'Vampirialism': George W. Explores the Dark New World beyond 'Voodoo Economics'
Gar Smith / The-Edge
September 12, 2003
In May, a column in the Wall Street Journal accused George W. Bush of practicing "voodoo economics" -- an ironic reference to his father's memorably disparaging characterization of Reagonomics. The idea that economic growth would be stimulated by increased defense spending and decreased taxation, was dismissed as lunacy by then-presidential candidate George Herbert Walker Bush.
|Drop Bush, not Puppies. A crowd of Little Leaguers gasps with shock as George W. Bush spills his pet dog, Barney, to the ground. Clearly, a man who can't handle a war or juggle the economy can't be expected to dandle a dog. (Perhaps Mr. Bush was just feeling weak from a lack of blood.)|
Twenty years later, George Junior's economic masterplan goes well beyond mere Reagonomics: it lurches boldly into the darkest realms of economic legerdemain.
The Bush administration understands all too well that the US is an enfeebled post-industrial giant cursed with economic inertia and a declining resource base. The US exists in a shuffling zombie-like daze, driven forward by habit, appetite and momentum.
On May 3, the New York Times announced that US companies fired 95,000 workers in April, marking "the 33rd consecutive monthly decline" in the US economy. Nearly 3 million jobs have been lost since George W. was installed in the Oval Office.
The once dynamic US economy has become the fiscal equivalent of the walking dead. The only thing that can keep the corpse alive is the blood of the living. The Bush/Cheney response has been to usher forth an updated form of 19th century imperialism - a cynical strike-and-suck version that can rightfully be called "Vampirialism."
The Cross, the Clove and the Euro
Count Dracula fears the dawn, the crucifix and the scent of garlic. Today, the US economy, a pale shade of its former robust persona, is not only riven with fears of deflationary paranoia, its patrons are terrified of a new specter that haunts Europe - the euro.
In 1971, after Richard Nixon took the US greenback off the gold standard, the only thing backing the dollar was the intrinsic value of Saudi crude. As Professor Gavin R. Putland of Australia's Queensland University of Technology notes, the Organization of Petroleum Exporting Countries (OPEC) came to the rescue of the US economy in 1973 when it jacked up the price of a barrel of oil and refused to accept payment in any currency but US dollars. The value of the dollar soared. At that point, the dollar became an "oil-backed" currency.
If the Saudis and other OPEC members ever opted for a genuine free-market in oil and abandoned the historic preference for the US dollar, the European Union's euro could quickly become the new oil-buck of the 21st century.
Thanks to OPEC's traditional dollar bias, Putland writes, "America can export dollars, which cost nothing to produce, and receive real goods and services in return." The dollars that wind up in foreign banks eventually return to the US. "This continuous flow of foreign investment... props up the American real-estate and stock market and allows America to run a mammoth trade deficit... without devaluing the dollar."
But if OPEC were to abandon the dollar, Putland notes, "the whole process would slam into reverse." The value of the dollar would plummet, banks would go bankrupt and stock markets would crash.
The Dollar Defectors
When the European Union (EU) introduced the euro as a regional currency in 1999, it created an attractive alternative to the dollar. Today, the 12 EU members import more oil from the Middle East than the US. Because the euro offers better interest rates than the dollar and because Europe's economies are not plagued by massive Bush-sized debts and trade deficits, the euro continues to make inroads on the dollar's claim to being the world's "global currency."
In 2002, China began swapping some of its dollars for euros. North Korea has dropped the dollar altogether and now trades only in euros. Last December, ten more countries joined the EU block, creating a common market of 450 million. The EU will soon be purchasing more than half of the Middle East's oil.
If the world's Muslim nations decided to "vote with their currency," they could rearrange the global food-chain overnight. Putland finds it odd that "these possibilities are not discussed in the US media."
The Dollar Defection has already begun. In 1999, Iran expressed interest in pricing its oil in euros. Within months, George W. Bush was labeling Iran (along with pro-euro Iraq and North Korea) as part of the "axis of evil." Tehran was undeterred. According to Putland, "Iran converted most of its currency reserves to euros during 2002 and a proposal to price oil in euros is being considered by the central bank and the parliament."
Putland considers it ironic that the US would be trying to topple Iran, a country that has been "experimenting with democracy" and wonders aloud "whether the Americans find an excuse to topple Iran's fledgling democracy and... replace it with a dictatorship that just happens to prefer dollars to euros."
The Dollar Defection Goes South
The Dollar Defection has also taken root in South America where, in 2000, the populist government of Venezuelan President Hugo Chavez proposed that OPEC establish a "high-tech electronic barter system, so that members could trade oil for goods and services without the use of dollars or any other currency." This approach would benefit OPEC's poorest consumers. Chavez already has struck a number of these deals - including one in which Cuba brought health services to villages in Venezuela in exchange for Venezuelan oil.
In April 2002, a group of Venezuelan businessmen (with covert support from Washington) staged a coup in an attempt to remove the democratically elected Chavez. The coup failed when thousands of Venezuelans stormed into the streets to demand Chavez' return.
But the most pugnacious of the Dollar Defectors, it turns out, was none other than Saddam Hussein. In October 2002, Iraq decreed that its oil would no longer be sold to holders of US dollars: Henceforth, Iraq would only accept payment in euros. In short order, Saddam converted Iraq's $10 billion "oil for food" fund from dollars to euros. Putland marvels how such a dramatic challenge to the dollar "went unreported in the US media."
Hussein's abandonment of the dollar has been cited (though not in the US press) as one of the triggers for the US invasion. Now that Iraq has become an occupied US protectorate, the situation has changed.
George W. Bush has promised that Iraq's oil wealth "belongs to the Iraqi people" but, as Putland points out, "any asset priced in dollars is at least partly an American asset because it adds to the demand for dollars, allowing America to export more dollars and receive more goods and services in return."
The test of Washington's pledge is a simple one: Will Iraq's oil continue to be sold for euros or will the US reinstate the dollar?
The Rise of Vampirialism
The dollar took another bruising psychic hit this spring when international financier George Soros publicly announced his intent to exchange his dollars for euros (and implicitly invited other millionaires, banks and investment houses to follow suit).
Faced with security threats, declining resources, mounting deficits and euro-neurosis, Team Bush came up with a stunning solution to what was beginning to look like the onset of America's sunset years.
Looking backwards to the 19th century for inspiration, Bush rifled the boneyards of the ideological past and disinterred the reliquaries of globe-roving imperialism. Instead of forecasting a bright new century of concord among nations, Bush has proclaimed an era of endless discord - a course of eternal war that will only cease when "evil" has been conquered.
Despite his Yale degree, Mr. Bush repeatedly proved himself a failure in the rough-and-tumble world of commercial enterprise. Bush may not know much about how to run a business and turn a profit but he does know something about vampires: The only thing that can keep the undead alive is the blood of the living.
When Bush first unveiled his new post-9/11 foreign policy - i.e., attacking terrorists without addressing the underlying causes of terrorism - it initially looked like a recipe for disaster. In retrospect, the "War on Terrorism" may prove to be rogue capitalism's last burst of desperate genius.
Afghanistan was the dress rehearsal, A drought-ravaged, starving, resource-poor country, Afghanistan's main claim to fame lay in the geophysical fact that it was perfectly situated to support construction of a pipeline from the oil fields of Khrygistan to the Indian Ocean ports of Pakistan.
Once identified as a "terrorist threat," Afghanistan was attacked and seized by British and US troops. US and UK-owned multinationals soon began to flow into the conquered country and millions of dollars in construction contracts soon began to flow into Western bank accounts. As the anticipated flood of oil (and opium) profits begin to rise, the bloodstream of the West's anemic economies will warm with the heat of new investments.
But if Kabul provided the warm-up for Vampirialism's strategy of Conquer-and-Divide-the-Spoils, it was Baghdad that was to become the main course.
The US economy needs fresh supplies of inexpensive oil like a vampire needs fresh infusions of warm blood. Iraq may be the Cradle of Civilization but Bush's advisors seem to have looked upon the country as the warm neck of the Middle East - pulsing with promise and prostrate from 12 years of economic sanctions and coalition bombing.
How Vampirialism Works
The elevation of former Halliburton CEO Dick Cheney to the White House provided Bush's strategists with the perfect Hannibal as they mapped out their new version of the ancient contest of empire-building. Call it The Great Game 10.1.
|Vampirialism in Action: US Forces Destroy New Diyala Bridge. Baghdad's Mu'alaq suspension bridge was one of the 133 bridges destroyed by US bombs in 1991. Within three years, Iraqi engineers had completely restored the bridge. After Baghdad's New Diyala Bridge was bombed by the US in 2003, an Iraqi engineering firm offered to rebuild the structure for $300,000. Instead the contract was given to a US vampirialist company that will suck up $50 million to do the job.|
Here is the way Bush/Cheney Vampirialism works:
(1) The US declares that it has the right to pre-emptively attack, invade and occupy any country that it identifies as a possible "terrorist threat."
(2) The US identifies a resource-rich and militarily week country as a "terrorist threat."
(3) The Pentagon draws up a targeting list designed to defeat the country's military and to demolish the country's civilian infrastructure.
(4) The Armed Forces occupy the country and the US declares its sovereign right to rule the country, restore its damaged assets and reinvent its political, social and religious realities to conform to "US interests."
(5) The US claims the right to administer the country's resources (in Iraq's case, oil) and use the profits from their sale to finance the post-war "rebuilding" of the country.
(6) Powerful, politically connected US multinationals are given the contracts to rebuild the damage that the US war machine has caused.
(7) The infusion of millions of barrels of cheap oil and the laundering of billions of dollars in restoration funds through US companies helps to revive the US economy.
One of the wonders of a strategy that bonds builders with destroyers: The more damage the military inflicts on roads, bridges, schools, hospitals and public buildings, the more work is created for those companies entrusted with the rebuilding process.
In many cases, the companies that build the weapons and support the military machine are now rebuilding with cranes and cement trucks the very buildings, roads and bridges they helped demolish with ship-launched missiles and smart bombs.
Bush's cold-blooded economic strategy calls for the hot-blooded murder of peace and stability around the world. The War on Terrorism is nothing but a cloak to conceal the disturbing spectacle of a dying economy trying to slake its craving for that last, life-giving hit of warm oil.
When you think of it, the modus operandi of the Bush administration perfectly matches demonic demeanor of the denizens of Transylvannia. Like the storied Vlad the Impaler, the coven of political vampires inhabiting the White House thrive on dark secrets, hide in "undisclosed locations," operate behind closed doors and demand utter and complete privacy. Their military strategy even requires that the best time to strike a target is in the middle of a moonless night.
And, like the fabled vampires of legend, Bush's cohorts have displayed an absolute horror at the threat of disclosure. They stonewall investigations. They obstruct the process of justice. They hide their victims out of public view. They try their victims in the invisible chambers of military tribunals. They abhor exposure.
It's time to see the menace for what it really is. The next time the peace-loving people of this nation march on Washington (on October 20), they may well carry a new symbol. In addition to picket signs, banners and US flags, they may also be brandishing flaming torches and millions of wooden stakes.
Gar Smith is the editor of Earth Island Institute's online magazine The-Edge (www.the-edge.org), a co-founder of Environmentalists Against War (www.envirosagainstwar.org) and Editor Emeritus of Earth Island Journal.
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