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Tug of War

by Gerald Horne Wednesday, Jan. 26, 2005 at 7:04 AM

Some view the election of George W. Bush as providing him with a mandate to pursue his reactionary policies at home and abroad.

Some view the election of George W. Bush as providing him with a mandate to pursue his reactionary policies at home and abroad. Certainly this is neither the view of the tens of millions who voted against him, nor is it an opinion shared around the world. For almost immediately after this election was decided, a run began on the dollar in international currency markets, as central banks globally frowned at Bush’s unwillingness to grapple with spiraling budget and trade deficits and his continued heavy borrowing to pay for his gargantuan military build-up.



Of course, there are those among the ruling elite who welcome the weakening of the dollar since this cheapens US exports and means, in effect, that the nation borrowed "strong" dollars and re-paid this borrowing in "weak" dollars. Still, there are few historical examples of nations who continued to ascend by debasing their currency. If this run on the dollar continues, expect to pay more at the pump for imports, especially gasoline, consumer electronics, clothing, etc.

If the dollar continues to weaken, it could call into question the billions of dollars that the US must attract daily in order to keep functioning. If China particularly finds US Treasury notes less alluring, then US imperialism may be compelled to raise interest rates sharply and slash domestic spending. Of course, military spending would be deemed sacrosanct. Bush’s talk about "tax reform" and Social Security privatization show his focus on cutting social spending.

Pentagon spending is deemed sacred because of the growing quagmire in Iraq – a war based on lies about the presence of "weapons of mass destruction." Tens of thousands of Iraqis have died as a result of this folly, not to mention hundreds of US nationals. This war contributes mightily to the continuing international isolation of US imperialism, as even former allies e.g. France and Germany, refuse to dispatch troops in support of a war their people strongly opposed.

Supposedly the war in Iraq is a key part of the "war on terror," yet according to the Cuban newspaper Granma, the Treasury Department’s critically important Office of Foreign Assets Control, which is supposed to track the financing of Al Qaeda and other criminal outfits, has assigned one-sixth of its 120 employees to tighten the illegal blockade against Havana. Over the past "14 years," according to Granma, "the OFAC has opened a mere 93 cases on terrorism and, on the other hand, 10,683 cases against US citizens for violating the blockade of Cuba. …[Recently] President Bush directed the Treasury Department and Department of Homeland Security to step up enforcement of the travel ban…." In other words, US imperialism is more concerned with people bringing Cuban cigars into the US than tracking the financing of military assaults on the homeland.

This extreme scrutiny of socialist Cuba should not surprise careful students of US imperialism. It is finally dawning on Washington that despite the triumphalism over Communism, Havana has yet to be subdued while China is becoming the economic dynamo of the planet. Indeed, Washington’s Cold War policies – aid to "Islamic fundamentalism" and encircling Moscow by promoting European integration and bolstering China – are precisely what is complicating US imperialism’s continued hegemony in the 21st century.

In 2003 the US ran a 4 billion trade deficit with China, its biggest gap ever with any country. And while Chinese imports of US goods are growing at a faster rate than US imports from China, the overall trade gap is slated to be even larger in 2004. Motorola, Intel, Kodak, General Motors and countless other US giants have poured almost billion into China, much of it in manufacturing. In 2002 China surpassed the US as the world’s leading destination for foreign investment. Critics – e.g. CNN’s resident right-wing populist Lou Dobbs – charge these companies with exporting US jobs. Dobbs is also among those who allege that China suppresses the prices of its exports by up to 40 percent by keeping its currency artificially weak. To do so, it is said, Beijing keeps the yuan at a fixed rate in relation to the dollar; to make this policy "work," it uses its own currency to buy up dollars – and in the process it has amassed an astonishing 1 billion in foreign reserves. China spends its dollars on US Treasury securities, not only financing the US government but helping to keep US interest rates low. In USA Today, Yale economist Jeffrey Garten was quoted as saying that this was a "sword of Damocles" held by China "over the United States. We never want to be in a position where any foreign government has so much influence over our interest rates."

Increasingly, Washington blames China’s thirst for petroleum for the sharp rise in gas prices. In 1999 only 220,000 autos were sold in China; in 2003 – 2 million. China could have nearly 30 million automobiles by 2010 – a prospect that has drawn huge investments by General Motors. Similarly, China’s investment in oil in Sudan – the largest nation by territory in Africa – is blamed for Beijing’s hesitance to join in condemning Khartoum for human rights violations in the Darfur region. Chinese oil exploration in Iran is said in Washington to shed light on Beijing’s reluctance to join US imperialism’s crusade against Teheran’s attempt to develop nuclear power.

In short, US imperialism is in an anomalous position of chortling regularly about the "death of Communism" while the Chinese Communist Party continues to construct a juggernaut – a juggernaut that imperialism has become dependent upon in various ways.

This has not escaped the attention of the Pentagon. During the summer of 2004 while the attention of most was turned to the presidential race and the continuing conflict in Iraq, the US Navy announced it would hold exercises dubbed "Operation Summer Pulse ‘04" in the choppy waters off the China coast near Taiwan. At the same time, according to the Washington Post, "about 18,000 Chinese troops using their country’s most advanced weapons systems last week rehearsed coordinated air, sea, and ground attacks on Dongshan, an island in the South China Sea that resembles Taiwan in terrain and weather." Not far away the "US Navy staged a global readiness drill with seven carrier groups to show that the United States could muster overwhelming force anywhere, including Taiwan, despite the war in Iraq." The paper of record of official Washington also noted nervously that "China’s defense spending has reached between billion and billion a year under [its] modernization program, ranking it behind only the United States and Russia." Cleary, Taiwan – the rebel province off China’s coast – is a continuing flashpoint in relations between Beijing and Washington and could become the pretext for a larger conflict between these two nations with consequences too ghastly to contemplate.

There are other Chinese maneuvers that are revealing similar concern in Washington. According to the Financial Times, not only China but Japan as well have decided to endorse Malaysia’s long-standing proposal for an "East Asian Community" or a regional trade bloc encompassing the Association of Southeast Nations [ASEAN], along with Beijing, Tokyo and Seoul. The acolytes of US imperialism fear that with the European Union consolidating, the EAC, or the "caucus without Caucasians’" as the FT dubbed it, would be akin to the EU on steroids. Also of concern is the "Asian Monetary Fund," which would challenge the hegemony of the US dominated International Monetary Fund (IMF).

Washington is also upset with Beijing because China has objected to US imperialism’s attempt to refer Iran’s attempt to construct civilian nuclear power plants to the UN Security Council for punitive action. Likewise, US imperialism is upset with the so-called "EU3," i.e. Britain, France and Germany, which similarly have been taking a conciliatory approach to Teheran in its attempt to defuse this crisis (strikingly, London – perhaps as a result of the disastrous alliance with Washington during the Iraq war – has decided to stand with its EU partners during this crisis).

The arrogant unilateralism of the Bush administration has not predisposed its former allies to go along with heightening tensions with Beijing either. Indeed, French President Jacques Chirac made a much publicized journey to Beijing in the fall of 2004 where he vocally endorsed lifting the 15-year arms embargo against China. US relations with France have been in a downward spiral since the March 2003 invasion of Iraq, which Paris opposed adamantly. Escalating tension between Boeing and the EU’s Airbus, the biggest trade dispute ever between Washington and Brussels, has also contributed to the conflict. Boeing charges that Airbus receives illegal subsidies from the EU. Yet Boeing itself has secured huge subsidies from Washington state and the Japanese government for production of its new 7E7 aircraft. Boeing also benefits handsomely from indirect federal support in the form of Pentagon projects.

Indeed, since the collapse of the USSR, tensions between the EU, which Washington once backed as a counterweight to Moscow, and US imperialism have skyrocketed, with festering hostility over genetically modified organisms, beef, barley, cinema (exports from Hollywood, especially to France), the global warming treaty, the International Criminal Court, the death penalty and much more. Thus, it was not surprising when the Financial Times reported ominously on its front page that "Giant US brand names suffer slump in Europe…. Anti-Americanism seen as possible cause…. Coca-Cola, McDonald’s, Marlboro and General Motors have revealed problems in Germany or France that echo those already faced by Disney, Wal-Mart and the Gap." This, it was reported, "lends credence to warnings by a marketing and advertising group after the Abu-Ghraib prison scandal that US brands could face trouble. ‘My sense is we are seeing a transfer of anger and resentment from foreign policies to things American,’ said Keith Reinhard, chairman of DDB Worldwide, an advertising agency." Thus, "Coca-Cola, which makes 80 percent of its profits outside North America, also had a sharp decline, selling 16 per cent less to Germans than this time last year." Simultaneously, US acquisitions in France have fallen by 80 percent, which is also seen as a reflection of deteriorating bilateral relations.

Surely, the continuing investigation in France of Halliburton, the Texas based firm once headed by Vice-President Dick Cheney and also under severe scrutiny in this nation, has done little to improve Paris-Washington relations. French investigators charge that during Cheney’s tenure with this firm, Halliburton intervened with its partners in a huge Nigerian gas venture to secure the reappointment of a business agent now at the center of an international bribery inquiry.

Halliburton is also at the center of controversy because of its dealings in Iraq, reaping millions of taxpayer dollars as government functions have been "outsourced." This trend has become so notorious that it has even reached into the groves of academe. Recently a US federal court found that Andrei Shleifer, a noted economics professor at Harvard and Jonathan Hay, a legal adviser also working for Harvard at the time, conspired in the 1990s to defraud the US government while helping to run a nearly 0 million US funded project to "reform" Russia’s economy. After the overthrow of Soviet rule, the now defunct Harvard Institute for International Development became a manager of US economic reform aid to Russia with the assistance of influential Harvard connected colleagues in the Clinton Administration – including present Harvard President and former Treasury Secretary, Lawrence Summers. In effect, US policy was "outsourced" to Harvard – where Shleifer and Hay were said to have benefited nicely from raking in taxpayer dollars, supposedly to install "reform."

This "outsourcing" of US foreign policy to profit-making concerns accelerated during the time the Pentagon was led by Dick Cheney – a policy that enriched him when he then assumed the helm at Halliburton. This "outsourcing" also has become the hallmark of Washington’s policy toward Colombia. This South American nation is embroiled in a long-standing guerilla insurgency that shows no signs of slowing down. In response US imperialism has stepped up aid to the increasingly anti-popular rule of President Alvaro Uribe. In October 2004 it was announced that the number of US military personnel in Colombia will double to 800 in coming months. The 2005 US Defense Department authorization also permits the Bush Administration to increase the number of US citizens working for private contractors in Colombia to 600 from 400. Eleven contractors including US and other foreign nationals working for US corporations under Pentagon contracts have been killed since 1998. Three US nationals have whose plane crashed in a surveillance mission over rebel territory remain in guerrilla hands 17 months after being taken hostage.

Because of the consolidation of left-wing influence in US imperialism’s "backyard," Washington finds it necessary to escalate its assistance to the increasingly discredited regime in Bogota. After all, President Hugo Chávez in Venezuela not only has blocked the imperialist backed effort to recall him but, as well, the number of pro-Chávez governors and other elected officials has actually increased in recent weeks. In Uruguay the left – in a coalition that includes Communists – has just assumed power, which mirrors similar developments occurring in the continent’s giant: Brazil. After ousting US puppet, Carlos Menem, Argentina has managed to stand up forcefully to the cruel diktats of the International Monetary Fund. In Chile, the former brutal dictator, Augusto Pinochet, remains under siege by those demanding that he be made to be held accountable for the horrendous human rights abuses that occurred after a US backed coup against the socialist, Salvador Allende, in 1973.

Ordinarily this left-wing upsurge would call forth full-throated warnings and denunciations from US imperialism but the Iraq war has led to a classic case of "imperial overstretch," the term devised by Yale historian, Paul Kennedy, to describe what happens to far-flung empires compelled to defend territory with a strained military.

This has led to a search for "Hessians" or militaries of other nations who will serve the interests of US imperialism. This policy has failed miserably in Iraq where the "coalition of the willing" has been described usefully as a "coalition of the billing" – but even bribes to smaller nations has not been enough to save US imperialism from absorbing 90 percent of the casualties and paying 90 percent of the bills in Iraq. Hungary has been the latest of a growing list of nations – led by Spain after the March 2004 electoral victory of the Socialists – to announce withdrawal of its token force from Iraq.

Still, in March 2004 the chiefs of staff of Chad, Mali, Mauritania, Morocco, Niger, Senegal and Tunisia took part for the first time in a little publicized meeting at the headquarters of the US army’s European Command in Stuttgart, Germany. This unprecedented and heretofore secret meeting concerned military cooperation in the so-called war against "terrorism" and, as the list of participants suggests, focused on the buffer zone between the Maghreb and sub-Saharan Africa, between the oil fields of the north – e.g. Libya – and those of the Gulf of Guinea. This was a follow-up to the 1996 creation of the African Crisis Response Initiative (ACRI), whose official mandate is to provide both training for peace-keeping and humanitarian aid. Yet, despite this high-flown mission, ACRI’s chief is the odious Nestor Pino-Marina. This Cuban-American took part in the failed 1961 Bay of Pigs invasion of Cuba, then went on to ignominious service as a special forces officer in Vietnam and Laos. Then he was a principal in the clandestine war against Nicaragua during the Sandinista era and was subsequently accused of involvement in drug trafficking to fund arms sent to Contra bands in Central America.

This continuing interest in Africa has increased in recent years, especially after the August 1998 bombings of US embassies in Kenya and Tanzania and the realization that the festering poverty of Africa is a breeding ground for extremism and "fundamentalism."

Thus, Secretary of State Colin Powell has made stops in Africa not ordinarily made by spokesmen for US imperialism. In September 2002 he visited the oil-rich nations of Gabon and Angola, a trip followed by George W. Bush’s July 2003 journey to Senegal, Nigeria, Botswana, Uganda and South Africa.

However, it is not just "terrorism" that has motivated Washington’s newly found fascination with Africa for US imperialism realizes that it is heavily dependent upon Africa for manganese (for steel production), cobalt and chrome vital for alloys (particularly in aeronautics), vanadium, gold (which is rising in price as the dollar plummets), antimony, fluorspar and germanium – and diamonds, especially the industrial variety. Congo and Zambia possess 50 percent of world cobalt reserves and 98 percent of the world’s chrome reserves are in Zimbabwe and South Africa. South Africa also accounts for 90 percent of reserves of metals in the platinum group (platinum, palladium, rhodium, ruthenium, iridium, and osmium). Of course, with the growing instability in Iraq and Saudi Arabia and the ongoing conflict with Iran, the importance of Africa’s oil – sited principally in Nigeria, Angola and Equatorial Guinea, cannot be underestimated either.

Speaking of Equatorial Guinea, this former Spanish colony has been much in the news lately, especially after the recent failed coup attempt by mercenaries funded by external forces – that allegedly included Mark Thatcher, son of the former British Prime Minister, Margaret Thatcher – to overthrow this oil rich nation’s government. In September 2004 a disturbing and detailed report from the US Senate outlined this nation’s questionable dealings with ExxonMobil, Hess Oil, Marathon Oil, the Riggs Bank of Washington, DC and other US business entities. Presumptive violations of the Foreign Corrupt Practices Act were said to be possibly involved, according to the Washington Post. Illicit payments from the oil companies to the ruling family of EG were facilitated by the bank to the tune of almost a billion dollars. This was leading to preferential treatment for these US oil giants and placing their European counterparts in a disadvantageous position. In fact, part of the underlying tension between Paris and Washington of late has been the viewpoint of France that Washington is encroaching on Africa, a continent traditionally seen as its own private preserve.

The Republican Party may feel that their domination of the Congress, the White House and the Supreme Court will somehow translate magically into global dominance. However, this is fanciful thinking at best. In fact, sharp challenges to US hegemony comes from the four corners of the plant and are bound to erode right-wing dominance in the US itself, particularly as foreign entities decide that pouring billions of dollars into the US economy might not be the wisest expenditure of resources. In short, the crisis of US imperialism continues unabated.

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