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As one writer said recently “Earthquakes are created by movement of tectonic plates, but the death toll they extract is determined by poverty.” I searched the BBC’s collection of videos from Haiti, taken from many places in the country immediately after the earthquake hit; it was hard to see a building that was still standing. In his testimony in Congress today, Paul Farmer indicated that 80% of the city of Port-au-Prince has been destroyed. The cinder block structure of many of those buildings would have withstood the earthquake with damage, rather than complete collapse, if the construction methods included steel rods interconnecting the blocks. But Haiti is too poor a country to support that kind of construction, or so we are told.  If new buildings now needed are not constructed with tougher quake standards, future tragedy awaits the region because the entire Caribbean area is a hotbed of seismic activity. The fault line that destroyed Port-au-Prince had not generated a major earthquake for 240 years, but 100 miles to the north is another similar fault that has not generated an earthquake for 800 years and should that one go, which certainly will happen sometime, it will likely be considerably larger than the recent one in Haiti, but this time centered in the Dominican Republic.  But whose fault is it that houses were not better built in Haiti and that poverty in the country  is so widespread? Short-term thinkers would have you believe that there is something intrinsically inferior with the Haitian people, who seem to preferentially travel along the road to abject poverty as if on automatic pilot.  Perhaps there is a gene for impoverishment and it has taken root within the Haitian people. But a little bit of study provides an alternative explanation, one in which American policies have been intertwined in ways that should be repulsive to American citizens.

A shortcut for understanding American foreign policy is to understand our long relationship and intertwined history with Haiti. If you do nothing more than understand that single relationship, you will understand the dominant theme of American foreign policy. To achieve objective knowledge of our history with Haiti, you must, not surprisingly,  expunge the information you generally get through the mainstream media because that’s the short-term view: history through the eyes of a Polaroid camera. For starters, you might begin by reading Mark Danner’s op-ed piece in the New York Times this past week “To Heal Haiti, Look to History, Not Nature.” As Mark explains, in the early part of the nineteenth century, there were two countries in the Western hemisphere that had been liberated from colonization. One was America of course and the other was Haiti. But before Haiti freed itself in a manner reminiscent of our own revolution, but far more gutsy, it was under grueling French rule as a slave colony growing sugar cane. At that time it was known as Santo Domingo and it was one of the richest colonies on the planet. Indeed, much of French wealth of that era was floated on the profits from sugar derived from the slave labor. Slaves  were worked so hard under the French, that many died without having children, so slaves were continuously brought in from Africa. Under legendary revolutionary  leadership, the African slaves launched a revolt in 1791 and defeated Napoleonic France, murdering their French masters or driving them from the land and repelling several attempted invasions. As Danner aptly put it, “when Dessalines [Haitian revolutionary slave hero] created the Haitian flag by tearing the white middle from the French tricolor, he achieved what even Spartacus could not: he had led to triumph the only successful slave revolt in history.”

So given the similarities of history, and the zeal for revolution inspired by the Haitian revolt, you might have expected that the new America would enthusiastically recognize the new state of Haiti, as a brother in the brave new world of unshackeling the  roots of colonialism. But, while that kind of alliance might seem natural to the ordinary citizens of America, at least today, we went in just the opposite direction in forming a bond with our fellow revolutionaries in Haiti. The new American government feared that knowledge of a slave revolt in Santo Domingo would embolden American slaves towards insurrection in America. Because of that, the United States refused to recognize Haiti for nearly 60 years, until Abraham Lincoln did so in 1862, after freeing the American slaves.  Not only did America refuse to recognize the new free state of Haiti, but we hit the new country with an onerous trade embargo and supported a claim made by the French that Haiti should pay reparations to France for their lost income from slave labor. These suffocating extortion-extracted payments from Haiti  started in 1825, in exchange for recognition from the French; they did not stop until after WW II. Democratically elected Haitian President Aristide, who demanded repayment from France when he was elected President, did the math: he calculated that with sensible interest rates, France owes Haiti about $ 21 billion in illegally obtained reparations. While France has scoffed at the idea of repayments, legal scholars consider that Haiti has a strong legal case to make in international courts, as the reparations paid by Haiti amounted to extortion. The French basically said to Haiti–pay us or we will invade your country and subjugate your people again.

Once the French were out of Haiti, the Americans took over. In 1915, the United States Marines invaded Haiti to enforce continued payment of debt to France. Americans occupied Haiti until 1934, after which we installed dictatorships, notably that of Francois Duvalier in 1957, who established a repressive, murderous regime which was handed to his son, Jean-Claude who was overthrown in 1986. The struggle to generate a democracy in Haiti has been continuously thwarted by American efforts at manipulating loans,  loan conditions and trade policies that have served to paralyze the country and stunt its development. What we want from Haiti is a continued impoverished state so that American businesses like Walt Disney, will have access to a nearby source of cheap labor. What we don’t want to see in Haiti is an example of former slaves becoming our equals, living in a thriving, independent, populist democracy. Indeed we don’t want that in any Western hemisphere country and we only tolerate it in Canada because we lost the war of 1812.   About 40% of Haiti’s current heavy debt (about $1.134 billion in 2004) is owed to international financial communities, largely overseen by the United States: it was acquired during the brutal  Duvalier dictatorships. Very little of that money actually went to the government, but served instead to enrich the coiffures of the ruling elite. More recently, through arrangements insisted upon by our government,  international loans don’t go directly to the elected government of Haiti, but are given first to non-government agencies (NGOs). Paul Farmer, a physician who has spent 25 years serving in Haiti,  has testified that less than 1% of the money given to NGOs in Haiti actually reaches the Haitian government and its people. This of course is explicable on the basis of Naomi Klein’s arguments about the “shock doctrine” and we have seen similar behavior in the recovery from Katrina in New Orleans, where NGOs absorbed much of the reconstruction money with very little accountability. Privatization of government functions is part of the mechanism of disaster capitalism. The costs go up, corporations get rich and the target of concern gets next to nothing. And, let’s be clear about one thing: when you begin a policy like that, you cannot reverse it. Like the bowling ball you released that heads down the lane, once launched, it cannot be recalled. Our entire government is like that–it’s on automatic pilot. This is nothing more than Folly Compounding which I have addressed at length in other articles.

A good book on the subject of Haiti is “Getting Haiti Right This Time“ by Noam Chomsky, Paul Farmer and Amy Goodman. This short book is centered around the Bush II administration’s removal of Democratically elected President Jean-Bertrand Aristide, with initial background material by Noam Chomsky and Paul Farmer on the history of Haiti and the more recent manipulations of the country by our foreign policy apparatus, including our international loan policies that can truly suffocate a country. The rest of the book is primarily based on Amy Goodman’s interviews on Democracy Now, during the upheaval in Haiti that led to Aristide’s forced removal to the Central African Republic in 2004.  This is a short read, but gives a lot of insight into how American foreign policy has nothing to do with whether a country is democratic or not because, in the case of Haiti, as it is throughout South America, we have done everything we can to destroy populist democracy, including, in the case of Haiti, the kidnapping of Aristide and his removal as president by GW Bush. Our CIA has trained and had on its payroll many of the terrorists that have worked to destabilize democracy in Haiti. Declassified records have established that the CIA and other government agencies helped to create, fund and train a paramilitary group known as FRAPH, which rose to prominence in 1991, after a military coup ousted Aristide for the first time (Clinton helped to restore Aristide to his presidency in 1994, but seemed unaware that elements in his own government had generated his removal and would attempt to do so again). The FRAPH group killed thousands of Haitians during the revolt in 1991 and helped to unravel Aristide’s presidency again in 2004.

The tragedy of Haiti and its deep impoverishment is an American achievement, designed to cripple a democracy so that American business interests can continue to enjoy a cheap source of labor. Haiti was made in America!  The ruling elites in Haiti own the press, so that little objective news ever reaches the general population. Polls that reveal the popularity of Aristide are never published in the major local news media. Haiti has had a rich history that we should admire and support: there is genius in what they did and what they are trying to do now. They threw off a brutal form of slavery, lived through and threw out dictators and have tried to establish a populist, democratically elected government. The Obama administration could change the course of history by bringing Aristide back, supporting him financially and, under his leadership, help the country recover, while at the same time, building a strong democratic state. It should seem to all of us that we and the French owe that much to Haiti. Ironically, while we are unlikely to ever build a democracy in Iraq or Afghanistan, Haiti would welcome and thrive with a populist democratic government that provided the basics of education, healthcare and all the things we no longer provide for many Americans here at home. Come to think of it, by reconstructing Haiti, we could learn how to reconstruct America! Both countries need to press the “restart button.” Haiti’s problem is that the island nation is in the wrong hemisphere. Do we just have to tear up the Monroe Doctrine?

RFM

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Stephen Hall stated that the $ billions of bonus money now being distributed within Wall Street firms was not generated by the work of genius, but in many cases resulted from “simple arbitrage” in which Wall Street firms got money from the government at very low interest rates and then invested in U.S. Treasury bills and turned a profit by the volume of that investment and the interest rate difference. Imagine what we could do with $ billions given to us from the government without much interest, which we then invest in treasury bills, getting back $ billions in profits, all from the same source and then demanding that the word genius be applied to our good works–God’s work really.  But would everyone agree that we were a financial genius or might some consider this to be one category of deviant behavior? A better question might be: how does that restore the economy of a country?

RFM

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As the first decade of the 21st century draws to a close, it is hard to avoid identifying the prominent initials of the person who is most readily associated with the worst decade of our lives–GWB. He was not alone, but as one misstep followed another, he operated as if his guiding hand was that of Medusa, as each of his efforts seemed to turn to stone. Almost nothing, foreign or domestic, went the way Americans expected of their government: Katrina and the fake evidence leading to the invasion of Iraq as but two examples. The guiding Medusa-like hand was in fact that of Dick Cheney, GW’s  most accomplished co-conspirator in the high crimes and misdemeanors committed by the worst presidency in the history of America, bar none! In eight years, the two of them managed to completely misalign our country in ways that still blur our capacity to see how off course we are as it seems like we must turn to celestial navigation to get our country back on a more familiar route to a safe harbor. It’s like we have to return to the original founding documents of our country to figure out who we are supposed to be. Bush, Cheney and their Neocon pals grabbed the instruments of government and steered our ship of state into the hands of a ruling oligarchy that remain in control of our policies and our financial future. The process was far too easy for comfort, as it relied on the fusion of fears and forces that have been long smoldering in our country, including the military-industrial complex and revisionist McCarthyism used against anyone suggesting that there are better ways than war to solve our problems. Under GWB, the true character of our militarism became painfully apparent. As the election of 2000 eventually demonstrated, Bush was elected as a non-president for America, but the un-elected executive serving the oligarchs, the new rulers of America. Bush is gone, but we have a sitting president who told us he would free us of the oligarchs  once he was in office, but he seems unable to mount a significant assault against their grip on our government and our sociopolitical institutions.

We shouldn’t be confused: Bush and Cheney were not the puppet masters in this new American play, but rather the obliging puppets, whose strings were pulled by the oligarchs of high finance and multinational corporate power, aided in part by people like Rupert Murdoch. The oligarchy includes the richest 1% (~ 3 million) of our population that received huge tax cuts and garnered about 2/3 of the real income growth that took place during the Bush years: it wasn’t much, but they got most of it. The ruling oligarchy is evident in the decisions we make that get us into new wars and diminish our constitutional freedoms. But perhaps more insidiously, another looming crisis lies within the financial sector, reflected in the way with which we are dealing with our deep recession and the bailout solution that has been applied to solve it. The solution was not aimed to serve our interests, but exclusively those of the ruling oligarchs of America.

With high unemployment that promises to loom far into our future, we continue to ship jobs to China and have a huge trade imbalance with them as we buy, buy, buy, but don’t sell much to them in return. Indeed, we give the store away.  The normal manner in which trade imbalance is dealt with, is to change the rate of currency exchange until a balance of trade is achieved, with neither side gaining significantly over the other–just trading for goods and services that are unique to each country.  We can readjust the value of the Chinese currency against the dollar on our own, but we refuse to do so, claiming that the Chinese must do it, which is how we hide behind the demands of the oligarchy, who continue to see high value and profit in the trade imbalance, all for purely selfish reasons–those of greed.  Our unbalanced trade with China, though it’s costing American jobs and serves to rapidly diminish our manufacturing capacity, is what Wall Street wants, so they can use the cheap labor of China, coupled to unlimited access to American markets, quite irrespective of what those policies do to the American worker, because destroying the American labor movement is sort of a bonus. In that way–the Wall Street way–corporate profits remain high and the stock market will continue to show good returns for the right kinds of  investments. The right kind of investment is not investing in American growth and its future. These financiers now know that they can safely build another bubble and get rewards from the taxpayers if they overextend their drive for higher profits. If you think the American way out of our high unemployment is through manufacturing ourselves into a new green economy, think again. China is already the largest manufacturer of photovoltaic solar panels, using American-based technological developments to aid in their design and production: we provide the fruits of our research to them for free.

Whereas, we go to war on borrowed money by selling bonds to countries like China, we deal with our financial problems at home by attempting to re-inflate our economy, so the big banks recover their original investments while we absorb their losses through the creation of new, unheard of levels of public debt. Today we hear that our deficit spending is approaching record levels, but what’s left out of the conversation is that the Bush-Paulson buyout plan for the financial sector has saddled us with $ 12 trillion in bad investment debt (”toxic assets”), for which we have assumed financial responsibility that will be passed on to the American public, requiring new long-term taxation policies that are likely to keep the American worker in a state of near serfdom for as far into the future as we can see. This debt never makes the news, but it is gradually sinking the American ship.

The general public expresses their outrage at the exorbitant bonuses paid to bank executives, while missing the much larger rape of our public financial resources through the economic enslavement of Americans with a plan that cannot succeed without committing our economy to repay their bad debts at their original face value–thus the $ 12 trillion in “under the radar-screen” “toxic investment,” public debt. If you want to read more about the essence of this debt and be better informed (but no less depressed) about the continued success of our ruling oligarchs, read Michael Hudson’s article in CounterPunch, or Nomi Prins‘ article on the same topic. Today, we are ruled by the same oligarchs for whom Bush and Cheney were the stage puppets. Obama has agreed to replace them on stage through a partnership with Larry Summers, Ben Bernanke and Tim Geitner. Collectively, they too are just the tools of the oligarchs.

Take for example the $ 50 billion program designed to renegotiate home mortgages for “troubled homeowners.” This sounds like an act of generosity for people having trouble making their mortgage payments. But in reality this bill turns out to be a huge benefit for large banks and was designed with them in mind, including  Citibank and Bank of America, as their just reward for making bad loans. It goes like this: the treasury takes on the bad debt that banks are stuck with, while negotiating with troubled homeowners to renegotiate their monthly payments down to 38 per cent of their income. But, whereas one might expect the banks to take their losses on this arrangement, justly earned by their behavior,  the treasury will make up the difference, so that the banks wind up will full repayment of their loan at its original value, plus a new government guarantee that the remainder will be insured by the government, providing the banks with a clean sweep and rosy record books. This is taking place, despite the fact that it was their over-zealous loan policies that got us into this fix in the first place. Treasury is hoping that the re-inflation of housing will eventually solve the problem of this debt, by returning these toxic assets to their original value, but we remain in a period of significant deflation, not the inflationary trend needed to reduce this debt level. If the banks had to contribute part of their resources for “troubled homeowners,” the money for this program could go much further in helping people with unmanageable mortgage debt. But, when the $ 50 billion has gone, that will be the end of the program. In the meantime, foreclosures continue and are seeping into people that have decent jobs, as higher payments get triggered in by the original mortgage arrangement. If this country was really committed to helping homeowners, they would put a freeze on foreclosures and allow judges to restructure homeowners debt, but efforts to do either have been defeated in Congress.

When Obama tells us he is worried about our debt, he doesn’t tell you which form of debt he is talking about. Collectively the give-away to the financial sector, for the trauma that their actions caused, amounts to providing them with payback at face value before the stock market deluge fully developed. Nice arrangement for them and a disaster for us. You can see the oligarch’s success with the overdue reform in our healthcare system, which permeates the bills recently passed by the House and Senate. While we can identify some improvements in how the insurance industry deals with those covered by their policies, the bills do very little to attack the structural problems of our healthcare system, such as employment-based insurance and the introduction of true cost-containment methods. At the same time, the healthcare bill will add as many as 30 million new enrollees to the insurance company’s  patient portfolios, with some government support for premiums, all going to enhance the profits of these insurance companies. The lack of a good and broad public option plan will mean that cost-containment issues will continue to haunt us, just as employment-based health insurance costs will continue to rise. There is little in either bill to keep these inflationary trends  in healthcare costs from changing their trajectory.
So, as we turn a corner on the first decade of the new Century, we are leaving behind a decade-long string of nightmares. But we have a string of new nightmares in our future, as well as  continuity with the old ones that remain in the current glide path towards our financial insolvency. I have only provided a small list of Bush’s trail of transgressions in favor of the oligarchs, all achieved by imperiling the country’s future.  But,  Juan Cole has a more complete list on his blog. Our governement’s response to Katrina told us how the olicarchs felt about treating people in poverty. Now we are fighting to avoid having our middle class be the next in line for Katrinaization. But, it doesn’t matter too much whether it’s excessive flood water or excessive debt. If one doesn’t kill you immediately, the other shortens your life and leads to a very diminished set of expectations.

The problems we face today actually began with Microsoft. As they started their meteoric rise to unimaginable levels of profit, beginning in the 1980s, other corporate masters saw this new stratospheric level of profitability and said, “why not us?” Major shareholders were saying the same thing: “why not us? Using the new Microsoft model, every corporation wanted extreme new profit margins to satisfy the new demands of their share holders and they placed the responsibility for achieving this in the hands of their CEOs. The trend for more wealth and profitability began when corporations took significant gains in productivity and, instead of giving some of it back to the workers responsible for those gains, saved and reported them as additional profits, shooting for eye-level performance with Microsoft, as determined by the value of their corporate stocks. The old corporate profit margin of 12% had to give way to 25% or more in order to sustain the march to greater corporate wealth. The gold watch for employees got converted to the gold parachute for the CEO, while workers earnings stagnated, even though their productivity grew and grew. The old corporate model fell by the wayside and new trends, like “re-engineering” and “downsizing” became the euphemisms for corporate greed and higher profits. How a software company can make mounds more in returns than the more creative inventors of the computer hardware has always perplexed me when thinking about just rewards for creativity. But the Microsoft model remains in effect today and will be there unless someone shoots it down!

Yet, hope springs eternal and perhaps in the decade ahead, the American public will begin to discover that the mission of our ruling class oligarchy does not have our economic interests in hand or even a healthy planetary future within their gun sights. With images of a vast new wealth as their sole vision, they can afford to reach the high ground, as the ocean fronts advance (moving to places like Aspen Colorado) with Blackwater mercenaries for protection, as they hold on to what they have, gardening under domes if necessary  with enslaved Americans serving as a source of cheap labor–eventually as cheap as China’s.  What will it take to make our future look brighter? Believe it or not, we are only a few dozen progressive legislatures away from controlling both the Senate and the House  by a progressive majority. To do this, we will have to hold onto the ones we have and successfully challenge some of the corporatist Democrats in their  primaries to begin the long journey back from these troubled times. Doable? yes!  Likely?, who knows?
Happy New Year!
RFM

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