Jed Morey

Jed Morey is the Publisher of the Long Island Press

Shamar Thomas Freed From Northport VA After Controversial Detention; Marine’s Stay Highlights Plight of Fellow Vets

Sgt. Shamar Thomas
Sgt. Shamar Thomas (with bullhorn) during a rally protesting police brutality. The former US Marine was detained against his will for eight days at Northport VA Medical Center and released June 10, 2015. (Photo credit: Sgt. Shamar Thomas/Facebook)

Sgt. Shamar Thomas is a big man.

At a hulking 6-foot-4, 300 pounds, dressed in government-issued garb and peering over the reception glass in the secured inpatient facility at the Northport VA Medical Center (VAMC), the former Marine-turned-Occupy Wall Street hero-turned-reality TV star cuts an imposing figure. All eyes were on him as the psychiatrist in charge of his care, Dr. Gregory Gunyan, conferred with Thomas’ appointed attorney and others behind the glass. The discussion centered on a waiver he was being asked to sign, which confirmed that he voluntarily sought services from the hospital, but would like to leave. And there is no mistaking the fact that Thomas would indeed like to leave. Immediately.

Only he wasn’t allowed to sign himself out. The waiver merely bought Thomas the ability to attend a hearing scheduled to occur fully 11 days after Thomas first walked into the hospital asking for assistance.

Sgt. Shamar Thomas was—until June 10—stuck in the system.

Initially Thomas was rattled by the reality that he was unable to leave on his own volition. Nevertheless, he was resigned to seeking help. Almost instantly, however, his experience soured as he lost basic privileges such as being able to retrieve his prescription glasses from his car or being able to walk outside.

“I feel like a political prisoner,” he told the Press during an interview within Northport VAMC six days into his forced detention there, “not to say this has anything to do with politics.”

Thomas clearly knows the difference. A veteran of the Iraq War, Thomas shot to instant viral fame during the Occupy movement when he squared off against about 30 NYPD officers in a now-infamous video with more than 17 million views on YouTube. In the footage, Thomas is reacting to what he perceived as excessive force against unarmed citizens exercising the right to peaceably assemble. To him, this was an affront to his service and everything he believed he was fighting to preserve back home. His outspoken nature and self-described “direct and honest” attitude didn’t win him many friends on 2013’s Survivor: Caramoan, where he lasted just 10 days before being voted off.

Like many veterans returning home from the wars in Iraq and Afghanistan, Thomas struggles to erase from his mind the images of what he encountered in combat.

“I think about death,” he said quietly as he explained what brought him to this place. Moreover, getting to this place was a battle in and of itself. “It took me six or seven years to say, ‘I’m going to go down there and commit myself to getting help,’” admits Thomas, shyly.

It’s a dilemma the entire VA system is struggling to combat, too.

Sgt. Shamar Thomas Occupy
US Marine Sgt. Shamar Thomas’ emotional defense of Occupy Wall Street protesters gained international attention when a video of his encounter with the NYPD went viral. (Photo credit: YouTube)


Can’t Breathe

On Tuesday, June 2, Thomas made the decision to seek counseling from the Northport VAMC because in many ways his combat experience didn’t end in Iraq. Since Occupy Wall Street, Thomas has garnered minor celebrity in both the reality TV world on Survivor and in activist circles, where he remains an outspoken opponent of police brutality, participating in several #blacklivesmatter demonstrations.

Most recently he had returned from a memorial service for Lance Cpl. Justin Repphun, who drove for Thomas’ assault team in Iraq; Repphun died in Al Albar Province in November of 2004. It was this trip and the emotions it stirred within him that finally compelled Thomas to “deal with the demons” that haunted his thoughts. Thomas had heard that the VA offered a 60-day inpatient program that would allow him to step away from his day-to-day life as a nightclub bouncer and finally face his emotions head on.

“I’ve never tried to hurt myself,” he explained during our visit, adding, “I’ve never tried to hurt anyone else.”

According to Thomas, he never expressed that he was suicidal when he presented himself to the Northport VAMC but admitted that visions of death plagued him and were beginning to weigh him down, both emotionally and mentally. He presumed, however, that something in the interview caused the intake team to categorize him as a potential threat and place him on lockdown in the secure wing of the VAMC; a widely cited analysis published in the February issue of Annals of Epidemiology put the suicide rate among recent vets 50-percent higher than non-military civilians. Once admitted, Thomas realized he was no longer able to sign himself out as he’d originally thought.

At first, Thomas said, he fell in line, even though he sensed that he might be in for more than he’d bargained for. He was, however, thrown for a loop when told he was required to take several prescription drugs despite claiming to have never taken narcotics of any kind in his life. Because of his size, Thomas said the doses are particularly large.

“The meds just make you feel so heavy,” he lamented.

Patient privacy laws prohibit the VAMC from speaking about Sgt. Thomas’ specific situation. Joe Sledge, the spokesperson for the Northport VAMC, declined to even comment on general procedures related to intake of post-traumatic stress disorder (PTSD) patients. Regardless of privacy policy, Thomas’ stay there has become a very public one.

The hospital switchboard, as well as the phone in his ward, rang night and day. Word of a demonstration on his behalf began to spread after news/media website posted a piece indicating that Thomas was being held against his will and was told his detention could be indefinite.

The network of activists connected to Thomas rallied around him through social media, maintaining a Facebook group titled “Freedom for Sgt. Shamar Thomas,” primarily updated by activist Atiq Zabinski. The purpose of this group, it declared, was to provide support to Sgt. Shamar Thomas during his detainment at Northport VA against his will.

On Thursday, Shamar announced the following on the group’s timeline:

“I’m free. Can’t even express how I feel. I will formally thank you all when I get myself together.”

Few questioned Thomas’ need for help, including Thomas himself. The strong reaction to his case stemmed more from the indefinite nature of his detention and that certain basic privileges were not available to him.

“I want air so badly,” he told the Press as we sat inside the recreation room just outside of the secure entrance to the lockdown wing on the second floor of the facility. Periodically, Thomas politely asked other patients who wandered in if they wouldn’t mind giving us some private time.

“I have no felonies, no misdemeanors,” he continued. “I feel dehumanized.”

According to Thomas, the overwhelming reaction from the outside to his detention had punitive results. He said Dr. Gunyan and the nurses on the floor told him that he lost the right to “get air” outside because the hospital was upset with the onslaught of requests for his release. Further, Thomas said, one of the nurses apparently told him: “If you leave here and don’t take this medication, you will go crazy.”

For these and other reasons, some began to question the VA’s ability to handle the volume of returning combat veterans whose symptoms present in different ways and at different times—Thomas, in his own way yet again, serving as a lightning rod and attracting a torrent of attention to an issue plaguing so many across the country, this time the plight of his fellow servicemen and women navigating a healthcare system inadequately prepared for the deluge.

“One of the things that make me lose sleep at night,” Rep. Steve Israel (D-Dix Hills) told the Press from his D.C. office, “is the massive increase in cases of PTSD and traumatic brain injuries that the VA is just not equipped to address over the next decades. We’re just now catching up with claims from Vietnam.”

Israel calls his relationship with the VA “bi-polar,” saying, “The Northport VA is generally responsive and well-regarded. The VA bureaucracy in Washington is consistently frustrating and a source of anger.”

Other organizations exist to fill the growing need for counseling returning veterans. One such organization is The Soldiers Project, a California-based nonprofit with a significant presence on Long Island.

“The Northport VA has referred certain cases,” explained Lael Telfeyan, a PhD and clinical volunteer for the Long Island chapter. “The reason people come to The Soldiers Project is because we’re free and completely confidential. We don’t have a record or a paper trail. That’s the whole idea…to provide an open venue for treatment without having anything go on a record that could jeopardize anything like their benefits or their status.”

Dr. Telfeyan erred on the side of caution when speaking about Sgt. Thomas and any veteran recommended for inpatient care. She acknowledged the wide room for interpretation of PTSD cases and believed Thomas might not be “aware of what he’s presenting and how serious it might be.”

Sgt. Shamar Thomas
US Marine Sgt. Shamar Thomas served in Iraq at the same time as his mother Dawn Glaspie (L). (Photo credit: Sgt. Shamar Thomas/Facebook)


A Family Affair

One person who also allows for this possibility but is deeply concerned about the path the Northport VAMC has taken is Thomas’ mother, Retired Sgt. First Class Dawn Glaspie.

“We can be having a conversation,” she told the Press from her home in North Carolina, “and he’ll just zone out. That was the first thing that concerned me. ‘Where are you going? You need to talk to somebody to find out where you’re going so we can bring you back.’”

Amazingly, Thomas and Glaspie were deployed at the same time, with a six-month overlap in Iraq. During their tours they were able to sporadically communicate, but did not see one another in person. At first, Glaspie had misgivings about her son’s intention to enlist in the military.

“I knew the hardships of the military, so when he decided that was what he wanted to do, it was really difficult for me,” she confided. “And at this point there was a war going on. But after thinking about it, somebody has to do it.”

Glaspie doubted that her son expressed any desire to “hurt himself,” but gave even deeper insight to Thomas’ life experience:

“Shamar’s father passed away when he was 2 years old and it was ruled a suicide,” she shared. “Shamar, knowing his past, he would never consider that. I can’t even think of a reason why he would consider that.”

The mother and son were able to speak when Thomas was first admitted but had trouble connecting in the days that followed due to how jammed the phone lines had been at the hospital. As for what caused the Northport VA to detain her son, Glaspie wasn’t sure.

“I couldn’t even think of anything—I don’t know about the system,” she said, admitting that she sought treatment in “somebody’s office. I went to see them, then I left.” It was her belief that her son would benefit from “a less-restrictive treatment” in an outpatient program. “Locking him down isn’t good. Would he really be receptive to what they’re offering?”

Congressman Israel declined to comment specifically on the course of action the Northport VA pursued in relation to Thomas, but indicated he had been in touch with the facility to assess the situation. He did, however, express concern that “the nature of PTSD is so complex and the volume of PTSD cases at our VA hospitals is so massive that the VA staff is in uncharted territory.

“They’re going to need new skills training and we’re going to need to provide them with more resources so you don’t have a potential action that exacerbates someone with PTSD,” he continued.

Israel knows the challenges facing the VA intimately, as support for veterans is a central focus of his office.

“Of all the functions my office performs,” he said, “veteran’s case work is not only at the top of my list as a moral obligation, but in allocation of time and resources.”

Newly released from the Northport facility, Thomas is in need of support, by his own admission. Although no one at the hospital or involved directly in caring for PTSD patients commented specifically on the proper course of action, his circumstances implied the same conclusion.

Sgt. Thomas’ situation highlights the evolving need for greater resources and understanding of what combat veterans are coping with upon their return to civilian life. His is a complicated story where there are no good guys or bad guys in terms of his emotions and need for care. Whether Dr. Gunyan and his staff used their positions to prevent Sgt. Thomas from breathing outside air is another matter that requires examination.

Given his history as an advocate—and whether Thomas meant to or not—the courageous Marine shifted some of the attention regarding his detention at Northport VA toward the plight of others with PTSD.

His mother offered this tidbit to the Press during his forced confinement, which helps, perhaps, to somewhat explain why.

“He has not done very much that I have not been proud of,” Glaspie says.

While it’s impossible to predict how, exactly, his stay at the VAMC has affected him, Thomas has already succeeded in opening a new front in the ongoing post-war battle that has claimed so many of his fellow brothers and sisters in arms.

Off the Reservation: Distributing Wealth

Last month’s column, “A Renewed Discourse on Inequality,” commenced with a discussion of how this issue, suddenly in vogue among certain political circles, has its intellectual roots in the Enlightenment but it must now reach a much more damning conclusion: A society that stifles social mobility is neither civil, nor moral.

Picking up on Part 1 of “A Renewed Discourse on Inequality”—an attempt to examine Jean-Jacques Rousseau’s original publication in 1755 through a modern lens—it is logical to extend our view to the theories offered by Karl Marx, another controversial Enlightenment theorist. (There are those who would take issue with this characterization.) At the outset, however, one should distinguish between equality as a measurement of how a society rewards individual behavior and accomplishment from the concept of egalitarianism. An egalitarian society is entirely too utopian (or dystopian depending upon the measurement) of a concept because it fails to recognize inherent differences in human beings. To strive toward an egalitarian society is to presume that every person enjoys a similar level of wants and needs.

Unfortunately, our concept of equality is too often reduced to “redistribution of wealth,” a familiar refrain uttered by talking heads in the media. This is a poisoned narrative lazily ascribed to Marx whose philosophy is an anathema in Western circles. Mind you, this impression is not entirely without support. The ideological expressions of Marxist economic theory have failed in practice due in large part to the corrupt legacy of the 20th century communist states. But there are aspects of Marxism still relevant today with respect to inequality, particularly as they relate to war and capitalism.

Marx viewed both nation states and capitalism as destructive forces that require the suppression of labor and forcible acquisition of land and natural resources. Marx tended to steer away from discussions of morality and justice, preferring a clinical analysis of the clash between market forces under capitalism and the natural tendencies of human behavior. Nevertheless, Marx is viewed as the antihero of capitalism and is therefore considered an affront to those who cannot discern the difference between capitalism and democracy. (Another subject entirely.)

That’s not to say Marx had no natural predispositions—he made his feelings more evident to his close associates and in moments of unscripted candor. But Marx should be viewed first and foremost as a social scientist who sought to prove that capitalism, by design, would inevitably advance communism once capitalism reached the maximum exploitive potential of both labor and natural resources.

Marx was correct in predicting that unfettered capitalism advances inequality and suppresses the working classes. But he was wrong that communism was the logical evolution of capitalism. To this, it was Mao Tse-Tung, who offered a more insightful prognostication on the decay of capitalism, saying, “Humanity left to its own does not necessarily re-establish capitalism, but it does re-establish inequality.”

Regarding the aggression of capitalist nation states, Marx speculates that once a capitalist nation had reached the inevitable limits of human and environmental capacity it would be forced to seek these means of production elsewhere, and attain them by force when necessary. This is the part of Marxist theory that has been born out conclusively by the United States. To this end, Marx believed that ending war was possible if workers of the world were united beyond the artificial boundaries and political constructs of nationhood. In theory, workers who controlled the means of production would naturally supersede the economic interests of the bourgeoisie and imperial proclivities of governments.

Marxist theory holds that the animus of nations does not exist in the fraternity of the working class, and that any act of aggression would be considered a form of cannibalism and therefore antagonistic to our humanity. Likewise, our humanity is only tenable when the working class is closely linked with production.

When one considers the age during which Marx was most prolific, his logic is more enticing than it is today. Science and reason had shattered the intellectual prism that confined mankind during the middle ages. Empires had crumbled and the church was losing its grip on politics. And while technology had advanced enough for Marx to envisage the terrible consequences of an industrial society, the industrial revolution was in its nascent stages.

What was evident to Marx were the conditions created by capitalism. For the destitute and working classes, the boom-and-bust cycles of the economy were apocalyptic. Even those who briefly climbed into the middle class would be frequently thrust back into penury due to the need of the bourgeoisie to maintain wealth during the bust cycles. Ultimately, Marx’s theories would be perverted by communism and the boom-and-bust cycles under capitalism would eventually be mitigated. Typically, however, these cycles were tamed by policies more associated with socialism than capitalism, particularly in the United States, during the first half of the 20th century. This nuance has been lost to time as the American conservative movement today seeks to destroy the last vestiges of the temperate regulations instituted with fairly strict accordance to capitalist theory. Which is to say, capitalism is not mutually exclusive of regulation.

Lastly, Marx couldn’t have foreseen the rise of nationalism at the turn of the 20th century, which would render the concept of a unified global proletariat virtually impossible. Militant Jingoism and xenophobia, manufactured tools of the ruling class, would supplant the possibility of universal solidarity among workers. Continuity can be found, however, in Marx’s theory of alienation.

The underlying precept of Marx’s theory suggests that mechanization and industry would alienate the worker from the process and therefore strip any meaning from his work. As a consequence, labor would become despondent and therefore further detached from its own humanity. The capitalist, forced to pursue greater profits, would continue to degrade working conditions through increased mechanization, thereby contributing to the downward spiral of human existence.

Examining this subtext adds layers to the phrase “redistribution of wealth,” a phrase that has been purposely bastardized and cheapened by conservative propaganda.

It’s time to embark on a new discussion that takes into account the shortcomings of Marxist theory but includes the best part of its intent. It begins with the reclamation of this battered phrase in a way that tunes our collective ear to the sound of justice. An economic system that functions properly while preserving our morality does not rely on redistributing wealth; rather, it relies on creating equitable access to wealth. An economic system based upon increasing alienation is doomed to failure, particularly when the political system supports such a divide. A system that rewards work and industriousness with participation in both the political and economic process is sustainable.

When food is used for fuel while children are “food insecure,” it is not simply immoral, it’s bad economic planning. When rampant speculation causes spikes in the price of food and fuel, it punishes the lower economic classes disproportionately. “There is a crime here that goes beyond denunciating,” writes Steinbeck at the end of his Depression-era novel, The Grapes of Wrath. “There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificates­—died of malnutrition—because the food must rot, must be forced to rot.”

Jed Morey is the author of The Great American Disconnect: Seven Fundamental Threats to our Democracy.

A Renewed Discourse on Inequality

Renewed Discourse

Suddenly, it is in vogue to discuss economic inequality. The idea of inequality and how it is interpreted today is relatively new in human history and has its roots in the Enlightenment period. By the same token the discourse surrounding it is old enough to have evolved greatly since this period to where it has finally entered the public consciousness via the mainstream broadcast media today. As usual, now that the quicksand is up to our chins, we have decided it’s time to start looking for help.

In many ways, having a rational conversation about economic inequality is like trying to have a rational discussion about climate change. Both have reached a consensus within their respective scientific communities that these issues are influenced by human behavior. Problematically, both are also highly charged and emotional matters being debated in high definition by a shallow pool of uniformed talent that panders to the lowest common intellectual denominator among us.

Many of the themes examined by Enlightenment philosophers, scientists and scholars remain highly relevant and are worth revisiting. These figures attempted to define the role of man in civil society, which was revolutionary thinking as civilizations emerged from the Middle Ages and the Renaissance. From the mid-17th to the mid-19th centuries, philosophers such as Descartes, Locke and Rousseau, scientists from Newton to Darwin, and writers such as Dostoevsky, Dickens and Melville created enduring masterpieces that challenge our concepts of liberty, democracy and the rights of man to this day.

Yet while understanding the foundations of inequality is instructive when examining it through a modern lens, there is a disruptive shift that has occurred that cannot be overlooked. The idea that corporations enjoy the very liberties we associate with humans is a dangerous departure from the theories suggested by the intellectual luminaries highlighted above.

Before we move further on, it is important to acknowledge that inequality is multifaceted and takes on several meanings depending upon the context in which it is raised. Gender and race, for example, are significant topics that move the discussion in meaningful directions but often correlate to the level of agitation. As economic inequality can serve as both the underlying cause and product of these factors, it therefore provides a more complete template for analysis. Without the polemic that surrounded the nature of liberty and man’s place in society, we would have little concept of equality and therefore no ability to debate tributaries such as sexual orientation, gender and race.

Another reason it is important to become familiar with the arguments proffered by the great Enlightenment thinkers is that their words informed the founders and subsequent leaders of this nation. For many, America represented the living enlightened experiment across the sea. This great ideological laboratory, theoretically free from old world constraints was a curiosity to Enlightenment theorists and a danger to established secular and theological rulers.

At times, the distance between this period and present day is incredibly short. To wit, the celebrated, and at times rancorous debate between Edmund Burke and Thomas Paine still plays out today, though diminished in both eloquence and erudition. Yet no matter how diminished our discourse has become and how far we have traveled from the egalitarian notions that inspired our founding, America as the “Enlightened state” is a portrayal we hold dear to as a people.

To be useful in today’s circumstances, any renewed discourse must begin by focusing on the nature and definition of equality in moral and economic terms before attempting to prescribe solutions to inequality. Until we evaluate our national sentiment toward inequality and determine what exactly we are striving for as a society, any practical solutions will be lost in the toxic ether of our rhetoric. Gross inequality is no longer a theoretical exercise, nor is it exclusive to underdeveloped or developing nations. It is a global phenomenon and one that is best illustrated by conditions in the wealthiest nation on Earth.

In purely economic terms, inequality is both America’s greatest challenge and number one export.

In an effort to focus the conversation on economic inequality in advance of the World Economic Forum in Davos, Switzerland, Oxfam International released a new report on the widening economic gap in the world. Its findings are hardly startling, but they are staggering. The report, compiled from numerous sources, concludes the following:

  • Almost half of the world’s wealth is now owned by just one percent of the population.
  • The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population.
  • The bottom half of the world’s population owns the same as the richest 85 people in the world.
  • Seven out of 10 people live in countries where economic inequality has increased in the last 30 years.
  • The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.
  • In the United States, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.

These findings seem more like verdicts; judgments handed down on capitalist society from the high court of natural law. How we act to reform these conclusions relies on our willingness to objectively interpret them and decide whether these are acceptable characteristics of modern society.

The Original Discourse

The title of this piece and much of the sentiment found within is drawn from the Swiss philosopher Jean-Jacques Rousseau’s work A Discourse On Inequality, published in 1755. In it he attempts to establish the nature of inequality by distinguishing between the perceived rights of “savage” man and civil society. The savage man, he claims, lives predominantly in a state of nature that values present existence and subsistence above all things. The civilized man lives within a system of laws designed to protect artificial geographic boundaries and places an economic value on property beyond what it provides for subsistence.

“Savage man,” he states, “will not bend his neck to the yoke which civilized man wears without a murmur; he prefers the most turbulent freedom to the most tranquil subjection.” At its best and most functional, Rousseau believed civilized society exists to organize principles and laws around the natural rights of man within the context of modern civilization.

According to Rousseau, the nexus between a natural existence and the need for civil society is founded in the concept of property. He begins the second half of A Discourse describing the evolution of human existence from savage and free to civil and enslaved with the following: “The first man who, having enclosed a piece of land, thought of saying ‘This is mine’ and found people simple enough to believe him was the true founder of civil society.”

Yet Rousseau sees civil society—when laws are meted out evenly and economic protections are in place—in more sanguine terms than other philosophers of the Enlightenment period such as Thomas Paine or later Karl Marx. In fact, A Discourse On Inequality, was intended as a defense of his hometown of Geneva, which he regarded at the time as the best example of progressive civil society and governance in terms of protecting man’s civil liberties. (Rousseau would feel differently after the same government he extols in A Discourse would later ban his work and accuse him of sedition. In this, Rousseau’s experience can be viewed as a cautionary tale regarding the vagaries of political corruption, but one that doesn’t diminish the intellectual scope of his earlier work.)

“Inequality,” Rousseau believed, “derives its force and its growth from the development of our faculties and the progress of the human mind, and finally becomes fixed and legitimate through the institution of property and laws.”

In linking “progress of the human mind” to inequality, Rousseau tacitly acknowledges the inevitability of inequality while arguing the need to protect some semblance of natural rights, lest our humanity be consumed by man’s insidious greed. “A devouring ambition, the burning passion to enlarge one’s relative fortune, not so much from real need as to put oneself ahead of others, inspires in all men a dark propensity to injure one another, a secret jealousy which is all the more dangerous in that it often assumes the mask of benevolence in order to do its deeds in greater safety: in a word, there is competition and rivalry on the one hand, conflicts of interest on the other, and always the hidden desire to gain an advantage at the expense of other people. All these evils are the main effects of property and the inseparable consequences of nascent inequality.”

Rousseau’s pessimism regarding ambition and greed informed his belief that a civil society is one in which our natural impulses are restrained by a just system of laws dispensed in an equitable fashion. This coincides with traditional Aristotelian theory that politics ordains all human sciences and artistic pursuits and therefore, “this end must be the good for man.”

If we are to submit, as Rousseau did, to the idea that civil society exists to contain the human impulse of greed that grows relative to progress, then we must also surrender to the idea that we can never return to a natural, or “savage” state. Put simply, liberty—in its truest sense—can never be achieved within a civil society. The best state it can attain is equity in terms of man’s access to, and representation by, the system.

To this end, we must therefore conclude that a system that restricts access to capital and social mobility regardless of talent—one that places the means of production and extraordinary profit in the hands of a few individuals—can then only be defined as the opposite of civil society. Inequality is a form of social and moral anarchy.

Slaves to Corporate Masters

In the United States, inequality is exacerbated by the extension of our natural and civil rights to corporations, which are organized solely for profit and therefore exist in a state contrary to the good of man. The rise of corporate influence further alienates us from our rights as well as the means of production. Furthermore, we have allowed corporations access to the political process while extending protections to corporations previously reserved for the people. Corporate personhood and the civil and criminal protections it affords, accompanied by the ability to craft legislation and pour unlimited funds into the political process diminishes all civil political theories that revolve around democratic principles.

Some in this country are awakening to the fact that our understanding of capitalism cradled within a democracy bears no resemblance to the world we live in. They have rightfully concluded that America is no longer a democracy, but a corporatocracy. Most of us, however, continue the grand delusion. We prefer to be spoon-fed comfortable ideological anachronisms while debating the symptoms of inequality with little or no relation to the underlying cause.

This is not a criticism; it’s an observation that recognizes that apathy is a direct corollary of inequality. Most of us are too busy and under too much financial pressure to remove ourselves from the cycle of madness. It’s the capitalist way. You snooze, you lose. Thinking is for the weak. Hard work and perseverance is enough. To question our corporate overlords (as Chris Hedges refers to them) is to commit economic suicide and to risk being ostracized from the system. It’s why so many marginalized people come to the defense of the very masters of their subjugation.

Even Rousseau recognized this phenomenon: “The rich man under pressure of necessity conceived in the end the most cunning project that ever entered the human mind: to employ in his favour the very forces of those who attacked him, to make his adversaries his defenders, to inspire them with new maxims and give them new institutions as advantageous to him as natural right was disadvantageous.”

Ultimately, a corporate system ensures that there is no failsafe for penury beyond what the government provides. And if corporations, which by definition require growth at any expense, subsequently seize complete control of government interests, inequality ceases to become a word. It becomes a foregone conclusion.

When an Empire Falls in the World, Does it Make a Sound?

Empire Falls

eagletreeMargaret MacMillan’s latest book on World War I, The War That Ended The Peace, opens with the Paris Universal Exposition in 1900. Countries from around the globe gathered in Paris to reveal inventions and works of art and to generally boast about nationhood. The event was underscored by political tensions but fueled by a collective optimism that technological advancements, many of which were on display at the exposition, would bring the world closer together and usher in lasting peace on Earth.

Fourteen years later, the world order collapsed. The Great War engulfed the very nations who proclaimed the 20th century as a new and peaceful era. Within five bloody years, vast empires had crumbled, maps were redrawn and a generation of men was decimated.

Great Britain entered World War I as one of the most impressive imperial empires the world had ever known; incredible given its size. Much of their greatness was attributed to being the greatest naval power in history. After the war, it was never the same. There are obvious parallels to be drawn between the position of the United States today and Great Britain’s a century ago. There are lessons to be heeded from their story.

Our disastrous wars in the Middle East at the beginning of the 21st century are akin to the Boer War fiasco Britain was embroiled in at the turn of the 20th century. The Boer War engendered near-universal antipathy toward the aging lion. Most notably, it drew strident criticism from the German people and Kaiser Wilhelm, which contributed to the burgeoning schism between the two nations.

One of the most striking similarities between the two eras is the manner in which Britain and the United States approached empire-building at the turn of the 20th and 21st centuries, respectively. Britain was suffering from growing pains related to over-colonization as its empire stretched around the globe. The U.S. is experiencing similar aches in its attempt to recover from naked imperialism under the guise of spreading democracy for the past 60 years.

Both nations display a paternalistic attitude toward “lesser” nations and believe a western style of governance was easily adopted through what Franklin Henry Giddings termed, “consent without consent.” In doing so both empires wore out their welcomes abroad and maintained relations strictly through fear of violent reprisal or loss of economic trade.

The British government was increasingly pouring resources into maintaining the largest navy in the world while ignoring the domestic cost of an aging population. Instead of cutting back on imperial pursuits and bolstering spending at home to stabilize its economy, it engaged in an arms race with Germany and sought new economic alliances in the event the two nations proceeded down the path to war.

Sound familiar?

The problem with military power is that it creates a desire among world leaders to employ it. Just as Capitalism requires constant growth, the suppression of labor and consumption of natural resources, the Military Industrial Complex requires conflict in order to sustain and justify its very existence. Despite famously being credited with the phrase, “Speak softly, and carry a big stick,” President Theodore Roosevelt sent America’s Great White Fleet around the globe to impress the world and privately lamented the fact that he did not preside over a war while serving in the Oval Office. His successors would put America’s newfound might to use, however, as the United States embarked on a century of unprecedented warfare and imperial harassment.

The dawn of the 20th century was rife with warmongering characters such as Roosevelt, who shared his attitude toward war. This idea is perfectly encapsulated in the words of Count Franz Conrad von Hotzendorf of Austria-Hungary: “The army is not a fire extinguisher, one cannot let it rust until the flames are coming out of the house. Instead it is an instrument to be used by goal-conscious, clever politicians as the ultimate defence of their interests.”

Naturally, the madness of these nations is somewhat clear. In hindsight, though, these are not the exclusive circumstances that led to the Great War. Nevertheless, one can’t help but experience déjà vu when examining the behavior of the Bush administration and the continuum that is the Obama administration. President Obama’s “pivot to Asia” is eerily similar to Britain’s thirst to tap into the faltering Chinese and Ottoman Empires of its age. Moreover, its effort to marginalize its perceived enemies through new and aggressive trade alliances is comparable to the Trans Pacific Partnership (TPP) currently being negotiated in secret between the U.S. and many of its so-called “client nations,” such as Canada, Japan, Mexico and South Korea.

The TPP is essentially an attempt by the U.S. to constrict China’s growth in the coming years by allowing TPP-participating nations access to labor forces in poverty-stricken parts of the world. It would function much like the North American Free Trade Agreement (NAFTA), in that the subordinate nations would be subject to the economic and human rights abuses of the more dominant nations.

Those familiar with the neo-liberal treatise called the Project for a New American Century will rightly view the TPP as the next logical evolutionary step in the process toward maintaining U.S. hegemony in the world by any means necessary. Where military interventions have failed us, a new form of economic warfare is stepping up to take their place.

For its part, China is responding as one might imagine—with a show of force and steady shift toward economic policies that bear a closer resemblance to Capitalism, though this may never be fully recognized. President Xi Jinping’s 10-year plan is called “The Chinese Dream,” which obviously borrows from the American Dream in its scale and ambition. Implicit in the Chinese Dream, as in the American Dream, is economic growth and continued technological progress. Inevitably, this will lead China down a familiar path. Growth is addictive and when it is no longer possible to grow through economic policies and market forces, empires do what empires do best: expand and acquire. Evidence of this strategy already exists, as China was more than happy to procure oil and gas contracts from nations, such as Iraq, that U.S. corporations walked away from after a decade-long struggle to obtain by forcible means.

Yet despite provocations between China and the U.S., there is a presumption that war is impossible given the interconnectedness of the world economies.

In an op-ed titled “The Great War’s Ominous Echoes” in The New York Times, Margaret MacMillan ruminates on this very theme, saying, “It is tempting—and sobering—to compare today’s relationship between China and America to that between Germany and England a century ago. Lulling ourselves into a false sense of safety, we say that countries that have a McDonald’s will never fight each other.”

MacMillan is right. Recently, China quietly joined the military fray in a significant way by revealing its first naval aircraft carrier and announcing plans to launch its first domestically built, nuclear-powered carrier by 2020. This announcement, in addition to China establishing a no-fly zone in the East China Sea and issuing several warnings to the Japanese government about its plans to increase its military presence, follows directly on the heels of President Obama’s decision to send American vessels into the region in 2012.

The United States would be wise to tread lightly in the coming years and begin to look inward to cure what ails it instead of continuing on this ceaseless path of imperial madness. We must address the colonies of dispossessed Americans living paycheck-to-paycheck and stop thinking about colonizing cheap labor pools of distant nations. We need a better plan to take care of our aging population and must provide greater educational resources to equip our young people with the skills they will need to get by in this world. This is the role of government. No nation can be truly secure until its people are.

When spending on our massive surveillance state and “homeland security” is taken into account along with Pentagon spending, fully 30 percent of our nation’s budget is allocated toward the military. And yet we wrangle over subsidies for programs that assist at-risk populations and cut pensions of those returning from our ignominious missions abroad.

One hundred years ago this year, 65 million men were mobilized in the Great War. By 1919 more than half were casualties of the war, with 8.5 million killed. Few in the world saw conflict on this scale coming. It was considered almost impossible due to the economic relationships between world power, technological advancements and fear that empires might collapse as a result. For those who believe that our financial arrangement renders war impossible, or impractical at the least, I leave you with MacMillan’s admonition:

“Globalization can heighten rivalries and fears between countries that one might otherwise expect to be friends. On the eve of World War I, Britain, the world’s greatest naval power, and Germany, the world’s greatest land power, were each other’s largest trading partners.”

Hoisting Atrophy in the Nassau County Executive’s Race

It’s the most wonderful time of the year. If politics is your sport, nothing compares to retail politics at the local level. No irrational exuberance surrounding national figures with long coattails or embarrassing blowback; just a good, old-fashioned boots-on-the-ground slugfest where committee members rule the day. This year’s election is one where ideology takes a backseat to patronage in the battle of the bureaucrats. This is small ball, baby.

It’s been a while since I pulled my thoughts out of the national and international clouds to take a look at what is happening here at home. So forgive me as I reminisce for a moment before handicapping the county executive race in Nassau County, far and away the most interesting local political story of the season.

A little more than a decade ago I ran for mayor in my hometown of Glen Cove. In doing so I found myself on the opposite end (and losing side) of the Suozzi family machine. While this was my adopted hometown, I was a so-called carpetbagger living in the feudal regime run by generations of Suozzis. The race was so parochial, my opponent even sent out a campaign flyer that told the good citizens of Glen Cove that I was untrustworthy because I was born in Canada. Glen Cove is the land of homemade pasta sauce, not maple syrup. I never had a chance.

As a Republican candidate (hard to believe, I know), I briefly found myself in the fascinating world of the Nassau County GOP. My first (and last) general meeting at GOP headquarters in Westbury was as if I had set the dashboard clock on my DeLorean to 1950. The nearly all-white and graying crowd milled about greeting one another with hearty slaps on the back while the power brokers huddled quietly in the corner of the room whispering among themselves and occasionally surveying the crowd. Gradually, everyone took a seat in a folding chair facing a large map and a podium where chairman Joseph Mondello presided over the meeting.

“This is a business!” he bellowed on more than one occasion. Mr. Mondello’s countenance would move from ashen to crimson within seconds as he addressed the audience alternately with the coolness of a CEO and the vigor of a college football coach. The overarching message was that we were to adhere to the script, send our money directly to headquarters and essentially fall in line.

The lessons I learned from this experience will stay with me forever. My 15 minutes of fame in Glen Cove has all but faded away, allowing me near perfect anonymity as I watch the lawn signs sprout up all over town with this year’s crop of candidates. My hope is that the politicians who occupy positions on the ballots, whether it’s Brookhaven, Southampton or Glen Cove, have gone to where the action really is: knocking on doors. There is no more authentic or humbling experience than standing in someone’s living room and listening to what they want from their local officials.

Which brings me to the two men atop the Nassau County ticket who are appropriately playing small ball, and in doing so, missing the larger picture altogether.
When watching current County Executive Ed Mangano and former county executive Tom Suozzi fight to be the one to circle the bowl next, it’s hard not to get caught up in the partisan bickering. And there is some great “inside baseball” going on here. Suozzi says Mangano is responsible for Nassau’s $2 billion debt. He’s not. Mangano claims to have presented balanced budgets. He didn’t. Suozzi attacks Mangano for being soft on gun control. This is grasping at straws. Mangano asserts that he has made progress on the property tax assessment issue. He hasn’t.

The biggest disconnect of this race, however, is ideology. The truth of this contest is that the two parties these men represent are indistinguishable from one another.

The assessment situation is fixable. But it must come from Albany—and the nine Long Island senators hold the key. Unfortunately, neither Mangano nor Suozzi will cop to this admission because each is cozy with law firms that extract exorbitant fees from tax grievances.

Both men share an antipathy toward labor and favor privatization. Mangano spends an inordinate amount of time cozying up to donors and Suozzi spent his political off-season consulting for an investment bank and commissioning works of art. In everything they have done and represent, they are shills for corporate America and complicit in an overall scheme designed to liquidate taxpayers, privatize public works, and ride the status quo deep into the ground.

It’s hardly their fault, mind you. Our troubles in suburbia are so thick that there is an air of inevitability to our decline. Mangano and Suozzi know it, which is why this is the ultimate bureaucratic contest. As voters, this election comes down to which starting lineup you want on the field playing in a game that won’t affect the outcome of your season. Got a buddy sandwiched in a cubicle in North Hempstead waiting to return to a cushy county job? Vote for Suozzi. Have a relative in the county who needs three more years to pad his or her pension before retirement? Vote for Mangano.

Want real change and a chance to redefine our future? Sorry. Not on the ballot.

Either way, I’ll be glued to my television as usual, watching Jerry Kremer and Larry Levy narrate the inevitable. And loving every minute of it.

Con Man Overboard: Wall Street Prepares to Pull the Plug

Conman Overboard

Lately I’ve been thinking a lot about the economy. Not our economy, the shadow economy run by the corporate masters of America. You can’t see it. No one can. But trust me, it’s booming.

It’s estimated that trillions of dollars from corporations, wealthy individuals and governments of small and corrupt nations are teeming through offshore accounts, robbing the home countries of domestic tax revenues. An Economist special report on offshore tax havens in February of this year cites, “James Henry, a former chief economist with McKinsey,” as saying he “believes the amount invested virtually tax-free offshore tops $21 trillion.”

Corporations, now considered people by the U.S. Supreme Court, like to refer to this money as “dry powder” just “sitting on the sidelines” waiting to be invested at any time. Indeed it is, in the most nefarious way possible.

In this magical world of paper finance the “too big to fail” banks are royalty. Since the banking collapse of 2008, they have emerged even bigger, far more profitable and just as leveraged.

Margin debt ratios, the extent to which financial institutions are leveraged in equities, are once again at pre-crash levels. After cooling off in the initial aftermath of the crisis, banks have steadily dipped their big toes back into the debt pool and begun packing on leverage at alarming rates. What’s even more insulting than the obvious recklessness this presents is that they’re not even using their own funds. The Federal Reserve has directed the U.S. Treasury to print money like mad since the crash in an effort to maintain liquidity within the system, with the banks all-too-happy to gobble it up. Given the ridiculously low interest rate environment maintained by the Fed since this time, it makes sense that the banks would take cheap government money and reinvest it.

It’s where they have invested it that warrants examination.

The easiest place for the public to spot the massive flow of liquidity is in the equity markets. The Dow Jones Industrial Average has more than doubled since it bottomed out near 6,600 immediately after the crash. And while some corporations have indeed posted substantial profits the past couple of years, overall performance and profitability are nowhere even close to explaining the gains on the Dow.

The next, most obvious place bank liquidity showed up, was in the commodities markets. The price of oil and certain agricultural products have been high for so long we have forgotten how outrageous the pricing truly is. Non-productive speculation in the commodities market has been upwards of 50 percent over the past few years, a phenomenon Dodd-Frank has yet to fix. This essentially means that nearly half of the price that you pay for a given commodity such as gasoline or milk is due to a bunch of high-frequency traders sitting at computers in Atlanta, Chicago and London.

Cheap, easy money from the Fed also means the dollar is relatively weak compared to foreign currencies. This works to the advantage of U.S. export companies, for now. But if our money is cheap, then by definition the flipside of this equation is that money is expensive in other places. The combined effect of a weak dollar and rampant speculation means that we are basically exporting inflation around the globe. The problem here is the timeless axiom: “What goes around, comes around.”

There are a couple of policy issues at play right now that should give everyone in the United States pause. The first is that the Federal Reserve has already indicated that its bond-buyback program is slowly coming to an end. As such, interest rates are gradually beginning to climb. Anyone with an adjustable-rate loan should pay even closer attention to this trend. The other consideration is that the rules of engagement in the swaps and derivatives markets haven’t changed all that much since the banking collapse. Therefore, there are still hundreds of trillions of dollars at stake in markets that no one can see.

Now add to the mix that regulators believe they will finally be able to put in place position limits on a good chunk of the activity in the derivatives market by the end of the year, and we are set for a few hairy months of fast and furious transactions as companies look to close out riskier investments. These factors alone foretell a period of volatility, particularly when the “recovery” hasn’t been so robust. Oh, and there’s a little matter of who will be the next chair of the Federal Reserve, which actually matters. A lot.

Having just vomited a bunch of financial mumbo-jumbo, now let me go back to where we began.

I’ve just given you a cursory explanation of why I believe we’re in for some serious upheaval in the financial markets between now and the end of the year. Over the next couple of months I think we will see interest rates continue to climb, a huge (albeit temporary) sell off in the commodities markets as the dollar rises and regulations tighten, and the equities market will be pounded. All of these things, were they to happen, would of course negatively impact most Americans. Higher loan costs, reduced value in pensions, and the beginning of inflation would be crippling to the American economy right now considering how tenuous the recovery is and how, according to the Associated Press, four out of five Americans are either living paycheck to paycheck, unemployed or working part-time, or below the poverty line.

Guess who will be just fine?

Because the banks are still allowed to engage in proprietary investing–meaning they can own the actual products they trade on the markets–and have trillions of “dry powder” sitting “on the sidelines,” they are more than poised to take advantage of what lies ahead. They’ll be dictating how, when and to what extent it will happen and doing so without leaving fingerprints.

Think of it like the mafia. Banks are like caporegimes and hedge funds are their hit men. Using government money the banks pack on debt and send funds to their offshore subsidiaries that, in turn, invest heavily through the hedge funds registered to places like the Caymans or Virgin Islands. Any time the big banks want to pull the plug on the equities market, they’ll do so without hesitation because they’ll have 10 times the money betting that it does.

It’s the perfect con.

Good thing we’re on to them. The corporate elite and the politicians who do their bidding will have to get up pretty early in the morning to fool the American public again. Unless, of course, there’s some big distraction like a new war in the Middle East or something. But that would be truly ridiculous.

There’s no way we’d ever fall for that old gag again.

Syria’s Other Chemical War – The Real Reason Behind a U.S. Strike

Syria’s Other Chemical War

The more deadly and confusing the situation in Syria becomes, the further away we travel from addressing the true reason the world’s superpowers have suddenly taken great interest in the safety and security of the Syrian people. Thus far, it has been estimated that more than 100,000 Syrians have lost their lives during this civil war and the refugee situation has become dire. Yet despite such heavy civilian losses, it wasn’t until the world learned of a chemical weapons attack outside of Damascus on Aug. 21, 2013 that this war presented an imminent policy decision for the United States and other stakeholder nations in the Middle East.

The keen interest in Syria on the part of the U.S. that the mainstream media has largely overlooked has its roots in the unsuccessful occupation of Iraq. Chemical weapons might be the proverbial straw that broke the camel’s back, but U.S. policy is being dictated by opportunities squandered over the past decade. Once again, all roads lead back to Baghdad.

As far as the attack itself, the nonprofit organization Human Rights Watch released a report on September 10 concluding: “telltale evidence… suggests that Syrian government troops launched rockets carrying chemical warheads into the Damascus suburbs.” However, there have been conflicting reports from the region that indicate the weapons may have been of Saudi origin and deployed by rebel fighters.

The fog of war combined with limited access for journalists in the region and the subsequent jockeying for diplomatic supremacy between the U.S. and Russia will likely leave this question unanswered for quite some time. At a minimum, Syrian President Bashar al-Assad was forced to admit that his government is indeed in possession of chemical weaponry, though it maintains that none was used in this conflict. And because it was Russian President Vladimir Putin who stepped in with the winning diplomatic solution of the moment, the American news cycle now is focused on whether or not the United States just lost a major psychological and tactical battle to Russia.

The chemical weapons debate and renewed tensions between Russia and the United States obscure the chemical war the United States truly cares about: the petrochemical war. Sarin gas might have been President Obama’s “red line” to intervene in the Syrian conflict, but natural gas is the underlying reason.

Taking a step back from Damascus reveals a much wider and more complicated picture with several important players. The U.S. and Russia are now primary actors in the Syrian conflict, but so too are Iraq, Iran, Lebanon, Saudi Arabia, Israel, Jordan, Western Europe and China.

Consider this timing for a moment. Less than a month before the Assad regime purportedly employed the use of chemical weapons, it entered into a potentially lucrative contract with neighboring Iran and Iraq., an online trade publication for the energy industry, reported that a deal struck on July 25 between the three nations for “the construction of what would end up being the largest gas pipeline in the Middle East, running gas from Iran’s South Pars field to Europe, via Lebanon and the Mediterranean Sea.”

The economic importance of this potential transaction cannot be overstated for two reasons. The first is that oil and gas companies in the United States are preparing an intense push into the natural gas export market. And because Europe remains the largest trading partner of the United States and several European countries are aggressively converting to natural gas as the energy source of choice, any competition represents a significant loss of market share. A pipeline carrying oil and natural gas from both Iraq and Iran directly to the Mediterranean makes far more logistical sense than gas traveling across the Atlantic. The second reason is that the U.S.-based energy companies are no longer in the position to participate in any newfound profits in Iraq, as they ceded this advantage almost entirely to the Chinese.

Stony Brook professor Michael Schwartz, who authored the book War Without End: The Iraq War in Context, gave a lecture at this year’s Left Forum at Pace University, where he argued, “China is reaping the benefits of the new Iraq oil boom.” During his talk he described the frustrations experienced by U.S. oil companies that attempted to cajole the Iraqi workforce into complying with U.S. demands. In the decade that followed the U.S. invasion into Iraq, the historically strong Iraqi unions essentially beat American oil giants into submission. Chinese oil companies were all too happy to take advantage of this opening by agreeing to incredibly unfavorable terms in order to access Iraq’s abundant supply of crude oil and natural gas. As Schwartz explained, the U.S. government can no longer “get Exxon to take one for the team.”

In a 2003 article that appeared on, Schwartz highlighted “Deputy Secretary of Defense Paul Wolfowitz’s pre-war prediction that the administration’s invasion and occupation of Iraq would pay for itself.” But experts such as Schwartz knew then that the U.S. had greatly overestimated its ability to find a cooperative workforce and knew that the invasion would stoke ethnic and religious tensions in a way that we were unprepared for. Understanding the social, political and economic structure of Iraq, Schwartz concluded the article saying, “the Bush administration’s ‘capture of new and existing oil and gas fields’ is likely to end as a predictable fiasco.”

Schwartz was prescient to say the least. Dr. Naser AL-Tamimi, A UK-based Middle East analyst, wrote an article for in March 2013 describing the partnership between China and Baghdad. In the article AL-Tamimi notes that, “Iraq is estimated to have the fifth largest proven oil reserves and the 12-largest proven gas reserves in the world,” and that “current trends suggest that China will soon overtake America to become Baghdad’s top trade partner.” This prediction proved true as well, as Chinese oil companies continued to sew up contracts in Iraq over the summer and its government made the critical move of forgiving 80 percent of Iraq’s outstanding debt owed to the Chinese.

The U.S. might have fought the battles in Baghdad, but China won the war.

One can’t help but be struck by how the U.S. military, after wasting billions of dollars to secure Iraq’s most precious commodity and killing tens of thousand of Iraqi civilians in the process, was ultimately done in by unions.

With China ravenously gobbling up the remaining contracts for Iraqi oil and gas, America’s options in the region are closing off faster than anyone might have predicted. Russia and China clearly have the upper hand in the battle for fossil fuel hegemony in the next century, which brings our interest in the Syrian conflict more clearly into focus.

U.S. allies in the Middle East, specifically Israel and Saudi Arabia, can ill-afford a lucrative alliance between their major oil producing neighbors. The Russians have a significant stake, both militarily and economically, in the Assad regime staying in power. And because the Chinese have significant entrée into the Middle East oil and gas market, it does as well.

Now play the scenario out even further. If Russia and China are successful in negotiating on behalf of the Assad regime and the American and Saudi-backed rebels are ultimately defeated, an economic alliance will be forged between Iran, Iraq, Syria and Lebanon. Jordan, a barren nation dealing with much of the fallout from the Syrian refugee situation, will likely fall in line with this coalition. The United States and its corporate oil interests become the odd men out in this scenario.

Traditionally, the U.S. has been able to rely on ethnic tensions between the Sunni and Shi’a populations in these countries to level the playing field, especially when stoked by U.S.-supported dictators. But since the U.S. overthrew Saddam Hussein and Iran has since elected a reformist government, it has fewer options to wage proxy fights along ethnic lines. Ethnic and religious differences that might otherwise be an obstacle to an alliance between these nations would likewise become a unifying determinant in the face of military threats from the United States. It’s why the political calculus in Washington is so complicated and severe. And it’s also why an episode as dangerous and offensive as a chemical weapons attack is the only plausible case the United States could make for an intervention.

Further complicating the U.S. position on chemical warfare is the stubborn fact that the U.S. supplied Iraq with chemical weapons during the Iran-Iraq War and did nothing when they were deployed against the Iranian people. Moreover, the U.S. was forced to admit that it used both white phosphorous and napalm against Iraqis during the Iraq War. While napalm is clearly outlawed, white phosphorous is not banned because it is used to illuminate the night sky during battle. However, it has the same effects as a chemical agent when used as a weapon. It was the latter use that the U.S. military admitted to—after initial denials—in operations called “shake and bake” whereby white phosphorous was used to flush Iraqi fighters out of buildings and trenches.

These admissions are conveniently omitted from the U.S. narrative on chemical warfare, but are hardly lost on foreign nations. Therefore, President Obama’s chemical weapon “red line” is dubious at best, particularly when the use of it occurs in a civil war.

All of the above factors continue to demonstrate U.S. foreign policy ignorance with respect to the Middle East. U.S. occupations have been an unmitigated and costly disaster that have ultimately inured to the economic benefit of rival nations such as China and Russia. An Arab allegiance in the form of a pipeline from Iran to the Mediterranean would have been almost unimaginable only a decade ago. But it was made possible by the U.S. occupation in Iraq and its failure to seize upon the unwholesome opportunity the war created.

Ultimately, somewhere in the scorching desert sun of the Middle East, the world might be witnessing the rebirth of the Cold War.

New Fox, Same Henhouse: Wall Street Takes Over LIBOR


Wall Street Takes Over LIBOR: New Fox, Same Henhouse

There is a scene in The Godfather Part II when the Hyman Roth character, played by Lee Strasberg, admonishes Al Pacino’s Michael Corleone over the death of the character credited with building Las Vegas out of a “desert stopover for GIs.”

Roth fixes his steely gaze angrily on Corleone and says, “That kid’s name was Moe Greene and the city he invented was Las Vegas. And there isn’t even a plaque or a signpost or a statue of him in that town.”

The same could be said of Thomas Jasper, the architect of the biggest gambling venture ever invented: the swaps market.

In her book The Futures, Forbes writer Emily Lambert describes how in 1981 Salomon Brothers “pulled an investment banker named Thomas Jasper out of a cloistered office and set him up on Salomon’s trading floor with its loud, swearing, cigar-smoking men.” Jasper’s job was to figure out how to turn a new type of banking agreement called an interest rate “swap” into a contract that could be traded on an exchange much like a commodity. By 1987 Salomon’s new product was ready for market, and as Lambert notes, “by that spring, there were $35 billion worth of bond futures contracts open at the Chicago Board of Trade, and there were $1 trillion worth of outstanding swaps transactions.”

For Wall Street this was like graduating instantly from slots to craps.

Twenty years later, unregulated swaps would be at the heart of the global financial meltdown and the very banks responsible for creating them would be considered “too big to fail.” A lethal mixture of deregulation, manipulation and greed would transform swaps—a type of investment known as a “derivative” in which two parties exchange risk with one another in a negotiated agreement—into opaque mega investments that many traded but few understood.

Today, the global derivatives market is estimated to be somewhere around $1.2 quadrillion—more than 14 times larger than the world economy.

After the crash in 2008, the whole world became acquainted with these investments and some of the toxic assets they were based on. Yet since the crash, and despite the best attempts on the part of regulators to get their arms around the world of derivatives, surprisingly little has changed in the way they are packaged, sold and regulated.

By staying one step ahead of regulators, banks have continued to rake in historic profits. Bart Chilton, a commissioner at the Commodity Futures and Trading Commission (CFTC), is one of the U.S. regulators charged with implementing rules that would curb risky speculative behavior on the part of banks and protect American consumers. He expressed his irritation in an interview with the Press, saying, “The financial sector has made more profits every single quarter since the last quarter of 2008 than any sector of the economy by like a hundred billion dollars. So they crash the economy and still make more than anyone else.”

Chilton points to the aggressive bank lobby against regulators as one major impediment to reform.

“They have fuel-injected litigation against regulators,” he laments. “There are ten financial sector lobbyists for every single member of the House and Senate.”

Despite this frustration, Chilton believes in the importance of speculators “in determining what the prices of things are, whether it’s a home mortgage or a gallon of milk.” Instead of squarely blaming the banks, he believes the question “is whether or not government has allowed too much leeway so that the markets have simply become a playground for speculators to roam and romp.”

One of the most important determinants in pricing everything from mortgages to the multi-trillion-dollar derivatives market is the London inter-bank offered rate, better known as LIBOR. Barclays, the British banking giant, thrust LIBOR into the headlines last year when it was discovered that it was among a handful of banks found to be manipulating daily rates for its own benefit. The scandal rocked the banking sector and sent European regulators searching for a replacement to LIBOR or, at the very least, a new third-party administrator.

Charting LIBOR’s new path was left to Martin Wheatley, who was head of the Financial Services Authority in the U.K. when the scandal broke. The recommendations, known as the Wheatley Review, included the formation of a panel charged with finding a new host for LIBOR that would restore confidence to the market and ensure transparency in the rate-setting process.

In a twist even Michael Corleone would appreciate, the panel chose Wall Street.

LIBOR: “A huge, hairy, honking deal.”

Beginning in 2008, rumors began to circulate in the financial world that several of the London banks were involved in influencing the daily posted LIBOR rates. During a 2012 House Financial Services Committee investigation into the matter, Treasury Secretary Timothy Geithner admitted to hearing the rumors while he served as head of the Federal Reserve Bank of New York. In his testimony, Geithner said he attempted to warn U.K. and U.S. regulators but assumed they would “take responsibility for fixing this.”

What the British and American governments knew and when they knew it unfortunately matters little at this juncture, as both have since levied financial penalties on the banks involved that amount to a slap on the wrist. What matters now is how rates are set going forward to ensure some degree of integrity. To understand how the Wheatley Review panel merely chose a new fox to guard the world’s financial henhouse, it’s important to understand how LIBOR is calculated and how much is riding on it.

LIBOR rates are determined on a daily basis. According to an Economist article that details the scandal, “The dollar rate is fixed each day by taking estimates from a panel, currently comprising 18 banks, of what they think they would have to pay to borrow if they needed money.

The top four and bottom four estimates are then discarded, and LIBOR is the average of those left.”

Rates were submitted to the British Bankers Association (BBA), a nonprofit third-party administrator responsible for gathering and posting the data. In theory, the arms-length distance of a disinterested third party provided enough oversight and assurances to the market that rates were being determined fairly. Only the rates weren’t based upon actual market rates. Rather, they were estimates supplied by traders from Europe’s largest banks and therefore surprisingly susceptible to manipulation and, as it turns out, collusion.

Traders were caught periodically manipulating these estimates in order to gain a trading advantage in the market and maximize profit on recent transactions. Moreover, because LIBOR is an indication of the perceived health of a financial institution, bankers had an added incentive to suppress rates to artificially illustrate confidence among their colleagues. In short, everyone was in on it. Because of the global credit crunch, few banks were actually lending large sums to other banks since both sides had cheap and easy access to government dollars to provide market liquidity. This reality made LIBOR even less realistic.

Former Barclays president Bob Diamond initially responded to the scandal by admitting that while manipulation occurred, it didn’t happen “on the majority of days.” The Economist said Diamond’s response was “rather like an adulterer saying that he was faithful on most days.”

Diamond subsequently resigned and so far three U.K. traders, Tom Hayes, Terry Farr and James Gilmour, were swept up in the LIBOR price-fixing scandal. According to the Financial Times, “Mr. Hayes, Mr. Farr and Mr. Gilmour are the only individuals to face U.K. criminal action to date in a global scandal that has seen three banks pay a combined $2.6bn in fines for attempting to manipulate interbank lending rates.”

Many bankers have distanced themselves from the importance of the scandal by calling it a victimless crime. Bart Chilton had a choice expletive for this attitude, and then added, “If it’s a home loan mortgage, or a small business loan or a credit card bill, if you buy an automobile or if you have a student loan, about everything you purchase on credit is impacted by LIBOR. It’s a huge, hairy, honking deal. If somebody says it’s a victimless crime, I bet you it’s a banker.”

Michael Greenberger, a professor at the University of Maryland, has been an outspoken critic of the way derivatives have been regulated for several years. (The Press first spoke with Greenberger for a 2008 cover story on the price manipulation of crude oil.) He weighed in on the Obama Administration’s reaction to the LIBOR price-fixing scandal saying, “This Justice Department is settling these LIBOR cases for what you and I would consider to be traffic tickets.”

Considering who is about to be in charge of administering LIBOR, the Obama Administration and U.S. regulators might want to pay close attention to how the process unfolds.

The Wheatley Review panel chose NYSE Euronext to step into the BBA’s role as administrator of LIBOR. On the surface, choosing the members of the New York Stock Exchange—one of the oldest and most trusted brand names in global finance—to oversee rate-setting seems like sound concept. Only the NYSE isn’t the clubby, self-governed body of individual members it once was. Today the exchange is a publicly traded, for-profit business whose shareholders include none other than the world’s biggest bank-holding companies. “They’re moving from a disinterested nonprofit that couldn’t do the job,” exclaims Greenberger, “to an interested for-profit. There’ll be less transparency I bet in the way that rates are set.”

Chilton is equally apprehensive at the idea of the transition: “When there’s a profit motive, I think it’s always suspect. That’s why key benchmark rates like LIBOR in my view should be monitored or overseen by either a government entity, a quasi-government entity or a not-for-profit third party that doesn’t have a vested interest in what the rates should be.”

How LIBOR will be determined in the future is still being hashed out. A spokesperson for NYSE Euronext declined to answer the Press’ questions on the record, instead directing us to their standard press release. Most observers agree, however, that the days of aggregating estimates should be a thing of the past.

“These benchmarks need to be based upon actual trades,” says Chilton, “not a poll of what the money movers believe it should be.”

As far as the bankers’ claims that price-fixing was a victimless crime, there are several municipalities that beg to disagree. The cities of Baltimore and Philadelphia, among others, have filed suit against several banks claiming severe financial injury due to LIBOR manipulation.

detroit“That’s the hidden story of Detroit,” says Greenberger. “Detroit got clobbered in the swaps market.”

Greenberger also warns that “pensions are still in this market.” That’s a scary proposition considering the underlying risk and leverage that still exists off bank balance sheets.

Eric Sumberg, the spokesman for the New York State Common Retirement Fund—the nation’s third-largest pension—says State Comptroller Tom DiNapoli is watching the LIBOR transition closely.

“There have been some calls for moving from LIBOR’s banker’s poll to a rate-setting process that is more directly based on a broader universe of transactions and on actual market activity,” Sumberg wrote the Press in response to our inquiries. “Such a change over time could have the potential to improve transparency and integrity in rate-setting, but potential details of any such process have not yet emerged. We will continue to monitor developments in this area.”

Yet even when the proposed rules are made public and the administration of LIBOR has fully transitioned, NYSE Euronext will still only be the titular head of LIBOR. The real force behind the market is neither in London nor New York. Atlanta, home of the Intercontinental Exchange (ICE), is the new financial capital of the world.


THE ICE MAN: Jeffrey Sprecher, Chairman and  CEO of the Intercontinental Exchange (ICE).  Photo taken from the  2012 ICE annual report.
THE ICE MAN: Jeffrey Sprecher, Chairman and
CEO of the Intercontinental Exchange (ICE).
Photo taken from the
2012 ICE annual report.

Many of the toxic assets the public became aware of after the 2008 crash have worked their way through the system and been mostly written off by many of the largest financial institutions. Much of the credit for the industry’s stunning recovery belongs to the U.S. Federal Reserve’s low interest rate policy and aggressive liquidity practices known as quantitative easing. Much like the exuberance that preceded both the tech-bubble crash of 2000 and the mortgage-backed securities crash of 2008, a capital bubble established by the Federal Reserve is artificially propping up the market.

Hedge funds and bank holding companies fueled their own recovery by using deposits, borrowed federal funds and leverage to drive the equity market to historic highs and post speculative profits in the derivatives market. And while the financial sector was scrambling to regain its footing, regulators in Washington, D.C., attempted to keep pace by passing reforms to prevent the next global financial crisis should the Federal Reserve change course and remove liquidity from the system while simultaneously allowing interest rates to gradually climb.

In 2010, Congress passed the Dodd–Frank Wall Street Reform and Consumer Protection Act in an effort to curb speculation and create greater oversight in the financial sector. It was a monumental legislative task that has proven even more difficult to translate into regulatory policy. Regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission have been working against bank lobbyists and the fact that the markets are global and U.S. regulatory authority only reaches so far.

To complicate matters further, banks have been busy changing the rules of engagement by shifting markets from classic bilateral swaps between parties to futures contracts, which are more standardized agreements traded on exchanges and therefore subject to greater regulatory scrutiny. In theory, exchange-traded derivatives will provide the transparency that regulators seek. In practice, however, this capital shift might simply move risky investments from the frying pan into the fire, as futures exchanges are global, meaning U.S. regulators must rely heavily on the voluntary cooperation of foreign exchanges.

The one person set to benefit from this capital shift is Jeffrey Sprecher, founding chairman of the ICE. Though not a household name outside of investment circles, Sprecher has emerged as the unlikely king of the global trading exchange industry. In little more than a decade, he helped transform the commodities market from a $10 billion market to more than a half a trillion dollars, with the ICE being a huge beneficiary.

The growth of trading on the ICE has been so explosive Sprecher is about to close on a deal to purchase the vaunted NYSE Euronext for $8.2 billion. The deal has already been approved by European regulators and awaits final approval in the U.S. Once completed, Sprecher will not only run the world’s most famous trading exchange; he will also extend his reach into the global derivatives market as the acquisition includes NYSE Liffe, one of the world’s largest derivatives trading desks.

Nathaniel Popper’s front-page story in the business section of The New York Times on Jan. 20, 2013 pulls the veil back on Sprecher, the man, and describes how he grew a little-known Southern exchange into a juggernaut capable of purchasing NYSE. As Popper himself writes, “It sounds preposterous.” Given the inevitable capital shift sparked by U.S. regulators, Popper also notes that “Wall Street firms will have to move trading in many opaque financial products to exchanges, and ICE is in a perfect position to profit.”

Popper’s piece brings forward a story that few people know. Most have no idea that trading exchanges are even for-profit businesses. And while he does a worthy job demystifying the business of exchanges, he overlooks the planet-sized regulatory loopholes that allowed Sprecher to convert a small energy futures trading exchange into a global exchange that is buying the most famous trading platform on Earth.

To call Sprecher an opportunist would be technically accurate but cheap and intellectually dishonest. He understood the inevitability of electronic trading and the superior potential it held. But there’s a danger in spreading the accepted mythology of Jeff Sprecher and his plucky exchange. Behind his story is the familiar invisible hand of Wall Street.

“The reason Sprecher has been so successful is he’s really representing all the major ‘too big to fail’ banks,” says Greenberger. “And they want him to succeed, and therefore he is succeeding.”

Missing from the brief history of the ICE are the loopholes that gave it life and the ability to flourish beyond imagination. It was the oft-spoken of— but rarely understood—“Enron Loophole” that gave corporations the legal right to trade energy futures on exchanges such as the ICE even if the corporation itself was in the business of energy. The second loophole was a maneuver by the Bush Administration that granted the ICE foreign status as an exchange despite its being based in Atlanta. This initiated a massive shift of trading dollars, and influx of new ones, into the ICE for one reason: This singular move placed the ICE outside the purview of U.S. regulators like Chilton at the Commodities Futures and Trading Commission (CFTC). Essentially, corporations could now trade energy futures electronically through the ICE without oversight or disclosure.

Moreover, the mere fact that the founding investors of the ICE are some of the world’s largest bank-holding companies, Morgan Stanley and Goldman Sachs in particular, speaks to how little transparency there truly is.

This in no way takes away from Sprecher’s genius as a businessman. It simply illustrates how willfully ignorant we are to the business of Wall Street and therefore how frightfully far away we are from properly regulating it. Everything Sprecher has done is legal and ethical, to the extent there is an ethos on Wall Street. Where all of this hits home for the consumer is at places like the gas pump and the supermarket.

Now it’s easier to place the LIBOR issue in its proper context. Almost every “too big to fail” bank has a significant ownership stake in both the ICE and NYSE Euronext, soon to be one entity. This combined entity will also soon control LIBOR, the world’s largest rate-setting mechanism. In trader’s parlance, this would be considered the perfect “corner.”

But wait, there’s more. In the attempt to rein in speculation and manage risk in the marketplace, Dodd-Frank might have unintentionally become the gift that keeps on giving—to Sprecher.


The sheer size and complexity of the derivatives market overwhelm even the most interested parties—including Congress, regulators and bankers themselves—leaving average citizens utterly dumbfounded and sidelined. It’s little wonder. Banks that were too big to fail in 2008 are bigger today in 2013. The vast majority of the much-ballyhooed Dodd-Frank regulations have yet to take effect, and bank leverage is back at pre-crash levels.

marketA former trader who worked in both New York and London recently told me, “At the end of the day, this market is running on the [Federal Reserve]. Once they pull out it’s all over. Cheap money, loads of people making loads of money, but no lessons learned.”

Derivatives themselves aren’t nearly as difficult to understand as the markets they trade in. They are essentially risk transfer agreements between two parties, a way to hedge investments. The word ‘derivative’ refers to the fact that the agreement derives value from other investments: a bet as to how the original investment would perform. It’s helpful to once again employ the casino analogy.

Ten random players approach the roulette table and lay down $100 worth of chips on various numbers. Each individual gambler is making a bet, or an investment, collectively totaling $1,000.

Now imagine that another gambler watching the action on the roulette table calls his or her bookie and places a bet on the outcome of their total wagers when the wheel stops spinning. Having sized up the situation, the gambler predicts that overall this group will win and walk away with $1,100. But in order for this bet to be placed, someone else has to take the action and bet the group will lose $100, leaving them with $900. Before the ball drops on the number, the bookie connects the two outside gamblers and creates a new bet. This bet functions as the derivative investment because even though they’re not actually playing the game, they have a stake in the outcome.

In the real world of investing, the bookie is a trader and the gambler taking the action from the outside is a speculator. Sounds nefarious, but in reality, these transactions are essential to providing market stability.

“If we didn’t have speculators,” says Chilton, the CFTC commissioner, “consumers would pay disproportionate prices.”

There are three classic types of derivatives, all of which Chilton and the CFTC have been trying to rein in well before the crash introduced the world to this type of investment. All three involve counterparties, which trade these investments either directly or through exchanges.

But the differences between the three types of derivatives are diminishing. The first type of derivative is commonly referred to as a “swap.” This is where two parties exchange risk with one another in a negotiated agreement. In the United States, these have traditionally been deals between banks that fall under the purview of the SEC. The other two types of derivatives, futures and cleared derivatives, are negotiated similarly but must be listed and cleared on exchanges.

The CFTC and other regulators have long argued that these investments are similar in nature and should therefore be consistently regulated with complete transparency. With the exception of swaps, the investment created at Salomon Brothers in the 1980s, this was historically the case. But despite the similarity between swaps and other types of cleared derivatives, regulators allowed swaps to be treated as banking instruments that were held “off balance sheet.” Over the next two decades a flurry of deregulation and the growth of global trading reduced the transparency of derivatives trading and increased the size of the market dramatically.

The Dodd-Frank regulations were designed to put an end to this practice by requiring anyone who deals in large amounts of swaps to register as a swaps dealer and clear their trades through an exchange. Yet CNBC’s John Carney believes the new swaps regulations have already created a “flight to futures” from swaps, an unintended consequence of Dodd-Frank that will end up with a “world with less collateral and less capital, less transparency, less investor protection, more concentration of risk, and a huge unanticipated market transformation.”

In other words, the ICE will likely be the greatest beneficiary of Dodd-Frank.

Nevertheless, Chilton believes that there will still be “trillions, tens of trillions if not hundreds of trillions of swaps that will be traded in the U.S. and worldwide that will be regulated and have the light of day cast upon them.”

For his part, Greenberger agrees U.S. regulators are beginning to get a handle on the markets but thinks inordinate risk is still present in the market. He calls the original Dodd-Frank a “Rube Goldberg system” that was “prospective in nature. There’s still trillions of dollars of swaps that are operating in an unregulated environment.”

The world will have to hold its breath until these unregulated swaps run their course and settle in the global marketplace. Intelligent reforms such as margin and capital requirements, position limits and cross-border coordination with respect to regulation are indeed around the corner. These reforms essentially mandate that everyone involved in trading these agreements has enough money to cover potential losses and plays by the same set of rules.

“Ultimately we will have position limits,” Chilton believes. “I would be surprised if they weren’t in place by the end of the year.”

Greenberger also believes the world will begin to recognize universal standards, saying: “The CFTC has made it clear that for futures the foreign exchanges have to comply with U.S. rules.”

Sign from the Occupy Wall Street encampment at Zuccotti Park in Manhattan. Protests over the Wall Street bank bailout raged throughout the nation and yet little has changed since Occupy.
Sign from the Occupy Wall Street encampment at Zuccotti Park in Manhattan. Protests over the Wall Street bank bailout raged throughout the nation and yet little has changed since Occupy.

Even still, he worries that “this international guidance is a roadmap for banks to avoid Dodd Frank. Just trade in foreign subsidiaries.”

Chilton takes a more sanguine view on immediate concerns such as transparency, working with his European counterparts and the future of LIBOR, but he worries more about the things he cannot see.

“I feel like we’re going to get things done on capital requirements and on cross-border stuff so that other regulators come to where we are,” says Chilton. “But there’s a bunch of new things that are around the corner that we can’t see.”

He cites high-speed trading computers that he calls “cheetah traders” as an example of the unknown. “The cheetah traders, the high-frequency traders, are proliferating. They’re 30 to 50 percent of markets on average but during feeding frenzy time, cheetahs can be up to 70 or 80 percent of the market. There’s not one single word in the Dodd Frank legislation that deals with high-frequency trading. Not one word.”

Once again, pulling the strings behind this unseen phenomenon is Sprecher, the man responsible for making high-frequency trading what it is today.

Thomas Jasper will likely never get that plaque for inventing the investment world’s biggest game of chance. On a positive note, however, he’s alive, well and wealthy, unlike Moe Greene, who infamously took a bullet through the eye. But there are better-than-even odds that a statue of Jeff Sprecher will someday be erected on Wall Street. Or, at the very least, downtown Atlanta.

The Long Island Press Drone

Press Drone

I need my own drone. Not me personally as a citizen (that would be ridiculous) but as a publisher.

A Long Island Press drone (available for sponsorship) would enable us to give timely traffic reports, provide up-to-the-minute surf conditions, look for fugitives and measure the size of the daily sewage leaks from our ever-failing sewer and storm water infrastructure.

The possibilities are endless. Aerial views of town employees driving official vehicles home after work. Spotting sharks too close to shore. You get the idea.

If the American public has little problem with police departments and the FBI using Unmanned Aerial Vehicle (UAV) technology and seems indifferent to disclosures that the National Security Agency (NSA) is harvesting massive amounts of its personal data, then it shouldn’t have a problem with journalistic enterprises enhancing their capabilities with drones. Seems logical to me. Though, admittedly, I’m having troubling locating the drone application form on the Federal Aviation Administration’s website.

Recently, my wife and I joined three members of the Long Island Press staff at the premiere of Jeremy Scahill’s documentary film, Dirty Wars—the companion piece to his new book of the same name. The film has been opening to packed houses around the country so I made certain to procure tickets in advance, for fear of being locked out of its debut. When the lights dimmed the five of us comprised exactly 50 percent of the audience.

Well done, Long Island.

Instead of being chagrined by this lack of intellectual curiosity among my fellow Islanders, I chose to view this remarkable display of apathy in a positive light.

Since many of you missed it, I’ll give you the upshot of the film. Dirty Wars shines a light on the secret, corrupt and illegal wars being conducted against nations we are not at war with. Scahill’s meticulously researched, first-hand accounts of the devastation being wrought by the excessive utilization of drones have put the Obama administration in an awkward position. The recent NSA spying revelations by whistleblower Edward Snowden in The Guardian further compound the administration’s problem with respect to human rights and civil liberties. The fact that the Department of Justice under President Barack Obama has brought more charges of espionage (a charge that potentially carries the death penalty) against Americans than all other presidents combined speaks volumes about Obama’s desire to silence critics and whistleblowers alike.

Further, the fact that the administration was forced to admit to killing four U.S. citizens (that we know of) with drone strikes abroad doesn’t seem to have rankled too many of my fellow Long Islanders that much, either. So, like I said, I’m taking this as a tacit show of support for the Press acquiring its very own drone for “surveillance” purposes.

There is one more thing. Because I am licensed by Nassau County to carry a weapon and am the owner of the Press, it’s only logical that my drone should be treated as an extension of me and should also be armed. You know, just in case. Rest assured that I would only use it to strike “high-value targets” who threaten our way of life here on Long Island. And, of course, before using my drone for surveillance purposes or (insert flowery euphemism for assassination here) I would seek approval from my secret hand-picked cadre of advisors from the Press.

That’s how the government programs work. And everyone is cool with that, right? CIA Director John Brennan comes up with a targeted kill list; runs it by a whole bunch of people in the executive branch, then asks the POTUS for permission to pull the trigger. That’s, like, so many people (from one branch of government) who have to determine (rubber stamp) who gets killed remotely in countries that we’re not at war with (except as designated by the executive branch under a perverted interpretation of authority granted under the AUMF law—look it up.) Surveillance in this country goes through just as arduous a process. The NSA has to ask the secret FISA court for permission in secret to secretly wiretap anyone so long as everyone involved keeps it a secret. Just in case, as Edward Snowden confirmed for us, the NSA has been secretly listening to everything we’ve been saying for quite some time now. They even made secret agreements with outside contractors to build secret facilities to store any and every piece of data secretly collected from around the world.

Arduous indeed! This is the process the president recently called “transparent.”

Because commercial licenses for drones have been suspended until the FAA issues new guidelines for their use, I’m invoking my privilege under the First Amendment to procure and operate my drone. How so? My drone is essentially like having a super-reporter on staff. Therefore its actions and the data it collects should be protected as free speech. (If unlimited campaign contributions are protected as free speech, this argument can’t be too far off-base.)

We are numb. Since 9/11 we have stood by passively during the greatest erosion of domestic civil liberties since the Alien and Sedition Acts and allowed our government to commit atrocities in faraway nations that have succeeded more in fostering antipathy toward our country than the purported purpose of protecting the homeland. Corporate media have furthered the government narrative instead of being a bulwark against it, thus normalizing egregious and unconstitutional behavior in the name of national security. Trusting me with a drone is no more ridiculous than allowing the executive branch to unilaterally determine which civil liberties and human rights to recognize, as if an option exists.

The overarching point that must be understood is that the Obama administration has amplified the assault on our rights in a way that would make Richard Nixon blush and Dick Cheney chortle villainously. The president has discarded every protection granted to the citizenry of the United States—and by proxy the world—that he is sworn to cherish and uphold.

Unfortunately, my ridiculous example of purchasing a drone is about as serious as the discourse taking place in the media regarding Edward Snowden and Bradley Manning. These two men understand what is at stake right now more than every corporate shill actor hired to read news that has been vetted and approved by the government and corporate masters they serve.

Big Oil’s Iranian Scare Tactic

Oil Drill

Republican bill uses Iran as bogeyman to benefit Big Oil donors and neuter environmental law

A couple of weeks ago, Sen. James Inhofe (R-OK) put forward a bill (S.965) with the title “Iran Sanctions Implementation Act of 2013.” It’s a ridiculously worded and speciously reasoned piece of legislation that calls for the expansion of domestic oil production in an effort to overtake and choke off Iran’s remaining crude oil supply. According to the bill, “by expanding oil production in the United States by 1,250,000 barrels per day” (the amount Sen. Inhofe estimates to be the current level of Iranian crude oil exports), “the United States will displace all oil exports from Iran on the world market.”

Inhofe accomplishes this in the bill by granting the president of the United States authority to “designate any area of Federal land that the President determines appropriate as an ‘Iranian Oil Replacement Zone,’” and that “Each Zone shall include any area of Federal land necessary for the transportation… of the oil produced in that Zone.” Moreover, Inhofe’s legislation would grant exclusive management of these zones to the individual states, thereby circumventing the federal agencies designated to protect and manage these territories. Finally, as a kicker, he exempts the entire act from both judicial review and environmental oversight under the National Environment Policy Act (NEPA) of 1969.

On nearly every level, this is a terrible bill. And Senator Inhofe and his co-sponsors likely understand this fact. But before we delve into the rationale behind floating a bill with almost no chance of succeeding, let me explain why it is so off-target.

First off, it’s important to know that this is not how the global crude oil market operates. By making the assumption that increased U.S. oil production can displace another country’s production ignores market fundamentals. As Gene Guilford, an expert in the field of energy policy, explains, “The Saudis, Libya and Iraq have already increased their output to some extent for this purpose. The excess crude oil production capacity that exists in the Middle East to take the place of Iranian production for export is already available.”

To most of us, the crude oil and gas market is a complex world. From drilling and transporting and buying and selling, it’s a murky realm of oil barons and commodities traders that speak a different language. But election cycles provide enough of a window inside to inform most Americans of this basic fact: The oil business is booming.

“We’re basically bursting at the seams with supply,” says Michael Masters, president of Masters Capital Management, an Atlanta-based hedge fund that specializes in the commodities sector. When oil prices spiked in 2008 and the derivatives market began to unravel, Masters provided important congressional testimony that gave U.S. lawmakers insight in to the inner workings of the commodities business. U.S. production has been so robust in recent years that Masters says, “I imagine in the second half of this year we won’t import any oil.”

This is a sentiment shared by Guilford, who talked about the remarkable turn of events in the U.S. fossil fuel industry. “In 2007 we were talking about peak oil,” says Guilford; “today we speak of the very real potential of the U.S. being the world’s leading crude oil producer by 2015 and U.S. energy independence.”

When I asked Masters specifically about Inhofe’s notion of displacing Iranian oil, he said, “It’s sort of a ridiculous theory because you’re not going to take it out of the market.”

In fairness, sanctions on Iran have lead to a serious decrease in Iranian crude oil exports. It’s estimated that Iran exported nearly 4 million barrels per day when President Obama took office. Today that figure is estimated to be anywhere between Inhofe’s proposed 1.25 million and 2 million per day. Either way, it’s a precipitous decline. But the decline has less to do with the supply of oil and more to do with pressure the U.S. brought to bear on those who purchase Iranian oil. So the question of whether or not the U.S. has the strength to convince the few remaining Iranian oil customers has less to do with availability and more to do with diplomatic ability.

To the extent that this is possible, the United States doesn’t necessarily hold all of the cards.

Because oil is a commodity that is traded globally it is obviously most responsive to price. According to Guilford, “Iran’s customers may well not care about alternative sources that are more expensive than Iran and that is one very likely reason Iran still has customers.” Knowing that Iran’s customers include nations such as China and South Africa, Guilford naturally questions our ability to drive the final nail in Iran’s coffin through sanctions asking, “Does the U.S. have the diplomatic ability to convince Iran’s buyers to pay more in order to isolate Iran?”

Nevertheless, this opens an important dialogue about the nature of sanctions themselves. There is no question that U.S.-lead sanction policy has been extremely effective in isolating Iran and wreaking havoc on its economy. Kate Gould, a lobbyist for Middle East Policy at the Friends Committee on National Legislation, believes that sanctions sometimes have the opposite of the desired effect by serving to “punish civilians, embolden hardliners and foreclose diplomatic options.” She explains her economic position saying, “We’ve seen huge growth in the black market, which is controlled by the Iranian Revolutionary Guard, so Iranians become dependent on going through these channels instead of legal channels.” Gould is quick to point out that despite decades of crippling sanctions against Iraq, “Saddam Hussein never missed a meal.”

Despite the backward logic inherent in Inhofe’s rationale, the bill currently has 11 other cosponsors, all Republican. Most hail from states with large swaths of federal land such as Arizona, Utah, North Dakota, North Carolina, Idaho, Kentucky and Missouri. Not surprisingly, Sen. Inhofe’s top campaign contributors between 2007 and 2012 are from the oil and gas industry, with Koch Industries being his single-largest donor.

Not surprisingly, the idea of manipulating federal regulations regarding drilling rights and ceding these rights to individual states is dangerous territory for the environmental community.

“Senator Inhofe would auction off America’s national parks and public lands to big polluters just so we could mimic Iran’s all-oil energy policy,” blasts Athan Manuel, Director of the Sierra Club’s Lands Protection Program. “We’d be better off embracing job-creating clean energy projects that protect our wild legacy and our future rather than selling off our nation’s crown jewels to the highest bidder.”

Legislative affairs specialists for the Bureau of Land Management (BLM), which controls the largest amount of federally protected land, did not respond to my request for an interview as of press time.

But Gould believes Inhofe’s bill is little more than a Trojan horse for U.S. oil and gas companies to gain access to land that is currently difficult to obtain.

“I think it’s a political stunt to try to disguise getting around environmental laws with sanctions,” she says, adding that sanctioning Iran, “generally has broad bipartisan support.”

Guilford sees it this way as well, but takes more of an academic approach to Inhofe’s proposal. He calls the “goal of increased domestic production a sound idea,” but says the “removal of judicial review and NEPA” would have “opposition that is only exceeded by those trying to stop the Keystone pipeline.”

The chances of Inhofe’s bill making it out of committee and eventually becoming law are slim. To put it into perspective, of the 3,716 Senate bills proposed between 2011 and 2013, only 449 (12 percent) made it to the floor. Of those, only 71 were enacted, or less than 2 percent. The fact that this particular bill was referred to the Senate Committee on Energy and Natural Resources, led by Sen. Ron Wyden (D-OR), means it will almost assuredly die in committee.

So why go through the machinations of compiling the language and amassing support for a bill that is practically dead on arrival?

The best way to view Inhofe’s bill is as a trial balloon—a way to test the effectiveness of certain angles and particular language.

“Perhaps for some the theory would be that U.S. domestic energy security isn’t reason enough to increase current production,” muses Guilford, “so the issue needs to be recast into a foreign policy and security debate about shutting down the remainder of Iranian production.”

Gould puts it more bluntly, saying it’s, “using the Iran bogeyman to advance an extreme agenda on another issue.”

No matter how you slice it, all roads lead back to Big Oil.

Jed Morey – Publisher, Long Island Press | |