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Thursday, January 21, 2016

Journalists or Courtesans?

If there is an honest, unfettered, or unsullied investigative reporter or commentator working for the major—even minor—US commercial press, would he or she please stand up?
This past several weeks have demonstrated that the so-called “free press” may well be free of overt US government dictate, but it nevertheless hues faithfully to the US government line on foreign policy matters. The words that flow from the official US spokespersons are dutifully recorded and slavishly reported as news copy by every domestic reporter or pundit holding a press badge and assigned to cover a branch of government.
Consider the outrageous rebuff of Seymour Hersh who has won well over a dozen of the most prestigious US journalism awards, including the Pulitzer and five Polk prizes. Responsible for the My Lai and Abu Ghraib atrocity revelations, Hersh has been effectively blacklisted from publishing in the US since 2013. His accounts of the Syrian war and the US assassination of Osama bin Laden were published overseas in the London Review of Books, since his former primary publisher, The New Yorker, and other US outlets refused to accept them. Amazingly, no groups of journalists, journalist organizations, or “freedom of the press” advocates have risen in protest against this muzzling of one of their most esteemed colleagues. Collective letters protesting alleged media repression in socialist countries or countries critical of US policy appear regularly in the New York Review of Books and as paid ads in the New York Times; yet these same indignant journalists, pundits, and academics have remained overwhelmingly silent when it comes to Seymour Hersh.
Even more outrageous is the lack of any serious effort by the mainstream press to confirm or refute Hersh’s claims. His counter narrative to the Obama Administration’s well publicized and embarrassingly self-serving account of bin Laden’s death would be easily assessed by following the threads developed by Hersh. Instead, the press interviewed a handful of government officials and camp followers and left the official story intact.
Even more egregious, some independent investigations of Hersh’s Sarin-gas claims have surfaced that suggest strongly that he might be right in laying the gassing of civilians at the doorstep of US allies in the anti-Assad crusade. Both a UN agency and a Turkish legislative body have challenged the sensational claims of alleged Syrian government barbarity that prop the US argument for regime change. However, no major US media outlet has actively acknowledged this challenge—a shameful affront to journalistic integrity.
The Blair/Ghadaffi Phone Transcripts
A few weeks ago, Tony Blair, former UK Prime Minister, released transcripts of two phone conversations that he had with Muammar Ghadaffi on February 25, 2011. Despite their significant bearing on the early moments of the Libyan rising that led to Ghadaffi’s assassination and overthrow, US media barons and their sycophant employees chose to trivialize the importance of the calls.
Ten days after the date that the West marks as the major start of the Libyan uprising, Tony Blair placed an anxious call to the Libyan leader, self-admittedly at the behest of the Obama administration and the NATO allies. It is just as clear, with hostilities at an early stage, that Blair is threatening Ghadaffi on behalf of his sponsors. He begins innocuously enough, decrying violence and calling for a peaceful outcome. He then adds that Ghadaffi must “engage with the international community, including American and European…” Why that engagement is essential is not clear. But it soon becomes so…
Five hours later, Blair is back on the phone with a message from his masters: “…if you have a safe place to go you should go there because this will not end peacefully and there has to be a process of change, that process of change can be managed and we have to find a way of managing it.” He goes on: “the violence needs to stop and a new constitution needs to take shape… I repeat the statement people have said to me, if there is a way that he can leave he should do so now. I think this can happen peacefully but he has to act now and signal that he wants this to happen.” [my italics]

Blair could not be clearer. He is demanding that the leader of a sovereign country step aside and allow the US and European powers unilaterally and without the consent of the people of Libya to determine the future of Libya. Moreover, Blair clearly backs the demand with the threat of violence—“…this will not end peacefully.” Sane people would count this as tantamount to a coup.
For his part, Ghadaffi asks Blair to come and see the situation himself. He denies that the situation is either dire or unstable. But he does affirm strongly that his opposition is Al Qaeda—that is, extreme fundamentalists. He asks Blair if he supports them: “…are you supporting terrorism?” Exasperated with the threat, Ghaddafi concludes: “…we have no problem, just leave us alone. If you are really serious and you are looking for the truth, get on a plane and come see us.”
Of course Blair and those pulling his strings were not “looking for the truth’ anymore than the Western media are seriously looking for the truth.
Less than three weeks later, the UN declared the infamous “no fly zone” that allowed NATO forces to launch an air war against Ghadaffi’s forces. US and NATO planes, along with covert fighters from the Gulf States, crippled loyalist forces and violently turned the war against Ghadaffi just as Blair said they would.
And today, Libya is a broken, ungovernable state, a haven for jihadists, just as Ghadaffi said would happen.
A pity the courtesans of the US media show no interest in “looking for the truth.”
Adrift in the Persian Gulf
Two shallow draft riverine craft operated by the US military were boarded and held by Iranian security forces near Farsi Island the day of President Obama’s state of the union address and days before a radical shift in US-Iranian relations.
Any reasonably alert reader of US news accounts of this encounter would be curious about nearly every detail and subsequent explanation offered. The fact that two specialized military craft favored by US special operations and used extensively for command, control and reconnaissance, were boarded in Iranian territorial waters near Iran’s largest naval base might cause some wonder.
The fact that the riverine craft are designed to operate in shallow river or coastal waters, but found their way over two hundred miles from the Saudi shore and in the middle of the Persian Gulf surely warrants some further wonder.
The military’s first explanations of these bizarre circumstances blamed engine failure and drift for the embarrassing presence of two boats and ten US personnel in unauthorized waters.
Of course, it’s hard to imagine that both boats suffered engine failure at the same moment and no relief was mobilized to render assistance. Before anyone asked embarrassing questions (not that the lapdog press would), Defense Secretary Ash Carter offered another tale: navigational failure caused the boats to go off course (way off course!).
But should anyone press this explanation (no one did), they might notice that the boats are equipped with sophisticated navigation, radar, and communication systems; and the likelihood that both of the boats would make the same error, go undetected, and proceed radically off course is about the same as a commercial air craft leaving New York’s LaGuardia airport and heading east rather than west.
So the military (CENTCOM) returned to a version of the first account, stating emphatically that mechanical failure of one boat’s diesel engine caused the two to stop for repairs while travelling from Kuwait to Bahrain. Of course that leaves the question of why the shallow draft boats needed to be hundreds of miles from the Saudi coast in the middle of the Persian Gulf, far away from the most direct and appropriate route to their destination.
But the bumbling explanations caused no consternation among the willfully gullible capitalist press. Instead, they reported earnestly the xenophobic ranting of election-season politicians about imaginary offense to US virtue.
Apart from Glenn Greenwald at The Intercept, no significant media figure cast a doubt on the Pentagon’s ever changing fairy tale, another demonstration of the utter spinelessness of the US media.

Zoltan Zigedy

Friday, January 8, 2016

Tottering on Another Brink

In June of 2015, I wrote:
Broadly speaking, the three key factors of fixed business investment, productivity and, corporate profits have been trending downward for three to four years. First-quarter 2015 fixed investments fell 3.4%, not surprisingly, output per hour (productivity) fell by 3.1%, and earnings were expected to barely move. These three interdependent and fundamental indicators underscore the critical weaknesses in the US economy. Capitalism has wrung as much sweat as it can from workers, managers are reluctant to invest in new or advanced means of production, and US corporations are experiencing a decline in the rate of profit.
Since then, the “three key factors” gauging the health of the US economy have only worsened: Capital expenditure in the third quarter fell by 3.8%, productivity on an annualized basis was only up .4% for the third quarter, and profits suffered the largest (annualized through the third quarter) decline since the 2008 downturn.
In addition, the US manufacturing activity index (Institute for Supply Management) has fallen to its lowest level since June of 2009 and industrial production has declined for the third straight month through November (the just released December data from ISM affirm the first consecutive monthly contraction of the index of manufacturing activity since 2009).
Capacity utilization has dropped to 77%, the lowest in two years. Before 2007 and the onset of the economic crisis, it stood at 80%.
I wrote in June of the stock market inflation generated by mergers and acquisitions, stock buy-backs, and the obscenely low cost of borrowing. The wealth effect of that inflation—its psychological effect on spending—has receded. Market losses account for most of the $1.2 trillion in erased wealth in the third quarter, as reported by the Federal Reserve.
The rout of junk bonds (high-risk, high-yield bonds) in 2015 only adds to insecurity. While junk bonds only totaled $709 billion at the onset of crisis in 2008, they totalled $1.3 trillion when investors began to abandon them. Consequently the ratio of high-yield debt to corporate earnings is close to a new high. A faltering equity market is dampening investor euphoria.
I warned in June:

Today, there are 65 venture capital investments of over $1 billion each (CB Insights says there are 107), drawing funds from yield-hungry retirement funds, mutual funds, and hedge funds. Whatever the number, all agree that the total capitalization of these investments in firms that are little more than start-ups approaches or exceeds the capitalization of the similar “dot com” firms that blew up in 2000.
But new start-ups hit powerful head winds in 2015, especially in the tech/internet sector. As The Wall Street Journal reports: “Technology and Internet companies that went public in the US raised $9.5 billion in 2015, down from $40.8 billion in 2014… the number of IPOs in the sector dropped by more than half, to 29 from 62.”
Clearly, “yield-hungry” investors have miscalculated, as reflected by the current sharp fall of the NASDAQ equity market.
Of course, the US economy is also decidedly rocked by global developments: the PRC economy is shaky at best, the EU is stagnant, Canada is slowing, and the Russian and Brazilian economies are in sharp decline.
While consumer spending has buoyed the US economy, lifting GDP into positive territory, the well-spring of capitalism—profitability—continues to pose the critical problem. The third quarter of 2015 suffered the largest annualized decline in profits since the 2008 downturn. Third quarter profits were down 1.1% from the second quarter and 4.7% from the same quarter in 2014, demonstrating a persistent downward trend.
Interviewed in Barron’s (December 21, 2015), David Levy of the Jerome Levy Forecasting Center perceptively opined: “…But the one thing that has actually caused the economy to weaken a little is sagging profits. We’ve heard people use the expression ‘profit recession’, but there is no profits recession without a real recession. I see signs of things slowing as a result of that profits decline…”
It confounds me that progressive economists, many Marxists, and even Communist Parties continue to locate the source of the ongoing, and now deepening, capitalist crisis in “overproduction” or declining consumption or demand. These notions are remnants of an earlier pre-monopoly era or the influence of Keynesian thinking on Marxism and the broader Left. The “overproduction” that is relevant to capitalist crisis is the overproduction of capital which cannot find a profitable home without gumming up the accumulation process.
The demand-based theories serve as the centerpiece of social democratic crisis theory. Yes, corporate revenue and consumer spending are now stagnant or declining—not as leading indicators, but as consequences of a general economic slowdown brought on by the prospect of fewer profit opportunities. But it is a fall in the growth of profits or a decline in the rate of profit that causes capitalists to apply the brakes. If markets demonstrate greater profitability (by awarding capitalists a greater share, for example), capitalists will continue to invest, fuel the economic engine, even in the face of the stagnant or declining revenues of the moment. Of course falling revenues will eventually further retard the rate of profit. But it is profit that propels capitalism or sinks it in its absence.
For Marxists, it is not simply the numbers that explain the future, but the trends or patterns. Clearly the trends are negative. With central bank tools largely exhausted, it is difficult to imagine an easy escape from deepening crisis; it is difficult to see the coming year as bringing anything other than economic hardship.
Given the rise of the extreme right and the absence of a militant left in most countries, the economic crisis threatens to pose formidable political obstacles. And given the ubiquitous deadly conflicts and increasing inter-imperialist hostilities, the new year demands a heightened commitment to peace and social justice. That commitment must go beyond the tinctures and band aids served up currently by liberals and social democrats.

Zoltan Zigedy