Each year, we lay the wreath. We hear “The Last Post.” We mouth the words “never again” like an incantation. But what does it mean? To answer this question, we have to understand what WWI was.
WWI was an explosion, a breaking point in history. In the smoldering shell hole of that great cataclysm lay the industrial-era optimism of never-ending progress. Old verities about the glory of war lay strewn around the battlefields of that “Great War” like a fallen soldier left to die in No Man’s Land, and along with it lay all the broken dreams of a world order that had been blown apart. Whether we know it or not, we here in the 21st century are still living in the crater of that explosion, the victims of a First World War that we are only now beginning to understand.
In the first two parts of this series we have seen how the WWI conspiracy came to be.
But more important by far is the question of why it happened. For what purpose was such carnage released upon the world? What did the First World War mean?
Part Three – A New World Order
…by the time the battle finished 10 months later, a million casualties lay in its wake. A million stories of routine bravery, like that of the French communications officer. And Verdun was far from the only sign that the stately, sanitized version of 19th century warfare was a thing of the past. Similar carnage played out at the Somme and Gallipoli and Vimy Ridge and Galicia and a hundred other battlefields. Time and again, the generals threw their men into meat grinders, and time and again the dead bodies lay strewn on the other side of that slaughter…
But how did such bloodshed happen? For what purpose? What did the First World War mean?
For the ones in control, World War One had been the birth pangs of a New World Order. And now, the midwives of this monstrosity slouched towards Paris to take part in its delivery.
The armistice on November 11, 1918, may have marked the end of the war, but it was not the end of the story. It was not even the beginning of the end. It was, at best, the end of the beginning…
After we previously reported that UK car registrations just fell at their sharpest rate since the financial crisis, the sharp plunge of auto sales in China has also continued: retail sales of passenger vehicles – which include sedans, MPVs, mini-vans and SUVs – in China fell a whopping 19% in 2018 to 2.26 million units.
In addition, SUV retail sales also fell 18.9% year over year to 965,772 units.
China is spearheading what is shaping up as a painfully anemic year for the industry around the world. The automobile industry in China has been crippled, partly as a result of this trade war, partly due to the ongoing domestic economic slowdown in the mainland, and absent major subsidies – which don’t appear to be coming – the outlook for 2019 is not promising.
We wrote back in early December, after reviewing November’s data, that the country was set for its first decline in decades. In November, passenger vehicle wholesales were down 16.1% on the year, according to the China Association of Automobile Manufacturers. November vehicle wholesales were also down well into the double digits, dropping 13.9% to 2.55 million units year-over-year. Total retail passenger vehicles fell 18% on the year and SUV sales fell 20.6% year-over-year to 854,289 units, according to the Passenger Car Association.
And as we reported more recently, registrations in the United Kingdom were down 6.8% to 2.37 million vehicles in 2018, according to the SMMT. Diesel vehicle sales were down a massive 30% and gasoline powered models were up 8.7%, showcasing a shifting trend. Electric cars and hybrids were up double digits, posting 21% gains for the year.
Confirming the gloomy picture for the auto sector, Morgan Stanley’s auto analyst Adam Jonas was the first to predict that global auto sales would be down 0.3% year over year in 2019 and that many consensus estimates across the industry are far too optimistic. In a note released last week, Jonas predicted “lower guidance” coming out of Detroit automakers at the same time that the global auto market sees its first volume drop since 2009. And despite consensus forecasts predicting revenue and margin growth across the board, Morgan Stanley generally defied the trend, reiterating its cautious view on the US auto sector.
Jonas expects global volume in 2019 to fall to 82.1 million units versus 82.4 million units in 2018. His team also expects higher input costs, combined with rising rates and rising R&D expense, to further pressure 2019 numbers. Aside from the obvious (lack of volume growth), he predicts tariff related costs will still be an overhang for automakers heading into the new year.
Here is a full chart showing Morgan Stanley’s predictions versus consensus estimates:
Morgan Stanley also believes that industry consensus for 2019 earnings is too bullish. Currently, the consensus is for all companies to grow revenues by 1% and EBITDA by more than 3%, which implies a 24 basis points EBITDA margin expansion. Instead, Morgan Stanley expects flat revenues and EBITDA down 1%, which would signify a 13 basis point contraction of EBITDA margins.
TruePublica, a British website that has avoided the 9/11 issue, has had its fill of ignorant journalists at the BBC, Huffington Post and other propagandists for the military/security complex. The constant, shrill demeaning of experts and distinguished people who have raised questions about the official story has convinced TruePublica that skeptics who need so much shouting down must have a point.
The media has NEVER EXAMINED the evidence or explained the analysis provided by scientists, architects, engineers, pilots, and the first responders who experienced the explosions of the World Trade Center twin towers. The media has never asked for the release of the multiple videos that recorded whatever struck the Pentagon. The media has never investigated whether cell phones worked in 2001 from the altitudes at which the official story claims calls were made.
Instead two-bit punk presstitutes, such as the BBC’s Chris Bell and the Huffington Post’s Jess Brammer andl Chris York, label experts with knowledge and integrity “conspiracy theorists.” These presstitutes knowingly use a cover-up term that the CIA put into use via its media assets to discredit the expert skeptics of the Warren Commission Report on the assassination of President Kennedy.
The fact that the carefully presented evidence is NEVER ENGAGED EXCEPT WITH NAME-CALLING is a strong indication that the evidence is true and cannot be refuted.
TruePublica is such a mainline site that, in its own words, it does not even “publish news sourced by RT,” a far more reliable source of news than the BBC, CNN, or New York Times. However, it has dawned on TruePublica that after 18 years an ad hominum attack remains the only defense of the official story. The official account has NO EVIDENCE WHATSOEVER. It rests entirely on the AVOIDANCE OF EVIDENCE and on unverified assertions.
The success of the 9/11 Lawyers’ Committee in obtaining the consent of the US Attorney for the Southern District of New York to “comply with the provisions of 18 U.S.C. 3332,” which requires the convening of a federal grand jury to examine the unexamined 9/11 evidence, has impressed TruePublica as no US attorney would convene a grand jury on the basis of a conslpiracy theory. Clearly compelling evidence has been presented to the US Attorney.
Obviously, Washington expects the Justice (sic) Department to escape from the bind into which it has been put by the Lawyer’s Committee, an escape that the presstitute media will aid and abet. Nevertheless, the escape will likely reinforce the public’s view that the government is afraid of the evidence and is no more likely to follow it than in the case of President Kennedy’s assassination, Robert Kennedy’s assassination, the Israeli attack on the USS Liberty and a large number of other officially covered up crimes.
More and more people will come to realize that ad hominum name-calling is not an acceptable response to evidence.
TruePublica Editor: We have published almost nothing about 9/11 on TruePublica. When independent news outlets do, they are immediately branded by the mainstream media and so-called ‘fact-checkers’ as conspiracy theorists. The BBC makes this point precisely in a 2018 article that starts like this –
“On 11 September 2001, four passenger planes were hijacked by radical Islamist terrorists – almost 3,000 people were killed as the aircraft were flown into the World Trade Centre, the Pentagon and a Pennsylvania field. Just hours after the collapse of New York’s Twin Towers, a conspiracy theory surfaced online which persists more than 16 years later.”
The entire article is dedicated to all the ‘conspiracy theories’ involved in 9/11 and makes a mockery of anyone or anything that questions the official government line. They even heavily mock the brother of one man killed in 9/11 and frankly, true or not, the BBC’s report itself is rather sickening to read.
And yet, here we are, all these years later and it’s hardly surprising the theories of a conspiracy continue.
A 2016 study from Chapman University in California, found more than half of the American people believe the government is concealing information about the 9/11 attacks. This is in part because, large sections of the official US government report were redacted for years – and is still missing to this day.
The big problem is that the government is withholding crucial evidence. And then there’s other evidence the state and mainstream media refuse to even consider.
Paul Craig Roberts is an American economist and former United States Assistant Secretary of the Treasury for Economic Policy under President Reagan. Roberts was an associate editor and columnist for The Wall Street Journal and columnist for Business Week and has received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists in the United States.
Roberts wrote this really interesting piece of information just a few days ago that the mainstream media has been completely silent about:
“Although the United States is allegedly a democracy with a rule of law, it has taken 17 years for public pressure to bring about the first grand jury investigation of 9/11. Based on the work of Architects & Engineers for 9/11 Truth led by Richard Gage, first responder and pilots organizations, books by David Ray Griffin and others, and eyewitness testimony, the Lawyers’ Committee for 9/11 Inquiry has presented enough hard facts to the US Attorney for the Southern District of New York to force his compliance with the provisions of federal law that require the convening of a federal grand jury to investigate for the first time the attacks of September 11, 2001. https://www.lawyerscommitteefor9-11inquiry.org
This puts the US Justice (sic) Department in an extraordinary position. There will be tremendous pressures on the US Attorney’s office to have the grand jury dismiss the evidence as an unpatriotic conspiracy theory or otherwise maneuver to discredit the evidence presented by the Lawyers’ Committee, or modify the official account without totally discrediting it.
“What the 9/11 truthers and the Lawyers’ Committee have achieved is the destruction of the designation of 9/11 skeptics as “conspiracy theorists.” No US Attorney would convene a grand jury on the basis of a conspiracy theory. Clearly, the evidence is compelling that has put the US Attorney in an unenviable position.”
If the Lawyers’ Committee and the 9/11 truthers trust the US Attorney to go entirely by the facts, little will come of the grand jury. If the United States had a rule of law, something as serious as 9/11 could not have gone for 17 years without investigation.”
Three weeks before Roberts’ made this statement a letter was published by Off-Guardian about a Huffington Post hit piece about an academic teaching journalism. Its first paragraph explains entirely its own position.
“An academic teaching journalism students at one of the UK’s top universities has publicly supported long-discredited conspiracy theories about the 9/11 terror attack, HuffPost UK can reveal.”
This entire article, like that of the BBC’s, vigorously attacks any individual or organisation that has the temerity to question the ‘official’ narrative on any major incident as offered up by the state, such as the Skripal poisonings, Syria’s chemical weapons, Iraq and Chilcot Report.
HuffPost even uses an unnamed former head of MI6 and an unnamed former Supreme Commander of Nato to dispel such challenges to this narrative and then attacks other sources of news such as RT as nothing more than Russian propaganda irrespective of the source. As a rule, TruePublica does not publish news sourced by RT but that does not make all of its content propaganda.
David Ray Griffin, a retired American professor and political writer who founded the Center for Process Studies which seeks to promote the common good by means of the relational approach found in process thought was the co-author of the book ‘9/11 Unmasked’ – part of the attack piece was centred on by the HuffPost hit piece.
The head of the 9/11 Consensus Panel, the other co-author, responded to the HuffPost. For information, the goal of the Consensus Panel is to “provide a ready source of evidence-based research to any investigation that may be undertaken by the public, the media, academia, or any other investigative body or institution.”
That letter is as follows:
Jess Brammer, UK Huffington Post
Chris York, UK Huffington Post
Dear Ms. Brammar and Mr. York:
I was the head information specialist serving the Medical Health Officers of British Columbia, Canada, for 25 years.
Your attack piece on Professor Piers Robinson and on the scholarly work of Dr. David Ray Griffin is the least accurate and the lowest quality published article I have ever seen.
I have assisted Dr. Griffin with 10 of his investigative books into the events of 9/11. In 2011 we decided to create the international 9/11 Consensus Panel to review and evaluate the official claims relating to September 11, 2001. The Panel we formed has 23 members, including people from the fields of physics, chemistry, structural engineering, aeronautical engineering, piloting, airplane crash investigation, medicine, journalism, psychology, and religion.
In seeking a consensus methodology, I was advised by the former provincial epidemiologist of British Columbia to employ a leading model that is used in medicine to establish the best diagnostic and treatment evidence to guide the world’s doctors using medical consensus statements.
Each Consensus Point, now a chapter in this book, was given three rounds of review and feedback by the Panel members. The panelists were blind to one another throughout the process, providing strictly uninfluenced individual feedback. Any Points that did not receive 85% approval by the third round were set aside.
The Honorary Members of the Panel include the late British (and longest-serving) parliamentarian Michael Meacher, the late evolutionary biologist Lynn Margulis, and the late Honorary President of the Italian Supreme Court, Ferdinando Imposimato.
The Huffington Post drastically lowered its standards to publish this hit piece, and what influenced it to do so is a question worth pursuing.
Yours truly,
Elizabeth Woodworth, Co-author with Dr. David Ray Griffin of 9/11 Unmasked
TruePublica continues:
It is over 18 years now since the world-changing event of 9/11. One wonders when the information held by the American government, that continues to anger so many people affected by it will ever emerge.
However, one reason why such questions persist is precisely that of the actions of the US government itself. One should not forget those so-called ‘conspiracy theories’ that actually came true that continues to pour petrol on the flames of doubt.
Then, you can take your pick of the lies government tells when it comes to starting wars – how about the lie the Saddam Hussain and Iraq had WMD ready to fire at Western targets. Total deaths exceeded 1 million. Yet another classic American lie was the Gulf of Tonkin incident in August 1964, as a pretext for escalating the country’s involvement in the Vietnam War that killed 60,000 American soldiers. Total deaths racked up 1.35 million, all based on a lie. That incident only came about because of an unintentional declassification of an NSA file in 2005.
Edward Snowden proved with his revelations in 2013 that the government was spying on everyone when the government had denied they had ever done so. It took a whistleblower to let us all know. The UK government has been found by the highest courts in the land to have broken numerous privacy and surveillance laws as a result of mass civilian surveillance systems.
Operation Mockingbird was a US government operation where journalists were paid to publish CIA propaganda, only uncovered by the Watergate scandal. It took a thief to unknowingly capture secret documents and recordings for the public to find out.
The list goes on and on – just as 9/11 will, so it will be interesting to see how the US Attorney, presented with evidence from so many prominent professionals will bury yet more 9/11 evidence. Don’t hold your breath though, the same questions will, no doubt, still be being asked in another 18 years time.
After Ankara slammed the door in John Bolton’s face during his trip to Turkey in which he expected to meet with Turkish President Erdogan, only to have Erdogan skip that meeting to criticize the US national security advisor in a speech to parliament, Turkey is now calling for Iran and Russia to step up coordination with Turkey in northern Syria as US troops withdraw.
Prior summit in Ankara, Turkey April 4, 2018. via Reuters
It’s but the next humiliation for Bolton, who flew out of Turkey on Tuesday, and for White House policy in the Middle East, after he announced preconditions to American troop draw down that emphasized Turkey agreeing to not attack the US-backed Kurds in Syria. Erdogan slammed this as a “serious mistake” and pro-government Turkish media painted the picture of a “soft coup” underway against Trump being orchestrated by Bolton and other subverters who had “rogue”.
But no doubt adding insult to injury, Turkish Foreign Minister Mevlut Cavusoglu issued further provocative words on Wednesday, noting that given “certain difficulties” of confused US policy, the American draw down should be coordinated with Iran and Russia to prevent a power vacuum and the reinvigoration of terrorists.
“The United States [has] been facing certain difficulties with the process of the troops’ withdrawal from Syria. We want to coordinate this process with Russia and Iran, with which we had arranged work in the framework of the Astana process,”the Turksih FM said.
This would involve Turkish forces conductingjoint patrols with Russia amidst a US withdrawal of all troops from Syria, in accord with prior agreements reached during the Astana talks, set to continue further in Moscow at a future date. Cavusoglu also said bilateral talks are being prepared between Turkey and Iran, but gave no further specifics, according to Russian media.
Closer Turkish and Iranian coordination in Syria would be a huge red flag for Washington, which has long stated a policy goal of thwarting Iranian entrenchment in Syria as part of its reason for keeping forces in the country. Israel has also focused on the Iran issue to argue the White House must stay the course in Syria, or else cede the Middle East to the Tehran-Damascus-Hezbollah pro-Shia axis.
Erdogan, for this part, sought to articulate Turkey’s vision for a post-US pullout solution in northern Syria in a Monday New York Times op-ed asserting, “President Trump made the right call to withdraw from Syria,” while promising to protect Syrian Kurds not associated with terrorist groups. He made no mention of current talks and increased coordination between the Kurdish YPG and the Syrian Army, and proposed a Turkish-backed “stabilization force” on the ground to patrol former US-occupied zones.
Given Turkish FM Cavusoglu’s most recent statements, it appears Erdogan is seeking approval and coordination for such a plan from Moscow, which however is likely to back the ongoing talks between Assad and Kurdish representatives. Or the provocative statements could also merely be the latest Turkish thumb in Washington’s eye.
But as we mentioned previously, this is where the Syrian Kurds are actually headed: towards making a deal with Assad which would provide Syrian Army protection to Kurdish enclaves in the face of the invading Turks. This truly local solution, fast taking shape, will occur without the United States or Turkey, and in affirmation of Syrian sovereignty.
As Washington and Ankara feud, and as President Trump seeks to clamp down on the conflicting messages on Syria from within his own administration, the “solution” may come faster and more organically than anyone thought, namely a Russian-backed Syrian Army advance on Kurdish enclaves in coordination with the YPG/former SDF Kurdish fighters.
On the 2nd anniversary of the ‘assessment’ blaming Russia for ‘collusion’ with Trump there is still no evidence other than showing the media ‘colluded’ with the spooks…
The banner headline atop page one of The New York Times two years ago today, on January 7, 2017, set the tone for two years of Dick Cheney-like chicanery: “Putin Led Scheme to Aid Trump, Report Says.”
Under a media drumbeat of anti-Russian hysteria, credulous Americans were led to believe that Donald Trump owed his election victory to the president of Russia, and that Trump, according to the Times, “colluded” in Putin’s “interference … to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton.”
Hard evidence supporting the media and political rhetoric has been as elusive as proof of weapons of mass destruction in Iraq in 2002-2003. This time, though, an alarming increase in the possibility of war with nuclear-armed Russia has ensued — whether by design, hubris, or rank stupidity. The possible consequences for the world are even more dire than 16 years of war and destruction in the Middle East.
If It Walks Like a Canard…
The CIA-friendly New York Times two years ago led the media quacking in a campaign that wobbled like a duck, canard in French.
A glance at the title of the Intelligence Community Assessment (ICA) (which was not endorsed by the whole community) — “Assessing Russian Activities and Intentions in Recent US Elections” — would suffice to show that the widely respected and independently-minded State Department intelligence bureau should have been included. State intelligence had demurred on several points made in the Oct. 2002 Estimate on Iraq, and even insisted on including a footnote of dissent. James Clapper, then director of national intelligence who put together the ICA, knew that all too well. So he evidently thought it would be better not to involve troublesome dissenters, or even inform them what was afoot.
Clapper: Showing handpicked evidence? (White House Photo)
Similarly, the Defense Intelligence Agency should have been included, particularly since it has considerable expertise on the G.R.U., the Russian military intelligence agency, which has been blamed for Russian hacking of the DNC emails. But DIA, too, has an independent streak and, in fact, is capable of reaching judgments Clapper would reject as anathema. Just one year before Clapper decided to do the rump “Intelligence Community Assessment,” DIA had formally blessed the following heterodox idea in its “December 2015 National Security Strategy”:
“The Kremlin is convinced the United States is laying the groundwork for regime change in Russia, a conviction further reinforced by the events in Ukraine. Moscow views the United States as the critical driver behind the crisis in Ukraine and believes that the overthrow of former Ukrainian President Yanukovych is the latest move in a long-established pattern of U.S.-orchestrated regime change efforts.”
Any further questions as to why the Defense Intelligence Agency was kept away from the ICA drafting table?
Handpicked Analysts
With help from the Times and other mainstream media, Clapper, mostly by his silence, was able to foster the charade that the ICA was actually a bonafide product of the entire intelligence community for as long as he could get away with it. After four months it came time to fess up that the ICA had not been prepared, as Secretary Clinton and the media kept claiming, by “all 17 intelligence agencies.”
In fact, Clapper went one better, proudly asserting — with striking naiveté — that the ICA writers were “handpicked analysts” from only the FBI, CIA, and NSA. He may have thought that this would enhance the ICA’s credibility. It is a no-brainer, however, that when you want handpicked answers, you better handpick the analysts. And so he did.
Why is no one interested in the identities of the handpicked analysts and the hand-pickers? After all, we have the names of the chief analysts/managers responsible for the fraudulent NIE of October 2002 that greased the skids for the war on Iraq. Listed in the NIE itself are the principal analyst Robert D. Walpole and his chief assistants Paul Pillar, Lawrence K. Gershwin and Maj. Gen. John R. Landry.
The Overlooked Disclaimer
Buried in an inside page of the Times‘ Jan. 7, 2017 report was a cautionary paragraph by reporter Scott Shane. It seems he had read the ICA all the way through, and had taken due note of the derriere-protecting caveats included in the strangely cobbled together report. Shane had to wade through nine pages of drivel about “Russia’s Propaganda Efforts” to reach Annex B with its curious disclaimer:
“Assessments are based on collected information, which is often incomplete or fragmentary, as well as logic, argumentation, and precedents. … High confidence in a judgment does not imply that the assessment is a fact or a certainty; such judgments might be wrong.”
Small wonder, then, that Shane noted: “What is missing from the public report is what many Americans most eagerly anticipated: hard evidence to back up the agencies’ claims that the Russian government engineered the election attack. This a significant omission.”
Scott Shane (Twitter)
Since then, Shane has evidently realized what side his bread is buttered on and has joined the ranks of Russia-gate aficionados. Decades ago, he did some good reporting on such issues, so it was sad to see him decide to blend in with the likes of David Sanger and promote the NYT official Russia-gate narrative. An embarrassing feature, “The Plot to Subvert an Election: Unraveling the Russia Story So Far,” that Shane wrote with NYT colleague Mark Mazzetti in September, is full of gaping holes, picked apart in two pieces by Consortium News.
Shades of WMD
Sanger is one of the intelligence community’s favorite go-to journalists. He was second only to the disgraced Judith Miller in promoting the canard of weapons of mass destruction in Iraq before the U.S. invasion in March 2003. For example, in a July 29, 2002 article, “U.S. Exploring Baghdad Strike As Iraq Option,” co-written by Sanger and Thom Shanker, the existence of WMD in Iraq was stated as flat fact no fewer than seven times.
The Sanger/Shanker article appeared just a week after then-CIA Director George Tenet confided to his British counterpart that President George W. Bush had decided “to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.” At that critical juncture, Clapper was in charge of the analysis of satellite imagery and hid the fact that the number of confirmed WMD sites in Iraq was zero.
Despite that fact and that his “assessment” has never been proven, Clapper continues to receive praise.
During a “briefing” I attended at the Carnegie Endowment in Washington several weeks ago, Clapper displayed master circular reasoning, saying in effect, that the assessment had to be correct because that’s what he and other intelligence directors told President Barack Obama and President-elect Donald Trump.
McGovern questions Clapper at Carnegie Endowment in Washington.(Alli McCracken)
I got a chance to question him at the event. His disingenuous answers brought a painful flashback to one of the most shameful episodes in the annals of U.S. intelligence analysis.
Ray McGovern: My name is Ray McGovern. Thanks for this book; it’s very interesting [Ray holds up his copy of Clapper’s memoir]. I’m part of Veteran Intelligence Professionals for Sanity. I’d like to refer to the Russia problem, but first there’s an analogy that I see here. You were in charge of imagery analysis before Iraq.
James Clapper: Yes.
RM: You confess [in the book] to having been shocked that no weapons of mass destruction were found. And then, to your credit, you admit, as you say here [quotes from the book], “the blame is due to intelligence officers, including me, who were so eager to help [the administration make war on Iraq] that we found what wasn’t really there.”
Now fast forward to two years ago. Your superiors were hell bent on finding ways to blame Trump’s victory on the Russians. Do you think that your efforts were guilty of the same sin here? Do you think that you found a lot of things that weren’t really there? Because that’s what our conclusion is, especially from the technical end. There was no hacking of the DNC; it was leaked, and you know that because you talked to NSA.
JC: Well, I have talked with NSA a lot, and I also know what we briefed to then-President Elect Trump on the 6th of January. And in my mind, uh, I spent a lot of time in the SIGINT [signals intelligence] business, the forensic evidence was overwhelming about what the Russians had done. There’s absolutely no doubt in my mind whatsoever. The Intelligence Community Assessment that we rendered that day, that was asked, tasked to us by President Obama — and uh — in early December, made no call whatsoever on whether, to what extent the Russians influenced the outcome of the election. Uh, the administration, uh, the team then, the President-Elect’s team, wanted to say that — that we said that the Russian interference had no impact whatsoever on the election. And I attempted, we all did, to try to correct that misapprehension as they were writing a press release before we left the room.
However, as a private citizen, understanding the magnitude of what the Russians did and the number of citizens in our country they reached and the different mechanisms that, by which they reached them, to me it stretches credulity to think they didn’t have a profound impact on election on the outcome of the election.
RM: That’s what the New York Times says. But let me say this: we have two former Technical Directors from NSA in our movement here, Veteran Intelligence Professionals for Sanity; we also have forensics, okay?
Now the President himself, your President, President Obama said two days before he left town: The conclusions of the intelligence community — this is ten days after you briefed him — with respect to how WikiLeaks got the DNC emails are “inconclusive” end quote. Now why would he say that if you had said it was conclusive?
JC: I can’t explain what he said or why. But I can tell you we’re, we’re pretty sure we know, or knew at the time, how WikiLeaks got those emails. I’m not going to go into the technical details about why we believe that.
RM: We are too [pretty sure we know]; and it was a leak onto a thumb drive — gotten to Julian Assange — really simple. If you knew it, and the NSA has that information, you have a duty, you have a duty to confess to that, as well as to [Iraq].
JC: Confess to what?
RM: Confess to the fact that you’ve been distorting the evidence.
JC: I don’t confess to that.
RM: The Intelligence Community Assessment was without evidence.
JC: I do not confess to that. I simply do not agree with your conclusions.
William J. Burns (Carnegie President): Hey, Ray, I appreciate your question. I didn’t want this to look like Jim Acosta in the White House grabbing microphones away. Thank you for the questioning though. Yes ma’am [Burns recognizes the next questioner].
The above exchange can be seen starting at 28:45 in this video.
Not Worth His Salt
Having supervised intelligence analysis, including chairing National Intelligence Estimates, for three-quarters of my 27-year career at CIA, my antennae are fine-tuned for canards. And so, at Carnegie, when Clapper focused on the rump analysis masquerading as an “Intelligence Community Assessment,” the scent of the duck came back strongly.
Intelligence analysts worth their salt give very close scrutiny to sources, their possible agendas, and their records for truthfulness. Clapper flunks on his own record, including his performance before the Iraq war — not to mention his giving sworn testimony to Congress that he had to admit was “clearly erroneous,” when documents released by Edward Snowden proved him a perjurer. At Carnegie, the questioner who followed me brought that up and asked, “How on earth did you keep your job, Sir?”
The next questioner, a former manager of State Department intelligence, posed another salient question: Why, he asked, was State Department intelligence excluded from the “Intelligence Community Assessment”?
U.S. Marine patrols the streets of Al Faw, Iraq, 2003. (U.S. Navy photo by Photographer’s Mate 1st Class Ted Banks.)
Among the dubious reasons Clapper gave was the claim, “We only had a month, and so it wasn’t treated as a full-up National Intelligence Estimate where all 16 members of the intelligence community would pass judgment on it.” Clapper then tried to spread the blame around (“That was a deliberate decision that we made and that I agreed with”), but as director of national intelligence the decision was his.
Given the questioner’s experience in the State Department’s intelligence, he was painfully aware of how quickly a “full-up NIE” can be prepared. He knew all too well that the October 2002 NIE, “Iraq’s Continuing Programs for Weapons of Mass Destruction,” was ginned up in less than a month, when Cheney and Bush wanted to get Congress to vote for war on Iraq. (As head of imagery analysis, Clapper signed off on that meretricious estimate, even though he knew no WMD sites had been confirmed in Iraq.)
It’s in the Russians’ DNA
The criteria Clapper used to handpick his own assistants are not hard to divine. An Air Force general in the mold of Curtis LeMay, Clapper knows all about “the Russians.” And he does not like them, not one bit. During an interview with NBC on May 28, 2017, Clapper referred to “the historical practices of the Russians, who typically, are almost genetically driven to co-opt, penetrate, gain favor, whatever, which is a typical Russian technique.” And just before I questioned him at Carnegie, he muttered, “It’s in their DNA.”
Even those who may accept Clapper’s bizarre views about Russian genetics still lack credible proof that (as the ICA concludes “with high confidence”) Russia’s main military intelligence unit, the G.R.U., created a “persona” called Guccifer 2.0 to release the emails of the Democratic National Committee. When those disclosures received what was seen as insufficient attention, the G.R.U. “relayed material it acquired from the D.N.C. and senior Democratic officials to WikiLeaks,” the assessment said.
At Carnegie, Clapper cited “forensics.” But forensics from where? To his embarrassment, then-FBI Director James Comey, for reasons best known to him, chose not to do forensics on the “Russian hack” of the DNC computers, preferring to rely on a computer outfit of tawdry reputation hired by the DNC. Moreover, there is zero indication that the drafters of the ICA had any reliable forensics to work with.
In contrast, Veteran Intelligence Professionals for Sanity, working with independent forensic investigators,examined metadata from a July 5, 2016 DNC intrusion that was alleged to be a “hack.” However, the metadata showed a transfer speed far exceeding the capacity of the Internet at the time. Actually, all the speed turned out to be precisely what a thumb drive could accommodate, indicating that what was involved was a copy onto an external storage device and not a hack — by Russia or anyone else.
WikiLeaks had obtained the DNC emails earlier. On June 12, 2016 Julian Assange announced he had “emails relating to Hillary Clinton.” NSA appears to lack any evidence that those emails — the embarrassing ones showing that the DNC cards were stacked against Bernie Sanders — were hacked.
Since NSA’s dragnet coverage scoops up everything on the Internet, NSA or its partners can, and do trace all hacks. In the absence of evidence that the DNC was hacked, all available factual evidence indicates that earlier in the spring of 2016, an external storage device like a thumb drive was used in copying the DNC emails given to WikiLeaks.
Additional investigation has proved Guccifer 2.0 to be an out-and-out fabrication — and a faulty basis for indictments.
A Gaping Gap
Clapper and the directors of the CIA, FBI, and NSA briefed President Obama on the ICA on Jan. 5, 2007, the day before they briefed President-elect Trump. At Carnegie, I asked Clapper to explain why President Obama still had serious doubts. On Jan. 18, 2017, at his final press conference, Obama saw fit to use lawyerly language to cover his own derriere, saying:
“The conclusions of the intelligence community with respect to the Russian hacking were not conclusive as to whether WikiLeaks was witting or not in being the conduit through which we heard about the DNC e-mails that were leaked.”
So we end up with “inconclusive conclusions” on that admittedly crucial point. In other words, U.S. intelligence does not know how the DNC emails got to WikiLeaks. In the absence of any evidence from NSA (or from its foreign partners) of an Internet hack of the DNC emails the claim that “the Russians gave the DNC emails to WikiLeaks” rests on thin gruel. After all, these agencies collect everything that goes over the Internet.
Clapper answered:
“I cannot explain what he [Obama] said or why. But I can tell you we’re, we’re pretty sure we know, or knew at the time, how WikiLeaks got those emails.”
People like to complain that China has abandoned its Communist values in favor of state-directed capitalism. But in at least one way, the rulers of the world’s second-largest economy are adhering to the prescriptions of Karl Marx – with a burdensome progressive income tax.
And as the CPC has imposed new tax cuts to try and pump more fiscal stimulus into the economy to help revive its flagging growth. But wealthy Chinese are worried that the state will expect them to cover the revenue shortfall (particularly as the trade war threatens to sap the Chinese economy of badly needed FDI).
In a country where personal wealth has swelled to $24 trillion since the days of Deng Xiaoping – $1 trillion of which is held abroad – these changes to China’s tax regime could have a resounding impact on asset markets around the world (Vancouver comes to mind).
The changes, which took effect on Jan. 1, have already prompted wealthy Chinese to look into creating overseas trusts that could help them protect their wealth from the state, as China’s decision to embrace the Common Reporting Standard, an international data-sharing agreement that allows governments to more easily track the overseas wealth of their citizens.
Here’s a rundown of how China’s new tax rules might impact wealthy Chinese, and how that in turn might reverberate around the world (text courtesy of Bloomberg):
Crackdown on Havens
Under the new rules, owners of offshore companies will not only pay taxes on dividends they receive but will also face levies of as much as 20 percent on corporate profits, from as low as zero previously. This has triggered a flood of rich families seeking refuge via trusts, which often shield wealthy owners from having to pay taxes unless the trusts hand out dividends. Overseas buildings or shell companies are also becoming easier to track for authorities as China embraces an international data-sharing agreement known as the Common Reporting Standard, or CRS.
It’s not clear how the government will utilize CRS data, especially in early 2019, but authorities may grant amnesty for a certain period for a stable transition or focus on penalizing the biggest offenders, according to Jason Mi, a partner at Ernst & Young in Beijing.
Closing Loopholes
In the past, the rich could avoid paying taxes on overseas earnings by acquiring a foreign passport or green card, while keeping their Chinese citizenship. But this won’t work starting in January as the government will tax global income from all holders of “hukou” household registrations – the most encompassing way of identifying a Chinese national – regardless of whether they have any additional nationalities.
That’s prompted many people to give up their Chinese citizenship in 2018 by surrendering their “hukou” to avoid paying taxes on foreign income from Jan. 1, according to Peter Ni, a Shanghai-based partner and tax specialist at Zhong Lun Law Firm. Starting in 2019, people surrendering Chinese citizenship will need to be audited by tax authorities first and possibly explain all their sources of income, according to Ni.
Reining in Gifts
Tycoons transferring assets to relatives or third parties could be subject to taxation in the new year, depending on how strictly China enforces rules on gifts, according to Ni at Zhong Lun. The levies could reach as much as 20 percent of the asset’s appreciated value, according to Ni.
For example, if a tycoon were to transfer overseas shares worth $1 million to his son for free, and if those shares originally cost the tycoon $100,000, the tycoon could be taxed 20 percent of the $900,000 increase in the value of those shares, or $180,000.
The risk of getting taxed will be higher if the recipient is a foreigner because their assets may be beyond Chinese officials’ reach, according to Ni.
Tougher Taxman
Tax authorities will sharpen their scrutiny of high-net-worth individuals thanks to more modern tools at their disposal, according to Ni. One is the Golden Tax System Phase III platform that’s being increasingly used to chase down people’s entire source of income. The system allows authorities to view various tax-related data, which had been scattered across various government departments, in one consolidated platform. The new system also beefs up the identification process by preventing individuals from divvying up their income across multiple sources or ID numbers to pay lower taxes.
But it’s not just the rich that may face a stricter tax environment. China lowered the threshold for blocking citizens with overdue taxes from leaving the country to 100,000 yuan ($14,600) from the previous threshold of 1 million yuan, according to the official Xinhua news agency.
Eyes on Property
Further down the road, China is preparing to introduce a property tax law that could go into effect as soon as 2020. Though the tax rate and the details remain unclear, the prospects of the tax has caused people with multiple apartments to worry and made properties a less desirable investment tool, EY’s Mi said.
The heroes of Dickens’ Pickwick Papers visit the fictional borough of Eatanswill to observe an election between the candidates of the Blue Party and the Buff Party. The town is passionately divided, on all possible issues, between the two parties. Each party has its own newspaper: the Eatanswill Gazette is Blue and entirely devoted to praising the noble Blues and excoriating the perfidious and wicked Buffs; the Eatanswill Independent is equally passionate on the opposite side of every question. No Buff would dream of reading the “that vile and slanderous calumniator, the Gazette”, nor Blue the ”that false and scurrilous print, the Independent”.
As usual with Dickens it is both exaggerated and accurate.Newspapers used to be screamingly partisan before “journalism” was invented. Soon followed journalism schools, journalism ethics and journalism objectivity: “real journalism” as they like to call it (RT isn’t of course). “Journalism” became a profession gilded with academical folderol; no longer the refuge of dropouts, boozers, failures, budding novelists and magnates like Lord Copper who know what they want and pay for it. But, despite the pretence of objectivity and standards, there were still Lord Coppers and a lot of Eatanswill. Nonetheless, there were more or less serious efforts to get the facts and balance the story. And Lord Coppers came and went: great newspaper empires rose and fell and there was actually quite a variety of ownership and news outlets. There was sufficient variance that a reader, who was neither Blue nor Buff, could triangulate and form a sense of what was going on.
In the Soviet Union news was controlled; there was no “free press”; there was one owner and the flavours were only slightly varied: the army paper, the party paper, the government paper, papers for people interested in literature or sports. But they all said the same thing about the big subjects. The two principal newspapers were Pravda (“truth”) and Izvestiya (“news”). This swiftly led to the joke that there was no truth in Pravda and no news in Izvestiya. It was all pretty heavy handed stuff: lots of fat capitalists in top hats and money bags; Uncle Sam’s clothing dripping with bombs; no problems over here, nothing but problems over there. And it wasn’t very successful propaganda: most of their audience came to believe that the Soviet media was lying both about the USSR and about the West.
People in Crimea are pretty happy to be in Russia.
The US and its minions have given an enormous amount of weapons to jihadists.
Elections in Russia reflect popular opinion polling.
There really are a frightening number of well-armed nazis in Ukraine.
Assad is pretty popular in Syria.
The US and its minions smashed Raqqa to bits.
The official Skripal story makes very little sense.
Ukraine is much worse off, by any measurement, now than before Maidan.
Russia actually had several thousand troops in Crimea before Maidan.
There’s a documentary that exposes Browder that he keeps people from seeing.
I typed these out as they occurred to me. I could come up with another ten pretty easily. There’s some tiny coverage, far in the back pages, so that objectivity can be pretended, but most Western media consumers would answer they aren’t; didn’t; don’t; aren’t; isn’t; where?; does; not; what?; never heard of it.
So, in a world where the Integrity Initiative is spending our tax dollars (pounds actually) to make sure that we never have a doubleplusungood thought or are tempted into crimethink, (and maybe they created the entire Skripal story – more revelations by the minute), what are we to make of our Free Media™? Well, that all depends on what you’re interested in. If it’s sports (not Russian athletes – druggies every one unlike brave Westernasthmatics) or “beach-ready bodies” (not Russian drug takers of course, only wholesome Americans) – the reporting is pretty reasonable. Weather reports, for example (Siberian blasts excepted) or movie reviews (but all those Russian villains). But the rest is some weird merger of the Eatonswill Gazette and Independent: Blues/Buffs good! others, especially Russians, bad!
So, as they say in Russia, что делать? What to do? Well, I suggest we learn from the Soviet experience. After all, most Soviet citizens were much more sceptical about their home media outlets than any of my neighbours, friends or relatives are about theirs.
Notice what they’re not telling you. For example: remember when Aleppo was a huge story two years ago? But there’s nothing about it now. One should wonder why there isn’t; a quick search will find videos like this (oops! Russian! not real journalism!) here’s one from Euronews. Clearly none of this fits the “last hospitals destroyed” and brutal Assad memes of two years ago; that’s why the subject has disappeared from Western media outlets. It is always a good rule to wonder why the Biggest Story Ever suddenly disappears: that’s a strong clue it was a lie or nonsense.
Most of the time, you’d be correct to believe the opposite. Especially, when all the outlets are telling you the same thing. It’s always good to ask yourself cui bono: who’s getting what benefit out of making you believe something? It’s quite depressing how successful the big uniform lie is: even though the much-demonised Milosevic was eventually found innocent, even though Qaddafi was not “bombing his own people”, similar lies are believed about Assad and other Western enemies-of-the-moment. Believe the opposite unless there’s very good reason not to.
In the Cold War there was a notion going around that the Soviet and Western systems were converging and that they would meet in the middle, so to speak. Well, perhaps they did meet but kept on moving past each other. And so, the once reasonably free and varied Western media comes to resemble the controlled and uniform Soviet media and we in the West must start using Soviet methods to understand.
Always remember that the Soviet rulers claimed their media was free too; free from “fake news” that is.
The past year was full of events that inevitably split the global geopolitical space into two camps: those who still support using US currency as a universal financial tool, and those who are turning their back on the greenback.
Global tensions caused by economic sanctions and trade conflicts triggered by Washington have forced targeted countries to take a fresh look at alternative payment systems currently dominated by the US dollar.
“Does he envisage one of the types of IMF SDRs to become a global currency in his lifetime? If so, will it be crypto/blockchain/gold ‘backed’?”
Carney’s response was oddly honest and open…
“The IMF’s SDRs are designed for a specific purpose – to supplement IMF member countries’ official reserves and so help them to address balance of payments problems. So they are not intended to become a widely accepted means of exchange – what most people understand ‘currency’ to mean.
“That said, I think it is likely that we will ultimately have reserve currencies other than the USD. The evolution of the global financial system is currently lagging behind that of the global economy, and there are asymmetric concentrations of financial assets in advanced economies relative to economic activity.
For example, EMEs’ share of global activity is now 60%, but their share of global financial assets lags behind at around one-third. And half of international trade is currently invoiced in US dollars, even though the US has a much lower 10% share of international trade. As the world re-orders, this disconnect between the real and financial is likely to reduce, and in the process other reserve currencies may emerge. In the first instance, I would expect these will be existing national currencies, such as the RMB.
However, history suggests these transitions will not happen overnight. The US economy overtook Britain’s in the second half of the 19th century, but it took until the 1920s before it became a dominant currency in international trade. “
“Nothing lasts forever”
Carney was skeptical about the possibility of cryptocurrencies such as bitcoin rivalling national currencies as a reserve instrument.
“It is early days for cryptoassets, but in their current form they are not promising as a form of money let alone as a global currency. They are poor stores of value – for example there is extreme daily variation in their value. Cryptoassets are not accepted on the high streets or at online retailers as a form of payment in the UK. And they currently raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and the circumvention of sanctions which authorities here and overseas are working to address.”
And as a follow-up, one person asked:
“Do you think trade wars and sanctions policies against Iran by the Trump administration are accelerating the decline of the USD as reserve currency as China offers RMB-denominated options for bypassing traditionally USD events (ie Shanghai oil futures market).”
But by then Carney had had enough and concluded his Q&A.
However, while Carney was comfortable claiming that the USD could lose its reserve status, he was notably opposed to a return to a gold standard:
“It would be undesirable to base the value of a global currency on gold. Under the Bretton Woods system – the international system of linking exchange rates to the US dollar which was pegged to gold existing from 1944 to 1971 – there was a fundamental tension in that the global supply of gold did not grow in line with the global demand for money. This tension peaked in the early 1970s and the system collapsed. Since then, major economies have moved towards a system of floating exchange rates, and the basis for the SDR’s valuation has also been switched from gold to the more stable arrangement of valuation based on a basket of currencies. “
We have a simple response to Mr.Carney – that’s the point of it – a feature not a bug!
However, as Alasdair Macleod recently detailed,if the yuan is to replace the dollar for China’s trade, a policy that leads to the mass accumulation of dollars has to be terminated at some point.
The answer is to back the yuan with gold
Major-General Qiao made it clear to the CCPCC that the dollar achieved global domination only after August 1971, when the link with gold was abandoned and replaced with oil. The link with oil was not through exchange values, as had been the case with gold, but through a payment monopoly. In Qiao’s words, “The most important thing in the 20th century was not World War 1, World War 2, or the disintegration of the USSR, but rather the August 15, 1971 disconnection between the US dollar and gold.”
Strong words, indeed. But if that’s the case, the Chinese will know that the most important event of this new century will be the destruction of the dollar’s hegemonic status. It requires careful consideration, and many unforeseen consequences may arise. The Chinese know they must not be blamed for the dollar’s demise.
So long as the world economy continues to grow without periodic credit dislocations, then China needs only to react to events, doing nothing overtly to undermine the dollar. She need never seek reserve currency status. No one can complain about that. But while central bankers may presume that they have banished credit crises, the reality is different. An independent, market-based view of the current credit cycle is that the onset of another credit crisis is becoming more likely by the day. That being the case, on current monetary policies China’s economy can be expected to crash, along with those of the West’s welfare states.
China’s manufacturing economy will be particularly hard hit by the rise in interest rates that normally triggers a credit crisis. Higher interest rates turn previous capital investments in the production of goods into malinvestments, because the profit calculations based on lower interest rates and lower input prices become invalid. This is a greater problem for China than for many other economies, because of her emphasis on the production of goods. In short, unless China finds a solution to the next credit crisis before it hits, she could find herself in greater difficulties than states where the production of goods is a minority occupation, purely from a production point of view.
From what we know of their strategic analysis of money and credit, the Chinese should be aware of the cyclical risk to production. If the yuan and the dollar go head-to-head as purely fiat currencies, the yuan will be the loser every time. It would mean the yuan would inevitably sink faster than the dollar in the run-up to the credit crisis, which appears to be happening now. As Qiao puts it, China is already being harvested by America. At some stage, China must act to protect herself from this harvesting. And that’s where her gold comes into play.
Stabilising the currency and the economy with gold
China originally accumulated undeclared reserves of gold as a prudent diversification from holding nothing but other governments’ liabilities. This then turned into a quasi-strategic policy, through encouraging her citizens to accumulate gold as well, while continuing to ban them from owning foreign currencies. We know roughly how much gold her own citizens have, but we can only guess at the state’s holding. It will soon be time for China to declare it.The reasoning is straightforward. At this late stage in the global credit cycle, and so long as the yuan is unbacked, yuan interest rates will rise to the point where Chinese business models will be destroyed. The only way that can be stopped is to link the yuan to gold, so that interest rates align with that of gold, not the rising rates of an unbacked yuan weakening against the dollar whose interest rates are rising as well.
China will be taking a major step by putting an end to the dollar era that has existed since August 1971, when gold as the ultimate money was driven out of the monetary system. She must be ready to do this urgently, despite the opinions of Western-educated economists within her own administration. Some Western central banks may face acute embarrassment, having sold and leased their gold reserves, so that they are no longer in possession. China must move soon to avoid further rises in dollar interest rates undermining the yuan even more.
That time must be approaching. China must resist the temptation to defer such an important decision, allowing the yuan to fall much further. The neo-Keynesians in Beijing will argue that a lower yuan will compensate exporters facing American tariffs. But all that does is drive up domestic prices, and increase the cost of commodities required for China’s infrastructure plans. No, the decision to move must be sooner rather than later.
Assuming China has significant undeclared gold reserves, this could be done very simply through the issuance of a perpetual jumbo bond, paying coupons in gold or yuan at the holder’s option. This financial model, without the gold convertibility feature, is based on Britain’s Consolidated Loan Stock, first issued in 1751 and finally redeemed in 2015. Being undated, there was no capital drain on the exchequer, except at the exchequer’s option.
China’s official gold reserves rose for the first time in around two years (since Oct 2016)…
China’s gold reserves had been steady at 59.240 million fine troy ounces from October 2016 to November 2018, according to data from the People’s Bank of China, and suddenly jumped to 59.560 million fine troy ounces at end-December.
…
Ultimately, a return to sound money is a solution that will do less damage than fiat currencies losing their purchasing power at an accelerating pace. Think Venezuela, and how sound money would solve her problems. But that path is blocked by a sink-hole that threatens to swallow up whole governments. Trying to buy time by throwing yet more money at an economy suffering a credit crisis will only destroy the currency. The tactic worked during the Lehman crisis, but it was a close-run thing. It is unlikely to work again.
Because China’s economy has had its debt expansion of the last ten years mostly aimed at production, if she fails to act soon she faces an old-fashioned slump with industries going bust and unemployment rocketing. China offers very limited welfare, and without Maoist-style suppression, faces the prospect of not only the state’s plans going awry, but discontent and rebellion developing among the masses.
For China, a gold-exchange yuan standard is now the only way out. She will also need to firmly deny what Western universities have been teaching her brightest students. But if she acts early and decisively, China will be the one left standing when the dust settles, and the rest of us in our fiat-financed welfare states will left chewing the dirt of our unsound currencies.
Big brass and government executives play both sides of the military revolving door, including “the only adult in the room.”
Before he became lionized as the “only adult in the room” capable of standing up to President Trump, General James Mattis was quite like any other brass scoping out a lucrative second career in the defense industry. And as with other military giants parlaying their four stars into a cushy boardroom chair or executive suite, he pushed and defended a sub-par product while on both sides of the revolving door. Unfortunately for everyone involved, that contract turned out to be an expensive fraud and a potential health hazard to the troops.
According to a recent report by the Project on Government Oversight, 25 generals, nine admirals, 43 lieutenant generals, and 23 vice admirals retired to become lobbyists, board members, executives, or consultants for the defense industry between 2008 and 2018. They are part of a much larger group of 380 high-ranking government officials and congressional staff who shifted into the industry in that time.
To get a sense of the demand, according to POGO, which had to compile all of this information through Freedom of Information requests, there were 625 instances in 2018 alone in which the top 20 defense contractors (think Boeing, General Dynamics, Lockheed Martin) hired senior DoD officials for high-paying jobs—90 percent of which could be described as “influence peddling.”
Back to Mattis. In 2012, while he was head of Central Command, the Marine General pressed the Army to procure and deploy blood testing equipment from a Silicon Valley company called Theranos. He communicated that he was having success with this effort directly to Theranos’s chief executive officer. Even though an Army health unit tried to terminate the contract due to it’s not meeting requirements, according to POGO, Mattis kept the pressure up. Luckily, it was never used on the battlefield.
Maybe it shouldn’t be a surprise but upon retirement in 2013, Mattis asked a DoD counsel about the ethics guiding future employment with Theranos. They advised against it. So Mattis went to serve on its board instead for a $100,000 salary. Two years after Mattis quit to serve as Trump’s Pentagon chief in 2016, the two Theranos executives he worked with were indicted for “massive” fraud, perpetuating a “multi-million dollar scheme to defraud investors, doctors and patients,” and misrepresenting their product entirely. It was a fake.
But assuming this was Mattis’s only foray into the private sector would be naive. When he was tapped for defense secretary—just three years after he left the military—he was worth upwards of $10 million. In addition to his retirement pay, which was close to $15,000 a month at the time, he received $242,000 as a board member, plus as much as $1.2 million in stock options in General Dynamics, the Pentagon’s fourth largest contractor. He also disclosed payments from other corporate boards, speech honorariums—including $20,000 from defense heavyweight Northrop Grumman—and a whopping $410,000 from Stanford University’s public policy think tank the Hoover Institution for serving as a “distinguished visiting fellow.”
Never for a moment think that Mattis won’t land softly after he leaves Washington—if he leaves at all. Given his past record, he will likely follow a very long line, as illustrated by POGO’s explosive report, of DoD officials who have used their positions while inside the government to represent the biggest recipients of federal funding on the outside. They then join ex-congressional staffers and lawmakers on powerful committees who grease the skids on Capitol Hill. And then they go to work for the very companies they’ve helped, fleshing out a small army of executives, lobbyists, and board members with direct access to the power brokers with the purse strings back on the inside.
Welcome to the Swamp
“[Mattis’s’ career course] is emblematic of how systemic the problem is,” said Mandy Smithberger, POGO’s lead on the report and the director of its Center for Defense Information.
“Private companies know how to protect their interests. We just wish there were more protections for taxpayers.”
When everything is engineered to get more business for the same select few, “when you have a Department of Defense who sees it as their job to promote arms sales…does this really serve the interest of national security?”
That is something to chew on. If a system is so motivated by personal gain (civil servants always mindful of campaign contributions and private sector job prospects) on one hand, and big business profits on the other, is there room for merit or innovation? One need only look at Lockheed’s F-35 joint strike fighter, the most expensive weapon system in history, which was relentlessly promoted over other programs by members of Congress and within the Pentagon despite years of test failures and cost overruns, to see what this gets you: planes that don’t fly, weapons that don’t work, and shortfalls in other parts of the budget that don’t matter to contractors like pilot training and maintenance of existing systems.
“It comes down to two questions,” Smithberger noted in an interview with TAC.
“Are we approving weapons systems that are safe or not? And are we putting [servicemembers’] lives on the line” to benefit the interests of industry?
All of this is legal, she points out. Sure, there are rules—”cooling off” periods before government officials and members of Congress can lobby, consult, or work on contracts after they leave their federal positions, or when industry people come in through the other side to take positions in government. But Smithberger said they are “riddled with loopholes” and lack of enforcement.
Case in point: current acting DoD Secretary Patrick Shanahan spent 31 years working for Boeing, which gets about $24 billion a year as the Pentagon’s second largest contractor. He was Boeing’s senior vice president in 2016 just before he was confirmed as Trump’s deputy secretary of defense in 2017. Last week he recused himself from all matters Boeing, but he wasn’t always so hands off. At one point, he “prodded” for the purchase of 12 $1.2 billion Boeing F-15X fighter planes, according to Bloomberg.
But the revolving door is so much more pervasive and insidious than POGO could possibly catalogue. So says Franklin “Chuck” Spinney, who worked as a civilian and military officer in the Pentagon for 31 years, beginning in 1968. He calls the military industrial complex a “quasi-isolated political economy” that is in many ways independent from the larger domestic economy. It has its own rules, norms, and culture, and unlike the real world, it is self-sustaining—not by healthy competition and efficiency, but by keeping the system on a permanent war footing, with money always pumping from Capitol Hill to the Pentagon to the private sector and then back again. Left out are basic laws of supply and demand, geopolitical realities, and the greater interest of society.
“That’s why we call it a self-licking ice cream cone,” Spinney explained to TAC.
“[This report] is just the tip of the iceberg. There’s a lot more subtle stuff going on. When you are in weapons development like I was at the beginning of my career, you learn about this on day one, that having cozy relationships with contractors is openly encouraged. And then you get desensitized. I was fortunate because I worked for people who did not like it and I caught on quickly.”
While the culture has evolved, basic realities have persisted since the massive build-up of the military and weapons systems during the Cold War. The odds of young officers in the Pentagon making colonel or higher are slim. They typically retire out in their 40s. They know implicitly that their best chance for having a well-paid second career is in the only industry they know—defense. Most take this calculation seriously, moderating their decisions on program work and procurement and communicating with members of Congress as a matter of course.
“Let’s just say there’s a problem [with a program]. Are you going to come down hard on a contractor and try to hold his feet to the fire? Are you going to risk getting blackballed when you are out there looking for a job? Sometimes there is no word communicated, you just don’t want to be unacceptable to anyone,” said Spinney. It’s ingrained, from the rank of lieutenant colonel all the way up to general.
So the top five and their subsidiaries continue to get the vast majority of work, usually in no-bid contracts ($100 billion worth in 2016 alone), and with cost-plus structures that critics say encourage waste and never-ending timetables, like the $1.5 trillion F-35. “The whole system is wired to get money out the door,” said Spinney. “That is where the revolving door is most pernicious. It’s everywhere.”
The real danger is that under this pressure, parties work to keep bad contracts alive even if they have to cook the books. “Essentially from the standpoint of Pentagon contracting you are not going to have people writing reports saying this product is a piece of shit,” said Spinney. Worse, evaluations are designed to deflect criticism if not oversell success in order to keep the spigot open. The most infamous example of this was the rigged tests that kept the ill-fated “Star Wars” missile defense program going in the 1980s.
* * *
Everyone talks about generals like Mattis as though they’re warrior-gods. But for decades, many of them have turned out to be different creatures altogether – creatures of a semi-independent ecosystem that operates outside of the normal rules and benefits only a powerful minority subset: the military elite, defense contractors, and Congress. More recently, the defense-funded think tank world has become part of this ecology, providing the ideological grist for more spending and serving as a way-station for operators moving in and out of government and industry.
Call it the Swamp, the Borg, or even the Blob, but attempting to measure or quantify the revolving door in the military-industrial complex can feel like a fool’s errand. Groups like POGO have attempted to shine light on this dark planet for years. Unfortunately, there is little incentive in Capitol Hill or at the Pentagon to do the very least: pull the purse strings, close loopholes, encourage real competition, and end cost-plus practices.
“We generally need to see more (political) championing on this issue,” Smithberger said. Until then, all outside efforts “can’t result in any meaningful change.”
China has activated its “ship killer” Dong Feng ballistic missiles after a US navy ship traveled within 12 nautical miles of the Parcel Islands “to challenge excessive maritime claims and preserve access to the waterways as governed by international law,” according to a US Pacific Fleet Spokesman.
In the 1990s, China laid claim to all of the Parcel Islands using a straight baseline around the entire archipelago, which it has labeled the Xisha Islands. The boundary is not recognized by international maritime law, while Vietnam and Taiwan have also laid claim to the islands.
The USS McCampbell (DDG-85) passed by the disputed island on Monday, during which “The Chinese side immediately sent military vessel and aircraft,” according to China’s Foreign Ministry Spokesman, Lu Kang, adding that they warned the ship to leave.”
The deployment of the DF-26 missiles was reported by China’s state-controlled Global Times, which tweeted a montage of brave and loyal Chinese servicemen driving Xi’s Dongs to various locations in China set to the theme song of your average 1990s action movie. The missiles will not be positioned near the Taiwan Strait or the actual disputed islands – instead, the truck-mounted weapons have been sent to China’s more remote plateau and desert areas.
“A mobile missile launch from deep in the country’s interior is more difficult to intercept,” said an expert quoted by the Global Times, who claimed that the DF-26 has a range of 4500km, more than enough to cover the entire South China Sea.
#ChinaDefense China’s far-reaching, anti-ship ballistic missile DF-26 has been mobilized to Northwest China’s plateau and desert areas as a US warship trespassed into China’s territorial waters in the S.China Sea Monday. https://t.co/tAMdaUchrKpic.twitter.com/YQBWhqFbzK
“The DF-26 is China’s new generation of intermediate-range ballistic missile capable of targeting medium and large ships at sea,” warned the Times,” adding “It can carry both conventional and nuclear warheads.”
“During the initial phase of a ballistic missile launch, the missile is relatively slow and not difficult to detect, making it an easier target for enemy antimissile installations. After the missile enters a later stage, its speed is so high that chances for interception are significantly lower,” reads the report – which points out that it could hit a US naval base in Guam – located in the middle of the Pacific.
“The report is a good reminder that China is capable of safeguarding its territory,” reads the report.
Another video of the DF-21D set to yet more action movie music shows a CGI simulation of the Dong-Feng unsheathing at high altitude before its warhead reenters the earth’s atmosphere and decimates a fleet of ships with what appears to be a nuclear blast.
The US Navy’s territorial test came weeks after Australian media published details from a speech by one of China’s leading military commanders where he recommended sinking two US aircraft carriers to resolve the ongoing territorial dispute.
During a wide-ranging speech on the state of Sino-US relations, Rear Admiral Lou Yuan told a Shenzhen audience that the current trade spat was ‘definitely not simply friction over economics and trade,” but a “prime strategic issue.”
His speech, delivered on December 20 to the 2018 Military Industry List summit, declared that China’s new and highly capable anti-ship ballistic and cruise missiles were more than capable of hitting US carriers, despite them being at the centre of a ‘bubble’ of defensive escorts.
“What the United States fears the most is taking casualties,” Admiral Lou declared.
He said the loss of one super carrier would cost the US the lives of 5000 service men and women. Sinking two would double that toll.
“We’ll see how frightened America is.” –News.com.au
Beijing has become more aggressive in recent years over the disputed islands – asserting sovereignty over the entirety of the South and East China seas despite an international arbitration court rejecting their claim, according to News.com.au. International law also prohibits Beijing to enforce territorial rights to the waters around artificial islands – which China has recently built on what was previously coral reefs.
China has demanded that all nations respect a 12 nautical mile (22km) boundary around them.
“We will continue to take necessary measures to safeguard national sovereignty and security,” said Foreign Ministry spokesman Lu.
