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The Bush Legacy

This Thanksgiving day I was musing about all the things I had to be thankful for and especially one thought that persisted, one I just couldn't push out of my mind, that it was my, and America's, good fortune that George W. Bush has only until Inauguration Day, 2009 to bring any more damage to this country.   Of course that's still more than a month away and is time enough for some more criminal acts before he goes.

I remember how Bush came in promoting himself as the president who would unite our country.  But now eight years later we find that he has wrought a bottomless abyss dividing the citizens of America, and yes, also the people of the world.  Proud of his minimum achievements in this world, he sold himself as a common man, one whom everyone could love and identify with as he blew into office.  I'm sure you still remember his self-directed jokes concerning his admitted shortcomings.  Very few of us at the time could have envisioned the nightmare that was to come.  He was just the good old country bumpkin.

The problem was that not many paid attention to the Cowboy mentality of the real George W. Bush, an extremely dense and dictatorial individual who had a thinly concealed fetish as a Julius Caesar wannabe.  But the Neo-Cons had him squarely in their sights.  Here was their dream president - low wattage, easily corruptible, and they convinced him that with their sage advice he would leave a legacy of greatness.  George never knew what happened.   It turned out that instead of being good ole George he was molded to became the "If you're not with us, you're against us tyrant".  

The past eight years have been the most disastrous in American history, a disaster of such proportions that it might take a couple of decades to recover.   The real irony is that during his first six years when most of the damage was done, he had a majority of his Party in both the House and the Senate.  He had the opportunity to cause great benefits and a bright future to come to the American people.  Instead he used his power to try and intimidate the world and at the same time criminalize the citizens of the United States. 

His advisors' War Monger mentality convinced him that one could find a terrorist under ever bed and especially in the American mainstream.  Average Americans became the potential enemy of the state and therefore gave rise to a domestic 1984 type Government that was sold as  needed to be implemented, in other words to "protect Democracy", Democracy needed to be suppressed.  The result was inevitable and the boogey man mentality fed on itself until we began to approach the beginning of the end of Democracy.  And finally the Bush Party aided and abetted him in the destruction of this country's morality and ethical behavior.

How was it that the Republican Party helped the destruction of American values?  Well during the first six years when George and the Republican Party wanted something , every bill forced thru the House and Senate was signed by George, and if he wanted to exempt himself from that new law, he just wrote on the bills' margins, the one he had just signed, that it, that new law, didn't apply to him and his clandestine organizations. 

Neither the Republicans nor the Democrats raised much of an alarm, one party out of protectionism and the other party out of a fear of political cost.  Those bill-signing issues could have been used to rule the bill null and void, that is had the Congress stood up to the blatant hypocrisy, but they weren't so inclined.  From this very practice arose the means to shred the constitution.  And from that followed Torture, the Death of Habeas Corpus, The Patriot Act, Illegal Surveillance, Gitmo, Abu Gharib, and  many other despicable insults to society. 

Yet I am calling for the end of the Republican Party as a viable political force in American politics and giving the Democratic Party a pass.  Why?   The answer is simple.  The Republican Party brought Bush forward and had the wherewithal to control him.  After all, the Republican elected majority had  pledged a fidelity to the American people, to protect them from all enemies both foreign and domestic.  That responsibility did not contain a caveat " except those domestic enemies that are Republican".  

And even after the first six years, the Republican Party Congressional Members had sunk so low in Moral and Ethical conduct that they were a given to block passage of any legislation that Bush objected to, irrespective of whether vetoing  it was harmful to the country or its people.  They were definitely Party First above country.

The Democratic Party gets a temporary pass.  They are now in control, having almost the same majorities that George Bush and Republicans had after the Clinton years.  It's too late to doom them because of the Clinton years but its not too late to make provisions for when they will be subjected to exile as I'm proposing to have foisted on the Republicans.  We need to demand three things from the Democrats:

1) A return to the Constitution as it was intended by our Founders
2) Ethical and Moral Governance as a standard for the people's rights and expectations
3) A dismantling of the Corruptive Structure of the Government/Corporate incestuous relationship      

When George Bush came into office the United States was the most respected Country in the world and represented the pinnacle of human rights across all peoples of the world.  Our moral principles, based on the Golden Rule had no challenge.  Yes there were signs that the image might be cracking and slipping away, mainly because of what previous presidents had done, but there was enough belief in the fairness of the United States among the World's nations that we were usually given the benefit of the doubt.  But after 9/11 when most of the world was in sympathy of America, the handlers of President Bush decided this was the opportunity to seize the resources of the third largest oil producer in the world and thus began the Iraqi war. 

And everything that followed.  Bush just recently promised to a rousing cheer that when the troops came home from Iraq they would come home victorious.  He didn't say what victory was or who profits from the victory.  There are over a million dead Iraqis and Americans who can't share in the "Victory", and the impoverished survivors, American and Iraqi, have only the fact that its over to cheer, that is when it is really over.  The most difficult thing to identify from my viewpoint is "What was it that the people of America won?  And the co-question - what did the Iraqis do to have been subjected to the devastation?

Rebuilding things lost, both tangible and intangible, will be the nightmare for Obama and Administration.  If the incoming administration doesn't do all three of the things I have mentioned above, and do it in the first four years, my plea to my fellow citizens is - "Lets have their replacements ready and lets get a Constitutional Convention going (as provided by in the Constitution) so that we the people can right the wrongs and incarcerate the criminals."

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Cliff Carson [send him email] is a freelance writer and Populist Party contributor.

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The Attempt at Vindicating Lincoln

When I reached page 222 of Vindicating Lincoln, I almost threw the book across the room. There I read, "First, the latest iterations of European philosophy during the antebellum period were to be found in the writings of G.W.F. Hegel and Charles Darwin, whose teachings, when transported to the United States, were often interpreted as justifications for, not arguments against, black slavery" (emphasis added).

Can Krannawitter be ignorant of the fact that Darwin did not discuss human evolution until The Descent of Man in 1871? Perhaps the passage was a trivial slip, that only a reviewer intent on blood would highlight. But several pages later, Krannawitter rides again: "In the antebellum South, religious thought incorporated the ideas of Hegel and Darwin to provide a potent defense of slavery that was well received by many Southern whites" (p. 234).

In trying to understand how Krannawitter could be guilty of so gross a mistake, we arrive at a key to the book. He was a student of Harry Jaffa, and his book defends to the last detail Jaffa's analysis of Lincoln.

I [Krannawitter] believe in honesty in advertising, and I therefore disclose to the reader that I am a student of Jaffa's. To be fair, I should have concluded almost every paragraph with a footnote acknowledging Jaffa's teaching, but I knew that the reader would tire of it, so let me state here that Jaffa's influence is present throughout the book. (p. xiii)

Now the mystery is solved. Jaffa makes exactly the same mistake, and it has not occurred to Krannawitter to check the claims of his revered teacher.

It would be an even more serious mistake, though, to dismiss Krannawitter's book as incompetent; whatever his failings, and they are many, he raises an important issue. If we think that slavery is unconditionally wrong, must we not acknowledge that Lincoln's waging war against the South was correct? By contrast with Lincoln, many of the leaders of the Confederacy thought that slavery was a positive good. Must not all libertarians, then, reject the Southern position that secession was constitutionally justifiable? To think otherwise, he claims, is to support slavery. Why then, Krannawitter asks, has a coalition between libertarians and pro-Southern writers formed to assail the Great Emancipator?

Krannawitter's question rests on a false premise. Referring to the critics of Lincoln, he writes

A rejection of the natural right principles that informed Lincoln's statesmanship unites their otherwise disparate writings. They aim to vilify Lincoln and to persuade the American people to abandon his principles and example. (p. 9)

Krannawitter argues in this way: Lincoln rejected slavery; for him, the "all men are created equal" clause of the Declaration of Independence applied to blacks as well as whites, and meant that no one by nature was fit to rule over another human being as his master. Those, then, who attack Lincoln must reject natural rights: they are either historicists or believers in economic determinism. The libertarian opponents of Lincoln, he thinks, fall into the latter class.

Of course, Krannawitter's conclusion does not follow. Many of Lincoln's critics also believe in natural law. He is kind enough to quote me as saying that leading classical liberals, from Lord Acton to Murray Rothbard, have defended the Confederacy (p. 289). Is he unaware that self-ownership and a Lockean theory of property acquisition are the key premises of Rothbard's political philosophy? Does he think that Lord Acton was an opponent of freedom?

Krannawitter has structured his book around a number of complaints against Lincoln. I cannot examine all of the charges, and his responses to them, but one especially interests me, as Krannawitter includes me among the critics. In the chapter "Was Lincoln a Racist?" he attacks the claim that Lincoln's undoubted personal rejection of slavery by no means signified his embrace of full political equality for blacks. Quite the contrary, the critics claim, Lincoln fully shared the racist opinions almost universally held in antebellum America.

The evidence for this lies ready at hand. In his famous debates with Stephen Douglas, Lincoln said that there was

a physical difference between the white and black races which I believe will forever forbid their living together on terms of social and political equality. And inasmuch as they cannot so live, while they do remain together there must be the position of superior and inferior, and I as much as any other man am in favor of having the superior position assigned to the white race. (p. 19)

There is an obvious line that those committed to the equality thesis might take. It might be claimed that Lincoln did not really believe what he said. In order to have a chance at winning the election against Douglas, he had to pander to the racial prejudice of his audience. Usually, those who say this will go on to justify the deceit.

To my surprise, Krannawitter does not follow this course. Rather, he says that the Lincoln's statements are, if read closely, not racist at all.

Is there a physical difference between black and white human beings? Of course, blacks are black, and whites are white. And while this simple difference of skin color does not, in itself, require political and social inequality, the distinction in color in America had become deeply entwined with slavery and questions of racial hierarchy. Lincoln did not endorse a political hierarchy based on race but indicated such a hierarchy may be "a necessity," an inescapable result of widespread racial opinions and assumptions. In such a case, anyone of any color, when presented with the choice of having his race assigned a superior or an inferior position in a given society, with no option of equal citizenship, would choose to have his race in the superior position. This in no way proves that Lincoln did not believe in the equality of rights of all men of all colors or that he did not hope American opinion would someday move in the direction of equal citizenship for all men of all colors. (pp. 21, 24)

Krannawitter has blatantly read into Lincoln's text what he wishes were present in it. Lincoln says nothing at all to indicate that the racial hierarchy rests on prejudices that he does not share. Why does Krannawitter do this?

His reasoning appears to be this: Lincoln recognized that blacks had the right to hold property: along with accepting Locke's doctrine of self-ownership, as found in the Declaration of Independence, he also accepted Locke's view of property and the social contract. If, like Locke, he believed that political rule requires the consent of the governed, does not universal suffrage follow?

Therefore if blacks possess equal natural rights, and if the purpose of the republic under which they live is to protect their natural rights through laws made with their consent, then withholding the power to consent by withholding the power of suffrage violates the social contract: the logic of the social contract demands nothing less than making voters of Negroes once their natural humanity and equal rights have been recognized. (p. 26)

We ought then to read statements by Lincoln that ostensibly deny this in a way that does not accord with their surface meaning

This argument rests on a misreading of Locke. He does indeed think that government requires consent, but it does not follow that everyone has the right to vote. Locke in the Second Treatise on Government makes clear that suffrage depends on property: only parts of the public that pay taxes have a right to vote, in proportion to the assistance which they afford the public. When Locke talks of the need for consent of the public, this means that the government must act in a way that does not provoke a revolution against it, not that everyone has the right to elect the government.

In fairness to Krannawitter, some scholars interpret Locke differently; but he shows no awareness that the point is controversial. In any case, why would Lincoln's belief that blacks had the right to hold property commit him to what Krannawitter believes to be the full logic of Locke's argument? Basing himself on a conjectural reconstruction, learned from Jaffa, of what Lincoln "must" have thought, he snatches at straws. True, Lincoln says that he rejects political and social equality for blacks; but "he never denied that such policies were right" (p. 32).

Further, Lincoln's commitment to natural rights, so much stressed by Krannawitter, had in truth a very attenuated application to blacks. Lincoln backed the Corwin Amendment of 1861, which Krannawitter mentions (p. 277) though he does not tell us that William Seward introduced the measure into the Senate at Lincoln's behest. Under it, the Constitution would have been entrenched against further amendments that would interfere with slavery. I do not think that anyone who favored this, albeit to preserve the Union, can have had a robust sense of the natural rights of blacks.

If, like Thomas Woods, you do not find Lincoln's rigmarole convincing but take his remarks as they stand, judging him to be a creature of his age, Krannawitter has a remarkable response:

Is Woods a creature of his age? Does Woods think that his own judgment (that Lincoln was a "creature of his age") is merely a reflection of Wood's own historical culture and therefore subject to historical change? Or does Woods claim to be telling us something that he believes is true? I suspect the latter. But then, why should we not also assume that Lincoln's mind and reason possessed the same freedom? Why . is Lincoln a "creature of his age" if Woods is not? (p. 137, emphasis in original)

Krannawitter deserves credit: he paid attention during his freshman philosophy class and learned that universal relativism cannot be sustained. If all judgments are relative, is this very judgment itself relative? But Woods does not advocate this position. He does not claim that everyone is a creature of his age, nor, for that matter, that in every judgment Lincoln made, he reflected no more than the beliefs of his era. Rather, the claim is that in certain specific beliefs, e.g., racial prejudices that we now deem unfounded, Lincoln was a creature of his age. To assert that does not mire one in the swamps of historical relativism.

Krannawitter is much too ready to ascribe false philosophies to his opponents. Thus, because Thomas DiLorenzo, Mark Thornton, and Robert Ekelund think that Lincoln's refusal to accept secession was motivated by his insistence on collecting tariffs and custom duties in Southern ports, they are "economic determinists."

DiLorenzo . looks at Lincoln through the lens of economic determinism, the theory that economic interests compel and inform all human experience. From this point of view, economic interests explain Lincoln's rhetoric and deeds far better than moral principles because moral principles merely reflect economic interests. (p. 215, emphasis in original)

Again, to claim that in a concrete instance someone was motivated by economic interests does not at all commit one to a universal ideology that holds that economic interests trump everything else. It is precisely by paying attention to Lincoln's "rhetoric", e.g., his statement in his first inaugural address that he would not initiate force against the seceding states beyond what was necessary to protect government property and "to collect the duties and imposts", that the libertarian critics of Lincoln arrive at their views.

However critical of Krannawitter one may be, one must be grateful to him for one admission:

In many ways, Lincoln's legacy hinges on the question of whether states did in fact possess a constitutional right of secession. If they did, then virtually everything Lincoln did as president was illegal at best, immoral at worst. If Lincoln had no legal power and no constitutional duty to maintain the Union against secessionist movements, then Lincoln might well deserve the title "war criminal" . and should be viewed with contempt. (p. 147)

Of course, Krannawitter thinks there was no right of secession, but his arguments for this are weak. He correctly notes that the anti-Federalist opponents of the Constitution claimed that it would subordinate the states to the federal government. He then adds

"That is, not only did the supporters of the Constitution of 1787 understand that it would form a national government proper and that states would fall under the jurisdiction of that national government, at least to some extent, but even the most vehement opponents of the Constitution agreed! (p. 162)

If everyone at the time of the adoption of the Constitution agreed that it established a strong central government, in which the powers of the states were radically attenuated, is this not conclusive proof that the Southern position of 1860-61 was wrong?

Krannawitter has ignored an important fact that undermines his contention. Precisely in order to rebut the anti-Federalist complaints that the new government unduly subordinated the states, the Federalist defenders of the document in the Virginia Ratification Convention of 1788 were anxious to assure opponents that if the federal government infringed on the prerogatives of the state, the state would not be bound by these actions. It is the great merit of Kevin Gutzman's Virginia's American Revolution (Lexington Books, 2007) to have made this clear. Gutzman notes that toward

the end of the Richmond [Ratification] Convention, Federalists believed they had found a solution. Would the concerns of the Republicans be allayed, they asked, if the form of ratification included . a general statement of Virginia's right to reclaim control of such questions in case of federal overreaching were affixed? After all, the Federalists explained, when two parties made a contract, any conditions in the ratification were understood to operate as amendments, and the reservation would do the same here. (Gutzman, p. 86)

Thus, contrary to Krannawitter, Virginia's conditions were not assertions of a general right of revolution but explicit limitations under which the state entered the new government. Is it not plausible to think, then, that if the state judged the federal government a persistent violator of its rights, it might withdraw from the Union? Further, it would not make sense to hold that some states were more firmly bound to the Union than others. Virginia's reservations applied to the other states as well. Krannawitter unfortunately was unable to make use of Gutzman's major scholarly work; he confines his criticism to Gutzman's books written for a popular audience. He might plead in extenuation that Gutzman's book appeared too late for him to use; but Gutzman's main conclusions about the Richmond Convention were set forward in his "Edmund Randolph and Virginia Constitutionalism" (The Review of Politics 66 [2004], pp. 469-97).

Gutzman's research helps us to understand better the Virginia and Kentucky Resolutions of 1798 and 1799. Contrary to Krannawitter, these resolutions were not the product of Jefferson's tendency toward hyperbole. Quite the contrary, Jefferson and Madison were solidly in the tradition of the Richmond Convention:

the twin enunciations of the Republican constitutional position adopted by the Virginia and Kentucky legislatures corresponded closely to the explication of the federal Constitution offered by Virginia Federalists in the Richmond Ratification Convention of 1788. By the time matters came to a head in 1798, the Virginians had insisted on holding the Federalists to their vows of 1788 for a full decade. (Gutzman, p. 114)

Krannawitter has vindicated neither Lincoln nor Jaffa. Lest I be accused of writing an unduly negative review, I shall conclude by recommending his discussion of the Progressives and the New Deal (pp. 293ff.) If Krannawitter were to expand these remarks, he would write a valuable book.

David Gordon covers new books in economics, politics, philosophy, and law for The Mises Review, the quarterly review of literature in the social sciences, published since 1995 by the Mises Institute. He is author of The Essential Rothbard, available in the Mises Store. Comment on the blog.

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Destroying a People

I went to the Houses of Parliament on 22 October to join a disconsolate group of shivering people who had arrived from a faraway tropical place and were being prevented from entering the Public Gallery to hear their fate. This was not headline news; the BBC reporter seemed almost embarrassed. Crimes of such magnitude are not news when they are ours, and neither is injustice or corruption at the apex of British power.

Lizette Talatte was there, her tiny frail self swallowed by the cavernous stone gray of Westminster Hall. I first saw her in a Colonial Office film from the 1950s which described her homeland, the island of Diego Garcia in the Indian Ocean, as a paradise long settled by people "born and brought up in conditions most tranquil and benign." Lizette was then 14 years old. She remembers the producer saying to her and her friends, "Keep smiling, girls!" When we met in Mauritius, four years ago, she said: "We didn't need to be told to smile. I was a happy child, because my roots were deep in Diego Garcia. My great-grandmother was born there, and I made six children there. Maybe only the English can make a film that showed we were an established community, then deny their own evidence and invent the lie that we were transient workers."

During the 1960s and 1970s British governments, Labour and Tory, tricked and expelled the entire population of the Chagos Archipelago, more than 2,000 British citizens, so that Diego Garcia could be given to the United States as the site for a military base. It was an act of mass kidnapping carried out in high secrecy. As unclassified official files now show, Foreign Office officials conspired to lie, coaching each other to "maintain" and "argue" the "fiction" that the Chagossians existed only as a "floating population." On 28 July 1965, a senior Foreign Office official, T.C.D. Jerrom, wrote to the British representative at the United Nations, instructing him to lie to the General Assembly that the Chagos Archipelago was "uninhabited when the United Kingdom government first acquired it." Nine years later, the Ministry of Defense went further, lying that "there is nothing in our files about inhabitants [of the Chagos] or about an evacuation."

"To get us out of our homes," Lizette told me, "they spread rumors we would be bombed, then they turned on our dogs. The American soldiers who had arrived to build the base backed several of their big vehicles against a brick shed, and hundreds of dogs were rounded up and imprisoned there, and they gassed them through a tube from the trucks' exhaust. You could hear them crying. Then they burned them on a pyre, many still alive."

Lizette and her family were finally forced on to a rusting freighter and made to lie on a cargo of bird fertilizer during a voyage, through stormy seas, to the slums of Port Louis, Mauritius. Within months, she had lost Jollice, aged eight, and Regis, aged ten months. "They died of sadness," she said. "The eight-year-old had seen the horror of what had happened to the dogs. The doctor said he could not treat sadness."

Since 2000, no fewer than nine high court judgments have described these British government actions as "illegal," "outrageous" and "repugnant." One ruling cited Magna Carta, which says no free man can be sent into exile. In desperation, the Blair government used the royal prerogative - the divine right of kings - to circumvent the courts and parliament and to ban the islanders from even visiting the Chagos. When this, too, was overturned by the high court, the government was rescued by the law lords, of whom a majority of one (three to two) found for the government in a scandalously inept, political manner. In the weasel, almost flippant words of Lord Hoffmann, "the right of abode is a creature of the law. The law gives it and the law takes it away." Forget Magna Carta. Human rights are in the gift of three stooges doing the dirty work of a government, itself lawless.

As the official files show, the Chagos conspiracy and cover-up involved three prime ministers and 13 cabinet ministers, including those who approved "the plan." But elite corruption is unspeakable in Britain. I know of no work of serious scholarship on this crime against humanity. The honorable exception is the work of the historian Mark Curtis, who describes the Chagossians as "unpeople."

The reason for this silence is ideological. Courtier commentators and media historians obstruct our view of the recent past, ensuring, as Harold Pinter pointed out in his Nobel Prize acceptance speech, that while the "systematic brutality, the widespread atrocities, the ruthless suppression of independent thought" in Stalinist Russia were well known in the west, the great state crimes of western governments "have only been superficially recorded, let alone documented."

Typically, the pop historian Tristram Hunt writes in the Observer (23 November): "Nestling in the slipstream of American hegemony served us well in the 20th century. The bonds of culture, religion, language and ideology ensured Britain a postwar economic bailout, a nuclear deterrent and the continuing ability to ?punch above our weight' on the world stage. Thanks to US patronage, our story of decolonization was for us a relatively painless affair..."

Not a word of this drivel hints at the transatlantic elite's Cold War paranoia, which put us all in mortal danger, or the rapacious Anglo-American wars that continue to claim untold lives. As part of the "bonds" that allow us to "punch above our weight," the US gave Britain a derisory $14m discount off the price of Polaris nuclear missiles in exchange for the Chagos Islands, whose "painless decolonization" was etched on Lizette Talatte's face the other day. Never forget, Lord Hoffmann, that she, too, will die of sadness.

John Pilger was born and educated in Sydney, Australia. He has been a war correspondent, filmmaker and playwright. Based in London, he has written from many countries and has twice won British journalism's highest award, that of "Journalist of the Year," for his work in Vietnam and Cambodia. His new book, Tell Me No Lies: Investigative Journalism and Its Triumphs, is published by Jonathan Cape in June.

Copyright © John Pilger 2008

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The Custodians Of Empire

The Obama national security "team" -- part of that much-hailed "team of rivals" -- does not yet exist, but it does seem to be heaving into view. And so far, its views seem anything but rivalrous. Mainstream reporters and pundits lovingly refer to them as "centrist," but, in a Democratic context, they are distinctly right of center. The next secretary of state looks to be Hillary Clinton, a hawk on the Middle East.

During the campaign, she spoke of our ability to "totally obliterate" Iran, should that country carry out a nuclear strike against Israel. She will evidently be allowed to bring her own (hawkish) subordinates into the State Department with her. Her prospective appointment is now being praised by the likes of Newt Gingrich and Henry Kissinger.

The leading candidate for National Security Advisor is General James L. Jones, former Marine Corps commandant and NATO commander, who remained "publicly neutral" during the presidential campaign and is known to be personally close to John McCain and, evidently, Secretary of Defense Robert Gates as well. Not surprisingly, he favors yet more spending for the Pentagon. The reputed leading candidate for Director of the CIA, John Brennan, now head of the National Counterterrorism Center, was George Tenet's chief of staff and deputy executive director during the worst years of the CIA's intelligence, imprisonment, and torturing excesses.

The new Secretary of Defense is odds on to be. the old secretary of defense, Robert Gates, a confidant of the first President Bush. Still surrounded at the Pentagon by former Secretary of Defense Donald Rumsfeld's holdovers, he has had a long career in Washington as a clever apparatchik. He was the adult brought in -- the story of how and by whom has yet to be told -- to clean up the Bush foreign policy mess (and probably prevent an attack on Iran). He did this. He now favors no fixed timelines for an Iraq withdrawal, but a significant American troop "surge" in Afghanistan, "well north of 20,000," in the next 12-18 months.

He has overseen the further growth of the bloated Pentagon budget and has recently come out for the building of a new generation of nuclear weapons. (Other candidates for Defense include former Clinton Navy Secretary and key Obama advisor Richard Danzig, who may end up -- for the time being -- as an undersecretary of defense, Clinton former Deputy Secretary of Defense John Hamre, and Republican Senator Chuck Hagel, who might instead land the job as the Director of National Intelligence.)

Drop down a tier, as Yochi Dreazen of the Wall Street Journal wrote last week, and you find the Obama transition people using a little known think-tank, the Center for a New American Security (CNSA), as a "top farm team" to stock its national security shelves. The founders of the center are -- don't be shocked now -- former Clinton administration officials providing yet more "centrists" to an administration that seems to believe the essence of "experience" is having been in Washington between 1992 and 2000.

CNAS, by the way, is officially against a fixed timeline for withdrawal from Iraq. In that, it seems typical of the coalescing national security team, almost none of whom, so far, opposed the invasion of Iraq (other than the president-elect). Having been anti-war is evidently a sign of inexperience and so a negative.

Add in the military line-up -- Chairman of the Joint Chiefs Mike Mullen, Centcom Commander David Petraeus, Generals Raymond Odierno and David McKiernan, the U.S. commanders in Iraq and Afghanistan -- all second term Bush picks, all reportedly ready to push for a major "surge" in Afghanistan, all evidently against Obama's timeline for withdrawing U.S. combat forces from Iraq.

Now, mind you, so far we've only been considering the foreign policy issues of empire that face the next team. Domestically, if Gates remains, the Air Force might get kneecapped (perhaps losing the F-22 Raptor, the weapons system it wants for a war that will never be fought), but the Army and Marines will expand, as (so he promises) will the Navy. The essence of the matter is simple enough, as Frida Berrigan, arms expert for the New America Foundation and TomDispatch regular, indicates: The Pentagon, even in the toughest of economic times, is likely to prove relatively untouchable.

The Obama transition team's explanation for the remarkably familiar look to its emerging national security line-up, suggested David E. Sanger in a recent front-page think piece in the New York Times, is "that the new administration will have no time for a learning curve. With the country facing a deep recession or worse, global market turmoil, chaos in Pakistan and a worsening war in Afghanistan, 'there's going to be no time for experimentation,' a member of the Obama foreign policy team said." In other words, we need the sort of minds, already imprisoned in Washington's version of "experience," who helped lead us into this mess (long term), to get us out of it. "Experimentation" is obviously for times when it isn't needed. For these custodians of empire, better a steady hand and the same-old thoughts. No?

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Getting To Know Your Local Farmer

The U.S. financial system is in collapse, and energy costs are likely to come back again next spring and summer with a vengeance that we can't imagine. This will make the price of food, already off the scale, skyrocket even further. We must all get to know our local farmers, or better yet, become them. In the moment, we have the "luxury" of low energy prices, and it is during this time that we should be making food security our top priority.

A few months ago I was introduced to Stuart and Margaret Osha of Turkey Hill Farms here in Central Vermont. I originally contacted them because people around me were raving about the taste and health benefits of raw milk. In fact, a couple of Truth To Power subscribers who live in the area were thrilled to have attended a workshop with the Osha's on "The Family Cow", and they wanted me to check out Turkey Hill Farms. 

I'll never forget the day I met the Osha's and the feeling I had when I left there driving off into the lush, rolling hills with a couple of quarts of raw milk, home made granola, eggs, and vegetables-all produced at Turkey Hill. For the first time in my life I had purchased my food directly from local farmers-not at a farmer's market, but directly from the farmer at the farm, and the feeling of satisfaction and a sense of rightness about it brought tears to my eyes. This was, after all, what I had been promoting for years, and finally, I had the opportunity to practice what I had been writing about. 

But Vermont is not the only place where people can and should get to know their local farmer. Opportunities to do so exist almost everywhere in North America. As I have learned more about organic farming, and particularly as I have consumed vast quantities of raw milk and gotten to know the people who produce it, I'm deeply motivated to invite Truth To Power readers to create similar opportunities in their local communities. 

I cannot stress the urgency of this. The U.S. financial system is in collapse, and energy costs are likely to come back again next spring and summer with a vengeance that we can't imagine. This will make the price of food, already off the scale, skyrocket even further. We must all get to know our local farmers, or better yet, become them. In the moment, we have the "luxury" of low energy prices, and it is during this time that we should be making food security our top priority. 

To that end, I thought that sitting down with the Osha's and allowing them to share their experiences with local farming would be especially useful. They graciously took time from their many chores to speak with me. 

CB: Stuart, you were an organic dairy farmer before you moved to this property in Central Vermont. At that time, you wrote a book, Loving A Dying Way of Life, so can you tell our readers a little bit about what inspired you to write the book? 

SO: Margaret and I were living on her family farm, and I was doing a lot of writing, and emotions were just coming out about a time in my life that was so dear and precious to me-childhood memories and a sense of community back in the 1940's and 50's. I began to realize that this life as I remembered it, was dying. That's really what inspired it. Margaret and I were farming at the time, and it took a tremendous amount for us to be doing it because there wasn't as much organic dairy farming going on at that time. I think maybe there were thirty-some organic dairy farms in Vermont that were NOFA-qualified. 

CB: Can you explain what NOFA is? 

SO: NOFA is the Northeast Organic Farming Association, and they do a number of things, but their main focus is certifying farms as organic, and they offer a number of workshops and have an annual conference. They have been the torch carriers for the organic movement here in Vermont and the Northeast.

CB: So there wasn't much support for what you were doing, and you had been talking about The Dying Way of Life. Please feel free to continue with that. 

SO: Yes, in the ten years or so since I wrote that book, I could say the dying way of life is coming back. I see it everywhere. And it's so exhilarating to both Margaret and I to see this, and our communities are going to be depending on us once again for this way of life. So at that time in the mid to late-nineties, I really thought that it was dying, and in just ten years, it's started to come back. We notice every year that more and more people are interested in what we do, and more and more people are buying our products. We started out with just having a milk cow, and it's really grown into something tremendously inspiring. 

CB: Right now we're finding ourselves in a very painful recession that by all accounts is going to become much more severe. Some very astute economists are calling this what it is, the collapse of the global economic system. An overwhelming majority of our readers eat organic or natural foods and are strongly committed to their local economies and local solutions. What is your sense of the role of local economies and family farms in providing an alternative to the global economy? 

SO: Back when 9/11 happened I remember distinctly thinking that it would be good for small farmers because if you want food security you need lots of small farms. Well, obviously it wasn't, and we continued to go in the direction we were already going. 

Food security is now a huge issue. When you find out that China's putting chemicals in the milk, that ought to wake up most people-that you need to be buying local, and you need to know the people that you're buying your products from. So I think this has been coming, but the present economic situation is creating an awareness in people that local is better, and they should know their producer.

Everyone is on hold with the oil situation because prices are down now, and people have put that on the back burner because they're worrying more about their mortgages. But in reality, the oil situation will be back, and when it comes back, it will come back with a vengeance, and we're not prepared to face it. The point here is that the prices of food produced locally have always been higher than food from the grocery store, but really not when you consider how much of the grocery store price includes the price of transport. 

As we go forward and as we face the economic crisis, the oil crisis, and climate change, locally is going to be the only way to get your food, and it's also going to be a more economical way to get your food. 

Also, the development of local communities where people work together and share together-this combination is going to be our road to survival. 

CB: In this article we're going to be linking to your Turkey Hill Farm website, and of course, one of your specialties here at Turkey Hill is raw or real milk. You've certainly researched a great deal and have found some very interesting things about raw milk. Please tell us what you know. 

SO: I can tell you what I know, and I'm pretty sure Margaret can tell you more. Raw milk gets a bad rap-everywhere-the medical profession, agricultural departments all over the country, and I believe probably there's a lot of politics here as there always is. But the fact of the matter is that raw milk is good for you. It contains enzymes and vitamins that are not depleted through the pasteurization process. It boosts the immune system too. In Vermont, we're very fortunate to be in a state where we can advertise it. We have a naturopath physician who is one of our raw milk customers and sends people here to get it because he wants people to have it as part of their diet. 

Vermont law states that you have to go buy raw milk at the farm where it's produced. I think that's a good idea because you should be able to see the cleanliness, milking practices, cows, how the milk is handled and make your own decision as to whether you want to buy it. What we can't legally do yet is advertise products related to the raw milk such as butter and cheese, and that would be a big help if we could. 

We've been absolutely amazed. We started out with one cow and a few milk customers. We now have two cows and over 30 customers getting milk from us. 

CB: I remember one time you and I were talking about raw milk, and you said "Cleanliness, cleanliness, cleanliness is the motto." How do you do that? 

SO: In any food preparation it's fundamental. It starts with the barn, keeping everything cleaned up every day, the cows, the milking equipment, the udders, how the milk is handled once they have dumped it into the pail, through the strainer, to where it's bottled-everything has to be cleaned very well every day, and attention to detail is crucial. If you don't do that, then you're probably risking some bacteria.

CB: Margaret, do you have anything to add about the raw milk? 

MO: Well, I've just been reading The Untold Story of Milk. There's a lot of history in that book. Back in the early 1900's a lot of people were getting sick from city dairies in New York and Boston, and the cows were actually eating swill from liquor making. It was a very unnatural diet for them, yet they produced a tremendous amount of milk. Also the cows weren't housed properly, facilities weren't clean, the swill wasn't that digestible for the cows, and a lot of problems came about from that. It was that poor quality milk that led to the pasteurization process. Yes, there have been cases off and on where raw milk can cause problems, but they stem from doing something unnatural for the cow. 

CB: You know, I have to say that my own experience with drinking raw milk has been amazing. I feel so much better, and people have commented that my skin looks better too. For me, it's like medicine. 

SO: I've received the same comments, and Margaret has become a chapter leader for the Weston Price Foundation, and we're pretty much following that diet. It's very much about eating whatever you like and not avoiding fat. We've been doing that, and I feel like I've responded tremendously. Of course, we're talking about fats that come from natural, not processed, foods. 

CB: This is very much the philosophy of Michael Pollan who wrote Omnivore's Dilemma and In Defense of Food: An Eater's Manifesto. It's about eating whatever you like as long as it's natural and not avoiding certain food groups simply because someone says they're not good for you. 

Stuart, I'd like to get back to you and your health. A couple of years ago you were diagnosed with cancer and went on a journey that many of us who are cancer survivors are quite familiar with. How did that journey change you? 

SO: Well, it did. I looked at life quite a bit differently afterward. My oncologist told me that my chances of not having a recurrence were much better if I were to have chemotherapy. So I did, but it nearly killed me. Actually, I didn't get through it all because of that. At that time I had a business, and I said, "We're getting out; I'm going to sell the business, and we're going to do what we want to do." We weren't sure what we were going to do, but we started to evolve back into a farming situation. Since we have started doing what we're doing now, life has become so sustaining and so inspiring, especially all the people we meet. The illness really changed my thought process. 

CB: More recently you've had a spike not only in your raw milk business but with an increase in customers who want to buy organic eggs, butter, cream, organic meat, and vegetables. What do you make of this surge in people who want to buy these products? 

SO: I think sometimes that's easy to analyze, but on the other hand it isn't. A big thing for us is being able to advertise the raw milk. Also, if you look at the demographics, many of these people are folks who have moved here from other places. And we are more left of center than some states, although I myself came from a family that was pretty far on the right. These folks have moved here, and they have an appreciation for our quality of life, and they're probably more educated and informed, and they know that food is extremely important. 

The difference in the quality of the food from a farm where it's been raised naturally and what you buy in the store-there's no comparison in the flavor. 

MO: We've had several people say that they used to be vegetarians, but since they know where the meat is raised and how it's being raised, they're eating meat now. 

CB: And so you sell meat? 

SO: Yes we sell chicken and pork. We may have some veal to sell by February. 

CB: Margaret, I wanted to ask you about the workshops you've been conducting. Why are you presenting these workshops? What has been the response? 

MO: We've mostly done a series on raw milk, and most of that has been cheese making. There again we did a workshop this summer through NOFA, and it was called "Family Cow". We were amazed at the amount of interest that generated-probably 30 people from all over the state. The interest in cheese and butter-making has been huge. There are lots of things to do with raw milk besides drink it, and we wanted to demonstrate that. We want to have seasonal workshops with another one coming up in January, probably focusing again on cheese-making. We also want to share some knowledge about broth-making and some of the old time farmer kitchen things that people just don't do so much of anymore. There's an art to doing it well. 

I'm just so interested in local food and food that's been raised in a thoughtful, healthy manner. I'm interested in peoples' health, and I feel badly for people who just go to the store and buy prepared food and don't know the joy of cooking-the joy of eating very simply and nutritiously. 

CB: You've also become a chapter representative for the Weston Price Foundation. Please tell us what the Weston Price Foundation is, and then tell us what you'll be doing for the foundation. 

MO: The Weston A. Price Foundation's president, Sally Fallon, has a wonderful cookbook called Nourishing Traditions. This is all based on the experiences of Weston Price who was a dentist who saw in his practice a generation of people who had very healthy teeth and pallets, and then he started seeing in their children and their children's children that something was changing, and the teeth were becoming crooked with many more cavities, so he decided to travel the world and research diets. He traveled to many different places where people hadn't been exposed to industrialized food, and he found that what people were eating made a huge difference in their dental health. Although the diets of these people varied, they were generally diets of natural foods and were high in fats. The foundation is very much about bringing back traditional ways of raising and cooking food.

As a chapter leader I'll be trying to organize a group of people in the area to help create a resource list of organic farms, holistic practitioners, and others who support natural eating and food production. 

CB: In one of our conversations recently you commented that you're both at an age where people should be slowing down, taking it easy, traveling, and not working so hard, but you find yourselves doing just the opposite. Would you comment on this? 

SO: Well, I just couldn't slow down. I want to slow down naturally. An old farmer I used to know said, "You can tell when you're getting older when you have to go back out after lunch to finish morning chores." So we slow down naturally, but it's hard to imagine not doing the type of work that we're doing. I would not be happy traveling, camping-a lot of the things that people enjoy in retirement. Actually, this is my retirement. Life doesn't get any better; these are the best years right now as far as I'm concerned-doing good things for the land and for people. 

We're part of nature; we're part of the land, and when you have that feeling, it doesn't get any better. That's not to say it doesn't get discouraging sometimes. 

MO: Agriculture is in one's blood. 

CB: I'm asking this question of both of you now: What is your passion? What excites you and keeps you doing what you're doing? And if I may ask, what is calling you right now? 

SO: Farming is my calling. I'm not a social person. I can stay right here for days, but it's so wonderful having people come, coming to get something they want, and the conversation is wonderful. This life that I'm living motivates me and brings me meaning. It's also a very spiritual feeling. I feel close to the land. I love the woods; I love cutting firewood; I love sugaring-I just love it in the woods. Sometimes when I'm having a hard time about whatever, I have to go to the woods. 

MO: I have really found meaning and purpose in what we're doing. I love food and everything about it. I love food that I grow; I love preparing food-in fact, I almost have to have a relationship with food, and if I can give that love to somebody else, that really makes me feel good. It feels so good to get back to raising all of our own stuff and being self-sufficient. It has a wonderful purpose for me these days that it didn't have twenty years ago. I feel really blessed to have had all the experiences I've had with cooking, baking, gardening, and farming. I also feel really grateful to be living in Vermont and for all that's happening here. 

Summary: As I left Turkey Hill Farms after this interview, I felt what I always feel when I leave there-so blessed and fortunate to know the Osha's and so filled with awe for the work they are doing. My wish for everyone reading this conversation between them and me is that you will be inspired by it to create similar networks in your local community that sustain the land and animals and people around you. My challenge to you-to all of us, is to continue nurturing the "dying" way of life by fortifying your own food security and that of your local place. 

Please visit the home page of Turkey Hill Farms where you can purchase Loving A Dying Way of Life. Stuart and Margaret Osha may be contacted at: msosha@gmail.com

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Carolyn Baker, Ph.D. [send her email] is an adjunct professor of history, an author, and former psychotherapist. Read her book, U.S. HISTORY UNCENSORED: What Your High School Textbook Didn't Tell You. See her website at http://www.carolynbaker.net/. 

More Articles from Carolyn Baker

Bailout-a-Go-Go

Keeping track of the ever mutating bailout debate is becoming increasingly difficult. With the Federal money spigots now thrown wide open, and with no one of influence advising restraint, the only debate is where to direct the torrent. During the past week, the talk began with Detroit and Citigroup, but by Friday had shifted to a massive "stimulus package" to bail out consumers. The early buzz includes some very large figures. But first, a bit of a recap:

On Monday, the $300 billion Citigroup bailout took center stage. Once again Henry Paulson decided to throw taxpayer funds into a bottomless Wall Street money pit. Shockingly the Citigroup plan did not seem to demand any serious curtailment of lavish salaries and bonuses. Paulson's shameless largesse to his Wall Street friends has elevated financial industry bonuses to entitlement status.

"Remember Lehman" now seems to be the rallying cry to justify any and all financial bailouts. But Lehman's demise is in no way responsible for our current problems, and the decision to let them fail is the only bright spot in otherwise consistent record of policy mistakes. We bailed out Bear Sterns and AIG, and what did that get us?

The Citi bailout greatly increases the chances for a similarly misguided auto industry bailout. After all, if taxpayers ensure multi-million dollar bonuses for Citi executives, how can they refuse similar help for eight-figure auto executives and $70 per hour unionized auto workers?

It was inevitable that the size of these bailouts would up the ante for an economic stimulus package aimed at consumers. Not missing a beat, Barack Obama announced a $700 billion dollar fast-tracked package that will likely exceed $1 trillion before passage. (Trillions are the new billions.) The plan must be sending shivers down the spines of our foreign creditors who are expected to foot the bill. Add this cost to the hundreds of billions of prior stimulus and bailout packages, and the cost to our creditors is quickly heading into the multi-trillion dollar range. It can't be long before they cry uncle and repeat the words of prizefighter Roberto Doran "No Mas."

With so many familiar faces on his new economic team, Obama signaled his intention to "hit the ground running." With the possible exception of Paul Volcker, all of his top appointees share the view of the Bush administration that the root causes of our economic problems lie in the reluctance of banks and other financial institutions to lend. As a result, we can expect a virtual continuance of current policy.

It is no surprise therefore that both Democrats and Republicans offered healthy "huzzahs" to Henry Paulson's latest bazooka: $200 billion to purchase securities backed by auto, student, and credit card loans. It is hoped that with this transference of risk to taxpayers, lending institutions won't be so cautious, and the credit-fueled American economy can thrive anew. This is unalloyed insanity that can only lead to total ruin.

Paulson stated clearly that he would like the Fed to print as much money as it takes to revive the economy. Unfortunately the only industry likely to be revived by such policies is printing itself. But even this will not help the United States as the majority of our printing equipment is imported from Switzerland.

But what if the root of our financial problem is that American consumers have already taken on too much debt? By trying to force feed even more credit down the throats of already overly indebted Americans, Paulson's plan will only weaken the economy further.

Building on the groundwork laid by Paulson, the massive stimuli that will likely be pushed through by Obama and an overly eager Democratic Congress will further impede any real recovery. By swallowing up all available capital, spending to create government jobs will destroy far more private sector jobs. Rather than expanding government and increasing the national debt, policy makers should be thinking about doing the opposite.

The brutal truth that no one in Washington dares acknowledge is that our systemic economic problems can only be solved by a reduction in consumer borrowing and an increase in savings. We must repair our national balance sheet and a painful recession is the only path to achieve this. By interfering with the market's attempts to bring this necessary change about, all the proposals currently coming from Washington or bubbling up from think tanks and Nobel prize-winning economists, will only exacerbate the imbalances and lay the foundation for even greater losses and a larger crisis.

A short-run reduction in GDP is a sacrifice we must be willing to accept. If we swallow this medicine now, in the long run we will have a sustainable rise in GDP as higher savings leads to increased capital investment, greater productivity, and eventually a lasting increase in consumption.

The Neo-Alchemy of the Federal Reserve

As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems.  Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is "just a start," more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.

The updated total bailout commitments add up to over $8 trillion now.  This translates into a monetary base increase of 75 percent over the last two months.  This money does not come from some rainy day fund tucked away in the budget somewhere - it is created from thin air, and devalues every dollar in circulation.  Dumping money on an economy, as they have been doing, is not the same as dumping wealth.  In fact, it has quite the opposite effect.

One key attribute that gives money value is scarcity.  If something that is used as money becomes too plentiful, it loses value.  That is how inflation and hyperinflation happens.  Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation.  Most of the founding fathers did not want a central bank.  Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system.  It gives one entity far too much power to control and destabilize the economy.

Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard.  In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. 

People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System.   Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today's bankers are poisoning the economy with accelerated fiat money creation. 

Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as "God's money", as only God can make more of it.  Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans.  In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.

The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth.  Creating gold from lead would have cheapened it's status to that of rhinestones or cubic zirconia.  It is unnatural and dangerous for paper to be considered as precious as a precious metal.  Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.

Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees.  I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.

Ron Paul is a republican member of congress from Texas.

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What is a Dollar Bill Worth?

Open your wallet and take a look at the money you have inside. Hopefully you have some metallic coins and slips of paper (actually its linen). Take a closer look. At the top in large letters it reads: 'FEDERAL RESERVE NOTE.'

The Federal Reserve is the central bank of the United States. It issued the money you hold in your hands, although the Department of the Treasury actually printed it. Although it has the word 'Federal' in the title, the Federal Reserve is a private bank or company delegated the power by Congress to manipulate the money supply. It is no more 'federal' than Federal Express or Wal-Mart for that matter. More on this later.

Now, far more curious is the use and definition of the financial term 'note.'

Note - A written promise to pay a specific sum of money on a certain date. A written pledge to pay.

Interesting. A 'Note' is actually a form of Debt, i.e. you are owed its worth by the United States government. The linen also has text "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE." 'Legal Tender' is a legalese that means money that cannot be refused by law when you are paid or go to buy something.

But what is this note for debt actually worth? A common fallacy is that the worth of the dollar is indirectly tied to the gold at Fort Knox. Dead wrong! Another is that the dollar is tied to the nation's GDP/GNP/purchasing-power parity. There is some truth to this, as the dollar's worth 'floats' or fluctuates with the exchange rates of other currencies like the Euro and Yen, but what is a dollar actually worth?

Well, fortunately, the Federal Reserve is kind enough to tell us. Visit this Fed link entitled "What is a Dollar Worth?"

There is a nice formula: "If in [year], I bought goods or services for [$1.00] then in [year], the same goods or services would cost [$x.xx]"

Try the year 2008, how much was a dollar worth in 1913? Holy smokes, just a nickel!

Well perhaps that was just because it was way before you were born. Try the year 2008, how much was a dollar worth in 2000? Just eighty cents worth of goods and services? That kind of sucks, and 8 years isn't all that long for the value to drop by 20%! Something is a little fishy here.

Of course the answer for this debasement of the currency, or loss in value, is inflation.*

What is inflation then? Well picture the United States, and imagine that $100 is the total worth of our economy. However, if we print and additional $100 and so increase the money supply from $100 to $200, then the price of everything will double. After reading Rothbard's work from Part 1, one discovers that inflation is defined as any increase in the economy's supply of money not consisting of an increase in the stock of the money metal. In other words, inflation is NOT rising prices. Rising prices are merely the effect from increasing the money supply, or "printing more money."

However, the second part of Rothbard's definition doesn't really apply, as I wrote above that there is no tie between the US dollar and a "money metal." More on this in Part 3. To prove this point, the Federal Reserve reports:

"The government still holds millions of ounces of gold and silver, but citizens and foreign governments can no longer exchange their US paper money for it. The government's gold and silver are considered valuable assets rather than forms of money. Today's coins and paper money are backed by the "full faith and credit" of the US government.

If that makes you a little uneasy, try the following exercise. Put a ten-dollar bill and a blank piece of paper on a tabletop, and ask people to choose between the two. Chances are everyone will choose the ten-dollar bill. Why? After all, neither the ten-dollar bill nor the blank piece of paper is backed by gold or silver.

The difference is that people all over the United States will accept the ten-dollar bill as payment if you want to buy something. But you would have a hard time finding someone willing to accept the blank piece of paper. That's because the ten-dollar bill is backed by the promise of the United States government, and to most people, that promise is as good as gold." - "Banking Basics", Federal Reserve of Boston, revised 1/2007

So "full Faith and Credit" is the answer. Faith is just the belief that the government will pay you back - like the Fed excerpt hints, Faith alone in the value of the money is certainly not acceptable. Credit is a different matter, and actually the only reason why people would have Faith in the first place is they trust the government's promise to back it up. As John Williams, the renowned economist from shadowstats.com, testified to Congress on July 24, 2008:

"The relative value of a nation's currency is a measure not only of its trade position, but also of global capital flows that mirror how the rest of the world views that nation's economic strength, financial system integrity and political stability. Underlying fundamentals that drive the relative value of the US Dollar, against the currencies of its major trading partners, could not be much more negative."

Williams brings up an important point, which is that in today's monetary system all currencies float against each other, although many Asian countries, for instance, peg their value to the dollar. A "strong dollar" is indeed very important as a weak dollar would enable other foreign countries to have a higher purchasing power and buy up American goods and assets cheaply - boosting our exports but most importantly depressing our purchasing power domestically. Also, the cheap imported goods from China and oil will become relatively more expensive for us as we buy in American dollars, but other countries' purchasing power will be stronger and it will be easier for them to outbid us for the goods.

I need to pause here for a moment to describe just how important Purchasing Power really is. If you have $100,000 in 2000 and can buy 10 cars, and have $100,000 in 2010 but can only buy 1 car, you may have the same amount of dollars, but you have lost 90% of your purchasing power. So please rid yourself of the preconception that your Wealth is calculated by how many Dollars you have (and that your home is worth as much as you think it is). Real Monetary Wealth has and always will be determined by your Purchasing Power, in other words, how much you can Buy. Real Materialistic Wealth is a combination of your Monetary Wealth combined with all of your property and assets.

Williams goes on to present some solutions to strengthen the dollar but also reviewed a dollar portfolio that "could not be much worse:"

• "Trade Balance (Negative): Despite recently reported narrowing of the monthly trade deficit, the US trade shortfall remains unprecedented in its relative global magnitude
• Economic Activity (Negative): US business conditions are deteriorating, with the economy clearly in a recession in all but formal declaration
• Inflation (Negative): US inflation has risen sharply, with the CPI-U up 5.0% year-to-year as of June; broad money growth is highest since 1971; double-digit inflation is possible by early 2009
• Fiscal Discipline (Negative): The already expanding US federal budget deficit likely will be worse than expected, thanks to the developing recession
• Interest Rates (Negative): US interest rates are low, with Federal Reserve policy perceived to be on hold per current market expectations
• Political/Systematic Stability (Negative): The President's approval rating (currently low) is a fair indicator of currency trends; the banking crisis is a negative"

Later in this series we will delve more into the above more, but for now just note that each parameter that influences the dollar is fairly soft - there is nothing concrete that stipulates exactly how much a dollar is worth. Still believe the Fed's claim that the Dollar is "good as gold?" Even if there is really no gold or other tangible backing?

Let me now introduce the US Dollar Index (USDX). The USDX is a weighted basket of six (6) freely floating currency exchange rates with the US dollar - the Euro, Yen, Swiss Franc, British Pound, Swedish Krona, and Canadian Dollar. The index was originally set to 100.00 when the index was started in 1973, so this reflects the average value of the dollar relative to that period. The USDX is computed 24 hours a day, see it live here.

Source and formula

Next, from the chart below, the USDX is in a major bear market. Having reached a high of 120.97 in July 2001, the USDX is now slightly above its all-time low of 71.33, set in April 2008. Combined with all of the factors Williams delineated above, there are no positives and only negatives, so it is highly likely that the USDX will continue downwards in the future, the only unknown is whether this will be sudden or gradual. Let's reflect for a moment on the loss of our wealth.

Since 2001, the Dollar has lost 41% of its overall purchasing power versus the USDX basket.

Since 2001, the Dollar has lost 18% of its domestic purchasing power to inflation.

Source

As it would be quite difficult to even counter this loss by saving the dollars in a bank, surely the speculations or investments into Wall Street, into 401k retirement "savings" ** accounts, index mutual funds, and the like would yield a better return? Only if you were smart and/or lucky!

Source

On January 14^th, 2000, the Dow Jones hit a contemporary high of 11,723 with the USDX at about 105. In October 2007, the Dow set its all-time high of 14,164 - in dollars, that is. The USDX was about 75. So if priced in USDX units, the Dow was only worth about 10,100, or factoring in just domestic inflation about 11,600 in year-2000-dollars.

And as of August 1, the Dow is at 11,326 with the USDX at 73.36. Price the Dow today in the USDX, and it lost 30% from 2000 - it is worth just 7,900 in 2000's dollars. Inflation adjusted the figure is 9,100. Although these figures don't factor in dividends, investing in the Dow (or S&P 500) was unable to generate extremely high gains on a purchasing power basis, as is generally believed.

So, most Americans have been actually been robbed in this decade - whether a saver or investor or speculator - due to the loss of purchasing power in the dollar due to the drop in currency exchange rate and money supply inflation. Anyone upset?

To succinctly answer the question posed, a dollar is worth whatever Americans and the international community believes it is worth per the six factors Williams listed above. There is no hard way to calculate its true purchasing power, which fluctuates at all times, and increasing the money supply (or inflation) is debasing the dollar at significant rates. A dollar bill's intrinsic value is no higher than any other slip of paper, in fact from the Fed's comparison above, the blank piece of paper may be worth more, since it's a commodity that can still be written on.

It would be of great value to read Rothbard's "What Has the Government Done with Our Money?".

The next article will review a basic question - what is money anyways? What are its properties?

* On the same page there is a link 'Consumer Price Index and Inflation Rates, 1913-' where the column on the right gives the inflation rate for the year. However, the CPI calculation method, particularly in recent years is under dispute. John Williams of shadowstats.com believes the current inflation rate is over 10%, not below 5%. If you regularly visit gas stations and supermarkets, you would probably agree less than 5% is not possible.

** Actually even the true meaning of what savings really are have been lost, as the common man has been driven to the stock market for higher returns, see aside here.

Technorati Tags: Federal Reserve, Central Banking, Economics, Money, Monetary Policy

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The Rights of Women as Casualties of War

Qurban-Bibi and Nahil Abu-Rada are two women, one Afghan and the other Palestinian, who made news with similar tragedies. But their losses also helped further delineate the plight of millions of women in war zones and poor countries.

The United Nations news service reported on the troubles of Qurban-Bibi, a pregnant woman who simply needed to reach a hospital. Doctors had instructed that she must deliver in an equipped medical facility, considering her previous Caesarean delivery. The desperately poor husband and her brothers opted for a delivery at home, citing the unaffordable taxi ride. The woman almost bled to death. When the delivery turned for the worst, the family rushed her to Faizabad hospital in a nearby province. Her life was saved, but, evidently not that of her baby.

Nahil's story also fails to deviate from the ever-predictable norm. The pregnant Palestinian woman was joined by her family on their way to a hospital in the West Bank city of Nablus. The hospital was so close, yet so far. Between their ambulance and salvation was an Israeli army checkpoint, Hawara. "Nothing helped. Not the pleas, not the cries of the woman in labor, not the father's explanations in excellent Hebrew, nor the blood that flowed in the car. The commander of the checkpoint, a fine Israeli who had completed an officers' course, heard the cries, saw the woman writhing in pain in the back seat of the car, listened to the father's heartrending pleas and was unmoved," reported Israeli journalist Gideon Levy in Haaretz. He added, "Nahil Abu-Rada is not the first woman to lose her baby this way because of the occupation, and she won't be the last."

The bearings of the painful losses of Qurban-Bibi and Nahil bring to mind two recently published reports pertaining to the rights of women and gender equality around the world: The State of the World Population 2008 report, produced by the United Nations Population Fund and The Global Gender Gap Report, published by the World Economic Forum.

The State of the World Population aims at development strategies that are sensitive to the uniqueness of particular cultures, for it found that culture is central to people's lives as are 'health, economics and politics'.

As for the Global Gender Gap report, it was a largely statistical study co-authored by researchers from Harvard and University of California-Berkeley, and published by the World Economic Forum. Researchers examined definite factors, such as jobs, education, politics, health, etc, to determine how improvements, or lack thereof in these areas have affected, or failed to affect, the equality between the sexes in 130 countries, that represent 90 percent of the world population. The outcome was predicable for the most part, but with notable deviations. "Out of 130 countries, Canada ranked 31 while the United States came in at 27. Canada also ranked behind Namibia, Sri Lanka, Mozambique, Cuba, Trinidad and Tobago, Lithuania and the Philippines, among other countries," reported Canada's Globe and Mail.

The reports raise many questions, present many challenges, but on their own fail to address the struggles and tragedies of women like Qurban-Bibi and Nahil Abu-Rada.

The Global Gender Report ignited media frenzy more appropriate for a beauty contest - winners and losers - not a pressing issue that continues to victimize millions of women worldwide. This was hardly the intent of the report, one would fairly assume. Expectedly, it was later turned into an opportunity to settle political scores, stereotype religion and, at times, disparage entire cultures.

The State of the World Population was largely sensible in its view of culture: non-Western cultures were not simply chastised as the problem, but cultural sensitivity was recommended as part of the solution.

But addressing women's rights and cultural patterns (as if these issues are not unique in time and space) without examining the underpinnings of the inequality is also a mistake.

Culture is hardly the summation of rational choices made by individuals in a specific time and easily demarcated space. It's an innate collective response to internal and external factors, changes and events - political, economic or social. Chances are Palestinian women in villages surrounded by Israeli checkpoints tend to deliver their babies at home or in an unfit local clinic, a natural response to risking losing one's baby altogether. Such a practice could eventually develop into a cultural pattern.

Many Afghan women are caught between the lethal occupation of foreigners and the extremism and vengeance of the Taliban. Early marriages are often the only available opportunity for women in some parts of the country, once they reach a certain age, sometimes as young as 9-years-old.

The same can be said about Iraq, where women, who comparatively achieved high status in pre-war years; have since endured untold humiliation. Thanks to the US 'liberation' of their country, they now constitute a large percentage of regional prostitution, a phenomenon alien to Iraqi society of yesteryear.

This hardly means that the suffering of women is always the outcome of foreign military interventions - masked as 'humanitarian' in some instances - nor does it render blameless local cultures, outdated customs and interpretation of religion. But what is missing from the reports, and subsequent analyses is how conflict, war and military intervention often jeopardize, more than anything else, the rights and welfare of women.

The issue of women's rights is a pressing one, not just because of the horrifying statistics. (Women and girls are the poorest, least educated and most victimized the world over.) But also because no real progress, development or sound governance can ever take place when half of the society is marginalized and mistreated. Equality between the genders is not an act f virtue, but also a sound strategy for a brighter future for any nation, rich or poor. To address the issue correctly, studies and reports must delve into the roots of women's suffering, and not be satisfied with numerical indicators that tell half of the story.

Technorati Tags: Women, Rights, War, Casualties

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Ramzy Baroud [send him email] is an author and editor of PalestineChronicle.com. His latest book is The Second Palestinian Intifada: A Chronicle of a People's Struggle (Pluto Press, London). Visit his website at www.ramzybaroud.net.

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