Centre for Research on Globalisation
Centre de recherche sur la mondialisation


Geopolitical Catch 22: Uncle Sam's Paper Tiger Dollar

by André Gunder Frank

www.globalresearch.ca 18 January 2005

The URL of this article is: http://globalresearch.ca/articles/FRA501B.html

Uncle Sam has reneged and defaulted on up to 40% of its trillion-dollar foreign debt, and nobody has said a word except for a line in The Economist. In plain English that means Uncle Sam runs a worldwide confidence racket with his self-made dollar based on the confidence that he has elicited and received from others around the world, and he is also a deadbeat in that he does not honor and return the money he has received.

How much of our dollar stake we have lost depends on how much we originally paid for it. Uncle Sam let his dollar fall, or rather through his deliberate political economic policies drove it down, by 40%, from 80 cents to the euro to 133 cents. The dollar is down by a similar factor against the yen, yuan and other currencies. And it is still declining, indeed it is apt to plummet altogether.

To read part I of this article click America's Spiralling External Debt and the Decline of the US Dollar: Why the Emperor has no Clothes, at   http://globalresearch.ca/articles/FRA501A.html


Part II on a Two Part Article


Of course, crashing the $ would also in one fell swoop wipe out, that is default, the Uncle Sam debt altogether. Thereby, it would simultaneously also make all foreigners and rich Americans lose the whole of their $ asset shirt. They are still desperately trying to save as much of it as possible by not going for the crash, that is for broke. That is, they are trying to protect the remainder of their $ investment shirt by keeping their $ live sustaining pump going. The whole business of maintaining the Uncle Sam Ponzi Scheme poses the world's biggest and craziest Catch - 22 since MAD, and it is just about as mad.

All the more reason why it MUST be resolved. But the way out of the mad Catch 22 need not be a soft landing. It can be hard one indeed. This dissolution of the Uncle Sam Ponzi Scheme will be costly and the greatest costs will as usual probably be dumped on the poorest who are least able to bear these costs, but who are also least able to protect themselves from being forced to do so. And the historically necessary transition out from under the Uncle Sam run doughnut world can bring the entire world into the deepest depression ever. Only East Asia is in a relatively good position to save itself from being pulled - or pushed - to the bottom, but even then also after paying a high cost for this transition - toward itself!

However, the world is facing an even MADer global geo-political and military Catch 22. It remains the great unknown and perhaps unknowable. How would [will?] Uncle Sam react as a Paper [money] Tiger that is wounded by a crash of the Ponzi Scheme Confidence Racket from which he and millions of un-knowing Uncle Sammies have lived the good life? To compensate for less bread and civil rights but more "Patriotic acts at home, a more chauvinist Uncle Sam can provide a World War III circus abroad. A crash of $ will pull the financial rug out from under, and his discourage his foreign victims from continuing to pay for new Pentagon adventures abroad. But some more wars may still be possible with the weapons he would still have and some more Military Keynesian government deficit spending at home, also for the new ''small'' nukes he is preparing for the occasion. That could well - nay horribly - be the cost to the world of the current policies to ''defend Freedom and Civilization." The Super Catch 22 is that almost nobody other than Osama bin Laden wants to run that risk.

Yet, such a transition would [will?] not be historically new. Recall how much the transition to Uncle Sam cost: a 30 Year War from 1914 to 1945 with the intervening second Great Depression in a century that cost 100 million lives lost to war, more than in all previous world history combined, not to mention the literally [hundreds?] of millions who suffered and died from unnecessary starvation and disease. Or the previous transition to the British Major Bull cost the Napoleonic Wars, the Great Depression of 1873-95, colonialism and semi-colonialism, to name a few, and their human costs. The latter coincided with the most pronounced El Niño climatic changes in two centuries, which ravaged Indians, Chinese, and many others with famines. But these were in turn magnified by the Imperial Colonial powers who used in their own interests, e.g. increased export of wheat from India especially during years of famine.

The parallels with today, including even again taking advantage of a century later renewed stronger El Niños are too horrifying and guilt generating for hardly anybody to make. They include Uncle Sam's IMF imposed ''structural adjustment" that obliges Mexican peasants to have already eaten the belt that the IMF wants them to tighten still further. Three million dead and still counting in Rwanda and Burundi, and then some in neighboring Congo, came after IMF imposed strictures and the cancellation primarily by Uncle Sam of the Coffee Agreement that had sustained its price for these producers. And now - nay since the CIA murder of Lumumba and the elevation of Kosavubu in Katanga in 1961, indeed since the King of Belgium's private reserve of the Congo in the 19th century, we get the scramble for and production and sale there of gold for Uncle Sam's Fort Knox, and now also titanium so that we can communicate by mobile cell phone, diamonds for ever, and so on. Uncle Sam also took advantage of yet another strong El Niño event that ravaged South East Asia, and especially Indonesia, simultaneously with the post 1997 financial crisis that Uncle Sam deliberately parlayed into an economic depression. It was so great that it swept out of office President Suharto whom Uncle Sam had installed there thirty years earlier with his CIA coup against the popular father of Indonesian independence, Sukarno. That had cost at least half a million but also an estimated up to one million lives that Suhartu took directly plus the poverty generated by the infamous "Berkeley Mafia" that he installed to run the Indonesian economy into the ground. The parallels with the past also include environmental degradation, and the shift of ecological damage from the rich who generate it to the poor Third World who bears its greatest burden. And of course we should not forget World War III [the third after the second AND fought in the Third World] that Daddy Bush began against Iraq in 1991 [See my "Third World War" http://rrojasdatabank.info/agfrank/gulf_war.html http://rrojasdatabank.info/agfrank/nato_kosovo/msg00080.html ].

Yet there are also others in the world who do not [yet? ] feel all that caught up in the Catch 22. Calculatedly just before this year's 2004 Uncle Sam election, one of them said so out loud in a video broadcast to the world. It seems to have been least publicly noted by its principal addressee Uncle Sam, who should have been the most interested party: For it was none other than bin Laden himself who announced that he is ''going to bankrupt the Uncle Sam! '' In view of the deliberate Uncle Sam blindness to the shakiness of his real world foundation abroad, so massive a collapse abroad may not be more difficult to arrange than as it was only to topple its Twin Tower symbol at home.


to redistribute income from poor to rich at home and abroad to blackmail friend and foe to do the same

Meantime back on the farm as the saying goes in Texas, what does Uncle Sam himself blithely do with the world's hard earned savings and money? His consumers still over-consume it without 99. 9 percent of them knowing what they are doing, since hardly anyone tells them so. And Uncle Sam's government uses much and all of its increase of hundreds of B$ for the Pentagon. That money is not spent to pay its poor professional soldiers who come mostly from small town rural America and took the only job they could get, and even less is spent on its hapless reservists. They told Rummy in Kuwait that he does not even provide them with sufficient and safe equipment. Rummy replied, I am an old man, I just got up, and I need time to get my thoughts together.

But at home in the Pentagon, Rummy faces no such problem. There he knows very well what he is doing, privatizing war also in Iraq as at home. The Military-Industrial Complex against which General Eisenhower warned in his 1958 parting Presidential address is alive and kicking, more than ever under the stewardship of "Vice" President Cheney and his De[a]fSec Rumsfeld. With their jobs disasterously well done, both are being kept on for a second term. So is Paul Wolfowitz "of Arabia" who with Douglas Feith is one of the duo at the Pentagon that went to Israel. Regarding the latter, the German Der Spiegel Dec 20,2004:33 quotes Tommy Franks, who was the commander of the Iraq invasion, as calling "the greatest total idiot that there is on God's Earth, with whom I have to battle almost every day"].

Between 1994 and mid - 2003, Uncle Sam's Pentagon made over 3,000 contracts valued at more than $300 billion with 12 Uncle Sam private military companies [PMCs] out of the 35 estimated by the NYT, others of which are small and offer mercenary services. But more than 2,700 of those contracts were given to only two companies: to Kellogg Brown & Root (KBR), a subsidiary of Cheney's Halliburton, and to Booz Allen Hamilton. [Center for Public Integrity's International Consortium of Investigative Journalists, cited in Mafruza Khan e-mail, 16 Aug 2003]. In Iraq these PMCs now have as many mercenaries as Uncle Sam and UK troops combined. But of course that is still ''small'' potatoes, since the bulk of Pentagon money is Uncle Sam-ed to buy expensive weapons systems from the only four major Uncle Sam ''Defense" contractors and the likes of Vice President Cheney's Halliburton. Uncle Sam then uses these arms unilaterally to twist others arms by armed threat and blackmail, and if that is not enough to invade the world that provided the money in the first place. After all, Uncle Sam has to do what it must to keep the money coming in.


The Law of the West is the Spaghetti Western Posse Vigilante Law

Uncle Sam unilateralism is not so much, as often mistakenly supposed, just going it alone. Yes, it is to proclaim fighting for ''Freedom" [whose?- we may ask] and "saving Civilization," as Uncle Sam President Bush and his even more eloquent UK mouth piece Tony Blair proclaim every day. The simplest way to ''save'' civilization was by simply abolishing in a day its most precious gift of the whole body of international law to keep the peace, which the West had taken centuries to develop, admittedly also in its own imperial interests. Still, it was the best and only international law we had, and at the very least better than nothing at all. Now the only "Law of the West" that remains is indeed 'The law of the West': The spaghetti western vigilante law of posses that, with or without a conniving judge, take the 'law' into their own hands to form a lynch party. Then they go after whom and where and when they please. Alas, now in the real world the self- appointed posses operate "out of area" on a much grander scale than any fictional spaghetti western film could ever have imagined.

That also means disemboweling and paralyzing the UN institution that was established to guard the peace, except when Uncle Sam after its own wars always re-cycles the UN to pick up the pieces he shattered in Yugoslavia, Afghanistan and now Iraq. But in so doing, it also means, to dupe, threaten, cajole and blackmail all others - friends and foes alike - to do his bidding on every issue, big and small. He has trained a whole civilian army of officials to do that. That way, Uncle Sam ''unilaterally'' throws his still apparent weight around in all other international institutions that deal with endeavors from agriculture and aviation to zoology. But Uncle Sam extorts real unilateral favors for himself even more through his bi-lateral relations. That is why WTO was dead on arrival. Indeed Uncle Sam now prefers to Uncle Same bi-lateral relations unilaterally, as he increasingly isolates himself internationally. So, he can exercise even more military, political and economic bargaining power over any one of his victims than he any longer can over all or even many of them in international institutions.


On to Panama, twice to Iraq, Afghanistan,

And when that bargaining is not enough, or even if it could be, Uncle Sam simply attacks when he feels like it and invades little Grenada [population, all of 300,000]; Nicaragua [with the help of arch-enemy Iran]; Panama [7,000 civilians killed in one night to capture one man only, Daddy Bush's one-time friend and ally Noriega - there is an all smiles photo of them shaking hands]; Iraq in 1991 [that was even a money making venture as Uncle Sam extorted more $ from his allies to pay for the war than it actually cost him! But Iraq was contaminated by Uncle Sam's depleted uranium, which has multiplied birth defect there - and which caused the infamous "Gulf War syndrome" among his and British troops, which Uncle Sam denies and refuses to acknowledge]. The less said about Somalia the better. Yugoslavia was attacked in part to make an example out of what can happen when a state is weak enough and, yet in abject defiance of Uncle Sam and his IMF, maintains some state ownership of important means of production and still provides social welfare state protection to the population. That is like still Belorus today, where Uncle Sam also tried to get ''regime change," but military action is more difficult on the border of Russia, unless it is in accord as against Afghanistan or is bought off. Moreover, Yugoslavia only gave up in 1999 after Russia withdrew its support from it; because Uncle Sam successfully used political economic blackmail and partly bought it off in Berlin.

Then Afghanistan became a targeted victim, again with the help of Iran and Russia. That is after Uncle Sam created and sponsored the Taliban government that eradicated opium. But the ''liberated" Afghanistan now grows opium again even more that before Taliban eradicated it so that opium now accounts for one third of Afghanistan's GDP, according to the new announcement upon taking office by the new President who was installed by Uncle Sam. At the same time as I write, Uncle Sam is launching a renewed military offensive against Taliban; but there is no more mention of bin Laden. And now innocent Iraq is already the Uncle Sam target and victim again, of which more below. Whose next, Iran?, Syria? - not Libya, it is now obediently making oil deals with Uncle Sam; and not North Korea that made nukes to protect itself against precisely that.

Sorry, I neglected to mention two additional perhaps possible alternatives prior to invasion. One is of course sponsoring, organizing, or even making a military or otherwise coup d' etat of which the CIA has a proud record,: Iran in 1953, Guatemala in 1954, Congo in 1960, Vietnam in 1961, Brazil in 1964, Guyana in 1964, Indonesia in 1964-65, Dominican Republic in 1965, Ghana in 1966, Greece in 1967, Cambodia in 1970, Chile in 1973, Argentina in 1976, Bolivia again and again, Fiji in 1987, Nicaragua in 1990 by "election" under threat of continuing the Contras war, Haiti again and again - against the ex-puppet Uncle Sam put there in the first place, just to name a few of the better known ones [of course not at the Uncle Sam home].

Another alternative is better known and attempted several times against on Fidel Castro in Cuba with explosive cigars and other imaginative CIA ''dirty tricks," all of which have been unsuccessful. So was the bombing of Cornel Ghadafi's tent home that killed his daughter. But our good Mr. Perkins relates a successful CIA attempt:

The Japanese wanted to finance and construct a sea-level canal in Panama. [It's President Omar] Torrijos talked to them about this which very much upset Bechtel Corporation, whose president was George Schultz and senior council was Casper Weinberger. When Carter was thrown out (and that's an interesting story-how that actually happened), when he lost the election, and Reagan came in and Schultz came in as Secretary of State from Bechtel, and Weinberger came from Bechtel to be Secretary of Defense, they were extremely angry at Torrijos -- tried to get him to renegotiate the Canal Treaty and not to talk to the Japanese. He adamantly refused. He was a very principled man. He had his problem, but he was a very principled man. He was an amazing man, Torrijos. And so, he died in a fiery airplane crash, which was connected to a tape recorder with explosives in it, which -- I was there. I had been working with him. I knew that we economic hit men had failed. I knew the jackals were closing in on him, and the next thing, his plane exploded with a tape recorder with a bomb in it. There's no question in my mind that it was C.I.A. sanctioned, and most -- many Latin American investigators have come to the same conclusion. Of course, we never heard about that in our country. http://www.democracynow.org/article.pl?sid=04/11/09/1526251

Torrijos had previously signed a treaty with President Cater handing over the Panama Canal to - Panama!

Simple inspection also reveals that being too good a political friend or tool of Uncle Sam can also be just about the riskiest, that is foolish, thing any statesman can do; for it can easily spell his political or physical death sentence after Uncle Sam stabs him in the back. A successor of Torrijos, as we noted, is now sitting in an Uncle Sam jail after loyally serving and smiling in a photo with George Bush [father]. But the line is long and goes all the way around the world starting in the 1950s and 1960s: Rhee in Korea, Diem in Vietnam, Trujillo in the Dominican Republic, Somoza in Nicaragua, virtually everybody in Haiti from Papa and Baby Doc to the priest Aristide installed by Clinton and removed by Bush, the Shah of Iran - put there after the 1953 CIA coup against Mossadeq after he had nationalized Irani oil but was let go when his usefulness faded, as was Mobutu after three decades in Zaire, Saddam Hussein - Rummy himself went to see him twice in his already previous incarnation as Secretary of Defense, Yugoslavia's Milosevic - he was the necessary and reliable implementer of the Uncle Sam Dayton agreement in Bosnia, and of course the Taliban - Uncle Sam himself formed and put it in charge of Afghanistan, not to mention one Osama bin Laden - he also served Uncle Sam there.

[Not?] incidentally, simple inspection of the facts on the ground also reveals that, if the above ''lines of defense" fail and Uncle Sam goes to war, except for little Grenada, not a single one of these or any other Uncle Sam wars was ever won by his military force, unless it be the Pacific one against Japan. World War II was won in Europe at Stalingrad in 1943 by Russian troops who would have reached Berlin even if Uncle Sam had not arrived later]. The Korean War was and remains a stalemate. The War against Vietnam was lost. The War against Yugoslavia was ''won" only when the Russians withdrew their support, and then all but seven Yugoslav tanks and all of its planes left Kosovo unharmed. Only its and Yugoslavia's civilian infrastructure had been bombed to smithereens, and its and the wider Balkan landscape was polluted for eons by Uncle Sam's renewed use of depleted uranium. The War against Afghanistan is being lost, and so is the War against Iraq, despite the reported use once again of depleted uranium, also again of napalm as in Vietnam and even of gas.


Nonetheless, Uncle Sam has plenty other geo- political economic military plans going again. For starters, he has already built 800 military bases around the world and especially in the oil rich ''heartland'' of Zbigniew Brzezinski [Ziggy's] global ''Chessboard" and to surround China. The Pentagon is also to redeploy 60 percent of U.S. Submarine fleet to Western Pacific [according to a P. Jakob Förg in December email to author]. All that is for future use but also already present political influence.

Apart from that, Uncle Sam President Bush has a new "Plan for the Middle East," which now stretches from Morocco beyond Pakistan - to Muslim Indonesia? Just what this plan involves is not yet clear, but civil society is already paving the way as well: Yale University Press already lists Pakistan among its "Middle Eastern" Studies, and Swissair has a paper place mat that places Karachi, Delhi and Mumbai on its ''Middle Eastern" destinations. What is clear is that Israel is to remain the Uncle Sam political and military stalking horse in the region that it has always been. Never mind whether Republicans or Democrats rule in Washington, Israel's hunting dog like role for Uncle Sam in its oil rich area of operation remains, and so does the security Israel in turn enjoys from Uncle Sam's international diplomatic, political and military protection no matter what, as well as Uncle Sam's direct economic and military support without which of Israel could not exist. Only now, Israel's assigned and self-appointed regional reach may expand even further as the two above mentioned high placed Pentagon neo-cons even went there to make a plan for the racist chauvinist Likud party now in power. And Bush himself went to Africa, especially West Africa to look at its oil.

In the Americas, his Plan "Colombia" [it has oil too] has been extended to the whole Andean region [Ecuador also exports oil], he has yet another plan for the Amazon [maybe some oil is to be found there and in the meantime he built a huge base there, allegedly for NASA which is not unknown to engage in military ventures], a plan to ''take care of " with World Bank help the world's largest underground deposit of sweet water under Iguazu Falls, where Brazil, Argentina and Paraguay meet, and he is already again training 40,000 Latin American military personnel at a time on Uncle Sam bases at home, of which he has another half dozen beyond his shores as well. Just recently Rummy went to Ecuador to meet with, lay out his plans for, and reportedly cajole, his counterpart assembled ''Defense" Ministers form all the Latin American countries.

All this is a giant global military political economic foundation on which to maintain Uncle Sam's financial Ponzi Scheme Confidence Racket, and cheap at twice the price for those that end up with the $ as long as he can pay for it all with the self-made paper $ that so far also maintains the global Ponzi business. Well to be honest, it's not only for the $. After all that is only useful if you can actually buy something with it, especially the oil that keeps the foundation running.

Not only does Uncle Sam have to buy ever more oil, today with self-printed $, but perhaps tomorrow with Euros or Yuan. He also has to try to make sure to have his hand on every spigot; so he can control who else can, and especially who can not buy it. So that is why we now find him attempting political and financial $ control of the oil spigots, wherever he still can, and for establishing a military presence as in Central Asia, or Uncle Sam-ing military power to go in as to Iraq. That is both to use it as a lever of control and/or to warn its neighbors what may happen to them if they fail to continue to play along with Uncle Sam. Fortunately for him, most of East Asia and especially China also seem to be obliged to buy foreign oil, even if tomorrow perhaps no longer with $ but with Yuan/Yen. On the other hand sad but true, the world's biggest seller of oil is Russia, whose spigots remain beyond Uncle Sam control. But how could Uncle Sam continue to pay for and maintain all these bold Uncle Sam ventures in Defense of Freedom with that self made paper $ -- if nobody accepts it any more? And why should anybody ?


The December 10 FT offers some additional tip of the iceberg examples of Uncle Sam Defense of Freedom in Iraq. Though poor Iraq sits on top of the world's largest still unexploited pool of ever more precious oil, it remains in the background or only at the bottom of this story that barely mentions it and, like the present essay, focuses instead on related $ and Uncle Sam. In two different reports, it relates how three helicopters flew 14 tons of $ 100 dollar bills in to the Kurds, who long since have been an Uncle Sam Fifth Column in the area. The money, much of the $ 1.8B Uncle Sam pay-off to the Kurds, was part of Iraq's earnings in the UN ''oil-for-food" fund. Initially, of course, the bills simply were the product of the self-same Uncle Sam printing press, for which Iraq had exported real oil. It did not come from the $ 18B that Uncle Sam's Congress appropriated for 'reconstruction' of Iraq. As an FT graph graphically shows, no more than $ 388 million - or 2.15 percent - of that Uncle Sam money had yet been spent, and only $ 5B of it had even been budgeted by Uncle Sam in Iraq by the time Uncle Sam pro-consul Brenner went home with a job well done. No, instead in his wisdom the Good Uncle had thought it best to have spent $13B of the $ 20B of Iraqi funds. That was 65 percent of the Iraqi money compared to the still only 2 percent of the nearly equivalent amount of original Uncle Sam money. By the time the new Iraqi government took over some tasks from Uncle Sam who put them there, they discovered that a full $ 20B of their funds had been spent, $ 11B from sales of oil [IHT]. How come? - we may ask. So simple is the answer of the ''responsible'' finance officer, Uncle Sam Admiral Oliver, "I know we spent some money from [the Iraqi] fund. It was purely the matter that we'd run out of Uncle Sam money" - of which there was only another $ 17.5+B unspent. We might wonder whether the good General was schooled in Clausewitz on war and happened to discover his good advice about making the conquered victim pay for his own military occupation, in this case by Uncle Sam,

The Iraqi representative on the funding disbursement and oversight committee attended only one of its 43 meetings; but why bather with more, when most expenditures were authorized without any meeting at all. So although Uncle Sam funds were budgeted for all sorts of projects, they were nonetheless paid out of Iraqi funds. Of these, many disbursements were even made without any contract whatsoever, in one case a mere $ 1.4B. Most others occurred without any multiple competitive, nor otherwise open bids. The Uncle Sam funds, on the other hand, remained virtually unspent in Iraq. Maybe Admiral Oliver had ''run out of Uncle Sam money" in Iraq, because it remained with Uncle Sam at home in Washington; and if disbursed at all, it simply changed hands and bank accounts right there. After all, that is much more efficient than it would be to send it back and forth, and a bit of it might not even get back. Moreover also, it has long since been SOP for the bulk of the $ that Uncle Sam lends or even "gives" "to" and ''for" all Third World countries, just to leave the $ at home where it belongs and would return to anyway. No matter; Uncle Sam Congress has already appropriated another $ 30B to ''prepare for transition to elections" in Iraq in January 2005.

All that being the case, it would of course be altogether undesirable for Iraqi, let alone Uncle Sam's, funds to be squandered on any Iraqi service of old foreign debt to others. So it was only logical to strong-arm ''allies'' who can't help already losing Uncle Sam debt to them, also to forgive the Iraqi debt. That is, as we may recall from above, while Uncle Sam still insists that the rest of the Third World must continue servicing their debts to him! For God forbid that any re-payment of Iraqi debt should go instead to those un-Godly Russians, traitorous Frenchmen or even to the Chinese best friend indeed, who most invested in Iraq, a dastardly thing to do in the first place, when Uncle Sam has much more worthy causes for the Iraqi money.

And what are these grander worthy Uncle Sam causes?, we may ask. The largest single payment of $ 1.4B was of course to the self-same Vice President Cheney's Halliburton. Yet we now know that at the same time it was also cheating even his generous Uncle Sam benefactor out of hundreds of millions more $ on the side, buying petrol for x $ in Kuwait and selling it in Iraq for 5 -10x $ and other sly frauds. Altogether, Halliburton got Iraq contracts for a cool $ 10B - plus change. [IHT]. [Cheney also has an interest in UNOCAL that has long wanted to build an oil pipe line from Central Asia to the Indian Ocean through Afghanistan, first with the help of Taliban whom Uncle Sam had put in charge there for precisely that purpose and then invited to Texas for talks while they still seemed to be doing their assigned job. Indeed, they also visited the purely Afghanistan ''academic research'' outfit at the University of Nebraska in Omaha. But alas, Taliban was not up to their assigned task of keeping order for the construction of the pipe line, and so had to go. Now Uncle Sam and UNOCAL will instead use the good offices of the new Afghani President and Uncle Sam Ambassador there, both of whom just ''happen'' to be former [?] UNOCAL people].


Without the shadow of a doubt, most of the other abundant Iraqi and so far sparse Uncle Sam $ that was spent in Iraq went to other Uncle Sam crony, with some crumbs off the table for UK, corporations and even to private and military individuals who have their fingers in the till. Alas, we will never know who they all are; since, as per Uncle Sam's Inspector-General, "I was, candidly, not interested in having army auditors because I thought we had to slide into the Iraqi system as quickly as possible." Frankly being both non and anti-military, I have not myself read Clausewitz. So I do not know what, if any, good advice he gives about relying on corruption as the first principle in cutting and dividing up the conquered pie.

All of the above ''speculation'' of mine was written before the UN International Advisory and Monitoring Board for Development in Iraq IAMBDI just issued a report on its findings about the Uncle Sam stewardship. Before we get to the Report, we should keep in mind that the FT observes diplomatically "the UN has been reluctant to take Uncle Sam to task publicly over its spending of Iraqi funds." The FT quotes directly from the Report: "There were control weaknesses … inadequate accounting systems, uneven application of agreed-upon contracting procedures and inadequate record keeping." The IHT also makes its own summary of the same report: "There had been widespread irregularities, including financial mismanagement, a failure to cut smuggling [outward of oil and other Iraqi physical property; nobody knows at what price and to whose benefit] and over dependence on no-bid contracts" [IHT]. The FT, for its part, offers a bit more specifics from the Report: "Of particular concern … were contracts with sometimes billions of dollars that were awarded to Uncle Sam companies such as Halliburton from Iraqi funds without competitive tender." Yesterday, Uncle Sam President Bush gave Uncle Sam's highest civilian award, The Medal of Freedom, to L. Paul Bremer III, the Uncle Sam civilian pro-consul who oversaw it all, and to General Tommy Franks, who led the invasion that made it all possible in the first place. George Tenet, the Director of the CIA that provided all the bogus Uncle Sam information to ''legitimatize'' the whole enterprise to begin with and who has since been discredited and forced to resign was not forgotten either and received the third award. The IHT published a ceremonial photograph of the three all smiles with George W. who was smiling too. After all it's due recognition for a job well done, thank youWe may rest assured that those who in their service to "Freedom" [for wm and what? we may ask],



We may rest assured that others who had hands in the till and trough were among those whom, we may recall, the Fed's Dr. Greenspan labeled as the upper 20 percent of Uncle Sam's income earners. They are the most privileged over-consumers, who are totally [ir]responsible for the Uncle Sam under-saving, he said, and also for the growing trade deficit about which the Dr. recently complained in Berlin. If we examine the Uncle Sam income distribution a bit further, we may well learn that among these 20 percent, the lion's share of this $, like most of that from the Pentagon, ends up in the pockets of the upper 2 percent most super-privileged, so they can over-consume still more of the fat of the earth. Who would deny them that this is surely a worthy cause for the protection of Freedom at any price. That includes President Bush's [in]famous invitation to the Iraqis ''let them come on" against Uncle Sam. It is difficult to understand the President when he encourages the Iraqis ''to come'' when they are already at home in Iraq and it is Uncle Sam who sent his troops there. But maybe Faluja explains what President Bush had in mind about the Iraqis ''coming'' our against Uncle Sam. But as Uncle Sam's President Bush himself told the world, it is only right that ''we'' exclude other countries from the trough and till in Iraq. After all he explained when the Iraqis accepted his invitation, it was ''our boys who put their lives on the line." I wish the personification of Uncle Sam had also explained for what and for whom.


The few numbers that are not generally available, or from the cited FT of December 10 and 15, 2004 and other sources like the International Herald Tribune [IHT] also of December 15 and EPW, Economic and Political Weekly,[ Mumbai Dec. 4,2004: 5189] are from "The Economics of Uncle Sam Imperialism at the turn of the 21st Century" by Gerard Dumenil & Dominique Levy in Review of International Political Economy 11/4/Oct. 2004:657-676.

The author is thankful to them in Paris, to Jeffrey Sommers in Riga, William Engdahl in Frankfurt and Mark Weisbrot in Washington for their useful and much Uncle used comments. Barry Gills in Newcastle insisted that I refer only to Uncle Sam and proposed the world division of labor between Uncle Sam consumers and producers everywhere else and referred me to Clausewitz. Readers will be most grateful to Arlene Hohnstock for having rendered all this tale readable. Of course none of them have any responsibility for the doughnut shaped use I have made of them.


André Gunder Frank is among the World`s leading political economists.

For more on Gunder Frank's writings. See his site at http://www.rojasdatabank/info/agfrank and in regard to Uncle Sam et al within it especially in the sections http://rrojasdatabank.info/agfrank/new_world_order.html and http://rrojasdatabank.info/agfrank/online.html#current


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