Originally Posted by Brian Rush

As my own household income is well into the six-figure range, I hardly think so.

Irrelevant. There are lots of socialists in Hollywood making much more than six-figures.

Managed-market capitalism has proven itself far superior to either free-market capitalism or Soviet-style socialism.

Can you provide an example of a managed-market capitalist economy that has prospered in the long-term, please?

Originally Posted by Mike Alexander

The key error in the first is the idea that "investment capital drives innovation". It does not in general. Investment capital is needed for innovation, but unless it is limiting, its availability does not control the rate of innovation.

I concede the point. I should have said IC funds innovation rather than drives it.

This is from a foreign source (British) so it is likely to be more reliable than any similar American media report.



http://www.guardian.co.uk/elsewhere/...0724%2C00.html

(Usual disclaimers)



World opinion moves against Bush

Growing worldwide opposition to a war on Iraq is putting the pressure on the US administration, argues Simon Tisdall

Thursday January 23, 2003

Those who are opposed to the George Bush administration's policy towards Iraq, and specifically its threat to launch an unprovoked invasion of the country, must surely be immensely heartened by the discernible shift in worldwide public opinion on the issue.

Last weekend's well-supported demonstrations in cities as diverse and far apart as Tokyo, Islamabad, Damascus, Moscow, Washington and San Francisco are indicative of the gathering power and reach of the anti-war movement.

For every person who took to the streets, there are thousands, maybe tens of thousands, who share their concerns. As the crisis appears to move towards some sort of denouement, the size and potency of this international resistance can be expected to grow.

It has been clear for some time that most people in the Arab world and Muslim countries worldwide would fiercely object to any US-led intervention in Iraq. Among the many reasons cited is the fear that war will increase regional instability and inflame the Arab-Israeli conflict.

The rising tide of anti-war sentiment has produced some remarkable recent poll findings in western Europe. Three out of four Germans, for example, say that they consider President Bush to be a greater danger than Iraqi president Saddam Hussein.

As is also the case in France, three out of four of those polled in Germany say that they are opposed to a war in Iraq, even if it is specifically authorised by the UN security council.

In Spain and Italy, majorities against war are over 60%, despite the expressed support for US policy of the countries' respective leaders, Jose Maria Aznar and Silvio Berlusconi. These largely Catholic countries will have listened to the Pope's recent denunciation of war as a "defeat for humanity".

The developing position in Britain is, in a sense, even more remarkable. For historical and cultural reasons, the British feel a greater affinity with the US than people elsewhere in Europe. Their instinct is to support the US, as the response to September 11 showed.

During the past six months or more, Britons have been repeatedly told by the prime minister, Tony Blair, that the threat posed by Iraq is urgent and must be dealt with, if necessary by force, as the US says.

Mr Blair's government has published dossiers on Iraq's estimated weapons of mass destruction capability and its human rights abuses in a bid to bolster the case for war. It has also followed the Bush administration's lead in drawing a link, without any evidence, between al-Qaida terrorists and Iraq.

It argues that the worldwide problem of weapons of mass destruction proliferation, and particularly the threat of weapons falling into terrorist hands, will somehow be curbed if Iraq's regime is ousted.

Yet from beneath the weight of this official, and media-backed, scaremongering and arm-twisting, a near-majority of Britons opposed to war is emerging. Over the past three months, those against an attack on Iraq has risen by 10 points to 47%, according to a Guardian poll.

Other polls show that more than 80% of Britons believe clear evidence of Iraqi non-compliance with the UN inspection regime's requirements, and specific UN authority for the use of force, are essential prerequisites for military action.

Yet for all this, perhaps the biggest turnaround in opinion is taking place in the US itself. Last summer, and throughout early autumn, many Americans complained that they were opposed to President Bush's plans but that their views were not being heard by the administration, Congress or the mainstream media.

They felt that they were talking into a vacuum, said there was no debate on the issue and feared being branded "unpatriotic" if they questioned their government's strategy.

The change since then has been startling. A recent Washington Post-ABC News poll shows that American grassroots support for the Bush administration's policy on Iraq is falling steadily. Seven out of 10 Americans want the UN inspectors to be given more time to do their job, according to the findings. They therefore oppose Mr Bush's anticipated attempt to curtail or cancel the inspections prior to launching military action.

As in Britain, this shift comes despite a daily diet of self- justifying speeches by the government, and a stream of new charges being levelled against Iraq. It is also occurring in the context of a gradual fall, as evidenced by other polls, in Mr Bush's overall approval rating. Confidence in his handling of the domestic economy is also dwindling, and it seems likely that these trends are connected.

For those opposed to war, this is all very jolly. But the key question remains: will it actually make any difference? A few weeks ago, the answer might have been a gloomy no. But now the picture has become more confused.

Responding to the concerns expressed by its people, the French government is currently trying to delay, at least for a few weeks, the onset of hostilities. It is backed in this aim by Germany, Greece and others - not an unpowerful alliance. France is also attempting to create a united EU position against an invasion.

Following France's lead, and perhaps reading the international public mood, veto-wielding China and Russia have called for an indefinite continuation of weapons inspections.

Another issue of particular concern to the hawks in the Bush administration may be Turkey's unexpected but dogged reluctance to allow its territory to be used as a large-scale base for war. Ankara has this week called a regional summit of all the major Middle East countries to discuss a non-violent solution to the crisis.

Even Mr Blair is showing signs of strain as he tries to take command of public opinion in Britain, but finds himself continually rebuffed. He will face stiff opposition from within his own party and government if, as seems increasingly possible, the US government asks Britain to join it in going to war without a clear UN mandate. Some commentators foresee his political demise in such circumstances.

And what of President Bush? Is there any sign that the pressure of growing public disapproval is telling on him? He certainly appears to be more than usually grumpy, and keeps saying that his patience with Iraq is running out.

But perhaps Mr Bush is beginning to wonder whether US voters are running out of patience with him. He wants to bring down President Saddam. He wants to vanquish his other perceived "rogue state" foes, such as Kim Jong-il in North Korea. He wants to win his "war on terror" at almost any cost, continuing to play the role of war president. It has worked for him so far.

But there is one price that Mr Bush will not pay, because there is one thing he wants more than anything else: a second term in office. He is unlikely to do anything to jeopardise that ambition, and up until now has seemed to think that starting a full-scale war in the Middle East, with all its potentially bloody consequences for Americans and others, would help him win another four years in power.

But perhaps even he is starting to worry that war, along with rising oil prices, unemployment, public and private debt and a faltering economy, could have the very opposite effect. Perhaps those around him, like campaign adviser Karl Rove, are worrying even more.

It remains unlikely that President Bush will back off now. But if he does, it would truly be a triumph for democracy in the very best sense of the word - and it would make all those street demonstrations worthwhile.

A growing divide between the Bush administration and Pentagon? If so, God bless the guys in uniform.



http://www.capitolhillblue.com/artma...cle_1587.shtml

(Usual disclaimers. Emphasis added and my comments in brackets)


Role reversal: Bush wants war, Pentagon urges caution
By DOUG THOMPSON
Jan 22, 2003, 01:18

Senior Pentagon officials are quietly urging President George W. Bush to slow down his headlong rush to war with Iraq, complaining the administration?s course of action represents too much of a shift of America?s longstanding ?no first strike? policy and that the move could well result in conflicts with other Arab nations.

[Exactly the point I emphasized to HC. Thank you, Pentagon boys!]

?We have a dangerous role reversal here,? one Pentagon source tells Capitol Hill Blue. ?The civilians are urging war and the uniformed officers are urging caution.?

Capitol Hill Blue has learned the Joint Chiefs of Staff are split over plans to invade Iraq in the coming weeks. They have asked Secretary of Defense Donald Rumseld to urge Bush to back down from his hard line stance until United Nations weapons inspectors can finish their jobs and the U.S. can build a stronger coalition in the Middle East.

?This is not Desert Storm,? one of the Joint Chiefs is reported to have told Rumseld. ?We don?t have the backing of other Middle Eastern nations. We don?t have the backing of any of our allies except Britain and we?re advocating a policy that says we will invade another nation that is not currently attacking us or invading any of our allies.?

[God bless the Pentagon boys! Exactly what I said to HC! This is just the most basic common sense which unfortunately has been lost in the never ending flood of propaganda emanating from the Bush administration through the corporate media.]

Intelligenced sources say some Arab nations have told US diplomats they may side with Iraq if the U.S. attacks without the backing of the United Nations. Secretary of State Colin Powell agrees with his former colleagues at the Pentagon and has told the President he may be pursuing a "dangerous course."

An angry Rumsfeld, who backs Bush without question, is said to have told the Joint Chiefs to get in line or find other jobs. Bush is also said to be ?extremely angry? at what he perceives as growing Pentagon opposition to his role as Commander in Chief.

[Eff you, Junior and Rummy! Note that the military guys are out of their jobs unless they stifle their gagging and repeat the Bush administration's propaganda, just like we have seen time and time again in this and previous administrations. Eff you, White House!]

?The President considers this nation to be at war,? a White House source says,? and, as such, considers any opposition to his policies to be no less than an act of treason.?

[Junior cannot tolerate the dissent our forefathers fought and died to give us? Eff you, you miserable little snot!]

But conversations with sources within the Bush administration, the Pentagon, the FBI and the intelligence community indicate a deepening rift between the professionals who wage war for a living and the administration civilians to want to send them into battle.

[Thank God! Stand up for your lives, boys!]

Sources say the White House has ordered the FBI and CIA to ?find and document? links between Saddam Hussein and Osama bin Laden, the mastermind of the 9-11 terrorist attacks.

?The implication is clear,? grumbles one longtime FBI agent. ?Find a link, any link, no matter how vague or unproven, and then use that link to justify action against Iraq.?

[Just stating the obvious! Hahahahahhahah!]

While Hussein and Iraq have been linked to various terrorist groups in the past, U.S. intelligence agencies have not been able to establish a provable link with bin Laden?s al Qaeda forces.

?There may be one,? says another FBI source. ?There should be one. All logic says there has to be one, but we haven?t established it as a fact. Not yet.?

Pentagon planners privately refer to the pending Iraq conflict as a ?Bush league war,? something that may be fought more for political gain than anything else.

[Hahaha! Brian Rush, the Pentagon is with you!]

?During Desert Storm, the line officers wanted to finish the job, wanted to march into Iraq and take out Hussein and his government, but President Bush and JOC Chairman (Colin) Powell pulled the plug on the operation,? says one Pentagon officer. ?We had our chance. We had the justification. We had the support. We don?t have it now.?

Some Pentagon staffers point to last weekend?s antiwar rally in Washington, where they say the crowd included many veterans of Desert Storm.

?This wasn?t just a bunch of tree huggers and longhairs marching,? says Arnold Giftos of Huntington, West Virginia, who served in Desert Storm and who came to march. ?Go to any meeting of veterans groups in this country and you will see serious discussion on whether or not we should be getting into this war.?

Reporters covering the marches on Saturday and Sunday say they counted about 500 marchers among the 30,000 who carried signs or other items identifying themselves as veterans.

?I served in Vietnam,? said Robert Brighton of Detroit, who marched in Washington. ?I supported Desert Storm. I don?t support this. It?s madness.?

In addition, Capitol Hill Blue has learned that both House Speaker Dennis J. Hastert and Senate Majority Leader Bill Frist have told the White House that they have ?increasing? numbers of Republicans in both Houses raising doubts about the war.

?Nobody in the party wants to come out publicly and tell the President he?s wrong,? says one Hill source close to the GOP leadership, ?but we don?t have the kind of unity we need on this thing. It could blow apart on us at any time.?

Public support for a war with Iraq is also slipping. In November of 2001, just two months after the attacks on the World Trade Center and Pentagon, 78 percent of Americans favored military action against Iraq. That support has slipped to as low as 52 percent in January polls. A Washington Post-ABC news poll taken last week shows Americans evenly split over Bush's handling of the crisis with Iraq.

Spokesmen for the White House, Pentagon and Congressional leadership offices would not comment on the record for this report.

? Copyright 2003 Capitol Hill Blue

Stonewall--

So then are you agreeing that "the whole thing could blow up on us at anytime"? For crying out loud, it better happen sooner than later!

The other day The Mumbler said this so wisely about evil: "You see, Saddam is exactly like that, only different."

Is this the United States of Ambiguity or what?

--Croaker

Brian:

Always a pleasure to be knockin' heads with a man of erudition.

While I agree that time is an important factor in the effect of capital investment on general economic growth, the circumstances of reality (finite resources and information; coupled with the opportunity costs to be incurred in the accumulation of more / better information) keep all types of investment from occuring in the optimal period -- instantaniously. That said, the crowning achievement of a money-based economy is the fact that one need not wait for the actual dollars just spent on gold to hop all the way into the hand of a purchaser of capital stock.

Entrepreneurism involves the skill of being aware of the circumstances of the market and anticipating the direction things will take. The fact that a market for gold (or artwork or what have you -- from now on simply referred to as gold) exists and has discoverable parameters allows a person to not only anticipate the available flow of capital, but attempt to make the capital flow in the fastest, most efficient way possible into the very "productive industry" which you imply has been given short shrift. Capital is invested very, very quickly -- regardless of what you, personally, are buying -- and without respect to the speed with which chits are exchanged.

And finally, you are wholly incorrect to presume that "None of these investments has anything to do with marginal liquidity or consumption; they are all ways to make money." As an example, let us posit two (hypothetical) offers made to you, personally. First, you are told that if you invest 100 dollars on day one, you will receive 110 dollars the next week. Second, you are told that if you invest 60 million dollars on day one, you will receive 70 billion dollars in two years. The returns, being approx 10% weekly for the first, and about 15% weekly for the second indicate that the second is the more lucrative investment. Why would a person not make this investment? Exactly as I said earlier, the marginal value of the 100 dollars liquidity loss for a week is much lower than the 10% return, while the same marginal value of 60 million dollars liquidity loss for two years (not to mention the risk inherent in having one's money out of one's own pocket (or bank account) -- the whole reason people value liquidity) is much higher than the 15% return offered. An investment is always made at the expense of present consumption and liquidity. The degree to which a person values the marginal unit of both of these holds a critical bearing on the level, degree, and type of investment to which that person will commit.

Suz X:

Irrelevant. There are lots of socialists in Hollywood making much more than six-figures.

I seriously doubt that they are motivated by class envy, though. And since that's what you were accusing me of, it's not irrelevant.

Can you provide an example of a managed-market capitalist economy that has prospered in the long-term, please?

You're living in one. (I'm assuming you live in an English-speaking country, probably the U.S.) America hasn't had a true old-style capitalist economy since the Depression. Nor does any other advanced economy practice free-market capitalism of the pre-Depression sort today.

Justin:

What I meant by saying that all of the means under discussion were ways to make money is simply that in buying gold, artwork, etc. an investor is not making a purchase for his own personal enjoyment; rather, he expects to see a return. None of the details you posted refutes this. Taking all such considerations into account, he will try to invest in whatever will provide the highest return. When demand for goods and services is slack, that is not job-producing ventures.

Entrepreneurism involves the skill of being aware of the circumstances of the market and anticipating the direction things will take.

Indeed, but I think you're misunderstanding my point. Please don't focus on the alternative investments as if THEY were the cause of slack business expansion. The cause is slack demand for the products of business. This unfortunate circumstance of the market causes investors to anticipate the direction things will take -- downward -- and invest their money elsewhere.

All I'm saying is that the problem is not a lack of accumulated capital in the economy. There is no shortage of capital to invest and since the early days of industrialization there never has been. Thus, it does not make sense to try to boost the economy by throwing yet more money to the rich in the hopes that they will invest it productively. Instead, we should try to spread the wealth around, so that people will spend it and create the circumstances of the market that will justify productive investment.

Originally Posted by Brian Rush

Originally Posted by Suz X

Can you provide an example of a managed-market capitalist economy that has prospered in the long-term, please?

You're living in one. (I'm assuming you live in an English-speaking country, probably the U.S.) America hasn't had a true old-style capitalist economy since the Depression. Nor does any other advanced economy practice free-market capitalism of the pre-Depression sort today.

Wrong. Economically, the New Deal was based upon "central planning," or "top down" policies commonly used during wartime (most recent to the depression was policies used during WWI). Highly experimental, and largely percieved as a failure after the Crash of 1938, the New Deal, while dropping all it's "central planning" apects but retaining many of the regulatory agencies, naturally became the Keynesian compact ironed out in the Bretton Woods Conference in 1944.

Bretton Woods established the "World Bank, International Monetary Fund, and pegged "all currencies to gold." Unlike Europe and the Soviet Union, the U.S. did not retain "central planning" after WWII. But it did create a very Keynesian-like "military industrial complex" complete with a military draft. This would prove to be it's undoing (and righly so).

Following the debacle of Nixon's Keynesian "wage and price controls" et al, rising stagflation, military humiliation in Vietnam, the fall of "trust" in the federal government and the oil shock (all occuring in the 1973/74 timeframe), all that was left for governments to do was to get out of the way, of market forces (as defined by the Chicago School of economist).

Today, while governments maintain a powerful presence in the marketplace, they are it's servants, not the other way around. This is a profound difference in the old school of Keynes or the outright socialism of the pre-1973 period.




For more information, see:
Commanding Heights Timeline

Originally Posted by Brian Rush

Suz X:

Irrelevant. There are lots of socialists in Hollywood making much more than six-figures.

I seriously doubt that they are motivated by class envy, though. And since that's what you were accusing me of, it's not irrelevant.

Hollywood socialist types routinely use class envy to motivate the lower classes (now ubiquitously known as "the working class" even though you and I, presumably, both work, but are not counted among them) to demand a proportionally larger share of our earnings. I didn't accuse you of class envy. I said your argument smacks of it.

For the record, I am personally opposed to progressive tax rates, particularly those based on earned income. Consumption taxes might be a better alternative. I do not believe Bush's proposed tax cuts will provide a short-term economic stimulous, though, for the reasons you and others have stated.

Now, would anyone care to tie something of what's being discussed here to the 3T/4T timing? I really want to know where everyone here thinks we stand. Thanks!

Originally Posted by Suz X

For the record, I am personally opposed to progressive tax rates, particularly those based on earned income. Consumption taxes might be a better alternative. I do not believe Bush's proposed tax cuts will provide a short-term economic stimulous, though, for the reasons you and others have stated.

Now, would anyone care to tie something of what's being discussed here to the 3T/4T timing? I really want to know where everyone here thinks we stand. Thanks!

I believe this discussion is intimately tied to 3T/4T. In looking at the last 3t 4t transition, what failed was not the ability to produce, nor the was there a lack of resources. What "failed" was the system that regulated commerce, and more importantly, people's perceptions of that economy. Despite having abundant resources and a tremendous industrial capability, America *believed* it was destitute, and hence it was. We even convinced enough of the world of this that we were discounted and eventually attacked. Oops.

The important part of the transition to 4t is social psychological "winter", where there is a sense of both doom and no effective way to avoid it. This goes with part of my argument that we are not quite in 4t, not yet. But we are percieving that there is not "plenty for all" and this is what drives the whole "class" warfare notion.

I am not making the argument that class divisions do not exist, nor that there is not conflict between them. If one believes fervently in "trickle down" etc., the one can make the same arguments for the plantation owners in the south that were "taking care" of the black people that they enslaved. Wealth for the wealthy does not and never has translated to better lives for the people not wealthy and in a system were wealth is increased, wages remain flat and less of a percentage of people are employed, it is difficult to see where any intelligent person can make that argument. The plain and obvious fact is that the wealthy are consumate experts at hoarding wealth, power and influence.

And in a system where political influence can and is purchased on a routine basis, even (or especially) in venues that are supposedly independent of wealth (like the criminal justice system), it is difficult to make the argument that such a system is democratic. "One person, one vote" becomes less meaningful if the context and choices presented merely reflect those the well-moneyed place before the voting populace. And the wealthy are well-meaning. After all, they have had generations of reinforcement for the idea that they know whats best for the people they are governing more than those people themselves. Haven't we made the point over and over that our brand of democracy is what is best for the world and actively proselytized it?

The presumption, I'm sure, is that I am now engaging in "class warfare" (and anti-American, to boot). This is the entertaining part of this. I am merely relating perceptions of reality. This is not warfare, it's discussion. And come on, like this is anything new. It has been this way for millenia.

But to bring it around back to my point..... The issue doesn't even pop on the radar *unless* there is a perception of insufficiency. Whether this becomes the defining conflict (and I don't think it will) of this 4t remains to be seen.

And for the record, I agree, a straight percentage consumptive tax would be the most just and create more of an incentive to both save and earn.

Originally Posted by Justin '77

... At the same time, artwork (let's say a painting, for the sake of argument) employs the painter, the paint makers and canvas makers, the brush makers, and those who build and maintain the machinery involved in fabricating these implements.

Not to mention the Art Dealer/Gallery taking their commission, and the sales tax going into the states coffers as well. When rich people buy art, or anything else for that matter, it does help the economy. When there is an auction, and a Van Gogh gets sold, don't you think some serious cash changes hands? (Although in that case, the Artist doesn't make anything, because he's dead). :wink:

Eventually, this money spent on gold or art makes its way to the hands of those who value a marginal direct capital investment more than the marginal liquidity or consumption they forego by investing. The capital created somewhere upstream of the guy who buys a painting or antique or whatever most certainly does end up increasing the general stock of humanity's capital -- and thus leading to generally improved prosperity and employment. The big picture is not simply important; it is fundamental.

Yeah, get that money to keep swimming around, and eventually it will spawn! :lol:

Justin, I take it the pun about the big picture was not intended? Riiiiiiiiight...

Originally Posted by HopefulCynic68

Actually, at that time you were right. Had a serious threat of regime change arisen in, say, 1982, it's highly likely the bombs would have been used.

The reason the Commies went down quietly was because the collapse came from within the lower ranks of the Communist Party, as well as from the general public. Communism, the organizing pseudo-religion of the USSR, had lost whatever hold it had ever had on the public mind. In fact, it had done some some time before, but Gorbachev, by trying to 'loosen' the grip, revealed that the regime was vulnerable. After that, it was only a matter of time.

This makes no sense. Communism hd lost support from the people by the 1970's. The authorities could have launched nuclear missiles on the US at any time they felt threatened. Support for the public is not need for them to do this. Many observers believed they would do exactly this before they would alow themselves to be toppled. They were wrong. When the time came, the USSR went down in a bloodless fashion reminscent of the Glorious Revolution.

No, it's not obvious at all. Nor is it obvious that he was closer to possessing nuclear weapons in 1990 than now. It might be true, but it's far from a certainty.

Again, that (N Korea) doesn't necessarily prove much. N. Korea is not near the major oil production regions, it doesn't border Israel, it doesn't border Saudi Arabia, and much of Europe is not (yet) within its strike range. I suspect that if N. Korea continues on its current course, the apparent unconcern with also alter. Note the location where there is talk of deployment of missile defenses. (Whether they'll work is a separate question from where they are being suggested for deployment).

It was well known in 1991 that Iraq had working towards obtaining nukes since the mid-1970's. Israel had "pre-empted" them in 1978 IIRC. The US was not concerned about this in the 1980's. In fact, we gave support to Iraq, a former Soviet client, instead. We didn't care because Saddam was fighting Iran, a former US client state now on the US shit list. Later Iran invaded Kuwait, not a US client, but also not on the US shit list and we decided this was a problem. So we kicked him out and we could easily have effected regime change had we wanted to.

If we feared Saddam's developing WMD and using them against us we would have taken him out then and there. What we did fear was what Iran might do with a power vacuum created by Saddam's exit so we left him in power. We did did not want to engage in necessary nation building that booting him out would entail. However we did not want Saddam to make any more trouble so we employed a containment policy against him. We hoped that maybe regime change would happen all by itself and we could then befriend the subsequent regime. Well it didn't.

The containment policy worked all too well. Saddam is so well contained none of his neighbors fear him. There would have been no problem with continuation of this policy (after all we contained the Soviets for half a century). But al qaeda changed the nature of th game. A contained Saddam was now a threat (as a symbol) to the US, but nobody else. So he has to go.

It's very hard for me to work out any near future scenario that lets us withdraw all our troops from the Middle East, Saddam or not. I don't like that, but I can't see one. As for terrorism, any plausilble WOT has to involve the state sponsors. The question is the exact ties to which states.

No no, not out of the Middle East, out of Saudi Arabia (the home of the holiest Muslim shrines). We can take the troops in Saudi Arabia and put them in Iraq--neatly solving the problem.

Of course the WOT involves the state sponsors, what do you call Afghanistan and the CIA offensive worldwide?

Michael Ruppert suspects that the Bush administration will begin to seize the Ruhr...er, Iraq by Wednesday at the latest. Note that others such as Larry Klayman read the signs to indicate that it will not happen for at least another 10 months. Maybe these guys ought to start a pool!



http://www.fromthewilderness.com/fre..._invasion.html

(Usual disclaimers)



FTW URGENT BULLETIN

U.S. - IRAQ INVASION LIKELY TO BEGIN WITH STATE of the UNION, Tuesday

by
Michael C. Ruppert

January 24, 2003, 1930 PST (FTW) - Serious international developments are indicating that the first stages of the U.S. invasion of Iraq will begin unilaterally no later than next Wednesday and most likely as the President delivers his State of the Union address to Congress on Tuesday night.

The Associated Press reported today, in a story little noticed by mainstream American press, that the Japanese government had today urged all Japanese citizens to leave Iraq as soon as possible. Japan has large numbers of its nationals working in Iraq in various trade and oil-related business ventures. According to a second report today on CNN Headline News the Japanese advisory was specific that all Japanese citizens should be out of the country by next Wednesday at the latest.

The Japanese alert was followed by a simultaneous advisory from the U.S. State Department issuing a worldwide alert to all Americans traveling overseas. According to another AP story, State Department officials tried to downplay the significance of the warning, "but officials were unable to say when the last such advisory had been issued." A worldwide alert for U.S. citizens is extremely rare and suggests that the administration is concerned about a global backlash against Americans traveling overseas. Cautionary advisories are normally isolated to specific countries or geographic regions.

The invasion of Iraq will most likely commence with a massive aerial campaign in which the U.N. and many military analysts have predicted widespread collateral damage with heavy civilian casualties. One recent UN estimate suggested that the total Iraqi casualty count for the entire operation could exceed 500,000.

This decision should not be taken as a surprise. In recent weeks support for the obvious U.S. intentions, both worldwide and at home, has been declining rapidly. At the time this story was written a contemporaneous CNN poll showed that 62% of those responding believed that the United States should not attack Iraq without UN approval. Politically, the Bush administration has seen that this situation is not going to improve. Every delay in an attack to which the administration has already committed not only risks greater military, political and economic opposition but also increases the risk that U.S. ground forces will be engaged in desert fighting in hot summer weather. Recent moves by both the French and Russian governments to approve new trade and development agreements with the Hussein government might also weaken U.S. economic control in a post-Saddam regime.

With crude oil prices at two-year highs and with U.S. oil reserves at 27-year lows the signs of a crumbling U.S. economy made themselves felt again today with a more than 200 point drop in the Dow Jones Industrial average. The Bush administration has apparently decided to roll the dice now in a go-for-broke imperial conquest that has as its primary objective the immediate control of 11 per cent of the world's oil reserves.

In many previous stories FTW has documented how the Iraqi invasion is but the first in a series of sequential worldwide military campaigns to which the United States has committed. All of these are based upon globally dwindling oil supplies and the pending economic and human consequences of that reality. On January 21st, CNN Headline News acknowledged, for the first time, the reality of Peak Oil and accurately stated that "all the cheap oil there is has been found." The story also acknowledged that there was only enough oil left to sustain the planet for thirty to forty years and that what oil remained was going to become increasingly more expensive to produce and deliver.

It is likely that the resiliency of Venezuelan President Hugo Chavez, in his effort to resist U.S.-inspired strikes by wealthy Venezuelan industrialists, has had an impact on this decision by the Bush administration. Venezuela, which is the third largest foreign importer of oil to the U.S., has seen its U.S. deliveries cut to a fraction of normal levels in recent weeks. Within the last week oil analysts have been predicting shortages and price spikes similar to those of 1973-4 if U.S. oil stocks were not replenished quickly. The administration's apparent decision to launch the attacks against Iraq appears to be at least a partial acknowledgement that Chavez is successfully resisting U.S. pressure to oust him.

Chavez angered multinational investors and financiers recently by moving to increase the share of oil profits retained in Venezuela for the benefit of its people.

Today's announcements signal that the world is entering a period of danger not seen for forty years. That the announcements from the Japanese government and the State Department came on the same day that the Department of Homeland Security became active and its Secretary Tom Ridge was sworn in seems an unlikely coincidence. Previous reporting from FTW had indicated that even massive protests and non-violent global resistance would prove ineffective in preventing an Iraqi invasion. And our predictions that the Bush junta had prepared for all the worst-case scenarios, including domestic unrest and worldwide opposition appear to be vindicated.

The administration has clearly issued a statement to the world. "Screw you. We're going to play this game any way you want to play it. And we're ready for anything that comes."

Only time will tell if they are correct.

Originally Posted by Brian Rush

All I'm saying is that the problem is not a lack of accumulated capital in the economy. There is no shortage of capital to invest and since the early days of industrialization there never has been. Thus, it does not make sense to try to boost the economy by throwing yet more money to the rich in the hopes that they will invest it productively. Instead, we should try to spread the wealth around, so that people will spend it and create the circumstances of the market that will justify productive investment.

I've been following this conversation with interest. I'd like to suggest one basic flaw is the push for short term profits. High management is paid in large part with stock. Thus, decisions are often made to push for immediate dividends in the short term. There is little incentive to fund long term R&D.

During my stay at GTE / General Dynamics, IR&D projects were at first driven to improve the capability of the company, or to generate long term opportunity. More recently, the IR&D budget was cut, and tied closely to existing projects. The higher the IR&D budget, the smaller the profits (short term). Thus IR&D faced a hard sell unless it would return payback within the expected tenure of the current Vice President of the division.

In the cheerleading sessions, with the big shots patting themselves on the back on their buisiness driven policies, the buisinessmen seemed pleased by their approach. When I was laid off, the division had two mature buisiness areas, and was spending no money to develop anything new. We were about to lose one of these buisiness areas as a competitor had spent lots of IR&D to pre-develop the next generation. The other area was fairly mature, requiring only a few engineers to maintain it, and to move the software to new platforms, thus downsizing the engineering support for that project seemed to make sense.

Leaving this engineering division with no engineering capability at all...

I don't know all the answers, but managers thinking long term with as much focus on maintaining the company as a long term stable entity as in short term profits might be part of it.

Originally Posted by Brian Rush

Mike Alexander said:

I also have a problem seeing how "massive infusions of cash from mortgage refi" have kept "employment up and wages growing," in view of the fact that employment is down and real wages shrinking.

Real wages are not falling. Here are annual median wage figures (CPI-adjusted) from the Dept of Labor (values in dollars per hour):

1989-1992: 14.01, 13.78, 13.63, 13.55 (falling)
1999-2002: 14.30, 14.38, 14.54, 14.77 (rising)

In 1991, the year we emerged from the 1990 recession, average unemployment was 6.9%. Unemployment showed a rising trend throughout the year.

In 2002, the year we (hopefully) have emerged from the 2001 recession, average unemployment was 5.8%. Unemployment showed a rising trend throughout the year.

My discussion pertained to recession-fighting policies. Compared the last recession, employment has held up (unemployment is lower than then) and real wages have grown, rather than fallen as they did last time.

see http://www.thestreet.com/funds/jubak/10063755.html

Originally Posted by chandalar

The important part of the transition to 4t is social psychological "winter", where there is a sense of both doom and no effective way to avoid it. This goes with part of my argument that we are not quite in 4t, not yet. But we are percieving that there is not "plenty for all" and this is what drives the whole "class" warfare notion.

I agree that we are either very late 3t or very early 4T. And I think you're right that perception is everything. As to the perception that there isn't enough to go around, I think that's a product of 3T culture wars, at least in part.

Wealth for the wealthy does not and never has translated to better lives for the people not wealthy

It has and does, but to a lesser extent in our current progressive tax system. We tax mostly income, therefore true wealth is largely untaxed. If you want to take wealth away from the wealthy, you'd best not do it the way the current "progressives" and democrats propose. They seem to want to simply increase income taxes on the "rich." If you define rich by income, and wealth by property, you get a clearer picture of who's paying and who's not.

and in a system were wealth is increased, wages remain flat and less of a percentage of people are employed, it is difficult to see where any intelligent person can make that argument.

I think that might depend on whether or not you meant to include "but" in your phrase above. If you meant "in a system where wealth is increased,
but wages remain flat..." then I agree with your assessment that no intelligent person can argue that individual wealth enhanced that society. If, however, your statement stands as written, and you meant that the concepts of increased wealth and flat wages are mutually inclusive, then you'd have to clarify the economic reasoning involved. Words mean things. (It depends on what the definition of is is." :wink: )
Put simply, I don't believe that increased wealth causes flat wages or unemployment.

"One person, one vote" becomes less meaningful if the context and choices presented merely reflect those the well-moneyed place before the voting populace. And the wealthy are well-meaning. After all, they have had generations of reinforcement for the idea that they know whats best for the people they are governing more than those people themselves. Haven't we made the point over and over that our brand of democracy is what is best for the world and actively proselytized it?

It does indeed. Do you mean to say that the democratic republic our founding fathers planned for us was faulty? Or do you mean to say that we have foundered in fulfilling it's promise? I'm not sure if you're critical of the original paradigm, or if you just think it's gone to the dogs. But, again, I think lots of that is 3T churning. No new ideas, really, just lots of fermentation of political angst.

The presumption, I'm sure, is that I am now engaging in "class warfare" (and anti-American, to boot).

Not at all. I think what you've said is far and away more "American" than the knee-jerk rhetoric we hear all the time from all "sides." I'm tired of "sides." This side, that side, inside, outside. Nothing but sides all around. There's not a right-side or a wrong-side anymore. Everything is just inside-outside. I think it is the other side that is maybe most important coming up. Can we see the other side from our side? That is maybe the crucial question. If this forum is any indication, I think we are still 3T.

--Suz X

In case this has already been posted, my apologies. I ran a search on "springer" for the past 2 weeks and the search function didn't seem to be working. Anyway, Marc might like and loath this news either way--loath it because Jerry Springer is both sleazy and a Democrat or like it because it supports his assertion that "we be 3T" and because Springer might hire him to produce his campaign commercials! :lol:

Standard Fair Use disclaimers apply.

TV's Springer considering U.S. Senate bid
'Known by everybody'

COLUMBUS, Ohio (AP) --Talk show host Jerry Springer has a secret of his own to share: He's considering running for the U.S. Senate next year.

Springer, a Democrat, said he'll decide by summer whether to challenge George Voinovich, a Republican who has said he'll run for a second term in 2004.

He acknowledged that his nationally syndicated "Jerry Springer Show" could work against him. Guests divulge their intimate secrets -- and frequently strip down to their intimate apparel -- on episodes with titles like "Your Lover Is Mine!" and "Explosive Betrayals!"

"There are pluses and minuses," Springer said. "The plus is that I'm known by everybody. The minus is that I'm known by everybody."

Springer figures it would take $20 million to beat Voinovich and as much as $5 million to win a Democratic primary.

"I have the resources," the 59-year-old millionaire said Wednesday night before speaking at the winter meeting of the Ohio Democratic Party Chairs Association.

Springer is a former Cincinnati mayor and councilman who lost the Democratic primary for governor in 1982 and considered running for the Senate in 2000. He said he also may run for Cincinnati mayor in 2005 or governor in 2006.

"I want to be helpful in rebuilding the party," he said. "Whether I have to be a candidate is a totally separate issue. ... I don't need a job."

Originally Posted by Suz X

We tax mostly income, therefore true wealth is largely untaxed. If you want to take wealth away from the wealthy, you'd best not do it the way the current "progressives" and democrats propose. They seem to want to simply increase income taxes on the "rich." If you define rich by income, and wealth by property, you get a clearer picture of who's paying and who's not.

Suz X, all income is real, much wealth is not. How can you tax something that may not be real? For example, how wealthy are my wife and I? Well we own a house two cars and a bunch of stuff in the house. We also have some cash and a bunch of "investments". Theoretically one can look up the market value of these investments and then put a dollar figure on them and thus arrive at an estimate of what one is "worth". For example in July 1998 I had one investment whose market value was $275,000. A couple of months ago I sold that investment for $700. So what were those investments worth? Should I have been taxed on that $275,000 in 1998 that it turns out was only worth $700? I don't think that is right

The reason income is taxed is because, ultimately, it is income that provides a value for wealth. For me and millions of other stockholders in the late 1990's, the income obtainable from our investments (what makes them worth anything) was largely received by insiders, via stock options. Since they received the benefits of our wealth (which is now a lot smaller) they should be taxed (and were) not we. In fact in a fair tax system, we should be able to deduct our losses from our own incomes and so reduce our own tax burdens. But that is not the case and I will likely carry losses from the above investment for many. many years, perhaps for the rest of my life.

Originally Posted by Suz X

We tax mostly income, therefore true wealth is largely untaxed. If you want to take wealth away from the wealthy, you'd best not do it the way the current "progressives" and democrats propose. They seem to want to simply increase income taxes on the "rich." If you define rich by income, and wealth by property, you get a clearer picture of who's paying and who's not.


--Suz X

Taxes on wealth and to a lesser degree on income are generally unproductive. As far as it goes, Bush's elimination of the estate tax and lowering of marginal income tax rates are sound policies. These taxes hinder incentives to work and invest. The estate tax in particular is a nightmare of complexity and loopholes.

The appropriate tax IMO that should replace these taxes is a consumption tax. First the tax system as it currently operates allows many of the wealthy (those who don't work but consume) to consume without paying their share (by borrowing, investing and spending they can engage in conspicous consumption without paying income or estate taxes). These "unproductive" wealthy are a threat to our society in ways that have destroyed previous societies. Note, I'm not talking about productive high income earners who work hard and generally contribute greatly to society.

Second, consumption taxes help guard the environment without the silliness of much of current environmental regulation - by incorporating the environmental costs into taxes the market plays a greater part in the shifting of pollution costs to the consuming party.

Third, the advancement of information technology should make consumption tax collection much more efficient and fair. Currently, states lose huge dollars to tax evasion - I saw an estimate that current state budget deficits would be largely eliminated if just what is currently owed were collected. Never mind the potential collections from e-commerce transactions.

Fourth, the consumption taxes could be made progressive if desired. Thus the inefficient progressivity in current taxes that most affect capital investment could be lessened.

Finally this could be a major part of the 4T realignment. Bush kicks off the first part with a lowering of federal taxes while later the states work together (a process they have already begun) to improve and increase consumption taxes. Of course this will be very difficult and painful in the short-run (it reduces demand which further exacerbates slow economic growth) but like all crises resolutions it entails short-term sacrifice for long-term reward.

The appropriate tax IMO that should replace these taxes is a consumption tax.

Why do you think this? Are you still in the eighties? Do you still think the Japanese are an attractive model for the US? It's amazing, its like the tech bubble never existed.

Originally Posted by Mike Alexander '59

The appropriate tax IMO that should replace these taxes is a consumption tax.

Why do you think this? Are you still in the eighties? Do you still think the Japanese are an attractive model for the US? It's amazing, its like the tech bubble never existed.

I don't think taxes in general should be raised - the income tax should be REPLACED by the consumption tax. The Japanese instituted consumption taxes in 1989 (after the bubble has gotten out of hand) but didn't lower income tax rates. The Japanese government rely today on individual income taxes as a percentage of total govt. receipts as much as it did in the eighties.

The Japanese also administered their consumption tax all wrong, IMO. They made it severely regressive and administratively burdensome - one of the advantages of the consumption tax should be its simplicity. You simply subtract investments from income and apply a tax rate to that number.

I don't believe consumption taxes cause more variability in capital markets. They simply eliminate the distortions involved in taxing investment capital inconsisently.

Originally Posted by Crispy '59

Originally Posted by Mike Alexander '59

The appropriate tax IMO that should replace these taxes is a consumption tax.

Why do you think this? Are you still in the eighties? Do you still think the Japanese are an attractive model for the US? It's amazing, its like the tech bubble never existed.

I don't think taxes in general should be raised - the income tax should be REPLACED by the consumption tax. The Japanese raised consumption taxes in 1989 (after the bubble has gotten out of hand) but didn't lower income tax rates. The Japanese government rely today on individual income taxes as a percentage of total govt. receipts as much as it did in the eighties.

The Japanese also administered their consumption tax all wrong, IMO. They made it severely regressive and administratively burdensome - one of the advantages of the consumption tax should be its simplicity. You simply subtract investments from income and apply a tax rate to that number.

I don't believe consumption taxes cause more variability in capital markets. They simply eliminate the distortions involved in taxing investment capital inconsisently.

I guess I wasn't clear. I meant to question why do you favor a consumption tax? Don't you think taxing consumption might discourage consumption?

Originally Posted by Mike Alexander '59

Don't you think taxing consumption might discourage consumption?

And this is bad because...?

Capital stock being the direct result of deferred consumption, I can't see how a general growth of capital stock due to reduced consumption could bring about any other result than the general rise in living standards in evidence over the past nearly all of human history during which such increases have happened. Or do you think that easy financing (the encouragement of consumption, not only of present capital, but of some measure of future production as well) such as we are seeing today is the path to general prosperity (not just for those properly leveraged, like yourself)?

Mike Alexander '59 wrote: Don't you think taxing consumption might discourage consumption?

That would be exactly the point. Discourage consumption of fossil fuels for one thing. The USA consumes far more of the planet's resources than it's shares of area or people. Per capita consumption of energy is TWICE that of Western Europe (and they live pretty well...)

Such behavior wins us no friends around the world.

Originally Posted by PaulD'50

The USA consumes far more of the planet's resources than it's shares of area or people. Per capita consumption of energy is TWICE that of Western Europe (and they live pretty well...)

An easy way to deflate this argument:

How does the US compare to the rest of the world in per capita energy production and resource extraction? You won't find too many grain or power exporters in sub-saharan Africa. . .

Mike:

Real wages are not falling.

Over the last 30 years, generally speaking, they have been falling. One may find years in which this is briefly not so. One may also find categories of employment in which it is consistently not so. If one is selective about which categories of employment to consider, it is even possible to create the appearance that it is overall not so.

Justin:

Capital stock being the direct result of deferred consumption, I can't see how a general growth of capital stock due to reduced consumption could bring about any other result than the general rise in living standards in evidence over the past nearly all of human history during which such increases have happened.

Once again, capital stock formation does not necessarily lead to a rise in living standards. Capital investment in productive enterprises does. How much capital is invested in productive enterprises in any one year is, in a mature economy, a function of demand, not availability of capital. (We never reach a point where the entire economy is capital-short; there is always more capital available than motivation to invest it.) Reduction in consumption would reduce demand, and thereby reduce investment.

How does the US compare to the rest of the world in per capita energy production and resource extraction?

That depends on how this is measured. If you include the extraction of resources from other countries' territory, the discrepancy is almost resolved. Limit consideration to domestic production and the discrepancy remains quite pronounced.