Global Economy: The End of Prosperity

From too much of a good thing. From the 1980s and 1990s excesses. From the longest ever US bull market. Heavily manipulated to keep it levitating. From August 1982 to January 2000. An illusory reprieve from October 2002 to October 2007. Fluctuations aside, all lost in the past 12 months. The wages of sin are now due, and payment is being painfully extracted. From all nations globally. Affecting ordinary people the most who had nothing to do with creating booms and busts. They got little on the upside but are paying dearly for the down.

Even "free-market" champions are unnerved. Arthur Laffer for one in his October 27 Wall Street Journal op-ed headlined: "The Age of Prosperity Is Over." He states that "This administration and Congress will be remembered like Herbert Hoover," but not for the right reasons. He continued: "what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity."

Readers will remember Laffer from the Reagan era. The "supply side trickle down" guru. More popularly called "Reaganomics." GHW Bush's "voodoo economics." The faux theory that tax cuts for the rich grow the economy and benefit everyone. By encouraging well-off recipients to earn more money. For more tax revenue. For the greater good of everyone.

What Reagan's budget director, David Stockman, called a "Trojan Horse." To con Congress into accepting "Republican orthodoxy (and pave the way for) the greed level, the level of opportunism, (to get) out of control." From tax cuts for the rich. Loopholes for special interests. Tax increases on low and middle-income households. Taking from the many for the few. What Laffer and others championed and still do. Along with believing markets work best so let them. Government is the problem, not the solution.

The results weren't encouraging. Macroeconomic growth for sure until it ended. The rich got much richer. The top 1%. Another 9% to some extent. Not the rest, however. Their well-being either stagnated or declined and now are in free-fall. Their savings and futures erased by rampant deleveraging. Market manipulation. Massive fraud. Leaving millions of households in trouble. With the worst likely yet to come. All Laffer can do is resurrect Hoover. The real villains are present and among us. Some active. Others not. Their venom corrosive and harmful. Hurting economies and people everywhere.

From boom now bust. Rampant speculation and fraud. In most asset classes. Especially equities, housing, commercial real estate, commodities, currencies, and huge leveraged debt for levitation.

As a consequence, world economies are reeling and leaders scrambling to contain them. With the most ambitious/outrageous rescue plans ever. Likely mindful, or they should be, that all their grand schemes can't undue nearly three decades of excess. The most extreme financial sins. The age of levitation is over. As financial expert and investor safety advocate Martin Weiss puts it:

Here's the "inescapable reality - Now that the global debt bubble has burst, all the world's leaders and all their radical new measures can't" contain, let alone undue, all the damage. They can't "turn back the clock or reverse decades" of excess and greed. "They cannot repeal the law of gravity or prevent investors from selling. Even as they sweep piles of bad debts under the carpet with bailouts and buyouts, mountains of new debts will go bad - another flood of mortgages that can't be paid, a new raft of credit cards falling behind, an avalanche of companies defaulting on their bonds."

No matter how many billions they throw at the problem, "trillions more in wealth will be wiped out in market declines. For a while longer, our leaders may try to play their last cards in a herculean effort to stop the fall." They may commit good money to save bad. "Inject more money into bankrupt banks, broken brokerage firms, endangered insurers and any company they deem essential to the economy."

It won't work. "It will be a blood transfusion with a failing heartbeat." Soon enough they'd better learn that "it's impossible to save the entire world." The right choice is to "accept the (inevitable) decline, manage it proactively," and avoid the perilous alternative. An "open floodgate (of) climatic selling. A crash producing "the final phase of the decline." Erasing "anywhere from 50% to 90% of (stocks, corporate bonds, real estate, foreign currencies and commodities valuations) in a matter of months or even weeks."

"As many as one-fourth (of S & P 500 companies) could go bankrupt." The entire index "flip(ing) from the black to the red." Around 20% of US workers could lose their jobs. The standard of living of American households seriously harmed. The potential for big trouble ahead is real and growing. The effect on world economies serious and spreading.

Weiss called the Fed's latest rate cut a "DUD," and said the big news was "the Fed's latest cockamamie effort to save the world." With $120 billion to Brazil, South Korea, Singapore and Mexico ($30 billion each). Besides committed IMF funds for Hungary ($25.5 billion), Ukraine ($16.5 billion), and Iceland ($2.5 billion) and a new $100 billion Short-Term Liquidity Facility offering short-term loans.

It's an illusion to think Bernanke can play "Santa Claus, the Pied Piper and the Fairy Godmother all in one act." In fact, he's "desperate" and resorting to "the most radical measures of all time. Playing his last cards." Knowing that if he fails, "it's game over. Taking huge risks - that his rescue-the-whole-world schemes will backfire in the form of falling confidence in the US government as a whole." Besides there's no way make banks lend. Consumers borrow. Continue to spend. Have the means to do it. Reverse decades of excess or repeal the law of gravity to keep markets levitating.

On October 28, more evidence of what he's up against from the Washington Post. In an article headlined: "Downturn Clobbers Public Pension Funds." According to staff writer Peter Whoriskey, they're being ravaged across the country, "with many state and local governments (losing) more than 20% of their retirements pools." Even worse because they were inadequately funded before the crisis, according to the Government Accountability Office. And the 20% figure is conservative given the severity of the October selloff.

According to Chicago-based Northern Trust Investment Risk and Analytical Services' William Frieske, "We expect this (will) be the worst year we've seen since we've been tracking the funds." They service 27 million people. Supported by taxpayer money, investment returns and employee contributions. The bear market "played havoc on" actuarial calculations to ensure enough is available for future retirees. Because about 60% of fund assets are in common stocks, according to the National Association of State Retirement Administrators.

What's ahead depends on economic prospects. Whether markets will continue to contract. How deep and for how long. When recovery will occur. Will it be sustainable, and is there enough time to make up the shortfall for retirees expecting their pensions. After the Dow bottomed in 1932, it took a generation to recoup losses. What investors hope won't repeat today.

Much will given the raft of bad news:

-- spreading layoffs across the country; on October 29, The New York Times reporting their painful impact in New York; spreading "well beyond Wall Street;" expected to "drive up the city's unemployment rate and strain the state's unemployment insurance fund;" hitting everywhere, including service firms; professional ones - law firms, banks, other financial services, publishers, tourism, besides tens of thousands on Wall Street;

-- official unemployment heading for the high single digits; the true number far higher and growing; real pain is being felt as a result;

-- the worst housing crisis since the 1930s; continued record home price declines, according to the S&P Case-Shiller Index; 16.6% in its latest (20 major metropolitan areas) reading; compounded by a glut of unsold homes;

-- in an October 28 news release, the Center for Economic and Policy Research (CEPR) reported grim findings; a comparison of ownership vs. rental costs "points to negative equity accruals in many markets over the next 4 years" even as prices keep falling; many homeowners won't ever accrue equity with many going under water; in the most inflated markets, homeownership costs outpace rents by as much as 300% placing enormous stress on household income, especially for middle and lower-income families;

-- declining production; autos especially hard hit; Chrysler sacking 25% of its salaried force; GM suspending employee benefits; all three auto makers closing or idling plants; steel affected as a result; 17 of the nation's 29 blast furnaces shut down; other industries also under stress;

-- economists lowering their GDP forecasts; many saying we're well into recession; fourth quarter results will be the worst since the severe 1981 - 82 one, and 2009 also looks even bleaker; third quarter ones out show an annualized .3% decline; most disturbing a minus 3.1% PCE (personal consumption expenditure) reading, the first drop since 1991; private investment also shrunk 1.9%;

-- against this backdrop, little relief is being proposed; where it's most needed; so beleaguered homeowners can keep their properties; to struggling households to stimulate demand; not for toxic assets or to fund giant bank acquisitions; what Alan Nasser reported in his article titled "The Bailout Lie Exposed;" that big banks won't lend out their windfall; that New York Times economics reporter Joe Nocera confirmed from an employee-only recording of a JP Morgan Chase conference he secured; that the bank will use bailout funds for acquisitions; leveraged buyouts; with public money; for assets at fire sale prices; courtesy of US taxpayers; for further consolidation; a multi-generational tradition; to crush competition and grow monopolies; with both presidential candidates on board; assuring reduced social spending and no return to enlightened New Deal policies when they're most needed.

In Times of Crisis, Bring Out the Heavy Artillery

It's a common tactic and the one used in 1929. Following Black Thursday (October 24), Black Monday (October 28) and Black Tuesday (October 29). Popularly called the Great Crash of 1929. After which the publication Variety headlined: "Wall Street Lays an Egg." A much larger one than at first realized but serious enough for the establishment to get John D. Rockefeller to state (on Black Tuesday):

"Believing that fundamental conditions of the country are sound and that there is nothing in the business situation to warrant the destruction of values that has taken place on the exchanges during the past week, my son and I have for some days been purchasing sound common stocks." Fast forward to the present. History is again repeating. At another crisis time. No garden variety one. The most serious since the 1930s. With investor and public confidence severely shaken. Enough for a repeat of Rockefeller's bravado.

Dire enough to get Warren Buffett to do what he rarely if ever does. Pen an op-ed. On October 16 in The New York Times. To sound like John D. and say in spite of gloom and doom, he's "buying American stocks." To affirm his faith in "the long-term prosperity of the nation's many sound companies." To predict "most major companies will be setting new profit records 5, 10 and 20 years from now." At age 78, he may not be around to confront critics if he's wrong.

On October 27, the Wall Street Journal took aim at him. A very uncharacteristic gesture toward a large (and successful) investor. Let alone the most famous individual one and one of the richest. "Even the Oracle Didn't Time It Perfectly" headlined the Journal. His class A Berkshire Hathaway shares have taken a hit like most others year to date, but that's a side issue for the Journal.

It's troubled because "the Oracle of Omaha failed to see how bad the market was going to get." And he's even exposed to credit default swaps (CDSs). Increased his position to $8.8 billion from mid-2006 - mid-2008. Already took a $490 million loss in the first quarter. Another $136 million in the second, and likely much more unreported so far for the third and beyond.

These positions show he "was relatively comfortable about the prospects for US corporations and global stocks at a time when (other observers) were predicting a bust." Maybe it's "time for the Oracle to get a new crystal ball."

Warnings from Abroad

Overseas comments differ greatly from more optimistic ones here. Germany's finance minister, Peer Steinbruck, for example. On October 26, the Financial Times reported his fears about global financial markets collapsing. At least through 2009. He said: "The danger of a collapse is far from over. Any attempt to give the all clear would be wrong."

His government committed $635 billion to rescue troubled banks. A "financial market stabilization fund." With most of it in credit guarantees and a smaller portion to recapitalize banks and buy toxic assets. But unlike the Paulson plan, Germany won't compel banks to take it and many so far haven't. For fear investors will punish them for admitting they're in trouble and also over concerns that conditions imposed are too stringent. Steinbruck is working through this and said banks eschewing state aid are "irresponsible."

Leaders in Europe fear the financial crisis will tip the continent into serious recession. And cause a currency meltdown in the East. Across former Soviet bloc nations. Testing currency pegs "on the fringes of Europe's monetary union in a traumatic upheaval" reminiscent of the 1992 Exchange Rate Mechanism collapse. Bank of New York strategist Neil Mellor called it "the biggest currency crisis the world has ever seen."

On October 26, Ambrose Evans-Pritchard wrote about it in the UK Telegraph. He cites what experts fear. A "chain reaction within the eurozone itself." A surge in capital flight from Austria. The latest Bank of International Settlements data aren't encouraging. They show Western European banks in trouble. With the most exposure "to the emerging market bubble, now bursting with spectacular effect."

The amount involved is huge. Around three-fourths of "the total $4.7 trillion in cross-border bank loans to Eastern Europe, Latin America and emerging Asia." Much greater than America's subprime lending. Iceland was at the leading edge of the problem. Hungary and other states may follow. In a Paul Krugman New York Times op-ed, he discussed currency crises and said he "never anticipated anything like what's happening now."

He cited Morgan Stanley's chief currency strategist Stephen Jen (his former student) saying since Lehman's demise, we've seen world emerging market currency crises. "So far, the US financial sector has been (at) the epicentre of the global crisis. I fear that a hard landing in EM assets and economies (unfolding in Europe) will become the second epicentre in the coming months, with very damaging feedback effects on the developed world."

Already Austria, Hungary, Ukraine, Serbia, Belarus "queuing up for" IMF rescue packages. Jumping from the frying pan into the fire unless they can arrange no-strings loans. Given the gravity of the crisis and danger of its contagion, maybe so or at least escape the worst type IMF demands. They've swallowed enough neoliberalism already. It exacerbates their dire condition.

Europe is now reeling under stress. Heavily pressured by emerging market debt. The Eastern bloc borrowed heavily in dollars, euros and Swiss francs. Some in Hungary and Latvia in Yen. An unpublished 2006 IMF report warned about their most dangerous excesses in the world. Nothing was done to curb them, and finally its authors "had their moment of vindication as Eastern Europe went haywire." It hit Hungary, Romania and put Russia "in the eye of the storm, despite its energy wealth. The cost of insuring Russian sovereign debt (through CDSs) surged to 1200 basis points last week." More than Iceland "before Gotterdammerung struck Reykjavik."

With oil prices plunging, markets no longer believe that Russian state spending is viable, and the fear is that peripheral contagion will invade the eurozone's core. Yield spreads between German and Italian 10-year bonds are being watched. "They reached a post-EMU (European Economic and Monetary Union)" high of 93 in late October. No one knows the "snapping point" but it's feared that anything above 100 is cause for alarm.

BNP Paribas' chief currency strategist Hans Redeker cites "an imminent danger that East Europe's currency pegs will be smashed unless EU authorities wake up to the full gravity of the threat, and that in turn will trigger a dangerous crisis for EMU itself."

"The system is paralyzed," he said, "and starting to look like Black Wednesday 1992." He fears a very deflationary effect across Western Europe. One "almost guaranteed" to implode the euroland money supply. As for UK banks, they're lightly exposed to the former Soviet bloc. But not to emerging Asia. In the amount of $329 billion. Almost as much and America and Japan combined. Evan-Pritchard concludes with a sobering note for his UK readers. "Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates." Like for many other investments, that money's safety is far from secure.

Neither is Britain according to a Mail online October 27 article headlined: The country "may need 0% interest rate to avoid a depression, leading economist warns." He's Charles Goodhart. A founding member of the Bank of England's Monetary Policy Committee (MPC). Now a professor emeritus of banking and finance at the London School of Economics.

He told Channel 4's Dispatches program: "Interest rates will go down from now, by how far and how fast nobody knows. They could go to zero" like in Japan. And may have to. Yet other experts warn that at this stage big cuts are "too little, too late" because the country already faces a long severe recession.

On October 29, more confirmation from a UK Independent article headlined: "Repossessions soar by 70 per cent as joblessness rises." From new Financial Services Authority figures. Some 11,054 second quarter foreclosures. Up from under 6500 last year. Numbers expected to keep rising, and new Land Registry data revealed continuing house price declines. Around 8% in the past 12 months.

A gloomy picture, according to Howard Archer. Global Insight's chief UK economist. In his view, "The fundamentals continue to be largely stacked against the housing market, and it seems odds-on that prices will fall considerably further." Especially given "accelerating unemployment set to pick up significantly....recession (and) wages (held) down." Add to this a 167% rise in calls to the housing charity Shelter helpline. Its chief executive, Adam Sampson, said: "These figures are not only shocking and worse than expected, they highlight the crippling severity of the credit crunch on ordinary homeowners." It's hit Britain especially hard, but economic woes are little different throughout the continent.

In Japan as well after the benchmark Nikkei index hit a 26 year low and a scant 18% of its 1989 high. Despite a few days of rebound, it made front page (October 28) Wall Street Journal news in an article headlined: "Crisis Deals New Blow to Japan" in a feature story about the nation's largest bank. Mitsubishi UFJ Financial Group. On October 27, it said it would raise $10.7 billion in new capital. The result of its own vulnerabilities and Japan's economic turmoil. According to Kristine Li of Tokyo's KBC Securities: Mitsubishi's announcement was a "big blow" to investors' confidence. Its share price reflected it. Plunging 15% on October 27. Other banks hit as well. Major ones. They, too, need more capital and will have to raise it from investors.

Some in Tokyo believe the country can do little to reverse the downward trend. According to Credit Suisse's Toyko-based chief equity strategist, Shinichi Ichikawa, "The Japanese government alone can't fix" the nation's export woes or the deepening global crisis. "The factors hurting the market are beyond Japan's control."

The Financial Times paints a similar picture. The Nikkei down 53% through late October and has "the dubious honour of having been the worst performing leading developed country market last year." The current crisis hit Japan in several ways. Its banking and financial sectors "in spite of having relatively less exposure to toxic assets." Nonetheless, investors worry about their underlying strength or lack of it.

Japan is heavily export dependent. For most of its economic growth and health. It's hurt by a surging Yen. At a 13 year high against the dollar. In addition, hedge funds and foreign investors are bailing out. The way they're doing everywhere, but it's hurting Japan more than most because it relies so heavily on outside capital.

So does China in the form of foreign investment that doesn't affect how it manages its banks. At least in what they can invest in non-Chinese securities. Very little and why the government is spending nothing to bail them out. There's no need because they own scant amounts of toxic assets and use their own to fuel internal growth. What China needs badly for its large and growing population.

It's not insulated from the global crisis and will feel it in slower growth. Still expected to be impressively high although certain to drop from its 9.9% in the first nine months of 2008. Down from 12% last year. Amidst a deepening global slump. It's helped by strong domestic demand and its exports. Up an impressive 21.5% over last year. Heavily to Asia to make up for slumping Western demand.

It's affected China's toy manufacturers. China's customs agency reported that 52.7% of them shut down in the first seven months of 2008. Mass layoffs resulted. Other industries are also affected. Textiles, shoes, clothing, home appliances and electronics because of slumping Western markets. Millions of workers are at risk and why China announced an economic stimulus plan to keep growth as high as possible. A targeted minimum 8%. If achieved will be impressive by any standard.

A potential glimmer of light amidst a dismal global outlook with China determined to keep it that way although there's no assurance it can. The reason its stock market slumped like most others. However, it may rebound sooner given the government's commitment to big infrastructure spending increases. With its "embarrassment of riches" according to The Economist. Growing "at a staggering rate" says its Intelligence Unit. Its huge $1.75 trillion in foreign currency reserves. Likely to top $2 trillion by yearend. That can be used for roads, airports, nuclear power plants, hydro power stations, and more. To create new jobs for laid off workers. As many as possible. What America should do to stimulate growth. Not commit billions for corporate acquisitions. Bailouts that won't work. That will harm the economy, not heal it. The reason even in today's climate China's star is rising. In the US, it's growing dim.

The Worst Is Yet to Come

According to economist Nouriel Roubini. Called Dr. Doom for his gloomy views that today command worldwide respect. Opinions once dismissed now widely sought. He believes recession began in early 2008. Will last throughout 2009. Will be severe and painful with GDP contracting 4 - 5%. On October 29, he told Bloomberg: "We're entering a vicious circle where economies are spinning down, financial markets are spinning lower, and policy makers in my view - and that's my biggest fear - have lost control of what's going on in the financial markets."

In London in late October he predicted that hundreds of hedge funds will close down and given the extent of panic selling markets may have to suspend trading. Perhaps for a week or more before resuming. In September, Russia's stock exchanges shut down after their steepest ever one day fall. They did again in late October after falling nearly as much. Perhaps Wall Street is next. Maybe Europe.

If the latest (October 28 reported) consumer confidence report is an indication, it may happen sooner, not later. It was dismal by any standard. From the Conference Board. An all-time low and far below expectations. Surveyed economists forecast a reading of 52. It came in woefully short at 38 from an upwardly revised 61.4 September figure. Results were "significantly more pessimistic" on future business prospects and jobs. It signals trouble if translated into spending that, in turn, means lower profits and share prices already crushed over the past 12 months. With no end of pain in sight.

Yet markets remain volatile because of heavy insider manipulation for big profits up or down. The "not-so-invisible hand" working its magic. Killing the "free-market" according to author Ellen Brown. Making it hazardous for ordinary investors to risk anything in this climate. Casino capitalism with the odds heavily favoring the house. Getting Brown to quote a talk show commentator saying: "I'm fully diversified; some under the mattress; some under the floor boards; and some in the backyard." Better that than lose everything.

Because world economies are "at a breaking point" according to Roubini. "Essentially in free fall (and near) sheer panic." Played out in markets that reflect future expectations. Despite relief rallies, very much pointing down and signaling no end of crisis in sight. It got Roubini to state:

"Every time there has been a severe crisis in the last six months, people have said this is the catastrophic event that signals the bottom." Every time so far they were wrong. "They said it after Bear Stearns, after Fannie and Freddie, after AIG, and after" the $700 billion bailout plan. "Each time they have called the bottom, and the bottom has not been reached."

Despite everything world governments throw at their problems, Roubini thinks investors no longer trust them or believe they'll do the right things. For good reason. Because so far they haven't and what they're now doing is mostly woefully misdirected and inadequate. "Even using the nuclear option of guaranteeing everything, providing unlimited liquidity, nationalising the banks, making clear that nobody of importance is going to fail, even that has not helped." Economic fundamentals no longer apply. "We are reaching a breaking point frankly."

From his Hong Kong base, long-time investment advisor and fund manager Marc Faber publishes the "Gloom Boom and Doom" report. On how he views economic and financial prospects and investment opportunities worldwide. Given today's climate, he's more than ever in demand and shows up often in the financial press and on business channels like Bloomberg and CNBC. But not with good cheer.

He thinks that government interventions may be partially responsible for world market selloffs. Not least because in the current climate guaranteeing bank deposits leaves investors with no incentive to take risks. And other measures have been counterproductive as well. "They have increased volatility. It's impossible to forecast market movements when you have interventions."

Downward readjustments of company book values may be next in his view as happened in previous bear markets. That revealed overstated estimates. "If the global economy slows down as much as I think," he said, "then a lot of book values will have to be adjusted downward quite substantially." And rate cuts will create their own headache. "I think first we'll have a bout of deflation that will actually be quite substantial, but then the budget deficits will go through the roof and the Fed will print even more money (so that) later on we'll have very high inflation."

Morgan Stanley ("perennial bear") economist and chairman of the company's Asia operations Stephen Roach was extremely critical of Fed policy in an October 27 Financial Times op-ed titled: "Add 'financial stability' to the Fed's mandate." He called "the era of excess as much about policy blunders and regulatory negligence as about mistakes by financial institutions." We need a new system and new role for the Fed in his judgment. Explicitly to reference "financial stability."

Something critically needed for a "post-bubble, crisis-torn US economy." To make the Fed "tougher in its neglected regulatory oversight capacity." To counter "bubble denialists (like) Alan Greenspan." To mandate Fed policy "err on the side of caution." To expose the "fatal mistake" in trusting "ideology" over "objective metrics. Like all crises, this one is a wake-up call. The Fed made policy blunders of historic proportions that must be avoided in the future."

However, dealing with today's crisis requires an even bigger international rescue according to Roubini. And whatever's done, America faces "year(s) of economic stagnation." After a deep protracted downturn. If as true as he forecasts, it signals the end of prosperity. A new age of austerity and world economies in extreme disrepair and needing an alternative model in lieu of a clearly failed one. Hugely corrupted as well.

Will world leaders seize the challenge and act? Only if mass outrage demands it and even then change at best may be minimalist and short-lived. If history is a guide. What better time to prove history wrong. If not now, when? If not by us, who? If not soon, maybe never. If that's not incentive enough, what is?

Targeting Dissent - The San Francisco Eight: Black Panthers

Throughout much of American history, dissent was never tolerated if thought to threaten entrenched interests. Especially in times of war, economic crisis, or social stress. During the great Red Scare from 1917 - 1920. Under the 1917 Espionage Act that barred mailing materials advocating insurrectionist or forcible resistance, and the 1918 Sedition Act that banned criticism of the government and ongoing war effort. Later targeting those on the left by the House Un-American Activities Committee (HUAC), the Smith Act, and during the age of Joe McCarthy. Post-9/11, anti-war activists, Latino immigrants, and Muslim Americans viciously targeted. The San Francisco Eight as well.

Former Black Panthers. On January 23, 2007, arrested in early morning raids in California, New York and Florida. Charged with the 1971 killing of a San Francisco police officer and various conspiracy acts from 1968 - 1973. A racist frame following decades of harassment and a ruthless vendetta against the Black Panther Party.

Targeted for destruction under COINTELPRO. The FBI's war against dissent. From 1956 - 1971 officially but it never ended and now is worse than ever. To disrupt, sabotage, and neutralize it. Against the Panthers from 1967 through the early 1970s. The party apparatus and its members. A "Black Nationalist Hate Group," according to the FBI. For J. Edgar Hoover, "the greatest threat to the internal security of the country." Along with the American Indian Movement, its primary target. The toll was devastating. Dozens incarcerated and killed. Including Fred Hampton and Mark Clark (in 1969) murdered in their sleep by Chicago police. George Jackson (in 1971) assassinated in San Quentin prison.

In 1968, eight Panthers (including Eldridge Cleaver, Bobby Hutton and David Hilliard) nearly killed when ambushed by Oakland police. They took cover in a basement that police quickly surrounded. Fired on it for over an hour. Then tear-gassed it. Cleaver was wounded. He and Hutton offered to surrender. Hutton first with his hands in the air and was shot 12 times and killed instantly. Murdered in cold blood.

A Brief History of the Panthers

In October 1966, Huey Newton and Bobby Seale founded the Black Panther Party for Self-Defense. Progressive, activist, militantly for ethnic justice, racial emancipation, and real economic, social, and political equality across gender and color lines. Radical ideas then and now. The party's ten-point program expressed them:

(1) freedom and "power to determine the destiny of our black community;"

(2) full employment for black people; for everyone;

(3) "an end to the robbery by the capitalists of our black community;"

(4) decent housing;

(5) education to expose "the true nature of this decadent American society (and teach) us our true history and our role in the present-day society;"

(6) for "all black men to be exempt from military service" at a time they were drafted for foreign wars;

(7) "an immediate end to police brutality and murder of black people;"

(8) "freedom for all black men held in federal, state, county and city prisons and jails;"

(9) for black people in court "to be tried....by a jury of their peer group or people from their black communities;" and

(10) "land, bread, housing, education, clothing, justice and peace."

It added words from the Declaration of Independence at the end:

-- "that all men are created equal";

-- "to secure (their) rights, governments are instituted among men, deriving their just powers from the consent of the governed;"

-- "that, whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and institute a new government;"

-- "to throw off (despotism), and to provide new guards for (peoples') future security."

They believed in the rule of law. Published a newspaper with 250,000 readers. Articulated fundamental wants and needs. Practiced what they preached with nutritious breakfasts for poor children. Groceries for needy families. Free clinics for medical care. A free ambulance service. Help for the homeless. Free legal aids and bussing to prisons. After-school and summer classes teaching black history. Voter registration drives for blacks. It helped elect Oakland's first black mayor, Lionel Wilson, in the city where the Panthers were founded.

They were young and idealistic. Willing to put their lives on the line for their beliefs and activism. Their goal - to make the world a better place. For black people and everyone. They were revolutionaries. Hostile to repression. In Huey Newton's words: "never a group of angry young militants full of fury toward the 'white establishment.' The Party operated on love for black people, not hatred of white people." They demanded change and fought for it. From over 30 branches throughout the country. By its over 2000 members.

They wanted redress of longstanding grievances - slavery, Jim Crow, segregation; neglect and abuse. The right to self-defense against them. A revolutionary agenda, and for practicing what Jefferson preached, the US government targeted them for destruction and largely succeeded. The 1960s civil rights gains as well so that today blacks are repressed, impoverished, and segregated. Stripped of their voting rights, and consigned to second class status by a society disdaining them. Targeted like the San Francisco Eight for crimes they didn't commit:

-- Ray Boudreaux, Richard Brown, Hank Jones, Richard O'Neal, Harold Taylor, and Francisco Torres;

-- Herman Bell and Jalil Muntaqim already imprisoned for 30 years; as political prisoners on trumped-up charges; and

-- a ninth man Ronald Stanley Bridgeforth still being sought.

No new evidence was found against any of them for decades. On February 7, 2008, the conspiracy charge against Boudreaux, Brown, Jones, Taylor, and O'Neal was dropped. The result of defense motions correctly challenging it on grounds that the three-year California statute of limitations expired. Similar motions for Bell, Muntaqim and Torres were heard by the California Appeals Court. O'Neal is now cleared of all charges.

Evidence in this case was obtained through torture. In 1973, on Taylor, John Bowman (recently deceased) and Ruben Scott. They were arrested and brutalized by New Orleans police. Assisted by two San Francisco detectives. Abuse continued for several days. Stripped naked for maximum effect and humiliation. Applied were electric shocks, cattle prods, beatings, sensory deprivation, plastic bags, and hot wet blankets for asphyxiation. Confessions finally extracted to end the pain. A federal court at the time ruled that torture was used and dismissed the case.

Ruben Scott is now believed to be the government's chief witness. To be used against the others. On the basis of torture-induced confessions. To get convictions and life sentences or perhaps the death penalty for innocent men. The result of continued COINTELPRO viciousness.Today as part of the "war on terror." Dissent and be targeted.

In 2003, the San Francisco police reopened the 1971 case. Along with FBI agents, visited dozens of people around the country. Pressured them to cooperate. When that failed, grand juries were convened (state and federal in 2003, 2004 and 2005) to subpoena people to testify. In 2005, Brown, Boudreaux, Taylor, Jones and Bowman were jailed for refusing to cooperate. Later released when the grand jury didn't indict them.

They responded by forming the Committee for Defense of Human Rights:

"to draw attention to human rights abuses perpetrated by the government of the United States and law enforcement authorities which were carried out in an effort to destroy progressive organizations and individuals. By building coalitions with organizations and groups that advocate for human and civil rights." Against extracting evidence through torture. Trying to make what was inadmissible 35 years ago acceptable today in a court of law. Legitimizing the "war on terror" on US soil. To be used against anyone the state targets. Their innocence irrelevant. Their guilt pre-ordained, case closed.

Activist blacks are again targets. The San Francisco Eight to send a message to others who resist. Six were released on bail. Thanks to heroic work by their families, supporters and lawyers. Two others, Muntaqim and Bell, are ineligible. They would be in New York where each served 30 years in prison. Their cases up for parole. Their transfer to San Francisco disqualifies them.

Bell was framed for the murders of two New York policemen. He's been a political prisoner since 1973. Muntaqim was arrested in 1971 on weapons charges. Later falsely implicated in the police officer killings. He's a founder of the Jericho Amnesty Movement for Political Prisoners and Prisoners of War. From organizations like the Panthers, American Indian Movement, MOVE, the Republic of New Afrika, and the Puerto Rican independence movement. Also North American anti-imperialist prisoners. Jailed for their solidarity with these movements and fighting for change in the current economic and political system. They're in prison for their activism. For being against racism, imperialism and injustice. For participating in the Black Liberation Struggle.

For the San Francisco Eight, delay is the prosecution's strategy. A preliminary hearing date approaches to decide if enough evidence exists to proceed. Thousands of document pages were delivered to the defense and a list of 180 potential witnesses. Enough time to review them and interview witnesses is needed. It was requested and granted. A new trial date has yet to be scheduled.

Meanwhile, Judge Philip Moscone refused to return Bell and Muntaqim to New York temporarily for their parole hearings. Both men may now lose any chance for release for years. It's to keep them and other activist blacks targeted and imprisoned. Victims of the "war on terrorism." For their efforts against it. Supporting the Black Liberation Struggle. Being the wrong color for the wrong cause at the wrong time and having only their raw grit in its behalf. United in solidarity as well. Along with others, committed against the power of the state. For the privileged, not the people. Determined to persist no matter how this case turns out. To prevail no matter how long it takes.

Support the San Francisco Eight. Demand their exoneration and release. Their struggle is ours.

The Religion of Guns

Americans worship guns. We stockpile nuclear weapons, we spend hundreds of billions of dollars on conventional weapons, and we keep handguns under our pillows. Not me, you might say: never touched a gun, never will. But you can still be part of the religion without visiting the church. Consider all the video games that involve shooting. And all the movies that center around gunfights in the same way that medieval paintings focus on the life of Jesus. And all the plastic guns our kids have. Then there's our $2,000 annual per-capita share of the Pentagon budget — that's a hefty contribution to the collection plate.

We use all manner of spurious rationales to justify our gun theology. It's a dangerous world out there, we say, and even though we spend as much on weaponry as the rest of the world combined, we need still more. At home, gun advocates hold up the Constitution's Second Amendment: "A well-regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed" — even though the Supreme Court has repeatedly ruled that the amendment protects only the rights of state militias, not individuals, to bear arms.

It's bad enough that we're awash in guns in the United States. But we also evangelize. We sell guns as aggressively overseas as a preacher hands out leaflets on a street corner. At Foreign Policy In Focus (www.fpif.org), we've published many articles on rising U.S. arms exports. But this week, FPIF columnist Frida Berrigan reports on an equally insidious problem: our exports of handguns. Consider the case of Mexico, where guns are fueling an epidemic of violence and death. "According to the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, more than 90% of guns seized after shootings or police raids in Mexico or at the border can be traced back to the United States," Berrigan writes. "Last year alone, 2,455 weapons traces concluded that the guns had been purchased in the United States."

I'm writing this from South Korea, where the citizens frankly think that we are all militant fundamentalists when it comes to guns. In South Korea, gun control laws are about as strict as they get. "When a gun is found on the street here," my friend here tells me, "it becomes the focus of national attention." That might change, of course. It wasn't long ago that bread was an unusual food here — that is, until the United States flooded the market with wheat beginning in the 1950s as a food assistance program that also just happened to help out U.S. agribusiness. If American suppliers and the unregulated market have their way, South Koreans will someday enjoy all the privileges of gun ownership — including the privilege of getting shot by accident on the street, by lunatics in crowded suburban malls, or by suicidal loners on school campuses.

Berrigan's column generated a load of anti-gun control responses, several of which suggested that a disarmed population would lead directly to tyranny and even genocide. South Koreans would be surprised to learn of this correlation, since they overthrew tyranny and today live in a democracy, all without guns. I, too, was surprised to learn that bullets, not ballots, are the cornerstone of U.S. democracy. The Aztecs believed that human sacrifice was necessary for the stability of their society. Today, we scoff at this "primitive" belief though we cling to our guns as surely as the Aztecs clung to their obsidian knives. Michael Moore chronicled this obsession in his film Bowling for Columbine. Lars von Trier lampooned it in the brilliant film, Dear Wendy.

Documentaries and satire are fine and dandy. But who will have the courage to stand up to bullies with guns — whether it's the National Rifle Association or the Pentagon — and get them to, in the words of Andy Partridge and the band XTC, "melt the guns, never more to fire them; melt the guns, never more desire them"?

Who will finally be able to convince Americans that the god of guns is the god that failed?

Hot Button Issue #2

Give us your tired, your poor, your huddled masses, and we'll send you some guns in return. Ooh, except, well, we don't really want your tired and poor and homeless any more. Even if your tired and poor turn out to be vital to our economy. Even if it was our free-trade policies that dumped cheap food in your country and drove farmers off the land and into our country to pick our vegetables and cut up our cattle.

The Department of Homeland Security has been rounding up "illegal aliens" and deporting them by the busload, most recently the first of a group of folks who had been working in a meatpacking plant in Postville, Iowa. "Hungry and desperate workers go to jail and get deported," writes FPIF contributor David Bacon. "The government protects employers and seeks to turn a family-based immigration system into a managed labor supply for business. Yet national political campaigns say less and less about it. Immigrant Latino and Asian communities feel increasingly afraid and frustrated. Politicians want their votes, but avoid talking about the rising wave of arrests, imprisonment, and deportations." Read his article Silence on Immigration to find out what the next president should do on the immigration issue.

The impact of these deportations is felt throughout Mexico — and the financial crisis is only making matters worse. "Millions of Mexicans rely on money sent home by family members working in the United States to meet their basic food and other needs," write FPIF contributors Manuel Pérez-Rocha and FPIF senior analyst Sarah Anderson in When the U.S. Gets a Cold, Mexico Gets Pneumonia. "But this source of income is drying up. In the U.S. construction industry alone, Latino workers have lost nearly 250,000 jobs over the past year, according to the Pew Hispanic Center. The Mexican government's most recent figures show that 'remittances,' the wages these workers send to their home country, fell sharply during the first eight months of 2008, from $16.2 billion to $15.5 billion. And that was before the September meltdown."

Mexico isn't the only source of immigrants. "Hurricanes Gustav and Ike pummeled Cuba, and the country suffered disastrous losses," write FPIF contributors Saul Landau and Nelson P. Valdés in Why the U.S. Must Help Cuba. "If it doesn't quickly rebuild its productive capacity and restore housing — some half a million homes were destroyed or seriously damaged — the United States can expect a tsunami consisting of hundreds of thousands of migrants." They add, "The latest humanitarian crisis in Cuba presents the Bush administration with a rare opportunity to stave off a looming migration crisis here and simultaneously boost the U.S. image abroad. Unfortunately, the Bush government seems inclined to pass on the opportunity."

Then There's Iraq

The Iraq War is driving the United States toward bankruptcy. One result of the financial crisis should logically be the rapid removal of U.S. troops from Iraq. The Bush administration is indeed negotiating a "timetable for withdrawal" with the al-Maliki government. But as FPIF contributor Phyllis Bennis points out in Tenuous Agreement on Maintaining U.S. Troops in Iraq, the version of the agreement that has so far been leaked lacks any "serious U.S. commitment to a timetable for full withdrawal of all troops, even by the end of 2011. Paragraph 5 of the same article explicitly authorizes the Iraqi government to request U.S. forces to remain in Iraq — for 'the purposes of training and support of the Iraqi security forces.' Such 'support' of the U.S.-trained, U.S.-armed, and still U.S.-dependent Iraqi military could in practice mean any military action the Pentagon wants to carry out."

The administration's status-quo approach goes beyond Iraq and crosses party lines as well. "Americans tried to change course in 2006 by replacing the Republican Congress with a Democratic-controlled House and Senate," writes FPIF senior analyst Antonia Juhasz in Big Oil's Last Stand. "Democrats pledged in their election campaigns to take action against the oil industry, climate change, and the war in Iraq — all three of which are intimately and rightly connected in the public's mind. The Democrats failed to deliver. Far too often, Big Oil's money appeared to be the reason why."

Oil, too, underlies the conflict that recently broke out between Russia and Georgia, argues FPIF contributor Herbert Bix. It was a war that highlighted "the increasingly fierce competition between U.S. and Russian corporations for control of Caspian Sea and Central Asian oil and gas resources," he writes in Challenging U.S. Global Dominance. "Georgians, Ossetians, Azerbaijanis, Kazakhs, and other peoples in the eastern Caspian Sea basin are hapless pawns in this continuous struggle, affecting their territorial and ethnic conflicts in ways they cannot control. The struggle over oil and gas has led the U.S. Central Command, originally established to deal with Iran, to extend its operations from the Middle East to the oil-and-gas-rich Central Asian and Caspian Sea states of Turkmenistan, Kazakhstan, Tajikistan, and Uzbekistan, thus underlining the geopolitics that lay behind the Iraq and Afghanistan wars, and now the Russo-Georgian war."

North Korea and Israel

North Korea is off the State Sponsors of Terrorism list and negotiations to end its nuclear program are back on track. But don't expect smooth sailing in the next administration, whoever happens to occupy the White House.

"John McCain has expressed concern over the removal of North Korea from the list of terror-sponsoring nations and is likely to push for a harder line on the North," writes FPIF contributor Scott Bruce in The Race to Denuclearize North Korea. "The Arizona senator has called on the United States to make North Korea's missile arsenal, human rights record, and abduction of Japanese citizens issues at the talks. Barack Obama called de-listing North Korea a 'modest step' but has also demanded a very robust verification regime and threatened to suspend energy assistance and impose new sanctions if the North refused to comply. The Democratic nominee has publicly noted his willingness to increase bilateral contact with the North, but would be under considerable political pressure to maintain a firm line with regimes like North Korea."

Obama's firm support of Israel, which has resulted from similarly significant political pressure, still isn't enough to satisfy some of his strongest critics. As FPIF senior analyst Stephen Zunes writes in Distorting Obama's Views on Israel, "the Republican Jewish Coalition has launched a series of ads in Washington Jewish Week, Detroit Jewish News, and other major Jewish newspapers across the United States claiming that the stridently pro-Israel Obama is actually 'reckless,' 'naïve,' and 'dangerous' when it comes to Israel and its security. One ad not-so-subtly warns of 'tragic outcomes for the Jewish people' in a headline over a photo of Obama speaking in Berlin."

"Gun control equals genocide." "Obama equals genocide." Can the political discourse sink any lower?

Links

Frida Berrigan, "No Recession for Arms Sales," Foreign Policy In Focus, September 19, 2008; (http://www.fpif.org/fpiftxt/5545).

Frida Berrigan, "Too Many Guns," Foreign Policy In Focus, October 23, 2008; (http://www.fpif.org/fpiftxt/5619). More than 200 years after our founding fathers enshrined the right to "bear arms" in our Constitution, we have more arms than we can bear.

Michael Moore, Bowling for Columbine; http://www.bowlingforcolumbine.com/

Lars von Trier, Dear Wendy; http://movies.nytimes.com/movie/319397/Dear-Wendy/overview

XTC, "Melt The Guns"; http://moodpoint.com/lyrics/xtc/melt_the_guns.html

David Bacon, "Silence on Immigration," Foreign Policy In Focus, October 23, 2008; (http://www.fpif.org/fpiftxt/5620). As Obama and McCain dodge the pressing issue of immigrants' rights, here's an immigration agenda for the next U.S. president.

Manuel Pérez-Rocha and Sarah Anderson, "When the U.S. Gets a Cold, Mexico Gets Pneumonia," Foreign Policy In Focus, October 23, 2008; (http://www.fpif.org/fpiftxt/5621). The U.S. economic crisis is making its southern neighbor sick.

Saul Landau and Nelson P. Valdés, "Why the U.S. Must Help Cuba," Foreign Policy In Focus, October 22, 2008; (http://www.fpif.org/fpiftxt/5615). Unless the Bush administration acts fast, a vast wave of rafters may greet the next U.S. president soon after he takes office.

Phyllis Bennis, "Tenuous Agreement on Maintaining U.S. Troops in Iraq," Foreign Policy In Focus, October 24, 2008; (http://www.fpif.org/fpiftxt/5624). The agreement now being negotiated would continue the U.S. occupation for years, but is unlikely to be accepted by the Iraqi parliament.

Antonia Juhasz, "Big Oil's Last Stand," Foreign Policy In Focus, October 22, 2008; (http://www.fpif.org/fpiftxt/5614). For all its enduring power, Big Oil finds itself in a precarious position today.

Herbert Bix, "Challenging U.S. Global Dominance," Foreign Policy In Focus, October 20, 2008; (http://www.fpif.org/fpiftxt/5609). The United States pushed NATO further eastward toward the borders of Russia while pouring money and armaments into Georgia, paving the way to the August war.

Scott Bruce, "The Race to De-Nuclearize North Korea," Foreign Policy In Focus, October 21, 2008; (http://www.fpif.org/fpiftxt/5613). The Six Party Talks are back on track, but many obstacles remain.

Stephen Zunes, "Distorting Obama's Views on Israel," Foreign Policy In Focus, October 20, 2008; (http://www.fpif.org/fpiftxt/5610). Republicans are trying to depict Obama's right-wing positions as being far-left to siphon off Jewish voters.

Tomgram: Nick Turse, Putting the Pentagon on the Auction Block

Back in September 1989 -- almost a lifetime ago -- I published an article in The Progressive magazine under the title "Star Wars Won't Die." Star Wars was, of course, the movie-inspired nickname for Ronald Reagan's Strategic Defense Initiative (SDI), his vision of putting an "impermeable shield" against nuclear weapons in space. ("The Force is with us," he joked at the time -- and when it came to high-tech R&D weapons research he wasn't wrong.) I wrote then that SDI would never be cancelled, no matter how many of its prospective parts failed. ("The loss of any particular [weapons] system," I indicated, "can only lead to the creation of others.") And today, of course, we still have SDI's impaired progeny: the missile defense system that the Bush administration has tried so hard to install in Poland and Czechoslovakia.

More generally, nearly two decades ago, I suggested that we already had a highly militarized country "that conforms to no notions we hold of militarism… The United States… still has the look of a civilian society… In the Reagan-Bush era, the military has gone undercover in the world that we see, though not in the world that sees us. For if it is absent from our everyday culture, its influence is omnipresent in corporate America, that world beyond our politics and out of our control -- the world which, nonetheless, plans our high-tech future of work and consumption… Those who fantasize about the possible militarization of America in terms of a future military coup should not hold their breath. To the extent that any takeover may be possible, it has already taken place, hardly noticed, in the economic sphere of our lives."

I stand by every one of those words, though little did I know then what was actually coming down the pike. If you read Nick Turse's new book The Complex: How the Military Invades Our Everyday Lives, you'll find out in eye-opening detail just how far the military-industrial complex has ventured since then -- and, of course, twenty years later the military is anything but out of sight. Increasingly, it's everywhere, doing everything, and itself has been privatized and corporatized in a way I couldn't have imagined back then.

The militarization of our society is, unfortunately, a subject most Americans seem remarkably uninterested in thinking about, and so what might be involved in demilitarizing our country (which is not faintly the same as disarming it, thank you) and un-garrisoning the planet is not much discussed. That's why Turse's thoughts below about what a "Pentagon tag sale" might mean for us seem so refreshing. Tom

The Trillion Dollar Tag Sale

How the Pentagon Could Help Bail Out America
By Nick Turse

Wars, bases, and money. The three are inextricably tied together.

In the 1980s, for example, American support for jihadis like Osama bin Laden waging war on (Soviet) infidels who invaded and constructed bases in Afghanistan, a Muslim land, led to rage by many of the same jihadis at the bases (U.S.) infidels built in the Muslim holy land of Saudi Arabia in the 1990s. That, in turn, led to jihadis like bin Laden declaring war on those infidels, which, after September 11, 2001, led the Bush administration to launch, and then prosecute, a Global War on Terror, often from newly built bases in Muslim lands. Over the last seven years, the results of that war have been particularly disastrous for Iraqis and Afghans. Sizable numbers of Americans, however, are now beginning to suffer as well. After all, their hard-earned taxpayer dollars have been poured into wars without end, leaving the country deeply in debt and in a state of economic turmoil.

In his 1988 State of the Union message, President Ronald Reagan called the jihadis in Afghanistan "freedom fighters." They were, of course, fighting the Soviet Union then. He, too, pledged eternal enmity against the Soviet Union, which he termed an "evil empire." For years, conservatives have claimed that Reagan not only won his Afghan War, but by launching an all-out arms race, which the economically weaker Soviet Union couldn't match, bankrupted the Soviets and so brought their empire down.

While that version of history may be disputed, today, it is entirely possible that one of Reagan's freedom fighters, Osama bin Laden, actually returned the favor by perfecting the art of financially felling a superpower. While Reagan ran up a superpower-sized tab to outspend the Soviets, bin Laden has done it on the cheap. Essentially for the cost of box cutters and flight training, he got the Bush administration to spend itself into penury, without a superpower in sight.

Since bin Laden's supreme act of economic judo in 2001, the U.S. military has spent multi-billions of tax dollars on a string of bases in Iraq and Afghanistan, failed wars in both countries, and a failed effort to make good on George W. Bush's promise to bring in bin Laden "dead or alive." Despite this record, the Pentagon still has a success option in its back pocket that might help bail out the American people in this perilous economic moment. It could immediately begin to auction off its overseas empire posthaste. To head down this road, however, U.S. military leaders would first have to take a brutally honest look at the real costs, and the real utility, of their massively expensive weapons systems and, above all, those bases.

Today, the Pentagon acknowledges 761 active military "sites" in foreign countries -- and that's without bases in Iraq, Afghanistan, and certain other countries even being counted. This "empire of bases," as Chalmers Johnson has noted, "began as the leftover residue of World War II," later evolving into a Cold War and post-Cold War garrisoning of the planet.

With those bases came a series of costly wars in Korea in the 1950s, Vietnam in the 1960s and 1970s, and the Persian Gulf in the early 1990s. An extremely conservative estimate of their cost by the Congressional Research Service -- $1 trillion (in 2008 dollars) -- tops the present economic bailout. Add in brief cut-and-run flops like Lebanon in 1983 and Somalia, from 1992-1995, as well as now-forgotten hollow victories in places like the island of Grenada and Panama, and you tack on billions more with little to show for it.

Since 2001, the Bush administration's Global War on Terror (including the wars in Afghanistan and Iraq) has cost taxpayers more than the recent bailout -- more than $800 billion and still climbing by at least $3.5 billion each week. And the full bill has yet to come due. According to Noble Prize-winning economist Joseph Stiglitz and Harvard University professor Linda Bilmes, the total costs of those two wars could top out between $3 trillion and $7 trillion.

While squandering money, the Global War on Terror has also acted as a production line for the creation of yet more military bases in the oil heartlands of the planet. Just how many is unknown -- the Pentagon keeps exact figures under wraps -- but, in 2005, according to the Washington Post, there were 106 American bases, from macro to micro, in Iraq alone.

If you were to begin the process of disentangling Americans from this world of war and the war economy that goes with it, those bases would be a good place to start. There is no way to estimate the true costs of our empire of bases, but it's worth considering what an imperial tag sale could mean for America's financial well-being. One thing is clear: in getting rid of those bases, the United States would be able to recoup, or save, hundreds of billions of dollars, despite the costs associated with shutting them down.

Tag Sales and Savings

If the Pentagon sold off just the buildings and structures on its officially acknowledged overseas bases at their current estimated replacement value, the country would stand to gain more than $119 billion. Think of this as but a down payment on a full-scale Pentagon bailout package.

In addition, while it leases the property on which most of its bases abroad are built, the Pentagon does own some lucrative lands that could be sold off. For instance, it is the proud owner of more than 11,000 acres in Abu Dhabi, "the richest and most powerful of the seven kingdoms of the United Arab Emirates." With land values there averaging $1,100 per square meter last year, this property alone is worth an estimated $48.9 billion. The Pentagon also owns several thousand acres spread across Oman, Japan, South Korea, Germany, and Belgium. Selling off these lands as well would net a sizeable sum.

Without those bases, billions of dollars in other Pentagon expenses would immediately disappear. For instance, during the years of the Global War on Terror, the Overseas Cost of Living Allowance, which equalizes the "purchasing power between members [of the military] overseas and their U.S.-based counterparts," has reached about $12 billion. Over the same period, the price tag for educating the children of U.S. military personnel abroad has clocked in at around $3.5 billion. By shutting down the 127 Department of Defense schools in Europe and the Pacific (as well as the 65 scattered across the U.S. mainland, Puerto Rico, and Cuba) and sending the children to public schools, the U.S. would realize modest long-term savings. Once no longer garrisoning the globe, the Pentagon would also be able to cease paying out the $1 billion or so that goes into the routine construction of housing and other base facilities each year, not to mention the multi-billions that have gone into the construction, and continual upgrading, of bases in Iraq and Afghanistan.

And that's not the end of it either. Back in the 1990s, the Pentagon estimated that it was spending $30 billion each year on "base support activities" -- though the exact meaning of this phrase remains vague. Just take, for example, five bases being handed back to Germany: Buedingen, Gelnhausen, Darmstadt, Hanau and Turley Barracks in Mannheim. The annual cost of "operating" them is approximately $176 million. Imagine, then, what it has cost to run those 750+ bases during the Global War on Terror years.

Some recent Pentagon contracts for general operations and support functions overseas are instructive. In March, for instance, Bahrain Maritime and Mercantile International was awarded a one-year contract worth $2.8 billion to supply and distribute "food and non-food products" to "Army, Navy, Air Force, Marine Corps and other approved customers located in the Middle East countries of Bahrain, Qatar and Saudi Arabia."

In July, the French foodservices giant Sodexo received a one-year contract worth $180 million for "maintenance, repair and operations for the Korea Zone of the Pacific Region." These and other pricey support contracts for food, fuel, maintenance, transport, and other non-military expenses, paid to foreign firms, would disappear along with those U.S. garrisons, as would enormous sums spent on all sorts of military projects overseas. In 2007, for instance, the Army, Navy, and Air Force spent $2.5 billion in Germany, $1 billion in Japan, and $164 million in Qatar. And this year, the Pentagon paid a jaw-dropping $1 billion-plus for contracts carried out in South Korea alone.

Men and Materiel

With most or all of those 761 foreign bases off the books, and a much reduced global military "footprint," the U.S. could downsize its armed forces. As Andrew Bacevich notes in his book The Limits of Power, it already costs the Pentagon a bailout-sized $700 billion a year to "train, equip, and sustain the current active-duty force and to defray the costs of on-going operations." Even if current U.S. forces were simply brought home, there would still be significant savings (including, of course, the $10 billion a month going into the Iraq and Afghan wars).

The very opposite, however, is happening. Facing manpower demands on an overstretched military, the Pentagon is planning to ramp up the size of the armed forces by 92,000 over the next several years. That expansion comes with a sure-to-rise price tag of $108 billion. This step has the support of large majorities in Congress and both presidential candidates. John McCain has denounced the notion of "roll[ing] back our overseas commitments" and instead proposes "to increase the size of the Army and Marine Corps." Barack Obama agrees, but has been more specific. He has long touted plans, echoing the Pentagon's desires, to "increase the size of the Army by 65,000 troops and the Marines by 27,000 troops."

Just attracting this many recruits would cost a small fortune. This year, the Army had to spend $240 million on advertising alone to help meet its recruiting goals. On top of that, it paid out $547 million in bonuses to recruits -- a 164% increase since 2005. And this is to say nothing of how much it costs to train, equip, feed, and pay these future troops.

Capping, if not decreasing, the size of the military and bringing troops home would be the foundation for a new foreign policy based on non-aggression and fiscal responsibility. This would, of course, be a major departure for the military. In the 120 years between 1888 and 2008, according to a study by the Congressional Research Service, only seven -- using generous criteria -- were without "notable deployments of U.S. military forces overseas." Beginning in 2009, U.S. forces could aim for a complete reversal of this trend for the next 120 years, enabling the slashing of budgets for force-projection weapons systems.

Take the F-22A Raptor, a fighter plane designed to counter advanced Soviet aircraft that were never built. Pentagon budget documents released earlier this year put the estimated cost of the program, 2007 to 2013, at almost $3.7 billion. With no advanced Soviet fighters around to dogfight -- Russian aircraft had trouble enough in their recent Georgian encounters -- and no need for its "global strike" capabilities, the program could be scrapped. Such a step is not without precedent. As Wired magazine's Danger Room blog reported last month, Congress "all-but-eliminated funding for the so-called ‘Blackswift' program," a prototype hypersonic aircraft for which the Pentagon had requested almost $800 million in 2009 start-up funding. If the project remains stillborn, that alone will mean billions in future savings.

This year, for example, the Air Force is spending nearly $65 billion on new weapons systems. By shutting current and future weapons programs not meant for actual defense of the United States, Americans would be looking at hundreds of billions of dollars in savings in the near term. If the Pentagon demilitarized and sold off existing equipment as well, including, for instance, some of its 120,000 Humvees, at least 280 ships, and 14,000 aircraft, you're talking about another significant infusion of cash.

Bases Gone Bust

If history suggests anything, it's that one way or another, on a long enough timeline, all imperial garrisons fall. Some, of course, go bust sooner than others. As one Army publication noted in the 1970s, "[t]he ravages of rot, jungle, and weather have left only memories of the once-mighty World War II bases of the South Pacific." The fate of many bases built since has been no less inglorious.

While it would be difficult to total up just how many firebases, camps, airbases, port facilities, and base camps the U.S. had in Indochina during the Vietnam War, or what it cost to build and upgrade them, the numbers would surely be staggering. What we do know is instructive. For instance, the U.S. Army-Vietnam headquarters complex at Long Binh, about 16 miles from Saigon, had a value of more than $100 million in 1972 -- the year the U.S. gave it away to its South Vietnamese allies. They, in turn, lost it when the Saigon regime collapsed in 1975. Today, it's an industrial park. Similarly, the U.S. poured huge sums into its naval base at Cam Ranh Bay. By 1979, the Soviet Navy was using it and, after abandoning it earlier this decade, may do so again.

Similarly, in the 1990s, the U.S. got kicked out of its massive bases in the Philippines. A volcano laid waste to Clark Air Base and the Philippine Senate rejected U.S. efforts to extend the lease on its massive installation at Subic Bay. Just moving out personnel and equipment afterwards cost billions. More recently, the same process played out on fast forward in Central Asia. As adjunct professor at the Air Force's Air Command and Staff College Stephen Schwalbe pointed out in an article in Air & Space Power Journal, after the U.S. negotiated the right to use Uzbekistan's Karshi-Khanabad Air Base in 2001, as part of its Afghan War plans, it pumped millions of dollars into the base to improve infrastructure and facilities -- from increased aircraft parking space to a movie theater. It also ponied up a $15 million fee for its use.

In 2005, however, Uzbek security forces perpetrated a massacre of domestic protesters, leading to a Bush administration demand for an investigation. In the end, all the money spent on the base was wasted. Not long after the American request, Uzbekistan gave the U.S. military 180 days to leave the base and the country -- and promptly signed friendship pacts with Russia and China.

The buildings and structures at the U.S. base at Ecuador's Manta Air Field are valued at over $176 million and are also soon to move into the Pentagon's loss column. Last year, Ecuadorian president Rafael Correa offered the following terms for continued use of Manta after 2009: "We'll renew the base on one condition: that they let us put a base in Miami -- an Ecuadorian base." The U.S. did not take him up on the proposal. Correa has since offered to lease the base to China for commercial use.

The Pentagon stands to lose billions more when it finally withdraws from Iraq and Afghanistan. The cost of manning, maintaining, and regularly upgrading the mega-bases in Iraq, in particular, is already a significant financial burden on American taxpayers, but it would be dwarfed by the losses incurred if they had to be abandoned. As such, getting out, even in today's depressed real-estate market, would be the financially prudent thing to do.

Similarly, closing down the Bush administration's notorious torture bases might yield significant financial savings (while enhancing global opinion of the U.S.). Selling off the Pentagon's facilities on the British-owned island of Diego Garcia in the Indian Ocean, for instance, where Global War on Terror "ghost prisoners" have been held (and U.S. air raids on Iraq and Afghanistan have been regularly launched), could yield $2.6 billion. Saying goodbye to the facilities at Guantanamo Bay in Cuba could net another $2.2 billion -- and some global cheers.

The Pentagon Comes Home

While we may never know if it was bin Laden's knowledge of America's "expeditionary" history that drove him to plan out the 9/11 attacks, he certainly goaded the Bush administration into a Soviet-style military spending spree, complete with a Soviet-style ruinous war in Afghanistan. With some caves for bases, he managed to sink Americans into a multi-trillion dollar financial quagmire.

If the United States had never wasted the better part of a trillion dollars fighting a war in Vietnam and, following defeat there, embarked on a scheme to saddle the Soviets with a similarly ignominious loss -- which has now led to wars with a multi-trillion dollar price tag -- the United States might not be in such dire financial straits today. And yet, despite the worst economic downturn since the Great Depression, the U.S. continues to sink money into costly wars fought from expensive bases overseas with no end in sight. The result is sheer waste in every sense of the word.

When Americans want to get serious about a long-term bailout strategy that brings genuine financial and national security, they'll look to real cost-cutting options like stopping America's string of costly wars and getting rid of the Pentagon's vast network of overseas bases. Until then, they are simply helping Ronald Reagan's freedom fighter, Osama bin Laden, be a better Reagan than Reagan ever was.

Nick Turse is the associate editor and research director of Tomdispatch.com. His work has appeared in many publications, including the Los Angeles Times, Le Monde Diplomatique (German edition), Adbusters, the Nation, and regularly at Tomdispatch.com. His first book, The Complex: How the Military Invades Our Everyday Lives, an exploration of the new military-corporate complex in America, was recently published by Metropolitan Books. His website is Nick Turse.com.