Tankar i Gryningens Ljus: 080808, vad hände igentligen?

Tankar i Gryningens Ljus: 080808, vad hände igentligen?

Condoleeza Rice presented her with the US Freedom Defenders Award on 8 December. Here's Rice's statement:

"In her investigative reporting and hard-hitting commentary, Yulia has exposed corruption and abuses of authority among government officials as well as egregious human rights violations by both government authorities and private actors, particularly in the North Caucasus. With great bravery, she has been outspoken in the defense of besieged fellow journalists at a time of growing self-censorship or forced silence, and I am deeply honored to present to Yulia Latynina the 2008 Freedom Defenders Award."


http://www.state.gov/secretary/rm/2008/12/112974.htm

THE RUSSIAN BATTLEFIELD

http://www.battlefield.ru/
DEAR FRIENDS!
You enter the military-historical website The Russian Battlefield that unites three former websites: 'Russian Military Zone', 'I Remember', and 'Soviet Guns 1941-45'. Today this is a united online resource devoted to the Soviet military conflicts 1920-1945, including Winter War 1939-1940 and the Great Patriotic War 1941-1945.

Our major point is to represent Soviet point of view based on materials from ex-Soviet archives for everyone who does not know Russian language. Therefore we try to make both Russian and English versions of every page. However translation takes a lot of time so it is possible some materials are not translated yet.
It is important to understand our website does support neither Bolshevik nor Nazi beliefs.
http://www.battlefield.ru/component/option,com_frontpage/Itemid,1/lang,en/

Wrong friends, wrong enemies

By Andrei Tsygankov Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. The United States would be in a state of war with Russia had Georgia been a member of the North Atlantic Treaty Organization (NATO) when President Mikheil Saakashvili attacked South Ossetia. Russia responded by ordering its military to defend South Ossetia and Georgia's NATO membership would have not restrained Moscow from protecting Russia's most important interests in the Caucasus. These interests include supporting Russian citizens in South Ossetia and preventing military buildup on Russia's southern border. Few people in the American political class have contributed more to provoking possible military escalation with Russia than Republican presidential nominee Senator John McCain. A prominent member of the American establishment, McCain has been an extremely partisan advocate of US ties with the small Georgia at the expense of relations with Russia. McCain advisors are also known to have worked as paid lobbyists for Georgia. In the words of the New York University law professor Stephen Gillers, the latter "poses valid questions about McCain's judgment" in choosing those who "are paid to promote the interests of other nations". To Russia, the American senator's actions have been nothing short of provocative, and the Kremlin made it clear that it holds the McCain-advocated expansion of NATO responsible for the violence in the Caucasus. In the aftermath of the alliance summit in April 2008, then-president Putin stated, "We view the appearance of a powerful military bloc on our borders ... as a direct threat to the security of our country." More recently, an anonymous senior official at the Ministry of Foreign Affairs predicted a "full-scale crisis of existence" in the United States and a further cooling of relations between the US and Russia. If McCain is elected president, it is likely that Russia will be treated as an enemy, rather than a potential partner, and US-Russia relations will escalate into a military confrontation. Since 1997 when he first met Saakashvili, McCain's relationship with the future president of Georgia has became a close friendship. He stood behind Saakashvili during Georgia's Rose Revolution in 2003; indeed McCain worked to make that revolution happen. In February 2003, six months before the Rose revolution, McCain was among those welcoming Saakashvili in Washington when the latter was received by senior officials, such as Vice President Dick Cheney. The McCain-led International Republican Institute (IRI), an international wing of the National Endowment for Democracy, was involved in training and financing the revolutionary opposition to Saakashvili's political rival Eduard Shevardnadze. Along with other organizations, such as the National Democratic Institute, Freedom House and the George Soros foundation, McCain's IRI presented its activities as a support of elections and the democratic process, but in reality it was biased in favor of the pre-selected candidate Saakashvili. On October 2003, immediately before the revolution, McCain traveled to Georgia to convince then-president Shevardnadze to relinquish power after conducting "badly flawed elections". After helping to bring Saakashvili to power, McCain became a leading voice in advocating for Georgia's membership in NATO - against Russia's objections. Along with other anti-Russian lobbyists and sympathetic politicians, McCain saw the alliance's purpose as to contain Russia and promote American domination in the Eurasian region with its vast resources and geopolitical importance. Saakashvili had his own objectives in mind in pushing his nation to NATO. In August 2004, Georgia first used force against South Ossetia, attempting to win control over the strategic Djava district. In the fall of the same year, Saakashvili also turned down Russia's offer of a good neighbor treaty and aimed at solving territorial disputes with Abkhazia and South Ossetia by relying on political support from the United States. In early 2005, Senators John McCain and Hillary Clinton "rewarded" Saakashvili for his strategic choice by nominating him for the Nobel Peace Prize for "leading freedom movements in their respective countries" and winning "popular support for the universal values of democracy, individual liberty, and civil rights". This emboldened Georgia's leader to the point that balanced American observers, like Dmitri Simes, asked: "Why do we allow and sometimes even encourage Georgia to continue provoking Moscow at our expense?" In August 2006, Senator McCain again traveled to Georgia as a part of a US Senate delegation. In evaluating the situation in the region, he found "a tremendous progress" in Georgia, but decried Russia's role, urging for the replacement of its peacekeepers in the region. Although his objective was to assess the state of Georgia's frozen conflicts and NATO membership effort, McCain had come to the region with his conclusions already formed. Speaking in Brussels before his trip to the Caucasus during the same year, he insisted that "We should be crystal clear: these conflicts endure because of Russian policy and Russian support for illegal separatists." He further condemned "Russia's predatory use of energy supplies and its reversal of democracy at home." In the meantime, McCain's advisors lobbied on behalf of Georgia's NATO membership in Washington and Europe. According to records at the Justice Department's foreign agents registration office, in recent years McCain's advisor Randy Scheunemann and his partner, Mike Mitchell, were paid more $830,000 by Georgia for advocating its membership to NATO. Holding neo-conservative political beliefs, these American lobbyists did not see a principal conflict with US national interests: they were providing Georgia and others with highly questionable security guarantees against Russia in exchange for obtaining Tbilisi's full support of even more doubtful American policies, such as the invasion of Iraq, all at the cost of angering Moscow. Instead of repairing its relations with Russia, tiny Georgia reciprocated by sending the third largest military contingent to Iraq and paying handsomely to anti-Russian lobbyists in Washington. When in November 2007 Saakashvili used force against his opponents at home, McCain's voice wasn't heard among the critics of Georgia. However, when Russia recently intervened to stop the Georgian military attack on South Ossetia, the American Senator was again accusing the Kremlin - this time of "a de facto annexation of part of Georgia" - and urging Western governments not to allow Russia to "undermine Georgian sovereignty." So extensive was McCain's involvement with Saakashvili during the crisis that the two talked over the phone several times a day. As Saakashvili said, referring to his American friend, "he spends less time on his presidential campaign these days and lots of time on Georgia." In his turn, the McCain said presumptuously, "I told him that I know I speak for every American when I said to him, today, we are all Georgians." Russia has always been presented by McCain in an extremely negative light, and as deserving of only a hard-line response. Assisted by the American media, the Republican Senator never missed an opportunity to blame Russia for everything that was going wrong in the former Soviet region and outside. It was following McCain's statement warning of "a creeping coup against the forces of democracy and market capitalism" in Russia, delivered in the Senate on November 6, 2003, that many on Capitol Hill, including senators Joseph Lieberman, Joseph Biden and Richard Lugar, were soon calling on the administration to get tough with the Kremlin. In 2004, McCain prominently supported the pro-Khodorkovsky campaign, along with such known advocates of American hegemony as Richard Perle. He subsequently made a number of anti-Russian statements and co-signed a number of anti-Russian letters, such as An Open Letter to the Heads of State and Government Of the European Union and NATO, organized by the right-wing group the Project for New American Century and released in September 2004. During the Orange Revolution in Ukraine, McCain was again on the frontline. In addition to traveling to the country, the American Senator publicly promoted breaking Russia's Ukraine connection, and insisted on "tying" Ukraine "to the West". Along with others in the American political class, he overwhelmingly supported the color revolutionaries' drive to join NATO and circumvent Russia's energy pipelines, claiming that doing otherwise would amount to appeasing the Kremlin. In early 2005, McCain was among the first to call for expelling Russia from the G8. In the Caucasus or outside, McCain believed that Russia was doing everything in its power to restore the old imperial control. Whatever actions were pursued by the Kremlin - reluctance to dismantle its military bases in Georgia, the exercise of force in Chechnya, promises to preventively use military force outside its own territory to respond to terrorist threats - was construed by McCain and his supporters as an imperialism incompatible with Western objectives and Russia's own international treaty obligations. Whatever instability persisted in the former Soviet region was linked to the Kremlin's failures or deliberate manipulations. These policy beliefs partly explain McCain's dismissive, even contemptuous tone while speaking about Russia. For example, in his remarks to the Los Angeles World Affairs Council, McCain proceeded from assumptions about the Kremlin's threatening intentions and spoke of "Russia's nuclear blackmail" - apparently referring to the nation's unwillingness to acquiesce to the US missile defense system (MDS) plans. McCain's disdain for Russia's view was clearly revealed during a Republican debate on MDS, when he said "I don't care what [Vladimir Putin's] objections are to it." In his article published in the Financial Times, McCain appealed to the European audience, seeking to rally it behind the US on an anti-Russian platform. Repeating the nuclear blackmail thesis, the republican senator charged that Putin's "blend of cynicism and Napoleonic delusion presents a dangerous challenge to the Euro-Atlantic community," and he insisted on confronting Russia's "profoundly authoritarian regime, dominated by an intelligence service hostile to Western liberal values". Some have suggested that, if he is elected president, McCain may be restrained in his further actions toward Russia. American institutions and the heavy burden of responsibility for maintaining peace and stability in the world may indeed encourage him to try diplomacy rather than belligerent rhetoric and hot-headed actions in Eurasia. But there is also the possibility that McCain will do what he says, and chose steps leading to a military escalation with the second largest world nuclear power. The question is whether Americans would want to explore that possibility. Andrei P Tsygankov is professor of international relations and political science at San Francisco State University and the author of Anti-Russian Lobby and American Foreign Policy (forthcoming). (Copyright 2008 Andrei P Tsygankov.) http://www.warandpeace.ru/en/reports/view/27537/

Financial Crisis: America's Own Kleptocracy

Nobody expected industrial capitalism to end up like this. Nobody even saw it evolving in this direction. I'm afraid this failing is not unusual among futurists: The natural tendency is to think about how economies can best grow and evolve, not how it can be untracked. But an unforeseen road always seems to appear, and there goes society goes off on a tangent.What a two weeks! On Sunday, September 7, the Treasury took on the $5.3 trillion mortgage exposure of Fannie Mae and Freddie Mac, whose heads already had been removed for accounting fraud. On Monday, September 15, Lehman Brothers went bankrupt, when prospective Wall Street buyers couldn't gain any sense of reality from its financial books. On Wednesday the Federal Reserve agreed to make good for at least $85 billion in the just-pretend "insured" winnings owed to financial gamblers who bet on computer-driven trades in junk mortgages and bought counter-party coverage from the A.I.G. (the American International Group, whose head Maurice Greenberg already had been removed a few years back for accounting fraud). But it is Friday, September 19, that will go down as a turning point in American history. The White House committed at least half a trillion dollars more to re-inflate real estate prices in an attempt to support the market value junk mortgages - mortgages issued far beyond the ability of debtors to pay and far above the going market price of the collateral being pledged.These billions of dollars were devoted to keeping a dream alive - the accounting fictions written down by companies that had entered an unreal world based on false accounting that nearly everyone in the financial sector knew to be fake. But they played along with buying and selling packaged mortgage junk because that was where the money was. As Charles Prince of Citibank put it, "As long as they're playing music, you have to get up and dance." Even after markets collapsed, fund managers who steered clear were blamed for not playing the game while it was going. I have friends on Wall Street who were fired for not matching the returns that their compatriots were making. And the biggest returns were to be made in trading in the economy's largest financial asset - mortgage debt. The mortgages packaged, owned or guaranteed by Fannie and Freddie alone exceeded the entire U.S. national debt - the cumulative deficits run up by the American Government since the nation won the Revolutionary War!This gives an idea of just how large the bailout has been - and where the government's (or at least the Republicans') priorities lie! Instead of waking up the economy to reality, the government has thrown all its resources to promote the unreal dream that debts can be paid - if not by the debtors themselves, then by the government - "taxpayers," as the euphemism goes.Overnight, the U.S. Treasury and Federal Reserve have radically changed the character of American capitalism. It is nothing less than a coup d'Etat for the class that FDR called "banksters." What has happened in the past two weeks threatens to change the coming century - irreversibly, if they can get away with it. This is the largest and most inequitable transfer of wealth since the land giveaways to the railroad barons during the Civil War era.Even so, there seems little sign that it even may end the free-market patter talk by financial insiders who have managed to avert public oversight by appointing non-regulators to the major regulatory agencies - and thus created the mess that Treasury Secretary Henry Paulson now says threatens the bank deposits and jobs of all Americans. What he really means, of course, are simply the largest Republican campaign contributors (and to be fair, also the largest contributors to Democratic candidates on key financial committees).A kleptocratic class has taken over the economy to replace industrial capitalism. Franklin Roosevelt's term "banksters" says it all in a nutshell. The economy has been captured - by an alien power, but not the usual suspects. Not socialism, workers or "big government," nor by industrial monopolists or even by the great banking families. Certainly not by Freemasons and Illuminati. (It would be wonderful if there were indeed some group operating with centuries of wisdom behind them, so at least someone at least had a plan.) Rather, the banksters have made a compact with an alien power -not Communists, Russians, Asians or Arabs. Not humans at all. The group's cadre is a new breed of machine. It may sound like the Terminator movies, but computerized Machines have indeed taken over the world - at least, the White House's world.Here is how they did it. A.I.G. wrote insurance policies of all sorts of that people and businesses need: home and property insurance, livestock insurance, even aircraft leasing. These highly profitable businesses were not the problem. (They therefore will probably be sold off to pay the company's bad gambles.) A.I.G.'s downfall came from the $450 billion - almost half a trillion - dollars it was on the hook for as a result of guaranteeing hedge-fund counterparty insurance. In other words, if two parties played the zero-sum game of betting against each other as to whether the dollar would rise or fall against sterling or the euro, or if they insured a mortgage portfolio of junk mortgages to make sure that they would get paid, they would pay a teeny tiny commission to A.I.G. for a policy promising to pay if, say, the $11 trillion U.S. mortgage market should "stumble" or if losers placing trillions of dollars in bets on foreign exchange derivatives, stock or bond derivatives should somehow find themselves in a position that so many Las Vegas patrons are in, and be unable to come up with the cash to cover their losses.A.I.G. collected billions of dollars on such policies. And thanks to the fact that insurance companies are a Milton Friedman paradise - not regulated by the Federal Reserve or any other nation-wide agency, and hence able to get the proverbial free lunch without government oversight - writing such policies was done by computer printouts, and the company collected massive fees and commissions without putting in much capital of its own. This is what is called "self-regulation." It is how the Invisible Hand is supposed to work.It turned out, inevitably, that some of the financial institutions that made billion-dollar gambles - usually in the form of a thousand million-dollar gambles in the course of a few minutes or so, to be precise - couldn't pay up. These gambles all occur in microseconds, at strokes of a keyboard almost without human interference. In that sense it is not unlike alien pod people taking over. But in this case they are robot-like machines, hence the analogy I drew above with the Terminators.Their sudden rise to dominance is as unforeseen as an invasion from Mars. The nearest analogy is the invasion of the Harvard Boys, World Bank and U.S.A.I.D. to Russia and other post-Soviet economies after the Soviet Union was dissolved, pressing free-market giveaways to create national kleptocracies. It should be a worrying sign to Americans that these kleptocrats have become the Founding Fortunes of their respective countries. We should bear in mind Aristotle's observation that democracy is the political stage immediately preceding oligarchy.The financial machines that placed the trades that bankrupted A.I.G. were programmed by financial managers to act with the speed of light in conducting electronic trades often lasting only a few seconds each, millions of times a day. Only a machine could calculate mathematical probabilities factored in regarding the squiggles up and down of interest rates, exchange rates and stock and bonds prices - and prices for packaged mortgages. And the latter packages increasingly took the form of junk mortgages, pretending to be payable debts but in reality empty flak.The machines employed by hedge funds in particular have given a new meaning to Casino Capitalism. That was long applied to speculators playing the stock market. It meant making cross bets, lose some and win some - and getting the government to bail out the non-payers. The twist in the past two weeks' turmoil is that the winners cannot collect on their bets unless the government pays the debts that the losers are unable to cover with their own moneyOne would have thought that this requires some degree of control over the government. The activity probably never should have been licensed. In fact, it never was licensed, and hence nor regulated. But there seemed to be a good reason: Investors in hedge funds had to sign a paper saying that they were rich enough to afford to lose their money on this financial gambling. Your average mom and pop investors were not permitted to participate. Despite the high rewards that millions of tiny trades generated, they were deemed too risky for the uninitiated lacking trust funds to play with.A hedge fund does not make money by producing goods and services. It does not advance funds to buy real assets or even lend money. It borrows huge sums to leverage its bet with nearly free credit. Its managers are not industrial engineers but mathematicians who program computers to make cross-bets or "straddles" on which way interest rates, currency exchange rates, stock or bond prices may move - or the prices for packaged bank mortgages. The packaged loans may be sound or they may be junk. It doesn't matter. All that matters is making money in a marketplace where most trades last only a few seconds. What creates the gains is the price fibrillation - volatility.This kind of transaction may make fortunes, but it is not "wealth creation" in the form that most people recognize. Before the Black-Scholes mathematical formula for calculating the value of hedge bets, this kind of put and call option was too costly to provide much profit to anyone except the brokerage houses. But the combination of powerful computers and the "innovation" of almost free credit and free access to the financial gambling tables has made possible a frenetic back-and-forth maneuvering.So why has the Treasury found it necessary to enter this picture at all? Why should these gamblers be bailed out, if they had enough to lose without having to become public wards by going on welfare? Hedge fund trading was limited to the very rich, for investment banks and other institutional investors. But it became one of the easiest ways to make money, loaning funds at interest for people to pay out of their computer-driven cross-trades. And almost as fast as it was made, this revenue was paid out in commissions, salaries and annual bonuses reminiscent of America's Gilded Age in the years prior to World War I - years before the income tax was introduced in 1913. The remarkable thing about all this money was that its recipients didn't even have to pay normal income tax on it. The government let them call it "capital gains," which meant that the money was taxed at only a fraction of the rate that incomes were taxed.The pretense, of course, is that all this frenetic trading creates real "capital." It certainly does not do so in the classical 19th-century concept of capital. The term has been decoupled from producing goods and services, hiring wage labor or from financing innovation. It is as much "capital" as the right to conduct a lottery and collect the winnings from the hopes of the losers. But then, casinos from Las Vegas to riverboats have become a major "growth industry," muddying the language of capital, growth and wealth itself.For the gaming tables to be closed and the money paid out, the losers must be bailed out - Fannie Mae, Freddie Mac, A.I.G. and who knows what to come? This is the only way to solve the problem of how companies that already have paid out their revenue to their managers and stockholders instead of putting it in reserves are to collect their winnings from insolvent debtors and insurance companies. These losers also have paid out their income to their financial managers and insiders (along with the usual patriotic contributions to the political candidates on the key committees in charge of deciding the nation's financial structuring).This has to be orchestrated well in advance. It is necessary to buy politicians and give them a plausible cover story (or at least a well-crafted set of poll-tested euphemisms) to explain to voters just why it was in the public interest to bail out gamblers. Good rhetoric is needed to explain why the government should let them go into a casino and let them keep all their winnings while using public funds to make good on the losses of their counterparties.What happened on September 18-19 took years of preparation, capped by a faux ideology crafted by public-relations think tanks to be broadcast under emergency conditions to panic Congress - and voters - right before the presidential election. This seems to be our September election surprise. Under staged crisis conditions, Pres. Bush and Treasury Secretary Paulson are now calling for the country to come together in a War on Defaulting Homeowners. This is said to be the only hope to "save the system." (What system is this? Not industrial capitalism, or even banking as we know it.) The largest transformation of America's financial system since the Great Depression has been compressed into just two weeks, starting with the doubling of America's national debt on September 7 with the nationalization of Fannie Mae and Freddie Mac. (My computer's spellchecker will not permit me to use the euphemism "conservatorship" that Mr. Paulson applied to bailing out the Fannie Mae and Freddie Mac fraudsters.)Economic theory used to explain that profits and interest were a return for calculated risk. But today, the name of the game is capital gains and computerized gambling on the direction of interest rates, foreign currencies and stock prices - and when bad bets are made, bailouts are the calculated economic return for campaign contributions. But this is not supposed to be the time to talk of such things. "We must act now to protect our nation's economic health from serious risk," intoned Pres. Bush on September 19. What he meant was that the White House must make the Republican Party's largest group of campaign contributors whole - Wall Street, that is - by bailing out their bad gambles. "There will be ample opportunity to debate the origins of this problem. Now is the time to solve it." In other words, don't make this an election issue. "In our nation's history there have been moments that require us to come together across party lines to address major challenges. This is such a moment." Right before the presidential election! The same guff was heard earlier on Friday morning from Sec. Paulson: "Our economic health requires that we work together for prompt, bipartisan action." The broadcasters said that half a trillion dollars was discussed for this day's maneuverings.Much of the blame should go to the Clinton Administration for leading the call to repeal Glass-Steagall in 1999, letting the banks merge with casinos. Or rather, the casinos have absorbed the banks. That is what has put the savings of Americans at risk.But does this really mean that the only solution is to re-inflate the real estate market? The Paulson-Bernanke plan is to enable the banks to sell off the homes of five million home mortgage debtors faced with default or foreclosure this year! Homeowners with "exploding adjustable-rate mortgages" will lose their homes, but the Fed will pump enough credit into the mortgage-lending agencies to enable new buyers to go deeply enough into debt to take the junk mortgages off the hands of the gamblers who presently own them. Time for another financial and real estate bubble to bail out the junk mortgage lenders and packagers.America has entered into a new war - a War to Save Computerized Derivative Traders. Like the Iraq war, it is based largely on fictions and entered into under seeming emergency conditions - to which the solution has little relation to the underlying cause of the problems. On financial security grounds the government is to make good on the collateralized debt obligations packaged (CDOs) that Warren Buffett has called "weapons of mass financial destruction."Hardly by surprise, this giveaway of public money is being handled by the same group that warned the country so piously about weapons of mass destruction in Iraq. Pres. Bush and Treasury Secretary Paulson have piously announced that this is no time for partisan disagreements over this shift of public policy to favor creditors rather than debtors. There is no time to make the biggest bailout in election history an election issue. Not an appropriate time to debate whether it is a good thing to re-inflate housing prices to a level that will continue to oblige new home buyers to go so deeply into debt that they must pay some 40 percent of their take-home pay on housing.Remember when President Bush and Alan Greenspan informed the American people that there was no money left to pay Social Security (not to mention Medicare) because at some future date (a decade from now? 20 years? 40 years?) the system might run a deficit of what now seems to be merely a trivial trillion dollars spread over many, many years. The moral was that if we can't figure out how to pay, let's plow the program under right now.Mr. Bush and Greenspan did have a helpful solution, of course. The Treasury could turn Social Security and medical insurance money over to Bear Stearns, Lehman Brothers and their brethren to invest at the "magic of compound interest."What would have happened to U.S. Social Security had this been done? Perhaps we should view the past two weeks' events as having assigned to Wall Street gamblers all the money that has been set aside since the Greenspan Commission in 1983 shifted the tax burden onto FICA wage withholding. It is not retirees who are being rescued, but the Wall Street investors who signed papers saying that they could afford to lose their money. The Republican slogan this November should be "Gambling insurance, not health insurance."This is not how the much-vaunted Road to Serfdom was mapped out to be. Frederick Hayek and his Chicago Boys insisted that serfdom would come from government planning and regulation. This view turned upside down the classical and Progressive Era reformers who depicted government as acting as society's brain, its steering mechanism to shape markets - and free them from income without playing a necessary role in production.The theory of democracy rested on the assumption that voters would act in their self-interest. Market reformers made a kindred happy assumption that consumers, savers and investors would promote economic growth by acting with full knowledge and understanding of the dynamics at work. But the Invisible Hand turned out to be accounting fraud, junk mortgage lending, insider dealing and a failure to relate the soaring debt overhead to the ability of debtors to pay - all of this mess seemingly legitimized by computerized trading models, and now blessed by the Treasury.Source: by Michael Hudson

The Puppet Masters Behind Georgia President Saakashvili

14.08.08 16:05 Global Security The controversy over the Georgian surprise military attacks on South Ossetia and Abkhazia on 8.8.08 makes a closer look at the controversial Georgian President and his puppet masters important. An examination shows 41 year old Mikhail Saakashvili to be a ruthless and corrupt totalitarian who is tied to not only the US NATO establishment, but also to the Israeli military and intelligence establishment. The famous ‘Rose Revolution of November 2003 that forced the ageing Edouard Shevardnadze from power and swept the then 36 year old US university graduate into power was run and financed by the US State Department, the Soros Foundations, and agencies tied to the Pentagon and US intelligence community. Mihkail Saakashvili was deliberately placed in power in one of the most sophisticated US regime change operations, using ostensibly private NGOs (Non Governmental Organizations) to create an atmosphere of popular protest against the existing regime of former Soviet Foreign Minister Edouard Shevardnadze, who was no longer useful to Washington when he began to make a deal with Moscow over energy pipelines and privatizations. Saakashvili was brought to power in a US-engineered coup run on the ground by US-funded NGO’s, in an application of a new method of US destabilization of regimes it considered hostile to its foreign policy agenda. The November 24 2003 Wall Street Journal explicitly credited the toppling of Shevardnadze's regime to the operations of "a raft of non-governmental organizations . . . supported by American and other Western foundations." These NGOs, said the Journal, had "spawned a class of young, English-speaking intellectuals hungry for pro-Western reforms" who were instrumental laying the groundwork for a bloodless coup.Coup by NGOBut there is more. The NGOs were coordinated by the US Ambassador to Georgia, Richard Miles, who had just arrived in Tbilisi fresh from success in orchestrating the CIA-backed toppling of Slobodan Milosevic in Belgrade, using the same NGOs. Miles, who is believed to be an undercover intelligence specialist, supervised the Saakashvili coup. It involved US billionaire George Soros’ Open Society Georgia Foundation. It involved the Washington-based Freedom House whose chairman was former CIA chief James Woolsey. It involved generous financing from the US Congress-financed National Endowment for Democracy, an agency created by Ronald Reagan in the 1980’s to “do privately what the CIA used to do,” namely coups against regimes the US Government finds unfriendly. George Soros’ foundations have been forced to leave numerous eastern European countries including Russia as well as China after the 1989 student Tiananmen Square uprising. Soros is also the financier together with the US State Department of the Human Rights Watch, a US-based and run propaganda arm of the entire NGO apparatus of regime coups such as Georgia and Ukraine’s 2004 Orange Revolution. Some analysts believe Soros is a high-level operative of the US State Department or intelligence services using his private foundations as cover.The US State Department funded the Georgia Liberty Institute headed by Saakashvili, US approved candidate to succeed the no-longer cooperative Shevardnadze. The Liberty Institute in turn created “Kmara!” which translates “Enough!” According to a BBC report at the time, Kmara! Was organized in spring of 2003 when Saakashvili along with hand-picked Georgia student activists were paid by the Soros Foundation to go to Belgrade to learn from the US-financed Otpor activists that toppled Milosevic. They were trained in Gene Sharp’s “non-violence as a method of warfare” by the Belgrade Center for Nonviolent Resistance. Saakashvili as mafioso PresidentOnce he was in place in January 2004 as Georgia’s new President, Saakashvili proceeded to pack the regime with his cronies and kinsmen. The death of Zurab Zhvania, his prime minister in February, 2005, remains a mystery. The official version—poisoning by faulty gas heater—was adopted by American FBI investigators within two weeks of the killing. That has never seemed credible to those familiar with Georgia’s gangland slayings, crime, and other manifestations of social decay. Zhvania’s death was followed closely by a functionary of the Premier’s apparat, Georgi Khelashvili, who allegedly shot himself the day after his chief’s demise. The head of Zhvania’s research staff was later found dead as well.Figures allied with Saakashvili reportedly had a hand in the premier’s death. Russian journalist Marina Perevozkina quoted Gia Khurashvili, a Georgian economist. Prior to the fatal incident, Mr. Khurashvili had published an article in Resonans newspaper opposing the privatization and sale of Georgia’s main gas pipeline. Ten days before the prime minister’s body was found, Khurashvili was attacked and his editor-in-chief—citing pressure from ‘security service’ figures he refused to name—issued him a warning. The late premier’s position on the pipeline issue was believed the direct reason for the murder of Zhvania. Zhvania’s brother, Georgi, also told Perevozkina that not long before Zhvania’s death he received a warning that someone was preparing to kill his brother. Saakashvili was reportedly livid when the US State Department invited Zhvania to Washington to win a Freedom Medal from the US Government’s National Democratic Institute. Saakashvili tolerates no rivals for power it seems.Saakashvili, who cleverly marketed himself as “anti-corruption,” appointed several of his family members to lucrative posts in government, giving one of his brothers a position as chief adviser on domestic issues to the Baku-Ceyhan Pipeline project, backed by British Petroleum and other oil multinationals.Since coming to power in 2004 with US aid, Saakashvili has led a policy of mass-scale arrests, imprisonment, torture and deepened corruption. Saakashvili has presided over the creation of a de facto one-party state, with a dummy opposition occupying a tiny portion of seats in the parliament, and this public servant is building a Ceaucescu-style palace for himself on the outskirts of Tbilisi. According to the magazine, Civil Georgia (Mar. 22, 2004) until 2005, the salaries of Saakashvili and many of his ministers were reportedly paid by the NGO network of New York-based currency speculator Soros—along with the United Nations Development Program.Israel US military train Georgian militaryThe current military assault on South Ossetia and Abkhazia, in violation of Saakashvili’s pledge to seek a diplomatic not military solution to the territorial disputes, is backed by US and Israeli military “advisers.” Israel’s Haaretz newspaper reported that on August 10, Georgian Minister of Reintegration, Temur Yakobshvili, “praised the Israel Defense Forces for its role in training Georgian troops and said Israel should be proud of its military might, in an interview with Army Radio. ‘Israel should be proud of its military which trained Georgian soldiers,’ Yakobashvili told Army Radio in Hebrew, referring to a private Israeli group Georgia had hired.” One of the targets of Russian bombs near Tbilisi was, according to IsraelNN.com, “a Georgian military plant in which Israeli experts are upgrading jet fighters for the Georgian military… Russian fighter jets bombed runways inside the plant, located near Tbilisi, where Israeli security firm Elbit is in charge of upgrading Georgian SU-25 jets.” Israeli Foreign Minister and candidate to succeed ousted Israeli Prime Minister, Olmert, Foreign Minister Tzipi Livni, proclaimed on August 10 that “Israel recognizes Georgia’s territorial integrity,” code for saying it backs Georgia’s attempt to take South Ossetia and Abkhazia. The reported 1,000 Israeli military advisers in Georgia were not alone. On July 15, the Reuters news wire carried the following report: “VAZIANI, Georgia - One thousand U.S. troops began a military training exercise called “Immediate Response 2008,” in Georgia on Tuesday against a backdrop of growing friction between Georgia and neighboring Russia. The two-week exercise was taking place at the Vaziani military base near the capital Tbilisi, which was a Russian air force base until Russian forces withdrew at the start of this decade under a European arms reduction agreement... Georgia has a 2,000-strong contingent supporting the U.S.-led coalition in Iraq, and Washington provides training and equipment to the Georgian military. The United States is an ally of Georgia and has irritated Russia by backing Tbilisi’s bid to join the NATO military alliance... “The main purpose of these exercises is to increase the cooperation and partnership between U.S. and Georgian forces,” Brig. Gen. William B. Garrett, commander of the U.S. military’s Southern European Task Force, told reporters.”With Russia openly backing and training the indigenous military in South Ossetia and Abkhazia to maintain Russian presence in the region, especially since the US-backed pro-NATO Saakashvili regime took power in 2004, the Caucasus is rapidly coming to resemble Spain in the Civil War from 1936-1939 where the Soviet Union, Nazi Germany and others poured money and weapons and volunteers into Spain in a devastating war that was a precursor to the Second World War. In a curious footnote to the actual launch of military fighting on the opening day of the Olympics when Putin, George W. Bush and many world leaders were in Beijing far away, is a report in IsraelNN.com by Gl Ronen, stating that “The Georgian move against South Ossetia was motivated by political considerations having to do with Israel and Iran, according to Nfc. Georgian President Mikheil Saakashvili decided to assert control over the breakaway region in order to force Israel to reconsider its decision to cut back its support for Georgia's military.”Ronen added, “Russian and Georgian media reported several days ago that Israel decided to stop its support for Georgia after Moscow made it clear to Jerusalem and Washington that Russia would respond to continued aid for Georgia by selling advanced anti-aircraft systems to Syria and Iran.” Israel plans to get oil and gas from the Baku-Tbilisi-Ceyhan pipeline from the Caspian.Although as of this writing Russian President Medvedev has announced Russia is halting its military response against Georgian targets, the situation is anything but stable. The insistence of Washington in bringing Georgia into its geopolitical sphere and backing an unstable regime around Mikhail Saakashvili may well have been the straw which broke the Russian camel’s patience if not his back. Whether oil pipeline disputes or Russian challenges to Israel are the proximate trigger for Saakashvili’s dangerous game, it is clear that the volatile Georgian and his puppet masters may have entered a game where no one will be able to control the outcome.* F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (Pluto Press) and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). He may be reached through his website, www.engdahl.oilgeopolitics.net.

Confessions of an Economic Hit Man

How the U।S. Uses Globalization to Cheat Poor Countries Out of TrillionsWe speak with John Perkins, a former respected member of the international banking community. In his book Confessions of an Economic Hit Man he describes how as a highly paid professional, he helped the U.S. cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies.
John Perkins describes himself as a former economic hit man–a highly paid professional who cheated countries around the globe out of trillions of dollars.20 years ago Perkins began writing a book with the working title, “Conscience of an Economic Hit Men.”Perkins writes, "The book was to be dedicated to the presidents of two countries, men who had been his clients whom I respected and thought of as kindred spirits–Jaime Roldós, president of Ecuador, and Omar Torrijos, president of Panama. Both had just died in fiery crashes. Their deaths were not accidental. They were assassinated because they opposed that fraternity of corporate, government, and banking heads whose goal is global empire. We Economic Hit Men failed to bring Roldós and Torrijos around, and the other type of hit men, the CIA-sanctioned jackals who were always right behind us, stepped in.John Perkins goes on to write: “I was persuaded to stop writing that book. I started it four more times during the next twenty years. On each occasion, my decision to begin again was influenced by current world events: the U.S. invasion of Panama in 1980, the first Gulf War, Somalia, and the rise of Osama bin Laden. However, threats or bribes always convinced me to stop.”But now Perkins has finally published his story. The book is titled Confessions of an Economic Hit Man. John Perkins joins us now in our Firehouse studios.John Perkins, from 1971 to 1981 he worked for the international consulting firm of Chas T. Main where he was a self-described “economic hit man.” He is the author of the new book Confessions of an Economic Hit Man. Rush TranscriptThis transcript is available free of charge. However, donations help us provide closed captioning for the deaf and hard of hearing on our TV broadcast. Thank you for your generous contribution. Donate - $25, $50, $100, More... AMY GOODMAN: John Perkins joins us now in our firehouse studio. Welcome to Democracy Now!JOHN PERKINS: Thank you, Amy. It’s great to be here.AMY GOODMAN: It’s good to have you with us. Okay, explain this term, “economic hit man,” e.h.m., as you call it.JOHN PERKINS: Basically what we were trained to do and what our job is to do is to build up the American empire. To bring—to create situations where as many resources as possible flow into this country, to our corporations, and our government, and in fact we’ve been very successful. We’ve built the largest empire in the history of the world. It’s been done over the last 50 years since World War II with very little military might, actually. It’s only in rare instances like Iraq where the military comes in as a last resort. This empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life, through the economic hit men. I was very much a part of that.AMY GOODMAN: How did you become one? Who did you work for?JOHN PERKINS: Well, I was initially recruited while I was in business school back in the late sixties by the National Security Agency, the nation’s largest and least understood spy organization; but ultimately I worked for private corporations. The first real economic hit man was back in the early 1950’s, Kermit Roosevelt, the grandson of Teddy, who overthrew of government of Iran, a democratically elected government, Mossadegh’s government who was Time‘s magazine person of the year; and he was so successful at doing this without any bloodshed—well, there was a little bloodshed, but no military intervention, just spending millions of dollars and replaced Mossadegh with the Shah of Iran. At that point, we understood that this idea of economic hit man was an extremely good one. We didn’t have to worry about the threat of war with Russia when we did it this way. The problem with that was that Roosevelt was a C.I.A. agent. He was a government employee. Had he been caught, we would have been in a lot of trouble. It would have been very embarrassing. So, at that point, the decision was made to use organizations like the C.I.A. and the N.S.A. to recruit potential economic hit men like me and then send us to work for private consulting companies, engineering firms, construction companies, so that if we were caught, there would be no connection with the government.AMY GOODMAN: Okay. Explain the company you worked for.JOHN PERKINS: Well, the company I worked for was a company named Chas. T. Main in Boston, Massachusetts. We were about 2,000 employees, and I became its chief economist. I ended up having fifty people working for me. But my real job was deal-making. It was giving loans to other countries, huge loans, much bigger than they could possibly repay. One of the conditions of the loan—let’s say a $1 billion to a country like Indonesia or Ecuador—and this country would then have to give ninety percent of that loan back to a U.S. company, or U.S. companies, to build the infrastructure—a Halliburton or a Bechtel. These were big ones. Those companies would then go in and build an electrical system or ports or highways, and these would basically serve just a few of the very wealthiest families in those countries. The poor people in those countries would be stuck ultimately with this amazing debt that they couldn’t possibly repay. A country today like Ecuador owes over fifty percent of its national budget just to pay down its debt. And it really can’t do it. So, we literally have them over a barrel. So, when we want more oil, we go to Ecuador and say, “Look, you’re not able to repay your debts, therefore give our oil companies your Amazon rain forest, which are filled with oil.” And today we’re going in and destroying Amazonian rain forests, forcing Ecuador to give them to us because they’ve accumulated all this debt. So we make this big loan, most of it comes back to the United States, the country is left with the debt plus lots of interest, and they basically become our servants, our slaves. It’s an empire. There’s no two ways about it. It’s a huge empire. It’s been extremely successful.AMY GOODMAN: We’re talking to John Perkins, author of Confessions of an Economic Hit Man. You say because of bribes and other reason you didn’t write this book for a long time. What do you mean? Who tried to bribe you, or who—what are the bribes you accepted?JOHN PERKINS: Well, I accepted a half a million dollar bribe in the nineties not to write the book.AMY GOODMAN: From?JOHN PERKINS: From a major construction engineering company.AMY GOODMAN: Which one?JOHN PERKINS: Legally speaking, it wasn’t—Stoner-Webster. Legally speaking it wasn’t a bribe, it was—I was being paid as a consultant. This is all very legal. But I essentially did nothing. It was a very understood, as I explained in Confessions of an Economic Hit Man, that it was—I was—it was understood when I accepted this money as a consultant to them I wouldn’t have to do much work, but I mustn’t write any books about the subject, which they were aware that I was in the process of writing this book, which at the time I called “Conscience of an Economic Hit Man.” And I have to tell you, Amy, that, you know, it’s an extraordinary story from the standpoint of—It’s almost James Bondish, truly, and I mean-–AMY GOODMAN: Well that’s certainly how the book reads.JOHN PERKINS: Yeah, and it was, you know? And when the National Security Agency recruited me, they put me through a day of lie detector tests. They found out all my weaknesses and immediately seduced me. They used the strongest drugs in our culture, sex, power and money, to win me over. I come from a very old New England family, Calvinist, steeped in amazingly strong moral values. I think I, you know, I’m a good person overall, and I think my story really shows how this system and these powerful drugs of sex, money and power can seduce people, because I certainly was seduced. And if I hadn’t lived this life as an economic hit man, I think I’d have a hard time believing that anybody does these things. And that’s why I wrote the book, because our country really needs to understand, if people in this nation understood what our foreign policy is really about, what foreign aid is about, how our corporations work, where our tax money goes, I know we will demand change.AMY GOODMAN: We’re talking to John Perkins. In your book, you talk about how you helped to implement a secret scheme that funneled billions of dollars of Saudi Arabian petrol dollars back into the U.S. economy, and that further cemented the intimate relationship between the House of Saud and successive U.S. administrations. Explain.JOHN PERKINS: Yes, it was a fascinating time. I remember well, you’re probably too young to remember, but I remember well in the early seventies how OPEC exercised this power it had, and cut back on oil supplies. We had cars lined up at gas stations. The country was afraid that it was facing another 1929-type of crash—depression; and this was unacceptable. So, they—the Treasury Department hired me and a few other economic hit men. We went to Saudi Arabia. We—AMY GOODMAN: You’re actually called economic hit men—e.h.m.’s?JOHN PERKINS: Yeah, it was a tongue-in-cheek term that we called ourselves. Officially, I was a chief economist. We called ourselves e.h.m.‘s. It was tongue-in-cheek. It was like, nobody will believe us if we say this, you know? And, so, we went to Saudi Arabia in the early seventies. We knew Saudi Arabia was the key to dropping our dependency, or to controlling the situation. And we worked out this deal whereby the Royal House of Saud agreed to send most of their petro-dollars back to the United States and invest them in U.S. government securities. The Treasury Department would use the interest from these securities to hire U.S. companies to build Saudi Arabia—new cities, new infrastructure—which we’ve done. And the House of Saud would agree to maintain the price of oil within acceptable limits to us, which they’ve done all of these years, and we would agree to keep the House of Saud in power as long as they did this, which we’ve done, which is one of the reasons we went to war with Iraq in the first place. And in Iraq we tried to implement the same policy that was so successful in Saudi Arabia, but Saddam Hussein didn’t buy. When the economic hit men fail in this scenario, the next step is what we call the jackals. Jackals are C.I.A.-sanctioned people that come in and try to foment a coup or revolution. If that doesn’t work, they perform assassinations. or try to. In the case of Iraq, they weren’t able to get through to Saddam Hussein. He had—His bodyguards were too good. He had doubles. They couldn’t get through to him. So the third line of defense, if the economic hit men and the jackals fail, the next line of defense is our young men and women, who are sent in to die and kill, which is what we’ve obviously done in Iraq.AMY GOODMAN: Can you explain how Torrijos died?JOHN PERKINS: Omar Torrijos, the President of Panama. Omar Torrijos had signed the Canal Treaty with Carter much—and, you know, it passed our congress by only one vote. It was a highly contended issue. And Torrijos then also went ahead and negotiated with the Japanese to build a sea-level canal. The Japanese wanted to finance and construct a sea-level canal in Panama. Torrijos talked to them about this which very much upset Bechtel Corporation, whose president was George Schultz and senior council was Casper Weinberger. When Carter was thrown out (and that’s an interesting story—how that actually happened), when he lost the election, and Reagan came in and Schultz came in as Secretary of State from Bechtel, and Weinberger came from Bechtel to be Secretary of Defense, they were extremely angry at Torrijos—tried to get him to renegotiate the Canal Treaty and not to talk to the Japanese. He adamantly refused. He was a very principled man. He had his problem, but he was a very principled man. He was an amazing man, Torrijos. And so, he died in a fiery airplane crash, which was connected to a tape recorder with explosives in it, which—I was there. I had been working with him. I knew that we economic hit men had failed. I knew the jackals were closing in on him, and the next thing, his plane exploded with a tape recorder with a bomb in it. There’s no question in my mind that it was C.I.A. sanctioned, and most—many Latin American investigators have come to the same conclusion. Of course, we never heard about that in our country.AMY GOODMAN: So, where—when did your change your heart happen?JOHN PERKINS: I felt guilty throughout the whole time, but I was seduced. The power of these drugs, sex, power, and money, was extremely strong for me. And, of course, I was doing things I was being patted on the back for. I was chief economist. I was doing things that Robert McNamara liked and so on.AMY GOODMAN: How closely did you work with the World Bank?JOHN PERKINS: Very, very closely with the World Bank. The World Bank provides most of the money that’s used by economic hit men, it and the I.M.F. But when 9/11 struck, I had a change of heart. I knew the story had to be told because what happened at 9/11 is a direct result of what the economic hit men are doing. And the only way that we’re going to feel secure in this country again and that we’re going to feel good about ourselves is if we use these systems we’ve put into place to create positive change around the world. I really believe we can do that. I believe the World Bank and other institutions can be turned around and do what they were originally intended to do, which is help reconstruct devastated parts of the world. Help—genuinely help poor people. There are twenty-four thousand people starving to death every day. We can change that.AMY GOODMAN: John Perkins, I want to thank you very much for being with us. John Perkins’ book is called, Confessions of an Economic Hit Man.