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Silent Coup
In the past 4 years 22 universities across the U.S. have quietly taken the CIA’s dollars and agreed to become spy-factories for student spooks. David Price breaks the story, identifies the campuses, details secret faculty protests and charts the strategy for resistance. The U.S.’s warlord clients in Afghanistan now produce 90 per cent of the world’s opium. Peter Lee reports how the U.S. sponsors widening drug plagues in Iran and Russia. Get your new edition today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and t-shirts make great presents.
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Today's Stories February 8, 2010 Pam Martens February 5 - 7, 2010 Alexander Cockburn Paul Craig Roberts Forrest Hylton Joanne Mariner Bill Quigley Jeffrey St. Clair Todd Gordon / Jeffrey R. Webber Consolidating the Coup in Honduras Joseph Nevins Mike Miller Mark Weisbrot Alison Weir David Swanson Missy Beattie Jonathan Cook Richard Morse David Ker Thomson Benjamin Dangl Cal Winslow Jim Goodman Michael Dickinson Bouthaina Shaaban Don Monkerud Ananya Mukherjee-Reed Doug Bevington Stephen Martin Charles R. Larson David Yearsley Kim Nicolini Poets' Basement Website of the Day February 4, 2010 Barbara Rhine Barry Lando David Macaray Shamus Cooke P. Sainath Christopher Brauchli Ramzy Baroud Suzan Mazur Harry Clark Andy Worthington Website of the Day February 3, 2010 Paul Craig Roberts Kathleen Christison Franklin Spinney Dean Baker Marc Levy Kathy Kelly Gareth Porter Joshua Frank Rannie Amiri Gregory Vickrey Website of the Day February 2, 2010 Michael Hudson Boadiba Chris Floyd Paul A. Passavant Mike Whitney John Ross Jonathan Cook Susan Galleymore Dave Lindorff Tolu Olorunda Ron Jacobs Website of the Day February 1, 2010 Michael Hudson Stan Goff Patrick Cockburn Saul Landau Dr. Carol Paris, MD Marshall Auerback Harvey Wasserman Johanna Berrigan Peter Gelderloos David Michael Green Martha Rosenberg Kevin Zeese Alan Farago Website of the Day January 29 - 31, 2010 Alexander Cockburn Daniel Ellsberg Bill Quigley Franklin Spinney Jeffrey St. Clair Steve Early Joe Bageant P. Sainath Jordan Flaherty Joshua Frank Winslow T. Wheeler Brian M. Downing Wajahat Ali William Loren Katz Dave Lindorff Jim Goodman Judith Scherr Kerry Kennedy / Monika Kalra Varma Anthony Papa David Macaray Roger Burbach Belén Fernández Nikolas Kozloff Dr. Susan Block Windy Cooler Charles R. Larson Mikita Brottman David Yearsley Lorenzo Wolff David Rovics Poets' Basement Website of the Weekend January 28, 2010 Bill Quigley Peter Hallward Tanya Golash-Boza Shamus Cooke Dave Lindorff Ray McGovern Uri Weiss Thomas M. Power Cecil Brown Wajahat Ali Harvey Wasserman Website of the Day January 27, 2010 Daniel Kovalik Paul Craig Roberts Dean Baker Uri Avnery Sasha Kramer Vijay Prashad Nikolas Kozloff Mark Weisbrot Jonathan Cook Bob Fitrakis / Binoy Kampmark Website of the Day January 26, 2010 Michael Hudson Joan Roelofs Patrick Cockburn Mike Roselle Brian M. Downing David Macaray Bouthaina Shaaban Kevin Zeese Richard Morse Fidel Castro Farzana Versey Jonathan Cook Website of the Day January 25, 2010 Michael Hudson Anthony DiMaggio JoAnn Wypijewski Nadia Hijab Robert Jensen John Maxwell Richard Morse Marilyn Langlois Dan Bacher James L. Secor Jayne Lyn Stahl Website of the Day January 22/24, 2010 Alexander Cockburn Russell Feingold Ralph Nader Christopher Ketcham Manuel Garcia, Jr Paul Craig Roberts Jeffrey St. Clair Nikolas Kozloff Jean Damu Mitchel Cohen Paul Buccheit Conn Hallinan Steven Higgs Rob Stone, MD Saul Landau / Ron Jacobs Vijay Prashad P. Sainath M. Shahid Alam George Wuerthner Missy Comley Beattie Jean Sabaté Shamus Cooke Stephen Fleischman Michael Donnelly David Michael Green Michael Dickinson Charles R. Larson David Yearsley Lorenzo Wolff Poets' Basement Website of the Day
Paul Craig Roberts Alan Farago Richard Morse Stewart J. Lawrence Harvey Wasserman Carl Finamore Ramzy Baroud Marshall Auerback Fawzia Afzal-Khan Adam Federman Website of the Day January 20, 2010 Alexander Cockburn James Bovard Mary Lynn Cramer Dean Baker Uri Avnery Kathy Kelly Jeb Sprague Ron Jacobs John V. Walsh Bouthaina Shaaban Gail Dines Website of the Day January 19, 2010 Michael Hudson John Maxwell Stephen Soldz Richard Morse Björn Kumm Gary Leupp Eric Toussaint / Nikolas Kozloff Benjamin Dangl Dave Lindorff Robert Roth Website of the Day January 18, 2010 Petra Bartosiewicz Nelson P. Valdés Bill Quigley Richard Morse Tolu Olorunda John Ross Manuel Garcia, Jr. The Murder of Masoud Alimohammadi: Assassinating the Iranian H-Bomb Ralph Nader Franklin Lamb Frederick B. Hudson Website of the Day January 15-17, 2010 Alexander Cockburn Richard Morse Bill Quigley Patrick Cockburn Jeffrey St. Clair Anthony DiMaggio Tom Reeves Daniel Wolff Alan Nasser Saul Landau / Andrew Oxford Michael Donnelly Russell Mokhiber Darwin Bond-Graham Missy Beattie David Ker Thomson Gary Leupp Ron Jacobs Clifton Ross Jordan Flaherty Marshall Auerback Marjorie Cohn Joe Bageant Tariq Ali Jayne Lyn Stahl Charles R. Larson Kim Nicolini David Yearsley Poets' Basement Website of the Weekend January 14, 2010 Ashley Smith Harvey Wasserman Dean Baker Brian Cloughley Brock L. Bevan Don Monkerud Winslow T. Wheeler Gideon Levy Adam Federman James McEnteer Brian Concannon Jr Website of the Day January 13, 2010 Patrick Haenni / Jonathan Cook Cecil Brown Steven Higgs Paul de Rooij Richard Forno Dr. Trudy Bond Daniel Drennan Martha Rosenberg Brenda Baletti, Gilson Rego and Antonio Sena Website of the Day January 12, 2010 Bill Salganik Uri Avnery Dean Baker Dan Kovalik Raza Naeem George Wuerthner Dave Lindorff David Macaray Tolu Olorunda Patrick Bond Website of the Day January 11, 2010 Patrick Cockburn Gareth Porter John Ross Gregory V. Button Ralph Nader Tom Barry Mikita Brottman David Michael Green Lost in the White House David Swanson Kevin Zeese Website of the Day
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February 8, 2010 Buy-to-Budget and the F-35 Joint Strike FighterMark-to-Market Pentagon StyleBy FRANKLIN C. SPINNEY "Mark to Market" is (or was?) an accounting standard that required financial institutions to value their assets at their current market value. Thus a stock portfolio would be valued at an amount determined by the stock market, if the stock holder sold all his assets in that market. Last Spring, when the government was contemplating its plan to rescue the big banks, it settled on the idea of using taxpayer money to purchase or guarantee the so-called toxic assets of the large "investment" banks and their insurers (e.g., collateralized debt obligations and credit default swaps). The banks lobbied furiously against the mark to market rule, because the toxic assets could not be sold in a market that was frozen, and under the rule, they would be valued a fraction (somewhere between 0% and 60%) of their original purchase prices. Under mark to market, the banks would take a bath or even become insolvent. So, they concocted a new concept of "fair value," which came close to reimbursing them at cost, thus implying the capitalist market was inherently unfair. The Federal Government ended up guaranteeing the debt at taxpayer expense, thus securing an American economic system that guarantees private profits at the expense of public losses for the privileged entities on Wall Street. But don't blame the banks for this kind of system. They are only doing what is natural when one is working with the best government money can buy. In fact, the American political economy has many ways of guaranteeing private profits with public subsidies of what should be private losses. For example, the latest scam in the Military - Industrial - Congressional Complex (MICC) is the so-called "Buy to Budget" formula for the hugely expensive and deeply troubled F-35 Joint Strike Fighter. This formula was just gleefully endorsed in an email recently sent to the F-35's Stakeholders. The author, Charles T. Burbage, is the executive vice president of Lockheed Martin Aeronautics Company and general manager of the F-35 Joint Strike Fighter (JSF) Program Integration. Burbage is responsible for ensuring that all of the F-35's requirements are fulfilled for both the program’s U.S. and its international customers, as well as its industrial partners around the world. And the email makes clear Burbage is licking his chops at the MICC's latest coup. It is pretty easy to understand why Burbage is so gleeful. Defense contractors operate in a "cost-plus" economy, where profits are a negotiated percentage of costs. If costs rise, profits rise. The Pentagon just approved another higher cost estimate for the F-35 and a reduced production quantity. That is clearly good, but Burbage is confident the future looks even rosier. The reasons for his confidence in Lockheed's rosy scenario becomes clear when "Buy to Budget" is viewed in this context of the MICC's political economy. "Buy to Budget" increases the incentive to grow costs even faster and thereby increase profits even more over the long term. The rosy scenario results when costs continue to grow, and smaller numbers of F-35s will be purchased each future year, all financed within a given budget level. The lower F-35 production rates will exacerbate the aging crisis of the F-16s, A-10s, F-18s, and AV-8s that the F-35 is supposed to replace. But the average age of these airplanes is already far greater that they were designed for, so the political/bureaucratic pressure to increase the production rate of the F-35 will be enormous. Moreover, Burbage knows the Pentagon does not want any alternatives to the F-35. This rising political/bureaucratic pressure caused by the aging inventories will therefore lead to loud calls for higher F-35 budgets, and larger budgets will provide a larger space in which to "Buy to Budget" by jacking up costs further. Thus, the deadly cycle of cost growth, decreasing production rates, aging inventories, and higher profitability will reinforce itself again, in what is the political-economic equivalent of a perpetual motion machine. At a program acquisition cost already exceeding $300 billion, and a total life cycle cost approaching one trillion dollars (which no doubt will include lots of follow-on maintenance contracts for Lockheed), the F-35 is solidly on track to be the all time record breaker in high cost programs, in which continual production cutbacks will finance a never ending honey pot for Lockheed. Moreover, the Pentagon just signaled its increased commitment to the importance of the program by elevating its government program manager (Burbage's uniformed equivalent) to a two star to a three star general officer, in this case a vice admiral in the Navy -- which means more high level meetings in bigger offices, more cocktail parties, and more of the pomp and circumstance that are the perks of working in the MICC, not to mention even greater high-powered efforts in the Pentagon to save face by continuing business as usual. That the F-35's foreign partners like Great Britain and the Netherlands will help to foot the ever increasing bill is merely icing on the cake. In the context of MICCs long-term survival, Burbage's gleeful endorsement of "Buy to Budget" reaches back to the end of the Cold War confirms the farsighted wisdom displayed William Anders, former CEO of General Dynamics (note: GD at that time owned the Fort Worth factory where Burbage now works and the F-35 is produced). "Buy to Budget" is validation of the MICC business strategy that Anders spelled out in 1991. Anders decided that General Dynamics (and by extension the Fort Worth factory, which he subsequently sold to Lockheed) was not going to diversify business operations into the non-defense commercial manufacturing sector, even though the Cold War had just ended. Anders said his decision was to increase his concentration in defense activities (a view widely shared and resulted in increased oligopolization of the industry, in an orgy of Pac Man gobbling up of defense companies by other defense companies during the early 1990s. He said this decision to increase concentration was "not surprising," because 80% of defense acquisitions in the non-defense sector failed. He then explained succinctly why these acquisitions are always so unsuccessful: "Defense industry management teams generally have little commercial experience and market savvy," and "Most have been cost-plus and mil spec trained." He concluded by saying, "In short, most don't bring a competitive advantage to non-defense business," and "Frankly, sword makers don't make good and affordable plowshares."[1] Of course, what Anders did not say is that sword makers also do not make good affordable swords. But who cares when you live in a posh, post-cold-war marketplace like Burbage's, where ever rising costs and profits are fueled by a user friendly Pentagon policy of "Buy to Budgets." Franklin “Chuck” Spinney is a former military analyst for the Pentagon. He currently lives on a sailboat in the Mediterranean and can be reached at chuck_spinney@mac.com Notes. [1] "Rationalizing America's Defense Industry: Renewing Investor Support for the Defense Industrial Base and Safeguarding National Security," Keynote Address, Defense Week 12th Annual Congress, 30 October 1991, page 13.
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