The announcement last week by the United
States of the largest military aid
package in its history – to Israel – was
a win for both sides.
Israeli prime
minister Benjamin Netanyahu could boast
that his lobbying had boosted aid from
$3.1 billion a year to $3.8bn – a 22 per
cent increase – for a decade starting in
2019.
Mr Netanyahu has presented this as a
rebuff to those who accuse him of
jeopardising Israeli security interests
with his government’s repeated affronts
to the White House.
In the past weeks alone, defence
minister Avigdor Lieberman has compared
last year’s nuclear deal between
Washington and Iran with the 1938 Munich
pact, which bolstered Hitler; and Mr
Netanyahu has implied that US opposition
to settlement expansion is the same as
support for the “ethnic cleansing” of
Jews.
American president Barack Obama,
meanwhile, hopes to stifle his own
critics who insinuate that he is
anti-Israel. The deal should serve as a
fillip too for Hillary Clinton, the
Democratic party’s candidate to succeed
Mr Obama in November’s election.
In reality, however, the Obama
administration has quietly punished Mr
Netanyahu for his misbehaviour. Israeli
expectations of a $4.5bn-a-year deal
were whittled down after Mr Netanyahu
stalled negotiations last year as he
sought to recruit Congress to his battle
against the Iran deal.
In fact, Israel already receives
roughly $3.8bn – if Congress’s
assistance on developing missile defence
programmes is factored in. Notably,
Israel has been forced to promise not to
approach Congress for extra funds.
The deal takes into account neither
inflation nor the dollar’s depreciation
against the shekel.
A bigger blow still is the White
House’s demand to phase out a special
exemption that allowed Israel to spend
nearly 40 per cent of aid locally on
weapon and fuel purchases. Israel will
soon have to buy all its armaments from
the US, ending what amounted to a
subsidy to its own arms industry.
Nonetheless, Washington’s renewed
military largesse – in the face of
almost continual insults – inevitably
fuels claims that the Israeli tail is
wagging the US dog. Even The New York
Times has described the aid package as
“too big”.
Since the 1973 war, Israel has
received at least $100bn in military
aid, with more assistance hidden from
view. Back in the 1970s, Washington paid
half of Israel’s military budget. Today
it still foots a fifth of the bill,
despite Israel’s economic success.
But the US expects a return on its
massive investment. As the late Israeli
politician-general Ariel Sharon once
observed, Israel has been a US
“aircraft carrier” in the Middle East,
acting as the regional bully and
carrying out operations that benefit
Washington.
Almost no one blames the US for
Israeli attacks that wiped out Iraq’s
and Syria’s nuclear programmes. A
nuclear-armed Iraq or Syria would have
deterred later US-backed moves at regime
overthrow, as well as countering the
strategic advantage Israel derives from
its own nuclear arsenal.
In addition, Israel’s US-sponsored
military prowess is a triple boon to the
US weapons industry, the country’s most
powerful lobby. Public funds are
siphoned off to let Israel buy goodies
from American arms makers. That, in
turn, serves as a shop window for other
customers and spurs an endless and
lucrative game of catch-up in the rest
of the Middle East.
The first F-35 fighter jets to arrive
in Israel in December – their various
components produced in 46 US states –
will increase the clamour for the
cutting-edge warplane.
Israel is also a “front-line
laboratory”, as former Israeli army
negotiator Eival Gilady admitted at the
weekend, that develops and field-tests
new technology Washington can later use
itself.
The US is planning to buy back the
missile interception system Iron Dome –
which neutralises battlefield threats of
retaliation – it largely paid for.
Israel works closely too with the US in
developing cyberwarfare, such as the
Stuxnet worm that damaged Iran’s
civilian nuclear programme.
But the clearest message from
Israel’s new aid package is one
delivered to the Palestinians:
Washington sees no pressing strategic
interest in ending the occupation. It
stood up to Mr Netanyahu over the Iran
deal but will not risk a damaging clash
over Palestinian statehood.
Some believe that Mr Obama signed the
aid package to win the credibility
necessary to overcome his domestic
Israel lobby and pull a rabbit from the
hat: an initiative, unveiled shortly
before he leaves office, that corners Mr
Netanyahu into making peace.
Hopes have been raised by an expected
meeting at the United Nations in New
York on Wednesday. But their first talks
in 10 months are planned only to
demonstrate unity to confound critics of
the aid deal.
If Mr Obama really wanted to pressure
Mr Netanyahu, he would have used the aid
agreement as leverage. Now Mr Netanyahu
need not fear US financial retaliation,
even as he intensifies effective
annexation of the West Bank.
Mr Netanyahu has drawn the right
lesson from the aid deal – he can act
against the Palestinians with continuing
US impunity.
- See more at: http://www.jonathan-cook.net/2016-09-19/palestinians-lose-in-us-military-aid-deal-with-israel/#sthash.fL4Eq28N.dpuf
Wall Street: The Trump-China missing link
By Pepe Escobar
September 30, 2016 "Information
Clearing House"
- "RT"
-
The yuan is about to enter the IMF’s
basket of reserve currencies this coming
Saturday - alongside the US dollar,
pound, euro and yen. This is no less
than a geoeconomic earthquake.
Not only does this represent yet another
step in China’s irresistible path
towards economic primacy; the Chinese
currency’s inclusion in the Special
Drawing Rights (SDR) basket will also
lead central banks and hyper-wealthy
funds – especially from the US – to
increasingly buy more Chinese assets.
At
the first US presidential debate, Donald
Trump took no prisoners, criticizing
China’s currency manipulation. This is
what he said:
“You look at what China’s doing to our
country in terms of making our product,
they’re devaluing their currency and
there’s nobody in our government to
fight them… They’re using our country as
a piggy bank to rebuild China, and many
other countries are doing the same
thing.”
Well, China is not “making our
product”; the manufacturing process
is Made in China – then exported to the
US. Most of the profits benefit US
corporations – everything from design,
licensing and royalties to advertising,
financing and retail margins. If the
mantras manage to spell out a partial
truth - the US has lost manufacturing
jobs to China, China is the “factory
of the world” – they don't spell
out the hidden truth that those who
profit are essentially major
corporations.
China does not “devalue their
currency”; the People’s Bank of
China periodically adjusts the yuan
according to a very narrow band. The
major practitioners of quantitative
easing (QE) are actually the US, as well
as Japan and the European Central Bank (ECB).
And the currency of global consumer
goods manufacturing continues to be the
US dollar, not the yuan.
Beijing also is not “using our country
as a piggy bank to rebuild China.” This
is all about balance of payments. What US
consumers spend on Made in China products –
many of them delocalized by US corporations
– is pumped back to the US as capital
inflows that keep interest rates down and
help to support the Empire of Chaos’s global
hegemony.
Win-win,
Wall Street-style
Trump’s attention span is notoriously
minimalist. If his advisers managed to
imprint – tweet? - a few one-liners on his
brain, he would be able to explain to US
public opinion how the US-China game is
really played, something that all relevant
parties in both nations know by heart.
And
the – crucial - missing link in the whole
game is Wall Street.
This is how it works. A mighty hedge fund
approaches a US corporation and/or large
company with “an offer you can’t
refuse”: Delocalize to China. This
necessarily implies that all the company’s
assets are re-hypothecated on a double-entry
ledger in Wall Street.
Wall Street “wins” both ways;
either by financing the delocalization (and
corresponding US job extinction) to China,
or buying companies that refuse to
delocalize.
Then they go for wage arbitrage concerning
products that used to be Made in USA and are
now Made in China; that concerns the huge
wage gap between the US and China, which
also factors the exchange rate between the
US dollar and the yuan.
China for their part recycles their US
dollars buying US Treasury Bills. This, of
course, holds bond prices high, and that
helps to keep US interest rates low.
Everything in fact is on a high; bond
prices, the US dollar perceived value all
over the world, the exchange rate. US
dollars keep frantically entering the US
economy, then – in theory - used to keep
frantically buying Made in China products.
Of course the price of a Made
in China product in the US is low – and that
is “incentive” enough for US
companies to essentially keep Main Street
USA unemployed. As Steve Jobs once famously
proclaimed, “these
jobs are not coming back”.
The
US dollar exchange rate will continue to be
high as long as China – and others - recycle
their excess US dollars to buy US Treasury
Bills en masse. The crucial point is that
these US dollars never enter the real
economy. They are sort of “trapped”
either in the extremely cozy upper strata of
Wall Street casino capitalism or Too Big To
Fail rarefied banking. And the Fed wants the
game to go on indefinitely, to prevent a
rate collapse.
Beijing for its part plays the game with
relish; as the prime global export
powerhouse, the agenda is to solidify – and
expand - manufacturing know how on the way
to achieve a status of “moderate income”
nation by the start of the next decade.
The
bottom line is that to recover US
manufacturing jobs – as Trump has been
forcefully promising – he will have to stare
down the whole Wall Street finance
oligarchy.
So
no wonder these oligarchs – responsible for
shipping all those US manufacturing jobs to
Asia and lavishly profiting from bailouts to
the 'Too Big To Fail' racket – hate him with
all their golden-plated guts.
Hellfiring
those Too Big to Fail
For
all his incapacity to formulate thoughts
above the language skills of a third grader,
Trump has been piling up astonishing
proposals that resonate wildly, way beyond
the “basket of deplorables”
spectrum.
He is against Cold War 2.0
and the pivot to Asia, when he says
“wouldn’t it be nice to
get along with Russia and China for a
change?”
He
no less than pre-empted WWIII when he said
he would be against a US nuclear
first-strike.
He
totally abhors global “free trade” – from
NAFTA to TPP and TTIP - because it has
“hollowed out the lives of American workers”,
as US corporations (under Wall Street’s
“incentive”) delocalize and then import
back into the US tariff-free.
Trump was even open to nationalizing Wall
Street banks after the 2008 financial
crisis.
So
we’re faced with the ultimate surrealist
spectacle of a billionaire denouncing
corporate globalization, which has been
responsible for stripping the US lower
middle classes of countless, decent
blue-collar jobs and social benefits – not
to mention turning them into hostages of
rotting public infrastructure. And all that
with absolutely no one among the US
establishment condemning the most
astonishing wealth transfer to the 0.0001%
in history.
If
in the next two presidential debates Trump
points to the crucial missing link in the
whole plot – Wall Street - he might as well
lock on as a surefire winner.
Pepe Escobar is an independent geopolitical
analyst. He is the former roving
correspondent for Asia Times Online. Born in
Brazil, he's been a foreign correspondent
since 1985, and has lived in London, Paris,
Milan, Los Angeles, Washington, Bangkok and
Hong Kong. |
