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Don Rumsfeld once said that “you go to war with Army you have”. The AC 130 aerial attack on the small Afghan Village of Azizabad is a classic example of misplaced priorities in the Pentagon.

Afghan and coalition forces were undertaking an operation in the area in pursuit of a Taliban commander named Mullah Siddiq. The attack on Azizabad was launched when intelligence reports indicated that Siddiq was in the village. A large crowd had assembled in Azizabad to commemorate the recent death of a local leader. When the airstrike occurred, an estimated 90 people – 60 children and 30 adults – were killed and many homes were destroyed, according to witnesses and a report made by the Afghanistan government. This has later been confirmed by the United Nations Assistance Mission in Afghanistan (UNAMA), led by the norwegian diplomat Kai Eide. The attack was carried out by a US AC-130 ground attack aircraft.

Using the 105 Millimeter Howitzer from 10,000 feet to blow up a town while seeking one man, is a classic example of mismatched firepower. It is almost as stupid as using F-18 Strike fighters in Counterterrorism operations. Now that the Army is finally admitting they may have killed a lot of civilians, perhaps we can begin to recalibrate our fighting strategy in Afghanistan. If our soldiers believe they can call in airstrikes whenever they are under attack, with no regard to collateral damage, we will never win the hearts and minds of the Afghani people.

In September of 2001, Bruce Ivins was just an unappreciated bio terror researcher in a lab at Fort Detrick, Maryland. He lived just off the base and many days walked to work. Though we now know he was probably suffering from paranoid schizophrenia, he had access to the most dangerous toxins in the U.S. Army’s unrivaled storehouse. Ebola, Anthrax, smallpox, you name it, Bruce could get his hands on it. And then Bruce probably realized he didn’t have to be the mousy nerd any more. And he carefully sent out some anthrax letters.

F.B.I. investigators have long speculated that the motive for the attacks, if carried out by a biodefense insider like Dr. Ivins, might have been to draw public attention to a dire threat, attracting money and prestige to a once-obscure field.

If that was the motive, it succeeded. In the years since anthrax-laced letters were sent to members of Congress and news organizations in late 2001, killing five people, almost $50 billion in federal money has been spent to build new laboratories, develop vaccines and stockpile drugs.

After the attacks, for example, an experimental vaccine Dr. Ivins had spent years working on moved from the laboratory to a proposed $877 million federal contract, though the deal collapsed two years later. Federal documents suggest that Dr. Ivins, along with several colleagues, might have earned royalties had the contract gone forward, but the deal ultimately collapsed.

According to some very reliable sources, Ivins was the main insider pushing the Steven Hatfill investigation , which ended with the government apologizing and paying Hatfill millions of dollars.

Two take-aways for me.

1. How the fuck did this nut case get access to these labs? And what did we do in reaction? We added 10 times as many University and corporate labs that have access to this deadly stuff. This is insane.
2. The lures to get in on the Homeland Security Gravy Train, a major topic of The Cost Of Empire, might move a truly mentally ill patient like Ivins, to kill people to get his patent taken seriously. It’s like a Batman villian. But for every truly crazy guy who made big money in the Military Industrial Complex(MIC) in the last 30 years, there are 100 Jack Abramoffs–just short of being institutionalized–we’d call them ambitious, who’ve made far more than Bruce Ivens.

Some were ambitious for money and some like Dick Cheney, who had already scored in the MIC Game, did it for power. The power to remake the American Constitution–to create a Defacto set of laws that concentrates power to the executive, backed by a conservative Supreme Court. Those laws allow the president to torture in contravention of the Geneva Convention of which we are a major signatory as Jane Mayer so brilliantly shows us in her new book The Dark Side. Those laws allow the President to declare de facto war on terrorism that only ends when he says so. In South American dictatorships these are called a “State of Emergency”. This is America, God Dammit. We’re not supposed to act like General Pinochet. We were going to be “The Light on a Hill”, not as someone said, “The man on a box with wires coming out of his fingers”; 

These de-facto laws allowed The President and Vice President to leak names of American undercover agents and classified documents to their propaganda wing in the establishment media. These laws allow the President and Vice President to read every one of your emails and listen ot all your calls through their IP vacuum pumps at the major switches. Anyone with any technical know how, knows that the decision as to whether your phone call is “of interest” is made after the IP splitter has sent you out of AT&T’s custody and into the government network.

While this frontal assault on the constitution was being carried out, Cheney, Halliburton, Blackwater and the rest of their MIC cronies helped themselves to the public treasury. And don’t you believe for a minute John McCain would change any of these “de-facto laws” or reduce the power of the Military Industrial Complex.

By contrast, my guess is that Obama would look again at each of these decisions and make major changes. 

We can do much better. We can restore the Constitution.

The Obama campaign, anxious to prove they are tough on national security, should be careful not to fall into the trap of pretending we can solve Afghanistan’s problems with more soldiers. Rory Stewart, the brilliant British diplomat and writer who has spent so much time on the ground in Afghanistan, makes a compelling case in Time Magazine for another approach. 

First, the West should not increase troop numbers. In time, NATO allies, such as Germany and Holland, will probably want to draw down their numbers, and they should be allowed to do so. We face pressing challenges elsewhere. If we are worried about terrorism, Pakistan is more important than Afghanistan; if we are worried about regional stability, then Egypt, Iran or even Lebanon is more important; if we are worried about poverty, Africa is more important. A troop increase is likely to inflame Afghan nationalism because Afghans are more anti-foreign than we acknowledge and the support for our presence in the insurgency areas is declining. The Taliban, which was a largely discredited and backward movement, gains support by portraying itself as fighting for Islam and Afghanistan against a foreign military occupation. Read more…

One of the main themes of The Cost of Empire is that we are usually designing our military to fight the last war. A new report from the Rand Corporation says that the only way we will be able to fight Al Qaeda is to end “the war on terrorism.”

A recent RAND research effort sheds light on this issue by investigating how terrorist groups have ended in the past. By analyzing a comprehensive roster of terrorist groups that existed worldwide between 1968 and 2006, the authors found that most groups ended because of operations carried out by local police or intelligence agencies or because they negotiated a settlement with their governments. Military force was rarely the primary reason a terrorist group ended, and few groups within this time frame achieved victory.

Rand suggests we drop the phrase Global War on Terror and simple refer to the police operations as counter-terrorism.

 Calling the efforts a war on terrorism raises public expectations — both in the United States and elsewhere — that there is a battlefield solution. It also tends to legitimize the terrorists’ view that they are conducting a jihad (holy war) against the United States and elevates them to the status of holy warriors. Terrorists should be perceived as criminals, not holy warriors.

Since the US government probably paid for this report, what are the chances that anyone in the Pentagon or White House will read it?

In 1964 at the height of the Cold War, the philosopher Herbert Marcuse in his book One Dimensional Man, made the following observation.

Free institutions (the media) compete with authoritarian ones in making the Enemy a deadly force within the system. And this deadly force stimulates growth and initiative, not by virtue of the magnitude and economic impact of the Defense “sector”, but by virtue of the fact that the society as a whole becomes a Defense society. For the Enemy is permanent. He is not in the emergency situation but in the normal state of affairs. He threatens in peace as much as in war (and perhaps more than in war); he is thus being built into the system as a cohesive power.

I think this is as relevant an analysis today of the ”Global War On Terror” (GWOT)  as it was in 1964 of the Global War on Communism. It is not easy sustaining the emotional hysteria needed to justify a permanent war economy. One need only look at the total U.S. Defense budget for the year 1950 of $13 Billion to understand that it had been our practice as a nation to have high defense budgets only in times of war. But both the Cold War and the GWOT were presented as open ended wars without end. To justify our current base Defense budget of $700 billion, we not only need to inflate the potential of Al Qaeda, Iran and North Korea, we also need to create the possibility that the Chinese Army might one day become our mortal enemy in a Third World War. Read more…

This is the final post of a four part series. For those of you who want to read it in one piece, you can find it here.

In September of 2000, at the height of the Presidential election campaign, The Project for the New American Century (PNAC) released a report entitled, Rebuilding America’s Defenses. PNAC was comprised of the major neoconservatives including Don Rumsfeld, Dick Cheney, Paul Wolfowitz, Doug Feith, William Kristol, John Bolton and Richard Perle. They were not interested in letting the end of the Cold War slow down America’s military buildup.

At present the United States faces no global rival. America’s grand strategy should aim to preserve and extend this advantageous position as far into the future as possible…At no time in history has the international security order been as conducive to American interests and ideals.The challenge for the coming century is to preserve and enhance this “American peace.”

Underlying the failed strategic and defense reviews of the past decade is the idea that the collapse of the Soviet Union had created a “strategic pause.” In other words, until another great power challenger emerges, the United States can enjoy a respite from the demands of international leadership. Like a boxer between championship bouts, America can afford to relax and live the good life, certain that there would be enough time to shape up for the next big challenge. Thus the United States could afford to reduce its military forces, close bases overseas, halt major weapons programs and reap the financial benefits of the “peace dividend.” But as we have seen over the past decade, there has been no shortage of powers around the world who have taken the collapse of the Soviet empire as an opportunity to expand their own influence and challenge the American-led security order.

In sum, the 1990s have been a “decade of defense neglect.” This leaves the next president of the United States with an enormous challenge: he must increase military spending to preserve American geopolitical leadership, or he must pull back from the security commitments that are the measure of America’s position as the world’s sole superpower and the final guarantee of security, democratic freedoms and individual political rights.

This is the “Pax Americana”– laid out in stark terms. Four months later, the authors of this document took over the National Security Strategy of the United States and immediately began to implement the “American Peace”. Their formula was based around four core missions.

• defend the American homeland;
• fight and decisively win multiple, simultaneous major theater wars;
• perform the “constabulary” duties associated with shaping the security environment in critical regions;
• transform U.S. forces to exploit the “revolution in military affairs;”
  

As clear as their vision was for the future of American force projection, the neoconservatives were not unrealistic about the power of domestic politics to slow down their transformational strategy. The first year of the Bush Administration met with considerable resistance both inside and outside the Pentagon to the strategy of “The Vulcans” , as Wolfowitz and Feith’s team were called. Buried deep on page 63 of the 90 page PNAC document was an acknowledgement of the need for a catalyst.

Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.

Conspiracy theorists have seized upon these two lines to show that Cheney and his teams knew that 9/11 was being planned and they let it happen to provide the catalyst. But it is not necessary to buy into this line of thinking to understand that the planning to overthrow Saddam Hussein had been in Wolfowitz’s head since probably 1976. Because they had studied Leo Strauss, Walter Lippman and the “manufacturing of consent”, they were well prepared to use the public’s hysterical reaction to 9/11 to move the country behind the Iraq War. Our task here is not to review the propaganda mission of the Bush Regime or its egregious strategic blunders, but rather now to turn to the economic effects of a $2 trillion “war of choice”. The reality of Bush’s huge military buildup began to put more stresses on the debt markets.

Fourteen months after the 9/11 attacks, Ben Bernanke, then a Fed Governor, gave a speech to the National Economists Club in Washington entitled, “Deflation: Making Sure “It” Doesn’t Happen Here”. The combined shocks of the Dot Com crash and 9/11 had drastically weakened demand and the Fed had studied the ten year Japanese battle with deflation as a cautionary tale. Bernanke, also a student of the punishing deflation of our Great Depression, was genuinely worried that corporations were losing all pricing power. Bernanke laid out the dangers of deflation.

Suppose that deflation is proceeding at a clip of 10 percent per year. Then someone who borrows for a year at a nominal interest rate of zero actually faces a 10 percent real cost of funds, as the loan must be repaid in dollars whose purchasing power is 10 percent greater than that of the dollars borrowed originally. In a period of sufficiently severe deflation, the real cost of borrowing becomes prohibitive. Capital investment, purchases of new homes, and other types of spending decline accordingly, worsening the economic downturn.

For Bernanke, this situation was a central banker’s worse nightmare, and he urged the Fed to get out ahead of this disaster by drastically cutting rates. His boss Alan Greenspan bought into the argument. Although rates were already historically low, the Fed continued to cut, ending at a 1% Fed Funds rate in June of 2003. As James Grant pointed out in the Wall Street Journal, this deliberate “reflation” of the economy had a number of effects.

The central bank pushed the interest rate it controls, the so-called federal funds rate, all the way down to 1% and held it there for the 12 months ended June 2004. House prices levitated as mortgage underwriting standards collapsed. The credit markets went into speculative orbit, and an idea took hold. Risk, the bankers and brokers and professional investors decided, was yesteryear’s problem.

The historically low rates in 2003 and 2004 were also very helpful for George Bush in that they made financing the Iraq War relatively cheap by historical standards. On May 15, 2003, The New York Times noted that the 10 Year T Bill had fallen to a 45 year low yield of only 3.52%. But as the war moved into its second full year and the Treasury borrowing continued to mount the once mighty dollar began to fall. From an economic point of view it was first noticed in the oil market as Mid East oil traders kept raising prices to make up for the dollar’s fall. As 2005 began the fall of the dollar accelerated. Warren Buffet disclosed he had a major short position in the dollar on global currency markets and the price of oil continued its relentless climb, especially if you were buying it with dollars. The continuing fall of the global reserve currency posed an especially tricky problem for the governments of China, Japan, Korea and Saudi Arabia. They were all selling a huge amount of goods and commodities to the U.S. and thus were taking in far more dollars than they needed for domestic uses. The Chinese and the Saudis were essentially pegging their own currencies to the dollar in order to keep prices stable and U.S. demand strong. But as the value of their dollar reserves was being marked down on a daily basis, they began to contemplate spreading their reserve holdings into Euros.  But they were caught in a trap. If they sold a lot of dollars their remaining reserves would plummet, U.S. interest rates would rise rapidly and a global recession might start, thereby harming their export industries. All through 2006 they tried to avoid this problem, but by mid 2007, they had no choice. This relatively benign diversification of risk on the part of sovereign wealth funds could have easily been absorbed in a global market with oceans of liquidity, except for one problem. The four year long housing bubble was rapidly deflating.

The world financial markets might have been able to handle the effect of yet a second bubble bursting in 6 years except for the fact that most Wall Street firms had been more profligate in their borrowing than their hapless sub-prime mortgage holders. As James Grant explains, they were leveraged to the gills.

For every dollar of equity capital, a well-financed regional bank holds perhaps $10 in loans or securities. Wall Street’s biggest broker-dealers could hardly bear to look themselves in the mirror if they didn’t extend themselves three times further. At the end of 2007, Goldman Sachs had $26 of assets for every dollar of equity. Merrill Lynch had $32, Bear Stearns $34, Morgan Stanley $33 and Lehman Brothers $31. On average, then, about $3 in equity capital per $100 of assets. “Leverage,” as the laying-on of debt is known in the trade, is the Hamburger Helper of finance. It makes a little capital go a long way, often much farther than it safely should. Managing balance sheets as highly leveraged as Wall Street’s requires a keen eye and superb judgment. The rub is that human beings err.

So we had the perfect storm: A U.S. Government needing to borrow $50 billion a month; a banking system needing to replace perhaps $1.2 trillion in capital losses;rapidly rising delinquencies in consumer mortgages, credit cards and auto loans. This could not end well.

The British economist Baron Robbins wrote that “economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” In a sense, politics is the process by which we decide which alternatives we will dedicate our ”means” to. Dick Cheney’s idea of a “Pax Americana” has brought us to this perfect storm. The chart on the left, of the 2007 discretionary budget, could not make our priorities more clear. In an era of global liquidity and easy money, we might, like the condo-flipper of 2006, have been able to avoid the hard choices between guns and butter. But the next two years and beyond will not afford us that luxury. As our country’s most important bond manager, Bill Gross has pointed out, the only exit strategy from our current economic nightmare is an old fashioned Keynesian stimulus plan.

To provide a stable recovery path, government spending needs to fill the gap – not consumption. Public works programs, badly needed infrastructure repairs, as well as spending on research and development projects should form the heart of our path to recovery.

But that stimulus will not be possible as long as the Military continues to hog 56% of our discretionary budget. Yesterday in Jordan, Barack Obama noted that the President must make hard choices that go beyond the responsibility of regional military commanders, including,

“what’s adequate for our security interests, factoring in the fact that not only do we have Afghanistan, which I believe is the central front on terror, but also the fact that if we’re spending $10 billion a month over the next two, four, five years, then that’s $10 billion a month that we’re not using to rebuild the United States.”

This is a start in the right direction, but the ultimate question of where the source of America’s power resides is yet to be addressed in the current Presidential campaign. The answer for the neoconservatives that make up John McCain’s National Security brain trust are clear. They all were members of the Project for the New American Century and the “constabulary duties” they see for American forces are endless. But a new vision of American power that resides in its economic, cultural and technological power has yet to be clearly defined by the Democrats. Perhaps a Presidential campaign is not the place to introduce America to the notion that spending more on the military than all our rivals and allies combined is folly. But at some point in the not too distant future this is a conversation we must have. I say this not because of some idealistic notion of peace, but rather from the hard bitten realism that comes to anyone who circulates in the world’s capitals. We are engaged in a global commercial competition of such scale that unless we are able to rebuild our schools, our health care system, our energy system, our transportation and digital networks we will surely become a second class power.

In 1997 the Yale historian Paul Kennedy, author of The Rise and Fall of Great Powers wrote,

The United States now runs the risk, so familiar to historians of the rise and fall of Great Powers, of what might be called ‘imperial overstretch’: that is to say, decision-makers in Washington must face the awkward and enduring fact that the total of the United States’s global interests and obligations is nowadays far too large for the country to be able to defend them all simultaneously.

Saying this less than eight years after the fall of communism brought ridicule from the Conservatives then planning their return to power. How ironic that a mere ten years later it all came true. But this story does not have to end like some sad tale of Nero-like decadence at the fall of Rome. Those of us that have spent our life in business know that “creative destuction” can unleash the powers of imagination. It will be our task to imagine a way to free our country from the grip of a permanent war economy.

It will not be easy, but it must be done.

This is part three of a four part series that ties our current economic crisis to the thirty year buildup of defense spending since the Reagan Presidency. The earlier parts can be found here, here and here.

The neoconservative narrative on the Ronald Reagan Presidency is that he raised our military spending and sent the Soviet Union into an arms race they could not afford. On their knees economically, they were forced to give up their empire. Thus the Berlin Wall came down.

But who really brought down the Berlin Wall? I say it was not Ronald Reagan and his $800 billion military buildup, but rather a courageous Pope named John Paul II who in 1979 journeyed to his native Poland, embraced the embattled trade union leader Lech Walensa and declared,

The future of Poland will depend on how many people are mature enough to be non-conformist…There is no need to be afraid. The frontiers must be opened. There is no imperialism in the Church, only service.

Within weeks a million people were in the streets in support of Solidarity. He had given the Polish people the will and courage to be non-conformist, even at the risk of imprisonment. Long before Reagan was even in office, the Pope had created the conditions for freedom.

It is of course one of the defining articles of faith of the conservative movement that Reagan militarily spent the Soviets into bankruptcy. But it is a Big Lie. Today, the Russian central bank and the Central Bank of China, our other cold war foe, now control over 20% of the U.S. Treasury debt, and we control none of theirs. Exactly who spent who into bankruptcy? As if in some epic match of “rope a dope”, our rivals, freed of the military burdens of imperialism, have allowed us to spend our selves deep into debt. Worse than just government and military profligacy, the consumer also went on a binge in the Reagan Era. The easy regulatory environment of the Republicans allowed banks to market credit cards with formerly illegal usury interest rates to almost anyone. The consumer who had maintained debt levels at near 12% of assets since the 60′s suddenly went into hock. This of course meant a declining personal savings rate (below zero for the last two years), which in turn meant the U.S. Government had to call on the more than ample savings of the rest of the world to fund its debt for military expenditures. It wasn’t that there weren’t people making money during the Republican reign in the 80′s. It was just a certain class of people–the richest 0.01% (chart below).

I remember having a meeting at Drexel Burnham Lambert in 1986, soon after it had been revealed that Mike Milken’s take home pay for the year was $550 million. I was working for Merrill Lynch’s media mergers and acquisition group and Milken demanded we show up at 5:15 AM in their Beverly Hills office in a glassed walled conference room right off the trading floor. Milken has spread another $150 million around to his colleagues on the trading desk, so the sense of bonhomie and entitlement was pretty thick. They “owned” the junk bond market, but as Bob Dylan once said, “to live outside the law, you must be honest.” Milken went to jail and had to pay a huge fine, but he’s out now, still with billions in the bank.

It is not the purpose of this relatively brief summation to review the elaborate rationalizations for Reagan’s defense build-up–to critique the work of Cap Weinberger, Richard Perle or Paul Wolfowitz. Suffice to say, when Perle advocated unilaterally abrogating the 1972 ABM treaty so that we could begin building what was to become the Star Wars anti-ballistic missile system, he said he felt no reason to keep treaties with a barbaric people like the Soviets. As James Carroll writes in his classic , House of War,

Perle blithely declared that the Soviet Union would willingly sacrifice twenty million of its own citizens in a nuclear war with the United States, a prediction the President had often made in after-dinner speeches as a private citizen.

Historians have since proven that many of the claims of the Reagan administration about Soviet power were constructs of the imagination with no basis in fact. But men like Perle and Wolfowitz had been schooled in the political philosophy of Leo Strauss, the spiritual father of neo-conservatism. Deception was part of their job description.

Not only did Strauss have few qualms about using deception in politics, he saw it as a necessity. While professing deep respect for American democracy, Strauss believed that societies should be hierarchical – divided between an elite who should lead, and the masses who should follow. But unlike fellow elitists like Plato, he was less concerned with the moral character of these leaders. According to Shadia Drury, who teaches politics at the University of Calgary, Strauss believed that “those who are fit to rule are those who realize there is no morality and that there is only one natural right – the right of the superior to rule over the inferior.”

What should be noted is that this philosophy of deception did not end when the Berlin Wall fell. During the Bush I Gulf War both the Pentagon and Raytheon claimed that their Patriot Missle had knocked down dozens of Iraqi Scud Missiles. This of course was not true and the Patriot was so hapless the Israelis refused to take them, even when offered at no cost. Media scholars of the Gulf War claim it was but a commercial for U.S. smart bombs and of course large contractors like Raytheon were happy to sell their wares to any country. But the tradition born of Woodrow Wilson’s Committee on Public Information, honed by the early propaganda work of Walter Lippman was alive and well. Lippmann assumed a public that “is slow to be aroused and quickly diverted . . . and is interested only when events have been melodramatized as a conflict.” Even Bill Clinton in his campaign against George Bush for President was not above using “melodramatized evil” in his campaign advertising. “Saddam Hussein still has his job. Do You?”, intoned one ad with ominous background music.

To study a new Democratic President arriving in office in 1992, at a time of peace is to reach into the core of our story. For if ever there was a time when our military commitments could have been cut back to give us a “peace dividend”, it would have been in 1993. The sad story of Clinton’s colossal failure to reign in the military is best encapsulated in an incident reported in House of War. Shortly after he had unveiled his “don’t ask, don’t tell” order on homosexuals in the military, Clinton visited the aircraft carrier USS Theodore Roosevelt.

As he was piped aboard, he passed a young sailor at the head of the gangplank. The sailor pointedly declined to salute his commander in chief. Instead of rebuking such disrespect to the office of the presidency on the spot, or afterward, Clinton let the slight pass, as if it did not matter. The President’s refusal to enforce due deference to authority was a graver offense against the military ethos than the sailor’s contemptuous act, and every member of the armed forces took note.

Whether intimidated by his own draft dodging past, or merely incapable of standing up to the generals, Clinton’s regime can be seen as an abject failure when it came to taming the military industrial complex. He took office in a recession and almost immediately had to deal with intense pressure from Congress and the military industrial complex to expand NATO. Both Reagan and Bush had made commitments to the Russians not to let the former Warsaw pact countries into NATO. As Carroll notes,

But the Pentagon had never accepted that. Getting former Warsaw Pact members into NATO, beginning with Poland, Hungary and the Czech Republic, was less a security question, now that Russia was in decline, than an economic one, for Moscow’s former satellite nations, needing an arms buildup from scratch, represented a major new market for the Pentagon’s industrial partners. That was an argument Clinton could understand, and as a politician he saw a benefit of pleasing U.S. voters with ties to Eastern Europe.

Needless to say defense contractors showered money on new Democratic committee chairmen and their allies, spending almost $50 million in one year to lobby for NATO expansion. The benefits of not crossing the military industrial complex could be shared by both political parties. And in the area of nuclear disarmament, Clinton ended up with a far worse record than either Reagan or Bush 1, under whom the nuclear arsenal had been cut in half. Under Clinton, partially because of his embrace of NATO expansion almost no cuts in nukes were made.

As our story moves towards the present, we must acknowledge one insight of the Clinton administration into the problems that will confront the Bush administration after the turn of the Millennium. Treasury Secretary Rubin was well aware that running a $3 billion per day current account deficit was unsustainable. And by a combination of raised taxes and fees along with spending cuts, he was able to bring it to a surplus in the last year of the administration. This lesson in fiscal responsibility was of course lost on the idealogical tax cutters of the Bush-Cheney administration. As we will see in the final part of the series, Eisenhower’s early warnings that “the disastrous rise of misplaced power exists and will persist” would come true in a way that perhaps only a poet of the apocalypse could have imagined. As W.B. Yeats had written in 1920,

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned.
The best lack all conviction, while the worst
Are full of passionate intensity.

You will be happy to hear that Homeland Security’s terrorist watch list will hit 1 Million names tomorrow.

Barry Steinhardt, director of the ACLU’s Technology and Liberty Program, spoke today along with two victims of the watch list: Jim Robinson, former assistant attorney general for the Civil Division who flies frequently and is often delayed for hours despite possessing a governmental security clearance and Akif Rahman, an American citizen who has been detained and interrogated extensively at the U.S.-Canada border when traveling for business.

I feel safer already.

In the mid fifties, the U.S. military got worried because American soldiers, captured by the Chinese in the Korean conflict had “confessed” publicly that the Americans were using germ warfare. We knew the confessions were false and so we began studying how the Chinese got these men to tell lies. As usual, the Army commissioned an academic study.

The 1957 article was entitled “Communist Attempts to Elicit False Confessions From Air Force Prisoners of War” and written by Alfred D. Biderman, a sociologist then working for the Air Force, who died in 2003. Mr. Biderman had interviewed American prisoners returning from North Korea, some of whom had been filmed by their Chinese interrogators confessing to germ warfare and other atrocities.

Those orchestrated confessions led to allegations that the American prisoners had been “brainwashed,” and provoked the military to revamp its training to give some military personnel a taste of the enemies’ harsh methods to inoculate them against quick capitulation if captured.

So when Dick Cheney wanted to get a manual for “enhanced interrogation techniques” for Guantanamo, what did he do? He used the Chinese torture techniques! Let me get this right. We knew this torture caused prisoners to lie. So we used them and then believed the lies.

Amazing.

In the mid fifties, the U.S. military got worried because American soldiers, captured by the Chinese in the Korean conflict had “confessed” publicly that the Americans were using germ warfare. We knew the confessions were false and so we began studying how the Chinese got these men to tell lies. As usual, the Army commissioned an academic study.

The 1957 article was entitled “Communist Attempts to Elicit False Confessions From Air Force Prisoners of War” and written by Alfred D. Biderman, a sociologist then working for the Air Force, who died in 2003. Mr. Biderman had interviewed American prisoners returning from North Korea, some of whom had been filmed by their Chinese interrogators confessing to germ warfare and other atrocities.

Those orchestrated confessions led to allegations that the American prisoners had been “brainwashed,” and provoked the military to revamp its training to give some military personnel a taste of the enemies’ harsh methods to inoculate them against quick capitulation if captured.

So when Dick Cheney wanted to get a manual for “enhanced interrogation techniques” for Guantanamo, what did he do? He used the Chinese torture techniques! Let me get this right. We knew this torture caused prisoners to lie. So we used them and then believed the lies.

Amazing.