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US Arms Sales Orgy…What’s It All About Alfie?

July 28, 2007

 Well, the US auto industry has been dying for decades, but no one can beat our missile sytems and and new generations of US jet fighter and tanks systems. Many weapons systems ago I used to follow these technological deals and innovations in killing people rather closely. Of course they were all developed for defensive purposes only and in the pursuit of liberty and democracy undoubtedly. I knew my Cruise Missiles from SS-20s as well any self respecting American. And then I read about a new missile we’d developed that could travel a gazillion miles, do a 15 minute tap dance in the air, hang out up there somehow, make love with fellow missile and actually wait for a target to appear. It was at about that point that i said `himmmm…something is rotten Washington’ and completely lost interest in the evolution of 500 pound bunker buster bombs, the latest in tactical nuclear weaponry and all how to make cluster bombs look like toys because they’ll only kill little Arab kids.

Oh yes, the arms deal…There is nothing new about this. Although the scope is unprecedented, it’s been going on nearly 40 years, maybe longer. As the details of the literally gargantuan arms sales and military aid deals to Middle East countries become clearer, we’ll explore their implications. For now let us note that the New York Times emphasizes the proposed $20 billion sale of arms to Saudia Arabia (and 5 other Middle Eastern countries) but tends to down play the $30 billion arms aid package to Israel over the next 10 years. What is it that the Saudi royal family and the great American taxpayer have in common? Together we’re footing the bill.

Let us also watch how all this plays out in Congress with an eye on who plays the Senate more in contributions – AIPAC – which most have us have heard a great deal about or the arms merchants and Saudi lobby which generally have a bit lower profile. It will be such fun – all the moral hypocrisy, a few juicy and new tidbits about the nature of power and how to best lobby the US Senate etc. etc.

What’s The Deal?

A little history is in order. Many people tell it well, but no one surpasses my friend and fellow former Peace Corps volunteer-turned-economic -hit-man turned-human-being again, John Perkins. I missed John on recent stop over in Denver to peddlie his most recent book, which I expect I’ll read. In any case, Perkins lays out what I refer to as the deal as well as anyone and does it so well perhaps because he is one of the people who crafted it.

The deal concerned US policies towards the oil producing countries in the aftermath of the 1973 Middle East War. Hard as it is to believe – now hold your seats for this one – those Arab oil producing countries actually thought that the US was less than evenhanded toward Israel and the Arabs during the war, and that we – a country that has never and will never show any favoritism towards anyone since we’re so even handed – actually favored Israel in that war. Imagine. The Arab oil producing countries responded with an oil embargo that triggered a global recessions and long lines at the pump everywhere. Bad situation, which could only be addressed by the likes of one Henry Kissinger whose sister managed the apartment complex in Queeens, New York where my Aunt Mal, now 99, resided for decades.

John Does All the Work; Henry Gets All the Credit: It’s Not Fair!

Now in October of 1973, Henry Kissinger was a very, very busy man. Let’s not make too much of the fact that Henry was little more than an intellectual flunky for the Rockerfellers – and their man in the Nixon Administration. Nor should over-emphasize the fact that today he cannot visit many of the world’s country’s because he’s been indicted for war crimes. He’d just done his bit for Chase Manhattan and Kennicott Copper by orchestrating the overthrown of the Allende Government in Chile, was having a fine time encouraing the Indonesian military junta in their purge and physical elimination of a million or more Indonesian nationalists and leftists and was still very much directing the not-so-secret air war against VIetnam that would kill more than 3 million there.

So preoccupied, he really didn’t have time to put together some kind of deal with the Saudis. So he asked Perkins to do it. And Perkins, who in his day was a gifted technocrat who specialized in squeezing big contracts from Third World countries for US corporations – especially constructrion companies – obliged. Kissinger liked Perkins’ work, treating the latter more or less the way profs treat their graduate students the world round: Perkins did the work, Kissinger got the credit.

The deal as described in some detail in Confessions of An Economic Hitman was as follows:

For its part the USA would not invade Saudi Arabia and cease the oil fields. (Very generous of us by the way because every American president since Roosevelt – and many American citizens too boot considered that oil Ours (with a capital `o’!). Military options were seriously considerednot object to a rise in the price of crude oil. Even here it was a sweet deal as the added cost of gasoline would simply be passed on to the American consumer not fight the wave of nationalizations of oil resources then sweeping the world (starting with Iraq and Algeria)

In response, the Saudis (and in so doing setting the stage for the policies of virtually all oil producing countries from then until recently) agreed to reciprocate in kind. Specifically they would

agree to keep the supply of crude to the core countries of the world economy as stable as possible. Note: they have kept this promise – and have at different times, when other oil producing countries, increased production. A stable supply of oil to the world’s core countries has flowed ever since agreed to never again cut production and participate in an oil embargo. My hunch is that the threat of the possible consequences were made very clear to the Saud family agreed to re-cycle some – but here `some’ means a good percentage – back into the core countries through the purchase of arms, through huge construction contracts with Western companies for infrastructural development in Saudi Arabia (and other oil producing countries) and through a promise to invest in westen financial institutions (stock market, treasury bonds, rea estate).

The price of oil might have increased, but so did the profits of core country corporations (core countries = essentially, E. Asia, The EU, and North America in the main). The big winners were giant construction companies, military contractors and financial institutions. And the deal has held until this day and is one of the key bases for corporate profitability in an age of dramatic agro-industrial over production (and therefore lower profit rates)

This new arms deal is only the most recent episode of one of the most stable political relationships (the US-Saudi relationship) of modern history. Saudi Arabia has `kept the faith’. For having stuck to the deal through thick and thin for 35 years, the Saudi monarchy – a place where capital punishment is still metted out by cutting people’s heads off with swords, that still has no constitution and where women have been treated as badly as anywhere in the world – this Saudi monarchy – is has gotten its just reward; it is referred to in the US political lexicon as being `moderate’, Washington’s version kighthood in England.

more on what’s the deal as the details emerge.

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