Attack of the Cyborg Insects- The dangers of science in the service of the state

Attack of the Cyborg Insects
The dangers of science in the service of the state

by Justin Raimondo
by Justin Raimondo

Recently by Justin Raimondo: The Alien Menace!

In the course of promoting a conference on “Warring Futures: How Biotech and Robotics Are Transforming Today’s Military – and How That Will Change the Rest of Us,” a May 24 conference in Washington, D.C.,co-sponsored by Slate, Arizona State University, and the New America Foundation (i.e. George Soros), ASU’s Brad Allenby averred:

Telepathic helmets. Grid-computing swarms of cyborg insects, some for surveillance, some with lethal stingers. New cognitive-enhancement drugs. (What? Adderall and Provigil aren’t good enough for you?) Lethal autonomous robots. Brain-chip-to-weapon platform control systems on a ‘future force warrior‘ platform. American military technology is getting very frisky.”

As my friend Lew Rockwell put it, “The article, a defense of sci-fi war, is a reminder, not only of how much loot is taken from us for these murderous purposes, but how many scientific and engineering brains are enlisted into Starship Trooperism. How much freer, wealthier, and more advanced our civilization would be without the Pentagon, the CIA, the whole military-industrial complex. How many people would not have had their lives ended too soon.”

Militarism distorts the development of civilization, deforming the natural evolution of culture and even science: the end result is the birth of misshapen monsters, such as nuclear technology, the love child of war and the Leviathan. Allenby’s cyborg insects are the Bizarro World version of productive achievements: they are the cancer cure, the clean power source, the life affirming and life-prolonging innovations that might have been invented, but weren’t.

Massive state intervention in the form of something like the Manhattan Project distorts the natural development of technology as it unfolds over time. It not only mis-directs resources to unproductive and even horrifically destructive activities, it upsets the natural progression of theoretical science and its technical applications, altering the sequence and tempo of the advance of human knowledge. The result is that some possibilities – e.g. a cancer cure – are aborted, while others – nuclear power and “telepathic helmets” – are unleashed prematurely on a world that isn’t ready, either ethically or otherwise, to make the kinds of moral decisions they are suddenly confronted with. It is like a young child suddenly faced with a life or death issue: he has neither the capacity nor the wisdom to deal with it.

Our elites glory in the term “technocrat” because it is synonymous with the kind of cool competence that supposedly elevates them above the common herd. Draping themselves in the mantle of science imbues their regime with an aura of ersatz legitimacy, the modern analogue of the divine right of kings. While tyrants of yore invoked Bible verses to justify the Crusades, their modern day equivalents rely on Power Point presentations of incomprehensible complexity and elaborate flowcharts. That’s “progress” for you.

Allenby argues that we can’t “stop” technology, but quite naturally fails to see these are the mutant offspring of an unnatural course of development, one distorted by the “Starship Trooperism” he epitomizes, and that every decent person rightly abhors. The consequences of this massive diversion of human and material resources are potentially fatal to the human race. We just barely escaped nuclear annihilation of much of the planet at several points during the long cold war between the US and the Soviet Union. Who knows what new monsters will be unleashed from state laboratories tomorrow?

Well, Allenby, apparently, for one, as well as the other attendees at the conference, which will doubtless attract the cream of the military-industrial-academic complex, hawking their wares and handing out their resumes to the warlords of Washington. Those telepathic helmets are sure to come in handy.

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May 22, 2010

Justin Raimondo [send him mail] is editorial director of and is the author of An Enemy of the State: The Life of Murray N. Rothbard and Reclaiming the American Right: The Lost Legacy of the Conservative Movement.

Copyright © 2010

The Best of Justin Raimondo

Time-asymmetry of Government: Terminal Stage Approaching

Time-asymmetry of Government: Terminal Stage Approaching

by patrissimo

I gotta read Matt Ridley’s new book, The Rational Optimist.  He’s going to be on the Reason/TSI Cruise in January, and here’s a snippet Arnold quoted from the book:

Empires, indeed governments generally, tend to be good things at first and bad things the longer they last. First they improve society’s ability to flourish by providing central services and removing impediments to trade and specialisation; thus, even Genghis Khan’s Pax Mongolica lubricated Asia’s overland trade by exterminating brigands along the Silk Road…But…governments gradually employ more and more ambitious elites who capture a greater and greater share of the society’s income by interfering more and more in people’s lives as they give themselves more and more rules to enforce, until they kill the goose that lays the golden eggs. There is a lesson for today.

This is exactly my view of history, the one you can find in Mancur Olson, or applied to the USA in Rauch’s book “Government’s End”.   The normal mode of government is to parasitically waste more and more of society’s resources, until there is a phase shift (collapse, revolution against government, revolution of colony against empire, etc)[1].  The US and Europe have, in my opinion, moved from the middle stage of this process towards the end stage. They have only decades remaining in their current form. If you want to personally influence the future, you should be watching this trend and asking yourself – what comes next? How can the transition be as painless as possible?

The sad thing is, a lot of people are wasting a lot of time and resources on trying to cure this metastasized terminal cancer. There don’t seem to be that many people who are, like we at this blog (and my professional work at TSI), working on figuring out the next stage. I really wish there were more serious alternatives (real options with real transition plans – not utopian hopes) being proposed, and more resources behind all of them.  I’m biased, but I don’t think it’s just that. This is serious, folks.

Although…much less serious than past collapses. I don’t think there will be much starvation or bloodshed. Paying attention to your own life and letting societal re-organization take care of itself is eminently reasonable, this time around.  I don’t fault anyone for doing that.  But I do fault those who act without careful analysis, and so make poor use of their resources.  Ah well – took me many years to see the light.

Anyway, just wanted to make sure everyone knew that current socialist western democracies are in a slow collapse, in case you hadn’t gotten the bulletin yet :) .

[1] To be honest, I must admit that I’ve only studied this phenomenon in the context of  democracy, so while I am inclined to believe it is more generally true, that could just be my prejudices speaking.

Immigration and Liberty

Immigration and Liberty

by Walter E. Williams

Recently by Walter E. Williams: Free Markets: Pro-Rich or Pro-Poor

My sentiments on immigration are expressed by the welcoming words of poet Emma Lazarus’ that grace the base of our Statue of Liberty: “Give me your tired, your poor, your huddled masses yearning to breathe free.” Those sentiments are probably shared by most Americans and for sure by my libertarian fellow travelers, but their vision of immigration has some blind spots. This has become painfully obvious in the wake Arizona’s law that cracks down on illegal immigration. Let’s look at the immigration issue step by step.

There are close to 7 billion people on our planet. I’d like to know how the libertarians answer this question: Does each individual on the planet have a natural or God-given right to live in the U.S.? Unless one wishes to obfuscate, I believe that a yes or no can be given to that question just as a yes or no answer can be given to the question whether Williams has a right to live in the U.S.

I believe most people, even my open-borders libertarian friends, would not say that everyone on the planet had a right to live in the U.S. That being the case suggests there will be conditions that a person must meet to live in the U.S. Then the question emerges: Who gets to set those conditions? Should it be the United Nations, the European Union, the Japanese Diet or the Moscow City Duma? I can’t be absolutely sure, but I believe that most Americans would recoil at the suggestion that somebody other than Americans should be allowed to set the conditions for people to live in the U.S.

What those conditions should be is one thing and whether a person has a right to ignore them is another. People become illegal immigrants in one of three ways: entering without authorization or inspection, staying beyond the authorized period after legal entry or by violating the terms of legal entry. Most of those who risk prosecution under Arizona’s new law fit the first category – entering without authorization or inspection.

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May 22, 2010

Walter E. Williams is the John M. Olin distinguished professor of economics at George Mason University, and a nationally syndicated columnist.

Copyright © 2010 Creators Syndicate, Inc.

The Best of Walter E. Williams

The Power Problem: How American Military Dominance Makes Us Less Safe, Less Prosperous, and Less Free

The Power Problem: How American Military Dominance Makes Us Less Safe, Less Prosperous, and Less Free

by David Gordon

The Power Problem: How American Military Dominance Makes Us Less Safe, Less Prosperous, and Less Free • By Christopher A. Preble • Cornell University Press, 2009 Xiii + 212 pages

America, it is frequently urged, cannot return to its traditional foreign policy of nonintervention. We live in a world that constantly exposes us to danger. Unless America acts as a world policeman, a conflagration far distant from us can soon spread and strike at our essential national interests. The lessons of 9-11 must not be forgotten. Fortunately, America is far and away the most powerful nation in the world. We can, if only we maintain a resolute will, act to promote world order: if we do not, no one else can act in our place.

This disastrous line of thought has embroiled us in futile wars in Iraq and Afghanistan; now neoconservatives urge us to take drastic action against Iran, lest that nation secure nuclear weapons. Once more, the contention supporting a strike at Iran is that the United States must act as a hegemonic power to maintain a stable world. Christopher Preble provides an outstanding critical analysis of this dangerous doctrine in what must count as one of the best defenses of a restrained and rational foreign policy since Eric Nordlinger’s Isolationism Reconfigured.[1]

Even those inclined to give credence to the siren song of a Pax Americana must confront reality. Though America may be the world’s mightiest nation, it cannot achieve the grandiose goals of the interventionists. America is strong, but not strong enough.

But our military power has come up short in recent years. Although the U.S. military scored decisive victories against those individuals in Afghanistan and Iraq who were foolish enough to stand and fight, it has proved incapable of enforcing a rule of law, or delivering security, in many parts of post-Taliban Afghanistan or post-Saddam Iraq… We know that our men and women in uniform can accomplish remarkable things. But we have also begun to appreciate their limitations, the most important of which being that they cannot be everywhere at once. (pp. 37–8)

If the goal of universal peace under American domination is unrealizable, the attempt to achieve it has imposed heavy costs. Most obviously, the wars undertaken to secure this chimerical goal have caused death, destruction, and resentment against the United States by the people subjected to our assault. In Afghanistan, e.g., the

use of air power to attack suspected insurgent strongholds has enraged Afghan leaders and the local population causing them to question our intentions. Afghan President Hamid Karzai’s “first demand” of Barack Obama was for the President-elect “to put an end to civilian casualties.” (pp. 147–48)

The financial burdens of hegemony are difficult to overestimate. America spends more on the military than all other industrialized nations combined. Defenders of our current policy counter by saying that our defense spending is no higher than many other countries as a percentage of GDP, and lower than some. Preble dismisses this as irrelevant:

There are a very few poor countries that spend a larger percentage of their meager GDP, but that translates to far less military capacity in real terms … what a country spends as a share of its GDP doesn’t tells us very much about how much it should spend. (p. 67)

Talk of percentages occludes the immense amount of money the hegemonic policy demands. As an example, the Iraq War, according to an estimate by Joseph Stiglitz and Linda Bilmes, will cost

between $2.7 trillion in direct costs to the federal treasury, to as much as $5 trillion in terms of the total impact of the war on the U.S. economy… Although critics challenged aspects of the Stiglitz/Bilmes research, two of their central arguments are beyond dispute – and they apply not merely to the Iraq War, but to all wars. First, we spend more money on our military when it is at war than when it is at peace. Second, having waged war, we pay more over the lifetimes of those injured and disabled than we would have paid if they had never fought. (p. 39)

Preble’s stress on this point continues the pioneering work of Earl Ravenal, a one-time Robert McNamara “whiz kid” who became a resolute foe of interventionism. He too stressed the extraordinary financial costs of American military policy, in such works as Never Again.

Leftist critics of American policy often call up visions of the utopia that would result were the government to spend its military budget on social programs. Could we not, absent a crushing military budget, easily provide decent healthcare and education for all, not to mention the drastic reduction of poverty, if not its total eradication? Preble trenchantly points out the fallacy. The problem of the military budget does not lie in its crowding out of other government programs. Rather, it prevents people from spending their money as they wish, owing to the high taxes it requires:

Such arguments implicitly assume that money not being spent on a war, or the military more generally, would be spent by the government or on other government programs. That is shortsighted and ultimately counterproductive… [Opportunity] costs apply not just to what the government is spending and where the government might be spending elsewhere, but also [to] what average taxpayers are not able or willing to spend because they are on the hook for paying for an enormous and seemingly permanent military industry, and also for the occasional wars. (pp. 78–9)

The pursuit of hegemony has also adversely affected our system of government. Recent presidents have arrogated to themselves the right to commit America to war, in defiance of the Constitution.

The Founders of our great nation … worried that wars would give rise to an overgrown military establishment that would upset the delicate balance between the three branches of government, and between the government and the people… A government instituted to preserve liberties could swiftly come to subvert them. A gloomy Jefferson opined, “The natural progress of things is for liberty to yield and government to gain ground.” (p. 80)

Defenders of current policy have a counterargument to all that has been said so far. They will reiterate the dangers that a disordered world presents to us. Even if we cannot completely attain a stable world order controlled by America, and even if the attempt to bring this about has heavy costs, we ought to try to come as close as we can to this goal. Otherwise, a conflagration anywhere on the globe can quickly escalate to an existential threat to us.

One of the best features of Preble’s book is the convincing response it offers to this objection. It is unquestionably true that disorder constantly threatens various areas of the world; but why must a single power act to restore order? If America does not act, will not those nations in the vicinity of a crisis have a strong incentive to cope with it?

In fact, there is little reason to believe the world will descend down this path [to chaos] if the United States hews to a restrained foreign policy focused on preserving its national security and advancing its vital interests. This is because there are other governments in other countries, pursuing similar policies aimed at preserving their security, and regional – much less global – chaos is hardly in their interests. On the contrary, the primary obligation of government is to defend the citizens from threats, both foreign and domestic. (p. 94)[2]

Those anxious to insure that America remains embroiled in the Middle East warn against a particular example of disorder, i.e., the danger to our economy that would result from an interruption in the supply of oil. Must we not act to interdict any threat to this vital resource? Preble points out that this danger is grossly exaggerated:

As oil is the principal source of revenue for the Persian Gulf countries, an explicit attempt to withhold this source of wealth from world markets would certainly be more painful for the perpetrators of such a policy than for their intended victims. (p. 111)

Even those who reject American hegemony sometimes call for American action to meet “humanitarian catastrophes.” Are we to stand idly by when mass murder, e.g., in Rwanda and Darfur, is taking place? Preble has a twofold response to this unfortunately influential doctrine of the “responsibility to protect.” First, military interventions often fail to achieve their ostensible humanitarian purpose and

[e]ven the best-intended military interventions, those specifically aimed at advancing the cause of peace and justice, can have horrific side-effects, [the] most important of these being the real possibility that innocent bystanders and those the operation seeks to protect may be inadvertently killed or injured.… Those killed leave behind a legacy of bitterness; parents, spouses, children, friends, few of whom may have actively supported the former regime, but all of whom may forget the noble intentions of the invading force and later direct their wrath at those responsible for their misfortune. (pp. 123–24)

The second strand of Preble’s case against humanitarian intervention appeals to the fundamental insight of his book: the limits of American power. To use the American military for humanitarian missions may strain our resources and interfere with the protection of the American people.

The Constitution clearly stipulates the object of the U.S. government is to protect “We the People of the United States.” Our government is supposed to act in our common defense, not the defense of others. (p. 131)

Preble has constructed an overwhelming case against our current hegemonic policy. The most valuable insight of the book, though, emerges once one accepts this case. This vital insight answers the question, what must be done to achieve a noninterventionist foreign policy? Preble forcefully contends that we will never be able to limit American overreaching so long as the current imbalance in military power persists. Given America’s overwhelming military superiority to any opponent, the temptation to use that power is well-nigh irresistible. To cope with this problem, our military forces must be drastically reduced. Preble is no pacifist; but only by making the grasp at hegemony impossible, he argues, can we hope for a more limited and saner policy. As Preble aptly remarks, “Reducing our power and thereby constraining our ability to intervene militarily around the globe will limit our propensity to intervene” (p. 138).


[1] (Princeton, 1995). See my review in The Mises Review Fall 1996.

[2] Preble expertly disposes of the claim that international defense is a public good that will be underproduced if the United States fails to provide it: nations, it is argued, will hope to benefit from efforts by others in their region to cope with threats rather than deal with these threats themselves. Preble counters that defense is not a pure public good. To the extent that it is a public good, though, smaller powers can free ride on American defense efforts.

Reprinted from

May 22, 2010

David Gordon [send him mail] is a senior fellow at the Ludwig von Mises Institute and a columnist for LRC. He is the author, most recently, of The Essential Rothbard. See his Books on Liberty. See also his Books on War.

Sell in May and Run Away . . . Fast by Gary North

Sell in May and Run Away . . . Fast

by Gary North
by Gary North
Recently by Gary North: The Keynesian Race to Bankruptcy

There is an old phrase regarding stock market investing: “Sell in May and go away.” Recent markets have reinforced that saying.

Stock markets all over the world are falling. The first market to begin falling was China’s. It peaked in early August of 2009. It struggled back, though not to its August peak, but is now falling. The decline is accelerating. It is down by about 25% in 2010. See the chart here.

The American stock market has been hit hard this month. So have European stock markets. They are plummeting. The charts are here.

Commodity prices are falling – not like a stone, but falling. The peak was in the first week of January. The chart is here.

Consumer prices are falling, just barely, and only if you accept the CPI: down 0.1% in April. If you use the Median CPI, as I do, it was unchanged over the previous two months: flat. More important, the rate of price increases, year to year, is decelerating. In November and December, the Median CPI was up 1.2%. In January, it was up 1%. In April, it was up 0.5%. The figures are here.

Gold is down. Silver is down. Oil is down. The euro is down. Mortgage rates are down. Mortgage applications are down.

The main thing that is up is mortgage payment skipping. At least 10% of American households missed a monthly mortgage payment during the first three months of 2010. This is an all-time high in the post-World War II era. The rate was 9.1% in the first quarter of 2009. It rose to 9.5% in the final quarter. The trend is ominous. Americans will stop making payments on every other category of debt before they skip a mortgage payment. The fact that they are skipping mortgage payments indicates that they are in very tight straits.

What is happening? This is not consistent with Keynesianism. Keynesians did not predict the 2008–9 recession, either. The other schools of economic thought that also did not predict the recession cannot explain why these signs of a secondary recession are taking place today, despite a huge increase in both the monetary base and government deficits.

One school of opinion did predict the 2008–9 recession: the Austrian School. Can Austrian theory explain this new situation?


The Austrian theory of the business cycle, developed by Ludwig von Mises in 1912, teaches that when central banks inflate, in order to hold down interest rates, this creates false price signals. Specifically, it creates false signals regarding the price and availability of capital. This in turn leads entrepreneurs to borrow money and invest in new projects. When the central bank ceases to inflate, these projects are revealed as unprofitable ventures.

Around the world in late 2008, central banks inflated massively to save the financial structure. They bought government bonds. They loaned money to commercial banks. The Federal Reserve swapped assets with the largest banks, giving them T-bills at face value and taking back toxic assets without any market for them. This was like trading the family silver for crushed beer cans. Congress said nothing. Keynesian economists cheered Bernanke’s brilliance.

The collapse of the largest banks was delayed. Their survival enabled them to swallow the busted giants like Wachovia. The central bank bought bad assets and time. The assets are still bad, and the clock is ticking.

Had commercial banks lent out the money they were legally allowed to lend, we would be in hyperinflation today. I define hyperinflation as price increases above 30% per annum. The FED doubled its balance sheet and therefore monetary base.

Commercial banks are legally allowed to double their loans, which would double the money supply. The bankers are so terrified of this economy that they have refused to lend. They have run up excess reserves at the FED of $1.2 trillion, thereby offsetting the FED’s comparable run-up of the monetary base.

The deficits of all major nations are massive today. The governments are borrowing money to bail out their economies. But the money is being wasted. It is going for politically acceptable boondoggles and payoffs to special interests. It is not funding projects to meet consumer demand.

These policies of monetary inflation, government debt, and political boondoggles are the essence of Keynesianism. They are known politically as kick the can. The essence of Keynesianism is for governments to borrow massively in order to solve the problems created by previous less massive borrowing by governments, entrepreneurs, and consumers.

The economic recovery is based on the idea that it is productive to substitute government borrowing and spending for private borrowing and spending. The Keynesian believes that the private sector will not borrow until entrepreneurs perceive future customer demand. Keynesians believe that politicians are capable of restoring economic growth by spending money on pet projects.

Whenever entrepreneurs who have their own money or borrowed money on the line conclude that the likelihood of losing it is just too high until production goods and labor get cheaper, Keynesians call on government to borrow, central banks to inflate, and consumers to spend, spend, spend. Why? In order to keep production goods from getting cheaper and labor from get cheaper. Why? Because when production goods get cheaper, corporate donations to the opposition party’s PACs increase. When labor gets cheaper, voters vote for the opposition party.

All over the world, politicians are using borrowed money and newly created money to keep the prices of production goods from falling. This worked until early January. It is no longer working. Commodity prices are falling. They will continue to fall. Why? Because commercial bankers are not lending, and businesses are not borrowing. The American labor market is still crippled. With unemployment in the 10% range, delayed mortgage payments are in the 10% range. Will wonders never cease?


Jim Rogers is bullish on China. Jim Chanos is bearish on China’s real estate market. Jim Rogers is bullish on commodities. Jim Chanos has sold short companies that export to China’s real estate sector.

Jim Rogers says he is no market timer. Jim Chanos is a supreme market timer, for he sells short. He sold Enron short.

I’m with Chanos. That’s because I came to the same conclusion regarding China’s real estate bubble before Chanos announced his position. Chanos agrees with me, so of course I’m with Chanos.

China’s economy is the ultimate schizophrenic monster. It has free choice for individuals to buy and sell. People can move. It has a Communist elite, which is committed to maintaining power, no matter what. It has a central bank that is under the thumb of the central government, which inflates constantly. It has corruption on a massive scale at the local political level. It has a traditional family structure, despite Marxism/Maoism, whose members see the preservation of family capital as a central goal.

This has combined to create the mother of all real estate bubbles. Tiny condos in Beijing and Shanghai sell at $400 per square foot. Who is buying these condos? Newlyweds whose combined income is under $6,000 a year. How is this possible? Because newly rich parents and grandparents are putting up the money. These investments are senseless as third-party loans, but inside the families, these wealth transfers are considered rational.

All over China, there has been massive building of apartments and condos. The central bank lends money to banks, which in turn lend to politically favored developers at low rates. The municipal authorities sell land at high prices to developers.

This has created a bubble. This bubble is consistent with Austrian economic theory. Central bank inflation leads to commercial bank lending to fund uneconomic projects. Low interest rates lure in entrepreneurs. They invest capital.

This drives up the costs of construction. When the central bank finally ceases to expand the monetary base, the boom will turn into a bust. The fact that condo buyers do not borrow money from local banks is economically irrelevant. What matters is that developers borrow to build them. The newlyweds borrow from their families.

Investors are buying multiple condos. They then hold them off the market, on the assumption that a new condo will appreciate faster. So, these condos’ pricing is not based on their ability to produce a stream of long-term revenue. They are purchased as pure speculations. The mania is in full force. This is the classic mark of the final stage of a real estate bubble. Those caught up in it cannot see that it cannot go on. They think this is the last train out. They borrow from their relatives to buy a ticket.

Chanos has seen that this cannot go on much longer.


The decline in commodity prices since January is consistent with the re-trenching of entrepreneurs. They are convinced that prices of final goods will hit a brick wall next year. They do not trust the economy. They see consumer prices going flat. They see that they will be trapped if they expand their operations.

The recovery in manufacturing in the United States is real. The producers are expanding output. But the fall in commodities indicates that this optimism is not worldwide. Commodity prices should be rising, as manufacturers around the world bid up prices in an attempt to secure greater quantities in order to convert them into final products. The opposite is happening. Commodity prices are falling.

Investors must decide. Should they buy commodities, as Jim Rogers recommends, or should they short them? Chanos has shorted some of them – those related to China’s real estate boom.

I do not trust this recovery. That is why I did not recommend buying commodities in 2009. I think that until commercial bankers regain their confidence and begin lending, this recovery will hit a brick wall. This will be a wall of resistance by final buyers. I look at what has happened to consumer prices, and I conclude that my skepticism a year ago was correct.

There can be mass inflation. It is assured when commercial bankers pull their excess reserves out of the FED and begin to lend. The doubled monetary base will become a doubled M1 and a rising money multiplier. The FED in this sense has created a time bomb for the economy. It is still ticking, because of the pessimism of commercial bankers. They are not lending, especially to small businesses, which historically do most of the new hiring.

The decline in commodity prices is consistent with the decline of the rate of increase in the price indexes. Consumer prices have decelerated. The CPI and Median CPI are flat. The increase in commodity prices that took place in 2009 in expectation of a V-shaped recovery ended in early January. When you see this for the year, you can see when optimism collapsed.

The entrepreneurs who make their money by forecasting prices, and therefore final demand for the goods produced by commodities, decided in January that this recovery could not be trusted to provide increasing demand. They began selling commodity futures. At the margin, they decided that it was wiser to be short than long.

Maybe they were wrong. Maybe the worldwide recovery will continue. But if it does, it will be marked by low or no price inflation. It is not that the fall in commodity prices will create falling consumer prices. It is that falling commodity prices fell because entrepreneurs saw low or no price inflation coming in 2010. They quite bidding to buy.


The expansion of central bank money, used to buy bad assets and save companies that should have been allowed to fail, was a frantic response to a looming breakdown of large New York banks and financial institutions. The capital markets were vetoing central bank policies, and the central bank’s bureaucrats fought back with fiat money.

The toxic debt has replaced Treasury debt on the FED’s balance sheet. With a $1.5 trillion Federal deficit scheduled for this year, the FED has been content to stop inflating and let the private sector fund the deficit. This money could have gone into the private sector. That it did not is an indicator of the fragility of the recovery.

The world’s capital markets are vetoing the central bankers’ policies and the politicians’ policies. This may change. Confidence may return. But the fiasco that is the Greek government has triggered the response of frantic and terrified politicians in the north of Europe. They did the Keynesian thing. They promised a huge bailout. It is clear that they will do it again if required. It will be required.

To call this recovery fragile is facing facts. This week, fear is dominant. What the central bankers and the politicians can do to restore confidence is not clear. Europe has shot its fiscal wad. Another round will send a message: “Bailouts forever.” The same dilemma faces Bernanke.

Politicians play kick the can. Commercial bankers will force Bernanke’s hand when they start lending. So far, markets say they won’t. The experts are saying this recovery is unlikely to last. They are saying that consumers are tapped out. That is bad news for Keynesians. With tapped-out consumers, the Keynesians must recommend another round of huge deficits. I thought $1.5 trillion was a lot of annual deficit. Apparently, I’m too conservative.

May 22, 2010

Gary North [send him mail] is the author of Mises on Money. Visit He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

Copyright © 2010 Gary North

Supplanting the US Constitution: War, National Emergency and ‘Continuity of Government’

Supplanting the US Constitution:

War, National Emergency and

‘Continuity of Government’

by Peter Dale Scott

In July 1987, during the Iran-Contra Hearings grilling of Oliver North, the American public got a glimpse of “highly sensitive” emergency planning North had been involved in. Ostensibly these were emergency plans to suspend the American constitution in the event of a nuclear attack (a legitimate concern). But press accounts alleged that the planning was for a more generalized suspension of the constitution.

As part of its routine Iran-contra coverage, the following exchange was printed in the New York Times, but without journalistic comment or follow-up:

[Congressman Jack] Brooks: Colonel North, in your work at the N.S.C. were you not assigned, at one time, to work on plans for the continuity of government in the event of a major disaster?

Both North’s attorney and Sen. Daniel Inouye, the Democratic Chair of the Committee, responded in a way that showed they were aware of the issue:

Brendan Sullivan [North’s counsel, agitatedly]: Mr. Chairman?

[Senator Daniel] Inouye: I believe that question touches upon a highly sensitive and classified area so may I request that you not touch upon that?

Brooks: I was particularly concerned, Mr. Chairman, because I read in Miami papers, and several others, that there had been a plan developed, by that same agency, a contingency plan in the event of emergency, that would suspend the American constitution. And I was deeply concerned about it and wondered if that was an area in which he had worked. I believe that it was and I wanted to get his confirmation.

Inouye: May I most respectfully request that that matter not be touched upon at this stage. If we wish to get into this, I’m certain arrangements can be made for an executive session.

But we have never heard if there was or was not an executive session, or if the rest of Congress was ever aware of the matter. According to James Bamford, “The existence of the secret government was so closely held that Congress was completely bypassed.” (Key individuals in Congress were almost certainly aware.)

Brooks was responding to a story by Alfonzo Chardy in the Miami Herald. Chardy’s story alleged that Oliver North was involved with the Federal Emergency Management Agency (FEMA) in plans to take over federal, state and local functions during a national emergency. This planning for “Continuity of Government” (COG) called for “suspension of the Constitution, turning control of the government over to the Federal Emergency Management Agency, emergency appointment of military commanders to run state and local governments and declaration of martial law.”

To my knowledge no one in the public (including myself) attached enough importance to the Chardy story. Chardy himself suggested that Reagan’s Attorney General, William French Smith, had intervened to stop the COG plan from being presented to the President. Seven years later, in 1994, Tim Weiner reported in the New York Times that what he called “The Doomsday Project” – the search for “ways to keep the Government running after a sustained nuclear attack on Washington” –had “less than six months to live.”

To say that nuclear attack planning was over was correct, but this statement was also very misleading. On the basis of Weiner’s report, the first two books on COG planning, by James Bamford and James Mann, books otherwise excellent and well-informed, reported that COG planning had been abandoned. They were wrong.

Mann and Bamford did report that, from the beginning, two of the key COG planners on the secret committee were Dick Cheney and Donald Rumsfeld, the two men who implemented COG under 9/11. What they and Weiner did not report was that under Reagan the purpose of COG planning had officially changed: it was no longer for arrangements “after a nuclear war,” but for any “national security emergency.” This was defined in Executive Order 12656 of 1988 as: “any occurrence, including natural disaster, military attack, technological emergency, or other emergency, that seriously degrades or seriously threatens the national security of the United States.”

In other words extraordinary emergency measures, originally designed for an America devastated in a nuclear attack, were now to be applied to anything the White House considered an emergency. Thus Cheney and Rumsfeld continued their secret planning when Clinton was president; both men, both Republicans, were heads of major corporations and not even in the government at that time. Moreover, Andrew Cockburn claims that the Clinton administration, according to a Pentagon source, had “no idea what was going on.” (As I shall explain later, this sweeping claim needs some qualification.)

The expanded application of COG to any emergency was envisaged as early as 1984, when, according to Boston Globe reporter Ross Gelbspan,

Lt. Col. Oliver North was working with officials of the Federal Emergency Management Agency . . . to draw up a secret contingency plan to surveil political dissenters and to arrange for the detention of hundreds of thousands of undocumented aliens in case of an unspecified national emergency. The plan, part of which was codenamed Rex 84, called for the suspension of the Constitution under a number of scenarios, including a U.S. invasion of Nicaragua.

Clearly 9/11 met the conditions for the imposition of COG measures, and we know for certain that COG planning was instituted on that day in 2001, before the last plane had crashed in Pennsylvania. The 9/11 Report confirms this twice, on pages 38 and 326. It was under the auspices of COG that Bush stayed out of Washington on that day, and other government leaders like Paul Wolfowitz were swiftly evacuated to Site R, inside a hollowed out mountain near Camp David.

What few have recognized is that, nearly a decade later, some aspects of COG remain in effect. COG plans are still authorized by a proclamation of emergency that has been extended each year by presidential authority, most recently by President Obama in September 2009. COG plans are also the probable source for the 1000-page Patriot Act presented to Congress five days after 9/11, and also for the Department of Homeland Security’s Project Endgame – a ten-year plan, initiated in September 2001, to expand detention camps, at a cost of $400 million in Fiscal Year 2007 alone.

At the same time we have seen the implementation of the plans outlined by Chardy in 1987: the warrantless detentions that Oliver North had planned for in Rex 1984, the warrantless eavesdropping that is their logical counterpart, and the militarization of the domestic United States under a new military command, NORTHCOM. Through NORTHCOM the U.S. Army now is engaged with local enforcement to control America, in the same way that through CENTCOM it is engaged with local enforcement to control Afghanistan and Iraq.

We learned that COG planning was still active in 2007, when President Bush issued National Security Presidential Directive 51 (NSPD 51). This, for the sixth time, extended for one year the emergency proclaimed on September 14, 2001. It empowered the President to personally ensure “continuity of government” in the event of any “catastrophic emergency.” He announced that NSPD 51 contains “classified Continuity Annexes” which shall “be protected from unauthorized disclosure.” Under pressure from his 911truth constituents, Congressman Peter DeFazio of the Homeland Security Committee twice requested to see these Annexes, the second time in a letter signed by the Chair of his committee. His request was denied.

The National Emergencies Act, one of the post-Watergate reforms that Vice-President Cheney so abhorred, specifies that: “Not later than six months after a national emergency is declared, and not later than the end of each six-month period thereafter that such emergency continues, each House of Congress shall meet to consider a vote on a joint resolution to determine whether that emergency shall be terminated” (50 U.S.C. 1622, 2002). Yet in nine years Congress has not once met to discuss the State of Emergency declared by George W. Bush in response to 9/11, a State of Emergency that remains in effect today. Appeals to the Congress to meet its responsibilities to review COG have fallen on deaf ears.

Former Congressman Dan Hamburg and I appealed publicly last year, both to Obama to terminate the emergency, and to Congress to hold the hearings required of them by statute. But Obama, without discussion, extended the 9/11 Emergency again on September 10, 2009; and Congress has continued to ignore its statutory obligations. One Congressman explained to a constituent that the provisions of the National Emergencies Act have now been rendered inoperative by COG. If true, this would seem to justify Chardy’s description of COG as suspension of the Constitution. Are there other parts of the Constitution that have been suspended? We do not know, and the Chair of the Homeland Security Committee has been told he cannot find out.

Plans drafted by a secret committee, including corporation heads not in the government, have provided rules that allegedly override public law and the separation of powers that is at the heart of the Constitution. Congress is derelict in addressing this situation. Even Congressman Kucinich, the one Congressman I have met, will not answer my communications on this subject.

Yet as I see it, the only authorization for the COG planning was a secret decision by President Reagan (NSDD 55 of September 14, 1982) which in effect federalized the counterinsurgency planning (called Cable Splicer), which he had authorized in California when governor there.

It is clear that the planning by Cheney, Rumsfeld and others in the last two decades was not confined to an immediate response to 9/11. The 1000-page Patriot Act, dropped on Congress as promptly as the Tonkin Gulf Resolution had been back in 1964, is still with us; Congress has never seriously challenged it, and Obama quietly extended it on February 27 of this year.

We should not forget that the Patriot Act was only passed after lethal anthrax letters were mailed to two crucial Democratic Senators – Senators Daschle and Leahy – who had initially questioned the bill. After the anthrax letters, however, they withdrew their initial opposition. Someone – we still do not know who – must have planned those anthrax letters well in advance. This is a fact most Americans do not want to think about.

Someone also must have planned the unusual number of war games taking place on 9/11. COG planners and FEMA had been involved in war games planning over the previous two decades; and on 9/11 FEMA was again involved with other agencies in preparing for Operation Tripod, a bioterrorism exercise in New York City.

Someone also must have planned the new more restrictive instructions, on June 1, 2001, determining that military interceptions of hijacked aircraft had to be approved “at the highest levels of government” (i.e. the President, Vice-President, or Secretary of Defense). The Report attributes this order to a JCS Memo of June 1, 2001, entitled “Aircraft Piracy (Hijacking) and Destruction of Derelict Airborne Objects.” But the written requirements had been less restrictive before June 1, 2001, and I am informed that the change was quietly revoked the following December.

In The Road to 9/11 I suggest the change in the JCS memo came from the National Preparedness Review in which President Bush authorized Vice-President Cheney, together with FEMA, “to tackle the… task of dealing with terrorist attacks.” Not noticed by the press was the fact that Cheney and FEMA had already been working on COG planning as a team throughout the 1980s and 1990s.

As I wrote above, it is necessary to qualify a Pentagon official’s claim (to author Andrew Cockburn) that the Clinton administration had “no idea what was going on” in COG. Let me quote from my response to Cockburn’s book in my own, The Road to 9/11:

[Weiner’s] article persuaded authors James Mann and James Bamford that Reagan’s COG plans had now been abandoned, because “there was, it seemed, no longer any enemy in the world capable of . . . decapitating America’s leadership.” In fact, however, only one phase of COG planning had been terminated, a Pentagon program for response to a nuclear attack. Instead, according to author Andrew Cockburn, a new target was found:

Although the exercises continued, still budgeted at over $200 million a year in the Clinton era, the vanished Soviets were now replaced by terrorists. . . . There were other changes, too. In earlier times the specialists selected to run the “shadow government” had been drawn from across the political spectrum, Democrats and Republicans alike. But now, down in the bunkers, Rumsfeld found himself in politically congenial company, the players’ roster being filled almost exclusively with Republican hawks. . . . “You could say this was a secret government-in-waiting. The Clinton administration was extraordinarily inattentive, [they had] no idea what was going on.”

Cockburn’s account requires some qualification. Richard Clarke, a Clinton Democrat, makes it clear that he participated in the COG games in the 1990s and indeed drafted Clinton ’s Presidential Decision Directive (PDD) 67 on “Enduring Constitutional Government and Continuity of Government.” But COG planning involved different teams for different purposes. It is quite possible that the Pentagon official was describing the Department of Defense team dealing with retaliation.

The Pentagon official’s description of a “secret government-in-waiting” (which still included both Cheney and Rumsfeld) is very close to the standard definition of a cabal, as a group of persons secretly united to bring about a change or overthrow of government. In the same era Cheney and Rumsfeld projected change also by their public lobbying, through the Project for the New American Century, for a more militant Middle East policy. In light of how COG was actually implemented in 2001, one can legitimately suspect that, however interested this group had been in continuity of government under Reagan, under Clinton the focus of Cheney’s and Rumsfeld’s COG planning was now a change of government.

Understandably there is great psychological resistance to the extraordinary claim that Cheney and Rumsfeld, even when not in government, were able to help plan successfully for constitutional modifications, which they themselves implemented when back in power. Most people cannot bring themselves even to believe the second, known half of this claim: that on September 11, 2001, COG plans overriding the constitution were indeed implemented. This is why the first two print reviews of The Road to 9/11, both favorable and intelligently written, both reported that I speculated that COG had been imposed on 9/11. No, it was not a speculation: the 9/11 Commission Report twice confirms that COG was instituted on the authority of a phone call between Bush and Cheney of which they could find no record. No record, I did speculate, because it took place on a secure COG phone outside the presidential bunker – with such a high classification that the 9/11 Commission was never supplied the phone records.

A footnote in the 9/11 Report says

“The 9/11 crisis tested the U.S. government’s plans and capabilities to ensure the continuity of constitutional government and the continuity of government operations. We did not investigate this topic, except as needed to understand the activities and communications of key officials on 9/11. The Chair, Vice Chair, and senior staff were briefed on the general nature and implementation of these continuity plans.

The other footnotes confirm that no information from COG files was used to document the 9/11 Report. At a minimum these files might resolve the mystery of the missing phone call which simultaneously authorized COG, and (in consequence) determined that Bush should continue to stay out of Washington. I suspect that they might tell us a great deal more.

What is the first step out of this current state of affairs, in which the constitution has in effect been superseded by a higher, if less legitimate authority? I submit that it is to get Congress to do what the law requires, and determine whether our present proclamation of emergency “shall be terminated” (50 U.S.C. 1622, 2002).

An earlier polite, judiciously worded appeal to this effect failed. It may be necessary to raise the issue in a larger, albeit more controversial context: the scandal that a small cabal was able to supersede the Constitution, and Congress has failed, despite repeated requests, to do anything about it. I would hope that Americans concerned about this matter would raise it with all the congressional candidates in the forthcoming elections. At a minimum, candidates should promise to call for a full discussion of the proclaimed national emergency, as the law requires.

This is reprinted from Global Research. Go to the original for footnotes.

May 22, 2010

Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, and The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His book, Fueling America’s War Machine: Deep Politics and the CIA’s Global Drug Connection is in press, due Fall 2010 from Rowman & Littlefield.