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Edited on Mon Oct-17-05 03:08 PM by Petrodollar Warfare
...one more note regarding Pitt's excellent essay are the hidden macroeconomic issues regarding UN Resolution 1483. Quick recap:
I hypothesized way back in December 2002 that the Bush administration sought to topple Saddam in 2003 and immediately reconvert Iraq’s oil export transaction from the euro back to the dollar. Regarding Iraq, the facts speak for themselves. Immediately after President Bush gave his “Mission Accomlished” speech, the US, UK, and Spain introduced UN Security Reslolution 1483, which passed on May 21, 2003. The critical exert that gave U.S. conplete control of Iraq's oil revenue - and quietly reconverted oil sales back to dollars:
"Pursuant to Resolution 1483 and this Regulation, it is understood that the Federal Reserve Bank will be requested to open and maintain on its books an Oil Proceeds Receipts Account (the "Receipts Account") for the initial receipt of proceeds of all export sales of petroleum, petroleum products, and natural gas from Iraq." (emphasis added)
Just as hypothesized, after toppling the Saddam regime, the Bush administration quickly reconverted Iraq’s oil transaction currency to the dollar....
...well, regarding Karen, the best part of my book is actually the Epilogue, for which I am honored and grateful...(here's some exerts of her brillant and witty writing)
Epilogue by Lieutenant Colonel Karen Kwiatkowski (retired)
In a lifetime of taking chances, Saddam Hussein’s biggest gamble occurred in late September 2000 when he walked out of a government meeting and announced he would henceforth sell his oil in euros, not dollars. This was seen as a political move; the euro had been down, struggling against the dollar and other currencies. Saddam would pay a financial price for this decision.
In return, he would perhaps curry favor with the euro-based suppliers of his Oil for Food imports, France and Germany, in a move not likely to concern the euro-ambivalent, but US-wary, Russia and China. Certainly the currency switch was a slap at the American and British governments. It probably seemed to be not only a cost-effective tactic, but also an efficient one, given the dearth of Iraqi military and economic capacity after over a decade of sanctions and US/UK.
Saddam’s gamble didn’t work out this time. He, his family, the Ba’ath Party that had ruled Iraq since 1968, 24 million Iraqis, France, Germany, Russia, China, Iraq’s neighbors, and the United Nations continue to pay dearly for this choice.
Saddam’s decision was ignored, buried in the petroleum business journals and the odd European publication, a blip in the stream from selected wire services. It was disregarded, just as Americans themselves missed the signs that the first part of the 21st century would be known by political scientists as Neoconservatism Ascendant.
William Clark has wisely and patiently explained how and why Saddam’s choice accelerated the current America military quagmire in Iraq. Clark has carefully illuminated how the Washington establishment, unaccountable to citizens and shrouded in arcane motivations, has willfully compromised the ideas of liberty and freedom that we so cherish in this country.
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In my 20th year of military service, from May 2002 to February 2003, I was a staff officer in the office of the Secretary of Defense, Undersecretary for Policy, Near East and South Asia Directorate (NESA). Our deputy undersecretary was Cheney’s hand-placed acolyte, William Luti. Our undersecretary for policy was the ardently pro-Likud and strikingly dim Douglas Feith; his bosses were Deputy Defense Secretary and neoconservative ideologue Paul Wolfowitz, and old Cheney pal and establishment insider Defense Secretary Donald Rumsfeld. The machinery for a new kind of American empire was in place with the odd neoconservative at the State Department and a former Chevron board director Condoleeza Rice as national security advisor to George W. Bush, himself quite familiar with the financial vulnerability end of the oil business. Fueled by unchallenged military capability, this group was further energized by the uniquely ignorant hubris that comes from never having worn a uniform. When I came to this assignment, I was unaware that neoconservatism was our foreign policy impetus. Co-workers told me there was a dangerously politicized environment in this part of the Defense Policy secretariat. I was advised to learn about neoconservatism and Leo Strauss in order to understand these strategy and policy choices and the role of propaganda and misdirection in pursuing them.
As William Clark has pointed out, neoconservative strategy — using overt military actions to pursue energy or financial policies — has two main flaws. First, the enabling political propaganda that may be successfully directed at Americans usually remains transparent to the rest of the world, and the odd American as well. Secondly, the aftermath of our invasion and occupation of Iraq, a country we had militarily humiliated in 1991 and militarily and economically punished since, would predictably provide a complicated environment on the ground. This would be necessarily unsupportive of the known neoconservative objectives of oil production, access, and military presence.
That the Bush administration apparently had no plan to change this environment of predictable resistance to better support our wishes is beyond irresponsible. But it is understandable. The philosophy that calls for American military dominance and control of (not just access to) global energy stocks, clothed in language of liberation and human rights, truly has little insight into either military strategy or liberation. Compounding the widespread ignorance of its advocates, the philosophy itself is unconstrained by basic morality.
It became clearer to me that the oaths taken by career military officers and NCOs, and similar commitments made by government employees and political appointees, to serve with honor, lawfully, respecting and preserving the Constitution of the United States, had been corrupted. Key neoconservatives, such as Paul Wolfowitz and Abe Shulsky, the director of the Orwellian-named Office of Special Plans (OSP), seemed to spend far more time in creative and urgent justification for the invasion of Iraq than in considering the legalities or moral correctness of propagating fearful falsehoods to the Congress and the people in order to “get” a war.
The recent revelation of an ongoing FBI investigation, since 2001, into possible espionage and other untoward activities in this part of the Pentagon is only one of many red flags indicating that our current foreign policy, particularly our neoconservative policy in Iraq, is defective and unserviceable.
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Tragically, in 2023, 20 years after the American invasion and occupation of Iraq, historians will draw similar conclusions about that unjustified, costly, and disastrous intervention.
Vietnam is often discussed as a parallel to Iraq these days, but it is a superficial one, with one exception. Then as now, we witnessed a media too willing to serve as a mouthpiece for Republican and Democratic administrations alike and too able to ignore the history, reality, and hypocrisies of our approach and objectives in Vietnam. Shortly after the Tet Offensive, Walter Cronkite was both commended and scorned for stating on the CBS Evening News in February 1968 that “We are mired in stalemate.” Any assessment of Cronkite’s honesty or venality ignored the fact that, long before 1968, the Pentagon understood the condition of stalemate and politicians were unwilling or unable to withdraw American forces from Vietnam until 1975, seven years after that CBS broadcast and after tens of thousands more American troops had died there. As we have seen in our recent Iraq experience, the Pentagon’s steadfast reliability in the face of amazingly corrupt and incompetent policy-makers and media collusion with the Washington party line are still with us. As a result, men and women still die for the unclear objectives, impossible dreams, and incorrigible greed of those inside the Beltway.
Today two generations of Vietnamese struggle to create their own reality, made possible only after our complete military withdrawal. Today, our administrations encourage trade with, and travel to, an emerging capitalistic and peaceful Vietnam. Could this be an Iraqi future? If we leave now, it indeed could be. But if neoconservatism really is ascendant, we are staying, and thanks to Petrodollar Warfare, you can begin to understand why.
The United States is facing crises — an energy crisis, a national fiscal crisis, a petrodollar crisis. A phase in our modern American history is ending, and something new will be either forced upon us or chosen by us, or some combination of both. Neoconservatives, accepting a zero-sum game and having a startling lack of imagination, believe that we need only reject our classical liberal and republican traditions and forcibly change others, to the extent of taking over foreign oil-rich countries while intimidating fellow oil-importing countries. America is a great nation, but the world is far bigger and far more resourceful than George W. Bush and the neoconservatives can appreciate.
The solid performance of the euro both before and since the invasion of Iraq and the emergence of a competing petroeuro continue to evolve, seemingly unaffected by our adventure in Iraq and, ironically, even encouraged by it. The economic marketplace seeks comparative value in currency, in businesses, in policies, and in countries. Thus the millions of economic and financial transactions worldwide persist and eventually prevail, while Washington neoconservatives nervously finger their beads and seek to implement a global command economy.
Thomas Jefferson clearly envisioned the disaster that would befall America if media were restrained, if citizens were uninformed and too trusting of government proclamations, and if the excessive political influence of big business and special interests were metastasized in the corridors of political power and at the door of the US Treasury. While Jefferson had some familiarity with the Jacobins in revolutionary France, it is doubtful he envisioned the neoconservative persuasion and its inane and warlike approaches to solving critical problems of excessive debt, decades of a military “subsidy” artificially depressing domestic oil prices, and currency collapse. He might have addressed our current and coming crisis as an oil-dependent nation in terms he knew and loved best — classical liberal values of free speech, free trade, and free action, constitutional restraint of centralized government power, strict limitations on executive power, trust in the creativity and productive power of Americans themselves, and possibly, the occasional usefulness of refreshing “the tree of liberty with the blood of tyrants” — tyrants he fully expected to be hiding out in a city called Washington.
*****
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