In Search of a Strategy

August 30, 2014 4:00 AM
By Andrew C. McCarthy

Is it better to have no strategy or a delusional strategy?

The question arises, of course, after President Obama’s startling confession on Thursday that he has not yet developed a strategy for confronting the Islamic State, the al-Qaeda-rooted terrorist organization still often called by its former name, ISIS – an acronym for the Islamic State of Iraq and al-Sham. Al-Sham refers to Greater Syria.

You may have noticed that President Obama calls the group ISIL, preferring the acronym that refers to the Levant to the one referring to al-Sham. After all, anything that invokes Syria might remind you of red lines that turned out not to be red lines and the administration’s facilitation of the arming of “moderate rebels” who turned out to include, well, ISIS. The fact is that the president has never had a Syria strategy, either — careening from Assad the Reformer, to Assad the Iranian puppet who must be toppled, to Assad who maybe we should consider aligning with against ISIS — ISIS being the “rebels” we used to support in Syria . . . unless they crossed into Iraq, in which case they were no longer rebels but terrorists . . . to be “rebels” again, they’d have to cross back into Syria or cruise east to Libya, where they used to be enemy jihadists spied on by our ally Qaddafi until they became “McCain’s heroes” overthrowing our enemy Qaddafi.

Got it?

No? Well, congratulations, you may have caught mental health, a condition to be envied even if it would disqualify you from serving as a foreign-policy and national-security expert in Washington. In either party.

The Islamic State’s recent beheading of American journalist James Foley is not the only thing that captured Washington’s attention of late. The Beltway was also left aghast at the jihadisst’ rounding up of over 150 Syrian soldiers, forcing them to strip down to their underpants for a march through the desert, and then mass-killing them execution style.

Shocking, sure, but isn’t that what the GOP’s foreign-policy gurus were telling us they wanted up until about five minutes ago? Not the cruel method but the mass killing of Assad’s forces. Nothing oh nothing, we were told, could possibly be worse than the barbaric Assad regime. As naysayers — like your faithful correspondent — urged the government to refrain from backing “rebels” who teem with rabidly anti-American Islamic-supremacist savages, top Republicans scoffed. It was paramount that we arm the rebels in order to oust Assad, even though “we understand [that means] some people are going to get arms that should not be getting arms,” insisted Bob Corker (R., Tenn.), ranking member on the Senate Foreign Relations Committee.

Turns out that quite a lot of people who shouldn’t have gotten arms have gotten quite a lot of arms. And that is because Syria is not the only place as to which Republicans urged Obama to ignore federal laws against arming and otherwise supporting terrorists. They did it in Libya, too.

We have several times documented here that influential Republicans led by Senator John McCain were champions of Moammar Qaddafi before they suddenly switched sides — along with President Obama — in campaigning to oust the Libyan regime they had only recently treated (and funded) as a key American counterterrorism ally. The resulting (and utterly foreseeable) empowerment of Islamic supremacists in eastern Libya directly contributed to the Benghazi Massacre of four Americans on September 11, 2012; to the rise of the Islamic State and the expansion of al-Qaeda franchises in Africa, all of which were substantially strengthened by the jihadist capture of much of Qaddafi’s arsenal; and to what has become the collapse of Libya into a virulently anti-American no-man’s land of competing militias in which jihadists now have the upper hand.

The disastrous flip-flop was no surprise. When Mubarak fell in Egypt, Senator McCain stressed that the Brotherhood must be kept out of any replacement government because the Brothers are anti-democratic supporters of repressive sharia and terrorism. He was right on both scores . . . but he soon reversed himself, deciding that the Brotherhood was an outfit Americans could work with after all — even support with sophisticated American weaponry and billions in taxpayer dollars. The Brothers were in power because, in the interim, McCain’s good friend Secretary Clinton pressured Egypt’s transitional military government to step down so the elected “Islamic democracy” could flourish. When the Brothers took the reins, they promptly installed a sharia constitution, demanded that the U.S. release the Blind Sheikh (convicted of running a New York–based terror cell in the 1990s), rolled out the red carpet for Hamas (the terror organization that is the Brotherhood’s Palestinian branch), and gave free reign to terrorist leaders — including the brother of al-Qaeda’s leader and members of the Blind Sheikh’s Egyptian jihadist organization — who proceeded to foment the violent rioting at the U.S. embassy in Cairo the same day as the Benghazi Massacre.

I could go on, but you get the point. While ripping Obama for having no Islamic State strategy, Republicans are now reviving the inane strategy of supporting the illusory “moderate Syrian opposition.” Those would be the same forces they wanted to support against Assad. The only problem was that there aren’t enough real moderates in Syria to mount a meaningful challenge to the regime. The backbone of the opposition to Assad has always been the Muslim Brotherhood, and the most effective fighters against the regime have always been the jihadists. So we’re back to where we started from: Let’s pretend that there is a viable, moderate, democratic Syrian opposition and that we have sufficient intelligence — in a place where we have sparse intelligence — to vet them so we arm only the good guys; and then let’s arm them, knowing that they have seamlessly allied for years with the anti-American terrorists we are delegating them to fight on our behalf. Perfect.

There is no excuse for a president of the United States to have no strategy against an obvious threat to the United States. But at least with Obama, it is understandable. He is hemmed in by his own ideology and demagoguery. The main challenge in the Middle East is not the Islamic State; it is the fact that the Islamic State and its al-Qaeda forebears have been fueled by Iran, which supports both Sunni and Shiite terrorism as long as it is directed at the United States. There cannot be a coherent strategy against Islamic supremacism unless the state sponsors of terrorism are accounted for, but Obama insists on seeing Iran as a potential ally rather than an incorrigible enemy.

Moreover, the combined jihadist threat is not a regional one merely seeking to capture territory in the Middle East; it is a global one that regards the United States as its primary enemy and that can be defeated only by America and its real allies. This is not a problem we can delegate to the basket-case governments of Iraq and Afghanistan, or to the “moderate” Syrian “rebels.” Yet the Obama Left’s relentless indictment of American self-defensive action in the Middle East has sapped the domestic political support necessary for vigorous military action against our enemies — action that will eventually have to include aggressive American combat operations on the ground.

But the GOP should take note: The jihad is not a problem we can delegate to the Muslim Brotherhood, either. We will not defeat our enemies until we finally recognize who they are — all of them.


A Purposeful Assault on Order

October 10, 2013
By Jeffrey T. Brown

Humans succeed in the administration of a society only when there are neutrally applied rules to protect its citizens, the rules are followed, and rule-breakers are punished. Society can only function to the benefit of its members when the actions of those members are governed, even if involuntarily, by a spirit of objective justice. We were blessed at the inception of our country with brilliant men and women, on the verge of creating a country in which they could have given themselves vast power, instead whose principles guided their hands. They influenced and wrote the most balanced, ordered blueprint for a civil society the world has ever known.

That system has been eroded over the last century by the inexplicable attraction of socialism to those too narcissistic to allow others to freely prosper, though it was not until the administration of our current chief executive that we understood the determination of the left to fully destabilize the country by attacking its fundamental order. That is where fundamental transformation actually happens. When the moral framework of a nation is purposefully assaulted to the benefit of the attackers, the survival of the ordered society is threatened. What we see as the near daily occurrence of political affronts to our traditions and history is intended both to overwhelm us, making it nearly impossible to respond to so many affronts at once, and distract from the eventual result. It is a constant war of manufactured crises waged against the founding principles of our society by those who seek to destroy and replace them.

Before the ascendency of the left in the last half century, hundreds of years of trial and error, guided by both malice and charity, gave us a society continually striving for equality and fairness in treatment under the law. Given the innumerable variables in human nature, any other form of equality or fairness is not attainable. Free will has always been the wild card. Before now, the freedom to exercise one’s will was considered a basic American right, so long as it was not exercised to purposefully or carelessly do harm to others. If applied in good conscience, the Constitution and those laws devised through an ordered legislative process were the ultimate bulwark against the malicious indulgences of human nature and free will.

An entitlement culture will, sooner or later, breed parasitic members whose mere existence is considered by them so meaningful that it is deserving of the reward of other peoples’ property. Indeed, one of the foremost tools in the left’s war on America is the redefinition of historically applied and understood principles, particularly equality and fairness. Everything that has been done in the last 50 years by the left, and particularly in the last 4, has been falsely done under the dual banners of equality and fairness.

“Equality”, in the economic sense, has been warped by the shiftless, envious, and greedy to become a unilaterally determined entitlement to what others have paid for with time, labor, risk, and determination, absent any contribution from the claimant. As applied to rights, “equality” means the entitlement to preferential treatment over fellow citizens who have done no wrong. “Fairness” has simply come to mean the right to extort or steal to achieve the new equality.

These irrational conversions, focusing exclusively on grievance rather than merit, are promoted in the mental fever-swamp of the left’s cultivated victims as the alternative to actually curing their own inadequacies. This is the bread and butter of community organizers. Victims suffer due to others, never due to their own qualities or choices. They suffer from the right of others to exercise free will, not due to the exercise of their own.

Acting on the premise that transformation is required to restore equality and fairness, as reinvented by the left, there is no moral structure, framework or institution of an ordered society that is not thereafter a justifiable target. The laws and traditions that previously kept people morally ordered are targeted for destruction by the left. The left cannot advance where there remains moral order; leftism and moral order are mutually exclusive. Like other cults of power, leftism must destroy traditional morality in order to replace it with the apparent wisdom of the ruling elite. When leftists act, therefore, they do so in purposeful violation of the established order, both structural and personal. They refuse to adhere to the rules they swore to uphold, and conduct themselves in ways clearly apart from the established moral order. They both subvert and overwhelm the system, knowing it is not equipped to respond to perpetual immorality.

The president came to power professing his belief in the restoration of equality and fairness, knowing full well that neither were fundamentally missing from our society, and that in truth he would seek neither. Aware that his enemy, decent Americans, would not define those terms as leftists do, he understood that his false invocation of those principles would provide cover, at least for a period of time, for actions designed to strike at the foundations of the country, weakening and collapsing it.

The administration of this president, and the legislative malfeasance of his party, have been a ceaseless attack on the order of our society, aided by a media that sees in Democrats the heralds of forced conversion to a uniformly anti-American worldview. Reason, the objective check on illogic and evil, has been relegated to a bygone era by the president’s servants, a quaint but undesirable remnant of a free America. The president shares nothing with us of our traditions, our beliefs, our history, or our morality. Even if an American by birth, he is not an American by experience. What he believes of this country was implanted by those bent on disordering it, and then destroying it. Thus, claims to equality and fairness are nothing more than disingenuous appeals to moral people, while acting to defeat them.

In this latest foray into malicious infliction of harm on Americans, the government shutdown, those who have yet to see the light may finally glimpse the mindset of this country’s most determined destroyers. Of course, one must have slept through the early stages of the Sequester not to have begun to see it then, even if one ignored the countless legal and moral indignities imposed on the country in the preceding three years. Tours of the White House, belonging to the public, were stopped on the basis of funding, though there was enough money to send the president’s daughters on vacation to the beaches of the Caribbean and the slopes of Colorado in the same week. Public services were cut, but there was enough money to fly the president’s dog to Martha’s Vineyard on its own plane. There has always been money for golf, and entertainment, and vacations, and the luxuries due a monarch.

Until now, with open air parks, private sites, and shrines to American Exceptionalism being needlessly barricaded, no American president has acted so overtly to punish Americans for the impertinence of seeking order. No prior president has acted to deprive them of the exercise of the benefits of citizenship for which they have paid dearly to a government designed to serve the country rather than own it. To inflict this level of harm, he has angrily rejected all appeals to order and structure. To the credit of the Republicans, they, at least, have employed the mechanisms of the system. They have invoked rules and tradition to seek an orderly resolution of political differences.

This president and his party, however, will have none of that. If this current impasse is to be resolved, it will only be through pain and the surrender of those few politicians left who are finally defending the American people, the target of the president’s loathing. Only when those remaining radicals, the advocates of Constitutional order, are defeated will the way be clear for the new America. This president has made unmistakably clear that he will not compromise with those who seek or promote order over chaos. Either he “wins” and the country is irreparably damaged, or…. nothing. Either way, ordered solutions are unwelcome as the demands of “terrorists” and “hostage takers”.

Without rules, there is no order. Without order, there is chaos and crisis. When there is chaos, there is opportunity to direct newly-disordered people into whatever the controlling forces desire. Until now, our laws have served to limit the historic inclination of emotionally and intellectually malformed citizens to enslave others whom they perceive as vulnerable to an assault by government. In our Constitutional history, nothing is more disordered than an American president who daily promotes chaos in open warfare against his own country’s founding principles.


Obama’s agenda: Overwhelm the system

Posted June 6, 2010

Rahm Emanuel cynically said, “You never want a crisis to go to waste.” It is now becoming clear that the crisis he was referring to is Barack Obama’s presidency.

Obama is no fool. He is not incompetent. To the contrary, he is brilliant. He knows exactly what he’s doing. He is purposely overwhelming the U.S. economy to create systemic failure, economic crisis and social chaos — thereby destroying capitalism and our country from within.Â

Barack Obama is my college classmate (Columbia University, class of ’83). As Glenn Beck correctly predicted from day one, Obama is following the plan of Cloward & Piven, two professors at Columbia University. They outlined a plan to socialize America by overwhelming the system with government spending and entitlement demands. Add up the clues below. Taken individually they’re alarming. Taken as a whole, it is a brilliant, Machiavellian game plan to turn the United States into a socialist/Marxist state with a permanent majority that desperately needs government for survival … and can be counted on to always vote for bigger government. Why not? They have no responsibility to pay for it.

— Universal health care. The health care bill had very little to do with health care. It had everything to do with unionizing millions of hospital and health care workers, as well as adding 15,000 to 20,000 new IRS agents (who will join government employee unions). Obama doesn’t care that giving free health care to 30 million Americans will add trillions to the national debt. What he does care about is that it cements the dependence of those 30 million voters to Democrats and big government. Who but a socialist revolutionary would pass this reckless spending bill in the middle of a depression?

— Cap and trade. Like health care legislation having nothing to do with health care, cap and trade has nothing to do with global warming. It has everything to do with redistribution of income, government control of the economy and a criminal payoff to Obama’s biggest contributors. Those powerful and wealthy unions and contributors (like GE, which owns NBC, MSNBC and CNBC) can then be counted on to support everything Obama wants. They will kick-back hundreds of millions of dollars in contributions to Obama and the Democratic Party to keep them in power. The bonus is that all the new taxes on Americans with bigger cars, bigger homes and businesses helps Obama “spread the wealth around.”

— Make Puerto Rico a state. Why? Who’s asking for a 51st state? Who’s asking for millions of new welfare recipients and government entitlement addicts in the middle of a depression? Certainly not American taxpayers. But this has been Obama’s plan all along. His goal is to add two new Democrat senators, five Democrat congressman and a million loyal Democratic voters who are dependent on big government.

— Legalize 12 million illegal immigrants. Just giving these 12 million potential new citizens free health care alone could overwhelm the system and bankrupt America. But it adds 12 million reliable new Democrat voters who can be counted on to support big government. Add another few trillion dollars in welfare, aid to dependent children, food stamps, free medical, education, tax credits for the poor, and eventually Social Security.

— Stimulus and bailouts. Where did all that money go? It went to Democrat contributors, organizations (ACORN), and unions — including billions of dollars to save or create jobs of government employees across the country. It went to save GM and Chrysler so that their employees could keep paying union dues. It went to AIG so that Goldman Sachs could be bailed out (after giving Obama almost $1 million in contributions). A staggering $125 billion went to teachers (thereby protecting their union dues). All those public employees will vote loyally Democrat to protect their bloated salaries and pensions that are bankrupting America. The country goes broke, future generations face a bleak future, but Obama, the Democrat Party, government, and the unions grow more powerful. The ends justify the means.

— Raise taxes on small business owners, high-income earners, and job creators. Put the entire burden on only the top 20 percent of taxpayers, redistribute the income, punish success, and reward those who did nothing to deserve it (except vote for Obama). Reagan wanted to dramatically cut taxes in order to starve the government. Obama wants to dramatically raise taxes to starve his political opposition.

With the acts outlined above, Obama and his regime have created a vast and rapidly expanding constituency of voters dependent on big government; a vast privileged class of public employees who work for big government; and a government dedicated to destroying capitalism and installing themselves as socialist rulers by overwhelming the system.

Add it up and you’ve got the perfect Marxist scheme — all devised by my Columbia University college classmate Barack Obama.


Wayne Allyn Root was the 2008 Libertarian Party vice presidential nominee and serves on the Libertarian National Committee.


Hillary’s Libyan Lies: Muslim Brotherhood, Terror and Dirty Money

Hillary Clinton is still lying about her illegal war.

October 22, 2015

by Daniel Greenfield

Hillary Clinton has only one accomplishment; the Libyan War. Bombing Libya in support of a Muslim Brotherhood takeover was Hillary’s pet project.

Obama unenthusiastically signed off on a war that he had told members of Congress “is all Secretary Clinton’s matter.”

The Pentagon fought Hillary’s illegal war every step of the way. Both the Secretary of Defense and the Chairman of the Joint Chiefs opposed Hillary’s plan to bomb Libya. One of the Chairman’s top aides said that he did not trust the reports coming out of the State Department and the CIA, then controlled by Clinton loyalist Leon Panetta. When it was clear that the Clintonites had gotten their war on, an irritated Secretary of Defense Gates resigned after failing to stop Hillary’s war and was replaced by Panetta.

As the State Department set the military agenda, the Pentagon retaliated by taking over the diplomatic agenda attempting to arrange a ceasefire with the Gaddafi regime over Hillary’s objections.

Hillary was using the State Department to start a war while the military was trying to use diplomacy to stop a war. The Pentagon lost the power struggle and one of her minions took over the military to make sure that the Muslim Brotherhood’s Jihadists would be able to overrun another country.

Huma Abedin had beaten the Secretary of Defense.

Panetta, unlike Gates, shared Hillary’s Arab Spring agenda. After the war, he paid a visit to Tripoli and claimed that similar “uprisings” would be taking place around the Middle East, including in Syria.

Military people never stopped loathing Hillary Clinton for her war and its consequences, the usurpation of a defense matter, the Al Qaeda training camps and the abandonment of Americans in Benghazi. That came to the surface during the Democratic debate when Senator Webb challenged Clinton on Libya.

Hillary Clinton smugly recited the same old lies about Gaddafi “threatening to massacre large numbers of the Libyan people” and European allies begging her to stop a “mass genocide.”

In reality, Hillary Clinton was the source of the claim that Gaddafi was about to commit genocide. This claim had no basis in reality and defense officials quickly shot it down. But that didn’t stop Obama from claiming during his war speech that he had bombed Libya to save Benghazi from a massacre. There was no massacre in Benghazi. At least not until Obama helped make a massacre of four Americans happen.

By September, the New York Times was asking where all the dead were. Morgue records showed that the dead on both sides actually numbered in the hundreds. The International Red Cross put the number of missing persons at around a thousand. The largest mass grave found had 34 bodies.

Obama claimed that he had seen Gaddafi “kill over a thousand people in a single day.” That never happened. It never happened when Gaddafi had actually captured a rebel city before.

“Imagine we were sitting here and Benghazi had been overrun, a city of 700,000 people, and tens of thousands of people had been slaughtered,” Hillary Clinton had said. That would be more than the entire number of people, combatants and civilians, who had died in the Libyan Civil War.

Gaddafi was an insane dictator, but he had never done anything on that scale, nor were his forces, which had been beaten by Chad in the Toyota War (Chad militias had fought using Toyota pickups), remotely capable of pulling off Saddam level of atrocities or he might have won the war.

Hillary Clinton claimed at the debate, “We had the Arabs standing by our side saying, ‘We want you to help us deal with Gadhafi.’” But by the second night of bombing, the Secretary-General of the Arab League had already condemned the “bombardment of civilians.”

“We did not put one single American soldier on the ground in Libya,” Hillary Clinton said. That’s technically true and also a lie. It was Panetta’s CIA people who were on the ground.

Tyrone Woods and Glen Doherty, two of the Americans murdered in Benghazi, were former Navy SEAL commandos who were working as contractors for the CIA. American soldiers still died in Libya. They were just officially contractors, more of the CIA’s “Sneakers on the Ground” approach that let hacks like Hillary and Obama claim that there were no American soldiers on the ground.

“The Libyan people had a free election the first time since 1951,” Hillary Clinton said. “And you know what, they voted for moderates, they voted with the hope of democracy.”

When Hillary says “moderate”, she means Islamist. The election was fake. It was rigged between the “moderate Islamist” Muslim Brotherhood and the “moderate Islamist” National Forces Alliance. While the media was repeating talking points about the fake election, fighting in Benghazi continued. But even though Hillary and Obama had used Benghazi as the basis for the war, no one was paying attention.

That would change soon enough. And before long every American would know the name Benghazi. But Benghazi was only an early warning. Before long entire Libyan cities would fall to Al Qaeda and ISIS.

Hillary closed by insisting, “Unless you believe the United States should not send diplomats to any place that is dangerous, which I do not, then when we send them forth, there is always the potential for danger and risk.”

Sending diplomats to dangerous places means providing them with adequate security.

Hillary’s State Department failed to do that. Even the whitewashed report of her cronies admitted that much. Benghazi’s compound was being protected by “moderate Islamist” terrorists who overlapped with the other “moderate Islamist” terrorists who attacked the diplomatic compound.

While Hillary’s State Department was spending fortunes on bad art, the Benghazi compound didn’t meet security standards in a city that had more terrorists than police officers.

And, best of all, the Muslim Brotherhood Martyrs of the Feb. 17 Revolution Brigade terrorists Hillary was paying to protect the ambassador, hadn’t even been paid.

Benghazi was a city that was effectively under the control of Jihadists, some of them blatantly identifying with Al Qaeda. Hillary Clinton might as well have sent Ambassador Stevens into an Al Qaeda training camp with terrorists providing his security. And that’s effectively what she did.

Her dismissive line about sending diplomats to dangerous places whitewashes what happened.

Now that we’ve cleared away Hillary’s lies, let’s get to the truth. The Libyan War, like the rest of the Arab Spring, was about empowering the Muslim Brotherhood.

And there were cruder motives in the mix.

Hillary Clinton hid emails discussing the exploitation of Libya’s oil fields. The Clintons had made an art out of merging their political and financial agendas. They had extensive ties with figures in the energy industry and the companies that dug into Libya’s energy sector, Royal Dutch Shell and BP, were Clinton Foundation donors.

Some of the deleted emails discussed this with Clinton Foundation employee Sidney Blumenthal, who was also providing Hillary Clinton with supposed intel from business interests while promising that the Libyan War would be an easy matter. Blumenthal encouraged “shock and awe” bombing in Libya.

According to Congressman Gowdy, who has been investigating the events in Benghazi, “Blumenthal pushed hard for a no-fly zone in Libya before the idea was being discussed internally by senior U.S. government officials.” He blasted Obama for being “unenthusiastic about regime change in Libya.”

Blumenthal called for providing the Jihadists with “armor piercing weapons” and called Secretary of Defense Gates a “mean, vicious little prick” who is “losing” the debate. Blumenthal also offered the very specific “national interest” argument that Obama would later echo, suggesting that he was unknowingly repeating the talking points of a man he loathed which had been handed to him by Hillary Clinton.

He also told Hillary Clinton that the war had to be ramped up or Obama would lose the election.

Having dragged Obama into Hillary’s war, Blumenthal was now pushing Hillary to blackmail him with the threat of losing the election if he didn’t escalate the conflict. Meanwhile he was pursuing his interest in getting the Libyans to pay for military training from a private military company he was linked to.

The entire nightmarish mess of Democratic conspiracy theories about Iraq, Blood for Oil, politicians fighting wars to win elections, corporate conflicts of interest and even private military companies are all here and no one will touch it. A roster of Democratic candidates still running against the Iraq War won’t talk about an illegal dirty regime change war that took place with their backing and support.

Bernie Sanders, who sputters incoherently about the Iraq War, co-sponsored the Senate resolution supporting a No Fly Zone in Libya. This was the Senate resolution that Obama exploited as a fig leaf of Senate approval for his illegal war.

Senator Sanders can’t criticize Hillary’s illegal war because he helped make it happen.

Hillary’s war has been an unmitigated disaster. Her lies about the war have been disproven. But not even the Democrats running against her are ready to hold her accountable for it.


The Scariest Trade Deal Nobody’s Talking About Just Suffered a Big Leak

By David Dayen

The Obama administration’s desire for “fast track” trade authority is not limited to passing the Trans-Pacific Partnership (TPP). In fact, that may be the least important of three deals currently under negotiation by the U.S. Trade Representative. The Trans-Atlantic Trade and Investment Partnership (TTIP) would bind the two biggest economies in the world, the United States and the European Union. And the largest agreement is also the least heralded: the 51-nation Trade in Services Agreement (TiSA).

On Wednesday, WikiLeaks brought this agreement into the spotlight by releasing 17 key TiSA-related documents, including 11 full chapters under negotiation. Though the outline for this agreement has been in place for nearly a year, these documents were supposed to remain classified for five years after being signed, an example of the secrecy surrounding the agreement, which outstrips even the TPP.

Would You Feel Differently About Julian Assange If You Knew What He Really Thought?

TiSA has been negotiated since 2013, between the United States, the European Union, and 22 other nations, including Canada, Mexico, Australia, Israel, South Korea, Japan, Norway, Switzerland, Turkey, and others scattered across South America and Asia. Overall, 12 of the G20 nations are represented, and negotiations have carefully incorporated practically every advanced economy except for the “BRICS” coalition of emerging markets (which stands for Brazil, Russia, India, China, and South Africa).

The deal would liberalize global trade of services, an expansive definition that encompasses air and maritime transport, package delivery, e-commerce, telecommunications, accountancy, engineering, consulting, health care, private education, financial services and more, covering close to 80 percent of the U.S. economy. Though member parties insist that the agreement would simply stop discrimination against foreign service providers, the text shows that TiSA would restrict how governments can manage their public laws through an effective regulatory cap. It could also dismantle and privatize state-owned enterprises, and turn those services over to the private sector. You begin to sound like the guy hanging out in front of the local food co-op passing around leaflets about One World Government when you talk about TiSA, but it really would clear the way for further corporate domination over sovereign countries and their citizens.

Reading the texts (here’s an example, the annex on air transport services) makes you realize the challenge for members of Congress or interested parties to comprehend a trade agreement while in negotiation. The “bracketed” text includes each country’s offer, merged into one document, with notations on whether the country proposed, is considering, or opposes each specific provision. You need to either be a trade lawyer or a very alert reader to know what’s going on. But between the text and a series of analyses released by WikiLeaks, you get a sense for what the countries negotiating TiSA want.

First, they want to limit regulation on service sectors, whether at the national, provincial or local level. The agreement has “standstill” clauses to freeze regulations in place and prevent future rulemaking for professional licensing and qualifications or technical standards. And a companion “ratchet” clause would make any broken trade barrier irreversible.

It may make sense to some to open service sectors up to competition. But under the agreement, governments may not be able to regulate staff to patient ratios in hospitals, or ban fracking, or tighten safety controls on airlines, or refuse accreditation to schools and universities. Foreign corporations must receive the same “national treatment” as domestic ones, and could argue that such regulations violate their ability to provide the service. Allowable regulations could not be “more burdensome than necessary to ensure the quality of the service,” according to TiSA’s domestic regulation annex. No restrictions could be placed on foreign investment—corporations could control entire sectors.

This would force open dozens of services, including ones where state-owned enterprises, like the national telephone company in Uruguay or the national postal service of Italy, now operate. Previously, public services would be either broken up or forced into competition with foreign service providers. While the United States and European Union assured in a joint statement that such privatization need not be permanent, they also “noted the important complementary role of the private sector in these areas” to “improve the availability and diversity of services,” which doesn’t exactly connote a hands-off policy on the public commons.

Corporations would get to comment on any new regulatory attempts, and enforce this regulatory straitjacket through a dispute mechanism similar to the investor-state dispute settlement (ISDS) process in other trade agreements, where they could win money equal to “expected future profits” lost through violations of the regulatory cap.

For an example of how this would work, let’s look at financial services. It too has a “standstill” clause, which given the unpredictability of future crises could leave governments helpless to stop a new and dangerous financial innovation. In fact, Switzerland has proposed that all TiSA countries must allow “any new financial service” to enter their market. So-called “prudential regulations” to protect investors or depositors are theoretically allowed, but they must not act contrary to TiSA rules, rendering them somewhat irrelevant.

Most controversially, all financial services suppliers could transfer individual client data out of a TiSA country for processing, regardless of national privacy laws. This free flow of data across borders is true for the e-commerce annex as well; it breaks with thousands of years of precedent on locally kept business records, and has privacy advocates alarmed.

There’s no question that these provisions reinforce Senator Elizabeth Warren’s contention that a trade deal could undermine financial regulations like the Dodd-Frank Act. The Swiss proposal on allowances for financial services could invalidate derivatives rules, for example. And harmonizing regulations between the U.S. and EU would involve some alteration, as the EU rules are less stringent.

Member countries claim they want to simply open up trade in services between the 51 nations in the agreement. But there’s already an international deal governing these sectors through the World Trade Organization (WTO), called the General Agreement on Trade in Services (GATS). The only reason to re-write the rules is to replace GATS, which the European Union readily admits (“if enough WTO members join in, TiSA could be turned into a broader WTO agreement”).

That’s perhaps TiSA’s real goal—to pry open markets, deregulate and privatize services worldwide, even among emerging nations with no input into the agreement. U.S. corporations may benefit from such a structure, as the Chamber of Commerce suggests, but the impact on workers and citizens in America and across the globe is far less clear. Social, cultural, and even public health goals would be sidelined in favor of a regime that puts corporate profits first. It effectively nullifies the role of democratic governments to operate in the best interest of their constituents.

Unsurprisingly, this has raised far more concern globally than in the United States. But a completed TiSA would go through the same fast-track process as TPP, getting a guaranteed up-or-down vote in Congress without the possibility of amendment. Fast-track lasts six years, and negotiators for the next president may be even more willing to make the world safe for corporate hegemony. “This is as big a blow to our rights and freedom as the Trans-Pacific Partnership,” said Larry Cohen, president of the Communication Workers of America in a statement, “and in both cases our government’s secrecy is the key enabler.”


“Literally, Your ATM Won’t Work…”


By Bill Bonner Of Bonner And Partners

Literally, Your ATM Won’t Work…

While we were thinking about what was really going on with today’s strange new money system, a startling thought occurred to us.

Our financial system could take a surprising and catastrophic twist that almost nobody imagines, let alone anticipates.

Do you remember when a lethal tsunami hit the beaches of Southeast Asia, killing thousands of people and causing billions of dollars of damage?

Well, just before the 80-foot wall of water slammed into the coast an odd thing happened: The water disappeared.

The tide went out farther than anyone had ever seen before. Local fishermen headed for high ground immediately. They knew what it meant. But the tourists went out onto the beach looking for shells!

The same thing could happen to the money supply…

There’s Not Enough Physical Money

Here’s how… and why:

It’s almost seems impossible. Hard to imagine. Difficult to understand. But if you look at M2 money supply – which measures coins and notes in circulation as well as bank deposits and money market accounts – America’s money stock amounted to $11.7 trillion as of last month.

But there was just $1.3 trillion of physical currency in circulation – about only half of which is in the US. (Nobody knows for sure.)

What we use as money today is mostly credit. It exists as zeros and ones in electronic bank accounts. We never see it. Touch it. Feel it. Count it out. Or lose it behind seat cushions.

Banks profit – handsomely – by creating this credit. And as long as banks have sufficient capital, they are happy to create as much credit as we are willing to pay for.

After all, it costs the banks almost nothing to create new credit. That’s why we have so much of it.

A monetary system like this has never before existed. And this one has existed only during a time when credit was undergoing an epic expansion.

So our monetary system has never been thoroughly tested. How will it hold up in a deep or prolonged credit contraction? Can it survive an extended bear market in bonds or stocks? What would happen if consumer prices were out of control?

Less Than Zero

Our current money system began in 1971.

It survived consumer price inflation of almost 14% a year in 1980. But Paul Volcker was already on the job, raising interest rates to bring inflation under control.

And it survived the “credit crunch” of 2008-09. Ben Bernanke dropped the price of credit to almost zero, by slashing short-term interest rates and buying trillions of dollars of government bonds.

But the next crisis could be very different…

Short-term interest rates are already close to zero in the U.S. (and less than zero in Switzerland, Denmark, and Sweden). And according to a recent study by McKinsey, the world’s total debt (at least as officially recorded) now stands at $200 trillion – up $57 trillion since 2007. That’s 286% of global GDP… and far in excess of what the real economy can support.

At some point, a debt correction is inevitable. Debt expansions are always – always – followed by debt contractions. There is no other way. Debt cannot increase forever.

And when it happens, ZIRP and QE will not be enough to reverse the process, because they are already running at open throttle.

What then?

The value of debt drops sharply and fast. Creditors look to their borrowers… traders look at their counterparties… bankers look at each other…

…and suddenly, no one wants to part with a penny, for fear he may never see it again. Credit stops.

It’s not just that no one wants to lend; no one wants to borrow either – except for desperate people with no choice, usually those who have no hope of paying their debts.

Just as we saw after the 2008 crisis, we can expect a quick response from the feds.

The Fed will announce unlimited new borrowing facilities. But it won’t matter….

House prices will be crashing. (Who will lend against the value of a house?) Stock prices will be crashing. (Who will be able to borrow against his stocks?) Art, collectibles, and resources – all we be in free fall.

The NEXT Crisis

In the last crisis, every major bank and investment firm on Wall Street would have gone broke had the feds not intervened. Next time it may not be so easy to save them.

The next crisis is likely to be across ALL asset classes. And with $57 trillion more in global debt than in 2007, it is likely to be much harder to stop.

Are you with us so far?

Because here is where it gets interesting…

In a gold-backed monetary system prices fall. But the money is still there. Money becomes more valuable. It doesn’t disappear. It is more valuable because you can use it to buy more stuff.

Naturally, people hold on to it. Of course, the velocity of money – the frequency at which each unit of currency is used to buy something – falls. And this makes it appear that the supply of money is falling too.

But imagine what happens to credit money. The money doesn’t just stop circulating. It vanishes. As collateral goes bad, credit is destroyed.

A bank that had an “asset” (in the form of a loan to a customer) of $100,000 in June may have zilch by July. A corporation that splurged on share buybacks one week could find those shares cut in half two weeks later. A person with a $100,000 stock market portfolio one day could find his portfolio has no value at all a few days later.

All of this is standard fare for a credit crisis. The new wrinkle – a devastating one – is that people now do what they always do, but they are forced to do it in a radically different way.

They stop spending. They hoard cash. But what cash do you hoard when most transactions are done on credit? Do you hoard a line of credit? Do you put your credit card in your vault?

No. People will hoard the kind of cash they understand… something they can put their hands on… something that is gaining value – rapidly. They’ll want dollar bills.

Also, following a well-known pattern, these paper dollars will quickly disappear. People drain cash machines. They drain credit facilities. They ask for “cash back” when they use their credit cards. They want real money – old-fashioned money that they can put in their pockets and their home safes…

Dollar Panic

Let us stop here and remind readers that we’re talking about a short time frame – days… maybe weeks… a couple of months at most. That’s all. It’s the period after the credit crisis has sucked the cash out of the system… and before the government’s inflation tsunami has hit.

As Ben Bernanke put it, “a determined central bank can always create positive consumer price inflation.” But it takes time!

And during that interval, panic will set in. A dollar panic – with people desperate to put their hands on dollars… to pay for food… for fuel…and for everything else they need.

Credit may still be available. But it will be useless. No one will want it. ATMs and banks will run out of cash. Credit facilities will be drained of real cash. Banks will put up signs, first: “Cash withdrawals limited to $500.” And then: “No Cash Withdrawals.”

You will have a credit card with a $10,000 line of credit. You have $5,000 in your debit account. But all financial institutions are staggering. And in the news you will read that your bank has defaulted and been placed in receivership. What would you rather have? Your $10,000 line of credit or a stack of $50 bills?

You will go to buy gasoline. You will take out your credit card to pay.

“Cash Only,” the sign will say. Because the machinery of the credit economy will be breaking down. The gas station… its suppliers… and its financiers do not want to get stuck with a “credit” from your bankrupt lender!

Whose credit cards are still good? Whose lines of credit are still valuable? Whose bank is ready to fail? Who can pay his mortgage? Who will honor his credit card debt? In a crisis, those questions will be as common as “Who will win an Oscar?” today.

But no one will know the answers. Quickly, they will stop guessing… and turn to cash.

Our advice: Keep some on hand. You may need it.


Memo to the Fed and its Media Tool Hilsenrath: We’re Not Here to Enrich Your Corporate Cronies

June 5, 2015
Memo to the Fed: you are the enemy of the middle class, capitalism and the nation.

The Federal Reserve is appalled that we’re not spending enough to further inflate the value of its corporate and banking cronies. In the Fed’s eyes, your reason for being is to channel whatever income you have to the Fed’s private-sector cronies–banks and corporations.

If you’re being “stingy” and actually conserving some of your income for savings and investment, you are Public Enemy #1 to the Fed. Your financial security is nothing compared to the need of banks and corporations to earn even more obscene profits. According to the Fed, all our problems stem from not funneling enough money to the Fed’s private-sector cronies.

Fed media tool Jon Hilsenrath recently gave voice to the Fed’s obsessive concern for its cronies’ profits, and received a rebuke from the middle class he chastised as “stingy.” Hilsenrath Confused Midde-Class “Responded Strongly” To “Offensive” Question Why It Isn’t Spending.

Memo to the Fed and its media tool Hilsenrath: we’re not here to further enrich your already obscenely rich banker and corporate cronies by buying overpriced goods and services we don’t need. Our job is not to spend every cent we earn on interest to banks and mostly-garbage corporate goods and services. Our job is to limit the amount we squander on interest and needless spending. Our job is to build the financial security of our families by saving capital and prudently investing it in assets we control (as opposed to letting Wall Street control our assets parked in equity and bond funds).

Your zero-interest rate policy (ZIRP) has gutted our ability to build capital safely. For that alone, you are an enemy of the middle class. Let’s say we wanted to buy a real asset that we control, for example, a rental house, rather than gamble our retirement funds on Wall Street’s Scam du Jour (stock buybacks funded by debt, to name the latest and greatest scam).

Thanks to your policies of ZIRP and unlimited liquidity for financiers, we’ve been outbid by the Wall Street/private-equity crowd–your cronies and pals. They pay almost nothing for their money and they don’t need a down payment, while we’re paying 4.5% on mortgages and need 30% down payment for a non-owner occupied home. Who wins that bidding process? Those with 100% financing at near-zero rates.

Here’s a short list of stuff we don’t need to buy:

1. New house: overpriced. Debt-serfdom for a wafer-board/sawdust-and-glue mansion? Pay your banker buddies $250,000 in interest to buy a $300,000 house? Hope the bursting of the real estate bubble doesn’t wipe out whatever equity we might have? No thanks.

2. New vehicle: overpriced. We can buy a good used car and a can of “new car smell” for half the price, or abandon car ownership entirely if we live in a city with peer-to-peer transport services. We can bicycle or ride a motorscooter.

3. Anything paid with credit cards.

4. Any processed food.

5. A subscription to the Wall Street Journal and other financial-media cheerleaders for you, your banker buddies and Corporate America.

How Wall Street Devoured Corporate America: Thirty years ago, the financial sector claimed around a tenth of U.S. corporate profits. Today, it’s almost 30 percent

Here’s how your cronies have fared since you started your low-interest rate/free money for financiers policies circa 2001: corporate profits have soared:

Now look at median household income adjusted for inflation: down 4%–inflation which we know is skewed to under-weight the big ticket items such as healthcare and college education that are skyrocketing in cost:

And here’s how the middle class has fared since the Federal Reserve made boosting Wall Street and the too big to fail banks its primary goal, circa 1982: the bottom 90% have treaded water for decades, the top 9% did well and the top 1% reaped fabulous gains as a result of your policies.

If you’re wondering why we’re not spending, look at our incomes (going nowhere), earnings on savings (essentially zero) and the future you’ve created: ever-widening income disparity, ever-greater financial insecurity, ever-higher risks for those forced to gamble in your rigged casino, and a political/financial system firmly in the hands of your ever-wealthier cronies.

Capital–which includes savings–is the foundation of capitalism. If you attack savings as the scourge limiting corporate profits, you are attacking capitalism and upward mobility. The Fed is not supporting capitalism; rather, the Fed’s raison d’etre is crony-capitalism, in which insiders and financiers get essentially free money from the Fed in unlimited quantities that they then use to buy up all the productive assets.

Everyone else–the bottom 99.5%–is relegated to consumer: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest paid to banks and buying goods and services that further boost corporate profits.

This inversion of capitalism is not just destructive to the nation–it is evil. Funneling trillions of dollars in free money for financiers while chiding Americans for not going deeper into debt is evil.

Memo to the Fed: you are the enemy of capitalism, the middle class and the nation.


Wall Street is warning its clients that commodity prices have disconnected from reality.

The big global banks have begun to warn clients that the blistering rally in oil and industrial commodities in recent weeks has run far ahead of economic reality, raising the risk of a fresh slump in prices over the summer.

Barclays, Morgan Stanley and Deutsche Bank have all issued reports advising investors to tread carefully as energy and base metals fall prey to unstable speculative flows in the derivatives markets.

Oil has jumped 40pc since January even as the US, China and the world economy as a whole have been sputtering, falling far short of expectations.

“Watch out: this rally may not last. The risks for a reversal in recent commodity price trends are growing,” said analysts at Barclays.

“There is a huge disconnect between the price action in physical markets where differentials are signalling over-supply and the futures markets where all looks rosy.”

Miswin Mahesh, the bank’s oil strategist, said a glut of excess oil is emerging in the mid-Atlantic, with inventories rising at a rate of 1m barrels a day. Angola and Nigeria are sitting on 80m barrels of unsold crude and excess cargoes are building up in the North Sea and the Mediterranean.

Morgan Stanley echoed the concerns, warning that speculators and financial investors have taken out a record number of “long” positions on Brent crude on the futures markets even though the world economy keeps falling short of expectations. “We have growing concerns about crude fundamentals in the second half of 2015 and 2016,” it said.

Shale producers in the US are taking advantage of the artificial surge in prices to hedge a large part of their future output, more or less guaranteeing that the US will continue to pump 10m b/d and wage a war of attrition against high-cost producers in the rest of the world.

A comparable dynamic is playing out in the copper market, where net long positions have jumped 60pc since the start of the year and helped power the longest rally in copper prices since 2005, even as industrial output grinds to a halt in China.

The warnings come as a draft report from OPEC painted a gloomy picture of energy industry, predicting that oil wouldn’t touch $100 in the next 10 years.

The mini-boom in energy and metals has taken on huge significance since it is being taken as evidence that global recovery is under way and that the dangers of a deflationary spiral have abated. Barclays said that this in turn is a key factor driving up global bond yields, and therefore in repricing the cost of global credit.

If the commodity rally is being driven by investor exuberance in the derivatives markets – rather than a genuine recovery in the world economy – it is likely to short-circuit before long and could even lead to a relapse into deflation. It is extremely difficult for central banks to navigate these choppy waters, raising the risk of a policy mistake.

Fresh data suggest that the US economy may have contracted in the first quarter, and is currently growing at a rate of just 0.8pc, below the US Federal Reserve’s stall speed indicator.

Deutsche Bank has also warned that the energy rally is showing “signs of fatigue”, with near-record inventories in the US, and little likelihood of further stimulus from central banks at this stage to keep the game going. “We see fresh downside risks to crude oil prices heading into the summer,” it said.

Durable oil rallies are typically driven by OPEC cuts but this time the cartel has boosted supply by 500,000 b/d to 31m as Saudi Arabia tries to drive marginal drillers out of business across the world.

Contrary to expectations, America’s shale producers have yet to capitulate. The rig count has fallen by more than half but output has held up longer than expected. While a few drillers have gone bankrupt, others are already signalling plans to crank up production.

Houston-based EOG said it expects to boost output in the third quarter at the Eagle Ford basin in Texas, benefiting from dramatic gains in technology that are cutting shale costs at an astonishing speed. Devon Energy has raised its growth target to 25pc to 35pc this year, having cut its production costs by a fifth in the first quarter.

Tactical stockpiling of crude oil by China and other countries has masked the scale of oversupply but oil analysts say this effect may be fading. The deep economic slowdown in resource-hungry emerging markets has snuffed out the commodity supercycle. There is little sign yet of a durable rebound.

China is still slowing as President Xi Jinping deliberately engineers a deflation of the country’s investment bubble.

A series of cuts in the reserve requirement ratio and interest rates – including a 25pc reduction over the weekend – merely offsets “passive tightening” caused by capital outflows and rising real borrowing costs.

It is not yet a return to ‘”stimulus as usual”.

Not everybody is willing to throw in the towel on crude oil.

Michael Wittner, from Societe Generale, said US output will decline in the coming months as the delayed effects of lower investment start to bite, ultimately vindicating the Saudi’s shock strategy of flooding the market.

Crude stockpiles tend to build up from March to May. This is the “window of greatest vulnerability for a crude price correction”, Mr Wittner said. That window will be closing within weeks.


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