http://video.google.com/videoplay?docid=1211942793628876800
======= 911 research news =========
The 10/15/07 issue of U.S. News and World Report features a Q&A interview
by Alex Kingsbury with Richard Rhodes, author of [The Making of the Atomic
Bomb], [Dark Sun] and [Arsenals of Folly; The Making of the Nuclear Arms
Race]. The piece appears on page 26 and in it, Rhodes states, "We now know
the United States and the Soviets planned to use "exercises" to conceal a
nuclear first strike." This unusual admission in a main stream media forum
is consistent with what is known about the presentation of 7/7 and 9/11
which were both embedded in drills, and it may foretell the future in how
the next national emergency will play out. This deception and cover
technique was so well known by 1963 that it was featured as the plot of
the John Frankenheimer film [Seven Days in May] in which a military
exercise is used to provide cover for a military coup against the
President of the United States.
NSA approached Qwest more than six months before the Sept. 11, 2001,
attacks Saturday, October 13, 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/12/AR200710...
Nacchio's account, which places the NSA proposal at a meeting on Feb. 27,
2001, suggests that the Bush administration was seeking to enlist
telecommunications firms in programs without court oversight before the
terrorist attacks on New York and the Pentagon. The Sept. 11 attacks have
been cited by the government as the main impetus for its warrantless
surveillance efforts.
The allegations could affect the debate on Capitol Hill over whether
telecoms sued for disclosing customers' phone records and other data to
the government after the Sept. 11 attacks should be given legal immunity,
even if they did not have court authorization to do so.
October 13th, 2007 7:06 pm
Former CEO Says U.S. Punished Phone Firm
Qwest Feared NSA Plan Was Illegal, Filing Says
By Ellen Nakashima and Dan Eggen / Washington Post
Hold onto your boxers.
According to the National Transportation Safety Board (NTSB.GOV), Flight
175 originated not at Logan airport. No. But at the BOSTON HELIPORT, CODE
1MA3.
http://www.ntsb.gov/ntsb/GenPDF.asp?id=DCA01MA063&rpt=fa
The code for Logan is "BOS," not "1MA3." Check list:
http://creports.capnhq.gov/airfield/airportselection.asp?state=MA
I did not personally discover this info. It was posted several places
including Pilots for 911 Truth. Another poster suggested that the heliport
was actually closed at that time.
http://progressiveindependent.com/dc/dcboard.php?az=show_mesg&forum=218&topic_id=3237&mesg_id=3299
However, I did the obvious thing, and looked into what they said about
Flight 11, also supposedly out of Boston.
...
Do you want to know?
http://www.ntsb.gov/ntsb/GenPDF.asp?id=DCA01MA060&rpt=fa
This is my "Holy F**king Shit" moment of the week.
There is no "Airport Identifier" code entered, at all, for Flight 11. They
have an airport code for the destination, that being
"LAX." For the origination, there's another anomaly. It originated nowhere.
=========================
Inflation and the Federal Reserve
by Richard C. Cook
Global Research, October 2, 2007
No term in the "dismal science" of economics is more misunderstood than
"inflation." The word means "rising prices," but is used at different
times by different people to describe totally different phenomena.
The most predominant type of inflation is natural and occurs as raw
materials are used up and must be replenished. It's akin to the law of
diminishing returns, or entropy, and is overcome by technological
innovation. Another type of inflation is expressed through constantly
changing conditions of supply and demand, including the fluctuating cost
of labor. Yet another type results from the predatory pricing practices of
monopolies such as the worldwide oil cartel which has jacked up the cost
of petroleum to over $80 a barrel.
Of an entirely different order are the inflation induced by central banks
such as the Federal Reserve in creating financial bubbles or by the
federal government in taking inflationary actions such as annually
compounded increases in government employee salaries to reduce the real
cost of servicing its astronomical debt. These instances might actually be
viewed as "high crimes and misdemeanors" which violate the due process
clause of the Constitution by unlawfully destroying the value of citizens'
property.
In any case, inflation is a fact of life that is almost impossible to
control, let alone understand in all its complexities and details. This
article focuses on inflation as it is treated by the official monetary
system.
So let's talk about money. Money is obviously an indispensable component
of our economic system. If it is properly constituted and managed, it has
the ability not only to command goods and services produced and traded
within the system, but also to encourage and call forth new types and
quantities of production. The presence or absence of sufficient quantities
of money, how it is created and introduced into circulation, how its value
is established and maintained, and how it is used or not used to further
the ideals of society are critical issues that properly should fall within
the purview of political debate.
Unfortunately, these issues are not debated at all within the American
political system, which is thereby failing in some of its most fundamental
responsibilities.
These issues are not debated because people make the mistake of believing
that money is, or should be, a thing of value in-and-of itself, or that
this value is created by "market forces," so is somehow a "given."
Many also believe that monetary policy is a technical subject
understandable only to experts, so should be immune from political
oversight.
But history shows that money serves its socially-beneficial purposes only
when it is regarded as an instrument of law and an economic
medium-of-exchange and when it is regulated by a government which can
responsibly direct its benefits to the common welfare of all citizens.
Such is not the case with the U.S. and other Western nations today.
That the Founding Fathers held a progressive view of money is proven by
the fact that the Constitution gave Congress the power "To coin Money,
regulate the Value thereof, and of foreign Coin, and fix the Standard of
Weights and Measures." During the nineteenth century, the Supreme Court
confirmed in cases involving the famous Greenbacks that this authority
includes the issuance of paper money.
Through much of our history, the monetary power has been implemented
through a variety of methods, though since the creation of the
privately-owned Federal Reserve System in 1913, it has been exercised
primarily by the private banking system which lends credit into
circulation and charges interest for its use.
Today it is the political power of the banks and financiers that prevents
monetary matters from being examined and debated the way they should be.
This power is also the basis of our retention of a medieval relic in the
destructive and corrosive system of fractional reserve banking.
Fractional reserve banking under a privately-owned central bank is not
ordained by our Constitution. It is an extralegal construction resulting
from abdication by Congress of its own lawful prerogatives. This system
has resulted in a condition of growing debt slavery fixed upon our
population which is afflicted with a chronic shortage of purchasing power
sufficient to absorb our national production.
If examined closely, this system could likely be declared
unconstitutional, as indicated above. A system which forces citizens into
ruinous debt is clearly in violation of the Constitutional guarantees of
due process and equal protection under the laws and might even be found to
violate the Thirteenth Amendment, which states that, "Neither slavery nor
involuntary servitude…shall exist within the United States."
Philosophically, the way money is viewed in the eyes of the banking system
is to confuse it with "wealth." "Wealth" to them means cash or bank
deposits. "Wealth" is regarded as belonging to private individuals, not
the government. Granted, the government has the power to commandeer
private wealth through taxation, or borrow it through the sale of bonds
and other securities. Also, the government holds the title to certain
assets, including land, buildings, equipment, etc.
But the government does not, in this view, originate wealth. Therefore,
money, viewed primitively as a commodity with intrinsic value, not as an
instrument of exchange created by law, cannot be created or originated by
the government. This is the presumption on which today's bank-oriented
monetary system is based, which is why it is so inadequate to meet the
needs of society.
Present dogmas overlook the fact that at critical periods of our history,
such as during colonial times, the Revolutionary War, and during and after
the Civil War with the issuance of the Greenbacks, the government did in
fact directly issue its own money without resort either to debt
instruments marketed to banks and/or the public or to collection of taxes
as backing for the currency. That is to say, the government exercised the
power at these times to utilize its sovereign prerogative to create
"wealth" on behalf of the public from which it derived its authority. It
then used this wealth to meet legitimate public objectives, such as to
wage the war that won our independence or the one that preserved the
Union. The fact that this wealth was "real" was reflected in the ability
of the government to receive such monetary tokens as payment-in-full of
taxes.
Also, the government has circulated wealth in the form of metallic
coinage, though its monetary value has been virtually eliminated by
inflation of the Federal Reserve Notes which, since their introduction,
have destroyed ninety-five percent of the value of the dollar.
An even broader view of wealth sees it as the total productivity of the
nation's economy, both present and potential. This includes the skills and
ability of the people who produce that wealth, as well as the laws,
institutions, and traditions which serve to unlock their creative
potential. Money is then a mere token used to facilitate exchange within
this complex of factors. Under this definition, the "wealth" of the United
States includes our Declaration of Independence and Constitution,
including the Bill of Rights.
Unfortunately, the present course of affairs as defined by the current
Federal Reserve System which oversees our monetary system falls short of
these rightful uses of money. With the participation of the financial
industry, the Federal Reserve mainly assures as its first priority that
the wealth held by the banks will never be relinquished by them and, if
possible, will not be diminished.
Rather this wealth will perpetually increase through the interest charged
for its use. Of course money borrowed from the banks may be used by
debtors to create new assets or may simply be spent on consumer goods. But
the wealth of the banks themselves must never be compromised.
Thus the banks have become the primary focus of power within our nation.
This is implied whenever the word "stability" is used with reference to
the financial system. Businesses, households, and individuals may be
subjected to the "creative destruction" of market forces, but not the
banks. Also, given compound interest, a monetary system based on lending
must result in the migration of all a nation's wealth into the hands of
the lenders within a few generations. This is what is happening in the
U.S. today.
The current crisis dates to 1979 when the Federal Reserve initiated a
severe recession in order to fight the inflation which had built up in the
aftermath of the Vietnam War and by the 1971 removal of the gold peg for
international currency transactions. The situation was similar to what
happened during the run-up to the Great Depression, starting well before
the 1929 stock market crash.
Since the recession of 1979-83, the concentration of wealth in the hands
of the nation's upper income groups, i.e., those with money to lend or
invest, has been increasing, all the way through the economic resurgence
of the mid- to late-1990s up to today. Claims during this period by the
Federal Reserve that inflation has been brought under control are called
into question by everyday experience, during which individuals and
families have seen large increases in prices for such necessities as
housing, utilities, fuel, health care, education, insurance, etc.
In fact, an examination of the Consumer Price Index (CPI) published by the
Bureau of Labor Statistics indicates a record of relentless and unabated
price inflation since 1965. The rate of increase slowed somewhat during
1979-81, when the Fed-induced recession began, but it resumed its climb
and has continued upwards since then. In fact, prices have been virtually
out-of-control for the last thirty-eight years despite official
disclaimers to the contrary. For this the Federal Reserve has offered no
explanation.
The question of why this inflation has occurred is one that requires
intensive study. There is a disconnect in the policy of the Federal
Reserve through its assumption that the inflation it did not necessarily
seem to have caused could be corrected by its periodic actions in raising
interest rates and so contracting the currency. In fact, the Fed has never
had any reason to believe it could regulate the economy through interest
rates—the essence of monetarism—except through the most simplistic
interpretation of its role. In fact, it seems to have been a kind of
hubris for it to think it could solve a problem which it obviously has
never fully understood.
As stated in its own 1994 publication, "The Federal Reserve System:
Purpose and Functions," the first duty of the Fed is "conducting the
nation's monetary policy by influencing the money and credit conditions in
the economy in pursuit of full employment and stable prices."
What does it mean that since the Fed came into existence, neither of these
two objectives has ever been achieved? Can it be that given the way our
monetary system under the Fed is constituted, the two goals of full
employment and stable prices are contradictory? Might some even say that
the chief method the Federal Reserve uses to reach for price stability has
been to create, or at least tolerate, un- and underemployment? In fact the
Fed in its actual operations, at least since 1979, has treated full
employment and price stability as being mutually exclusive. Otherwise it
would not have created a major recession at that time, where unemployment
increased by sixty-five percent and many businesses and even some major
industries were decimated or destroyed.
In fact, the ability of the Fed to act so destructively is one of the
bedrock principles of monetarism. The Fed attacks inflation by
constricting consumer demand through reducing pressure on prices from
potential wage and salary escalation. Therefore it is the workers of the
nation who are unwittingly and without their consent the foot-soldiers in
the Fed's price stability battle strategy.
The Fed exercises its powers by expanding and contracting the currency
through the three tools of buying and selling U.S. Treasury securities
through open market operations, operating the discount window at the
Federal Reserve Bank of New York, and establishing reserve requirements
for financial institutions which are engaged in fractional reserve lending.
The Federal Reserve says that by altering the quantity of currency in
circulation it is not creating or eliminating wealth. Rather it says it is
merely affecting the amount of "liquidity" available to meet current
economic needs. It does this, it says, by moving money from stored wealth;
i.e., interest-bearing forms such as savings accounts, to cash and
checking accounts used to meet immediate financial requirements.
Admittedly, the ability of the Fed to control the amount of money in
circulation and to influence economic outcomes is limited. Even though
investors believe that the key to a sound investment strategy is to gauge
accurately the effect of the Fed's actions on the economy, expectations
should never be raised too high. The Fed cannot directly dictate such
measures as how much unemployment should be tolerated. And while the tools
at its disposal are powerful and effective and have been honed through
decades of practice, they are still awkward and difficult to manipulate in
order to prevent undesirable or even catastrophic effects. But these
effects have nevertheless taken place.
Returning to 1979 when the Fed sought to squeeze out the inflation from
the economy that had built up during the years following the Vietnam War—
partly through the loose money policies of Arthur Burns, Chairman of the
Fed under President Nixon—it did so by raising the federal funds rate for
borrowing by member banks. Under Chairman Paul Volcker, who was appointed
in 1976 by President Jimmy Carter, interest rates soared at times to above
twenty percent over the next several years, rates unprecedented in the
nation's history.
These actions had only a slight impact on reducing inflation, but at a
terrible cost to the American economy and to American workers, farmers,
and small businesspeople. Also devastated were the poorer areas of
America's cities which had been steadily climbing out of poverty. Examples
were the destruction wrought in places such as Baltimore or Detroit, where
huge sections turned into "death zones."
Since that time, the U.S. economy has not recovered. These were the
actions that wrecked our manufacturing industries and produced the
so-called "service economy." The nation languished in this condition as
sub-par economic conditions lingered through the Reagan years and into the
term of President George H.W. Bush. Continuing poor economic conditions
contributed to Bush's defeat by Bill Clinton in 1992, with relief coming
later through the boom of the mid- to late-1990s, during the so-called
dot.com bubble.
At this time, huge amounts of investment capital, particularly from
abroad, went into building the technology firms that were leading the
microcomputer and internet revolutions. But with the recession triggered
by the crash of the stock market in 2000, this presumed prosperity was
exposed as an illusion. Today we find ourselves again in a serious stage
of economic stagnation, marked by rising un- and under-employment and
massive increases in consumer, business, and government debt. And
inflation marches on.
Faced with such circumstances, the Federal Reserve does not seem to know
what to do. By its own admission, it lacks measures and targets by which
to regulate the currency. During the early 1980s, the Fed went through a
period where it tried to set interest rates based on quantitative monetary
targets. Under the influence of the monetarists, the Fed tried to gauge
the amount or money needed in the economy from such measures as M1, M2,
and M3. This policy failed, so that today, no one, including leading
economists, pays any serious attention to the "Ms" as a guide to monetary
policy.
A major reason for this failure was the proliferation of different types
of financial accounts resulting from financial institution deregulation.
This proliferation was made possible by the growth in electronic funds
transfer, where money became a mere electronic blip, rather than a check,
cash, or some other paper instrument. Using computer processing, the money
supply changes abruptly every night through the use of cash management
tools such as "repos," or repurchase agreements.
The growth in complexity through electronics has also made possible many
new types of crime, including electronic theft, diversion of funds, and
money-laundering. Also complicating the situation was the widespread use
of corporate stock as money through such actions as mergers, leveraged
buyouts, and payment of compensation with stock options.
While the Federal Reserve has a general sense that the money supply must
be kept sufficient to meet the needs of the economy, it finds it difficult
to compare the growth of the two or define how they relate to each other.
So rather than watching monetary targets, the Fed says it is steering by
what it calls an interest rate "smoothing" policy. It says it chooses a
currency level consistent with economic growth with the intent of
supplying enough money to fuel the economy. Thus the Fed claims that it
wants to get the price of money right for the economy at any given time,
though the target is elusive.
In other words, the Fed doesn't know what it is doing. What it mainly
seems to do is to watch the same economic indicators everyone else does,
and if it thinks the economy is "overheating" it raises interest rates.
When liquidity contractions appear to be too destructive and the screams
from individuals and businesses get too loud, it will then lower them.
Unless of course foreign investors start screaming, when the Fed will
raise rates again or leave them steady.
Unable to quantify either the money supply or actual economic activity,
the Fed supposedly uses inflation as a surrogate. Unable even to gauge
inflation accurately, it uses worker wages as a surrogate for that. So if
individual earnings go up, the lid on the economy comes crashing down, as
though people who work for a living have been caught with their hands in
the cookie jar.
After starting to raise interest rates around 1994 to slow down the
economy during the dot.com boom which had been engendered by a "strong
dollar" policy by the U.S. Treasury to attract foreign investment, the Fed
later began to lower them in an attempt to revive the economy when
recession began in 2001. But this never really produced the hoped-for
recovery.
In particular, housing mortgage rates were lowered to the lowest rates in
four decades, thereby increasing available cash to consumers through
refinancing of existing mortgages and through new home equity loans. These
actions maintained activity in an economy which now relies for
three-quarters of the value of its transactions on consumer spending. Of
course such an economy is highly susceptible to variations in consumer
confidence, which was why, after the stock market plunge following the
terrorist attacks of September 11, 2001, President George W. Bush told the
public to go shopping.
As the deflating housing bubble has made clear, even this rare bright spot
in the declining U.S. economy scarcely improved the employment picture
except through low-paying service jobs. Meanwhile, the ability of
consumers to support the economy has been weakened by the further decline
of manufacturing due to NAFTA, free trade policies, and the globalization
of industry. The strong dollar of the 1990s led to massive increases in
the trade deficit and even more reliance on foreign purchase in the U.S.
bond, stock, and Treasury markets. Now with the value of the dollar
falling, purchase by foreigners of securities is also slipping.
But again, inflation when gauged by the long-term CPI is not low—its
cumulative effect since 1965 has been devastating. Yet by trying to target
inflation as its chief measure of success, the Fed is clinging to what can
only be described as a fetish of "price stability." Nor is Congress taking
any action to challenge this interpretation of the proper goals of
monetary policy. Indeed, Congress seems totally passive in the face of the
Fed's own confusion.
Congress's commitment to so-called price stability was shown by a series
of analyses produced in the late 1990s by the staff of its Joint Economic
Committee (JEC) and by the absence of any attempt by anyone in Congress to
challenge the Fed's policies. What Congress should be addressing is that
in order to achieve price stability, un- and under-employment has become
the tool of choice both of the money managers at the Fed and of their
supporters in Congress. Price stability is in fact a tool of "class
warfare" directed by the moneyed interests from the nation's banks, as
well as by the Fed itself, against the workers, farmers, and responsible
businesspeople of the nation. The dichotomy between price stability and
unemployment is another relic of the Dark Ages out of which our system of
central banking has emerged.
These points show that the goal of monetary policy should be neither price
stability nor full employment. Not only are the two goals contradictory,
but they both postulate a static state of the economy where change simply
does not occur. Such a state, however, can never be truly realized, except
perhaps in death. As said by Heraclitus, "There is nothing constant but
change." Nothing alive is without change, as everyone knows. And a
nation's economy is undoubtedly alive.
This leads in turn to an assessment of what really should be the goal of
monetary policy. Given the irrefutable presence in life of ceaseless
change, price stability as an anchor which by itself can remove
uncertainty is an illusion. Of course, price stability is only a surrogate
for what the Fed is really trying to achieve, which is stable profits for
those who lend money at interest, whether institutions or individuals. As
stated earlier, money itself is thus viewed as a commodity and a
mathematical constant. This philosophy of rigidity raises money to the
status of a heathen idol to which all other economic values, and all human
beings as well, should be sacrificed.
In actuality, money is, or should be, also as stated at the outset, an
instrument created by law to act as a medium of exchange in facilitating
the legitimate trading of goods and services within the economy. The
Federal Reserve and the financiers do not view money this way. The term of
art for a commodity definition of money is "store of value." It implies
that money is essentially the same whether it is being used or not. But
this can never be.
Returning to price stability, it is clear that such a state is also
unattainable due to the laws of physics. Rather prices must continuously
tend to rise, unless restrained by unnatural force, due to a) the physical
principle of entropy, or the law of diminishing returns; and b) the
consumption of resources devoted to production. This will happen until
technological breakthroughs are achieved which improve productivity
through the application of human intellect and creativity. Such
breakthroughs create efficiency and productivity gains, and, in many
cases, quantum changes through entirely new product lines and industries.
So prices must always fluctuate.
This happened, for instance, through Edison's harnessing of electricity,
Henry Ford's mass production of automobiles, the development of airplanes
and air travel, and the creation of a microcomputer industry through the
manned space program. Indeed, the example of quantum physics is
instructive, as it postulates a universe of endless creativity in contrast
to the medieval dogma of scarcity and struggle between social classes for
the right to exist. The more optimistic view of human possibilities
exemplified by modern science has produced the explosion of world economic
development starting with the discoveries of the European Renaissance
beginning about 1450 A.D.
This discussion also raises some philosophical questions about the nature
of man. From this standpoint, all ideologies associated with the concepts
of Social Darwinism, for instance, must be viewed as an assumption of an
essentially animalistic level of consciousness, as expressed historically
through the barbarism of the European Dark Ages. According to this
ideology, which may have given rise to both the current banking system and
the laissez-faire school of economics, people are animals who fight over
finite resources like half-starved dogs.
But if it's the biggest, baddest, meanest dogs that survive; i.e., "the
fittest," mankind must of necessity be on a downward evolutionary spiral.
This, however, is contrary to human experience, where a progressive trend
can clearly be discerned through a long-range survey of human history.
Mankind does seem to be learning something, though it often seems like we
learn the hard way and that for every step forward we take a half-step
back. In contrast to ideologies based on human savagery—and any ideology
which sees man's potential as less than infinite falls into that category—
a quantum approach to economics defines a world that is truly human by
looking to the endless possibilities expressed in the material environment
for creativity, imagination, and evolution. A monetary system worthy of
support must therefore facilitate these characteristics.
A humanistic approach to economic development does not mean that full
employment should then become a graven image for worship, replacing price
stability. Full employment can never be attained, as all economists know,
because jobs will constantly become obsolete, also due to the same forces
of change. Thus a certain level of "structural unemployment" has proven
acceptable as a practical matter. This is only common sense. But it also
leads to a social obligation to support displaced workers until they can
be retrained or relocated to work at new locations using improved tools
and processes.
It also means that the aim of monetary and economic policy must be shifted
from the present paradigm based first and foremost on the profits of
lenders to one that can facilitate adaptation to change and overcoming of
entropy by supporting the human needs of the workforce. It may also mean
reforms so that people can finally begin to enjoy the leisure dividend
that should result from technological development and will not be
obligated to work all the time.
How can this be done? Precisely through the methods implied or set forth
in the founding documents of American culture, such as the Declaration of
Independence, drafted by Thomas Jefferson, which says, "All men are
created equal." Therefore all must be given an equal opportunity to live,
grow, and adapt to change and to do so without trespassing on the rights
of others to do the same.
Further, the Preamble to the Constitution sets forth the principle of the
general welfare, not only for existing society, but for posterity.
Therefore the government is required by law and conscience to provide the
means for such attainment. Through experience we can clearly see that this
includes a decent education, access to water and sanitation facilities, a
clean and wholesome place to live, access to energy resources, adequate
health care, transportation, etc. It is the responsibility of adult
individuals to contribute to making all this available, not only to
themselves and their families, but to the entire society.
These elements of social infrastructure thereby become a requirement of
common life and are the duty of representative government at all levels to
provide. People can then build the economic life they are entitled to
enjoy through the competitive system of private enterprise which helps to
define the American economy. Any successful modern nation has a
combination of robust public infrastructure and a dynamic private sector,
not one based on increasing "privatization" of public services.
It is the duty of those in charge of monetary and economic policies to
facilitate the development of such a society. But today, neither the
Federal Reserve, nor other authorities such as Congress, the Treasury
Department, or the Executive Office of the President are doing the job
they should be doing. Instead, they are operating the monetary system to
the advantage and benefit of private banks and the private financial
markets. This is wrong, and it must be changed.
We might look at the inflation issue from another angle, in that
economists have pointed out that periods of inflation seem to coincide
with those of war. The causes of this confluence appear complex and may
include price gouging by those who sell to the government, fear and panic
which cause people to inflate prices to secure their economic position, a
premium built into prices to compensate for a general atmosphere of
economic uncertainty, or the sudden influx of new money due to precipitate
government borrowing. Probably all these factors play a role. If we look
again at the history of price inflation since 1915, we discern a
pronounced increase in prices during the periods of World War I and World
War II. This would tend to confirm the hypothesis of a link with inflation.
But what about the wave of higher inflation since 1965? What is unique
about this period is that the nation has been in a state of permanent war
mobilization since the Vietnam conflict. A considerable amount of economic
research would be needed to test the hypothesis that the high level of
defense spending has in fact caused the high inflation, but such a study
would be worthwhile.
Another hypothesis might be added which would be difficult to measure but
which should also be considered. This is that money spent on permanent war
mobilization is essentially non-productive in terms of producing goods and
services of value to the larger civilian economy; i.e., it has a
relatively low multiplier effect. Wartime spending may also be less able
to call forth the type of scientific research and development needed to
improve the economy in most aspects of everyday life. We never got the
"peace dividend" we were told would result from the end of the Cold War.
Instead, the military-industrial complex pressed forward without missing a
heartbeat until now the War on Terror and possible future wars against
Iran and other nations offer new justification for perpetual war
mobilization.
The economic question is whether a society permanently at war or always
preparing for war has the ability to overcome the natural entropy that
will make its production processes less efficient over time. If it cannot,
then no amount of reform can solve its problems. We know that no culture
in history which has had warfare as its main preoccupation has long
survived, unless and until it has seen the error of its ways and changed,
or unless it simply was destroyed.
Ancient Greece never really recovered after the Peloponnesian Wars. The
debt-riddled, socially-stratified Roman Empire exhausted itself in a blaze
of military conflict, then saw defeat and dissolution. The British Empire
went bankrupt in a single generation from 1914 to 1945. The U.S. is
teetering on the edge of a major financial collapse right now. In fact,
those with money are quietly trying to secure their wealth while the
unfortunate ones who are heavily mortgaged or locked into inflexible
retirement accounts may be left holding the bag. Can the American Empire
survive the economic forces that doomed the empires of the past? Or will
what some call the "New American Century" turn into the "No American
Century"?
Richard C. Cook is a retired federal analyst, whose career included
service with the U.S. Civil Service Commission, the Food and Drug
Administration, the Carter White House, and NASA, followed by twenty-one
years with the U.S. Treasury Department. His articles on monetary reform,
economics, and space policy have appeared on Global Research, Economy in
Crisis, Dissident Voice, Atlantic Free Press, and elsewhere. He is the
author of "Challenger Revealed: An Insider's Account of How the Reagan
Administration Caused the Greatest Tragedy of the Space Age." His website
is at http://www.richardccook.com
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