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COUNTERPUNCH Magazine

Wednesday, September 14th, 2011

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The Perils of Military Expansionism

America’s Financial Armageddon and Afghanistan

by PAUL FITZGERALD and ELIZABETH GOULD

As the U.S. economy grinds down to a finish, it becomes increasingly difficult to measure whether Washington understands the importance of how to deal realistically with the worsening crisis in Afghanistan. Left off the front pages during the recent obsession with the debt crisis, Afghanistan has lurched back onto the scene in ways that are reminiscent of the Soviet collapse of two decades ago. After ten years of war, it seems Washington not only continues to lack a comprehensive understanding of Afghanistan, but it lacks an understanding of its own role in creating both the economic and political catastrophe it now faces.

Even less understood is how the political decisions of the late 1970s are tied to the current simultaneous financial and foreign policy crisis. Nor is it understood how Washington and Wall Street set the stage for America’s financial downfall by using Afghanistan as an investment bank throughout the 1980s to renew the Cold War instead of reinvesting in America’s civilian economy.

Much like today, the America of 1979 faced a crossroads. Vietnam, two oil shocks, a disintegrating infrastructure, a beleaguered manufacturing base and the loss of strategic ally Iran had shown that America was a vulnerable colossus. Thirty five years of economic Cold War against the Soviet Union and China had produced a vast arsenal of nuclear weapons that were proving as useless as they were unusable. World War II had set the stage for the happy marriage of war production to business — pulling the U.S. out of the depression by doubling the Gross National Product in one year (1940). The Cold War ushered the financial benefits of the 1940s into the 1950s and 1960s. But these expenditures came at a massive expense to the civilian economy and not just in terms of tax dollars. Weapons development of the post World War II years lured America’s best and brightest away from the civilian economy and even the real world of guns, tanks and armies into a world detached from time, space and money. While Germany and Japan rebuilt their civilian industries free from defense spending, the U.S. moved into ever higher levels of technology, glorifying and expanding the influence of the defense industry into every fabric of American life.

Originally termed Military Keynesianism to describe the buildup of the German defense industry prior to World War II, America’s military Keynesianism of the Cold War was the unseen hand of government supporting the American economy, balancing the cyclical ups and downs of the market by providing 16 percent of the Gross Domestic Product in 1950s and 9 percent in the 1960s. By 1963 defense spending accounted for 52 percent of all the research and development done in the United States. But by the mid-1970s, a stagnant American economy combined with the Arab oil embargo and inflation brought on by the Vietnam War exposed the weakness in the system. As German and Japanese manufacturers battered their American competition in the marketplace, the defense-heavy American economy faltered.

Born of necessity, diplomatic overtures to China and détente with the Soviets offered the first chance since World War II to get off the wartime treadmill. To that end, for most of the decade the U.S. and Soviet Union pursued Strategic Arms Limitation Talks.

Endorsed by President Nixon in 1972, it was hoped that the agreement signed by President Carter and General Secretary of the Communist Party of the Soviet Union Leonid Brezhnev would enable the United States to back away from weapons manufacturing and reinvest those resources in the civilian economy. But the Soviet invasion of Afghanistan changed all that.

Our involvement in this story began in the summer of 1979 when we began production of a documentary we called Arms Race and the Economy: A Delicate Balance. During the next months numerous experts including economist John Kenneth Galbraith lent their experience to our understanding of the unseen damage that a massive new diversion of tax dollars and capital investment would represent to the civilian economy. The arms race wasn’t just about defending the United States. The arms race was also about jobs and money in a dark world of business, science, and politics ruled over by a self-described “priesthood” of experts. Galbraith insisted that accelerated defense spending and renewing the Cold War, which the neoconservative right was lobbying hard for at the time, would ultimately destroy the civilian economy. He was convinced that the Cold War had already helped rigidify the capitalist system by bureaucratizing a large part of production for non-productive uses. He saw American industry becoming more and more like the Soviet Union, ruled by a military-industrial-academic establishment immune from reality, living in a planned economy designed to suit its own needs at the expense of society.

Galbraith jokingly referred to his “First Law of Executive Talent” that he had formulated to describe the thinking of America’s military-industrial leadership. “It was that all great executives come to resemble intellectually the products they manufacture. Until you had done business with top officers of the steel industry, you didn’t really appreciate the intellectual qualities of a billet of steel.” So it was with the defense department. America’s militarized economy was already in essence a Soviet-style “planned economy,” to make it an even larger part of the economy would only lock the U.S. into the same dismal fate.

That fall, in Washington, the Arms Control and Disarmament Agency was one of the last holdouts of sanity in a rolling sea of hysterical accusations about American security. Was the Soviet Union really planning a sneak attack on the United States with nuclear weapons as the right wing claimed? Was SALT II really just a public relations scheme by Moscow to put the U.S. off its guard?

In hindsight we know that these claims were absurd. The Soviet Union was dying, driven to SALT by its weakness, not its strength. But when the Soviets crossed their southern border into Afghanistan that December of 1979 it played out on America’s TV screens like a World War II Hollywood B movie. Afghanistan was a far off South Asian country of no particular interest to the United States. A half dozen administrations had refused Afghan requests for military assistance. Eisenhower’s Secretary of State John Foster Dulles’s callous and careless diplomacy drove Afghanistan towards Moscow in the mid 1950s and its politics followed close behind. A low priority remnant from Britain’s colonial empire, President Carter labeled the invasion, “the greatest threat to peace since the second World War.” But the script had already been written long before the Soviet’s crossed their southern border on December 27, 1979.

A trap had been set to give the Soviets their own Vietnam and the Soviets had taken the bait. But no one outside a handful of policy experts and Wall Street wizards were supposed to know that. Instead, a crop of neoconservative experts appeared on the scene claiming the Soviets were running out of oil and using Afghanistan as a staging ground for Middle East conquest.

By the time our program aired that winter, the argument was no longer whether our government should call a halt to the nuclear arms race and reinvest in the civilian economy. The U.S. had stepped into the mirror with the media echoing a return to 1947 style Cold War rhetoric, and the debate refocused not on whether, but on how much was to be spent to counter Soviet aggression.

In the planning stages for most of the decade, the new right’s military stimulus program regained for them a strategic hold over the economy, raising American investment in new weapons systems to a new high, while setting in motion a series of changes to the fundamental economic order endemic to the previous iteration of the Cold War.

As it had in the 1950s and 1960s, military spending once again drove the American economy, accounting for up to 6.2 percent of GDP by 1984. But where previous defense spending had been carefully balanced against America’s industrial output as a percentage of GNP, the so-called Reagan agenda or Reaganomics required massive borrowing to finance the military budget while reducing regulation and oversight of where it was spent. This change would transform American thinking about the economy, sending it into a star wars unreality and more importantly from a creditor to a debtor economy.

Always detached from the real economy, the Reagan budgets lifted the arms race and its Wall Street backers into the stratosphere, focusing the nation’s attention away from the depression era roads, bridges, dams, schools and industry that were in desperate need of attention. Instead, America became transfixed by the phantom of an ever present danger of Soviet troops in Afghanistan and a stock market driven by the military’s expansion. Copyright © 2011 Gould & Fitzgerald All rights reserved



Part IV: Sibel Edmonds boilingfrogspost presents:

Thursday, September 8th, 2011

9/11, Psychological Warfare and the American Narrative- Part IV

Willie Wonka & the National Security State

By Elizabeth Gould & Paul Fitzgerald

TT9/11. New York’s twin trade towers exploded and vaporized in a hypnotic Old Testament moment. It was as if some invisible dark force had reached out and in one swift strike brought on a biblical, primeval Apocalypse. The destruction seemed to defy gravity itself as 200,000 tons of steel and 425,000 cubic yards of concrete fell so freely and effortlessly to the street below, it resembled a controlled demolition. This was no simple Pearl Harbor that could be avenged with a counterstrike of air and sea power. This was a poisonous wound to the American psyche, a more devastating act of psychological warfare than any military strike could ever have accomplished. From ten years on, everything about 9/11 feels otherworldly and irrational, the reasons for it, the apparent helplessness in the face of it, the curious identities of the people involved and the American government’s response to it. It defied logic then and it still does. The World Trade Towers were proud symbols of who we were as early 21st century Americans, at least who we thought we were. After all, wasn’t the spiritual motto of the original 1939 Flushing, NY World’s Fair “World trade center” pavilion dedicated to “world peace through trade?”

There would be no peace after 9/11. The destruction loosed a demon that had been struggling for America’s soul since the creation of the Cold War in 1947. The U.S. would now be freed to pursue “evil” wherever it could be found and there would be no turning back. The creation of the World Trade Towers by Rockefeller brothers Nelson and David had been steeped in psychological symbolism from their start in the early 1960s. As the most well known scions of American business, the Rockefeller family brought more than just money to their endeavors, they brought a vision for the future of the planet and a philosophy to guide it.

Begun as a massive undertaking to revitalize lower Manhattan, Chase Manhattan Bank Chairman David and New York Governor Nelson pushed hard for the project and each tower stood as a symbol of their respective power. As metaphor, the towers were more than just two of the tallest buildings in the world. It might be said they were as important as the two pillars Joachim and Boaz which stood at the entrance to Solomon’s Temple; mystical gates to a Cathedral of wisdom in which all could worship under one religion; the religion of business, Capitalism.

rockThe Rockefellers were no strangers to the power of psychological warfare and its impact on American opinion. During World War II Nelson had headed the U.S. government’s intelligence agency for Latin America, the Coordinator of Inter-American Affairs (CIAA). CIAA’s film division guided the 1942 production of Walt Disney’s Saludos Amigos to promote pro-American sentiment in South America. In 1954 Nelson was appointed as President Eisenhower’s White House special assistant on Cold War tactics and psychological warfare. Nelson Rockefeller played a central role in formulating domestic propaganda programs throughout the 1950s as chairman of the Planning Coordination Group which, in addition to its propaganda work, oversaw all CIA covert operations. His 1956 Special Studies Project directed by Rockefeller protégé Henry Kissinger produced many of the domestic policy recommendations that came to be known as President Kennedy’s New Frontier. His family’s philanthropic support of the arts had been carefully coordinated with the CIA and was both overtly and covertly propagandistic.

As a committed Anglophile, Rockefeller had aided British intelligence during World War II when he rented space in New York’s Rockefeller Center at a steep discount to a number of British propaganda agencies including their secret intelligence service for the Americas, the British Security Coordination (BSC). The BSC’s chief, Sir William Stephenson (Intrepid) set up shop in New York City with the help of some of New York’s wealthiest families with one main objective in mind: Get the United States into the war in Europe on Britain’s behalf.

One key agent in the psychological war for American public opinion was young RAF pilot Roald Dahl who along with James Bond creator Ian Fleming, playwright Noel Coward and Gallup pollster David Ogilvy were given free rein to commit sabotage, political subversion and propagandize “the natives” (Americans) through whatever means possible.

Dahl’s creative fiction earned him praise from the New York Times and publishing contracts from Random House as well as entrée to Hollywood where he would collaborate with Walt and Roy Disney in their studio’s transformation into an arsenal of animation while inspiring numerous imitators. Dahl would go on to marry a movie star and become a Hollywood icon with perennial successes, most notably “Willie Wonka and the Chocolate Factory.” The cult of intelligence would ultimately become so seamlessly blended into every aspect of publishing, television and film, the CIA would jokingly be referred to as “the Chocolate Factory.” Along with Fleming, Ogilvy and Coward, Dahl would help to get the United States into the war with Germany and craft an enduring Anglo-centric cultural narrative in the public’s mind whose main objective was the promotion of a British agenda for the United States. That agenda would quickly shift from anti-fascist to aggressive Cold War anti-communist (read anti-Russian) as World War II ended, with Britain playing a seminal role in the creation of America’s national security state.

trumanPresident Harry Truman’s March 12, 1947 proclamation laying out the rationale for the Cold War (Truman Doctrine), fundamentally altered America’s identity by embedding a permanent psychology of fear. But a hidden aspect of this conflict was the slow, grinding corruption that its unreality fostered in America’s leadership. That unreality was finally revealed in the catastrophe of Vietnam.

In a remarkably self-effacing (especially by today’s standards) January 8, 1972 New Yorker article tracing the origins of the devastation caused by Vietnam titled “Reflections: In Thrall To Fear,” Senator J. William Fulbright bemoaned the mental corruption caused by the Truman Doctrine during the 1940s, 50s and 60s, whereby “Our leaders became liberated from the normal rules of evidence and inference when it came to dealing with Communism… The effect of the anti-Communist ideology was to spare us the task of taking cognizance of the specific facts of specific situations. Our ‘faith’ liberated us, like the believers of old, from the requirements of empirical thinking… Like medieval theologians, we had a philosophy that explained everything to us in advance, and everything that did not fit could be readily identified as a fraud or a lie or an illusion.”

fulbrightWhat Fulbright’s brilliant but tragic reflections fail to include is that America’s assumptions about the Cold War were never empirical. In fact the assumptions weren’t even necessarily American but had been crafted by America’s Anglo-centric intelligence bureaucracy and rooted in messianic 19th century British designs for control of the Eurasian landmass. A recent release of classified documents reveals that Britain’s wartime Prime Minister Winston Churchill was so obsessed with Eurasian conquest, he’d envisioned rearming Germany and attacking the Soviet Union right up to the end of World War II in a plan named Operation Unthinkable. Faced with the absurdity of confronting an overwhelmingly superior Soviet force and starting World War III, Churchill’s operation was shelved, but his famous Iron Curtain speech of 1946 would animate the idea while establishing the ideological narrative by which all future U.S./Soviet relations would be defined.

The inspiration for Churchill’s speech and its warning of the growing Communist threat to “Christian civilization” was the American child of British immigrants, James Burnham. As the godfather of neoconservatism, Burnham would work his way from Bolshevik revolutionary Leon Trotsky in the 1930s, to authoring a book that would forge the foundations of a new kind of planned, centralized society, to the Office of Strategic Services (OSS) during World War II. His much critiqued landmark 1940 The Managerial Revolution would be read and admired by Hitler’s general staff and viewed as the blueprint for George Orwell’s 1984 in which a new class of business executives, technicians, bureaucrats and soldiers would destroy the old capitalist order, crush the working class and seize all of society’s wealth for themselves.

eurasiaIn a 1945 Partisan Review article titled “Lenin’s Heir” Burnham, while still at the OSS, infused his apocalyptic political views with mystical allusions to the Eurasian heartland as “the magnetic core” of Soviet power, comparing it to the mystical “reality of the One of Neo-Platonism,” whose inexorable and unstoppable “emanative progression… descends through the stages of Mind, Soul, and Matter” towards its ultimate destination beyond the Eurasian boundaries and through “Appeasement and Infiltration (England, the United States).” Burnham was a keen advocate of dirty tricks. He would play an important role in the overthrow of Iran’s Mohammed Mosaddeq and the installation of the Shah. His book The Machiavellians would become a handbook for CIA planners.

As an “anti-Communist ideology” Burnham’s apocalyptic warnings about the inevitability of Soviet expansion from Eurasia’s magnetic core ring like a medieval theologian’s incantation throughout Churchill’s “Iron Curtain” speech. George Orwell even makes clear in his 1946 “Second Thoughts on James Burnham” that Burnham’s words read like a mystical invocation and were most likely intended to hypnotize.

Twenty six years later, Senator Fulbright would realize that only because of the disastrous outcome of Vietnam was there any willingness at all to reexamine the basic assumptions of American postwar policy toward the Soviet Union and what had brought the United States to such a sorry state. The 1972 Strategic Arms Limitation Talks SALT would spring from this realization, as would the Anti-Ballistic Missile Treaty ABM and eventually SALT II, until in January of 1980 President Jimmy Carter would ask the Senate to delay consideration of the Treaty on the Senate floor because of the Soviet invasion of Afghanistan. That treaty would never be passed.

Our involvement in the Afghanistan story began in the summer of 1979 when we began production of a documentary titled Arms Race and the Economy: A Delicate Balance. During the next months numerous experts including economist John Kenneth Galbraith lent their experience to our understanding of the unseen damage that a massive new diversion of tax dollars and investment capital would represent to the civilian economy. Galbraith insisted that accelerated defense spending and renewing the Cold War – as the neoconservative right was demanding at that critical moment – would ultimately destroy the civilian economy. He was convinced that the Cold War had already made America more and more like the Soviet Union, ruled by a military-industrial-academic establishment suspended from reality.

But by the time our program aired that winter, the argument was no longer whether our government should call a halt to the nuclear arms race and reinvest in the civilian economy. The December 27, 1979 Soviet invasion of Afghanistan had rolled back the narrative to 1947, the Truman Doctrine, to Churchill and Burnham’s mystical, medieval enchantment and the psychological warfare campaign necessary to bring it back to life was about to begin.

J. William Fulbright’s 1972 “Reflections: In Thrall To Fear” represented an awakening from the deep hypnotic trance imposed upon Americans by Cold War ideology. The Soviet invasion of Afghanistan brought about its re-emersion, but this time to a deeper and totally detached level of unreality.

reaganWith the election of Ronald Reagan in the fall of 1980, the United States not only rejected Fulbright’s concerns for the intellectual dishonesty represented by the continuation of the Cold War, but willfully embraced the fraud, the lie and the illusion as its own and was willing to take it one step further.

The U.S. had silently, almost imperceptibly crossed through a mirror in 1947 with the creation of a second and covert national-security-government. But few in Washington understood at the time, the Faustian bargain they were signing onto. Now that secret government would take the U.S. on a fairytale journey into a mirrored image of itself from the 1940s, interweaving its own delusion with a remanufactured, two dimensional Hollywood invention named Ronald Reagan as the host. America would never be the same.

As an actor, Reagan had been implanted into America’s subconscious as a hero during the 1940s and his militaristic campaign of Peace through Strength was sold to Americans as the Reagan revolution. It was in fact a counter-revolution engineered by a reactionary gang of consummate insiders headed by former Research Industry of America employee, OSS veteran and Wall Street lawyer William J. Casey with the intention of restoring America’s militarist Cold War thinking.

caseyAs Reagan’s intelligence chief, Casey had key access to the concentric circles of international power necessary to carry off the tectonic shift of wealth from Main Street to Wall Street that would transfer power to an already wealthy globalist elite. As one of OSS chief Wild Bill Donovan’s Knights Templar during World War II, Casey took his “Crusade for Freedom” and a one world religion of Capitalism as creed, and as Director of Central Intelligence was perfectly positioned to put James Burnham’s dirty tricks and Machiavellian philosophy to work in the heartland of Eurasia.

Casey’s passion for the Afghan jihad was messianic. An ultra-conservative Catholic, Casey saw little difference in the antimodernist beliefs of the Wahhabist House of Saud and the anti-enlightenment views of the newly installed Polish Pope, John Paul II. Disguised as a war to liberate Afghanistan from Soviet aggression, Casey’s campaign was intended to infiltrate covert teams beyond Afghanistan into the Soviet Union’s Muslim provinces and provoke an insurrection. Backed by neoconservatives, the Saudis and secretive organizations like the Safari Club, Le Cercle, the Bilderberg Group and the 6I, it would play out in propaganda from Rambo to Charlie Wilson’s War as the greatest American victory of the Cold War.

In reality, Casey’s team would so tear down the wall between fact and fiction, legal and illegal, truth and the lie, it would make 9/11 inevitable.

But if anyone deserves the prize for the culture of triumphalist self-deception which lives on today in the endless war on terror and the Homeland Security State-culture-of-fear, it is James Burnham. On February 23, 1983 James Burnham was awarded the Presidential Medal of Freedom by Ronald Reagan culminating his fifty years of service as one of the “guiding lights in mankind’s quest for truth.” Burnham’s 1940 prediction that Nazi Germany would win the war had actually been wrong as was his prediction that the Soviet Union would lose. His subsequent revised prediction that the Soviets would win and expand beyond the Eurasian heartland followed only after a Soviet victory appeared obvious in 1944.

In George Orwell’s 1946, “Second Thoughts on James Burnham,” Orwell clinically diagnosed Burnham’s convenient powers of revisionist prophecy as the product of a “mental disease” whose “roots lie partly in cowardice and partly in the worship of power, which is not fully separable from cowardice.”

Ten years after the events of September 11, 2001, thirty two years after the Soviet invasion of Afghanistan and sixty four years after the creation of the Cold War, James Burnham lives on as an icon to a deeply corrupted Homeland Security-culture “In Thrall to Fear.” We have no one to blame but ourselves for allowing that culture’s acolytes, their lies and their fabrications to continue to hypnotize us. Copyright © 2011 Gould & Fitzgerald All rights reserved