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Deep State Conspiracy Theories Come True in Iraq

As good Americans, we all know that conspiracy theories are automatically false. Middle Easterners, however, haven’t learned that lesson yet, so much of 21st Century history in that region consists of elaborate conspiracies. From the NYT:

Uneasy Alliance Gives Insurgents an Edge in Iraq
By TIM ARANGO JUNE 18, 2014

ERBIL, Iraq — Meeting with the American ambassador some years ago in Baghdad, Prime Minister Nuri Kamal al-Maliki detailed what he believed was the latest threat of a coup orchestrated by former officers of Saddam Hussein’s Baath Party.

“Don’t waste your time on this coup by the Baathists,” the ambassador, Zalmay Khalilzad, chided him, dismissing his conspiracy theories as fantasy.

Now, though, with Iraq facing its gravest crisis in years, as Sunni insurgents have swept through northern and central Iraq, Mr. Maliki’s claims about Baathist plots have been at least partly vindicated. While fighters for the extremist Islamic State in Iraq and Syria, once an offshoot of Al Qaeda, have taken on the most prominent role in the new insurgency, they have done so in alliance with a deeply rooted network of former loyalists to Saddam Hussein.

The involvement of the Baathists helps explain why just a few thousand Islamic State in Iraq and Syria fighters, many of them fresh off the battlefields of Syria, have been able to capture so much territory so quickly. It sheds light on the complexity of the forces aligned against Baghdad in the conflict — not just the foreign-influenced group known as ISIS, but many homegrown groups, too.

And with the Baathists’ deep social and cultural ties to many areas now under insurgent control, it stands as a warning of how hard it might be for the government to regain territory and restore order.

Many of the former regime loyalists, including intelligence officers and Republican Guard soldiers — commonly referred to as the “deep state” in the Arab world — belong to a group called the Men of the Army of the Naqshbandia Order, often referred to as J.R.T.N., the initials of its Arabic name. …

Analysts say the former regime figures, whose group combines strands of Islamic thought with notions of Arab nationalism typical of Baath ideology, are bedfellows with the Islamist extremists in one respect: Both sides are determined to restore Sunni rule to Iraq and rid the country of what they see as the pernicious influence of Iran, which like Iraq has a Shiite majority. Like the extremists, the former regime figures have won sympathy from ordinary Sunnis who are alienated by Mr. Maliki’s sectarian policies. …

While they may be allies today in the interest of fighting a common enemy — the Shiite-dominated government of Mr. Maliki — the two sides are unlikely to coexist if they should attain power in some areas. The Baathists, being more secular and more nationalist, have no interest in living under the harsh Islamic law that ISIS has already started to put in place in Mosul. …

Duraid Adnan contributed reporting from Baghdad, and employees of The New York Times contributed reporting from Kirkuk, Iraq, and Diyala Province, Iraq.

In other words, the local stringers are scared to give their real names, which seems reasonable.

In case you are wondering, the Syrian Baathists under the quasi-Shi’ite Iranian-allied Assad regime and the mostly Sunni anti-Iranian Iraqi Baathists have hated each other like Stalinists and Trotskyites for a half century or more. (There’s probably a less confusing way to articulate that distinction between the Iraqi and Syrian Baath Parties, but my brain is tired already.)

These two Baath Parties represent what I call the old-fashioned Bonapartist tendency of military-based modernizers. In the Middle East, Bonapartists have included Nasser, Ataturk, and, perhaps, the early 19th Century Albanian sultan of Egypt, Muhammad Ali. In Latin America, Bonapartists have included Bolivar, Hugo Chavez, Juan Peron, and various Mexican generals. Gore Vidal portrayed Aaron Burr as an American Bonapartist in Burr.

In the long run, Bonapartism generally leads to entrenched corrupt elites, such as the military rulers of Egypt, who also own much of the economy. But then you could say much the same about almost every other political system these days.

Another reason for the decline in popularity of Bonapartism is the decline in the frequency of wars as they have become less of an adventure and more of an exercise in industrial slaughter. Bolivar’s wars for independence from Spain, for example, involved all sorts of heroic expeditions, such as crossing the Andes in 1819, followed by small but often decisive battles that changed the political map of the world.

In contrast, Saddam’s Iran-Iraq war of 1980-1988 wasn’t much fun at all.

The old soldiers still have the guns, the training, and the command structure to conspire with some success, as they’ve recently done in Egypt and before that in Pakistan and as recently as 1997 in Turkey. But the thrill is largely gone, leaving people to look to Islamists for inspiration.

 
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  1. Can anyone explain to me the interventionist argument? They say there can’t be a “terrorist state” in the Middle East because it would lead to terrorism. But what does terrorism have to do with holding territory? 9/11 hijackers came in on student visas, they planned in Germany, got flying lessons in the United States.

    What do smart interventionists say? Has anyone ever addressed this point?

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  2. My geopolitical advice to the 20 or so people who read my blog has been to quarantine the conflict. These societies need to learn to work out things for themselves. When enough people die, they’ll stop fighting.

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  3. anonymous says:     Show CommentNext New Comment

    I think there’s a range of IQ’s–I’m not really sure what it is–that is probably below 100, but not too low, where despite what they might say and despite all they know about it, often first hand, they really don’t want violence and war to end. It’s way too much fun and they are all inept enough at it that they won’t kill off entire generations, a la WWI.

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  4. “Can anyone explain to me the interventionist argument?”

    There isn’t one. That’s why they try to create, magnify or use media fire storms to bounce people into things.

    Or rather there isn’t an honest argument.

    The true reasons are:

    1) maintain the petrodollar by destroying anyone who might sell oil without using dollars
    2) improve Israel’s security by destroying all the neighboring states

    Once you realize it’s really all about causing maximum destruction and chaos it makes sense.

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  5. Whether oil is priced in dollars or not is completely irrelevant economically. It is a symbol of American economic dominence that annoys Hugo Chavez and Iran, but they could just as well price them in any stable currency. Dollars are just convenient because we have the most developed commodity and financial markets.

    International transactions have often been priced in legacy currencies, like the continued use of Spanish and Venice coins long after their economies had fallen.

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  6. There is a nifty Spanish word for this: http://en.m.wikipedia.org/wiki/Caudillo

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    • Replies: @Steve Sailer
    Thanks. "The related caudillismo is a cultural phenomenon that first appeared during the early 19th century in revolutionary South America, as a type of militia leader with a charismatic personality and enough of a populist program of generic future reforms to gain broad sympathy, at least at the outset, among the common people."

    Bonaparte really was a competent reformer and civil servant.

  7. “1) maintain the petrodollar by destroying anyone who might sell oil without using dollars
    2) improve Israel’s security by destroying all the neighboring states

    Once you realize it’s really all about causing maximum destruction and chaos it makes sense.”

    So why do John Bolton, Sean Hannity, and Marco Rubio care about that?

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  8. @Lot
    There is a nifty Spanish word for this: http://en.m.wikipedia.org/wiki/Caudillo

    Thanks. “The related caudillismo is a cultural phenomenon that first appeared during the early 19th century in revolutionary South America, as a type of militia leader with a charismatic personality and enough of a populist program of generic future reforms to gain broad sympathy, at least at the outset, among the common people.”

    Bonaparte really was a competent reformer and civil servant.

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  9. My impression is that rule by the theocrats is both less corrupt and more oppressive than rule by the Bonapartists, but it’s hard to tell for sure – for Shia in Iraq Saddam’s rule may have been more oppressive than the Shia theocracy in Iran, but Sunnis in Ba’athist Syria may have been better off than Sunnis in Iran. I don’t know; I think it is clear that there are no ‘good guys’ in the Middle East, just bad guys and even worse guys. The US has generally managed to back the even-worse guys and to promote chaos, which makes things worse for everyone.

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  10. “The US has generally managed to back the even-worse guys and to promote chaos, which makes things worse for everyone.” I think you’re saying that in the Middle East it’s the Americans who are the bad guys. True, I fear, but only after Bush the Elder.

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  11. “As good Americans, we all know that conspiracy theories are automatically false.”

    In the past the US was mostly mono cultural, had only a few government departments, and had a fair degree of civilian control of government. So there were no conspiracies, the FBI was doing it. But these days you have have DHS and it’s allies vs the FBI and it’s allies vs the CIA and it’s allies, all being spied on by the NSA, all with no government oversight. So especially after Bush II, conspiracies are possible.

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  12. I think there’s a range of IQ’s–I’m not really sure what it is–that is probably below 100, but not too low, where despite what they might say and despite all they know about it, often first hand, they really don’t want violence and war to end.

    Wrong. It’s not the propensity to violence but the willingness to hunker (or cower) down without resisting that is possibly symptomatic of low IQ. Even in “violent” societies, only a small subset is disposed to violence, typically young machos egged on by older power brokers. The problem is the non-violent portion of society doesn’t come together to resist and punish the ultras. Or establish a society based on the rule of law. The result is therefore a mafia state, which is what every country in Arabia is.

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  13. Fundamentals: The petrodollar is the basis of American power in the world. This is a unique power. Owning the world’s reserve currency based on fractional reserve banking backed by gold is the medieval dream of being able to “make gold”, albeit with restrictions. Owning the world’s reserve currency based on fractional reserve banking back by fiat money is the ability to “print gold” without restrictions. Sans the petrodollar, the United States is a bankrupt country in the same league with Argentina. US foreign policy has had one major goal since the dollar replaced the pound as the world’s reserve currency in the economic turmoil between WWI and WWII … and that is to take down any threats to the status of the dollar. Hence, the recent aggressive wars against Iraq and Libya and the covert and overt actions against Venezuela and Russia.

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  14. @bjdubbs–John Derbyshire has an theory for it. It’s because “racism” has become problematic due to the fact that non-whites, especially blacks, are often so racist. Cultural Marxism requires that all sin emanate from whites. A term was needed that could only be used to stigmatize only them, hence “white privilege.”

    True, but the central point of “white privilege” is its invisibility; sappy whites can be told they qualify without being conscious of the fact. Whites know when they are racist (me) and when they are not (the 99%, scrambling to be thought un-racist), but “privileged”? It’s a way to get whites to self-examine while the usual suspects pick their pockets. A real “reach for my revolver” term, if there ever was one. (Loudly announcing a wallet-check every time the term is deployed might be a good defense)

    I really love “white privilege,” btw. It’s so wonderfully Orwellian. Yeah, sure, the whole of American law, politics, media, academia, and culture in general are oriented to privilege blacks and un-privilege whites, so, let’s complain about “white privilege.” Whites pay the freight on the murder-rape-and-mayhem-happy, parasite, tax-recipient black race, so let’s gripe about “white privilege.” Little white babes in swaddling are being set up to take the fall for “black failure” (AKA low black IQ and backward black behavioral genetics), so, “white privilege”! Blacks are a scourge on white society, so let’s whine about “white privilege.”

    “White Privilege”: the “privilege” of being the only adult in a room full of children with voting rights.

    Now, JEWISH PRIVILEGE, on the other hand; now there’s something worth talking about. That’s one well-stocked invisible knapsack, my friend.

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  15. One of these sides is going to regret the alliance.

    The Naqshbandia Order is a Sufi order. While they are Sunni, so perfectly amenable to restoring Sunni dominance in Iraq, they are not going to be that chuffed about Wahabi puritanism unless they really like the underground life.

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  16. Iraq was recognised as one of the many Arab Humpty Dumpty countries decades ago ; that after the knock over of the the one party state it has fragmented into statelets ought not to surprise anyone. Iran will be the next to be smashed, and soon.

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  17. “George” above points to the relatively recent proliferation of government intelligence agencies in the USA whose domains overlap and which find themselves working at cross purposes to and often spying on and denouncing each other.

    Hannah Arendt in the Origins of Totalitarianism made the same observation about both the regimes of Stalin and Hitler in which each agency competed with the next for the Glorious Leader’s ear and favor while the Leader used the ensuing uncertainty to divide and rule the division heads.

    Okay, okay. I had to bring up Hitler. What’s that law again?

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  18. “Newt says:
    June 19, 2014 at 1:35 am

    Whether oil is priced in dollars or not is completely irrelevant economically.”

    Is it now? If oil were priced in some currency we could not simply print, then we would have to do something in order to earn or buy whatever currency was required to buy the oil. That would not be irrelevant, I should think.

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  19. “In contrast, Saddam’s Iran-Iraq war of 1980-1988 wasn’t much fun at all.

    ………………

    But the thrill is largely gone, leaving people to look to Islamists for inspiration.”

    People – young men, at least – don’t seem to have tired of the kind of war that involves driving around in trucks, executing people you don’t like, raping their women, and looting their stuff. Much of the world seems to have an inexhaustible appetite for that kind of war.

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  20. Whether oil is priced in dollars or not is completely irrelevant economically. It is a symbol of American economic dominence that annoys Hugo Chavez and Iran, but they could just as well price them in any stable currency. Dollars are just convenient because we have the most developed commodity and financial markets.

    International transactions have often been priced in legacy currencies, like the continued use of Spanish and Venice coins long after their economies had fallen.

    Disagree that current dollar holdings internationally provide little value to the American Financial Complex.

    The comparison with Spanish and Venice coins which circulate near their melt value in metal is quite off because with such coins there is not a lot of Seigniorage. They cost about as much to make as they are worth.

    Dollar denominated cash and cash equivalents which are held (to the tune of hundreds of billions? trillions? of dollars) by foreigners for the purpose of trade cost almost nothing to make, and as long as they don’t come washing back up the Hudson, are not inflationary. I’m not certain that I’m right, but given the price of Manhattan real estate, I’d imagine this has been quite profitable.

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  21. Newt said: “Whether oil is priced in dollars or not is completely irrelevant economically.”

    That’s completely wrong. When a Japanese entity wants to buy a barrel of oil from Saudi Arabia, it needs dollars. The USA has a monopoly: it is the only country which can print US dollars. Therefore said Japanese entity has to sell worth of $114 of stuff to the USA, which the USA pays with dollars fresh from the printer. $114 is the price of a barrel of oil today, on the Brent market. Just because oil is priced in dollars, the US just got $114 worth of Japanese stuff which it paid with what is basically fake money.

    Then, with those $114, which it just bought from the US, the Japanese entity buys a barrel of oil from the Saudi. What do the Saudi do with their $114? They invest them, directly or indirectly, in the US economy. In costly and useless fighter jets, for instance. That was the condition Henry Kissinger imposed on them in the 70′s: invest your petrodollars in the US economy, or else. The Saudi are corrupt, but they are not stupid. They accepted Kissinger’s proposal. That’s why the Arab Spring has not hit their country, and the US armed forces have not invaded the Saudi kingdom to impose democracy. And they got a pass on the fact that 17 of the 19 hijackers of 9/11 were Saudi.

    So, you see, Newt, that’s one good reason why it’s VERY important for the US that oil is priced in dollars: every time someone buys a barrel of oil somewhere in the world, the US gets $114 dollars in stuff (in Toyotas, computers and suchlike) and $114 in investments. FWIW, 84 million barrels of oils are traded each day of the year.

    If oil wasn’t priced in dollars, the US would be much less rich than it is. Its financial system might even collapse.

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  22. The case for non-intervention:

    ‘Never interfere with an enemy while he’s in the process of destroying himself.’

    In this case both shia and sunni enemies.

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  23. That’s completely wrong. When a Japanese entity wants to buy a barrel of oil from Saudi Arabia, it needs dollars. The USA has a monopoly: it is the only country which can print US dollars. Therefore said Japanese entity has to sell worth of $114 of stuff to the USA, which the USA pays with dollars fresh from the printer. $114 is the price of a barrel of oil today, on the Brent market. Just because oil is priced in dollars, the US just got $114 worth of Japanese stuff which it paid with what is basically fake money.

    Then, with those $114, which it just bought from the US, the Japanese entity buys a barrel of oil from the Saudi. What do the Saudi do with their $114? They invest them, directly or indirectly, in the US economy. In costly and useless fighter jets, for instance.

    50 pts: Explain again how giving Saudi Arabia military hardware for “what is basically fake money” is good for America.

    25 pts: Explain how I can turn dollars into other currencies and back again, but Japan can’t.

    25 pts: Explain how American fighter jets are “useless”.

    Extra credit: Explain it to Saddam Hussein.

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  24. I’m still taking notes on this one. So, ISIS is bad in Iraq, because they’re opposed to the Shia government we installed, although moderately useful since ISIS ran the Iraqis out of Kirkuk and let the Kurds take over. On the other side of the border, in Syria, ISIS is good, because they’re fighting Bashar al-Assad, who is bad, because he is aligned with Iran. But Iran is sort of good too, because they’re fighting ISIS in Iraq, allied to the Shia government we installed. So when ISIS is in Syria, they’re good, when they’re in Iraq, they’re bad, and it’s flopsy -swapsy with Iran.

    Thank goodness that’s clear.

    Now, who’s on first?

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  25. ” If oil were priced in some currency we could not simply print”

    1. The profit from printing a fiat currency is called seignorage. It would exist regardless of foreign dollar use since Americans hold dollars. Total foreign holdings of US currency is around $500 billion. That’s 5% of GDP spread out over decades of issuance. It is no big deal.

    2. Pricing transactions in dollars doesn’t mean that the transactions are actually *settled* in dollars. Most commerce is handled electronically, an Indian firm buying oil from Canada for $115US/bbl is going to take its rupees to the currency market and convert them to canadian dollars. No actual US dollars change hands, no more than if it had been priced in poodle feet or wampum.

    For certain small illiquid currencies, maybe they need to be converted to dollars first, but that represents very little actual commerce.

    Also, issuing a reserve currency has its downsides as well. During the financial crisis people rushed into Swiss Francs so much it was badly undermining their tourism and export industries, so the government adopted extremely aggressive measures to stop the rise of their currency.

    Nobody needs to be forced to use US dollars. We have the world’s largest and most open economy and two centuries of political and economic stability.

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  26. I compiled thousands of reports from these Baathists as they fought a low-level insurgency in the Sunni strongholds. They are nationalists, anti-Islamist and, I must admit, relatively humane and sophisticated compared to, say, Taliban and Al-Qaeda.

    That they have joined forces with ISIS simply tells me that they threw their hands up and said “what the hell — at least the Saudi-funded jihadis won’t kill us in our beds for being Sunni.” Less than a decade ago they were bitter enemies.

    I’m pretty impressed, Steve, that you have actually identified the importance of this. Very few Americans are capable of teasing these things out.

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  27. These two Baath Parties represent what I call the old-fashioned Bonapartist tendency of military-based modernizers.

    There isn’t enough brain power between these various Arab coalitions to light a child’s LED nightlight.

    They’re at each other’s throats because the bought off, Cold War era dictators are gone and the Muslim people are free to vote (once) for their politicians, politicians as blood thirsty as the electorate and worse than military junta dudes. What Iraq needs is an equal to Egypt’s Al-Sisi to keep the loony people from voting for their madman Imam of choice.

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  28. These two Baath Parties represent what I call the old-fashioned Bonapartist tendency of military-based modernizers.

    There isn’t enough brain power between these various Arab coalitions to light a child’s LED nightlight.

    They’re at each other’s throats because the bought off, Cold War era dictators are gone and the Muslim people are free to vote (once) for their politicians, politicians as blood thirsty as the electorate and worse than military junta dudes. What Iraq needs is an equal to Egypt’s Al-Sisi to keep the loony people from voting for their madman Imam of choice,

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  29. These two Baath Parties represent what I call the old-fashioned Bonapartist tendency of military-based modernizers.

    There isn’t enough brain power between these various Arab coalitions to light a child’s LED nightlight.

    They’re at each other’s throats because the bought off, Cold War era dictators are gone and the Muslim people are free to vote (once) for their politicians, politicians as blood thirsty as the electorate and worse than military junta dudes. What Iraq needs is an equal to Egypt’s Al-Sisi to keep the loony people from voting for their madman Imam of choice;

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  30. “Very few Americans are capable of teasing these things out.”

    I’ve harped on this for a long time, but I think it’s now clear the respectable press’s ferocious reaction to Oliver Stone’s “JFK” and the subsequent demonization of conspiracy theories left higher-brow Americans intellectually under-equipped for dealing with sizable parts of the world, which really are a lot like an Oliver Stone movie.

    For example, the concept that young Bonapartists tend to turn into old deep staters is a helpful one, but it doesn’t really exist in 21st Century American conceptual vocabularies anymore.

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  31. So much esoteric garbage here!

    What you need to know is this. Islam is a religion of simplicity, designed to overcome all the complex theological arguments of early Christianity. That is the secret of its success. But the Shia party came along to introduce (probably with Christian and Jewish sources) theological squabbles which to this day have fortunately divided Islam and made it weaker. We need to keep Islam weak and unable to do its evil; it is inherently evil and must be contained. I would even say destroyed.

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  32. Anon says:     Show CommentNext New Comment

    Is it now? If oil were priced in some currency we could not simply print, then we would have to do something in order to earn or buy whatever currency was required to buy the oil. That would not be irrelevant, I should think.

    There’s nothing magical about the dollar’s reserve currency status. Other countries use it because we allow it, and it’s the most liquid currency out there – getting in and getting out involves an infinitesimal haircut compared to other currencies. The reason we are able to buy foreign goods with the dollar is because we produce a lot of goods and services for foreign consumption. We sell cars, tractors, airplanes, chicken legs (to Russia), chicken paws (to China), soy beans, mechanical harvesters, irrigation systems, pesticides, medicines, grain, lumber, oil, coal, gas, iron, fashion items (Coach, Ralph Lauren, Michael Kors, and hordes of midscale and downscale designers), semiconductors, computers, software, cash register systems, automated teller machines, check processing systems, retail bank processing systems, machine tools, books, music CD’s, TV and movie DVD’s and so on. American companies also run all kinds of service operations abroad, including Walmart, McDonald’s, KFC, Subway, Burger King, FedEx, UPS, Exxon, Chevron, Avon, Ernst & Young, Price Waterhouse Coopers, Arthur Andersen, KPMG and so on. The benefits from these endeavors come back to the US via designers, operational and support staff and corporate HQ’s staffed with Americans, and catered to by other Americans working for small businesses and corporate profits that benefit (typically majority American) stockholders who range from one percenters to anyone with a 401(k) fund holding. That is what separates us from countries like Saudi Arabia, Brazil, Iran or Russia, whose economies are based mainly on raw material extraction.

    Many of those American products and services we see domestically are also big players abroad. The economy is a complicated thing. Can anyone even name what Finland, Singapore or Hong Kong do? And yet they are developed territories with incomes higher than either South Korea or Taiwan, both of which are known for their tech sectors.

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  33. Anonymous says:     Show CommentNext New Comment

    @asdf:

    “50 pts: Explain again how giving Saudi Arabia military hardware for “what is basically fake money” is good for America.”

    Answer:
    1. It keeps the US military-industrial complex thriving. Dollars can be used to buy stuff everywhere. In China for instance, as every US customer knows.

    2. A country which buys American fighter jets becomes dependent on the US for spare parts, upgrades, training of pilots, etc. Basically, it can’t use those jets without US customer support.

    “25 pts: Explain how I can turn dollars into other currencies and back again, but Japan can’t.”

    Answer:
    Japan can’t print yens the way the US prints dollars, because it doesn’t have the military might to “persuade” oil-exporting countries to price their oil in yens. Why do people buy yens? To buy Japanese stuff. If Japan stopped producing Toyotas and Hondas, the yen would be worthless, because oil isn’t priced in yens.

    “25 pts: Explain how American fighter jets are “useless”.

    Same thing as above: A country which buys American fighter jets becomes dependent on the US. Similarly, just ask the British if they could use their nukes without American agreement: They can’t, because their missiles are built by the US firm Raytheon.

    The things which foreigners would really like to buy in the US, such as TV channels (in order to influence US public opinion), US nuclear power plants, aircraft factories, oil companies, etc, are not for sale. Any attempt by foreigners to buy those really valuable things is blocked by Congress or discreetly torpedoed.

    “Extra credit: Explain it to Saddam Hussein.”

    Answer: I wish I had. He didn’t understand how badly the US wanted Iraqi oil to be priced in US$, that’s why he switched to the Euro in 2000, for two reasons: first, to spite Uncle Sam. Second, because the euro was rising against the dollar, therefore it was in Iraq’s interests. Less than three years later, Iraq was invaded by the US, and you know what happened.

    Similarly, Gadhaffi signed his own death warrant when he decided to sell Libyan oil in “golden dinars”.

    Newt said: “For certain small illiquid currencies, maybe they need to be converted to dollars first, but that represents very little actual commerce.”

    Saudi, Algerian, etc, oil and gas exports don’t represent “very little actual commerce”, they represent the bulk of the international oil and gas trade.

    @ Anon: Your long list is misleading. American computers are made in China and in Taiwan. American smartphones are built in South Korea. The USA doesn’t make a single cell phone. An American brand name on a smartphone or appliance doesn’t mean that it was built in the US… You can drive months in the EU without seeing a single US-made car. The US doesn’t export crude oil (it is illegal to export US oil) but it exports oil products, like benzine, in small quantities. There are McDonalds, Burger Kings and KFCs everywhere in the EU, but they hire local employees, and I don’t think that the profits which are repatriated in the US create many jobs over there. They end up as dividends to shareholders, not all of whom are Americans. The reality is that the US has a trade deficit with almost every other country in the world.

    Your explanation would have been true in the 70′s or 80′s, but it isn’t true anymore. The US doesn’t produce “a lot of goods and services for foreign consumption.” It’s amazing that you mentioned Arthur Andersen in your list. The company doesn’t exist anymore, only as a shell to handle dozens of lawsuits. What happened is that Arthur Andersen was caught red-handed advising Enron on how to produce fake wealth… Which is what most of the so-called “legal services” basically are: hot air…

    I’m not writing America’s epitaph. I’m typing this in France, but on an Apple computer. The software, at least, is American…

    Not sure that it will still be true a generation from now, though. The US used to be a nation with a three-digit average IQ. It is rapidly turning into a nation with a two-digit average IQ, and so are France and the UK. I would be surprised if, in the future, nations with two-digit IQs sell software and financial products to three-digit IQ nations… It’s usually the reverse.

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  34. @asdf:

    “50 pts: Explain again how giving Saudi Arabia military hardware for “what is basically fake money” is good for America.”

    Answer:
    1. It keeps the US military-industrial complex thriving. Dollars can be used to buy stuff everywhere. In China for instance, as every US customer knows.

    2. A country which buys American fighter jets becomes dependent on the US for spare parts, upgrades, training of pilots, etc. Basically, it can’t use those jets without US customer support.

    “25 pts: Explain how I can turn dollars into other currencies and back again, but Japan can’t.”

    Answer:
    Japan can’t print yens the way the US prints dollars, because it doesn’t have the military might to “persuade” oil-exporting countries to price their oil in yens. Why do people buy yens? To buy Japanese stuff. If Japan stopped producing Toyotas and Hondas, the yen would be worthless, because oil isn’t priced in yens.

    “25 pts: Explain how American fighter jets are “useless”.

    Same thing as above: A country which buys American fighter jets becomes dependent on the US. Similarly, just ask the British if they could use their nukes without American agreement: They can’t, because their missiles are built by the US firm Raytheon.

    The things which foreigners would really like to buy in the US, such as TV channels (in order to influence US public opinion), US nuclear power plants, aircraft factories, oil companies, etc, are not for sale. Any attempt by foreigners to buy those really valuable things is blocked by Congress or discreetly torpedoed.

    “Extra credit: Explain it to Saddam Hussein.”

    Answer: I wish I had. He didn’t understand how badly the US wanted Iraqi oil to be priced in US$, that’s why he switched to the Euro in 2000, for two reasons: first, to spite Uncle Sam. Second, because the euro was rising against the dollar, therefore it was in Iraq’s interests. Less than three years later, Iraq was invaded by the US, and you know what happened.

    Similarly, Gadhaffi signed his own death warrant when he decided to sell Libyan oil in “golden dinars”.

    Newt said: “For certain small illiquid currencies, maybe they need to be converted to dollars first, but that represents very little actual commerce.”

    Saudi, Algerian, etc, oil and gas exports don’t represent “very little actual commerce”, they represent the bulk of the international oil and gas trade.

    @ Anon: Your long list is misleading. American computers are made in China and in Taiwan. American smartphones are built in South Korea. The USA doesn’t make a single cell phone. An American brand name on a smartphone or appliance doesn’t mean that it was built in the US… You can drive months in the EU without seeing a single US-made car. The US doesn’t export crude oil (it is illegal to export US oil) but it exports oil products, like benzine, in small quantities. There are McDonalds, Burger Kings and KFCs everywhere in the EU, but they hire local employees, and I don’t think that the profits which are repatriated in the US create many jobs over there. They end up as dividends to shareholders, not all of whom are Americans. The reality is that the US has a trade deficit with almost every other country in the world.

    Your explanation would have been true in the 70′s or 80′s, but it isn’t true anymore. The US doesn’t produce “a lot of goods and services for foreign consumption.” It’s amazing that you mentioned Arthur Andersen in your list. The company doesn’t exist anymore, only as a shell to handle dozens of lawsuits. What happened is that Arthur Andersen was caught red-handed advising Enron on how to produce fake wealth… Which is what most of the so-called “legal services” basically are: hot air…

    I’m not writing America’s epitaph. I’m typing this in France, but on an Apple computer. The software, at least, is American…

    Not sure that it will still be true a generation from now, though. The US used to be a nation with a three-digit average IQ. It is rapidly turning into a nation with a two-digit average IQ, and so are France and the UK. I would be surprised if, in the future, nations with two-digit IQs sell software and financial products to three-digit IQ nations… It’s usually the reverse.

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  35. Priss Factor [AKA "Cloudcastler"] says:     Show CommentNext New Comment

    “We need to keep Islam weak and unable to do its evil; it is inherently evil and must be contained. I would even say destroyed.”

    At least it aint for ‘gay marriage’.

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  36. “50 pts: Explain again how giving Saudi Arabia military hardware for “what is basically fake money” is good for America.”

    In the long run, it isn’t. Henry Kissinger did alot of things that weren’t good for America. In the short run, it does keep some Americans employed.

    25 pts: Explain how I can turn dollars into other currencies and back again, but Japan can’t.

    And you do that at considerable cost. You pay a big premium to convert currencies. It’s cheaper to just get paid in the currency you want.

    “25 pts: Explain how American fighter jets are “useless”.

    Extra credit: Explain it to Saddam Hussein.”

    American fighter jets in the hands of Saddam Hussein would have been useless – just as his French and Russian jets were.

    Bonus 50 points: explain why anyone should give a damn what you think, considering the idiocy of the opinions you’ve expressed here.

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  37. “Anon says:
    June 20, 2014 at 1:14 am

    There’s nothing magical about the dollar’s reserve currency status.”

    So you would have no problem ceding it to another country?

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  38. “Farang says:
    June 19, 2014 at 2:05 pm

    Then, with those $114, which it just bought from the US, the Japanese entity buys a barrel of oil from the Saudi. What do the Saudi do with their $114? They invest them, directly or indirectly, in the US economy. In costly and useless fighter jets, for instance. ”

    One of those things the Saudis bought was GE Plastics – a leading supplier in a huge industry, and the inventor of many engineered plastics. It is now the wholly owned property of SABIC, a consortium of the Saudi government and a group of rich Saudi sheiks (i.e., also the Saudi government). But, of course, it doesn’t matter who owns what, does it?

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  39. If you look in the Wikileaks files, you will see no mention of gold dinars. That was one of Gaddafi’s wild ideas from a while back that no one, least of all, him, took seriously. What mattered was the fact oil companies’ profit margins from extracting Libyan oil were unusually low due to numerous Libyan arbitrary demands.

    I support direct and indirect U.S. intervention in Iraq and Syria to destroy the ISIS. Like it or not, at present, Syria and Iraq are massive training grounds for fundamentalist Sunni Muslim terrorists. As an example of what is mostly yet to come as a result of this fact, see

    http://www.nytimes.com/2014/06/02/world/europe/suspect-arrested-in-jewish-museum-killings-in-belgium.html

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  40. Mr. Anon said: “But, of course, it doesn’t matter who owns what, does it?”

    On the contrary, who owns what is very important. That’s why the US sells fighter jets to Saudi Arabia (which make Saudi Arabia dependent on the US for spare parts and training) but not Boeing or Chevron.

    Buying GE Plastics was a smart move by the Saudis. Technology is the most precious US asset. That’s why the US defends intellectual property rights so aggressively.

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  41. J.R.T.N., the initials of its Arabic name….
    Wouldn’t the initials of its Arabic name be…….Arabic?
    But seriously, explain the difference between Syrian Baath and Iraqi Baath. I saw how it bothered Sadaam to act Islamic…both parties are atheistic…but the atheistic Syrian Baath party is run by Alawites. No one seems to know what Alawites believe, but surely it is a religion.

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  42. “Farang says:

    Buying GE Plastics was a smart move by the Saudis. Technology is the most precious US asset. That’s why the US defends intellectual property rights so aggressively.”

    Evidently we do not defend those rights aggressively. If we did, we would not permit American companies to sell themselves out to foreign interests.

    Plastics is not the only industry we are losing. Electronic test equipment – a sector which is at the root of the entire electronics industry – is in the process of decamping to China.

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