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If we consider the Fed’s policies (tapering, etc.) solely within the narrow confines of the corporatocracy or a strictly financial context, we are in effect touching the foot of the elephant and declaring the creature to be short and roundish.
I have been studying the Deep State for 40 years, before it had gained the nifty name “deep state.” What others describe as the Deep State I term the National Security State which enables the American Empire, a vast structure that incorporates hard and soft power–military, diplomatic, intelligence, finance, commercial, energy, media, higher education–in a system of global domination and influence.
Back in 2007 I drew a simplified chart of the Imperial structure, what I called the Elite Maintaining and Extending Global Dominance (EMEGD):
At a very superficial level, some pundits have sought a Master Control in the Trilateral Commission or similar elite gatherings. Such groups are certainly one cell within the Empire, but each is no more important than other parts, just as killer T-cells are just one of dozens of cell types in the immune system.
One key feature of the Deep State is that it makes decisions behind closed doors and the surface government simply ratifies or approves the decisions. A second key feature is that the Deep State decision-makers have access to an entire world of secret intelligence.
Here is an example from the late 1960s, when the mere existence of the National Security Agency (NSA) was a state secret. Though the Soviet Union made every effort to hide its failures in space, it was an ill-kept secret that a number of their manned flights failed in space and the astronauts died.
The NSA had tapped the main undersea cables, and may have already had other collection capabilities in place, for the U.S. intercepted a tearful phone call from Soviet Leader Brezhnev to the doomed astronauts, a call made once it had become clear there was no hope of their capsule returning to Earth.
Former congressional staff member Mike Lofgren described the Deep State in his recent essay Anatomy of the Deep State:
There is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power.
The term “Deep State” was coined in Turkey and is said to be a system composed of high-level elements within the intelligence services, military, security, judiciary and organized crime.
I use the term to mean a hybrid association of elements of government and parts of top-level finance and industry that is effectively able to govern the United States without reference to the consent of the governed as expressed through the formal political process.
I would say that only senior military or intelligence officers have any realistic grasp of the true scope, power and complexity of the Deep State and its Empire.Those with no grasp of military matters cannot possibly understand the Deep State. If you don’t have any real sense of the scope of the National Security State, you are in effect touching the foot of the elephant and declaring the creature is perhaps two feet tall.
The Deep State arose in World War II, as the mechanisms of electoral governance had failed to prepare the nation for global war. The goal of winning the war relegated the conventional electoral government to rubber-stamping Deep State decisions and policies.
After the war, the need to stabilize (if not “win”) the Cold War actually extended the Deep State. Now, the global war on terror (GWOT) is the justification.
One way to understand the Deep State is to trace the vectors of dependency. The Deep State needs the nation to survive, but the nation does not need the Deep State to survive (despite the groupthink within the Deep State that “we are the only thing keeping this thing together.”)
The nation would survive without the Federal Reserve, but the Federal Reserve would not survive without the Deep State. The Fed is not the Deep State; it is merely a tool of the Deep State.
This brings us to the U.S. dollar and the Deep State. The Deep State doesn’t really care about the signal noise of the economy–mortgage rates, minimum wages, unemployment, etc., any more that it cares about the political circus (“step right up to the Clinton sideshow, folks”) or the bickering over regulations by various camps.
What the Deep State cares about are the U.S. dollar, water, energy, minerals and access to those commodities (alliances, sea lanes, etc.). As I have mentioned before, consider the trade enabled by the reserve currency (the dollar): we print/create money out of thin air and exchange this for oil, commodities, electronics, etc.
If this isn’t the greatest trade on Earth–exchanging paper for real stuff– what is?While I am sympathetic to the strictly financial arguments that predict hyper-inflation and the destruction of the U.S. dollar, they are in effect touching the toe of the elephant.
The financial argument is this: we can print money but we can’t print more oil, coal, ground water, etc., and so eventually the claims on real wealth (i.e. dollars) will so far exceed the real wealth that the claims on wealth will collapse.
So far as this goes, it makes perfect sense. But let’s approach this from the geopolitical-strategic perspective of the Deep State: why would the Deep State allow policies that would bring about the destruction of its key global asset, the U.S. dollar?
There is simply no way the Deep State is going to support policies that would fatally weaken the dollar, or passively watch a subsidiary of the Deep State (the Fed) damage the Deep State itself.
The strictly financial arguments for hyper-inflation and the destruction of the U.S. dollar implicitly assume a system that operates like a line of dominoes: if the Fed prints money, that will inevitably start the dominoes falling, with the final domino being the reserve currency.
Setting aside the complexity of Triffin’s Paradox and other key dynamics within the reserve currency, we can safely predict that the Deep State will do whatever is necessary to maintain the dollar’s reserve status and purchasing power.
Understanding the “Exorbitant Privilege” of the U.S. Dollar (November 19, 2012)
What Will Benefit from Global Recession? The U.S. Dollar (October 9, 2012)
Recall Triffin’s primary point: countries like China that run trade surpluses cannot host reserve currencies, as that requires running large structural trade deficits.
In my view, the euro currency is a regional experiment in the “bancor” model,where a supra-national currency supposedly eliminates Triffin’s Paradox. It has failed, partly because supra-national currencies don’t resolve Triffin’s dilemma, they simply obfuscate it with sovereign credit imbalances that eventually moot the currency’s ability to function as intended.
Many people assume the corporatocracy rules the nation, but the corporatocracy is simply another tool of the Deep State. Many pundits declare that the Powers That Be want a weaker dollar to boost exports, but this sort of strictly financial concern is only of passing interest to the Deep State.
The corporatocracy (banking/financialization, etc.) has captured the machinery of regulation and governance, but these are surface effects of the electoral government that rubber-stamps policies set by the Deep State.
The corporatocracy is a useful global tool of the Deep State, but its lobbying of the visible government is mostly signal noise to the Deep State. The only sectors that matter are the defense, energy, agriculture and international financial sectors that supply the Imperial Project and project power.
What would best serve the Deep State is a dollar that increases in purchasing power and extends the Deep State’s power. It is widely assumed that the Fed creating a few trillion dollars has created a massive surplus of dollars that will guarantee a slide in the dollar’s purchasing power and its demise as the reserve currency.
Those who believe the Fed’s expansion of its balance sheet will weaken the dollar are forgetting that from the point of view of the outside world, the Fed’s actions are not so much expanding the supply of dollars as offsetting the contraction caused by deleveraging.
I would argue that the dollar will soon be scarce, and the simple but profound laws of supply and demand will push the dollar’s value not just higher but much higher. The problem going forward for exporting nations will be the scarcity of dollars.
If we consider the Fed’s policies (tapering, etc.) solely within the narrow confines of the corporatocracy or a strictly financial context, we are in effect touching the foot of the elephant and declaring the creature to be short and roundish. The elephant is the Deep State and its Imperial Project.
When Major General Smedley Butler made his case, “War is a Racket” he did not pull any punches.
The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits – ah! That is another matter – twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent – the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let’s get it.
The business of military procurement has multiplied since his fateful revelations.
Not satisfied with fair profits or feasible competition, the practices of the defense corporatists illustrate one aspect of waste, graft and systemic bribery. William D. Hartung describes the consolidation and expanse of a select group of companies in the paper, The Military-Industrial Complex Revisited: Shifting Patterns of Military Contracting in the Post-9/11 Period
Many of the same companies that benefited from increased Pentagon and war spending were top contractors for other security related agencies. For example, Lockheed Martin was not only the top contractor for the Pentagon, but it also ranked number one at the Department of Energy; number eight at the Department of Homeland Security (Boeing was number one); number two at the State Department; and number three at the National Aeronautics and Space Administration (NASA). Contracts let by these agencies were only a fraction of the levels awarded by the Pentagon, but they were significant nonetheless. For example, the Department of Homeland Security issued $13.4 billion in contracts in FY2008, NASA $15.9 billion, the State Department $5.5 billion, and the Department of Energy $24.6 billion.
This dramatic growth in budgets is even more significant, when viewed in the context of world expenditures of other counties. Leaving aside the relative merits of the dangers and risk of external threats, the gigantic enterprise of fostering the biggest military apparatus in history has made select factions rich at the expense of the many.
Jonathan Turley in “Pentagon Plugs: New Study Finds Pentagon Has Hidden Trillions In Missing Money And Equipment,” references an example on how the overall avoidance of financial accountability, outright fraud and intentional concealment operates.
A new report has detailed how the military has cooked the books to hide trillions, that’s right trillions, in missing money and equipment. The military calls them “plugs,” a curious term for fraud. These are knowingly fake figures used to hide the fact that there is no accurate record of the money.
The plugs are generally the work of the office of the Defense Finance and Accounting Service, the Pentagon’s main accounting agency. Required to complete an audit, the staff simply faked the numbers.
Reuter’s reports on a “Special Report: The Pentagon’s doctored ledgers conceal epic waste.”
Over the past 10 years, the Defense Department has signed contracts for the provision of more than $3 trillion in goods and services. How much of that money is wasted in overpayments to contractors, or was never spent and never remitted to the Treasury, is a mystery. That’s because of a massive backlog of “closeouts” – audits meant to ensure that a contract was fulfilled and the money ended up in the right place.
Now trillions are sums that are unimaginable The Department of the Treasury acknowledges that U.S. gold reserves (if you believe their figures) total $11,041,059,958.16 as of their Current Report: January 31, 2014.
An eleven billion dollars equivalent is a mere drop in the bucket to the monies allocated to the military and homeland security. Taxpayers are regularly deceived about the costs. Congress is kept in the dark about black programs. And the war racket keeps funneling and siphoning off unknown sums to accounts that only a super computer can track.
Corporatocracy: How the Corporate Welfare State Divides and Conquers is a video by James Corbett that provides an insightful analysis which establishes a surreal account how the oligarchy operates. The financial shenanigans of corporatists contribute to the interlocking directorates, which run the money pit that keeps the empire operating.
A rational reform of a depraved money laundering arrangement is impossible without a fundamental repudiation of the internationalist foreign policy doctrines that permeates the State Department. Funding advanced technological warfare platforms that are unheard of to even congressional oversight is profoundly unconstitutional.
When such practices become routine, the economic incentives breed crooked abuses. The obligations for responsible public policy are methodically destroyed, when transparency is eliminated.
Washington’s Blog provides several useful sources that document the extent of the problem in “$8.5 TRILLION In Taxpayer Money Doled Out By Congress To The Pentagon Since 1996 … Has NEVER Been Accounted For” and sums up with a bleak assessment.
The Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.
Evidently, the elites that benefit from bilking appropriations and the board members that steer the defense contractors want the con to continue. For all the money directed towards maintaining the war machine, our actual security become less secure.
Banks launder ill-gotten gain, as prevailing practice, in the normal course of business because the arm merchants are protected players in the trade. The reprehensible circle that the dogs of war unleash the cash flow from their illicit drug sales, through arms sales, allows for the smooth transfer of hidden blood money into number accounts.
Such an organized system of mutual payoffs greases the ever growing industry of fear and destruction. All the missing money is buried in the unknown cashes of subterranean tyranny. Creating false flag threats allows for imaginary scourges to be new enemies. Protection from such manufactured foes is the real business of the military-industrial-complex.
So, when more details surface about the lost and unaccounted military funding money, it is just part of the price of keeping you safe.
James Hall is a reformed, former political operative. This pundit’s formal instruction in History, Philosophy and Political Science served as training for activism, on the staff of several politicians and in many campaigns. A believer in authentic Public Service, independent business interests were pursued in the private sector. Speculation in markets, and international business investments, allowed for extensive travel and a world view for commerce. Hall is the publisher of BREAKING ALL THE RULES. Contact firstname.lastname@example.org
State Department Releases Flawed Keystone XL Final Environmental Review In Super Bowl Friday Trash Dump | DeSmogBlog
The State Department has released theFinal Supplemental Environmental Impact Statement (SEIS) for the proposed northern leg of the controversial and long-embattled TransCanada Keystone XL tar sands pipeline.
In a familiar “Friday trash dump” — a move many expected the Obama administration to shun — John Kerry’s State Department chose to “carefully stage-manage the report’s release” on Super Bowl Friday when most Americans are switching focus to football instead of political scandals. **See bottom of this post for breaking analysis**
Anticipating the report’s release, insiders who had been briefed on the review told Bloomberg News the SEIS — not a formal decision by the State Department on the permitting of the pipeline, but rather another step in the department’s information gathering — “will probably disappoint environmental groups and opponents of the Keystone pipeline.”
And, indeed, the new report reads: “Approval or denial of any one crude oil transport project, including the proposed Project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.”
This reiterates one of the earlier draft’s most heavily criticized conclusions that the pipeline is “unlikely to have a substantial impact on the rate of development in the oil sands,” and thus avoids a comprehensive assessment of those climate impacts.
In June 2013, President Obama said in a speech announcing his Climate Action Plan at Georgetown University that he would only approve the permit if it was proven that “this project does not significantly exacerbate the problem of carbon pollution.”
The final environmental review is being released on the heels of damning revelations about the close ties between the Canadian pipeline builder, TransCanada and Environmental Resources Management (ERM). ERM was hired by the State Department to conduct the environmental review.
Friends of the Earth president Erich Pica did not mince words in his reaction to the State Department’s new report, telling the National Journal, “The State Department’s environmental review of the Keystone XL pipeline is a farce. Since the beginning of the assessment, the oil industry has had a direct pipeline into the agency.”
ERM Group: A History Tied to API
Over the past two years, DeSmogBlog has published a number of articles documenting controversial projects — in Peru, the Caspian Sea, Delaware and Alaska — that the ERM Group has approved. In each case the projects have been permitted and have eventually resulted in spills or severe environmental damage.
ERM Group is a dues-paying member of the American Petroleum Institute, which has spent over $22 million lobbying on behalf of Keystone XL.
Timing of the Release
The Final SEIS also precedes a heavily anticipated State Department Inspector General’s report addressing these potential conflicts-of-interest between TransCanada, ERM and the State Department, as has been covered here onDeSmogBlog. It also occurs on a Friday afternoon before the Super Bowl, with attention of much of the American public diverted.
Environmental groups and opponents of the Keystone XL pipeline were surprised by the timing and suddenness of the report’s release. The surprise was not shared by supporters of the pipeline.
For days, industry reps have been claiming that the SEIS would be released this week. The loudest voice was that of Jack Gerard, chief executive of the American Petroleum Institute (API), who speaking to Reuters last week said, “It’s our expectation it will be released next week,” citing sources within the administration.
ERM Group is a dues-paying member of API. Of this clear conflict and the timing of the release, Steve Kretzmann of Oil Change International wrote:
Jack Gerard was apparently briefed by “sources within the Administration” on the timing and content of the report. Before the environmental community. Before Congress. Before anyone else.
If that doesn’t prove once and for all what a corrupt process this has been, I don’t know what will. The oil industry, which has had this process rigged since the word go, are the first to know, because of their cozy and corrupt role in this process.
Green Groups Respond
Jim Murphy of National Wildlife Federation asked this of the decision before the State Department:
The question going into the State Department’s final environmental impact statement is this: Who will State listen to? Will State reverse course after listening to the Environmental Protection Agency experts who criticized the first draft as ‘inadequate‘ and the second draft as ‘insufficient’ on climate impacts, oil spill risks, and threats to water resources? Will it listen to Goldman Sachs, who called Keystone XL key to expanding tar sands production and all the carbon pollution that goes along with it?
What about Canada’s own government or the oil industry, which has repeatedly said Keystone XL is needed to realize tar sands growth plans that Canada projects will cause its own carbon emissions tosoar 38% by 2030? Or will State stand by the oil industry consultants it hired to write that first draft currently being investigated forconflicts of interest?
During the State of the Union, President Obama said he wanted to be able to look into the eyes of his children’s children and say he did everything he could to confront the climate crisis. How exactly does he plan on explaining to his grandchildren how building a 800,000 barrel a day tar sands pipeline like Keystone XL helped solve climate change? The twisted logic in the State Department’s environmental assessment might provide some political cover in DC, but it will be small comfort for future generations who have the bear the impacts of the climate crisis.
Over 76,000 citizens have pledged an oath of civil disobedience if Keystone XL gets the final green-light from President Obama. Though that decision will probably not be made for months.
Green Groups Take Action
In anticipation of the report’s release, a diverse coalition of 16 environmental organizations sent a petition to Secretary of State John Kerry, insisting that the scope of the environmental review is far too narrow and that an entirely new review is necessary.
Citing the National Environmental Policy Act, or NEPA, the groups threaten legal action if the environmental review doesn’t consider the cumulative impact of related projects, like the Keystone XL and the proposed Alberta Clipper expansion.
The groups write:
The National Environmental Policy Act (NEPA) requires that an EIS consider the cumulative impacts of the proposed federal agency action. Cumulative impacts are defined as: “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.”…
The Keystone XL DSEIS fails to address the cumulative effects of Keystone XL and Alberta Clipper, especially the growth-inducing effects that the combined 1.3 million bpd of additional pipeline capacity would have on the rate of tar sands extraction in Canada.
The groups signing the petition include: Sierra Club, Bold Nebraska, Center for Biological Diversity, For Love of Water, Friends of the Earth, Institute for Agriculture and Trade Policy, Labor Network for Sustainability, Michigan Environmental Council, Minnesota Environmental Partnership, Minnesota Public Interest Research Group, Michigan Land Use Institute, National Wildlife Federation, Natural Resources Defense Council, Oil Change International, Rainforest Action Network and 350.org.
“The State Department will open a 30-day comment period on Feb. 5, and the agencies will have 90 days to weigh in,” The Washington Post explained. “After a decision is issued other agencies have 15 days to object, and if one does, the president must decide whether or not to issue the permit.”
DeSmogBlog will continue to feature in-depth analysis of the Keystone FEIS and responses from energy, climate and policy experts.
**UPDATES WILL BE ADDED BELOW AS ANALYSIS ROLLS IN**
BusinessWeek points to this section on the paltry job creation: Once constructed, Keystone XL “will support only 50 U.S. jobs–35 permanent employees and 15 temporary contractors.”
Ben Jervey contributed reporting to this article.
Image credit: Kris Krug.
Days after terrorists attacked the U.S. mission in Benghazi, a State Department official ordered an executive at the security company charged with protecting the special compound not to respond to media inquiries, according to documents obtained by Judicial Watch.
The order was delivered via electronic mail and it’s part of a new batch of State Department documents obtained by JW in an ongoing investigation of the September 11, 2012 Benghazi attack and subsequent cover-up by the Obama administration. Islamic jihadists raided the U.S. Special Mission Compound in Benghazi, Libya and murdered Ambassador Christopher Stevens—the first diplomat to be killed overseas in decades—and three other Americans.
The Obama administration has worked hard to keep details of the attack—and the negligence that led to it—from the American public, but JW has gone to court and filed a number of public records requests to expose the truth. JW has also published two in-depth special reports on Benghazi, the last one on the first anniversary of the terrorist attack. Read the special reports here and here.
The latest batch of documents obtained by JW include a scandalous email from a State Department contracting officer named Jan Visintainer to an unidentified executive at Blue Mountain Group (BMG), the inexperienced foreign company hired to protect the U.S. mission in Benghazi. In the email, dated September 26, 2012, Visintainer writes: “Thank you so much for informing us about the media inquiries. We notified our public affairs personnel that they too may receive some questions. We concur with you that at the moment the best way to deal with the inquiries is to either be silent or provide no comments.”
Some of the records were redacted or simply not included. For instance Visintainer received a cryptic email from a redacted source with an attachment that was not provided to JW by the State Department. The exchange, just two days before the attack, received a lot of attention from both the State Department and BMG, which could indicate that perhaps it contained a more specific concern or warning about the U.S. mission’s vulnerability.
Last month JW released the Benghazi security contract that paid BMG, a virtually unknown and untested British company, $794,264 for nearly 50,000 guard hours. The Benghazi security deal had not been available to the public because it was not listed as part of the large master State Department contract that covers protection for overseas embassies. JW had to take legal action to get it.
The deal is for one year and includes very specific requirements for things like foot patrols, package inspection, contingency and mobilization planning. The total guard force was 45,880 with an additional 1,376 guards for “emergency services,” the contract shows. It also includes one vehicle and 12 radio networks. The guards were responsible for protecting the U.S. government personnel, facilities and equipment from damage or loss, the contract states. “The local guard force shall prevent unauthorized access; protect life; maintain order; deter criminal attacks against employees; dependents and property terrorist acts against all U.S. assets and prevent damage to government property.” Clearly the firm failed miserably to fulfill its contractual obligation.