Economic Consequences of Iraq Occupation

By Garda Ghista

Introduction
The U.S. real economy is in virtual shambles. It is the most debt-ridden country in the world, with every American having an average debt of $12,000. Its position is worse than that of Indonesia when it imploded in 1998, and it is even worse than that of Argentina. In February and March of 2003 another half a million Americans were laid off from their jobs.

US has a record trade deficit of nearly 5% of GDP, a $6.3 trillion dollar deficit (55% of GDP which is $9 trillion) and is looking at annual budget deficits in the hundreds of billions. There is massive debt manipulation, unaffordable tax cuts, massive current account deficits, trade deficits, corporate accounting fraud running into billions, unsustainable credit expansion, and near zero personal savings. The dollar is surviving all this economic turmoil only because it is the international fiat currency (i.e.“petro dollar”) for global oil transactions. The US prints billions of these fiat petro-dollars to be used by other countries when purchasing oil from OPEC and other producers. These dollars are then recycled back into the US via Treasury Bills or other assets such as US stocks, real estate, etc. As W. Clark says in his article “The Real but Unspoken Reasons for the Iraq War”,

“World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world’s interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world’s central banks to acquire and hold more dollar reserves, making it stronger.”
“This phenomenon is known as dollar hegemony, which is created by the geo-politically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollar is the price that the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.”

Clark goes on to say that those dollar reserves must be invested in US assets, so as to create a capital-accounts surplus for the US economy. Hence even today the US stock valuation is at a 25-year high and trading is at a 56% premium. When oil is denominated in dollars and the dollar is the fiat currency, then basically the US owns the world’s oil for free. US has had such an agreement with Saudi Arabia for the past 30 years. This strategy has allowed the Federal Reserve to create a massive debt and credit expansion which is sustainable only as long as (1) countries continue to buy oil for their survival, and (2) the fiat reserve currency for global oil transactions remains the dollar. This second point is what is becoming very tricky for the US. The euro has been growing in strength. In December 2002 ten more countries agreed to become members of the Euro-zone. When this goes into effect in May 2004 it will result in an aggregate GDP of $9.6 trillion and 450 million people for the Euro-zone. This will mean an oil consuming/purchasing population 33% larger than the US. More than half of OPEC oil will be sold to the EU as of mid-2004. This is a real economic threat to the US economy, which has an aggregate GDP of $10.5 trillion and 280 million people. One year ago in April 2002 in Spain, the Head of OPEC’s market analysis department talked about switching from the dollar to the euro as the fiat currency. While this fact has been frequently published in European media, it is completely suppressed in the American media. In addition, EU members do more trade with OPEC members than the US does. Hence there are compelling reasons to make the euro the fiat currency for global trading. Britain and Norway have not yet joined the EU. If they do, it can certainly shift the balance of economic power to the euro, especially as these two countries have the largest oil reserves in Europe. A major argument hitherto for keeping the fiat currency in the dollar has been that US is such a big importer of oil. However, the Euro-zone –all EU members combined – is an even larger importer of oil and petroleum products than US. The trading between the Euro-zone and OPEC countries is large, with 45% of imports of OPEC MCs (member countries) coming from the Euro-zone, and in reverse the OPEC MCs are the main suppliers of oil and crude oil products to the Euro-zone. It would appear a natural stream of events for the fiat currency to change to the euro.

Benefit Cost
Why was the U.S. government so desperate to go to war? Was it about bringing democracy to Iraq? Was it about stamping out terrorism? Or was it about oil? According to journalist and commentator Peter Arnett, the real reason for the desperate U.S. attack on Iraq was simply economic hegemony. Clearly it was desperate because Bush ignored international law, he ignored the UN Security Council, the Universal Declaration of Human Rights, NATO, the Geneva Convention, and he ignored the definition of “aggression” established by the U.N. It took the United Nations body more than thirty years to finally agree on a definition of aggression. The one country delaying that agreement year after year was the U.S. government. Now we can understand why. The U.S. government wanted the freedom to conquer other countries any time in order to extend its capitalist economic empire. Not only will US suffer from economic retribution, it will suffer from increased terrorism on its own soil as well. The US is becoming a ‘rogue’ superpower that does not hesitate to slaughter several hundred thousand Iraqi civilians as collateral damage in order to maintain global economic hegemony.

Today the issue is not about political colonization of third world countries. It is about economic colonization. The Iraq war is about economics and economic domination. As Professor Carl Simkonis of Northern Kentucky University says, just follow the money trail and it will give the answers. This war is about the U.S. fighting head on with Europe to become the world’s economic leader. Bush trotted out a litany of lies, innuendoes and fraudulent excuses and spent billions of dollars in bribe money to buy UN votes, but still failed to get the requisite majority to approve his brutal “shock and awe” attack on Iraq. His attack puts him in violation of every human rights resolution on record, and justice demands that he be put on trial at the International Criminal Court for crimes against humanity!

It is a likely supposition that the U.S. attacked Iraq primarily to retain the U.S. dollar as the global fiat currency. In 1971 when the US stopped exchanging dollars for gold, it forced the whole world to use the US dollar as the world currency. According to Rachel Douglas, “Since the dollar supply is 80% created against US government bonds, this means that anybody using the dollar is effectively financing the US budget free of charge. Therefore the Americans can wage expensive wars and terrorize the whole world; and everybody who holds or uses the dollar is paying for these ‘services’”. Also according to Douglas, at present only four percent of the dollars in circulation are backed by US gold and currency reserves. If there is a massive dumping of dollars, it could launch the collapse of the dollar-based global financial and monetary system, heralding the end of US economic dominance. The US, currently in debt to the rest of the world to the tune of $30 trillion, would face bankruptcy, which would be also disastrous for all other countries holding their reserves in dollars. It is hence critical for the US government to stall nations’ conversion to the euro for as long as possible. If Saudi Arabia and other Arab countries decide to switch to the euro, it would bankrupt the American economy and thus prevent it from attacking the many other countries it is daily threatening. Hence, we may likely see the U.S. take revenge by military attack on those countries in the name of fighting terrorism, but in reality to keep the dollar as the fiat currency.

In 1999 Iraq broke ranks and began trading oil in euros (primarily with France and Germany) and made big profits. Iran took note and so did Venezuela, the fourth largest oil producer in the world. Venezuela has already taken steps to lessen its dependence on the dollar by bartering oil with several neighboring countries, including Cuba. Russia is also bumping up oil production with Europe and trading in euros instead of dollars. If this continues, it would make the euro the dominant legal tender in the world. Hence the U.S. had no choice but to attack Iraq, as otherwise the U.S. dollar would have been in serious jeopardy. With the U.S. conquest of Iraq, the EU euro will suffer a temporary setback and the U.S. economic position may last a bit longer. By conquering Iraq, the US government intends not just to restore Iraq to trading oil in US dollars, but to also send a clear message to any other country as to what will happen if they stop trading in the dollar. By conquering Iraq the US gains control of the second largest oil reserves in the world, as well as a solid military base in a now secular state to allow the US to control the entire Middle East oil reserves.

Russian economist and political figure Sergei Glazyev vigorously opposed the US attack on Iraq. He rejected the idea of ‘cheap oil’ as being the only reason for the war. He said the more fundamental reason was the crisis in the global financial system and the competition between the dollar and the euro. Up until the attack, Russia was ready to trade with Europe in euros and conduct the rest of its trading in local currencies. This would provide real benefit to the fragile Russian economy. Glazyev further said that countries trading in dollars are essentially financing this illegal occupation of Iraq, and if they do not support it, then those countries should seriously consider changing to a new world monetary system. He said that the Bush regime is not really interested in lowering oil prices because it would reduce the personal profits of the Bush family and his entire regime, many of who have strong financial ties to the petroleum industry. Presently the marginal cost of consumption of oil is $40 per barrel. If oil prices rise above this, the economy will suffer, as losses will begin to surpass revenues and production will shut down.

The chief aim of the US in attacking Iraq was economic – to destroy the power of the euro and to gain control of the major oil reserves, thereby solidifying the hegemony of the US dollar. According to Peter Arnett, the cost of the Iraq war will not be heavy. What would have a heavy cost for the U.S. is losing the US dollar as legal tender of world trade. Australia does substantial trading with US and hence it is also in their interest to retain the dollar as legal tender. Britain has not yet adopted the euro. Britain may even decide to remain with US economically and withdraw from joining the EU. There is still the alternative for the EU that in view of the US conquest, European countries move into the area of alternative energy technologies so as to lessen their dependence on oil. This would give them the opportunity to trade with these technologies in euros and would again give them the chance to shift the world trade balance.

Global economic hegemony means that the axis-of-evil called Bush-Cheney-Rumsfeld will never be satisfied with the spoils of Iraq. Already in the first week of April, Rumsfeld has been on TV talking about narco-terrorism in South America, and said that the US will not tolerate this because those narco-terrorists are aiding and abetting the ‘other’ terrorists in the Middle East. He declared that US would have to interfere and take action against these narco-terrorists. On April 25, 2003 on C-Span, Robert Novak of the Chicago Sun Times talked about the need to combat terrorism in Columbia and other countries in Latin America. Columbia is the eighth largest oil producer in the world. Americans and the world should expect to see this occupation of Iraq grow to become World War IV, with US attacking every country that dares to trade oil in any currency other than the US dollar. This is American democracy abroad!

Explicit Cost
On September 16 the Wall Street Journal reported that Bush’s chief economic adviser Lawrence Lindsey, estimated an attack on Iraq would cost $100-200 billion. The House Budget Committee Democratic Staff analyzed Lindsey’s estimate and found it accurate. Lindsey’s projected budget included the cost of the initial attack, the prolonged occupation of Iraq by U.S. (up to six months), inducements (also called bribes) to attract allies through foreign assistance or loan forgiveness, the impact on US economy due to higher oil prices, and humanitarian assistance. Desert Storm was used as a basis for these estimates. However, there is a big difference between the two scenarios. In the Gulf War, other nations paid the costs. In this attack the US will have to foot the bill. According to the report summary by the House Budget Committee, (1) the military action in Iraq will be far more costly today than it was during Desert Storm due to lack of other nations’ contributions, (2) if a force of more than 250,000 military personnel is required, costs could spiral significantly; (3) if the US military force ends up staying in Iraq for months or years, this will drive up costs considerably, to more than $300 billion; (4) humanitarian assistance to refugees, reconstruction assistance, foreign assistance to get cooperation for US military action, and interest costs due to increased borrowing to finance these other costs – may become huge.

According to Keynesian economics, when there is a downward spiral or economic recession moving to depression, the government can step in and halt the process by one of three ways: by reducing taxes, by spending money on public service projects , or by going to war. Going to war is a way to stimulate the economy. It is one way government can spend billions of dollars. If government consumption goes up, the GDP should go up too. It remains to be seen in the coming months whether the GDP will really go up. Suppose we witness that despite the Iraq war and continued occupation of Iraq, the US economy continues to crumble unabated. Would it mean that Keynesian economic theory does not work all of the time, but only some of the time? We need to consider why this time his theory may not work.

In recent months when major airlines companies in US faced bankruptcy they laid off about 450,000 employees. The US government stepped in and gave the airline companies a gift of $25 billion to get back on their economic feet. The intent of giving that money was to enable the airlines to rehire most or all of the laid-off employees. However, the airlines did not do that. Instead, they used that $25 billion to award huge 33% salary increases to the company CEOs. It means they did not put money back into the system. The consequence of this action as we can see today is that those same airlines are again facing bankruptcy and this time the government is not going to bail them out. Similarly, we have around $80 billion that Congress has approved for the Pentagon to pay for the attack on Iraq. What is going to happen to that money, and to future monies of say $300 billion and more that will also be awarded directly to the Pentagon for its long-term occupation and reconstruction (aka oil pipelines) of Iraq or even for expanding the war to other countries? We already know, for example, that $4 billion went to pay Turkey just for permission to fly over their airspace. This use of the money will not lead to production and jobs in America. If our economy continues to slide, it would either mean that Keynesian economics doesn’t work all the time, or it would mean that the $100-$300 billion never got funneled back into the economy via Pentagon purchases of goods and services. Rather it could mean that the money or a large portion of it was gobbled up by Pentagon CEOs, exactly as what happened with the airlines. It would make for a logical explanation of why the U.S. economy does not recover any time in the near future.

Keynes said, it is better to be vaguely right than precisely wrong. However, it is impossible tbe even vaguely right regarding the costs of the attack and occupation of Iraq. It depends upon the impact of the oil market, the macroeconomic impacts on the U.S. economy, the aftermath of hostilities in Iraq and neighboring countries. It also depends upon the duration of US occupation, the extent of civilian casualties, the potential for unconventional (guerilla) warfare, and the spread of war outside Iraq. There may be terrorist attacks around the world, heavy prolonged occupation costs, reconstruction costs, and costly humanitarian assistance. If the US occupies Iraq for an extended period – anywhere from seven years (Japan) to fifty years (South Korea), the costs will run into more than $500 billion. Present estimates suggest occupation of longer than a decade.

Implicit Cost
Perhaps the highest implicit cost of the brutal attack on Iraq is that the hatred of Muslims worldwide along with many other people for America will increase to the nth power. As months pass, it will become crystal clear to the entire world that US went to Iraq not for WMD (weapons of mass destruction) but solely for oil and to maintain global economic hegemony. U.S. soldiers allowed the Baghdad museum to be destroyed and looted , and the entire Iraqi government structures to be bombed or burned (except the Ministry of Interior and the Ministry of Oil). They cut off water and electricity to Baghdad and Basra, and even after taking Baghdad were in no hurry to restore something as fundamental as water to the civilian population, causing unnecessary untold suffering. There is no way that the world will soon forget the brutal atrocity of the U.S. attack on Iraq. There is no way the world will forget the calculated destruction of all government ministries. The world will not forget the pre-planned destruction of the Iraqi National Library housing more than one million books and archives. The world will not forget the US calculated destruction of the Iraqi universities – as part of a larger plan to destroy the entire culture and identity of this ancient Euphrates civilization. The clear plan of US is to reduce Iraq to a nation of slaves, with no history, no dignity, and no heritage – in such a scene, the US can take all the oil it wants and will not be questioned regarding the ownership, the price and the destination of that oil. However, there is no way that the world will forget the “brazen arrogance of the power-keepers who decide on the destruction of life while sipping coffee and posing for photos!”

US soldiers calculatedly bombed the Al-Jazeera television station in Baghdad, as Al Jazeera made the fatal mistake of giving US the exact coordinates of their location. Within days a U.S. plane dropped a bomb directly on the building. The plane was so low that the people inside the building could hear the bomb coming out of the plane. This was no accident. The U.S. bombed Al Jazeera television station because it was the only TV station planning to film the takeover of the Baghdad airport. But, at the Baghdad airport Saddam’s heavily bribed top military generals were being flown out of Iraq, many of them to U.S. (in accordance with an agreement made between Condaleeza Rice and Putin on April 7, 2003). The U.S. did not want the world to know how or what transpired during the airport takeover, hence their simple solution was to eliminate any potential media coverage. There are more than 300 journalists from around the world staying in the Palestine Hotel in Baghdad. One morning two weeks ago a U.S. soldier outside the hotel took aim and fired missiles right into the hotel. This was videotaped by a French newswoman on the balcony of the hotel. It was also no accident. The U.S. wants to silence and suppress what is happening in Iraq. During any war, journalists are to be immune from conflict as per the rules of the Geneva Convention. The U.S. in its arrogance has totally flouted Geneva Convention. This is a first for any war in recent history. This is the remarkable extent to which Cheney and Rumsfeld are prepared to go to silence opposition, hide the truth, and get rich. While the average American has no idea about these incidents due to complete media censorship, these facts are certainly well-known in Arab and European countries. One can only imagine the escalating hatred of the U.S. for such under-handed actions during war, i.e., the unprecedented murder of journalists, US use of cluster bombs – also against the Geneva Convention, its intentional dropping of depleted uranium bombs that will contaminate the Iraqi land, people and even unborn babies for decades to come.

Another growing cost for the US economy will be the fast-growing movement in countries around the world to boycott US and British produced goods. In South Africa, Pakistan, Egypt, Belgium, Saudi Arabia, Indonesia, Thailand, Brazil, Chile and even Britain itself, protestors are demanding that the population boycott all U.S. and British goods. South Africa Indymedia recently called on the world to “take aim at the only thing that can bring Bush to his knees: the American economy.” Already sales of Pepsi and Coca Cola have plunged in Middle Eastern countries, where they have already begun marketing their own local drinks like Zam Zam and Mecca Cola. Mecca Colas are now being marketed in Britain where peace groups recently distribute 36,000 bottles at Hyde Park. The Iranian government has already banned ads for U.S.-manufactured goods. With the intention of denying corporate US and British interests the spoils of this war, peace groups are calling for boycott of Esso/Exxon, Mobil, Chevron and Texaco. This boycott of British/US goods will extend way beyond the present. Boycotts can change the world. The Boston Tea Party started the American revolution. Gandhi began the boycott of British textiles. The Montgomery Bus boycott launched the civil rights movement. Cesar Chavez led boycotts of lettuce and grapes in California. This global boycott has the potential to become a kind of economic empowerment. As Paul Rockwell writes, “CEOs who treat world opinion with contempt go berserk when their sacred profits shrink.” Today, symbols of American culture are being attacked, including Starbucks, McDonalds and Kentucky Fried Chicken. This economic pressure may be the only way to stop the greedy profiteers in their tracks! As the great Dr. Martin Luther King said, “The arc of the universe is long but bends toward justice.” And as Paul Rockwell writes, “Time is on the side of the people. Let the boycott begin!”

Assumption
If we imagine an economic model in the mind of the U.S. government, their assumption would be that this war will bring economic gain and establish the economic supremacy of the U.S. The body of this model will claim that the conquest of Iraq will help to stamp out terrorism. But in reality, rather than stamp out terrorism, this war will cause a substantial increase in terrorism, simply because global hatred of America has multiplied to the nth power. Terrorism can be defined as the war of the poor, while war is the terrorism of the rich. Terrorism can also be defined as the desperate cry of the powerless suffering humanity for justice in an economically exploitative, unjust world. The cost in the form of future terrorism may be immeasurable for the US and for the world.

Prediction
In the prediction part of the model, the U.S. government would claim that conquest of Iraq will bring peace, freedom and democracy to Iraq and will maintain peace, freedom, democracy and economic prosperity in US. In fact, the exact opposite is happening. In Iraq there is a state of complete anarchy. Every single government building in Baghdad was bombed or burned out of existence, with the U.S. calculated plan being to destroy the entire national infrastructure. U.S. soldiers are doing only one thing in Iraq and that is controlling areas around the oil fields. Americans do not know this because it is not being told on the major media networks like Fox News, CBS and ABC.

As for freedom and democracy in U.S., this government has used the excuse of 9-11 not only to begin World War IV (ostensibly against so-called ‘terrorism’) but to re-write the U.S. Constitution like never before. With Patriot Acts I and II it has stripped away the fundamental rights of American citizens. The original Constitution created in 1776 concentrated political power primarily in the Congress and the Senate. The position of President was an afterthought because the early American colonialists did not want to recreate the kind of dictator they had left behind in England. Hence the position of President had few powers, while the essential powers lay with the Congress and Senate. With the passage of Patriot Act I, there has been a huge shift in political power. In fact the Act gave near dictatorial powers to the U.S. President. The most criminal section of Patriot Act II if passed will allow the government to remove the citizenship of any American and deport the person at will – based solely on who his friends are and how he thinks! Both Acts are unprecedented in American history and are essentially creating a fascist dictatorship. Due to the general political illiteracy of the American people, this robbing of fundamental freedoms and rights will not be understood for months to come.

Policy
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it…. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Joseph Goebbels
German Minister of Propaganda, 1933-1945

The bottom line is that 9-11 is being used by the U.S. government to attack any country anywhere in the world, supposedly for WMD and for terrorists but in reality to maintain the global economic hegemony of the U.S. dollar. It will go to any lengths to stop the takeover of the dollar by the euro, which is the one real challenge to the dollar in international markets. Iraq already switched to the euro and made big profits due to the dollar’s steady depreciation. (The dollar declined 15% against the euro in 2002.) Saudi Arabia is also thinking to switch from the dollar to the euro. But if they dare, the US will surely declare them as terrorists, crush them militarily, and take over their country and oil fields. In this way, the US or rather the corporate-military-industrial complex will make it very tense for OPEC members to shift to the euro.

As Arnett said, “Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the UN to euros) – at that point another … Gulf War became inevitable under Bush II.” Bush-Cheney-Rumsfeld et al are willing to risk economic hardship for US in the short-term in order to retain the dollar as legal tender for the long term. If OPEC does manage to switch to the euro, the US dollar would crash from 20-40% in value and the consequence would be massive inflation in America, similar to what happened in Argentina. Foreign investments would start flowing out of US, and there would be a run on the banks similar to that of the 1930s. The present deficit would become unserviceable and go into default, and we would face a world economic crisis. The US economy is totally dependent on the dollar remaining the world legal tender. Hence we can expect the US military to remain in Iraq indefinitely, also so as to send a message to the world that if they dare switch to the euro, they should expect regime along the lines of Iraq.

Nevertheless, it is reasonable to assume that by the year 2005 OPEC would switch completely over to the euro for oil pricing. According to Clark, the aim of the US pre-emptive attack on Iraq is to grab control of oil production, reduce global oil prices and thereby collapse OPEC’s price controls and hence their power. The very first item on the US government agenda hence is to immediately convert Iraq back to the dollar fiat currency and to quintuple Iraq’s oil output, which will put its production way beyond that of OPEC. Present total world oil production is about 75 million barrels, out of which OPEC members produce about 25 million.

Since Iran has switched to the euro for their oil transactions with Europe, and since during 2002 Iran’s reserve funds in its central bank have all been switched to euros, we can certainly expect for Rumsfeld et al to announce that there are terrorists in Iran or that the Iranian government is harboring terrorists, and hence US must attack soon. It is not about terrorism. It is about the dollar and the euro. The American people have been hoodwinked and lied to by their leaders. And as the title of William Greider’s book says, “Who Will Tell the People?”

Another problem in the world economy is Japan. If oil prices spiral to $40, $50 or even $100 a barrel in the coming months, Japan’s fragile economy will completely collapse and will further devastate the already faltering US economy. Basically, it looks like the whole world is getting fed up with US bullying, bribing and threats. North Korea made the switch to euro in December 2002. While it may not have economic impact, it is just a sign that countries are tired of Bush-bullying. In the 1990s the world considered the US as a benevolent albeit self-centered nation. However since 2000, or since the illegitimate rise of Bush to power, world opinion towards US has done a negative reciprocal. Today there is practically no country that likes America. Partly out of dislike and partly for economic benefit, more and more countries are moving away from the dollar and shifting to the euro. China, Venezuela, OPEC countries and Russia are cases in point. Other third world countries are following the lead of Chavez Frias by entering barter deals with each other. As the Bush oligarchy has deep interest in Venezuelan oil reserves, it should be expected that the US media will soon sing the song of “There is terrorism in Venezuela” – to justify a US attack there to overturn the democratically elected Venezuelan government and replace it with a pro-US military junta – thereby putting Venezuelan oil into US hands. The democratically elected Chavez Frias is facing an uphill battle against the U.S. government, as still today the CIA is actively trying to dislodge him so as to get control of the country and the oil, and keep the country trading in dollars.

Conclusion
While it may appear today that there are substantial marginal benefits from this war, those benefits will in time be eroded by expansion of the war to the entire Middle East, Korea, and South American countries. It will not be a small disaster overseas. It will become World War IV, and the costs – both economic and human – will be immeasurable. No part of the world will be spared from these costs and sufferings. It is completely unrealistic to think that the US can inflict such vast damage around the world and not have to pay a price for that – both economic and human.. Hence the American people should be prepared to pay heavily for the unbounded arrogance of the American government. Despite US economic collapse, despite the steady inroad of the euro in world trading, Bush and company will not cease in their imperialist economic agenda. At present the ratio of euro to dollar is 1 to 1.06 and the dollar continues to drop in value. It means that due to Bush creating an unprecedented debt both by giving a tax rebate and going to war, the US is going to face complete economic collapse. If Al Gore had come to power, we would have faced a different scenario, as Gore would not have given a tax rebate. He may have instead raised taxes. Gore would also not have gone to war. However, even with Gore as president, the euro would have gained ground even faster and hence the US economy was doomed regardless of who became president.

It is hoped that in 2004 a new administration may come to power that will cease unilateral policies and return to its multilateral tradition. If the UN still exists as a world force, the US could again become a now much humbler member of this world body – humble due to the crimes of the present administration. Under the guise of the perpetual “war on terror”, the Bush regime is hiding from the American people the real reason for the war on terror – to maintain the dollar as the global fiat currency and fill the personal pockets of Bush and Company.

The US needs to learn about energy conservation. It needs to learn about renewable energy sources and sustained balanced budgets so as to reduce the present budget deficit. It needs to enforce corporate accounting laws and reinvest in the manufacturing and export sectors so as to bring the country back into a trade account surplus position. The people at large must also learn to reduce their excessive energy consumption. The greatest cost of this war will be that the entire world, in reaction to the brutality and arrogance of the US government, will switch the euro so as to cut their ties to US.

We need to crush the economic system called capitalism wherein the vision of governance begins and ends with Enron, ExxonMobil and Monsanto. We need to replace capitalism with a kind of economic democracy wherein people gain control over their local economies, wherein full employment (newly defined by this author as, ‘Every person willing to work will be provided a job and paid a livable wage.’) is the norm, and where there is environmental sustainability and financial stability. International trade agreements would be created specifically to aid the poor people in all countries. We need a system wherein people, communities and countries own the productive assets on which their livelihoods depend, wherein they will be free from illegitimate foreign debts, and wherein they have the right to manage the flow of goods and money across their borders and set their own economic priorities. In such a system, there would be no scope for affluent countries to demand access to the markets or resources of weaker countries against their will and interests. Corporations wishing to do business in another part of the world would have to apply to that government and be subject to that government’s laws and taxes.

US imperialist wars (be it Iraq, Iran, Venezuela or Columbia) are all a symptom of unlimited human greed of a few individuals at the highest levels of power. That unlimited greed is given free license in the economic system called capitalism and now global capitalism or globalization. The harm to humanity as a consequence of this greed is incalculable, and must be stopped. The way to stop it is to convince the people from the ground up, from the grassroots level, that there are better economic systems being developed by the idealistic lovers of humanity, and these economic systems do not create stark disparities in wealth. These new economic systems cater fully to the largest number of people and particularly to the poorest of the poor. They ensure that every citizen has adequate purchasing power and the five minimum necessities of life, i.e., food, clothing, shelter, education and medical care. We need to go back to local people becoming self-sufficient by growing their own food, producing their own necessities and controlling the conditions of their lives. In this scenario, the issue of price and even GDP becomes irrelevant. It becomes our duty to study these systems and teach them to others, so as to finally put the economic power into the hands of the people. As was declared at the United Nations Conference on Indigenous Peoples,

“The majority of the world does not find its roots in Western culture or tradition. The majority of the world finds its roots in the natural world, and it is the natural world, and the tradition of the natural world, which must prevail.”

And in the words of the great economist, Prabhat Ranjan Sarkar,

“There is only one way to stop economic exploitation and alleviate the plight of the common people, and that is to implement a policy of decentralized economy in all the sectors of the economy. Successful planning can never be done by sitting in an air-conditioned office thousands of miles away from the place where planning is to be undertaken. Centralized economy can never solve the economic problems of remote villages. Economic planning must start from the lowest level, where the experience, expertise and knowledge of the local people can be harnessed for the benefit of the members of a socio-economic unit. All types of economic problems can be solved only when economic structures are built on the basis of decentralized economy.”
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Notes
It does not seem correct to refer to this pre-emptive act of aggression or attack going against all international laws as a ‘war’ since there was hardly a fight worth mentioning. The Iraqi generals were heavily bribed within the first few days and then whisked into planes and off to faraway places. It means, there was no war, just a brutal one-side attack on a people without any means to fight back. Perhaps it will go on record as the most cowardly ‘war’ in history.
2 The largest public service project in US history was the construction of the Hoover Dam after the Great Depression of the 1930s.
3 Investigative journalist Robert Fisk of the British Independent personally witnessed blue buses filled with men arriving with museum maps. These men knew exactly where to go inside the museum and what to destroy, burn or remove. It was completely planned, and was not anarchic looting.
4 B.J. Jabri, “Hyper-Imperialists on a Rampage’, Online Journal, www.onlinejournal.com
5 Coalition forces had been pinned down across Iraq. After Rice’s meeting with Putin, there was no Republican Guard Resistance to US forces. (Larry Chin, “Bush’s World War Four: Fall of Iraq Sets up New ‘Clashes of Civilizations’, Online Journal.) ArabVoice (based on US military sources) published a detailed article on how Republican Guard generals were flown out of Iraq (www.globalresearch.ca/articles/RAB3044.htm)

References
Alternatives to Economic Globalization: A Better World is Possible – A Report of the International Forum on Globalization. Bennett-Koehler Publishers, Inc. San Francisco, 2002, p.
Arnett, Peter, “The Real War? Oil, Europe and Euros”. Internet source.
Clark, William, “The Real Reasons for the Upcoming War with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth”, www.globalresearch.ca.
House Budget Committee: Democratic Caucus executive summary of presidential economic adviser Lawrence Lindsey’s report on the costs of US attack and occupation of Iraq.
www.house.gov/budget_democrats
Kosiak, Steven, “The FY 2004 Defense Budget Request: Is the Currenet Plan Affordable, Sustainable and Sufficiently Transformational?” Presented before the House Budget Committee on February 27, 2003.
Nordhaus, William D., “The Economic Consequences of a War With Iraq”. www.nybooks.com, December 5, 2002.
Rockwell, Paul, “No oil for blood: A post-war boycott in the making”. Online Journal. http://www.onlinejournal.com
Sabri, B.J. “Hyper-imperialists On a Rampage”, Online Journal. http://www.onlinejournal.com
Sarkar, Prabhat Ranjan, Proutist Economics: Discourses on Economic Liberation, Calcutta, 1992.