International Socialist Review, July–August 2002

Editorials

Washington’s new Middle East policy

From International Socialist Review, Issue 24, July–August 2002
Downloaded with thanks from the ISR Archive.
Marked up by Einde O’Callaghan for the ETOL.

EACH TIME the Israel-Palestine conflict threatened to become a region-wide conflagration in the last decade, the standard American response was to rush in advisers to “get the peace process back on track.”

President Bush’s June 24 speech on Palestine signaled the end of that strategy.

For more than two years, Palestinians have known that the “peace process” launched under the 1993 Oslo Accords was dead. The Israeli government of Ariel Sharon never accepted Oslo. Now the Bush administration has administered the coup de grace.

The Palestinian Authority (PA) created to police the Palestinians under Oslo is a smoldering ruin following Israel’s April invasion of the West Bank. The U.S., which had helped bring the PA into existence, now shows no interest in bringing it back.

Instead, the main West Bank towns supposedly allowed Palestinian rule under the Oslo Accords are languishing under Israeli military occupation. Israeli politicians openly talk about reestablishing the system of direct colonial occupation that predated the PA. In these plans, Palestinians would be allowed only “civil administration”–like the responsibility to pick up garbage–rather than anything that smacks of control over their economic or political lives.

The centerpiece of Bush’s speech was his call for Palestinians to depose PA president Yasser Arafat. On hearing this, Israeli leaders couldn’t believe their good fortune. Only a few months ago, Washington slapped down Sharon when he suggested that U.S. talk about the need for a settlement of the Israel-Palestine conflict amounted to “appeasement” of terrorism.

Bush’s speech hewed so closely to Sharon’s views that many commentators wondered if Sharon’s press office had written it. In fact, Bush’s call for the Palestinians to get rid of Yasser Arafat before the U.S. would consider supporting a “transitional” Palestinian state was Sharon’s idea.

After Israel’s murderous invasion of the West Bank in the spring, Sharon began calling for democratic reforms in the PA–which Israeli forces had just destroyed. It was simply a stalling tactic to cover for Israel’s continued occupation and annexation of Palestinian land. And now Bush has endorsed it.

Of course, no Washington press courtier who covered Bush’s call for Palestinian democracy pointed out that the Oslo Accords strictly limited the powers of the PA’s legislature, that Israel vetted all PA candidates, and that the CIA trained the repressive and corrupt PA security forces.

Bush is not only calling for the Palestinians to dump Arafat, but he’s calling for them to create a model democratic state and a “market economy.” To think a country suffering military occupation and economic strangulation could jump through these hoops is a fantasy.

It’s very much like Bush’s demands that Iraq submit to open American espionage as a condition for readmitting weapons inspectors into the country. As critics of U.S. policy like former Iraq weapons inspector Scott Ritter have pointed out, these U.S. demands aren’t aimed at restarting weapons inspections. They are designed to provoke a crisis that Washington could use as a justification for a war to overthrow the Iraqi government.

Likewise, Bush’s conditions for Palestinians to meet aren’t designed to provide a path to peace and a Palestinian state. They are meant to erect roadblocks that will help Sharon carry out his plans to further colonize the West Bank and Gaza. They are a signal to Sharon that he has U.S. approval to do virtually anything he wants.

Bush’s call for Palestinians to depose Arafat dovetails neatly with his constant threats to overthrow governments around the world. This is hardly a new practice among American presidents, who have ordered the destabilization and overthrow of dozens of governments, whether democratically elected or not. The only difference is Bush’s brazenness in openly advocating “regime change” of any government it opposes.

Never mind that the CIA helped Saddam Hussein into power, that the U.S. and the West provided Saddam with the capacity to build “weapons of mass destruction.” Saddam is “evil” and must go, Bush repeatedly announces.

Bush hasn’t the slightest intention of allowing the Iraqi people to exercise their right to determine their future. He wants a more pliant dictator to rule Iraq on behalf of Western interests.

Similarly, Bush has indicated that he won’t accept the legitimacy of Palestinian elections unless they produce the result Washington wants–the election of a CIA-trained strongman who will police the Palestinians on Israel’s behalf.

The hawks behind the Bush administration’s policy in the Middle East think the U.S. should adopt Sharon’s approach to the region–make war on all “enemies of Israel” until they submit to it. Rhetorically, Bush has already taken the first steps in this direction. We will soon find out if (or when) Bush means to back up his rhetoric with the 250,000-troop invasion military planners envision for “regime change” in Iraq.

Bush’s policies have already proven to be a disaster to people in the Middle East. They are also disastrous for ordinary Americans. In the U.S., activists in solidarity with Palestine and anti-war forces must lay the groundwork for a renewed movement against Bush’s plans to dictate to the world.

* * *

They are all Enron

JUST AS the Enron scandal was fading from public view, another major financial scandal rocked Wall Street. WorldCom, the country’s second largest telecommunications company, improperly recorded $3.85 billion in expenses in order to make it look like the company made $1.4 billion last year, when in fact it lost money.

The scandal–considered the biggest fraud in history–is one of many revelations that have surfaced in recent months about companies cooking the books in order to hide losses and exaggerate earnings to keep stock prices up. Enron’s financial wizardry under the best political climate money can buy brought about that company’s collapse. Arthur Anderson, Enron’s accounting firm–and also for WorldCom–has been convicted for obstructing justice and probably won’t survive.

The CEO of Tyco International faces charges of tax evasion. Xerox paid a $10 million fine for “overstating its revenues” by $1.9 billion. Two other energy companies, Dynegy and CMS Energy Corp., bought and sold electricity strategically in order to drive prices up, much like Enron did in California. Adelphia, a cable television provider, is on the verge of bankruptcy–$2 billion was wiped from its books after falsifying cash flow and capital expenditures for the last two years. Even Vice President Dick Cheney is facing a lawsuit charging him with defrauding Halliburton investors when he was CEO between 1995 and 2000.

The list goes on, and other firms are now in the firing line. “Now the dotcoms have basically collapsed, telecom is collapsing, and people are beginning to think that much of what they thought was success was nothing more than fraud and artifice,” said Stephen Paskoff, an employment lawyer from Atlanta.

The result has been a slumping stock market (approaching its post September 11 low), wary investors, and new talk of a second recessionary dip in the U.S. economy. No longer considered a “safe haven,” U.S. markets have also seen a flight of overseas investors. Foreign investment in stocks has declined by 40 percent. Foreign purchase of U.S. bonds has declined in the last three months by half, and foreign direct investment has dropped by more than 50 percent since 2000. The value of the dollar has also dropped against the Euro by 14 percent in the last three months.

The scandals confirm what this journal has been saying for some time. Namely, that such practices are the rule rather than the exception, especially at the apex of an economic boom, when they can be papered over by economic expansion. But when the economy goes into a crisis of overproduction, all the companies that were lauded as brilliant success stories–Tyco’s CEO, for example, was Business Week’s CEO of the year for 2001–suddenly are revealed to be cheaters and swindlers. Financial scandals are not the product of a few bad companies that don’t play by the rules, but of capitalism’s headlong rush for growth during periods of expansion.

In the words of London Observer columnist Ed Vulliamy, such shady business practices “are how the ‘Enronomics’ of modern greed work.”

The only thing different this time around is that “the scope and scale of the corporate transgressions of the late 1990s, now coming to light, exceed anything the U.S. has witnessed since the years preceding the Great Depression,” admitted the Wall Street Journal.

The scale of the transgressions are so colossal that the Journal is deeply worried about their impact on the credibility of American capitalism and its ability to spread what has become know as the “American model”–that is, using free market dogma to batter down investment barriers to U.S. corporations.

“The wave of scandals in corporate America is roiling world stock markets. But the controversy may have an even greater impact in the marketplace of ideas, where the U.S. economic model is coming under attack.” The Journal continued:

“You tell us to do this and do that, but look at your own house,” says Rizal Ramli, the former chief economic minister of Indonesia, whose country four years ago was compelled by the U.S. and the IMF to promote better corporate governance in exchange for a $5 billion bailout. “The moral power of the one who lectures developing countries will be much reduced.”

Such sentiments will challenge those who have used American success as a wedge for forcing through pro-market changes in their own societies.

The scandals also have a domestic political dimension, opening a gaping hole in the credibility of the Bush administration, several of whose members have connections with some of the companies under scrutiny, and whose entire administration has from the beginning acted as the “executive committee” of big capital. Every major energy-related policy adopted by the administration looked liked it came from an Enron wish list. Trent Lott’s personal foundation received $1 million from WorldCom as recently as May 23. Bush has been forced to talk tough about curbing the excesses of rogue profiteers, expressing his “outrage” toward WorldCom and calling for “renewed corporate responsibility.” But as Vulliamy points out, “No administration has been so closely associated with, and beholden to, corporate America.”

There have been some efforts by Democrats to exploit the openings. Democratic House leader Richard Gephardt, for example, accused the Republicans of “creating the environment” in which corporate corruption could flourish. But this can only go so far, since the Democratic party also shares a cozy relationship with big business.

The economic impact of the scandals– and the damaged credibility of U.S. capitalism–is forcing Bush to promise legal measures to restore “investor confidence.” Bush’s July 9 speech to Wall Street executives opined, “In the long run, there’s no capitalism without conscience, there is no wealth without character.” This is hard enough to take from Enron’s closest political pal–a man who himself is under scrutiny for using insider information to pocket more than $800,000 from a stock sale a decade ago. But the main problem with Bush’s bluster is that the opposite is true: At the heart of capitalism is rampant greed which allows no room for character or conscience.

Moreover, the measures he proposed–slightly increasing the Securities and Exchange Commission budget and increasing prison terms for executives who break the law–are window dressing. Though current laws already stipulate prison terms for certain business crimes, very, very few capitalists have ever served time.

The broader ideological impact of the scandal and the economic crisis on the ideology of rampant U.S.-style “free market” capitalism is opening further the breach in the system’s armor. At home, it will have a cumulative impact on the attitude of ordinary workers toward this administration, and toward the system as a whole. NBC television and Wall Street Journal polls show widespread distrust of all businesses and of corporate leaders. The immense greed of the ruling class makes it more difficult to sell the idea to working class people that they must pay for the crisis–haven’t they already paid? This may be the deepest and most lasting impact of the current scandals.