Are Neocons in Iraq Thinking Like the Banks that Blew up the Global Economy?

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Yves here. For the normally anodyne OilPrice to run an article, Obama Fiddles While Iraq Burns, that is openly frustrated with US conduct suggests that there is considerable consternation in the oil industry about the lack of a coherent policy in Iraq. One school of thought has been that the US wanted a breakup, but history like the dissolution of Yugoslavia shows that they are ugly, bloody affairs that hurt the population and infrastructure. Both are bad for business, such as drilling for and refining oil, which was apparent reason we occupied Iraq in the first place.

I’ve discussed with Lambert the difficult of coming up with a coherent rationale for the US stance towards Iraq. The only one I can come up with is that the neocons have convinced themselves that chaos in Iraq creates more options for the US, and as the world’s only superpower, we’ll find a way to take advantage of the situation. Readers of this blog will recognize this is troublingly similar to the way banks generate risk, because it’s profitable for them, even if they break the system.

As Andrew Haldane, executive director of financial stability for the Bank of England, said in a 2010 speech we’ve cite often, The $100 billion question:

Tail risk within some systems is determined by God – in economist-speak, it is exogenous. Natural disasters, like earthquakes and floods, are examples of such tail risk. Although exogenous, even these events have been shown to occur more frequently than a normal distribution would imply. God’s distribution has fat tails.

Tail risk within financial systems is not determined by God but by man; it is not exogenous but endogenous. This has important implications for regulatory control. Finance theory tells us that risk brings return. So there are natural incentives within the financial system to generate tail risk and to avoid regulatory control. In the run-up to this crisis, examples of such risk-hunting and regulatory arbitrage were legion. They included escalating leverage, increased trading portfolios and the design of tail-heavy financial instruments.

And from a later Haldane speech (emphasis ours):

In particular, we can draw on a framework developed a century after the introduction of limited liability – the contingent claims model of Nobel Laureate Robert Merton (1974). This tells us that the equity of a limited liability company can be valued as a call option on its assets, with a strike price equal to the value of its liabilities.

Figure 1 demonstrates this option-like payoff profile to holding a hypothetical bank’s equity. The beta of a firm is measure of how its value varies with the market as a whole. Arithmetically, the beta of a bank’s equity is the product of its leverage and the beta of its assets.11 So assuming an asset beta of 0.1 and a leverage ratio of 10, the bank’s equity beta will be equal to one. The returns on bank equity and the return on the market will then lie on a 45 degree line, provided returns are positive. When market returns are negative, however, returns on bank equity will not follow them south. Instead they will be capped by limited liability.

This asymmetric payoff schedule generates interesting incentives. The value of the equity option is enhanced by rises in the volatility of the bank’s assets. Why? Because volatility increases the upside return without affecting the downside risk. If banks seek to maximise shareholder value, they will seek bigger and riskier bets. Joint stock banking with limited liability puts ownership in the hands of a volatility junkie.

While this conceit may strike some readers as a stretch, the flip side is the neocons seem to be very fond of expressions like “rearranging the strategic game board” and are addicted to the muscular use of US power. This seems to put them in the same place as too big to fail banks, of seeing only advantage in risk’taking (which in its most extreme form in policy terms means fomenting war) and naively see the US as having no downside (the globe’s only hegemon is seen as too formidable to fail). The sad reality is that this assessment of risks and returns may be true for the neocons personally, as they are likely to score gains and incur little in the way of costs by breaking countries and creating failed states. But it isn’t true for the US as we become more and more resented and isolated.

By Claude Salhani, a journalist, author and political analyst based in Beirut, specializing in the Middle East, politicized Islam and terrorism He is the former editor of the Middle East Times and a long-time contributor to the Commentary pages of the Washington Times and Beirut’s Executive Magazine. He is the former International Editor with United Press International and also ran UPI’s Terrorism & Security Desks. Originally published at OilPrice

To compare U.S. President Barack Obama to a modern-day Nero may be somewhat harsh, but as the Middle East continues to disintegrate, falling into chaos and unprecedented violence, its oilfields and gas fields within grasping reach of well-organized terrorist groups, it’s hard not to when no clear U.S. foreign policy is in sight.

In 1990, President George H. W. Bush (the elder) went to war against the most powerful Arab army to force Iraqi President Saddam Hussein out of Kuwait, the tiny emirate he had invaded a few months earlier, claiming it as Iraq’s 19th province.

The only reason Bush Sr. went to war and succeeded in putting together a formidable coalition that included Arab countries was the need to safeguard Kuwait’s oil.

Today, two of the Middle East’s most key countries – Syria and Iraq — are quite literally on the verge of disintegration, threatened by terror groups the likes of which the world have rarely seen, with the potential to jeopardize the security of Western Europe and United States, and yet there is no visible U.S. involvement or articulated policy to manage the crisis.

What is even more alarming is that this latest crisis did not suddenly appear out nowhere, as the loudest media narrative has insisted. Alarm bells and red flags were consistently ignored by the Obama administration.

Members of the U.S. administration were warned, repeatedly, that ISIS, the Islamic State of Iraq and Syria, posed a real threat to the security of Iraq, and ultimately to the region, but chose to ignore the warnings.

As reported by the Daily Beast, “On November 1, 2013, Iraqi Prime Minister Nouri al-Maliki visited the White House, and made a rather stunning request.”

Maliki — who reportedly celebrated when the last U.S. troops left Iraq in 2011 — made a very discreet request of the White House to return some U.S. military units to Iraq so they could assist the country’s air force in planning target acquisition of ISIS positions.

Senior administration officials told the president that ISIS was producing upwards of 40 suicide bombers a month.

ISIS took advantage of the Iraqi government’s weakness and the Iraqi army’s unpreparedness. That, compiled with Sunni disenchantment with the government’s policies, provided fertile grounds for the Islamists to strike.

Yet the warnings were there, clear for anyone to see, if anybody really wanted to see. The problem was that nobody close to the American president seemed to give it much thought. All the intelligence services were telling anyone who was willing to listen that the news from Iraq was worrisome. No one at the White House seems to have been listening.?

Additionally, too much trust was placed in the restructured Iraqi Army. Despite major U.S. training and reforms, Iraq’s military suffered from poor operational tactics while legitimate and popular grievances were unheeded.?

Obama could have used political leverage to force al-Maliki to avoid sidelining the country’s Sunni population. The sale of advanced weapon systems for nearly $11 billion should have been the carrot.

And major notice should have been taken when Fallujah — a town made infamous during the U.S. occupation of Iraq when Sunni gunmen killed American contract workers, and where resistance to the U.S. presence became notorious — was the first major and strategically important city to fall to the Islamists.

When Fallujah fell, red flags should have gone up. But the only flag that went up was the black banner of the jihadists.

It was only after Iraq’s second-largest city, Mosul, fell to ISIS that the world began to take notice. But by then, ISIS had gained control of oil fields in Syria and some in Iraq, and had looted millions from banks in the cities they occupied.

Obama may be thinking that the fallout of this crisis will be mitigated if the U.S. continues to pursue improved relations with Iran. But again, he seems to ignore the fact that countries like Saudi Arabia and Turkey will never accept Iran playing the role of the regional policeman.

Like it or not, as the only remaining superpower, the job falls to the United States. It’s a dirty job, but somebody has to do it.

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  1. Sy Krass

    I’m not sure exactly what startegy would work in Iraq. What is the goal exactly? I think the only eventually outcome is the one we’re seeing as of right now. The American people no longer desire to defend an empire that gives the benefits thereof to a mere few.

    1. Carla

      The American people didn’t want to go into WWI, WWII, Vietnam, Kuwait, Iraq, or Afghanistan. Pretexts, propaganda, manipulation, lies and damned lies were employed in every case. This was the reality then, and it is the reality now. The American people have been used and mis-used. I think Yves’ theme is more than an analogy: the truth is, all wars are bankers’ wars. The American people no say in this.

        1. susan the other

          My thinking too. Yves hit the nail on the head comparing banking aggression (aka capitalism as we know it) to wars of aggression. All for gain. For someone. Not usually us. Really capitalism has become war. Competition is over the top. And the Middle East is in ruins. So kinda like a big bubble where those with any money left can go in and buy up everything else. Because if the US actually ran out of money prosecuting this crap, then they would not profit in the end. And etc.

          1. OpenThePodBayDoorsHAL

            I’ve been thinking the same thing, Capitalism has become War. It used to be that a slight tremor (riot in Jerusalem, car bombing in Athens) would cause a ripple in the markets. Not so any more. War is normalized, an expected permanent state of affairs, routine. The important thing is to pile into the stock markets of the contiguous countries (Turkey, Pakistan etc) and harvest the spoils. Across the imaginary dotted line mothers are dying…but on this side there are fat profits to be made.
            The other difference is that war used to be about grabbing territory and resources, not any more. Now the war-making itself IS the treasure, all those juicy taxpayer dollars you can funnel through your favorite contractors. The rationale, strategy, ideology, or policy don’t matter one little bit any more.

      1. H. Alexander Ivey

        Agree with the America public having been dragged, kicking and screaming, into the wars of the 20th and 21st century. But don’t confate them together (not that you were, am just worried about careless readers). Not all wars are fought for the same reasons. WWII actually was a war to fight. The others, not so much. And these Middle East / North Africa ones, not at all. There is (or was) little serious threat to the oil the West needed. But now, after a decade or so of wasteful energy use, I guess the West does need the oil. Only, joke joke, they don’t seem to get that fact.

        1. griffen

          I’m glad you commented – WWII extracted an immense cost in human lives. One wonders if Russia could have successfully defeated Hitler’s Germanic forces absent any US presence on that front.

          Let alone, what might have become of UK or France.

    2. Lambert Strether

      There is no goal. There are multiple competing factions, each with different portfolios of options.* At some point, something blows up really badly, and all the positions unwind. None of the options holders really loses, of course, in terms of life or limb or family or property. They just get shuffled around to a new think tank, or lobbying firm, or academic position. Because freedom.

      * Which are often options in persons, e.g. Petraeus. I would love to know what he really did.

      1. David Lentini

        Lambert, I understand your comment refers to the various neocons of various ranks. My own view is that there are indeed goals, and perhaps even a single over-arching goal, but it’s hard to discern because this group is highly secretive and the press simply refuses to ask them hard questions. You’re right of course that these folks never lose, but, and I think this analogy to the banks is even stronger than the option analogy, Obama, Congress, and the public refuse to enforce the laws that would put these people in jail and expose their treasonous behavior.

        As for goals, I think the neocons have all along wanted a Middle East that was dominated by a US-Israeli-Saudi axis they controlled behind the scenes. I always thought their desire to install Chalabi was exactly the capstone of their plan. I suspect the point of destroying the Iraqi Army and Baathist civil service was to keep any Baathist successors our and all him (and the US) to install his own loyal forces. Of course, he made fools of them and the whole plan exploded in their faces.

        But these folks, like the Terminator, don’t give up. And they don’t look back. As Karl Rove supposedly told Ron Suskind, these people act while everyone else is looking at history. So don’t look for reflection in this crowd. They’re like the group of idle rich searching for the Maltese Falcon, causing death and destruction playing their game and having no remorse whatsoever. Given the power they have backing them why should they?

        So now, they’re on to a new tack to get what they want. Plan A—which included “liberating” Shia Iraq from Sunni dominance— went to hell and started to put Iraq into Iran’s orbit, which then suggested using the Sunnis to fight back. How handy The Surge™ came in to have provided arms, money, and connections. Plan B is now to break Iraq up into zones using ISIS (heavily funded by Saudi Arabia and with its connections to the US) and the Kurds, as that would give Sunni control to much of the Iraq’s oil and the on to the next phase of control.

        In a way, it seems to me that the neocons, like Nazi German and Fascist Italy, are long on goals and excellent in tactics, but they are ultimately poor at strategy. They have a vision. They are amazingly effective at getting their immediate aims. But they often overrate their long-term abilities and underestimate everyone else. They also often fail to see that winning battles rarely adds up to winning wars. But that’s the arrogance that comes with fascists, who at bottom think they’re smarter and tougher than everyone else.

        And here is where Obama’s moral cowardice has shown through. Back in 2008 he could have cleaned house very loudly and publicly, just like he could have with the banks. The public would have cancelled any serious threat from the dark forces supporting the neocons. But like so many other cases, he took the money himself and sold us all out instead. He’s one of them.

        1. susan the other

          Good comment, but oil is still the prize and could be made to last, almost like a relic, for centuries.

        2. OpenThePodBayDoorsHAL

          I don’t think this was a case of “moral character failure”. Even before his first inauguration I knew the fix was in (I will take credit for spotting the truth way before any of my friends). He appointed Tim Geithner. Recall this was in the middle of the financial crisis, when anything might happen, but likewise anything was possible. But it didn’t smell right: a young black one-term State Senator? I just knew that they weren’t going to let him be president without sitting him down and telling him “ok son, here’s how this thing is gonna go…”
          So the narrative of a basically good man who has a moral failure at the time of crisis doesn’t work. This is much darker than that. They wanted a supine Left who would acquiesce to every loss of civil liberty, every new war and drone bombing, every new excuse not to prosecute financial crime. They wrapped it in the Basketballer-in-Chief narrative and it worked a treat.

      2. Banger

        Given what has happened and what appears to be the case your comment is the only rational conclusion to the question of U.S. policy in Iraq and the region.

      3. sufferin' succotash

        For neocons foreign and national security policy generally serve as a means to professional advancement. Regime changes, fomenting insurgencies and “popular” uprisings–these are ways of getting one’s ticket punched, polishing up the resumé. It goes without saying that the long-term interests, much less consent, of the nations concerned (including the US) are of no real concern whatever. What matters is the score. This Middle East isn’t the only region to feel the results of this sort of nihilistic careerism. You can bet that since the start of this year Victoria Nuland has made the short lists for Secretary of State of all the prospective 2016 Republican presidential contenders–with the possible exception of Rand Paul.

      4. Cocomaan

        I got into it with a Petraeus supporter not long ago.

        It was interesting to see how lionized he was in terms of the “strategy” in Iraq, that he was a COIN ‘genius’, and so on. For these folks, it was a success, but only failed because political situations on the ground (ie, Maliki government) didn’t follow the prescription laid out by Petraeus et al.

        It’s an absurd argument, and reminds me of government economic forecasting.

        The economy shall see strong growth in year 2022 in the event that nothing goes wrong.

        That’s why this Adam Curtis piece is incredible. Economic theory and COIN are inextricably linked.

      5. redleg

        Lambert: I think the the goal of the Iraq war was to loot the US Treasury through no-bid and no-oversight contracts, not for oil or to loot Iraq (not that that hasn’t happened). This is identical to naked short selling – get paid for something that you claim to have but nobody ever checks, and once the payer figures out the contract was never completed it’s too late.
        The looting scheme is only way the Iraq debacle makes any sense at all. Looked at this way, the whole operation was an enormous success (with everything else being an out-of-scope externality). The concept is also very similar to privatizations due to neo-liberal austerity, or selling CDO^3 to CALPERS.

        1. Lambert Strether

          One of the goals, surely. Different factions have different goal. (I think that Bush honestly believed he could “stand up” a functional Iraqi state (showing — to speculate freely — the deeply provincial and, to say the least, unseasoned character of his Christianist base*, not fit for prime time on the world stage, as subsequent events have shown. Chicago has proven itself more nimble than Dallas + Houston.)

          NOTE * Remember Monica Goodling (not that Monica) whose job was to hit all the Attorneys General? Talk about a deer caught in the headlights during the hearings! Totally not qualified (Regent University). And if the faction controlling an administration can’t even purge the Justice Department, what can it do? BWA-HA-HA-HA-HA!!!

  2. Vatch

    The chaos in Iraq (and elsewhere) reminds me that Victor Frankenstein lost control of his creation.

  3. Dirk77

    Merton’s comment makes sense to me.

    As far as Obama is concerned, I can understand the lack of direction. The only thing that makes sense is to go back in time, put Saddam Hussein back in charge of Iraq, and get the hell out of the Middle East and not look back. Probability seems slim though. As for the neocons: “There has never been a wise man who hasn’t failed to prefer the lie invented by himself to the truth discovered by someone else.” – Rousseau (as quoted by Ramon y Cajal). How must it be if the term “wise” doesn’t apply?

  4. Jagger

    Neocons, what do we need to keep them down…silver bullets, stakes, garlic, holy water and a cross, …something must work…

    1. Whine Country

      “..what do we need to keep them down…”? Simple, reinstate the draft and make sure that there are minimal exclusions. Like the bankers, war has become a heads I win, tails someone else loses (dies) affair. I remember reading a very well written (and reasoned) argument by an Army general when a proposal to eliminate the draft was floated in the ’70s. It described how our history of the “citizen soldier” was vital to the proper conduct of our military affairs. (Another example of the genius of our founding founders!) According to the general, elimination of the “citizen soldier” concept where wars were fought only when declared by congress and then by those of our society who would engage with one overriding concern, win and get home to get on with their lives. The general predicted that a military consisting solely of “professional” soldiers would lead to careerism and make war merely a business. And, as Calvin Coolidge said: “the chief business of America is business”. We keep listening to people who want to lead us but have no skin in the game.
      Shame on us!

      1. sufferin' succotash

        The problem with the citizen-soldier tradition was that it reality it was more lip service than anything else.
        As far back as the 1792 Militia Act there was no serious effort to enforce universal military service even though in theory all able-bodied adult males were supposed to be liable for it. Prior to the Civil War militia service was taken seriously in the Deep South because of white fears of slave uprisings; elsewhere being in the militia was strictly a volunteer affair. Even on the frontier the Regulars carried the heavy end of the Indian-fighting. The US fought two expansionist wars (Mexico in the 1840s, Spain in the 1890s) with Regulars and Volunteers. Imperial policing in Central America and the Caribbean was done entirely with professionals, mainly Marines (see Smedley Butler).
        Nope, the historical record doesn’t support the notion that decisions to wage wars of choice depend on the nature of the armed forces involved (representative of the population or not).

  5. James Levy

    This is bunkum. ISIS came out of the Syrian opposition which was funded and armed by the Saudis, the Turks, and the US (OK, and Qatar). It is our creature. It’s job is to kill Shiites and destroy the ability of Iraq under Maliki to buck the US and the Gulf States. The author is being naïve or stupid if he doesn’t realize these facts. But all he cares about is Uncle Sam waving his dick around and taking other people’s oil from them so that shits like him and those he shills for can make more money.

    1. Jim Haygood

      ‘Fallujah — a town made infamous during the U.S. occupation of Iraq when Sunni gunmen killed American contract workers, and where resistance to the U.S. presence became notorious.’ — Claude Salhani

      Astonishing … a scene of grotesque war crimes, where the US military indiscriminately targeted Iraqi civilians and children, is now ‘notorious’ for its ‘resistance’ to an illegal occupation. How dare they?

      Salhani must be one of our rent-an-arab presstitutes.

      1. Jagger

        I remember the US would not allow fighting age men to leave Fallujah before they made it into a free fire zone and razed the city. So what about the mentally ill, the crippled, the deaf, the blind, the ill, the innocents? Talk about warcrimes. Talk about infamy. Down the memory hole in the US.

        The Israelis did something very similiar to a Palestinian town which I can’t recall the name. Just completely flattened it with bulldozers when they were done. I remember wondering why we follow in the footsteps of the worst of the Israeli atrocities.

    2. Banger

      If he drew the obvious conclusion you are drawing then he would never get mainstream media gigs. The tragic thing is that the ISIS/ISIL situation is as obvious as it is yet not a subject of discussion–this entry, while useful to discuss the issue here is clearly very incomplete. Why not look slightly deeper than the surface–why is it forbidden to look into who funds this group, what are the origins of these groups–who fights for them–there’s talk of mercenaries and so on but the mainstream media checks with their contacts in the media to gauge what line is allowable in mainstream Narrative and then try to make sense of things within that narrow range of opinion. The author, I’m sure is not stupid or naive–just part of the system.

    3. Doug Terpstra

      Right on target, James, except about Salhani being naive or stupid. I’d suggest dishonest and cagey. Here we have a W Times (Moonie) correspondent soft-serving us the case for regime change 2.0. How’s this for feigned puzzlement:

      “…this latest crisis did not suddenly appear out nowhere, as the loudest media narrative has. insisted. Alarm bells and red flags were. consistently ignored by the Obama [regime].”


      “Alarm bells and red flags were consistently ignored by the Obama [regime].”

      Riiight, the Neocon regime was, despite “repeated warnings”, caught totally off guard by the very same terror group it funded in Syria.

      Oh please. Maliki disobeyed imperial orders, assumed our oil was owned by Iraqis, and must now be chastened or removed. This MSM idea that ISIS is some grave new global threat the US regime never saw coming is self-evident nonsense. In reality, a divided Iraq is probably more stable, at least for Exxon, BP, Shell et al. ISIS is a conjured bogeyman, thus far, though it may get out of CIA/Mossad/Saudi control at some point.

      1. sufferin' succotash

        The general ignorance of history on the part of our so-called policy makers never ceases to astound. The evidence of the past 1500 years is that any outside power that attempts to use, manipulate, or otherwise exploit the Arabs always ends up getting its ass kicked. The emergence of Islam was in part initially an Arab reaction to persistent meddling by the neighboring Byzantine and Sassanid Persian Empires. Both empires assumed that that the primitive childlike Arabs could be moved around like pawns on a chessboard. Bad mistake, but somehow the lesson never sinks in.

  6. lakewoebegoner

    1) Fortunately? Unfortunately? for once the typical Dem/Rep divide is muddled as there are lots of Republicans who dislike anything Obama does but also dislike anything to do with Iraq but also dislike Islamic fundamentalism but also dislike Iran. A complete “divide by zero” error.

    2) “It’s a dirty job, but somebody has to do it.” I’m in the camp that “doing nothing” can be no worse than the history of US interventionism post-1946.

    3) ironically, the Neo-Cons’ best hope may be a Clinton 2016 victory as I see Clinton as a 100% US interventionist, a likely closet neo-con and definitely a person who buys into the idea that the US should fight ‘humanitarian’ wars like in Kossovo and Libya—aka the Rwandan Holocaust guilt syndrome.

    1. Lambert Strether

      1946? I’ve been reading up on the Philppines. The 1898 war against Aguinaldo was just like Vietnam, except no B52s and we, well, won. Of course, the Army that fought it had just gotten finished polishing off the Plains Indians, another lovely little war. It goes back before 1946….

  7. Quantum Future

    Isn’t the job of global policeman part and parcel of reserve currency host? According to the IMF, the defacto host is now China. Someone correct me if I am wrong or clarify, but didn’t Haliburton contract the Chinese for oil field reconstruction?

    Can anybody tell me where ISIS received it’s funding? Follow the money?!?

    Why is this M.E. editor for UPI asking America to do the dirty work? Because the American MSM doesn’t support it?
    The U.S. has had plenty of kenetic action taken without Congressional approval. Why does Al-Malaki need air units, I thought the U.S. has formidable carrier fleet in the Persian Gulf and air bases in surrounding countries. The Iraqi army with vast U.S. air support can’t stop a few hundred jihadis in toyota pickups?

    In any event it is China’s job now – sorry middle kingdom, fence sitting is not a condition that can last long. How about you Chinese get your hands dirty expending blood and treasure? As an American, I think we have given more than enough and what did the population get in return? A lot poorer and global scorn….

    1. daomaha

      You are not the only one who noticed that China benefited greatly from the Iraq war (as evidenced by the oil contracts).

      I believe that was no accident but part of the “deal”. We can only look to the end results of the Iraq war to deduce what the real motivations were.

      The evidence is overwhelming it was to protect the petro-dollar. So where does China come in? Was this a payoff?

    2. EoinW

      The poverty and global scorn have been well earned. Comes with apathy, ignorance and rabid nationalism.

      You are just mad because China has a more intelligent(less parasitic?) leadership. Plus average Americans have given nothing. It’s been taken from them by their own leadership which they continue to glorify as fabulous celebrities.

      1. Lambert Strether

        Yikes! Different clue, that’s an object lesson in why pasting URLs into comments isn’t always the best idea, because WP doesn’t know how to break shorten them. You should have seen how that URL looked in the sidebar — about two inches tall.

        So I put it into an HTML A tag.

  8. Globus Pallidus XI

    Ah yes – technically you are correct. The Neocons are thinking exactly like the banks that blew up the world economy.

    They are thinking that they are so powerful and have so many rich backers that it doesn’t matter how much they fail or how bad things go, they will always be showered with honors and money and membership on corporate boards etc. The neocons are beyond consequences.

    So they give massive aid to extremist jihadists in Syria – a mistake that a dull-average high school student wouldn’t make – and it blows up their face – and they don’t care, because they are so insulated from reality. It’s all our fault. It’s all Maliki’s fault. Or the French. Or those obstructionist Republicans. Or something.

    The neocons hear only what they want to hear, because they can. For a little while longer.

  9. OutsideLookingIn

    “But it isn’t true for the US as we become more and more resented and isolated.”

    Awwww. Poor old Americans. I’ll shed a tear for you, if I have any left after weeping for the millions of dead human beings, and the millions more whose lives and families have been wrecked in the countries you broke like a spoiled kid playing with toys.

    1. Yves Smith Post author

      It might help if you noticed that the majority of Americans are opposed to US military intervention abroad. And the point about isolation is not to elicit sympathy, but to point out that these destructive, reckless policies are backfiring.

      1. EoinW

        Rewind please. The majority of Americans supported Afghanistan and Iraq at the beginning(when it actually mattered and their opposition might have stopped both invasions). Furthermore Americans did not turn against the Iraq war until the perception America was losing came into play. Have to conclude that Americans oppose losing wars, not wars themselves as a rule. Only natural as this attitude was inherited from the British Empire and still exists to a lesser degree in the British Commonwealth nations.

        Plus to be fair to my US friends, they’re simply victims of being white and thus programmed by century old attitudes. We lived in a very racist world a century ago and have made significant progress the past 100 years. Nevertheless whites throughout the western world still view the lives of foreigners of different religions and different or slightly different colour as being of less value. In Canada, the big concern at the time of the Iraq invasion was how to oppose it but maintain business as usual with our southern neighbour. No amount of Iraqi dead was ever going to lead the Canadian government to even talk of closing the border or economic sanctions against the US.

        The new White Man’s Burden is the struggle he must endure with his conscience. Very handy to blame it all on the neocons and avoid such a struggle. Will be even more convenient when an Iranian nuclear plant is bombed or the US finally gets around to the neocons ultimate wet dream: using tactical nukes and getting away with it.

        1. Yves Smith Post author

          I was in Australia in the runup to the war. Australia is white and not opposed to imperialism, so your racist explanation doesn’t wash. The media coverage could not have been more different. I’d regularly see stories that were front page in the press there (anti war) that were not at all in the US press or buried in the middle of the first section of the NY Times below the fold. 94% were opposed to the war (you never see numbers like 94% in polls) yet their Prime Minister still decided to follow the US.

          Propaganda works. Go read up on the Creel Committee. It’s called “garbage in, garbage out” in computer terms.

          And contrary to your account, there were efforts to have large scale demonstrations. In NYC, despite it being a bitterly cold January day, hundreds of thousands turned out to protest. They tried to get to UN Plaza but were barred at Second Avenue and herded towards Harlem. I’ve heard numerous accounts from participants as to how large the crowd was (enormous, it took a full court press by the NYPD to divert the protestors). It was blacked out by the media.

          1. Jackrabbit

            I didn’t take his comment to be that there wasn’t opposition. He talks about the majority that didn’t find the moral courage to actively oppose the war.

            I do blame the neocons. They will push and manipulate as much they can until there is opposition. That opposition ulitmately has to come from the people.

      2. guest

        Most Americans are opposed to military intervention.
        Very well.
        But are they opposing it?

        1. Yves Smith Post author

          Did you see what happened to Occupy Wall Street? Tell me how Americans oppose paramilitary police forces. There is no more right to assemble in the US.

  10. pissed younger baby boomer

    As my grand father told my mom .The rich elite ran the world in the past and into the future.Now we have climate,social,and political crises,if it comes up to total collapse as planet we ‘re finished .I read and heard on the internet and cable/satellite news channels,our demise is 2020 A.D. OR 2030A.D. The year 2030 was confirmed by mathematicians of the colleges in the America.It was a professor in the early1970’s or late 1960’s. I forgot his name :( .

  11. Lambert Strether

    “The ideas of the ruling class are in every epoch the ruling ideas.” So, if the apparent strategy for Iraq is “troublingly similar to the way banks generate risk,” that is because the banksters are ruling the country, and that’s how they think.

  12. mmckinl

    ISIS is part and parcel of the US/CIA/NATO- KSA destabilization plan for the Middle East. ISIS is a big show designed to foment more fear and terror both in MENA and in the US and the EU.

    Be prepared for a rough Autumn … With the US besieged by a faltering economy, NSA revelations and a gathering storm around dollar hegemony their next planned false flag/ war could be soon.

  13. John

    I spent many years in the Iraqi zone and will add the biggest winners were the large American and allied companies that set up shop to gouge the tax payers. Contract sizes were enormous and gave a big boost to the Wall Street bottom-line. Planes would fly in loaded with cash from the US which ended up in someone’s pocket as soon as the plane landed. Auditors would come to investigate where all the money went only to find there was little accounting. A few characters were punished but the money could not be brought back… It was in someone’s wallet.

    War was good to the neocons. They could get their speaking fees and join corporate boards to give ‘advice.’ Retired generals were given accesss to TV to divulge Pentagon propaganda so FoxNews in turn could hire them as a ‘guest.’ They want the good times back.

    Recently the ‘cons have been behind the scenes keeping veteran funding from advancing in congress. The bills are not ‘paid for’ is the punch line. Ironically, the ‘cons are quick to get themselves re-freshed and re-branded to push for a war that is not ‘paid for.’

    Follow the money then all your puzzles will be solved.

    1. trish

      I agree. Follow the money. The Iraq war in all its chaos and death and misery for so, so many has been a gold mine for the corporate/finance elite (Cheney’s Halliburton, blackwater were early poster children for this).
      All those others, the Iraqis, the peons fighting our wars, don’t really matter.
      (Indeed, there seems of late a way to squeeze a little profit from the latter via VA privatization drift).

      A gamble on profit, what does it matter the wreckage, the carnage, the destruction left in their wake?

      I think some of the best analysis of Iraq lately has come from Counterpunch’s Mike Whitney et al (often linked here).

    2. Banger

      Exactly–the basics of the situation involve money–and money, in the case of the whole Iraq venture was at the heart of the Iraq War, not necessarily it’s initial planning but as the War went on every shark in the water in Washington and that place may well be the most shark infested area in the world (I lived there for most of my life). Iraq was corruption central and everyone knew it but the American public and the usual gee-whiz retards that make up some of officialdom.

  14. joecostello

    Of course his conclusion is obscene and ahistorical as the US has proved pretty inept at imperial business post-WWII. But thats not really the point, its the oil, and we’ve spent trillions trying to secure the oil around the gulf for forty years, yet it grows more expensive and less secure every year.

    I suppose at some point an American politician will break the rule of verboten to talk about why were in the Gulf, and say were there for the oil, unfortunately they’ll probably get more support for reengaging. Sad business empires and their end.

    1. Jim Haygood

      ‘But thats not really the point, its the oil.’

      Funny, I don’t remember Richard Perle, Paul Wolfowitz, Douglas Feith and the ex-con Scooter Libby rabbitting on about the oil that much. Their schtick was ‘Saddam is Hitler,’ with its none-too-subtle Holocaust associations.

      For this crowd, ‘securing the oil supply’ was but a convenient pretext for executing the PNAC agenda of William Kristol and Robert Kagan.

      1. James Levy

        If not one, then not the other. Oil comes first, Israel second. The American elite is pretty happy giving Israel a pass to beat down her Arab neighbors. But they will only go all-in with land forces for reasons of oil or prestige. Keeping Jewish political donors and Zionist pundits (Jewish or not Jewish) happy and is a consequence of America’s oil mania, not its cause. The Dick Cheneys of this world would throw the Israelis to the wolves if they screwed with their bottom line. America’s love affair with Israel is a matter of national convenience, not conviction.

  15. /L

    Neo-cons doesn’t they believe in “creative” destruction and out of the ashes will Fenix rise. If not US total control and smooth operation could be achieved second best is Divide et Imperia, when waiting for Fenix to rise from the ashes. Finance don’t need roads and and infrastructure for functioning workers to make profit.
    Now almost all of the local powers of potential opposition to US world order is crushed to pieces. Iraq, Libya, Syria. i

  16. Working Class Nero

    The key here is Iran. The US strategic goal is to bring Iran in from the cold. The way accomplish this is to build up leverage by having some insane Sunni jihadis threatening the Iranian puppets in Iraq. The first step are the ongoing nuclear negotiations. Not only did the US release the Jihadi dawgs of war in Iraq; they also recently showed their resolve to continue sanctions if there is no deal by fining BNP Paribas. If there is a deal; an unmentioned part of it will be US assistance in rolling back the ISIS. If there is no deal expect the ISIS to increase their attacks against Shiites.

    Remember, the US is much closer to Sunnis and it was always a little strange invading Iraq just to hand it over to Iran. Now Iran has to balance making concessions of enriching uranium vs. losing more and more of Iraq.

    1. Yves Smith Post author

      Except you forget that Iran was EXTREMELY helpful to the US in the wake of 9/11, so much that that organ of leading edge conventional wisdom in the security state, Stratfor, was gushing about “the coming US/Iran alliance” in 2002 and early 2003. Then Bush gave his “axis of evil” speech and that honeymoon was over.

      And we were the ones who overthrew Iran’s democratically elected leader in 1953 and installed the Shah. So who exactly is to blame for Iran not seeing the US as a reliable ally?

      1. Working Class Nero

        The goal here it to try to understand what strategy the US foreign policy establishment is following — not determining who the ‘good’ or “bad” guys are. Of course Iran has historic issues with US behavior — just like most other countries in the world. Yes the US screwed Iran by placing the Shah in power and one way of trying to make amends was to boot out Saddam and place the Shia in power there. But the US was always going to expect some concessions from Iran, not least of which will be on the nuclear issue. Ultimately the goal is to have Iran accept and respect US global authority. And along with sanctions, the only other thing the US can do is threaten Iranian hegemony in Iraq with the ISIS. If all this fails then the next President will again start threatening an attack on Iran.

        To understand or explain what someone is doing is not necessarily the same thing as endorsing these actions.

        1. Yves Smith Post author

          Except that the threat of attacking Iran is an empty threat. The collateral damage to the world economy would be catastrophic. Iran has tons of well-protected conventional weapons aimed at Saudi oil fields and refineries, and it also can close the Strait of Hormuz. If it hits one tanker, or is believed to be able to hit one tanker, shipments through the Strait stop. Plus even with a big wave of US air strikes, Iran has enough missiles aimed at Saudi targets that it can put the Middle East in flames within the first hour of a US attack. Oil prices go to $200 a barrel or $250 a barrel overnight. And everyone who is reality based knows that. So all the US really has to use against Iran is economic sanctions.

          1. Jackrabbit

            “So all the US really has to use against Iran is economic sanctions.”

            And IS/ISIS.

          2. James Levy

            Yves, I think you are right but we have to remember a quote from a certain someone from the very small US foreign policy establishment: “I think it is a cost worth paying.” The Albrights and the Perles and the Kristols of this world are not going to go hungry or broke because oil hits $250 a barrel. Neither are the Clintons or the Romneys or the Bushs or the Obamas. Sure, they know that attacking Iran is a bad idea. But they are the most haughty, prideful, vindictive sons of bitches around. If Iran gives them the finger long enough, they may (will?) attack on petulance and spite. Hell, they destroyed Libya for less and just walked away.

            1. James Levy

              Oh, and Bechtel and Haliburton and the Carlyle Group will make tens of billions rebuilding all that infrastructure. Win-win.

              1. susan the other

                Well, Bechtel for one, has plenty of other more pressing, honest and immediate tasks, like Fukushima support, Hanford, the NM WIPP, lots of crap in Colorado, South Carolina, Tennessee, Kentucky, Illinois and etc. etc. Haliburton is not an expert in anything except drilling rigs and government handouts; and Carlyle only funds what brings in big, unjustified, under-the-table returns. And Etc. So yes, capitalism is a lot like war.

          3. EoinW

            It’d be an empty threat if an intelligent person who cared about America was in charge. Don’t forget the psychopaths running the show. If they think they can personally profit from bombing Iran… We do know these ambulance chasers love train wrecks.

            What matters the destruction of the world economy if the people destroying it are still in charge of the most powerful country afterwards and can institute their new world order? Lesson #1 from Wall Street post 2008.

          4. Banger

            Not quite an empty threat. I never believed the U.S. would attack Iran for the reasons you cite–bad for bidness. But there is a faction within the national security state centered in parts of the CIA and the Air Force that want general war—sort of the same faction that wanted JFK to attack the USSR during the Cuban Missile Crisis. Their goal is to push aside the bankers and corporate elites and make the world a place dominated by the military presumably to impose virtue on a world some of these types see as degenerate. Fortunately these people are not dominant at the moment, obviously. But they came fairly close, according to people like Sy Hersh to getting their way.

            The central conceit of the neocon program of war and chaos is that it would give the U.S. a mission, as in WWII, that would unite the country and cause virtue to bloom. If you read Adam Smith’s The Theory of Moral Sentiments you will find a section there that talks about war as being important and the neocons are very much influenced by the classics and tend to reject modernism as destructive to morality and social cohesion–and they are right in that analysis.

          5. Park Nihrs

            Or further strain the Iranian economy with a distracting war in Iraq. Russia is also put under pressure, and the pretext is there for another overt war, not in Iran, but in Iraq and Syria.

            From Nabeel Naiem, “one of the founders of Jihad in Egypt, and … at the beginning times of Al-Qaeda,” we get the claim that ISIS forces were trained in Jordan under USA tutelage.
            “When Obama was exposed and it was learned that he’s arming ISIS and Nusra Front with American and Turkish weapons said: ‘We will stop the arming because the American weapons were leaked to Nusra..’ Didn’t Obama say that?
            Leaked?! You discovered it was leaked after 2 years war?! … Are you thinking we are fools? [Naiem then refers to PNAC, and Cheney et al]
            … [Snip] …
            This might all be misinformation, but it concords with the report by Seymour M. Hersh

            Hersh’ more solid information links the sarin attacks to Al Nusra Rebels being supplied and trained by Turkey. (ISIS came over to Syria from Iraq.)
            “British intelligence had obtained a sample of the sarin used in the 21 August attack and analysis demonstrated that the gas used didn’t match the batches known to exist in the Syrian army’s chemical weapons arsenal.”
            … [Snip] …
            ‘We now know it was a covert action planned by Erdoğan’s people to push Obama over the red line,’ the former intelligence official said. ‘ …The deal was to do something spectacular. [Sarin] could only have gotten there with Turkish support. The Turks also provided the training in producing the sarin and handling it.’”

            The Turks have also been the main pipeline for weapons from Libya (Benghazi) to the Syrian Rebels.

            All this happens near the borders of Russia. Meanwhile, shelling of civilian targets in the Donbass/Eastern Ukraine/NovoRussia continued without Western MSM reports. The Nazi government in Kiev has indirectly sponsored massacres in Odessa and Mariupol, bombed the “terrorists” (Russian speaking civilians) in Slaviansk and created 500,000 refugees. Ethnic cleansing, genocide. Putin shows great restraint so far, but he has his hands full. Cold War II is underway.

        2. amateur socialist

          Ultimately the goal is to have Iran accept and respect US global authority.

          Coming soon to an election near you!

        3. flora

          China has large investments in oil field development in 2 of Iran’s largest oil fields. China exports a great deal of Iranian oil. A US military strike on Iran would step on China’s toes pretty badly. I don’t think the US wants to do that for all sorts of reasons. (on a side note: the China-Japan saber rattling is ratcheting up.)

        4. Gaianne

          The Iranians are not stupid. They know full well from hard experience that the US will not rest until Iran is destroyed. Being a relatively weak player, they have to pretend to co-operate while mitigating the damage of co-operation. So far, they have been managing this balance quite well.

          It is not that the US is an unreliable ally–though our allies do tend to discover this regularly. Rather, the US is an implacable enemy. Nothing the Iranians could do or can do will change this-and they know it.

          However, the US is also a declining empire. As Eurasia learns to co-operate and form a center of resistance, time is on the Iranian side as they throw in with Asia. They just have to persist.

  17. john dordan

    what about the israeli lobby element? didn’t the pro-israeli neocons (wolfkowitz, feith, perle et alia) write the “clean break” manifesto–a blueprint– for netanyahu in 1996 which called for the destruction of the middle east as we know it. their goal was to make the middle east safe for israel. haven’t their operatives taken over the defense establishment and implemented those plans. shouldn’t american kids die for israel? shouldn’t palestinians be rounded up and put in concentration camps?

  18. Ignim Brites

    Obama’s policy is to slow/sleep walk through all these middle east crises while Americans get used to the idea that we really have no national interests in the region. It is really pretty straight forward.

  19. Jackrabbit

    It seems to me that Oilprice is only regurgitating MSM bulls!t.

    We’ve been talking about ISIS/IS on NC for 2 weeks or more. Many interesting and insightful comments have been made in that time. So I don’t really see why the studied ignorance and pretended bafflement of MSM (regurgitated) would draw your attention. Just yesterday, Banger summed up what many keen observers believe when he wrote:

    “ISIL is a US/UK/Gulf State operation with other intel services contributing particularly the Turks and Israel. That’s why the reaction in the media is so odd.”

    And we had a whole discussion the day before in the post: Glen Ford: ISIS Declares Caliphate as US Middle East Policy Continues to Unravel which was summed up very well by Fiver as follows:

    What’s expressed here in comments is gaining traction in many independent media – just too many lies too many times, and with this latest plot twist too many glaring discontinuities for credibility to grant. Even 5 years ago we would not have seen nearly so much reasoned doubt expressed so quickly and based on enough evidence from various sources to legitimately question what I believe is the fairy-tale we’re all being told.

    I can understand not wanting to believe what is behind IS/ISIS because it is so horrendous and/or experiencing cognitive dissonance because Obama was supposed to be so good and just and fair and wonderful and . . .

    Here’s a little help:

    > In the 2008 election, Obama promised the American people “change you can believe in” – we got more of the same.
    Plus Election fraud (Benghazi and IRS), the lie of “if you like your insurance, you can keep it”, etc.

    > In his Cario speech, Obama promised “a new beginning” with the Arab World – The US now supports the Egyptian coup government and (covertly) sectarian war.
    And I have said several times that no one should be counting on the overture to Iran to bear fruit. It is rather strange to me that soooooooo many take our deceitful President’s peace initiative as genuine and virtually certain (because Obama?!?).

    > Obama promised a “reset” with Russia – they got a Ukrainian coup and sanctions.

    H O P

    1. Jackrabbit

      With that said (above), I think Yves is intuitively on to something.

      The TBTF analogy has some appeal but I see it a little differently. In the Iraq War, the neocons were like traders at a big bank, exercising a free option to take risky positions. Rouge traders can bring down a bank, and the Iraq debacle ‘brought down’ the MIC bank. Committing US troops to is now off the table.

      Today we have a far worse situation. Neolibcon’s think they are TBTF. USG deceitfulness is ‘political credit’ that has been extended to the neolibcons. And the US, the NWO monoline insurer is now stuffed with it. The stakes are MUCH higher and rise to a systemic level. Allies have been roughed up and enemies united against us. Any neolibcon reversal could lead to criticism and rebuke that open the floodgates of public disgust and despair. Stocks MUST keep marching higher and neolibcon adventures MUST succeed. The neolibcon shark must keep moving forward or perish.

      This is where people can make a difference. IF/WHEN the music stops, neolibcons will look to the ‘Deep State’ to bail them out. They will appeal to patriotism and all that is good and holy (think of the children!). They will be at their doorstep early, before significant public outrage is expressed (recall Hank Paulson’s initial demand for a $700 billion no-strings attached bailout). Criticism NOW against neolibcon policies and adventures could be important when the ‘Deep State’ is faced with such a choice.

      1. Jackrabbit

        Somehow this got lost: USG is now stuffed with wrong way risk.

        To the extent that any neolibcon deception becomes unglued, the whole house of cards is at risk.

  20. Steven Greenberg

    You have to take into account how the goals with respect to oil have changed since we invaded Iraq. When we first invaded, the US was a net importer of oil. We needed to control more foreign oil.

    Now, with fracking and such, the US is the largest producer of oil. Our goals have changed. Now we want to take as much foreign, competing oil off the market so that the prices of our own oil can rise. Sanctions on Iran and Russia to take out their oil. The collapse of Iraq to take out their oil. Sanctions on Venezuela to take out their oil. Destabilizing Ukraine to take out their oil. It all makes sense.

    1. James Levy

      Your facts are not facts. The US is third in global oil production, and produces less oil than it did in 1971:

      Because oil smashed through the magic $80 a barrel figure all sorts of dirty, difficult non-conventional sources started to become economical (if not ecologically sound). Everyone in the media likes to blather about technology, but we knew that shale oil was there back in the 70s and could have developed the technology to extract it then. What changed was the price of oil. And what this has done is cement us into a high cost-per-gallon regime where our most reliable local sources are also some of the most expensive. Other than a few sweet spots, shale oil and tar sands today are unprofitable if oil falls below about $100 dollars a barrel, and those sweet spots are depleting rapidly. The era of cheap oil is over.

    2. Gaianne

      Only, the US is still a net importer of oil because our domestic consumption is so high.

      With oil fracking set to peak in two years, the US will never become a net exporter. Even the coming economic crash is unlikely to reduce consumption sufficiently to change the import/export balance.

      Okay. One scenerio that supports your position: The US economy collapses to the level of Haiti. No business. No commerce. Survivors of the crash subsist by farming with manual tools. American oil goes to China. I admit this is possible but I do not think it is likely.


    3. juandonjuan

      we’re STILL a net importer of oil, albeit a lower percentage, and not so dependent on MENA supplies. BUT oil, unlike natgas, is a marginally priced commodity and we are Not Invulnerable. Or at least not all of us

  21. Banger

    I think, perhaps, the main issue here, as Jackrabbit rightly argues, is whether or not we accept the mainstream media Narrative, as the author of this piece does or, decide to look deeper. There’s a question here of whether the U.S. knew about the strength of ISIS and whether that was communicated to the President. The CIA knew because the CIA was instrumental in forming not just ISIS but the whole jihadi movement to create and maintain the illusion of threat and thus further the development of Police-State USA after the death of the Soviet semi-threat as well as keeping the voracious maws of the MIC fed. This is the emerging consensus of those of us who understand that these situation arise from the reality of the Deep State.

    And this is where we are, not only in our discussions about FP but economic discussions as well. Any kind of federal response whether it is to a financial crisis or any domestic issue comes at the pleasure of the Deep State, not the POTUS and not Congress. So this is what we ought to be talking about not the misdirection of articles like the one presented here. Of course I know that this is unlikely because the gauleiters within the left would howl at the Moon at any sign of “conspiracy theories” because that would put EVERYTHING into question. Here is the main thing–this Deep State is not a highly stratified top-down structure–but a collective that is broadly based, international and structured as an emergent network of people who have been carefully vetted as all people are the minute they come close to power. We can tiptoe all we want around the subject but a careful look at world events since WWII would indicate that something like a Deep State must be there–or, perhaps, something supernatural. At any rate the evidence concerning the situation in the ME is obvious and the motivation of why the Obama administration is obvious too–I agree they are confused but not because they are ignorant or “mistakes were made” and all the usual crap the MSM regurgitates–but because, in my view, different strata of this state are in conflict. Some want perpetual war and chaos and others want a more moderate approach.

    But a critic of my approach needs to explain why the U.S. and its allies have consistently supported jihadis in the region from the 50s to this day. Or, perhaps, you don’t believe that is the case and then we can have a historical discussion. Because if I’m right that brings into question 9/11 and all the destruction of the U.S. Constitution as well as what I believe to be Orwellian wars that followed mainly fought for profit and domestic political reasons.

  22. PaulArt

    Parasites go where the money is. This is the story of the Neocons or any other group. If you spend upward of a billion dollars each year on Defense then you are basically engendering the growth of several groups, independent and/or financed by corporate benefactors motivated by this stream of cash. Neocons are one such group. People like Wolfowitz, Perle and others are parasites that feed off defense cash. Cut off the flow of money and these fellows will pack up their tents and look for other circuses to go clown in. IMHO, the death of America will come from the obstinate refusal of its elite to cut off the head of the Defense snake. I think its a complete waste of time talking about what to do in Iraq and strategy and all that nonsense. No other country in the world spends so much time and effort meddling in other nations goings-on. Let Iraq and Syria fix itself. Lets plan to stop depending on oil from these places. That should be the only solution. In many ways the Tea Partiers have it right. Washington has become a cesspool of corruption that is tended to and fed by Federal dollars and has become unaccountable.

    1. Jackrabbit

      Neocons are ideologues. They co-opt the parasites to achieve their ideological goals.

    2. Jim Haygood

      ‘I think its a complete waste of time talking about what to do in Iraq and strategy and all that nonsense.’

      Years ago, rummaging in a used book store, I came across an erudite paper on Vietnam by Robert Kennedy. It went on for dozens of pages about the inner workings of the Van Thieu regime; policy options for shoring up the ARVN; U.S. defense appropriations and the draft; etc. With the passage of a few decades, it was all so utterly anachronistic. Vietnam governs itself, and not one in 10,000 Americans could name its leaders.

      So it is with Iraq. ‘What should we do about Iraq?’ is of a piece with the question an anguished contributor urgently posed after scandal broke out around televangelist Jim Bakker: ‘What are y’all gonna do about Tammie Faye?’ The option of ‘ignore her and she’ll go away’ never occurred to him.

      And so it is with the America’s idée fixe that the ‘city on the hill’ must share our enlightenment with lesser peoples, at gunpoint if necessary.

  23. Paul Tioxon

    If those finance types can recall some of their fond memories of SUPERTANKER AMERICA, STILL ON COURSE, by the then famous rah rah of capitalism out of Goldman Sachs, Abby Joseph Cohen, who was lionized and celebrated to the nth degree due to her unsinkable coined meme of the American economy being a supertanker, able to sail over the rough oceans of turbulence, towering waves of volatility that would sink lesser economies, but no, not us, we’re special, we’re SUPERTANKER AMERICA! You get the financial code of the road for American exceptionalism.

    In that regard, the blind faith in the overwhelming power and greatness of America, as exhibited in our singular dominating superior military capacity is mirrored in the #1 position as the largest economy. of course,the two go together. The two camps differ in the ultimate power proposition. One believes that money makes the world go round, the other believes that power comes out the barrel of gun. It’s sort of a wave/particle dichotomy that lesser minds melt down upon contemplation. Power like energy comes in different forms, and energy becomes matter and matter can become energy. We see separate states of existence but it is all one. Our minds process reality as best it can, but the underlying unity of banking and military power is a question of when to abstain from one or call down the other. One thing is prized above all by both, stability or certainty as the business community whines about on a daily basis today.

    The world is too volatile right now, and too many countries strike out on their own. That is why policy looks incoherent. A hegemon get most of what it wants 95% of the time, due to getting everyone else that counts to go along, to get along. But when too many people get bright ideas, get to ambitious to show initiative, then the hegemon looks like he lost control. That’s because he has. For the sake of conversation, I would say America is getting most of what it wants, 80% of the time. In Iraq, other than not being there to fight a war with our troops, we are getting nothing that we want at all.

  24. flora

    Bankers fell in love with the “disrupt or be disrupted” business ideology. Neocons appear to accept the same dubious approach to foreign policy, military action, and history.

    per Jill Lepore in The NewYorker:
    “The eighteenth century embraced the idea of progress; the nineteenth century had evolution; the twentieth century had growth and then innovation. Our era has disruption, which, despite its futurism, is atavistic. It’s a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation, and shaky evidence.

    Most big ideas have loud critics. Not disruption. Disruptive innovation as the explanation for how change happens has been subject to little serious criticism, partly because it’s headlong, while critical inquiry is unhurried; partly because disrupters ridicule doubters by charging them with fogyism, as if to criticize a theory of change were identical to decrying change; and partly because, in its modern usage, innovation is the idea of progress jammed into a criticism-proof jack-in-the-box.

    ….”When the financial-services industry disruptively innovated, it led to a global financial crisis. Like the bursting of the dot-com bubble, the meltdown didn’t dim the fervor for disruption; instead, it fuelled it, because these products of disruption contributed to the panic on which the theory of disruption thrives.”

    1. James Levy

      Sometimes an idea is so breathtakingly stupid that it is hard to argue with. When you combine a head-shakingly dimwitted approach to reality with cock-surety and all the money ZIRP can provide, it’s hard to coherently refute this idea of disruption. What is an intellectual to do in the face of smooth as glass sociopaths with tons of worth-affirming money our society worships telling people convincing-sounding fairy stories? Cite Heilbronner, Galbraith, Hobsbawm, and Kindleberger?

  25. flora

    It’s easy to see how the “disrupt or be disrupted” ideology serves as the mother of all self-dealing TINA excuses.

  26. Adam Eran

    Greg Palast says the Iraq war was designed to keep the petroleum in the ground. If cheap Iraqi crude made its way to the world market, oil prices could not sustain the highs they’ve recently reached. That, in turn, would make a lot of unconventional oil (fracking, tar sands) uneconomic to produce.

    …I have no idea whether it’s true, but it sure explains a lot.

  27. different clue

    Lambert Strether,

    Thank you for re-accessabelizing “Miss me yet?” as a tag not that long URL. I wouldn’t have known how to do that anyway and I can barely even understand what you described. I am but an analog refugee in this digital world.

  28. Vatch

    Hi DC. Here’s how:

    <a href=””>Whatever You Want to Say</a>

    will appear as

    Whatever You Want to Say

    The “<a” begins the block of text, and the “</a>” ends it. The slash “/” is used to indicate the end of a block that was started by whatever letter follows the slash. You can use the summary of the HTML rules at the bottom of the Comment window as a crib sheet.

  29. Steven

    The United States is following the same game plan it has followed at least since the days of Gen. Smedley Butler. To be the world’s banker, i.e. to issue its reserve currency, you have to be the world’s cop. As Gen. S. Butler noted Wall Street and its banks need their debt collectors, their high class muscle men. The number one criteria for creating the world’s ‘legal tender’ is the muscle to enforce the legal status of the money a country’s bankers and government create with printing presses, the country’s full faith and credit or just a few computer keystrokes.

    The Middle East’s oil may be The Prize in a strategic military sense. There is nothing like cheap oil if you are planning a big war with lots of tanks, bombers, etc. But the United States doesn’t NEED the oil and other fossil fuels. It has Canada and fracking. Europe, Japan and China on the other hand DO need oil. (More to the point, it has lots of open space it could cover with solar electricity generators and windmills, saving its oil for big wars if that was its pleasure. I still wonder whether it was America’s bankers that told Reagan to take down Jimmy Carter’s solar panels or the bankers’ biggest client, Saudi Arabia?) If they all have to come to the world’s cop and ask “May I have some oil (please)?”, they can’t very well say “But we don’t want any more of your money.” Dr. Michael Hudson keeps repeating “The product of Wall Street is debt.” He might have added the U.S. government to the list of manufacturers.

    Manufacturing debt, i.e. money, is much easier than manufacturing things people really need and can afford, particularly in a world already choking with industrial over-capacity. Moreover, it is less risky, especially when that debt is ‘guaranteed’ by the U.S. government and its military. U.S. auto industry execs laughed at the business model of German and Japanese car makers when they started manufacturing more affordable cars that didn’t fall apart after 3 or 4 years. They thought they had at least the American consumer better trained than to want to do something else with their money other than buy new cars and lots of gas to run them.

    Anyhow, rest assured. All is right with the world. Consider those Iraqi Chinese oil leases interest on the U.S. debt they hold; and consider IS and the general political instability fostered by U.S. foreign policies a reminder that the world still needs the U.S.

    1. Paul Niemi

      You’re right. The United States doesn’t need the oil specifically, but let’s turn it around and look at it another way. What would happen if 2.5 million barrels of oil a day from Iraq suddenly ceased to pump? Can the fighters there now do that? Sure. Could other countries hike production to compensate? Not really, they have already hiked production. So that oil disappears from the market and Brent crude hits $125 or more. In the United States, gas prices would hit $5 a gallon, but we can live with that, having gotten a lot more energy efficient in the last few years. On the other hand, I don’t think our biggest economic rival China could live with that price increase. It would be the straw that broke the camel’s back, their Minsky moment, pushing their economy off the cliff for sure. I happen to think their economy is going to crash anyway, as it is a debt pyramid of fatal proportions, but messing with the oil price could hasten that, and one of today’s themes is volatility of prices and who benefits. People are nuts enough now for someone to actually welcome the resulting chaos.

  30. VietnamVet

    The California rolling blackout electricity crisis of 2000-2001 heralded the beginning of corporate takeover of the US government; if there is money to be made, damn the consequences to the public. “All the money you guys stole from those poor grandmothers in California?” “Yeah, Grandma Millie man.”

    Jeff Skilling, Enron, was jailed. The Wall Street CEOs who followed the trail blazed by Enron have all avoided jail time.

    The corporate coup culminated with the United States involved in wars in Ukraine, Yemen, Sudan, Iraq and Afghanistan; all to make more money or to preserve the petrodollar. This insane need for money has merged with the fascist desire to be the world’s sole power.

    Thus, America’s ruling class are taking enormous risks, even greater than the mortgage derivatives that crashed the economy in 2008; including quantitative easing, no debt write downs, starting a civil war next door to a nuclear armed Russia, or egging on Japan with its confrontation with China. The White House is proposing to spend $500 million more for arms for Jihadists in Syria even after the Islamic State in the Levant liberated millions and millions in cash and Iraqi American supplied armament, seized an oil field, and whose main goal is to behead infidels like you and me.

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