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Wednesday, April 29, 2015

"Corruption American Style"

The point Stiglitz makes is that our system is so corrupt that judges and officials, politicians and law enforcement folks don't have to be obviously on the take. The system rewards them for going along with the program and punishes them for doing the right thing.

Friday, April 24, 2015

Fielding Candidates

Mayday US is suggesting a:

"plan to elect a reform minded Congress by 2016, please consider being a Congressional candidate yourself.

I suggest folks also consider forming groups, like my "Maryland Green Democrats" Group to find and support such candidates. Not all of us would make great congressmen, but we also need I think we need to build a support infrastructure as well because without that candidates will never get elected. We need a plank (best to base it on E. Warren or Bernie Sander's list with some additions). And sometimes we need to find candidates other than ourselves. The big problem with American Politics is the focus on "fearless leaders". We need a bench; County Officers, local government, and State officers. Even so he's right when he says:

This suggestion is not so ridiculous as you may think.

What we can do is:

"Internet Volunteer Activity"
"General Exception"
"An uncompensated individual or group of uncompensated individuals may engage in certain voluntary Internet activities for the purpose of influencing a federal election without restriction. These exempted Internet activities would not result in a contribution or an expenditure under the Act and would not trigger any registration or reporting requirements with the FEC. This exemption applies to individuals acting with or without the knowledge or consent of a campaign or a political party committee. 100.94 and 100.155. Exempted Internet activities include, but are not limited to, sending or forwarding electronic mail, providing a hyperlink to a website, creating, maintaining or hosting a website and paying a nominal fee for the use of a website."

We can fight for change by running an insurgency within the Democratic Party.

A Common Plank:

Note: Bolded Are Bernie Sander's plank ideas, "EW" is for Elizabeth Warren's 8 points (mapped to Bernies)

Rebuilding Our Roads [and Infrastructure]
EW: "Investing in roads, bridges, power grids, education and research to create good jobs in the short run and help build new opportunities over the long run
Threshold: Repair and upgrade our current Infrastructure
Create a distributed and robust networked infrastructure.
Reversing Climate Change
Creating Jobs
Protecting Unions
EW: "Supporting the right for workers to bargain together
EW: "Enforcing labor laws so workers get overtime pay and pensions that are fully funded
EW: "Giving equal pay for equal work
Raising the Wage
EW: "Raising the minimum wage so no one should work full-time and still live in poverty
Pay Equity
All Candidates must support the Lily Ledbetter fair pay act and it's enforcement, threshold=objective.
Making Trade Work for Workers
Cutting College Costs
Breaking Up Big Banks
Objective: Reorganize the Federal Reserve to be less oppressive and reforming the banking system to eliminate bank control over money supply.
Bringing Health Care to All
Ending Poverty
Threshold: EW: "Protecting Social Security, Medicare and pensions
Stopping Tax Dodging Corporations
EW: "Making sure all Americans and corporations pay a fair share to build a future for all
EW: "Having trade policies and tax codes to strengthen the American economy, raise living standards and create jobs."

Further Reading:
How the Fed Reserve was corrupted:

Hamilton on Free Trade

Alexander Hamilton was a proponent of free trade. But what he meant by "Free Trade" and what is sold as free trade now, are two different things!

In 1795 writing as Secretary of Commer, In No. Xxvi (From The Minerva.) he writes of the difficulties presented by our treaty with Great Britain, and of the evils of monopolistic Colonial trade. But then he notes:

"Several circumstances calculated to give our trade with Asia an advantage against foreign competition, and a preference to our trade with Europe, are deserving of attention." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

He then goes on to list what made our ability to trade with foreign countries superior to that of the Colonial Powers (he mainly was referring to Britain, but he includes other countries too). The first advantage being our ability to trade directly with East Asia and not have to ship to London and then to our country anymore. And:

"Second.—The difference between the duties on Asiatic goods imported in American bottoms direct from Asia, and the duties imposed on the same goods in foreign bottoms from Asia or from Europe; being on all articles a favorable discrimination, and in the articles of teas, the duties on those imported in foreign bottoms being fifty per cent. higher than on those imported in American bottoms." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

Free Trade requires Individual not Corporate Enterprise!

For Hamilton and our sane founders, "free trade" didn't mean freedom from duties or the freedom for Giant Foreign Conglomerates to corner our markets. It meant the right to individual enterprise. And his third reason why we had the advantage is telling on this:

"Third.—The European intercourse with Asia is, in most cases, conducted by corporations or exclusive companies, and all experience has proved that in every species of business (that of banking and a few analogous employments excepted), in conducting of which a competition shall exist between individuals and corporations, the superior economy, enterprise, zeal, and perseverance of the former will make them an overmatch for the latter; and that while individuals acquire riches, corporations engaged in the same business often sink their capital and become bankrupt." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

Note, free enterprise doesn't mean treating "corporations as people" it means the right of individuals to participate in markets. There is no free enterprise in monopolies or conglomerates. The Freedom comes from individual freedom within the context of commonwealth. I think he would be aghast at the degree that East India style companies have taken over our country. We've given away our freedom to conglomerates.

No Saint

Free Enterprise benefits from natural advantages from differences of climate, resources and cultural ability. Hamilton finishes his paragraph saying:

"The British East India Company are, moreover, burdened with various terms and conditions, which they are required to observe in their Asiatic trade, and which operate as so many advantages in favor of their rivals in the supply of foreign markets. The company, for example, are obliged annually to invest a large capital in the purchase of British manufactures, to be exported and sold by them in India; the loss on these investments is considerable every year, as few of the manufactures which they are obliged to purchase will sell in India for their cost and charges; besides, from the policy of protecting the home manufactures, the Company are, in a great measure, shut out from supplying India goods for the home consumption of Great Britain. Most of the goods which they import from India are re-exported with additional charges, incurred by the regulations of the Company, to foreign markets, in supplying of which we shall be their rivals, as, from the information of intelligent merchants, it is a fact that Asiatic goods, including the teas of China, are [on an average] cheaper within the United States than in Great Britain." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

He would have been happy with importing cheap manufactures from China and India, as long as they weren't competing unfairly with US manufacturers. And his fourth point was how cheap Asian Manufactures were compared to European Manufactures.

"Fourth.—The manufactures of Asia are not only cheaper here than in Europe, but in general they are cheaper than goods of equal quality of European manufacture. So long as from the cheapness of subsistence and the immense population of India (the inhabitants of the British territories alone being estimated at forty millions) the labor of a manufacturer can be procured from two to three pence sterling per day, the similar manufactures of Europe, aided with all their ingenious machinery, are likely, on a fair competition, in almost every instance, to be excluded by those of India. So apprehensive have the British Government been of endangering their home manufactures by the permission of Asiatic goods to be consumed in Great Britain, that they have imposed eighteen per cent. duties on the gross sales of all India muslins, which is equal to twenty-two per cent. on their prime cost. The duties on coarser India goods are still higher, and a long catalogue of Asiatic articles, including all stained and printed goods, is prohibited from being consumed in Great Britain." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

Hamilton described the then superiority of Indian (and Chinese) manufactures to European ones, even as late as 1795. It took concerted effort to reduce India and China to the basket cases they were under colonial oppression. What they are doing now is to regain ground they lost, not acting in some kind of vacuum.

"The British manufacturers were not satisfied even with this prohibitory system; and on the late renewal of the Company’s charter, they urged the total exclusion from British consumption of all India goods, and, moreover, proposed that the Company should be held to import annually from India a large amount of raw materials, and particularly cotton, for the supply of the British manufacturers." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

It is policy that drives poverty. Free markets mean free access to markets for individuals. Not a system where giant companies exercise monopolies.

"Those facts are noticed to show the advantages to be derived from a free access to the India market, from whence we may obtain those goods which would be extensively consumed even in the first manufacturing nations of Europe, did not the security of their manufactories require their exclusion." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

It makes you wonder how much Hamilton really was a protectionist, or if he saw the advantages of genuine free trade, meaning genuine individual enterprise. He certainly saw the risks of corporations and not protecting industry at home. But I think this article shows he knew the risk of overprotecting markets. We don't have free trade we have giant Conglomerates, more like the East India Company than what we had in 1795.

Further Reading

Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] []

Thursday, April 23, 2015

Libertarians versus Henry George and Marx

Recently, Fred E. Foldvary, a guy I respect, wrote an essay in which he tried to find points of commonality between the Libertarian movement and those Georgists he leads. In his article "Austrian Economics Explained" [] The top caption states:

"Why It Matters, The Austrian School of economic thought is often misunderstood." []

...which kind of is either an understatement, or some kind of twisted humor in my mind, because to me the Austrian School has been a source of evil second only to the evil created by that other progeny of Austria...He's got a nice graphic (I'm using a link because it's too nice to merely copy:

Poor misunderstood Austrian School. I've blogged a number of times about Hayek and Von Mises. But I've pretty much left the others alone, though I've read about them and read as much of their writings, or at least summaries of their work, as I could. As usual I'm not totally done. Fred tries to explain the common threads of the Austrian School, but myself, I found that they were no more alike than any other collection of college professors or theoreticians. Still he explains their points of comparison. Rather than reprising them I'm listing and summarizing Fred's points in my own words:

  1. Praxeology; They, or at least Von Mises, claimed that through "Axiomatic-deductive reasoning" they could establish "a pure universal economic theory". Von Mises called this "praxeology", I suppose to differentiate his version of the term from the one used by the Marxists (Praxis). Like Marxism the Austrian School, or at least Von Mises' subschool and it's disciples, is highly deductive. The Austrian thinkers deduced principles from elements of action and derived their theory from these.
  2. "Marginal Analysis". Carl Menger developed the theory of Marginal Utility which has proven useful in price theory.
  3. "Methodological individualism" is the notion that one should focus on individuals, and ignores or deprecates the collective behavior of markets as "holism"
  4. Austrians argue that "capital investment does not simply add to production in a general way but rather is embodied in concrete capital items." [Hayek]
  5. "Interpretive understanding:" Human behavior is too complex in their view to be subjected to social science.
  6. "Subjective values: all values are subjective, based on individual beliefs, interests, and preferences."
  7. Source: []

Fred then goes on to summarize the subjects that are most common among Austrian School Teachers:

a) entrepreneurship;
b) money and banking;
c) the time structure of capital goods;
d) the business cycle;
e) the dynamics of markets and spontaneous orders;
f) critiques of governmental intervention and planning;
g) knowledge as decentralized and unknowable to central planners.

Looking at the list one can see that the Austrian School is the anti Marxism school. If the Marxists make one set of erroneous structures and focus on the collective. The Austrian School focuses on the individual and rejects social science. Looking at their history they've been preoccupied with "refuting" Marxism for more than a century. This shows in their assumptions:

"Austrian economists tend to believe that markets work well. Austrian theory concludes that interventions as taxes, subsidies, mandates, and prohibitions, which interfere with peaceful and honest human action, reduce the productivity of economies and human well-being." []

Two sets of faulty assumptions, both erroneous, both leading to diametrically opposite conclusions. Where Marxism sees grand movements of "history" the Austrians see the efficiency of markets and the virtue of self interest. Where Keynesians, Georgists and Marxists see flaws in human virtue, they praise it. In hindsight both Marxism and the Austrians have too rosy a view of human virtue. "Honest human action" in the jaded reporting of Marx is a joke. The notion that Collective behavior can be predicted in the selfish ideology of the Austrians is equally a joke. Both are using deductive methods to try to understand the world. And both seem to ignore the test results of their theories. Later he Fred notes:

"Austrian economists have been the leading theorists of “free banking,” the replacement of central-banking controls with a free-market setting of interest rates and the money supply, an application of the Austrian critique of central planning." []

My friend Rick DeMare shares

"there are some similarities between the two systems, but so-called "free banking" should be an absolute deal-breaker for Georgists, and Georgists should not get hung up on trying to reconcile Austrian free banking with Georgism." [ April 13 at 7:27am]

I agree. And Rick quotes del Mar's "The Science of Money":

"When money shall be recognized in the law, when it is defined, when its volume, magnitude, dimensions, limits are set forth as precisely, fixed as unchangeably, and protected as securely from alteration, as are now the dimensions of the yard-stick, the pint-pot, and the pound-weight, then, and only then, will money perfectly resemble other measures; for then only will it become a concrete thing of known dimensions. When this comes to pass, Aristotle's definition of its function will resume its original correctness, and money will be as fit in fact, as it is now only in theory, to measure the relation called value." pg. 58" [ April 13 at 7:27am]

I may have more to say. But that's enough for this post. I've already talked about Faulty Assumptions.

Previous entries on Hayek and Von Mises:
Starve the Beast, Destroy Democracy: []
Mt. Pelarin and Milton Friedman -- fighting to make the world safe for Oligarchy since the 1940's []
Reading David Stockman's Deformations []
Holte's law applied to Rothbard []
Faulty Assumptions and Verification []
Examining Bad Economic Theories (Von Mises) []
More on Hayek's view:
The Science of Money []

Wednesday, April 22, 2015

Privateering and Multifarious other Swindles

Max Keiser has been documenting the subtle and not so subtle ways that British Economic Royalists steal from their citizens. I was watching this program [] and I recognized the game. I don't know if the Brits are imitating the USA or if the USA imitated the Brits, or it's just that the same international firms are driving corruption in the USA and around the world. When I was working in DC I noticed some strange things in government contracting, but it wasn't until recently that I realized that I was witnessing the perfectly legal swindles by which the 1% con the rest of us into supporting them. I suggest you listen to him describe how the Tories and Labor party swindled the British Medical System out of millions.


A clever DA could probably find a way to charge these people with committing fraud, but probably not. One the DA would be arrested himself. And Two, it's not even on the radar. Keiser is showing some of the manifold ways the "monied men" take public money, entrusted to their care, give it to themselves, loan it back to the public and then pretend that they are doing the public a favor. Sadly all that is not only legal, but people who are supposed to be on our side will betray us for some "trickle down" from the fraudsters!

There is no transcript for the Keiser report so I looked up some articles to explain how "Private Finance Initiatives" work. They gave me some information such as the following:

"[W]hy did hospitals at Barking, which has had to find £50m on its private finance initiative (PFI) deal and is heading for a £50m loss, be allowed to go on despite years of red ink?" []

Essentially the British Government contracted these "Private Finance Initiatives" to build hospitals, schools and other institutions and lease them back to the Government. The Government would pay them back for their costs, including the private finance costs through these 'mortgages'. But here's the rub. If a Central Government borrows money it can borrow at very low interest (almost no interest if it uses sovereign notes) and thus it's finance costs are minimal and the investment is virtually all capital investment. But when done through private financing, the PFI's borrow at interests and those interests are built into the costs of their construction and into the eventual "mortgages" (really rent) they charge the government for having built the Hospitals, Schools, etc... This is a great deal for investors. They can create a company. Pay themselves a fee for running it. Loan it money at high interest. Pay themselves rents and "pay back" the loans, and get the General public to pick up the tab.

The reality is that the Brits aren't the only one doing this.

Privatization works by building in costs to a project, hiding those costs to the public. Pretending the costs will be lower while selling the project. Kicking back advertizing to reporters and "donations" to politicians. And thus filling pockets all over the place with taxpayer money. All the while setting the stage for the failure of the public projects and public good associated with them.

And the beauty is that all this theft can be blamed on "Socialism"

I worked in Government buildings that had private owners when I worked in DC. I saw how contracting was used to both hide and pad expenses all around me. There are other schemes besides Private Financing Initiatives. But we all should learn to beware of the power of privateers to steal from government. And beware of people working in Government preaching the evils of Government. They can only know those things from experience or intention.

Monday, April 20, 2015

The vicious and War

War attracts the virtuous.
it also attacks the vicious.
Eagles and Vultures fighting over carrion,
and gnawing the bones of fallen heros.
Indeed the corrupt are jealous of the virtuous.
The vicious find a way to fell them,
and tie them to a tree,
to eat their livers and laugh at their plight.
But which would you rather be?
virtuous or vicious?
Is it really worth it to be mean?
How is it noble to be so classless?
Is the brief joy of strutting on top of a pyramid
worth being sacrificed at the end of the season?
Our best warriors know how to wage peace.
They prefer keeping the killing to the minimum,
and avoid corrupt grease.
Christopher Holte

Sunday, April 12, 2015

Washington's Advice still applies

Before they went insane after 9/11, some conservatives I knew used to quote Washington's Farewell Speech to me. It was a good speech. Of course they saw it as recommending no UN, complete isolationism, and no "entangling alliances." It seemed good advice to me, and the denouement of recent events recommends his word anymore. Which I suppose is why I haven't heard a conservative quoting it to me in a long time.

Good Faith and Justice

Washington's advice seems especially cogent now, in the face of the subversion, sedition and sabotage we are seeing in the Senate against efforts by the Obama administration to work with the Security Council nations to negotiate a Nuclear Arms agreement with the Iranians. Washington would have been fine with such treaties, as long as we weren't getting in bed with any particular country! He admonished that we should:


"Observe good faith and justice towards all nations; cultivate peace and harmony with all. Religion and morality enjoin this conduct; and can it be, that good policy does not equally enjoin it - It will be worthy of a free, enlightened, and at no distant period, a great nation, to give to mankind the magnanimous and too novel example of a people always guided by an exalted justice and benevolence."

When T.R. Roosevelt negotiated the Russo-Japanese peace treaty, Franklin Delano Roosevelt created the UN, or Truman went ahead and recognized Israel, they were guided by the principle that US Foreign Policy should be magnanimous, just and that benevolence is, in the long run, more profitable than greed. I believe that Obama's negotiations with Iran are guided by a similar approach. Something that doesn't sit well with the privateers and free booters who think they own our foreign policy and see any other approach as idiocy and usurpation. Yet Washington's guidance was wise and prescient:

Paragraph Continued:

"Who can doubt that, in the course of time and things, the fruits of such a plan would richly repay any temporary advantages which might be lost by a steady adherence to it ? Can it be that Providence has not connected the permanent felicity of a nation with its virtue ? The experiment, at least, is recommended by every sentiment which ennobles human nature. Alas! is it rendered impossible by its vices?" [Washington's Farewell Address]

The root of viciousness is "vice" and our foreign policy, while occasionally following Washington's admonitions has been more often vicious, greedy, self serving and even violent. For every Portsmouth Treaty (TR's negotiation), there was a land grab or selfish intervention like that of the Panama Canal. And if we've removed tyrants, we've also installed them. And our rationale has been often, petty self interest of a minority of our officials, or of our entangled allies:

"the main beef with the Iranian Prime Minister was that, in May of 1951, he had nationalized the oil fields controlled by the Anglo Iranian Oil Company, the precursor to BP. From the perspective of Washington, though, as the newly released documents confirm, Mossadegh’s biggest sin was his flirtation with the Soviet Union, which, like Britain, had colonial ties to Iran." []

And that action back in 1953 is still bearing bitter fruit. If our GOP Cons are upset that Iran might get Bombs, the Iranians still have a grudge about that coup.

Permanent Friendships or Permanent Antipathies

Washington next gave this piece of advise:

"In the execution of such a plan, nothing is more essential than that permanent, inveterate antipathies against particular nations, and passionate attachments for others, should be excluded; and that, in place of them, just and amicable feelings towards all should be cultivated."

Just and Amicable, or Exxon and Mobile

Now note, it's not enough that we should avoid too much friendship, or too much enmity, we need to cultivate "just and amicable feelings". This is what the purpose of the "League of Nations" was intended to be, and of the United Nations. That it hasn't always worked that way is because we have not cultivated justice but have violated these principles. And that excessive zeal for "special relationships" has plagued our country.

Paragraph continued....

"The nation which indulges towards another a habitual hatred or a habitual fondness is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest."

Shortly after Washington left office we started to have a "Quasi-war" with France. It was never declared, but the Federalist Faction wanted war with France and Spain while the Republican faction wanted peace. We had been too attached to the French, and already the Brits were working their diplomacy on us to reverse that attachment by recruiting ex-tories and Anglophiles. Later we would be forced to war with the Brits. Once there is a war among our neighbors, it is difficult to stay out of them. The Brits too have a motto "no permanent friends, no permanent allies", which they violate with impunity too.

Trying to play both sides.

Though it may seem to be neutral to "play both sides". I don't think Washington was talking about that kind of "neutrality." One reason for both the Quasi-War and the War of 1812 is that our merchants were smuggling arms and materiel to both sides of their conflict with each other. When we sent more goods to the Brits and the French thought they had the power to stop us, the French attacked. Later when the French lost control over the seas and we continued to sell goods to them, the Brits started attacking our ships. Washington's advice wasn't always easy to follow.

"Antipathy in one nation against another disposes each more readily to offer insult and injury, to lay hold of slight causes of umbrage, and to be haughty and intractable, when accidental or trifling occasions of dispute occur. Hence, frequent collisions, obstinate, envenomed, and bloody contests."

We had an embargo on Cuba for more than 50 years, which was useless in stopping Human Rights Violations, and mainly hurt the families of Cuban refugees who's anger drove the antipathy. And similar ill will drives the efforts of Senators to sabotage Obama's negotiations with Iran. Instead of listening to Washington.

He continues:

Power of Outside influence from "Pernicious" Forces

"The nation, prompted by ill-will and resentment, sometimes impels to war the government, contrary to the best calculations of policy. The government sometimes participates in the national propensity, and adopts through passion what reason would reject; at other times it makes the animosity of the nation subservient to projects of hostility instigated by pride, ambition, and other sinister and pernicious motives. The peace often, sometimes perhaps the liberty, of nations, has been the victim." [FA]

Not to mention the opportunism of privateers, smugglers and arms salesmen. It turns out that hostilities towards nations, peoples (or internal minorities) is profitable. Sometimes the folks pushing war have "pernicious motives" as is the case of folks like Senator Cotton who were paid by Israeli Lobbyists to try to sabotage our peace treaty with Iran. I've found evidence that the folks pushing to scuttle talks want us to be at odds because it marks up the value of their smuggling. Which is exactly what the next passage in George Washington's Speech was referring to:

"Most Favored Nation"

"So likewise, a passionate attachment of one nation for another produces a variety of evils. Sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification."

Which is exactly what has been happening with our "special relations" with France and Britain, where we were duped into supporting French interests in Vietnam or British influences in Iran, on the false fear of "communism." Our special relationships with European Countries also led to us supporting European banks in oppressing Central and South America, and latter letting the former Colonial powers try to "take back" properties they'd invaded and conquered as colonial subjects once before. Much of our fear of Communism was exaggerated fear of revolutions that were as much a reaction to colonialism and tyranny as a result of the spread of Bolshevik ideas. And this also has led to us supporting bad trade treaties like the Trans Pacific Partnership which try to overrule even our own laws:

"It leads also to concessions to the favorite nation of privileges denied to others which is apt doubly to injure the nation making the concessions; by unnecessarily parting with what ought to have been retained, and by exciting jealousy, ill-will, and a disposition to retaliate, in the parties from whom equal privileges are withheld."

A lot of our conflicts have been the result of other countries perceiving that we are in league with their enemies. Not just between countries, but even within them. When our country serves the interests of the wealthy, or of the giant multinational countries, we are creating blowback.

"And it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation), facility to betray or sacrifice the interests of their own country, without odium, sometimes even with popularity; gilding, with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good, the base or foolish compliances of ambition, corruption, or infatuation." [FA]

Entangling Alliances

One of our biggest problems for us started was when we let the British and French convince us to take their side in World War I, and also after World War II when we joined our intelligence services. This has led to a CIA with purported or actual factions, ever since. And it has led to some countries having legal access to our intelligence information, which gives them a massive advantage in manipulating us. The British, Australian, Canadian, New Zealand governments, for example, signed an intelligence sharing agreement with us called the 5 Eyes, which gets advertized as the agreement that makes it unnecessary for us to spy on each other. But what it has actually done was to set it up so we could form a condominium so our governments could mutually spy on our citizens without taking credit for it. This excessive friendship harms both the USA and the other four countries. Similarly our "special relationships" with Israel, Japan, South Korea and other countries, have often caused us more trouble than they've been worth. It's not that we shouldn't be friendly towards these countries but that Washington's words on too much "friendship were never more cogent:

"As avenues to foreign influence in innumerable ways, such attachments are particularly alarming to the truly enlightened and independent patriot. How many opportunities do they afford to tamper with domestic factions, to practice the arts of seduction, to mislead public opinion, to influence or awe the public councils. Such an attachment of a small or weak towards a great and powerful nation dooms the former to be the satellite of the latter." [FA]


It is fortunate that we listened to Washington during our early years -- and that we preserved our Union. The European powers at various times had designs on Texas (Prussia) California (Britain) NW (Britain/Russia) and our own South only could have won the Civil war by becoming a satellite of either France or Britain.

"Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy to be useful must be impartial; else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people, to surrender their interests." [FA]


We should be as careful in dealing with the Brits and French as we are with the Germans or the Ukrainians, and with them as we are with the Russians. And we should be careful with all of them. Not over-enthusiastic. Nor doing the "1984" equivalent of hating on the "enemy of the week." It's as much to protect us against home-based demagogues as to protect against the Foreign intrigues of a Rupert Murdoch or some other foreigner.

"The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible. So far as we have already formed engagements, let them be fulfilled with perfect good faith. Here let us stop. Europe has a set of primary interests which to us have none; or a very remote relation. Hence she must be engaged in frequent controversies, the causes of which are essentially foreign to our concerns. Hence, therefore, it must be unwise in us to implicate ourselves by artificial ties in the ordinary vicissitudes of her politics, or the ordinary combinations and collisions of her friendships or enmities." [FA]

Taking this seriously, we should not be creating special Admiralty style Courts to give private separate advantage to external investments as we have been doing with our TPP negotiations and the ISDS provisions. Washington was also counselling Union. Modern seditious, subversive and centrifugal folks would disrupt our Union, but it's been our unity that has allowed us to survive:

A vision of the USA as a Powerful Neutral Force for Good

"Our detached and distant situation invites and enables us to pursue a different course. If we remain one people under an efficient government. the period is not far off when we may defy material injury from external annoyance; when we may take such an attitude as will cause the neutrality we may at any time resolve upon to be scrupulously respected; when belligerent nations, under the impossibility of making acquisitions upon us, will not lightly hazard the giving us provocation; when we may choose peace or war, as our interest, guided by justice, shall counsel." [FA]

Had we split up, our country would resemble El Salvador, Honduras, or at best Brazil; with an even more bloody history of repression and poverty. We'd still have rich people, but our industry or middle class would never have been allowed to develop. And part of the reason we've avoided such breakups is that we haven't played favorite. Even when factions wanted us too.

"Why forego the advantages of so peculiar a situation? Why quit our own to stand upon foreign ground? Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?" [FA]

UN and Entangling Alliances

The key is to understand what Washington was talking about when he said the following:

"It is our true policy to steer clear of permanent alliances with any portion of the foreign world; so far, I mean, as we are now at liberty to do it; for let me not be understood as capable of patronizing infidelity to existing engagements. I hold the maxim no less applicable to public than to private affairs, that honesty is always the best policy. I repeat it, therefore, let those engagements be observed in their genuine sense. But, in my opinion, it is unnecessary and would be unwise to extend them." [FA]

In other words we need to be friendly to all, but not subject to any. I think the UN, in it's best sense might be an exception, because it isn't any "portion" and at it's best is a forum for communications, cultivating "good faith and justice, peace and harmony" towards all nations than the kind of "entanglement" he's warning about. Even so I think those who've read Washington would see he was warning even about relying too much on the UN.

"Taking care always to keep ourselves by suitable establishments on a respectable defensive posture, we may safely trust to temporary alliances for extraordinary emergencies." [FA]

We have violated this principle since the beginning of the 20th century. Mostly by going from a defensive posture to an offensive one.

"Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest. But even our commercial policy should hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing; establishing (with powers so disposed, in order to give trade a stable course, to define the rights of our merchants, and to enable the government to support them) conventional rules of intercourse, the best that present circumstances and mutual opinion will permit, but temporary, and liable to be from time to time abandoned or varied, as experience and circumstances shall dictate; constantly keeping in view that it is folly in one nation to look for disinterested favors from another; that it must pay with a portion of its independence for whatever it may accept under that character; that, by such acceptance, it may place itself in the condition of having given equivalents for nominal favors, and yet of being reproached with ingratitude for not giving more. There can be no greater error than to expect or calculate upon real favors from nation to nation. It is an illusion, which experience must cure, which a just pride ought to discard." [FA]

Ironically our treaties with countries like China or South Korea grant them "most favored nation" status. Pretty much sticking a finger in Washington's statue's eye. And treaties like TPP pretty much ignore him.

Sources and Further Reading
Source: Wasington's Fairwell Address []
TR & Russo-Japanese War: []
Britannica on Mossadegh:
Mosaddeq's overthrow:

Rest In Peace (RIP) Michael C. Ruppert April 13 2014

I followed the Career of Michael C. Rupert, partly due to some overlap in acquaintances and encounters. Unlike him, I was too chicken to follow up on my observations. I'm still alive. He's been suicided. I don't know if that is an accomplishment. A "coward dies a thousand deaths, the brave die but once." I'm sure he's off in the land of odd characters in a heaven of his own now, and finally at peace. Whether one is a coward or a hero, is often a matter of which narratives one believes. One can be paranoid about it, or one can be naive. But in either case there are real bad guys, real good guys, and most folks are in between. So who knows. Maybe he was a nut case? But I suspect he was right more often than he was wrong. I only think that way because of things that happened to me that destroyed my sense of self satisfaction. Too many people I admire have been "suicided" for me to believe all of them are suicides (though many of them were). This world is a hard one and some folks just get tired of dealing with it. At the same time the real heros have a way of "suiciding" in media res. Whether Michael is the former or the later I'll leave to the audience. I suspect he was just tired.

I started to write this back in April when I first read about his death. Suicide happens. People do give up sometimes. But I had a little trouble believing this guy would take his life and found it a lot easier to think someone killed him. But when I looked into the stor, since there was no evidence that implicated anyone. His situation was so depressing I abandoned the project. Leaving a draft on my blog. The guy was one of my investigative reporter heros, despite or because he was so human. So I figured it would be appropriate a year later to finish this post.

From the Wilderness"

He ran a blog called "From the Wilderness" which chronicalled his investigations, managed his writings and presented his life. I only paid attention to him occasionally. I confess I got his name mixed up with that of other whistleblowers and reporters I've paid attention to, sometimes. It also continues his investigations to a degree. His website reported:

"This is the man who cost CIA Director Deutch his guaranteed appointment as Secretary of Defense after confronting him at Locke High School with hard facts about CIA dealing drugs." - Dick Gregory
" the course of investigations in the mid 70's he came across information that the CIA was trading drugs in order to fund covert operations in the Middle East...Perot called him back to offer encouragement...Ruppert says that his main objective is to see that the country gets a leader worthy of its people. Even for Ross Perot those will be tough shoes to fill." - PEOPLE MAGAZINE 6/22/92

He went on to discover other abuses, but his main concern was how mankind is destroying our planet:

"he’d become convinced that the places we live, the cars we drive, the products we buy, the food we consume — the habits that shape industrial human civilization — were leading to our demise. Smith was intrigued. The resulting interviews in late March and early April 2009 became Collapse, a dark, ominous documentary. The film compiled some of the most intriguing facts Ruppert had amassed during his career, along with some of his most dire predictions. Among them: the imminent end of human industrial civilization. Ruppert made "Michael Moore sound like Mr. Rogers," said one reviewer." [The Unbelievable Life and Death of Michael C Rupert]

The Cassandra Curse

Most of his friends and relatives believe he committed suicide. His last days seem like an episode of "Supernatural. Still he was a fascinating person. He suffered the Cassandra curse. He was a sensitive soul who could sense the pain and suffering, potential and doom all around him. He could warn about what is happening. Tell truth to power and tell folks what to do to avoid a terrible fate. But in the end he realized he had done all he could and he could do no more.

Cassandra was a prophetess, cursed with the ability to see the future, but the complete inability to forestall it. She was the one who warned the Trojans not to take in the Trojan Horse. Sometimes our prophets are murdered. Sometimes they suicide. Sometimes they live to a ripe old age. But it seems nobody ever listens to them.

Others are carrying on his investigative work. A Journalist named Carolyn Baker is continuing his blog and some of his efforts. I guess that is the best anyone can expect, that when the torch is dropped, someone will pick it up and keep running.

Further Reading
War is a Racket []
Collapse Net's report:
In memorium:
In Memorium

Thursday, April 9, 2015

International Sea Dogs, Smuggling and Playing Both sides

This article follows from my post arms-lobbyists and war Mongering.

I suspect the seditious campaign to undermine, sabotage, subvert and prevent an arms agreement with Iran is worse than mere cynicism and is essentially pure treason. Not to stop Iran from getting a bomb, but to bid up the prices for the centrifuges, equipment, tools and ingredients that they buy from their patrons in the Arms Industry. I looked at who was lobbying for War, and the folks paying them to lobby were all Arms manufacturers.

Waging War for Profit Against Iran -- While Smuggling to them

Our experience with Iran since 1980 has been that sanctions not only haven't been effective but have been counter-productive. I used to think they weren't effective because they mostly hurt ordinary people and the target country and not the elites. But then I started revisiting the stories around the "October Surprise" of 1980 -- when the Iranians waited until Ronald Reagan took office and the rumor later circulated that Reagan's foreign policy team had sabotaged the negotiations.

The Messiah Walks Among us

The Messiah Walks among us
He ministers in Aids clinics
He attends Seders in Shul
He prays on a rug in the mosque
And meditates in Ashrams
He leaves invisible footprints
we can follow if we choose to see.
The Messiah walks among us
Barefoot in the back of the bus
He's been spotted sitting next to your grandmother
and talking to your autistic brother.
The Messiah has been seen wandering the streets of calcutta
And among the slumdogs in Bombay
He wanders barefoot in Nairobi
and shelter's women from Al Shabaab
He saves children from Christian Militias
and turns diamonds back into coal
His miracles are simple things
like restoring an orphan child's sight.
He is the friend to the humble
But is offended by those who call his name in vain.
And do deeds that are offensive in his sight
The Messiah wanders the ruins of Gaza
Performing miracles to save children from bombs.
He has saved Bosnian Muslims from Serbs
And Serbians from Croatians.
The Messiah rescues Jews from murder
And hears the pleas of all the children.
But he is offended by the prayers of the arrogant
Who dare to preach war in his name.
When it is their turn to pray, he will ignore their pleas.
The Messiah walks the world
Carrying refugees on his back.
He ferries them across the Rio Grand
And washes them in the Jordan.
He walks across the seas
preaching a brotherhood of man.
Borders are meaningless to him.
The Messiah knows the game
And his greatest source of shame
are the scoundrels who make the claim
they are teaching in his name.
He knows they know who they are
And he prays they will seek redemption
Before they fall into the pit of their own lies
The Messiah is there in your church
Though more likely in the back than in the front.
He is teaching in all the schools
Though those who hear him rarely preach.
He speaks to anyone who:
listens with his inner ear
casts out demons of hate,
and lets go of blinding fear
He ignores those who pretend to see him.
And strikes the hypocrites blind who ignore his lessons.
The Messiah is here, he walks among us.
And those who ignore him, will pay for their crimes.
But those who deliberately distort his teachings earn a place in hell.


Christopher H. Holte

This poem is a follow up to "Oh Jesus" and in the same theme. It is part of the series "The Burning Bush".

Related poems:
The Burning Bush -- Christmas Truce
The Burning Bush [the-burning-bush.html]
"Oh Jesus"
The Cage [burning-bush-cage.html]
From older blog at "Fraught with Peril":

Wednesday, April 8, 2015

The Principle of the Commons: Was the Magna Carta the beginning of liberty or it's end?

Magna Carta as "Where Modern European Civilization went wrong?"

My friend shared a post in Facebook on the Magna Carta in which Fred Harrison maintains that "If we want to discover where modern European Civilization went wrong, one of the places to start to look for the clues is this field" in Runnymede. And surprisingly he maintains that:

"The liberties of the individual began to be eroded with Magna Carta. Far from celebrating it as a sacred document that protected people’s natural rights, the 1215 deal in Runnymede between king and aristocracy took the first fatal step in a centuries-long process of de-socialising the nation’s rental revenue, necessitating the imposition of taxes that damage the health and welfare of the nation." []

Now I agree with Fred Harrison in the overall theme of his argument that it was the conversion of feudal rights and obligations to absolute property rights that undermined the wealth and comfort of the common people of England. But I disagree that it started with the Magna Carta. I think he's pointing to the wrong culprit, and that on the contrary the Magna Carta was even more important to the Future of human rights than is commonly acknowledged and the reason is that the King was also forced to uphold the rights of commoners, something that other Kings and nobility in Europe successfully denied. Had the aristocracy lost their battles with the King, then the King would have had the level of power and wealth he needed to enforce absolutist monarchy similar to what happened in France where there was no Magna Carta. Had the King lost completely to the Aristocracy the tyranny would have been local as happened in Poland.

When the magna carta was granted the Normans had just finished almost 100 years of trying to stamp out Liberty for commoners (sometimes more successfully than others).

In his Youtube exposition he claims that the:

"ugly truth" of the Magna Carta is "terrible to behold" and that the "Magna Carta was the beginning of the end of the liberties of people born on the British Isles!" [Youtube]

When I heard that my jaw almost fell to the floor. On the contrary, in the context of it's times, it was huge progress for all involved. Without the Magna Carta, the Kings of England would have had an easier time asserting an absolute monarchy. And when the transition to a modern country occurred 300 years later the common folks of England would have had more trouble maintaining their rights than they had anyway.

The balance between the nobility and the King was important. The King provided an appellate outlet for local tyranny from nobles. The King in turn needed at least some check on his powers and the Magna Carta was that. It also was a reassertion of pre Norman Conquest Germanic beliefs over the Christo-Fascist notions brought in from France and the Frankish Empire. "Divine Right of Kings" made royalty totally subservient to the Crown. Magna Carta asserted that at least some of the people had rights too.

TO ALL FREE MEN OF OUR KINGDOM we have also granted, for us and our heirs for ever, all the liberties written out below - [Magna Carta]

If anything the Magna Carta was an acknowledgment that at least some people had rights. As my friend Robert Burns notes right off the bat the Magna Carta:

"did not de-socialize anything. It was understood that the nobility, the peers, were rulers over the commoners. They did not engage in the same deception today where the capitalist/rentier ignoble rulers pretend to be mere ‘private’ commoners (de-socializing the rents)." [¬if_t=group_comment_reply]

Rights to the Commons

Yes, the nobility and the King cut a deal that mostly ignored the concerns of the Peasantry. But not of all the peasantry. The thin middle class of English commoners was represented. Yeomen, who usually owed more than a few acres and farmed their own land in return for being England's famed and feared "longbowmen" were present at the table and their voice is heard indirectly along with other commoners. I like to think that the echoes of "Robin Hood are present in the treaty in the Magna Carta, in this passage:

"(47) All forests that have been created in our reign shall at once be disafforested. River-banks that have been enclosed in our reign shall be treated similarly." - []

Yes the Magna Carta was imposed on King John and guaranteed the rights of nobles. But at least some of the better educated and armed lower classes were there too, and they forced their issue on King John as well. That includes the small farmers known as Yeomen who also were the backbone of the British Army with their archers. The magna Carta is where most Robin Hood stories are set for a reason.

Common Rights

In feudal times feudal obligations were law. They were governed by common law and the only real threat to common law was the various crowns, all of whom sought to establish absolute arbitrary rule. Where the nobility won too much power the crown became so weak it couldn't even defend the country -- as happened to Poland. But in England the feudal rights were affirmed without totally Défenestreing the crown. As Robert Burns notes:

"So Magna Carta instead decentralized the feudal State power. In contrast, the anointing of ignobles centralizes and de-socializes ruling power (Citigroup, for example, rules the entire World and calls its rule merely its own ‘private interest’ and none of our business)." [¬if_t=group_comment_reply]

But what documents like the Magna Carta did were to distribute powers and obligations and attempt to establish basic principles of rule of law. The principles may even have been conscious of the principles behind what they were doing, because much of what became common law is based on traditional principles. And you see these affirmed in passage after passage in the Charter. For example:

"(57) In cases where a Welshman was deprived or dispossessed of anything, without the lawful judgment of his equals, by our father King Henry or our brother King Richard, and it remains in our hands or is held by others under our warranty, we shall have respite for the period commonly allowed to Crusaders, unless a lawsuit had been begun, or an enquiry had been made at our order, before we took the Cross as a Crusader. But on our return from the Crusade, or if we abandon it, we will at once do full justice according to the laws of Wales and the said regions." -[Magna Carta]

Rule of Law:

The Magna Carta imposed principles of rule of law for commoners:

"(20) For a trivial offence, a free man shall be fined only in proportion to the degree of his offence, and for a serious offence correspondingly, but not so heavily as to deprive him of his livelihood. In the same way, a merchant shall be spared his merchandise, and a villein the implements of his husbandry, if they fall upon the mercy of a royal court. None of these fines shall be imposed except by the assessment on oath of reputable men of the neighbourhood." [Magna Carta]

The principle of "trial by one's peers, was originally a principle of nobility, but it's still a principle of fairness:

"(21) Earls and barons shall be fined only by their equals, and in proportion to the gravity of their offence." [Magna Carta]

And also for the Church:

"(22) A fine imposed upon the lay property of a clerk in holy orders shall be assessed upon the same principles, without reference to the value of his ecclesiastical benefice." [Magna Carta]

So was the Magna Carta the "End of Liberty" or a victory in a long war?

So On the contrary the Magna Carta was not the "end of freedom" or "liberty" but a successful skirmish in a long war between conflicting interests. I agree with the theme expressed in the last 5 minutes, but his facts and justifications are poorly argued. The Magna Carta actually reflects the complexity of the struggles for common rights of commoners. At the table at Runnymede commoners weren't even directly represented but as shown in the above passages they were there.

Later in his exposition he claims that the expression "estate" or "land" was eliminated from the American founding documents because they wanted to deny the people a right to land property. But the problem with that argument is that the assertion of an absolute (or alloidal) right to land would have been the basis of the great landlords asserting the right to collect massive rents and evict people who couldn't pay them, not that people have an "equal right" to land. That is precisely the mistake that commoners made during the Enlightenment. It wasn't the Magna Carta that converted feudal rulers rights to simple property, it was the very sleight of hand in parliament of ending 'nobility' without redistributing the property that the nobles controlled that converted those rights to simple property and paved the way for fencing and highland clearances. On the Contrary the Magna Carta saw the Crown forced to concede people's right to access rivers or use the "Kings Forests." An equal right to use of land is asserted in the the passage the "Pursuit of happiness." Fred Harrison gets it exactly backwards.

The Magna Carta as a Battle in a Long war

The fact is that the magna carta was one battle of a long struggle between socially dominant nobles (and clergy), commoners and the Crown in which the sides constantly shifted. Commoners fought the crown and nobles by asserting Feudal obligations on the part of both, and by asserting "common rights". They usually had to fight and be crushed to get even minor concessions. And much of what is in "natural rights" discourse was under-ground and expressed in legend, lore (stories like Robin Hood), limericks ("When Adam spat and Eve Span, who was then the common man" dates back to the Normans). And local rebellion, even when it resulted in mass beheadings was often the only path to assert justice. A little more than 100 years later, Peasants would give their lives fighting the crowns on similar arguments to what Locke would argue 2 centuries after that. Rights are Bottom up. Social Domination is top down. It has to be resisted bottom up.

As I noted in my blog on the Peasant Revolt of 1381, at the beginning of 2014:

"When Adam delved and Eve span,[a] Who was then the gentleman?[3] From the beginning all men by nature were created alike, and our bondage or servitude came in by the unjust oppression of naughty men. For if God would have had any bondmen from the beginning, he would have appointed who should be bond, and who free. And therefore I exhort you to consider that now the time is come, appointed to us by God, in which ye may (if ye will) cast off the yoke of bondage, and recover liberty" [] Src: []

Rights come from below. As I noted:

"the Peasants of Wycliff and Watt read the bible and were quietly the equals of anyone. They shared jokes about the wealthy and expressed them in short poems, which were basically the tweets of the day."

And many of the men and women of the time of King John were educated too. It's that quiet assertion of human dignity that continues to this day and that will prevail in the face of bullying, social dominance and the arrogance of the rich and powerful.

Further Reading:¬if_t=group_comment_reply
Peasant Revolt:
John Ball:

Plutocrats versus Democrats Bill Moyer's Article

Plutocracy is not new in the United States. Our Modern Cons (not conservatives they only conserve money), do inherit a legacy of anti-Democratic feeling and action that dates back to both the "Tories" who supported the British during the American Revolution and the "Whigs" who were often family members of the Tories, and made money off of the revolution. Self Aggrandizement is human nature, and I've talked about the Pirates of the American Revolution, but there were pirates and their Money Men Admirals in every subsequent war.

As General Smedley Butler documented in his book "War is a Racket":

"The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits -- ah! that is another matter -- twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent -- the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let's get it." []

And war-profiting goes with industrialism. It's documented that much of our industry has been the product of the need to provide war-materials. The rest has been the product of the more prosaic and legitimate need to provide consumer goods, but the profits have been in the war and the profits from war were used to build plutocratic power and wealth. And these people came to define the 19th century:

"The first class of multimillionaires had made their fortunes in the Civil War, and during subsequent decades they began to consolidate holdings in a number of industries with national and international reach. Among the most famous were Carnegie Steel and John D. Rockefeller's Standard Oil Company." []

The first class of multimillionaires were people like the Goulds, Harry Payne Whitney, the Vanderbilts and the Astors. Technically the Rockefellers and Carnagies were second generation Millionaires. Carnagie made his millions building bridges for millionaires out of Steel using the Bessemer process he got from hiring Bessemer to work for him. And Rockefeller made his millions by refining oil into standard volume and quality Kerosene and then getting a monopoly over the distribution. The millionaires of the 1860's turned into industrialists and by the turn of the 20th century were an aristocracy. And some wealth does trickle down from the top .01% to the top .1% to the top 1%, in a hierarchy of diminishing returns. Bessemer may have invented the Bessemer process, but it was Carnagie who made the millions. Plutocracy forms pyramids. Eventually some "fearless leader" stands on top the pyramid, but the energy is in the social dominance of the wealthy.

Plutocrats hate Democracy:

“Awful Democracy”

Bill Moyers takes an excerpt from the book and writes:

"Wall Street Brahmin Henry Lee Higginson, fearing “Awful Democracy” — that whole menagerie of radicalisms — urgently appealed to his fellows to take up the task of mastery, “more wisely and more humanely than the kings and nobles have done. Our chance is now — before the country is full and the struggle for bread becomes intense. I would have the gentlemen of the country lead the new men who are trying to become gentlemen.” []

This was naked aristocracy, and the attitude is coming out of the closet again. Because these aristocrats don't have a sense of social contract to others. Many of them are heirs to the privateering, piracy approach to wealth. If you can't earn it steal it. If it's illegal to trade it smuggle it. It's the Ferenghi ethos, nothing can standing the way of profits and "gold pressed latinum". These people were and are:

"sea-dog capitalists, dynasty builders, for whom accumulation was a singular, all-consuming obsession. They reckoned with outside authority if they had to, manipulated it if they could, but just as often went about their business as if it didn’t exist. Bred to hold politics in contempt, one Social Register memoirist recalled growing up during the “great barbeque.” He was taught to think of politics as something “remote, disreputable, and infamous, like slave-trading or brothel-keeping.”" []

Then as now the goal was social and economic dominance not benevolence. A disdain for "politics" is usually a preference for brute force.

"Brute Force"

They may have eschewed "politics" but they had no trouble with buying politicians, hiring private police, or enforcing their power. Then and now their corporate libertarianism and rejection of "government" led to violence not paradise.

"The frequent resort to violence that so marked the period was thus the default position of a ruling elite not really prepared to rule. And of course it only aggravated the dilemma of consent. Those suffering from the callousness of the dominant classes were only too ready to treat them as they depicted themselves — that is, as aristocrats but usurping ones lacking even a scintilla of legitimate authority." []

Frazer explains:

"The American upper classes did not constitute a seasoned aristocracy, but could only mimic one. They lacked the former’s sense of social obligation, of noblesse oblige, of what in the Old World emerged as a politically coherent “Tory socialism” that worked to quiet class antagonisms. But neither did they absorb the democratic ethos that today allows the country’s gilded elite to act as if they were just plain folks: a credible enough charade of plutocratic populism. Instead, faced with mass social disaffection, they turned to the “tramp terror” and other innovations in machine-gun technology, to private corporate armies and government militias, to suffrage restrictions, judicial injunctions, and lynchings. Why behave otherwise in dealing with working-class “scum” a community of “mongrel firebugs”?" []

In the 19th century the wealthy could rely on a corrupt and aristocratic Courts. What the Right Wing called "judicial activism" in the 20th century was merely the result of years of efforts to clean up these very actively oppressive courts of the 19th century. Using absolute notions of property rights to justify repressing workers was standard practice until the New Deal. These "sea-dog capitalists" haven't changed. The only difference is that, Sadly their descendents have learned to play politics. They still see the rest of us as "scum" and "mongrels". Just ask John McCain about Code Pink or Romney about the "47 Percent".

International Sea Dogs

And that is not just true of the United States. It is true around the world. War attracts sociopathic and "Sea Dog" businessmen like flies. In the Iran Iraq war:

"According to "Crimes of the President" Markups of weapons during the period when it was enforced were more than "ten times more than ordinary sales prices." "During the time of the embargo the numbers of countries selling weapons to Iran boomed from 40 countries to 53 countries." An embargo raises the profits for illegal arms sales." []

War mongering and war-profiteering aren't new. Many of our wanna-be plutocrats got their fortunes from it. And these people no longer just dominate the USA, they dominate the world.

Further Reading:
War is a Racket:
Plutocracy First time around:
From the book The Age of Acquiescence by Steve Fraser. Copyright (c) 2015 by Steve Fraser:
Cartoon and some background from: []

Tuesday, April 7, 2015

Arms Lobbyists and War-Mongering

Modern Pirates, Lobbyists and War-Mongers

In my post "Did Cotton and other GOP politicians take money from Israel? [] I dug up material about some major lobbyists for foreign countries and the disproportionate influence they are having on our politics and foreign policy. My anti-Israel friends may think I've gone over to their side, but the evidence I saw was of an mafioso-esoteric layer, not one where one side is saintly and the other nefarious and dirty. The people involved don't really care about either side. They'll sell weapons to both sides. I saw evidence of nefarious, dirty, sneaky types all over the place, but mostly connected with the Reagan Administration and it's program to win millions and defeat "Communism" if the Communists aren't buying. These are people who work together while plotting against each other. Just as scandals connected to the Reagan and Bush Administrations trace to Watergate related events, world events trace to the piracy and freebooting of our Arms Dealers, Secret Agents and "Cold Warriors."

I might never have gotten at the material, completely or factually at all, except that it became a "who done it" of American Politics. If the Dems hadn't been the target of the 1980 "October Surprise" efforts of the wealthy backers and corporations behind the Reagan Counter-revolution the energy to dig into these criminal behaviors or to expose them would have been lacking. Indeed, it turns out Carter was trying to exchange arms for the Hostages, covertly, too, and the Reagan War-monger crowd outbid him. The "October Surprise" that sabotaged Carter's efforts to end the Hostage crisis with the Iranians back in 1980, was because Reagan's wealthy backers were running their own programs. These illegal, "extralegal" and subversive programs continued long after Reagan won election. They funded the dirty wars in Central and South America. And that is what attracted my interest. My wife was traumatized by what the Argentine military did during that period. I'm a little protective.

I'll present the timeline as best I can but the story is bigger and murkier than I can simplify it from. Rather than rehash the details I'm trying to focus on what I believe was the big picture. Starting with the:

The Cast of Characters

Adnan Khashoggi

For example while looking up the biography of Adnan Khashoggi the Wikipedia article notes "(Arabic: عدنان خاشقجي‎; born 25 July 1935) is a Saudi Arabian businessman. At a peak net worth of up to $4 billion USD in the early 1980s, he was considered one of the richest men in the world" []. At the height of his power he owned the Kingdom 5KR, which is now owned by Al-Waleed bin Talal.

This ship was used as a setting for some scenes the Bond movie "Never Say Never Again" where Bond chases a character who could have been loosely based on Adnan Khashoggi (or any wealthy arms dealer) "Maximillian Largo" was being chased after stealing and dealing in Nuclear Warheads at the behest of the "Dr. Evil" Ernst Stavro Blofeld. The parallels were there. Khashoggi ran his business from his ship in a way that has been a pattern since before John Pierpont Morgan used to do his more shady dealing from his yacht the "SS Corsair". I read an article about JP Morgan flying a black pirate flag but have never been able to confirm it. He did fly his yacht colors and did claim descent from Henry Morgan. He is also famous for negotiating the "Corsair Compact" aboard one of his yachts [] in which he got the major railroads to collude on prices.

Image from

Adnan Khashoggi:

"Khashoggi headed a company called Triad Holding Company, which among other things built the Triad Center in Salt Lake City, Utah, which later went bankrupt. He was famed as an arms dealer, brokering deals between US firms and the Saudi government, most actively in the 1960s and 1970s. In the documentary series The Mayfair Set, Saudi author Said Aburish states that one of Adnan's first weapons deals was providing David Stirling with weapons for a covert mission in Yemen during the Aden Emergency in 1963. Among his overseas clients were defense contractors Lockheed Corporation (now Lockheed Martin Corporation), Raytheon, Grumman Aircraft Engineering Corporation and Northrop Corporation (which have now merged into Northrop Grumman)." []

Adnan Khashoggi was never working alone, but at the height of his power and influence he was a major player in international dealings in oil, weapons, major weapons systems (aircraft, bombs, rockets, jets). But his dealings were as much outside "official channels and within them.

"He was implicated in the Iran–Contra affair as a key middleman in the arms-for-hostages exchange along with Iranian arms dealer Manucher Ghorbanifar and, in a complex series of events, was found to have borrowed money for these arms purchases from the now-bankrupt financial institution the Bank of Credit and Commerce International (BCCI) with Saudi and US backing. In 1988, Khashoggi was arrested in Switzerland, accused of concealing funds, held for three months and then extradited to the United States where he was released on bail and subsequently acquitted." []

In the Iran Contra case, Khashoggi was a bit player in a game of international intrigue and high level sedition and sabotage that makes organizations like Spectre seem like amateurs. Renegade elements of the USA government, led by Oliver North after the election and by William Casey before the election made deals with the Iranian Ayatollahs at the very same time period they were painting the Iranians as terrorists and members of the Axis of Evil. But he made billions, and if some of it later disappeared, he's not doing so bad. The official timeline was:

The 1953 Coup - the Brits and USA Secret Services conspired to overthrow the reformer Iranian leader "Mossadegh". This led to the "election by coup" of the son of the previous Shah who'd been ousted by popular revulsion.

Reza Shah Pahlavi

1953-1979 : Mohammad Reza Shah Pahlavi (known as “the Shah") is secular and authoritarian ruler of Iran. Iran is one of the United States’ strongest allies in the Middle East.

The Shah ran a repressive government that was secular, corrupt and tried to modernize top down. The model for these regimes was Fascist even when they allied with communist countries. Top down rule, liberalization of education, coupled with a violent secret police, prison and execution system to keep people in order. He made many enemies, and the leaders of the expat community mostly moved to France and lived in Paris.


The Ayatollah Khomeini Revolution

1978 : Riots and demonstrations break out across Iran, largely in response to the Shah’s secularism and close relationship with the U.S.

The riots were actually in response to the Shah's repressive, corrupt government and use of Secret Police. The religious response was one of the tools of those revolting, and sadly the religious resistance was the largest faction resisting the Shah. Religious Iranians saw liberating women, friendships with Israel, and being "too secular" as evils along with the corruption that made the Shah and his relations incredibly wealthy while keeping the wealth for themselves. Sharp leaders formed temporary alliances between secular liberals like Bani Sadr and the Ayatollah, who was living in France at the time. The Ayatollah, by keeping quiet on controversial subjects and speaking in abstracts, seemed a progressive hero to many, until he returned to Iran.

1979 : Riots and demonstrations grow increasingly numerous, frequent, and violent, ultimately culminating in the Iranian Revolution.
January 1979 : The Shah leaves Iran, and the country is declared an Islamic Republic by Ayatollah Ruhollah Khomeini. The Ayatollah severs all ties with the U.S. and declares Israeli illegitimate.
November 4, 1979: Muslim Followers of the line of the Imam, a fundamentalist, anti-imperialist group made up predominately of young radical revolutionaries, seized the U.S. embassy in Tehran. End of cordial diplomacy between the two nations

These people called themselves "students" but they hadn't been studying in 2 years and it later turned out that they were professional revolutionaries and the core of later religious militia/police/army cadres.

In 1980 Carter had his deputy Secretary of State Cyrus Vance lead "the official diplomatic effort, Hamilton Jordan spent thousands of hours working secret channels." But it appears that the Cons had their own side channels. []

The public story of the Carter Administration includes large offers of carrots if the Ayatollahs would free the hostages. But the Ayatollahs wanted Reza Pahlavi's head more than they wanted material goods. And when the USA sent helicopters to try to rescue them they appear to have decided to stick their thumb in the face of the President. They might have done the same even without the advice and offers of the Presidents Industrialists and advisors. The New York Times article says:

"in March 1980, four months after followers of the Ayatollah Ruhollah Khomeini had seized the United States Embassy in Teheran and taken the hostages, Casey approached two Iranian-born wheeler-dealers, the brothers Jamshid and Cyrus Hashemi, who had ties to the Khomeini regime. Casey asked them to set up a meeting with representatives of the Iranian Government. Thereafter, the Hashemis purportedly arranged for Casey to attend two meetings in Madrid in the summer of 1980 with Mehdi Karrubi, an Iranian cleric close to the Ayatollah. According to Mr. Sick, Casey subsequently had one last meeting in Paris about two weeks before the election to clinch the deal." []

But that is not the only narrative. In other versions of the narrative the Reagan Operatives were

"Richard Allen, subsequently Reagan's first national security adviser, Allen aide Laurence Silberman, and Robert McFarlane, another future national security adviser who in 1980 was on the staff of Senator John Tower (R-TX)." []

"In any case there are a number of witnesses who say (despite the denials) that the meeting did occur and was a success. Robert Perry writes

"In 1994, I found a classified summary of the FBI bugging. According to that summary, the bugs revealed Cyrus Hashemi deeply enmeshed with Republicans on arms deals to Iran in fall 1980 as well as in financial schemes with Casey's close friend and business associate, John Shaheen." []

Meanwhile the Carter Administration was working it's own deal without knowing what the Cons were doing:

"Bani Sadr, however, says the secret deal was made, even as the Iranians publicly reached an agreement with the Carter administration to release the hostages in return for the unfreezing of $4 billion. The Iranian who secretly met with the Reaganauts in Washington, Bani Sadr says, was either Parvis Sabati, Manucher Ghorbanifar, or both." []

Cyrus Hashemi: Arms for Hostages & Refugees


To the Republican Operatives around Reagan double and dirty business was old business. Casey had recruited one of the key Iranian players a year before the hostages were taken. Parry Reported:

"the Iranian banker was recorded [by the CIA/NSA] as boasting that he and Casey had been "close friends" for years. That claim was supported by a CIA memo which stated that Casey recruited Cyrus Hashemi into a sensitive business arrangement in 1979." []

Casey was never at a lot of places during the time from when he was recruited by the OSS to his death. But he definitely was in Paris, despite the denials and bi-partisan cover-up that occurred later. In the book "The Secret Wars of the CIA" Casey comes across as someone for whom the boundaries between personal business, self enrichment and public service are non-existent. This seems to be a pattern among the sociopaths who dominate international business and politics.

Parry notes:

"The secret FBI summary showed Hashemi receiving a $3 million offshore deposit, arranged by a Houston lawyer who said he was a longtime associate of George H.W. Bush. The Houston lawyer, Harrel Tillman, told me in an interview that in 1980, he was doubling as a consultant to Iran's Islamic government." href="">[]

Lloyd Cutler writes:

"Hashemi tried to serve as an intermediary for the Carter White House because, at the request of his lawyer, several of us met with him in New York in the fall of 1980." "Hashemi claimed a family relationship with Hojatolislam Hashemi Rafsanjani, then speaker of the Iranian parliament and now president of Iran." He was already involved in arms deals with Iran by then, and "A few weeks later U.S. Customs and Justice Department officials notified us of evidence that Cyrus Hashemi, along with his brothers Jamshid and Reza, were involved in illegal arms exports to Iran via Kennedy Airport; when confronted, they had said they had our permission." The State Department denied they had any permission to export weapons.

Which is consistent with what an Iranian expat/national would think if he was dealing with people running an extralegal operation. The deal with Hashemi fell through because "." He admits "It is plausible that the Hashemis also were in contact with Republicans, as Jamshid now claims." And if Casey had recruited him in 1979 it could be that Casey is the one who got him in trouble in the first place. He also concedes that "Rafsanjani and his Islamic Republican Party did not consolidate their internal power until the fall of 1980."


Genesis of the Israel connection.


If the United States couldn't officially support Iran's military, Israel could! And if, instead of giving Arms to the Iranians they sold them, this could be a profitable effort for all involved. The nice thing (for arms dealers) is that they could do this semi-legally. During the Shah years Israel had developed relationships with top Iranian officials, some of whom avoided being jailed or executed. As Khomeini started to take over in 1979, Israel used the chaos to try to rescue Jews from Iranian persecution. Their first project was known as Shulhan Arukh (שולחן ערוך) or laid table; and rescued 40,000 of Iran's 100,000 Jewish Community. The director of this operation was an operative left behind when most of the Israeli Government withdrew their Embassy. Khomeini had kept SAVAK and military Officers in place, despite the fact that a large amount of the reason for the revolution was SAVAK behavior. These became contacts for Israel, Arms dealers, and their CIA and GOP contacts. For the Israelis the motivation for dealing with iran included Israel's interest in protecting the nearly 200,000 Jews living in Iran. Iran had been a refuge and conduit for Iraqi Jews fleeing Iraqi (and other) persecutions before, during and after the 1947 war, now there had to be some way to withdraw the remaining Jewish population (those willing to leave) in the face of the vicious anti-semitism of the new Ayatollah regimes.

So Israel had a motivation to sell or broker Arms to the Iranians.

September 22 1980-90 : Iran-Iraq War.

According to Lloyd Cutler during the official negotiations with the Carter Administration the:

"Iranians asked us to release undelivered military spare parts bought by the shah's regime. We agreed in principle to do so upon return of the hostages and supplied a list of what was available. But the Iranians surprisingly dropped this request and it never became part of the January 1981 agreements. Was this because of some secret deal with the Reagan team to obtain a larger quantity of American arms from the incoming administration?" [Baltimore Sun Article]

So where would be the evidence that he kept his bargain? The Larouchis published an article by Robert Dreyfuss in 1980 titled "Iran's armed forces receive covert aid from Washington" [] alleging that in September 1980:

"quietly begun a major military airlift to resupply the Iranian armed forces with spare parts, arms, and ammunition, including heavy weapons. American C-130 air transport planes are ferrying this equipment to at least three secret NATO bases, including a location in the Azores, where the cargo is then transferred to Iranian transports for the rest of the journey!" [LaRouche Article]

This may have been from La Rouche, but this was corroborated. But apparently what Carter offered was a drop in the bucket compared to what the Republicans offered. And, apparently Likud Operatives as well. Consortium News reports:

“But the evidence points in that direction, and there are some points that are not in dispute. For instance, there is no doubt that CIA Old Boys and Likudniks had strong motives for seeking President Jimmy Carter’s defeat in 1980.”062410.html

Betrayal of Carter

When Casey was appointed CIA director in early 1980 these "old hands" cheered:

“Inside the CIA, Carter and his CIA Director Stansfield Turner were blamed for firing many of the free-wheeling covert operatives from the Vietnam era, for ousting legendary spymaster Ted Shackley, and for failing to protect longtime U.S. allies (and friends of the CIA), such as Iran’s Shah and Nicaragua’s dictator Anastasio Somoza.”062410.html

Carter had tried to stop (or at least moderate) ongoing dirty wars in Central and South America and the operations of Secret police like SAVAK and the agents not only of the above list but also including the dictators in Chile, Peru, Argentina and Bolivia. To these CIA officers dirty wars and the utter defeat of Communism, socialism, and uppity or rebellious people world wide was the mission. Protecting "Democracy" was code for how to win people over, kill enemies and make fortunes. It looks like we now know these Cold Warriors were in covert rebellion against the President.

At least the current rebellion is open.

“As for Israel, Likud Prime Minister Menachem Begin was furious over Carter’s high-handed actions at Camp David in 1978 forcing Israel to trade the occupied Sinai to Egypt for a peace deal. Begin feared that Carter would use his second term to bully Israel into accepting a Palestinian state on West Bank lands that Likud considered part of Israel’s divinely granted territory.”062410.html

Likud's goal was to gradually ethnically cleanse the West Bank as a threshold for regaining "Judea and Samaria" which were the Biblical Israel homeland.

“Former Mossad and Foreign Ministry official David Kimche described Begin’s attitude in his 1991 book, The Last Option, saying that Israeli officials had gotten wind of “collusion” between Carter and Egyptian President Anwar Sadat “to force Israel to abandon her refusal to withdraw from territories occupied in 1967, including Jerusalem, and to agree to the establishment of a Palestinian state.”062410.html

Which of course was anathema to the Likud, even if the stated position of Israel was to trade land for peace.

Kimche claimed: “This plan – prepared behind Israel’s back and without her knowledge – must rank as a unique attempt in United States’s diplomatic history of short-changing a friend and ally by deceit and manipulation.”062410.html

I remember the goals of Jimmy Carter were all being stated out in the open. He wasn't doing any secret side deals. But believing that is typical paranoid behavior of people who have their own secret agenda. I followed the Camp David accords. But both were willing to agree to some general outlines. Carter was negotiating out of love for the people over love for governments. To this day I don't believe that Israel was going to negotiate seriously without someone pushing them. So while from the POV of Begin that might have seemed a betrayal, Begin's reaction was a betrayal of his promises at Camp David. And how did Israel come to know of Carter's discussions with Sadat?

“However, Begin recognized that the scheme required Carter winning a second term in 1980 when, Kimche wrote, “he would be free to compel Israel to accept a settlement of the Palestinian problem on his and Egyptian terms, without having to fear the backlash of the American Jewish lobby.”062410.html

So in the name of stopping a final peace plan, Begin helped the Republicans sabotage the peace process by sabotaging Carter's re-election.

“In his 1992 memoir, Profits of War, Ari Ben-Menashe, an Israeli military intelligence officer who worked with Likud, agreed that Begin and other Likud leaders held Carter in contempt.” [062410.html]

Which is something they had in common with the GOP Cons.

“Begin loathed Carter for the peace agreement forced upon him at Camp David,” Ben-Menashe wrote. “As Begin saw it, the agreement took away Sinai from Israel, did not create a comprehensive peace, and left the Palestinian issue hanging on Israel’s back.”062410.html

35 Years of Peace Undermined by the Likud

Begin was the one betraying Carter, and the attitude of the Likud was the usual projection of bad intentions that people with bad intentions regularly do.

We can thank Carter for nearly 35 years of relative peace between Israel and her neighbors. If Carter didn't succeed in getting peace between Israel and the Palestinians the blame for that falls on the Likud and the GOP. Neither Reagan nor the two Bushes did anything to advance peace and the result has been 35 years of apartheid, low level violence, terrorism and ethnic cleansings. This has contributed to undermining the peace of those countries that Israel made peace with and is now unravelling Israel's relationships with it's neighbors. If Begin hated and despised Carter, his hatred was like taking poison and hoping your enemy will die. Israel was a heroic place before 1968. Since 1980 it has been involved in atrocities and dirty dealings. It took the election of Clinton to get talks started again, and by then the situation with the West Bank was even more intractible.

“So, in order to buy time for Israel to “change the facts on the ground” by moving Jewish settlers into the West Bank, Begin felt Carter’s reelection had to be prevented. A different president also presumably would give Israel a freer hand to deal with problems on its northern border with Lebanon.”062410.html

Begin's invasion of Lebanon resulted in the attrocities of the Sabra and the Shatila, destabilized Lebanon, and turned Israel's northern border into one even less secure than before. It may have undermined the PLO but it set loose Hezbollah to take their place.

Sound familiar? And the Inner Circle of CIA Agents and their friends outside the Government but still operating in Arms companies, Wall Street, and who knows where else felt:

"As for the CIA Old Boys, legendary CIA officer Miles Copeland told me that “the CIA within the CIA” – the inner-most circle of powerful intelligence figures who felt they understood best the strategic needs of the United States – believed Carter and his naïve faith in American democratic ideals represented a grave threat to the nation." []

The cynical CIA operatives figured that "national security" = Wall Street, Main Street and personal profits, not naive democratic ideals.

The Iranians may well have decided to negotiate with both sides and "take advantage" of GOP and Israeli willingness to sell arms. This certainly would have taken the pressure off of them to deal with the Carter administration until their own power was consolidated, which was around the same time as the Reagan/Carter Election.

Free For all

Once the war broke out between Iran and Iraq Arms Dealers of all stripes found they had leverage with the Iranians again. The Iranians balanced that leverage by taking hostages. With the USA that was through Kidnappings. With Israel they had a two thousand + year old population of Iranian Jews. The USA "arms for hostages" of USA secret dealings were paralleled by an Israeli "arms for emigration" effort by Israeli leadership. Both dealings were secret. If aircraft carrying Jews, or hostages, were seen as flying for purely humanitarian reasons, then everyone would see it as pure patriotism and nobody would suspect any ulterior motive. The Iranians would be seen as generous humanitarians, and would get much needed arms for their war with Iraq. This also provided a get around because the Ayatollahs had restricted emigration to those rich enough to give up everything they had in order to leave. Selling Arms to a desperate Iranian military was one avenue to get around this. It would be a mix of bribery and extortion on both sides. For Israel rescuing oppressed Jews was part of their mission, and selling arms could more than finance that rescue. It would enrich everyone involved if they wanted to take the money.


Operation SeaShell


As Ronen Bergman wrote in “The Secret War with Iran: The 30-Year Clandestine Struggle Against the World’s Most Dangerous Terrorist Power,” pub. 2007, Israel made a fortune selling arms to Iran throughout that war. Bergman writes:

"First, Israel could not come to terms with the military, intelligence, and diplomatic losses that it had sustained with the disruption of relations with Iran after the revolution. Arms exports would at least give it a foothold in Tehran. In Israel’s defense establishment, the lesson had been learned from many cases over the years that swiftly supplying weaponry and military know-how to a totalitarian state will bring the supplier as close as possible to the rulers, because the weapons are their means of holding on to power."
Second, it was hoped that the infusion of weaponry would intensify the Iran-Iraq war and lead to the mutual destruction or, at least weakening, of two enemies
"Third, Israeli officials feared a victorious Saddam" . . .
Fourth: “More than anything else, the weapons industry wanted to make money. As one Israeli Defense Ministry official, a key figure in Operation Seashell, recalls: “I do not remember even one discussion about the ethics of the matter. All that interested us was to sell, sell, sell more and more Israeli weapons, and let them kill each other with them.” p. 43

And there was a fifth reason. They used arms as a trading lever to help Iranian Jews leave Iran.

According to Ronen Bergman,

"Israel sold Iran US$75 million worth of arms from stocks of Israel Military Industries, Israel Aircraft Industries and Israel Defense Forces stockpiles, in their Operation Seashell in 1981.[1] Materiel included 150 M-40 antitank guns with 24,000 shells for each gun, spare parts for tank and aircraft engines, 106 mm, 130 mm, 203 mm and 175 mm shells and TOW missiles. This material was transported first by air by Argentine airline Transporte Aéreo Rioplatense and then (after the 1981 Armenia mid-air collision) by ship."

According to Trita Parsi, Israeli support for Iran consisted of several elements:

"Arms sales to Iran that totaled an estimated $500 million from 1981 to 1983 according to the Jafe Institute for Strategic Studies at Tel Aviv University. Most of it was paid for by Iranian oil delivered to Israel.[2]:107 "According to Ahmad Haidari, "an Iranian arms dealer working for the Khomeini regime, roughly 80% of the weaponry bought by Tehran" immediately after the onset of the war originated in Israel." [Trita Parsi]
"Arms shipments from the U.S. to Iran in the Iran-Contra Affair facilitated by Israel." [Trita Parsi]
"Israel's June 7, 1981 attack on Iraq's Osirak nuclear reactor which set back Iraq's nuclear program. In fact, Iran bombed them first, back in 1980, but they only damaged secondary buildings." [Trita Parsi]
"Israel is also reported to have supplied instructors and non-armaments help to Iran for the war effort. According to Mark Phythian, the fact "that the Iranian air force could function at all" after Iraq's initial attack and "was able to undertake a number of sorties over Baghdad and strike at strategic installations" was "at least partly due to the decision of the Reagan administration to allow Israel to channel arms of US origin to Iran to prevent an easy and early Iraqi victory." [Trita Parsi]
"Israeli arms dealer Yaacov Nimrodi apparently signed a deal with Iran's Ministry of National Defense to sell $135,842,000 worth of arms, including Lance missiles, Copperhead shells and Hawk missiles. In March 1982, The New York Times cited documents indicating that Israel had supplied half or more of all arms reaching Tehran in the previous 18 months, amounting to at least $100 million in sales. The Milan weekly Panorama reported that Israel had sold the Khomeini regime 45,000 Uzi submachine guns, anti-tank missile launchers, missiles, howitzers and aircraft replacement parts. "A large part of the booty from the PLO during the 1982 Lebanon campaign wound up in Tehran," the magazine claimed." [Trita Parsi]
Book with details of Mossad Operation:
"The Secret War with Iran" by Ronen Bergman[]
Also: Ronen Bergman, The Secret War with Iran, Free Press, 2008, p.40-48
Trita Parsi: Treacherous Alliance:
Cut-able reference: []

Arms for Hostages Deals 1980-1983


Operation Demevand


In his book Crimes of a President, By Joel Bainerman:

"Although it never got into the mainstream press, the alternative press; The Nation, The Village Voice, The Progressive and In these times has given extensive coverage to operation Demevand. Named for a Mountain Range in Iran, this was a White House operation to sell massive amounts of arms to Iran Covertly and Illegally." [The Crimes of A President]
"Barbara Honneger, in her book October Surprise, gave one of the earliest reports on massive arms sales from the U.S. to Iran (pp. 179-183). Although many of the sources remained anonymous, she has to be given a lot of credit for investigating a secret agenda that up until then had gone virtually undetected. Her sources told her that arms shipments began in 1981, and by 1986 more than $15 billion worth of arms had been redirected to Iran. She quotes Richard Muller, a former colonel in the Marine reserves, as claiming that secret NATO military supplies stored in reforger stores throughout Europe." [Inside the Covert Operations of the CIA]

And this was all before the formal "Iran Contra" sales began.

"The proceeds went to the Pentagon's "black budget" for covert activities. " [Inside the Covert Operations of the CIA]
Crimes of the President
Chapter 5 "How many Weapons did the Reagan-Bush Administration really sell?
October surprise Books:
By Barbara Honneger
By Gary Sick

During Thom Hartman's interview with Honneger:

"...the Iran arms sales that surfaced in the Iran side of the Iran-Contra scandal were indeed the tip of the iceberg of just a few hundreds of million dollars of illegal arms shipments to Iran. That was just the tip of the iceberg of literally billions that started flowing right after Reagan took the oath of office."

After 1983

1983 : U.S. actively engaged in arms embargo, Operation Staunch.

Operation Staunch was a public cover. It had the benefit of bidding up the price for black market and covert sales. According to "Crimes of the Presidnet" Markups of weapons during the period when it was enforced were more than "ten times more than ordinary sales prices." "During the time of the embargo the numbers of countries selling weapons to Iran boomed from 40 countries to 53 countries." An embargo raises the profits for illegal arms sales.

Perhaps that is why the same folks who backed arms sales to Iran in the 80's want to sabotage peace talks now. Maybe they want the covert channels to reopen.

1983 : Adnan Khashoggi first meets with Robert McFarlane, Theodore Shackley meets Iranians Manucher Hashemi, Manucher Ghorbanifar and Hassan Karoubi.
January 1984 : McFarlane formally requests the NSC to formally examine ways to influence Iran. Report conveys an impasse.
March 1984 : Religious fundamentalist group Islamic Holy War kidnaps William F. Buckley, the CIA chief in Beirut, Lebanon. More American hostages taken in the following years.
1985 : Ghorbanifar and Khashoggi meet in Hamburg and devise skeleton of plan that will become Iran arms deal.
Summer 1985 : Israeli representatives drawn into discussion

The Middleman of the deal, Roy M. Furmark, between Khashoggi and Ghorbanifar would later testify:

"Furmark said he was the one who first brought together the two key middlemen in the arms deal by introducing Saudi Arabian arms dealer Adnan Khashoggi to Manucher Ghorbanifar, an Iranian businessman, at a Persian rug auction in Hamburg, Germany, in June, 1985. The two men have acknowledged arranging four arms sales to Iran." []

During that meeting:

"In my last meeting, (with Casey) I told him that Ghorbanifar thinks some of the money may have gone to the contras," Furmark said. He said he told Casey: "It looks like $15 million is missing." []

And note, all this is going on at the very moment that:

July 1, 1985 : President Reagan publicly denounces bartering with terrorists.
July 3, 1985 : McFarlane meets with Israeli David Kimche, who is in the U.S. on behalf of the Israelis who had met with Khashoggi and Ghorbanifar. The arms-for-hostages deal is first outlined, as is the prospect of improving the U.S.-Iran relationship.
July 16, 1985 : McFarlane meets with Reagan and his Chief of Staff Regan while Reagan is in the hospital recovering from surgery. They discuss the possibility of selling arms to Iran via Israeli in order to get the release of the hostages and to open communications with Iran. The details of this visit are hazy, but McFarlane came away from it with the idea that the President had encouraged him to go forward with discussions with the Iranians and Israelis.
August 1985 : Reagan approves the plan to allow Israeli to sell U.S.-made weapons to Iran.
August 20, 1985 : first load of missiles sent from Israeli to Iran.
September 15, 1985 : American hostage Benjamin Weir released. Colonel Oliver North brought in to deal with logistics
November 1985 : second load of missiles sold. Major General Richard Secord brought in to help replenish Israeli’s supply of weapons.

Adnan Khashoggi


Arms dealers like Khashoggi served as go-betweens and made millions:

"Furmark said he told Casey that Khashoggi had arranged the financing of two arms shipments from Israel to Iran in August and September of 1985 for $1 million and $4 million. He said Khashoggi had then arranged a third shipment in February, 1986, for $10 million."

And like all Criminals the deals get financed:

"He said it was a fourth transaction, involving $15 million in May, 1986, that led to problems. Furmark said two Canadian investors, Walter E. Miller and Donald Fraser, had provided $10 million in "bridge financing" to Khashoggi for the deal. The Canadians have had extensive business dealings with Khashoggi in Vancouver, Salt Lake City and the Cayman Islands."

And This financing introduces risk:

"Furmark said unidentified 'European and Middle East sources' had provided the money for the $4-million transaction, the $10-million transaction and $5 million of the $15-million transaction.

Iran Contra may have only involved a small cabal of GOP operatives running a renegade operation in the Federal Government, but it involved some big players in the arms industry:

"Mr. Khashoggi knows the true source of the money used here, and I think only he knows," Furmark said, and "that two "partial shipments" of arms were delivered in July and August, 1986, but the Iranians paid only $8 million of the $15-million deal. Adding $3 million for handling and shipping, that left Khashoggi, the Canadians and the other investors $10 million in debt" []

Khashoggi claims he got stiffed. Which might account for the beginnings of his financial troubles after Iran Contra. Or maybe the money was coming from other sources like the USA and Arabian Governments. Or maybe the "stiffed" tale is a cover story.

"In 1990, a United States federal jury in Manhattan acquitted Khashoggi and Imelda Marcos, widow of the exiled Philippine President Ferdinand Marcos, of racketeering and fraud" []

That case fell through, but prosecutors have been after Adnan Khashoggi non stop since then, and he he's kept a low profile (selling his boat among other things).

"Mr Khashoggi’s fortunes declined in the late 1980s, thanks to overspending on festivities, ill-advised investments and his entwinement in scandals including the collapse of the Bank of Credit and Commerce International, the fall of Ferdinand Marcos and the Iran-Contra affair—though he was never convicted of criminal wrongdoing. He now claims to be broke. That hasn’t stopped a tenacious creditor and its lawyers hounding him for an 11-year-old debt of $21m to a securities-clearing firm. In a move that would break new legal ground if successful, they are trying to get the American judgment against Mr Khashoggi enforced in his native Saudi Arabia." []
"It also emerged that someone with the same name as an official in the Saudi embassy in Washington, Hassan Yousef Mohammed Yassin, had paid at least one of Mr Khashoggi’s legal bills. When the diplomat was subpoenaed for information, he invoked immunity through the embassy’s Washington-based lawyers, who threatened to seek unspecified “sanctions” under the Vienna Convention unless the request was dropped. This fuelled suspicions that the Saudi state was throwing a protective arm round Mr Khashoggi for some reason, though there is no clear evidence of this, nor that the diplomat was the same Mr Yassin who paid the bill. Mr Khashoggi’s sister subsequently said that they had a cousin with that name." []

Khashoggi's belt tightening:

Al Waleed Bin Talal

The man who bought Khashoggi's boat:

"Al-Waleed is the founder, the chief executive officer and 95 percent-owner[6] of the Kingdom Holding Company, a Forbes Global 2000 company with investments in companies within various sectors such as banking and financial services, hotels and hotel management companies, mass media, entertainment, retail, agriculture, petrochemicals, aviation, technology, and real estate" []

I doubt Saudi princes get directly involved in sordid details anymore. And even the front men have front men. So the days of a Khashoggi or a Hashemi getting caught with actual goods are probably over. They merely need to own shares in the companies doing the business.

"In 1999, The Economist expressed doubts about the source of income of Al-Waleed and whether he is a front man for other Saudi investors. "You could barely clothe a Saudi prince for such sums, let alone furnish him with a multi-billion-dollar empire. Nevertheless, by 1991 Prince Alwaleed had felt able to risk an investment of $797m in Citicorp", wrote the magazine." []

I could write more, but I wanted to focus on parallels between then and now. Then regressive and greedy forces who despised notions like "peace", "democracy" and human rights deliberately sabotaged a US President to prevent peace and undermine his foreign program. The spirit of piracy is alive and well. It may be dressed up with charters and legitimate trappings, but modern privateering isn't much different from it's 16th and 17th century predecessors. Anyway to make a buck, smuggling, slavery, piracy, freebooting, war; as long as there is profit in it you can find an investor, and if you can find an investor you can find canon fodder to deliver the product.

Further Reading:
Mondoweiss article claiming Israel having nefarious motives: []
October Surprise, By Barbara Honneger: []
Review by Thom Hartmann: []
October Surprise: America's Hostages in Iran and the Election of Ronald Reagan, Gary Sick
Consortium news files on the subject:
Lloyd Cutler notes that Hashemi throws out some interesting comments in a Baltimore Sun article: