What's Left

February 15, 2003

Scammed!

By Stephen Gowans

You're being scammed. Lied to, deceived, cheated and taken for a sucker.

Your government is doing it to you, industry is doing it to you, and the media is playing you for a fool.

It's a big con game, where your sweat, and your tax dollars, make rich people richer.

The scam has many faces, but it usually involves getting you to put up money that finds its way into the pockets of the wealthy who run the defense industry or who make bad loans to despots in Third World countries or who need investment barriers smashed down abroad to expand their portfolios and beef up their bottom lines.

Military aid to foreign countries, NATO expansion, deficits run up by tax cuts, wars, tanks patrolling airports, even the IMF, are all part of a scam to transfer wealth from you and me to a small elite at the top.

Military aid. Every year billions of taxpayer dollars are pumped into the US defense industry so that it can sell arms to countries like Israel, Turkey and Colombia. When it's said that $x billion in military aid is being given to one of these countries, what's really being said is that $y billion worth of orders are being sent to Lockheed-Martin, Raytheon and other US firms to make tanks, missiles, helicopters and jetfighters.

But it isn't Israel, Turkey and Colombia who are buying these arms. They're being bought by US taxpayers for them, so that Israel can drop one-ton bombs on apartment blocks in Gaza City, so Turkey can continue its program of ethnic cleansing against the Kurds (the same Kurds Washington says it's protecting from Saddam), and so that Colombia can wage war against guerillas, to protect a pipeline owned by wealthy American investors that runs through the country.

For the people who run Israel, Turkey and Colombia, and in the boardrooms of defense contractors, it's win-win. But for Palestinians, Turkish Kurds, and Colombian peasants, and for the ordinary people who foot the bill for the bullets and bombs and missiles, it's more like lose-lose.

The IMF. The IMF has received a lot of bad press in recent years, almost all of it well-deserved. It's said that the IMF bails out poor countries that can no longer pay their debts. But for every debt, there's a creditor, and the creditor, more often than not, is a bank that has lent money to a poor country on the expectation that it will be repaid in full, with generous interest for...well, for doing nothing more than lending money. It's the creditor, just as much as the debtor, who is being bailed out -- by you and me. We're the people who furnish the IMF with the funds it needs to operate.

It's a good deal for the wealthy. They use their wealth to generate more wealth in the form of interest, and with the IMF, it's risk-free. If the debtor can't pay, the IMF transfers money from you and me, in the form of taxes, to the creditor, and then imposes harsh conditions on already impoverished countries as a condition of the bailout.

For the citizens of the debt-troubled countries, who find their basic services slashed and life a lot harder, it's a bad deal. And for those of us who foot the bill, what is gained? But for the bailed out creditors, there's nothing so sweet as the sound of IMF.

Tax cuts. The Bush administration is about to run up the largest budgetary deficit in US history by chopping taxes on the rich, again. At the same time, it will pitchfork money into "national defence," or, to put it more precisely, it will pitchfork money at the wealthy who own and control America's vast defense industry.  The wealthy, of course, will make off like bandits. Ordinary working Americans -- as usual -- will do all the heavy lifting, furnishing Washington with the tax dollars to be pitchforked.

That's great for the wealthy, for obvious reasons. But it's also a boon in another way for millionaires, corporate CEO's, and the owners of big businesses.  If the government's outlays can't be covered by tax revenues, the government will have to issue bonds. And guess who buys the bonds, and therefore, collects the interest? The wealthy. In other words, rather than taxing his rich friends to cover the government's expenses, Bush is going to borrow money from them and then pay them interest on the money he could have raised by not cutting their taxes, and, preferably, having raised them. Bush's plan is great for those who reap the reward of generous interest payments on the accumulating debt, but it's not so great for those who pick up the tab -- average, working Americans.

By the way, at some point, Bush, or his successors, will have to deal with the debt. It's almost certain that the way the problem will be dealt with is by cutting expenses. The cuts won't be to  military expenditures--they keep defense industry dividends rolling in--but will almost certainly be targeted at the already anaemic social expenditures that, you, not corporate CEO's, are likely to benefit from.

NATO expansion. As more and more countries are folded into NATO and other US-led military alliances, you would think the threat to the US and its allies would diminish, not increase. But as new countries are absorbed into the US fold, more demands are made of US allies for stepped up defense spending. There's always some new menace on the horizon that must be dealt with now.

It turns out, however, that it's never good enough for American allies to buy tanks and guns and missiles from domestic firms. They must buy these things from American firms, to ensure their militaries are equipped with hardware that meshes with the Pentagon's (which, of course, pursues a buy-American policy.) That works out well for America's "masters of war," but what of the people who live in the newly integrated NATO countries?

War. Apart from keeping Lockheed-Martin and other US defense firms afloat on a rising tide of profits, vigorous defense spending serves another purpose: it equips a military whose object -- notwithstanding the laughable claims about fighting terrorism and promoting democracy -- is to open foreign markets, foreign resources and foreign labor to exploitation by American investors.

"The hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps," remarked New York Times columnist Thomas Friedman. He added, "McDonald's cannot flourish without McDonnell-Douglas, the designer of the F-15." That might be why "free trade," "investment" and "free markets" run through  George W. Bush's National Security Strategy as a central theme. Part of the scam is letting you believe that "national security" is what the words mean, not what it is: securing the world for American investors to make a profit.

Of course, if the people who foot the bill--to buy the war toys defense contractors get rich off of and the Pentagon uses to grab control of foreign markets and resources--ever started wondering whether it's all necessary, the scam would collapse. Peace is bad for business. ("My God," said a newspaper columnist, not too long ago. "For a moment, it looked like peace was going to break out." He wasn't being flip.)

There's an interest, if you make arms or benefit from their robust application abroad,  in elevating minuscule threats into huge, looming threats, which must be immediately addressed with cruise missiles and multi-billion dollar missile shields, and anything else that keeps the defense industry flush with profits and the population willing to at least acquiesce to another war.

Tanks at Heathrow, duct tape and plastic sheeting in the US. The British government says it has intelligence that terrorists are plotting to use rocket launchers to bring down a commercial aeroplane at London's busy Heathrow airport. This may or may not be true (but if I had to bet, I'd say it wasn't.) But if it is, it's doubtful that a tank is going to be of much use. What tanks are useful for, however, is shameless threat inflation -- raising anxiety over external threats to ensure everyone stays onboard government plans to spend more money on tanks, jetfighters and nuclear weapons, while waging wars on countries whose markets, resources and labor are not yet under the control of the country's corporations.

Telling Americans to buy duct tape and plastic sheeting is no less shameless as threat inflation, and no more effective against biological or chemical attack, than tanks are against terrorists launching rockets against aeroplanes.

By the same token, saying that North Korea could launch a nuclear strike against California (as the CIA Director did the other day), as a way of saying that North Korea is on the verge of doing so, is a thinly veiled attempt to crank up the anxiety level, send the population into a panic, and scare everyone into supporting slaughter abroad. The media, which claims to ask tough questions, doesn't ask, "Why would North Korea launch a nuclear attack on California?" nor point out that having nuclear weapons isn't the same as using them.

The media. The scam would be nearly impossible to carry on were it not for the media. If a threat is to be inflated, the media obliges. If presidents and prime ministers speak nonsense, utter Orwellian absurdities, and tell bald-face lies, the media say nothing. For the media identify with one group and one group alone: those at the top, in whose interest the giant scam is run.

But don't we get something out this?  The defense industry is more than just CEO's and investors. It's also employees, whose jobs and incomes depend on building jetfighters and missiles and nuclear warheads. And while wars may be waged to expand the economic interests of corporations, doesn't that mean more, or better, jobs at home?

Well, it doesn't always, or even often, mean more or better jobs at home. Firms want to minimize labor costs as much as they can. Part of the incentive of smashing down barriers to investment overseas is to move production to low wage parts of the world. That hardly benefits American workers, who are faced with job loss, and downward pressure on their wages as competition for jobs globally intensifies. Nor does it benefit working people in Britain, Canada, Australia, Bali, or anywhere else.

And military Keynsianism is hardly a recipe for personal safety and security. The unwelcome repercussions of American jackbooting around the world will increasingly be felt on American soil.

But more than that, we aren't wealthier for the scam, even though we may sometimes think we are. The amount of wealth there is or isn't is independent of the scam, for what the scam has to do with is not how much wealth is created, but how the wealth that is created, gets distributed -- to the people who generated it, or the people who "own" it?  It could be said that the wealthy are wealthy because they've figured out how to legalize the theft of the wealth generated by others; and the poor are poor, because they don't recognize the scam, or do, but can do nothing about it.

But it's clear the vast majority of people would be far better off were the wealth they generated distributed more equitably and used for pro-social purposes, rather than being expropriated to be hoarded and channelled into war machines and conquest of other countries, so that more wealth can be hoarded by those in whose interest the whole scam operates.

Imagine. Cuba, a Third World country, that has been blockaded for more than 40 years by the United States, and has nowhere near the wealth the US has, offers superior education and health care for all. Meanwhile, 90 miles to the north, in the world's richest country (most of whose vast wealth is owned by a tiny minority), 40 million have no healthcare insurance and inner city schools are falling apart and are left to crumble. You don't have to like Castro or the Cuban brand of socialism to see that if an impoverished country with a tiny fraction of the resources of the US can provide sterling education and healthcare for all, then this, and vastly more, is well within the realm of possibility for the United States and other Western capitalist democracies. We're not better off for the scam, but poorer for it.

Six million Jews died in the Nazi Holocaust. This, quite rightly, is considered unspeakable. According to the UN, six million children under the age of five die every year from hunger. No one speaks of it. Six million children don't have to die every year from hunger. But they do.

Billions of dollars of your money are about to be spent to wage a war against a country that poses no more than a trumped up threat to the United States. The war could result in the deaths of up to one-half million Iraqis, and will ratchet up the misery level of countless others who have already suffered from a decade of sanctions and the after-effects of the Persian Gulf War. The war will almost certainly deliver control of Iraq's vast oil wealth into the hands of US oil firms.

The same billions could be spent on healthcare and education at home. It could also be spent feeding six million children who otherwise will die from starvation. Sanctions on Iraq could have been lifted. But if billions were spent on food for the hungry, on education and healthcare for everyone, US oil firms wouldn't get the prize of Iraq's oil.

If that's not a scam, what is?

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