotion Authority] bill have taken longer than expected, prompting speculation the two panels may not be able to produce a package.”

Bipartisan opposition to fast track has already appeared in Congress. Alan Grayson (D-Florida) voiced opposition and Rosa DeLauro (D-Connecticut) is gathering signatures from other members on a letter to the president opposing fast track. Michelle Bachman (R-Minnesota) and Walter Jones (R-North Carolina) have a similar letter to the president. Many groups are lobbying against fast track, including Public Citizen, environmental groups and labor. We are organizing Fair Trade Brigades to track congressional support for fast track through our Flush the TPP campaign. Everyone is encouraged to participate in that effort.

Don’t Fast Track this Train Wreck

As Mizohata wrote in Asia Times, the TPP is Trojan horse that is not about trade. We know this because only five of its 29 chapters are about trade. Ben Beachy reports that “of the 11 countries negotiating the TPP with the United States, six already have FTAs with the US.”

So, if we already have trade agreements with these countries, and we know that trade deals don’t reduce our trade deficit, what is the reason for the TPP? It looks like a backdoor to the neoliberal economic agenda that has been stalled under the WTO since the Battle of Seattle in 1999. The tremendous secrecy surrounding the TPP is because the policies that are being pushed through are both harmful to – and unpopular with – the American public. Fast track is necessary to protect this secrecy because the TPP would not survive the light of day.

Senator Elizabeth Warren (D-Massachusetts) has been one of the most outspoken members of Congress on the need for transparency. She wrote a letter to the president requesting that the text be made available to the public. Even members of Congress have restricted access to the text. Zach Carter writes that “Some [members of Congress] have said they were insulted by the complex administrative procedures the office of the U. Trade Representative, or USTR, imposed to actually access the texts – barriers not imposed on unelected corporate advisers.”

And, it is not only texts, when Rep. Darrell Issa (R-California) sought to observe negotiations being held near his California Congressional District, the US Trade Representative would not allow it. While corporations have been allowed to participate throughout the process, a member of Congress who serves on committees dealing with energy, small businesses, foreign policy and government oversight – which would all be impacted by the TPP – was blocked from merely observing. As Rep. Issa wrote: “Congress has a constitutional duty to oversee trade negotiations and not simply act as a rubber stamp to deals about which they were kept in the dark. While I had hoped the TPP would permit me to observe this round of the negotiation process firsthand, our efforts to open TPP negotiations up to transparency will continue.”

Looking at the office of the USTR website, one would think that the process of negotiating the TPP has been open and broad, rather than closed and exclusive as it has been. Negotiators write that they are reaching out to a “broad cross-section of stakeholders” and they want to “set the stage for a deeper level of engagement with these and other stakeholders in the weeks and months ahead.” But these are empty promises and misleading statements as both members of Congress and stakeholders know.

The actions of the USTR are designed to give the illusion of engagement while the needs and interests of those affected by the TPP will be ignored. One of the authors of this piece, Kevin Zeese, participated in a stakeholder briefing last September. He found that questions from the stakeholders in attendance were not answered by the representatives and the entire event felt like a charade.

That is why last week, we decided to expose the secret TPP and make the public’s demands for democracy and transparency more visible through spectacle protests. On Monday, September 23, eight of us wore work coveralls and hard hats and climbed scaffolding next to the USTR building. We draped the outside of their building with four large banners calling for democracy and transparency and calling the TPP what it is in reality, a global corporate coup against people and the planet. Our effort to raise awareness was successful as the Washington Post reported on the protest, calling it “one of the best ever.” The next day we spread the news by conducting a march featuring a 32-foot fast track train, going back to the US Trade Rep. office, then to the World Bank, White House, Chamber of Commerce, business district, Pennsylvania Ave. and Congress.

It is up to the public and their representatives in Congress to demand that the full text of the TPP be released and that there be a democratic process of review. We must fully understand the effects of the TPP on employment, wages, the environment, Internet freedom, public health and safety, and more. Jim Hightower outlines some of the major concerns in his newsletter, The Lowdown.

We cannot blindly accept the information coming from the USTR, President Obama and Big Business supporters of the TPP. They have misled the public before, and they are doing it again to advance an agenda that puts profits before the needs of people and protection of the planet. The TPP will force smaller countries like Vietnam to change their entire economy by eliminating their publicly supported enterprises and services and opening them up to the private sector and foreign investors. This will increase poverty and suffering while lining the pockets of the wealthy.

Countries negotiating with the United States need to realize that if the TPP becomes law, they will be under the thumb of Monsanto, JPMorgan, Bank of America, Wal-Mart and other US-based transnational corporations. Rodrigo Contreras, Chile’s lead TPP negotiator recently quit to warn people of the dangers of the TPP – highlighting how big financial institutions will dominate their governments and how the TPP “will become a threat for our countries: It will restrict our development options in health and education, in biological and cultural diversity, and in the design of public policies and the transformation of our economies. It will also generate pressures from increasingly active social movements, who are not willing to grant a pass to governments that accept an outcome of the TPP negotiations that limits possibilities to increase the prosperity and well-being of our countries.” The TPP will destroy the sovereignty of the nations who agree to its terms.

The destruction of sovereignty includes the United States. One of the most egregious outcomes of the TPP, if it passes, is the way it will undermine our national sovereignty as well as the ability of state and local governments to pass laws. All laws will have to be brought into compliance with the TPP. This means that public institutions like schools and hospitals can no longer give preference to buying local products, and consumers may be barred from knowing whether foods contain GMOs. It means the “Buy America” laws will be illegal, so Americans will be forced to spend their money on foreign products that create a massive trade deficit.

And if we pass laws that interfere with expected corporate profits, those laws can be challenged in a special court, an international trade tribunal that operates outside of our legal system and that is staffed largely by corporate lawyers on leave from their corporate jobs. There will be no appeal to traditional courts from these rigged trade tribunals.

The TPP Unites Us and We can Stop It

The TPP will affect everything we care about. It is a cause that unites us, and if we work together to stop it, we will have won against the behemoth of transnational corporate power. A broad range of groups across the political spectrum are involved in stopping the TPP from becoming law. This includes Internet freedom, anti-GMO, health care, labor, faith, immigrant rights and environmental groups, among others.

We can stop the TPP. Indeed, 14 trade agreements have been prevented in the last dozen years. As more people know about it, the less popular it will become among politicians who will be held accountable for the TPP’s failures. It is up to the public to demand that our representatives put the interests of their constituents before the profits of their corporate campaign financiers. They must know that they will be held accountable for the detrimental consequences that are being predicted.

Public awareness and pressure are already having an effect. The media is starting to cover the TPP more, and the process of granting fast track has been slowed. We can expect more propaganda to appear as the TPP falters and so we must prepare ourselves to repel it with the truth. And we must remember that no matter what we are told about it, no matter what protections we are told are included in it, we must have access to the text before it is signed and we must review and fully understand what its impacts will be.

Other countries are taking steps to demand transparency and democracy. Recently, the Parliament of Peru passed a resolution “requesting that the government open a ‘public, political, and technical debate’ on the binding rules being negotiated in the TPP.” Protests in Japan have been widespread. The more we are visible in our concerns about the TPP, the more people in other nations will be emboldened to stand up to US imperialism and domination.

It is time to end the era of rigged corporate trade and begin fair trade that respects all people and the planet, and that is developed in an open and transparent manner. Join the Fair Trade Brigade either in Congress or where you live. Tell your member of Congress to vote “no” on fast track and pass a resolution locally that declares your community to be a TPP-free zone. Visit for more information on what you can do.

For more on the TPP visit here and here.

Other articles on the TPP by Margaret Flowers and Kevin Zeese:

TransPacific Partnership Will Undermine Democracy, Empower Transnational Corporations Protesters Take Over US Trade Rep Building, Expose Secret NegotiationsWhy It’s Time to Revolt Against the Worst “Trade Agreement” in History

October 3, 2013 Posted by | Deception, Economics, Progressive Hypocrite | , , , | Leave a comment

Flynt Leverett: U.S. Is Engaged in A Dirty War against Iran

Iran Review | April 21, 2013

Interview with Flynt Leverett by Kourosh Ziabari

If you regularly follow the headlines on the American and European radio stations, TV channels or newspapers, you come to believe that Iran’s nuclear program is the world’s most important, unsolvable and complicated problem. It’s been more than a decade that they have been incessantly talking of an Iranian threat that has endangered world peace and security. At the same time, they turn a blind eye to Israel’s nuclear arsenal and the fact that Israel is the sole possessor of nuclear weapons in the Middle East. The claim that Iran is trying to produce atomic weapons has laid the groundwork for the U.S. and its allies to impose harsh economic sanctions on Iran and damage Iran’s economy and trouble the daily lives of the ordinary Iranian people.

To study the different aspects of the sanctions imposed on Iran by the United States and the European Union, Iran Review has conducted a series of interviews with world-renowned political scientists, lawyers, journalists and authors and asked them some questions on the humanitarian and legal impacts of the sanctions, their compatibility with international law and the human right standards, etc.

Today’s interviewee is Prof. Flynt Leverett, a prominent Iran expert. Leverett is a professor of international affairs and law at Pennsylvania State University and co-author of “Going to Tehran: Why the United States Must Come to Terms with the Islamic Republic of Iran.” Prof. Leverett has written on Iran’s nuclear program extensively and is regularly interviewed by international media. What follows is the text of the interview.

Q: The United States claims that by imposing sanctions on Iran, it intends to prevent Tehran from acquiring nuclear weapons, but the sanctions have recently targeted the ordinary citizens and consumer goods and medicine. Why have the sanctions swiftly diverted from the issue of disarmament and are directed toward the daily life of the ordinary Iranian citizens?

A: This is the inevitable logic of sanctions. American and other Western officials declare that the targets of their sanctions policies are governments, not people. In reality, though, the point of sanctions is to make ordinary people in targeted countries miserable.

In the Western logic of sanctions, if enough ordinary people are made sufficiently miserable, then they will rise up and either force their governments to change policies that Washington views negatively or else force these governments from power. There is no other strategic rationale for sanctions.

Q: While the process of passing on Iran’s nuclear dossier to the Security Council was illegal, do the resolutions issued on this basis have a legal warranty?

A: A number of prominent international legal scholars have advanced a powerful argument, with which I agree, that the Security Council resolutions calling on Iran to stop enriching uranium are legally invalid. Article 25 of the UN Charter establishes a strong presumption that UN member states should comply with Security Council resolutions. But the same article also limits member states’ obligation in this regard to Security Council decisions “in accordance with the present charter.” Likewise, Article 24 of the Charter holds that, in discharging its duties, “the Security Council shall act in accordance with the purposes and principles of the United Nations.” (Those purposes and principles are presented in Articles 1 and 2 of the Charter.)

The Security Council resolutions calling on Iran to suspend uranium enrichment demand, in effect, that the Islamic Republic surrender what the Nuclear Non-Proliferation Treaty recognizes as signatories’ “inalienable right” to the peaceful use of nuclear technologies—including uranium enrichment. By adopting these resolutions, the Council was acting neither “in accordance with the [UN] Charter” nor “in accordance with the purposes and principles of the United Nations.” And that renders these resolutions invalid.

Q: Don’t you think that focusing the sanctions on basic staples and goods, especially medicines, is tantamount to a continued and systematic violation of the human rights?

A: The U.S. government claims that the sanctions are not focused on items like food and medicine—that there is an explicit exemption for food and medicine in the sanctions policy. But, as the question implies, this is, to say the least, hypocritical. Formally, there is an exemption in the sanctions for food and medicine. But, in practice, as long as banking sanctions deter Western and many other international banks from processing transactions with Iranian counter-parties—even for “permitted” items like medicines—the effect is to bar the export of medicines to Iran, with predictably tragic consequences.

This is both inhumane and illegal, on multiple levels. Besides the horrible impact of U.S.-instigated sanctions on ordinary Iranians, U.S. sanctions policy is a gross violation of international economic law. Most of the sanctions that are having such terrible effects on ordinary Iranians are not unilateral U.S. sanctions—which the Islamic Republic has been dealing with for decades—or multilateral sanctions authorized by the UN Security Council. Most of the sanctions that are creating real difficulties and hardships for Iranians are so-called “secondary” sanctions, whereby Washington threatens third-country entities doing perfectly lawful business with the Islamic Republic with punishment in the United States. In recent years, Congress has been regularly expanding and intensifying Iran-related secondary sanctions through laws that President Obama immediately signs and obediently implements.

Secondary sanctions clearly violate American commitments under the World Trade Organization (WTO), which allows members to cut trade with states they deem national security threats but not to sanction other members over lawful business conducted with third countries. If challenged on the issue in the WTO’s Dispute Resolution Mechanism, Washington would surely lose. That’s why U.S. administrations have been reluctant to impose secondary sanctions on non-U.S. entities transacting with Iran, and have done so pretty rarely. What Washington relies on is that, in many cases, the legal and reputational risks posed by the threat of U.S. secondary sanctions reduce the willingness of companies and banks in many countries to transact with Iran, with negative consequences for Iran’s economy and for many ordinary Iranians. It is the approach of a bully who does not believe he is constrained by the same laws that apply to others.

Q: It’s said that the sanctions that target ordinary civilians are a kind of collective punishment, and collective punishment is a crime according to the Nuremberg Tribunals. The Western states claim that they care for human rights, but they are behaving in such a hypocritical manner and punish the Iranian citizens for a crime they have not committed. What’s your viewpoint on that?

A: As a matter of policy, the United States is not and never has been interested in human rights in any sort of universal or objective way. The United States is only interested in the selective, instrumental exploitation of human rights concerns to undermine governments it does not like. As Washington has co-opted, and corrupted, the human rights agenda in this way, it has also undermined its credibility to address human rights in Iran or anywhere else. Moreover, as the question implies, America’s professed concern for human rights in Iran is especially hypocritical so long as the United States continues what I would call its “dirty war” against the Islamic Republic—including economic warfare targeting civilians (through sanctions), cyber-attacks, and support for groups doing things inside Iran that, in other places, Washington condemns as “terrorism.”

Q: It seems that the sanctions are not simply aimed at curbing Iran’s nuclear program but the main objective of the sanctions is seemingly to create social unrest in Iran which can finally lead to a regime change. So, what’s the message which the sanctions impart? Diplomacy or conspiracy?

A: Since the Iranian revolution, no American administration—not even that of Barack Hussein Obama—has been prepared to accept the Islamic Republic as a legitimate and enduring political entity, representing legitimate national interests. Every administration has seen the Islamic Republic as fragile and vulnerable to internal subversion, and has sought in various ways to encourage such subversion. Of course, it has not worked, but this outlook continues to dominate mainstream foreign policy discussions in the United States about Iran.

U.S. sanctions policy toward Iran needs to be seen in this context. The proposition that sanctions are somehow intended to promote a diplomatic “solution” is, to put it bluntly, dishonest. Consider the way that the sanctions have been drawn up. Even just a few years ago, most of them were imposed by executive orders, which are more or less at the discretion of the White House. Now, though, most of the sanctions have been written into law, which greatly reduces the President’s ability to pull back on them as part of a negotiating process, or to lift them even if Iran acceded to all U.S. demands on the nuclear issue.

Regarding this point, look at the language in current U.S. law on sanctions. Even if the Islamic Republic allowed the U.S. government to come in, dismantle every centrifuge in Iran, and take them back to the United States—like Qadhafi did in Libya—there would still be no legal basis for the President to lift sanctions. The law says that, in order for sanctions to be lifted, the President would also have to certify to Congress that Iran had stopped all dealings with resistance movements like Hizbullah and Hamas, which the United States persists in calling terrorist organizations, and that the Islamic Republic had effectively turned itself into a secular liberal “Republic of Iran” to meet U.S. standards on “human rights.”

That’s not a serious approach to diplomacy. The argument that sanctions are somehow meant to encourage a diplomatic outcome is detached from reality.

Q: Along with the expansion of sanctions, the resistance of the Iranian nation has increased, as well. Why haven’t the sanctions had the effects the West desires, whether in the political or social level?

A: There is no case in history in which sanctions have prompted a target population to rise up, overthrow their government, and replace it with a government prepared to adopt policies sought by the sanctioning power. That has literally never happened. Even in Iraq, where for twelve years the United States led the way in imposing sanctions so severe they killed more than a million Iraqis (half of them children), the population did not rise up to overthrow Saddam Hussein. That took a massive U.S. invasion—and even then, the United States did not get a “pro-American” government in Baghdad.

Beyond this history, the Islamic Republic, as I have come to understand it, is the product of a revolution that had, as one of its highest priorities, the restoration of Iran’s effective sovereignty and independence after a century and a half of domination by Western powers.

Q: The experts say that something around 15-20% of the current price of the oil is a result of the EU’s oil embargo against Iran. How much has the oil embargo influenced the EU’s economy in the current critical juncture?

A: In the late 1990s and early 2000s, when some European elites had serious ambitions for the European Union to emerge as an independent force in international affairs, capable of balancing the United States, European nations pursued an at least somewhat independent policy toward Iran. However, with the collapse of the EU’s constitutional project in the mid 2000s, European elites calculated that the next-best way for Europe to have influence in the Middle East is by helping the United States pursue its hegemonic ambitions in the region.

To understand what I am talking about, just look at the extraordinary shift in the Middle East policies of France and Germany. Both of those countries were absolutely right in anticipating what a strategic and moral disaster America’s 2003 invasion of Iraq would be, and in refusing to go along with the United States in this ill-conceived campaign. But within just a few years of having been right on Iraq—and having been proved right by events on the ground there—the French and German governments aligned themselves almost completely with Washington’s Middle East policies.

As a result of this shift, Europe has, over the last few years, almost completely subordinated its Iran policy to that of the United States—even though, as the question implies, this imposes additional costs on European economies at a time when those economies are already under significant strain. A few EU countries, like Sweden, continue trying, on the margins, to keep some element of rationality in European discussions on Iran, but they are fighting a losing battle.

Q: Currently a number of countries implement the sanctions for different reasons, but several others don’t, so the sanctions have practically turned into an economic opportunity for those countries which haven’t put into effect the sanctions because those countries that adopt the sanctions have deprived themselves of robust and profitable trade with Iran. Are the sanctions capable of curtailing or stopping Iran’s foreign trade?

A: I agree with the premise of the question. Those countries which comply with illegal U.S. secondary sanctions and limit their trade with the Islamic Republic are ultimately hurting themselves more than they may hurt Iran. Sanctions may distort Iran’s foreign trade to some degree, but they cannot stop it.

Q: Complementing the sanctions with valid threats of military strike and intelligence operations are among the most important advice given by Israel to Europe and the United States. How successful have these countries been in sabotaging Iran’s security?

A: They have not been successful at all. I hope that my country will not engage in overt military aggression against the Islamic Republic. If, however, the United States is so foolish as to launch another war in the Middle East, to disarm yet another Middle Eastern state of weapons of mass destruction it does not have, I believe that the blowback to U.S. interests in the region will be disastrous for America’s strategic position. The United States will be the big loser in such a war.

April 23, 2013 Posted by | Deception, Economics, Timeless or most popular, War Crimes | , , , , | Comments Off on Flynt Leverett: U.S. Is Engaged in A Dirty War against Iran

US Sanctions Policy on a Collision Course against Iran; Increasing Tensions with China

By Flynt Leverett and Hillary Mann Leverett | Race for Iran | June 27th, 2012

America’s policy on Iran-related secondary sanctions is on a collision course with itself as well as China.  Secondary sanctions violate the United States’ obligations under the World Trade Organization and are, thus, illegal.  (While a WTO signatory may decide, on national security grounds, to restrict its trade with another country, there is no legal basis for one state to impose sanctions against another over business that the second state conducts with a third country.)  If Washington actually imposed secondary sanctions on another state for, say, buying Iranian oil and the sanctioned country took the United States to the WTO’s Dispute Resolution Mechanism, the United States would almost certainly lose the case.

Given this reality, the whole edifice of Iran-related secondary sanctions is in reality a house of cards.  It rests on an assumption that no state will ever really challenge the legitimacy of America’s Iran-related extraterritorial sanctions—and this means that the United States cannot ever really impose them.  Instead, successive U.S. administrations have used the threat of such sanctions to elicit modifications of other countries’ commercial relations with the Islamic Republic; when these administrations finally reach the limit of their capacity to leverage other countries’ decision-making regarding Iran, the United States backs off.

The Obama Administration is bringing this glaring contradiction increasingly to the fore, by supinely collaborating with the Congress to enact secondary sanctions into laws that give the executive branch less and less discretion over their actual application.  This dynamic is now coming to a head in the Administration’s dealings with China.

We are currently in China, as Visiting Scholars at Peking University’s School of International Studies.  And that means we are here during the run-up to formal implementation of the United States’ newest round of Iran-related secondary sanctions, due to go into effect on June 28.

These new sanctions, at least as legislated, threaten to punish financial and corporate entities in countries that continue to purchase Iranian oil at their historic levels of consumption.  So far, the Obama Administration has issued sanctions waivers to all of the major buyers of Iranian oil, see here and here—all the major buyers, that is, except the People’s Republic of China.

Trade data indicate that China’s imports of Iranian oil declined significantly in the first quarter of this year.  It is unclear to what extent this reduction was intended as an accommodation to the United States and to what extent it was the product of a payment dispute with Tehran.  But, whatever the reason, the reduction prompted Secretary of State Hillary Clinton to note last week that “we’ve seen China slowly but surely take actions,” see here.  Clinton even seemed to hint that the Administration might be looking for an opening to waive the imposition of sanctions against China:  “I have to certify under American laws whether or not countries are reducing their purchases of crude oil from Iran and I was able to certify that India was, Japan was, South Korea was… And we think, based on the latest data, that China is also moving in that direction.”

Since the resolution of the payments dispute between China and Iran, however, China’s imports of Iranian oil have picked up once again, see here and here.  And the Chinese government continues to insist that the country’s purchases of oil from the Islamic Republic are “fully reasonable and legitimate,” see here.

Once June 28 comes the White House and State Department will be under enormous pressure from the Congress (Hill Democrats will provide the President no cover on the issue), the Romney campaign, and various domestic interest groups to sanction China over its continued oil buys from Iran.  The Administration’s alliance with Congress and the pro-Israel lobby on Iran sanctions, combined with its misguided assessment that the United States can somehow compel Iran’s “surrender” on the nuclear issue, have put the President and his team in a “damned if you do, damned if you don’t” position.  This is very much a problem of the Administration’s own making.

June 27, 2012 Posted by | Economics, Progressive Hypocrite, Wars for Israel | , , , , , , , | 2 Comments