Friday, January 19, 2007

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January 18, 2007

Carolyn Baker

[With deep appreciation to Jason Miller for this interview, his tireless efforts at TOM PAINE'S CORNER, CIVIL LIBERTARIAN BLOGSPOT, and for his marvelous articles.--CB]

Deep crimson stains mottle the pages of humanity’s history. Untold numbers of souls who were skewered, decapitated, eviscerated, or obliterated in anonymity scream out for recognition as one peruses humankind’s memoirs. While our historical manuscript is also generously dappled by the milk of human kindness, much of our narrative is dominated by tales of man’s savage cruelty to man.

And despite widespread misconceptions, the human collective of the United States has acted in accord with the rest of the players on history’s stage.

Relative to its predecessors, the empire sometimes referred to as Pax Americana is not exceptionally exploitative, acquisitive, or genocidal. One can point to numerous historical examples of clans, tribes, or nations with comparable levels of bloodlust. As masters of the world go, the United States has been fairly run of the mill in its pathologies.

Yet what galls many about the United States is the hubristic set of pernicious and enduring myths that portray our nation so disingenuously. Since the founding of our so-called republic, textbook authors, historians, teachers, our government, the mainstream media, and the moneyed elite have striven tenaciously to convince the working class, the rest of the world, and perhaps even themselves of our moral superiority and exemplary virtue.

Recently the Bush administration’s egregious and blatant breaches of morals, ethics, and laws have rendered the illusion of American Exceptionalism virtually untenable.

Yet not unlike Joe Pesci’s witness in My Cousin Vinny, whose testimony could only have been true if the “laws of physics ceased to exist on [his] stove”, there are still many among us in the United States who make claims that could only be true if the “laws of human nature” ceased to exist in our country.

We are as prone to cruelty, greed, gluttony, selfishness, and the like as the rest of the human race. In fact, our refusal to own our collective shadow (coupled with our possession of nearly unlimited economic and military power) has heightened our nation’s tendency to behave like a rogue.

Why do so many amongst the poor and working class of the United States embrace the spiritual cancers of consumerism, patriotism, nationalism, blind allegiance to corporations, and delusional thinking so readily proffered by a relatively tiny group of aristocrats who reside on the other side of a wealth canyon that was once known as a gap?

A few days ago, I caught up with Carolyn Baker, an open-minded and deeply knowledgeable author, essayist, publisher and history professor. She worked as a psychotherapist for two decades and has spoken truth to power for years. I felt confident that Carolyn could shed some serious light on the issues vexing me. So I asked her a series of questions….

1. Please briefly acquaint us with your latest book,
US History Uncensored: What Your High School Textbook Didn’t Tell You (1).

This book grew out of years of teaching recent American history (1865 to the present) when after several semesters of teaching, I realized that I should compile my lecture notes and relevant documents into a book. Because I prefer struggling with questions rather than declaring that I have answers, I introduce the book in this way: “How did we arrive where we are now: American society dominated by corporations and their interests, an economy based on war and the weapons industry, trillions of dollars missing from federal government agencies, the annihilation of our civil liberties and the shredding of the U.S. Constitution, the dumbing-down of America and the reduction of our educational system to the lowest common denominator, Peak Oil—the best-kept secret in America, and the polarization of economic prosperity and quality of life?”

The book raises myriad questions about recent American history and offers possible answers, and very well-documented ones at that.

2. Those who are familiar with Howard Zinn’s A People’s History of the United States(2) are probably thinking that the two books sound similar. How would you compare and contrast your book with Zinn’s?

First, Zinn’s books are essentially essays, and they are extremely worthwhile. Zinn has been an enormous inspiration for me, and I can’t get enough of him, but my book is more than a book per se; it is a curriculum abstract. In other words, it was written not only for the reader who just wants to read about U.S. history from the end of the Civil War to the present, but was also written so that history instructors or instructors of other subjects can utilize it as a supplement to their required textbooks or other materials.

In addition, while I have the greatest respect for Howard Zinn, there are some subjects that I do not feel he has sufficiently addressed such as 9/11 and energy depletion as a motivation for epidemic resource wars around the world.

3. I am curious, and I suspect the readers are too, to know more about you as a person. Please favor us (to the degree to which you feel comfortable) with a brief verbal self-portrait of Carolyn Baker.

I’m a baby-boomer who grew up in a fundamentalist Christian family in the Midwest. I was raised on McCarthyism, racism, hellfire and brimstone. I bought into it throughout my childhood, and at the age of sixteen was saving my money to join the John Birch Society. I was sent to an evangelical bible college where I became a rebellious skeptic and left there in order to attend a major Big Ten university. One thing that my upbringing was unable to squelch was my thirst for learning, and my university experience proved that indeed, a little knowledge is a dangerous thing. I became an activist in the throes of the sixties, and you might say that I have never ceased being one. I spent most of my adult life in the fields of human service and psychology and returned to college teaching about ten years ago. Although I am no longer a psychotherapist as I was for seventeen years of my career, I experience the fields of psychology and history as extremely relevant and complementary to each other. What is history if not the story of the behavior of human beings? Learning from history can alter our psychology, and altering our psychology can re-direct how we make history.

4. Who has been your biggest inspiration?

It is almost impossible to name any one person as my biggest inspiration. In college I was greatly inspired by Norm Pollack, the history professor to whom my book is dedicated, other professors, peers, employers, therapists, and a variety of other activists.

My spiritual path is extremely important to me, and individuals like the poets Rumi, Mary Oliver, Mario Benedetti, and Pablo Neruda have been guiding lights, as well as the principles of indigenous spirituality and specific teachers such as Carl Jung, Matthew Fox, the Gnostics, Pema Chodron, and many more.

Politically, I am inspired by contemporary Latin American socialists such as, President Michelle Bachelet, of Chile; Hugo Chavez of Venezuela, Evo Morales of Bolivia; Che Guevara; others like Vandana Shiva, Cesar Chavez, and Robert Kennedy continue to inform my perspective.

Sometimes when I am feeling depressed or discouraged, I go to the websites of the Latin American presidents I have mentioned, and there I see and hear the changes they are making and the ways in which they are transforming their countries and defeating neoliberalism in Latin America through democratic elections and by engineering humane government, and I am inspired and enlivened. In an article I recently wrote entitled “New Kids On the Block Confront Imperial Bully: Why I Am Smiling”(3), I explained how these people warm my heart and challenge me to keep going. Most of them know more of suffering and the struggle for justice than I ever will, and the ways in which they walk their talk daily reminds me that a better world is possible.

5. Who has influenced you the most?

I suppose I would have to say that the teachings of Jung influenced me the most in my forties and continue to inform my emotional, spiritual, and political perspectives. One does not have to be in the field of psychology to experience illumination of one’s inner and outer worlds from Jung’s writings. While Jung was a product of his time and influenced by the racism and sexism of his era, he was also far ahead of his time in a host of other ways. As a group, I feel that Jungian therapists can sometimes become focused on the inner world to the exclusion of the outer, whereas for me, it is essential to develop both a rich inner world and at the same time, struggle to create a just and humane outer world. In terms of history, it is because of Jung that I insist on looking at the dark aspects of it as well as the positive. Only in this way can real integration occur.

6. Your bio for your new book states that you were an administrator for non-profits and a psychotherapist (for about two decades) before you became a history professor. What motivated your transition?

Perhaps it was exactly what I just mentioned in answer to the last question. I began feeling that it was time for me to get out of the therapist’s office and human service management and into the world more directly.

For one thing, I felt that the injustices in those fields were becoming intolerable. Increasingly, there were no federal and few state funds for non-profits, while the unregulated corporate capitalist system was running amuck. The field of psychotherapy was also being destroyed by the health insurance industry, unbridled and unchecked. For example, we all know that the society in which we live in the United States is not emotionally healthy, and there is a ghastly amount of violence and abuse on every level. In the pre-managed care world, people could receive psychotherapy and be able to use their health insurance benefits indefinitely, but after the triumph of managed care, “brief therapy” prevailed, and people were generally only allowed twelve sessions in which to address gargantuan emotional issues such as sexual abuse or other trauma. Thus, the profession increasingly became about bandaging people up and getting them “repaired” well enough to function. At the same time, the mental health professional has been put in the position of either playing the insurance company’s game in order to survive or taking only clients who can pay out-of-pocket, and the economic situation in this country being what it is, makes that untenable.

But more importantly, my leaving those fields also had to do with a transition from life in California, as I responded to an inner calling to move to the Southwestern US and specifically to live in closer proximity to Latin America and its cultures. Nevertheless, the experiences and enrichment of the two prior decades continue to inform every aspect of my current work as a teacher and writer.

7. How long have you been teaching history?

I have been teaching history at the college/university level for almost a decade.

8. How valuable has your humanitarian background been to you in your efforts to teach and record history in ways that deviate significantly from the “traditional approach”?

Well, as I said in my answer to #3, I see the two worlds as very compatible and complementary to each other. Much of the psychotherapy world, certainly when one has a Jungian perspective on board, is about finding meaning—critically thinking about any subject, analyzing, looking deeper than the bland, superficial material that is printed in college textbooks. My graduate studies in history were all about that, and when I became a teacher of college history myself, I was appalled at the lack of concern for this. Students came into classes loathing history based on their experiences of it in high school which were overwhelmingly about memorizing dates and names and with absolutely no attempt to connect the dots or make meaningful sense of history.

9. Quoting from your book’s forward: “….the relegating of history to an antiquated closet of insignificance is not only intellectually unsound but fundamentally dangerous.” How much of the US American publics’ minimization of the value of history do you think is orchestrated by the plutocracy which has managed to leverage most of the wealth and power in the United States?

I do believe that a significant amount of the minimization of history is orchestrated by the plutocracy, but there are other factors at work as well. First, we have a president who received an undergraduate degree in history from Yale and nearly brags about his doing so by making C’s and D’s. In addition, technology, which I love and utilize as much as anyone else, has seduced us into believing that only that which is instant, momentary, or future-focused is worth considering. Current conditions do not lend themselves to a consideration of history as relevant or valuable. I believe that we live in an infantilized culture, and I have written about this extensively, as recently as in
my commentary on the film “Children Of Men”. Part of the infantilization is due not only to the United States being a very young nation compared with European countries, but we have little sense of history. What inkling most Americans do have is inordinately positive. Few students coming into my classes have any concept of Native American genocide or the actual treatment of African Americans before or after the Civil War. For most of them, U.S. history is “white, bright, and light”—we were the good guys in white hats, devoid of any dark side. I’ve noticed, however, that during the past six years, that attitude has been changing specifically as a result of war-weariness and the demise of Bush’s popularity.

Moreover, and this is extremely important, if people do not know their own history, then like children, they are easily manipulated and controlled and have little discernment about when they are being lied to by their government or the extent of corruption in their government. Being unfamiliar with the U.S. Constitution and the process by which it was formulated makes citizens extremely vulnerable to oppression because as a result of their ignorance, they do not know when their rights are being violated, why they should not be violated, why hundreds of thousands of men and women died so that these rights would not be violated, and that citizens have every right, not only to make certain that their liberties are not violated, but that according to the Constitution, when their government does so, they have a right and a duty, to abolish that government. Certainly, such ignorance of history benefits the plutocracy and no one else. That is the danger of not knowing one’s history.

10. How do you believe the opulent class and corporatists use the dearth of historical knowledge amongst the masses in the United States to their advantage? If the question is too broad, perhaps you could simply provide a few specific examples.

No, the question isn’t too broad. As stated above, unfamiliarity with the history of the U.S. Constitution creates people who function like sheep in obedience to their government. For example, unfamiliarity with the war in Vietnam makes certain that young men and women have no historical perspective about fighting in wars. Many have heard that the “poor U.S. troops” upon returning from Vietnam were spit on by protestors, but they have no clue that thousands of those returning troops quickly joined the anti-war movement, and they have no clue about why because they have no historical understanding of the Vietnam War and what it was about.

When I teach the late-nineteenth and early-twentieth century periods of U.S. history, students rarely know that working people at the time were subjected to ghastly mistreatment by management with no laws to protect them. They take working five days a week with a guaranteed lunch break and bathroom breaks for granted, as they take getting a paycheck and having a weekend for granted, not knowing that working people of earlier eras in the U.S. often worked 18 hours a day, 6 days a week and got no paycheck or were cheated on the amount they received. In my class they learn where these things that they take for granted in the workplace came from, and they learn about the lives that were lost in the cause of making sure that working people had humane treatment and that their civil liberties were respected.

When you do not know your history, you can be sorely taken advantage of, and of course, who does that benefit?

11. As I watched Scott Pelley interview our unitary executive on Sixty Minutes last Sunday, I literally felt a chill go down my spine followed almost immediately by a feeling of intense rage when I heard this exchange:

PELLEY: Do you believe as commander-in-chief you have the authority to put the troops in there no matter what the Congress wants to do?

BUSH: In this situation, I do, yeah. Now, I fully understand they could try to stop me from doing it. But I made my decision, and we're going forward.

Drawing on your knowledge of history, when has another US president so boldly asserted his intention to utterly defy the system of checks and balances so crucial to the preservation of our Constitutional Republic? Obviously, the Bush Regime has dealt many blows to what is left of our Constitution. How much weight do you give this one relative to the Patriot Act, Signing Statements, and MCC?

To my knowledge, no other U.S. president has so blatantly disregarded checks and balances, but in my book, I discuss a couple of incidents in which Bush’s father did the same kind of thing as Reagan’s Vice-President, but did so behind the scenes. For example, I explain in detail the creation of a black budget for the military industrial complex under Vice-President Bush which egregiously violates the U.S. Constitution.

While I give little attention to mainstream media, I do watch Keith Olbermann’s “Countdown” on MSNBC every night. In the throes of debate on the Military Commissions Act a couple of months ago, I listened to Olbermann interview Jonathan Turley, law professor at George Washington University, and as they discussed the appalling violation of the Constitution that the Act is, Turley’s principal lament was that the American people and Congress were doing nothing about it. Congress has little excuse since most of its members have some knowledge of U.S. history, but the American citizenry, ignorant of their history, if they had even heard of the Military Commissions Act, had virtually nothing to say about it, and if they did, it was most likely in support of torture and “doing whatever it takes” to get rid of those nasty terrorists.

I consider one of the final steps of sealing our fate as a fascist empire, this 2006 act which violates every principle of liberty in the U.S. Constitution. The violation is blatant—unprecedentedly blatant, but no other president of earlier generations could have gotten away with shredding the Constitution or calling it as Bush did “a goddamn piece of paper”. That’s because in those times, people still had enough sense of history to prevent such outrageous usurpation of power.

12.Your book touches on the darker aspects of US American history which are often white-washed or ignored in “mainstream” texts. Most history students spend very little time learning about the Native American genocide, chattel slavery, the violent oppression of labor and social movements by the moneyed class, US imperialism, and unprosecuted US war crimes (i.e. Dresden and the secret bombings in Cambodia). How much time do your students spend studying these facets of US history?

My students spend a great deal of time learning about those facets, alongside the positive aspects of our history. Zinn has done a fabulous job in PEOPLE’S
HISTORY OF THE UNITED STATES in recounting noble, courageous, and heroic acts undertaken by ordinary people in our nation’s history that served to make us, in principle at least, a great nation. I educate my students in the necessity of knowing the dark side of their history, just as they should know some of the not-so-pretty parts of the personality of a person they plan to marry, or the unpleasant aspects of a job they want to be hired for. Without an integration of the dark side and the light side, we either become cynical and depressed, or infantilized sycophants. Either way, we cannot function as informed and useful citizens.

One thing I want my students to know about is role models in U.S. history other than presidents. In fact, I spend very little time talking about presidents because, as I tell students, presidents don’t run the United States, in my opinion, and because this nation was built on the backs of people of color, women, and the poor. One of my favorite assignments is a reaction paper on the “Autobiography of Frederick Douglass” in which students must read the autobiography and write a paper, putting themselves in his place. There are specific questions they must address in the paper, but without exception, when students read the life of the former slave and imagine themselves in his shoes, they begin to see themselves, people of color, and their entire world differently. I have had students contact me years after doing the assignment and tell me that it was the most life-changing college assignment they had.

13. You wrote that educators face a backlash for deviating from teaching “traditional history”. How has your critical and honest examination of US history affected your professional career?

Personally, I believe that it is easier to teach alternative history in college than in high school. There are too many constraints--parents and administration looking over the shoulders of high school teachers. College and university professors have greater latitude.

My professional career has not suffered as a result of my alternative views. As I mention in the book, one student once said in front of the entire class, “We may not agree with you, but we will never forget this class.” In 2004, one of my very activist students wanted to give an oral presentation on the war in Iraq and used a couple of video clips she had gotten from a returning veteran. Some of the scenes were gory, but overall, they simply raised disturbing questions about why the U.S. was even occupying Iraq. There were several complaints to the administration about the class and my not being “patriotic”, but I was not personally penalized. Today, in 2007, attitudes have shifted enormously, and what I hear and feel in class from students is rage at the current administration—bitterness and despair over having lost relatives and friends in a war that they now recognize as vile and based on lies. The overwhelming majority of my students are Hispanic and therefore are disproportionately affected by a recruitment system that promises them the sun, the moon, and the stars, but either gets them killed in combat or does very little to help them when they return to the U.S. gravely disabled or suffering from post-traumatic stress disorder.

14. How much pressure have you felt from the university where you teach to curb your efforts, which often (in your words) lead people to accuse you of “hating America and lacking gratitude for the benefits of being born in this nation”?

As stated above, I have not felt a great deal of pressure. What I have seen in the classroom in the past three years is the almost-total evaporation of patriotism and a burgeoning cynicism and despair.

15. Despite the existence of nearly innumerable sources of evidence that obliterate the incredibly disingenuous assertion “that the United States of America is the most tolerant, moral, non-aggressive, and benevolent nation on earth”, many US Americans cling tenaciously to this pernicious delusion. How do you account for this?

Actually—and fortunately, I’m finding that many students these days are not clinging to this disingenuous assertion. I think that because many of my students are working class Hispanics and have seen the darker side of U.S. history in terms of the experiences of family members who have come to this country to have a better life, only to find that the U.S. isn’t the “land of the free” they had fantasized, perhaps they are more open to an alternative view of U.S. history. However, there are still some who do embrace the “America can do no wrong” delusion, and of course, I believe, this is true of many more Anglo American adults. My sense of that is not only what Jung says, that human beings can only handle so much reality, but that people who cling to this assertion need to do so because to entertain a different perception is too threatening, i.e., coming to realize that they have been egregiously betrayed and that what they have worked so hard to support and affirm is not as it seems. All of our institutions in the U.S. serve to perpetuate this myth, so without profound life experiences that break through the fantasy, many people never do.

16. In your opinion, considering the unbridled power of corporations, unchecked militarism, propaganda disseminated by the corporate media, erosion of civil liberties, and concentration of power into the Executive branch, has the United States devolved far enough for the label of fascism to be accurate? Please elaborate on the reasoning you used to draw your conclusion.

As I tell students, we tend to think of fascism as soldiers marching around in jackboots, flags with swastikas draping the entrances of buildings, and Jews being loaded into boxcars headed for death camps. But Mussolini gave us a very simple definition of fascism which I emphasize in my book: the merging/symbiosis, enmeshment of the state and corporations. In fact, he said fascism should be more properly called “the corporate state.”

It is no longer possible in the United States to define where corporations leave off and the state begins. That situation has existed for decades, but the current Bush administration has taken fascism not just to the next level, but to a new galaxy—a new realm of power of the state and of capitulation by the citizenry, as well as a carte blanche for corporations more lenient than we have seen since the late nineteenth century.

In the 1930s, historian Robert Brady wrote a powerful and chilling analysis, The Spirit and Structure of German Fascism(4), in which he examined the creation of the Nazi empire, but also argued that fascism was not necessarily unique to Germany. In the book he states that
“…almost the entirety of the German Nazi program and line of argumentation is identical in content and point of view with that of the American business community.”
(P.380) He continues:

If the analysis given here is correct, the only difference between fascist and non-fascist capitalist states—between Italy, Germany, Portugal, Austria, Hungary, Brazil, etc, on the one hand, and England, France, and the United States, the Argentine, Belgium, etc. on the other—is to be found not in the content, but in the level on which the propaganda is promoted.(P.384)

Brady then asserts: “…in the United States business is still trying to ‘sell itself to the public’ while in Germany this is no longer necessary—it has sold the public to itself, and those who do not believe, who do not accept, and who do not conform are branded as ‘traitors’ to the state and treated accordingly.” (P. 384)

I submit that the corporatocracy of the United States has “sold itself” unequivocally to the American people, and the Bush II administration is putting the finishing touches of institutionalized fascism on the society—a society that has little sense of history and what actually happened in Germany in the 1930s.

If you have any doubt left, you must watch Aaron Russo’s fabulous documentary
“America: From Freedom to Fascism.”(5)

17. You have indicated that you see a connection between the 2000 Presidential “election” and the events on 9/11. What does that entail?

One point I made in the book is that 9/11 is not necessarily the most significant event of the twenty-first century because I believe that the 2000 presidential election was. I believe that it was unambiguously a coup d’etat, and that that coup was completed with the orchestration by the U.S. government of the 9/11 attacks. Thus, the two events are inextricably connected.

You know, on the night of the 2000 elections I was teaching at the university in Juarez, Mexico, and I was watching the election returns on TV in the faculty lounge, quite appalled at what I was witnessing. Then one of my colleagues, a friend and a Mexican national, playfully but seriously said to me, “It looks like you Gringos are living what we Mexicans have been living for decades—dirty elections that have nothing to do with how the people actually voted.”

Very soon on my site ( I will be reviewing the book 9/11 And American Empire: Intellectuals Speak Out(6) which is one of the best examinations of 9/11 in the past year. A chapter at the very end “Parameters Of Power In The Global Dominance Group: 9/11 & Election Irregularities in Context” by Peter Phillips, Bridget Thornton, and Celeste Vogler, superbly connects the dots between this administration’s usurpation of power illegally and “The New Pearl Harbor” of 9/11. Overwhelming evidence of every kind points to the orchestration of the attacks by the Bush administration, and on this point, most Americans cannot and will not allow themselves to demand a deeper investigation because they are terrified of what such an investigation may uncover: that their government—yes, that government that is supposed to be the most liberal, uncorrupted, pure- as- the -driven -snow entity on earth, murdered 3000 of its own people as a pretext for endless war and global dominance.

Thinking critically and analytically demands that we penetrate the veneer of the “official” story of that event; otherwise we will not understand the current occupation of Iraq, the likely escalation into Iran and Syria, or the plethora of resource wars provoked and carried out by the United States that will ensue for the remainder of this century and beyond.

18. You are one of a growing number who now calls the United States an “empire”. What do you say to those who claim that we US Americans only use our military might to maintain a peaceful, free, and orderly world?

Well, don’t take it from me, take it from history! In my book is a marvelous article by Zoltan Grossman, a professor at Evergreen State College, Olympia, Washington in which he presents a detailed and very well-documented list of all U.S. interventions internationally in our nation’s history. It is one thing to have heard about this, and it is quite another to actually see the list with one’s own eyes. It appears almost infinite. And history absolutely does not confirm that these interventions served to maintain a peaceful, free, orderly world. Quite the contrary!

But that’s empire on the geopolitical front.

The consequences of empire are always a draining and hollowing out of the domestic economy as a result of endless military adventures abroad. Catherine Austin Fitts writes and speaks of this hollowing out as “slow burn” in which the nation’s economy and infrastructure are gradually eviscerated as a result of war and corporate privatization, or as she says “piratization’ of resources at home and abroad. An honest examination of the current U.S. economy—an examination that looks beyond the rosy picture of the financial pages of U.S. media, reveals that this is precisely what is occurring, and precisely why the American middle class and working people are working themselves to death but have nothing to show for it—or as a friend of mine says, “I’m working my tail off, but I feel like I’m on welfare.”

Another result of empire is that it must make war not only on the rest of the world but on its own citizens. American citizens are now the targets of unprecedented totalitarian surveillance in the United States, and like the frog placed in a pan of cold water who feels quite comfortable; the heat is being turned up daily and will continue to rise until the contented inhabitant of the cold water is cooked.

19. How has your friendship with “conspiracy theorist” Michael Ruppert affected your academic career and reputation?

Well, first of all, Mike would say that he doesn’t deal in conspiracy “theory” but deals only in conspiracy fact. Mike’s research has been pivotal in my political awakening in recent years. His writing, speaking, and research are superb and impeccably documented. In my opinion, he has written the definitive book on 9/11, Crossing the Rubicon, and while I believe that physical evidence on 9/11 is important even though it has all been destroyed, Rubicon provides us with indisputable evidence of motive, means, and opportunity regarding the atrocities of 9/11.

And by the way, ALL theories of 9/11 are conspiracy theories. The greatest conspiracy theory ever devised is the premise that 19 Arab males under the direction of Osama bin Laden hijacked four airplanes and flew three of them into the World Trade Center and Pentagon. Once we understand that all theories of 9/11 are conspiracy theories, then we have to decide which conspiracy theory, based on a thorough examination of the evidence, we will embrace.

20. Are you still affiliated with Michael’s From the Wilderness website?

From the Wilderness, of which I was the last Managing Editor, went out of business late in 2006. I link to the FTW archives on my
website(7) and maintain a site that is extremely current with breaking news and trends, as well as offer a free subscription to my daily news service in which I email the most current stories from websites people may not know about or have time to visit.

21. Catherine Austin Fitts, a former Wall Street banker and Assistant Secretary of Federal Housing Commissioner at HUD under Bush I, wrote the foreword to your book. Catherine is now a strident critic of the Empire and a strong supporter of Cynthia McKinney. She cites you as a guiding influence in her profound conversion. How much influence did you have in her metamorphosis?

I believe that I have had a great deal of influence in Catherine’s understanding of history, but her “conversion” as you say, began long before she met me in 2002. Catherine’s story is extraordinary, and as a result, she cannot possibly be considered a conspiracy theorist because she has lived through an enormous conspiracy by the U.S. government to destroy her. I strongly urge folks to not only study her website at but also her newer site at which she constructed while I was writing my book and which she constructed with my book and history classes in mind. The latter site documents the extent of U.S. government and corporate corruption during the past fifty years.

And by the way, I would like to add that one of the topics I offer to my recent American history students for research and an end-of-semester oral presentation is: MOST AMERICANS BELIEVE THAT THE U.S. GOVERNMENT, UNLIKE THE GOVERNMENT OF MEXICO, IS NOT CORRUPT. DO YOU AGREE OR DISAGREE? WHY? EXPLORE THE REALITY $59 MILLION MISSING FROM THE DEPARTMENT OF HOUSING AND DEVELOPMENT (H.U.D.) AND $1.3 TRILLION MISSING FROM THE PENTAGON.

Catherine’s story and research profoundly inspired me to include this as one of the topics of research and oral presentation. As I mentioned above, many of my students have their roots in Mexico, where they and most Americans presume the worst corruption on earth exists. Without exception, however, I have never had a student, with roots in Mexico or otherwise, who completed the assignment and did not overwhelmingly conclude that the U.S. is one of the most corrupt nations on earth.

22. You have impacted me positively as I have been awakening from my corporate media-induced slumber over the last few years. Care to speculate on how many others you may have truly enlightened along the way?

I’m honored and humbled to have impacted you, Jason.

I don’t like to apply numbers to the people who have been exposed to my classes or writings. One of the unfortunate aspects of being a teacher of any kind is that unlike being a psychotherapist, one does not always get to see progress in the moment. A student may take my classes and yawn his or her way through, not appearing to be deeply affected by anything he or she heard there. Yet years later, a light bulb may go on, and much of what I said in class is recollected by the student. That very thing has happened on a number of occasions as students have contacted me years later to relate such an experience. But if I make a difference in only one person’s life, I will have served my purpose on this earth.

My passion today is getting information out into the world because if I believe nothing else, I believe—I know, that knowledge is power. How can we create options to navigate the daunting future ahead of us if we do not have information?

Therefore, I am pleased to announce many positive changes occurring on my
website in the coming months. We are beginning to feature pivotal articles by talented writers who will offer the best in writing and research. Other changes are in the works as well, and I invite everyone reading this article to visit us and become a news service subscriber.

Incidentally, today, I received the following comment on my book:

I had to comment on your book. I purchased it recently and once I opened it, I read it cover to cover – it’s that compelling. As a ‘baby boomer’ who experienced doubts about the JFK assassination, researched conspiracies, protested the war etc., this book was a must read. It provides a cogent approach in weaving together seemingly disparate and disjointed historical events into a definitive context – one in which the American public has been repeatedly lied to and led like ‘sheeple’. Hopefully, research like this will raise consciousness of awareness and will stem the tide of inequities and lies.

Keep up the great work. I would recommend this to anyone.

—Dennis from Texas

You see Jason, not everyone in Texas is jaded!

23. In closing, I note that the introduction to US History Uncensored: What Your High School Textbook Didn’t Tell You would seem to indicate that you are encouraging history instructors to incorporate your book into their curriculum. In today’s increasingly academic environment (which is increasingly subject to over and covert oppression of “alternative” or “subversive” viewpoints), how could a text like your proliferate?

I have no illusions that my book will become a “best-seller” in academia, but some professors may want to use it supplementally or as the foundation of their teaching. I think the best way to test its usefulness is simply to use it and see what happens. If an instructor wants to generate discussion, it is guaranteed to assist that process.

I also believe that the academic experience can generate both positive and negative results. Sometimes we emerge from academia with constricted notions about what it means to be part of academia—how we “should” think, how we “should” teach. I notice that many academics are terrified of being called a conspiracy theorist which is one reason that I so admire the individuals who participated in the writing of 9/11 And American Empire: Intellectuals Speak Out.

In recent years I have taught a course in the Education Department on academic excellence in addition to my history courses, and one section of the course addresses critical thinking. I have incorporated into that section of the course a segment on 9/11 and created a critical thinking project on the official story of 9/11. The project certainly revealed to me on the deepest level why students are fearful of knowing the full extent of the evidence regarding the event, and in the process, I also learned how fearful some instructors are of being accused of being labeled nut-jobs for questioning the official story.

So I would say, use my book and tear it to pieces, but use it!

In conclusion, thank you Jason for giving me this opportunity to share more of who I am and what I do.

Carolyn, on behalf of those who will read this piece and myself, I thank you for taking the time to provide such insightful commentary.

I also want to express appreciation for your stalwart efforts to enlighten people.

While food is fairly abundant here in the United States, many of us suffer varying degrees of chronic spiritual malnutrition. Truth is essential to the well-being of our souls, yet it is woefully scarce in the lives of US Americans.

Carolyn, may you continue to follow the noble path blazed by the Religious Society of Friends in the 18th Century as you speak truth to power….

And to the rest of us!

US History Uncensored: What Your High School Textbook Didn’t Tell You

(2) A People’s History of the United States

(3) “New Kids On the Block Confront Imperial Bully: Why I Am Smiling"

(4) The Spirit and Structure of German Fascism

(5) America: From Freedom to Fascism

(6) 9/11 And American Empire: Intellectuals Speak Out

(7) Speaking Truth to Power

CAROLYN BAKER, Ph.D., is an adjunct professor of history, an author, and former psychotherapist. Her lastest book is U.S. HISTORY UNCENSORED: What Your High School Textbook Didn’t Tell You.

Jason Miller is a wage slave of the American Empire who has freed himself intellectually and spiritually. He writes prolifically, his essays have appeared widely on the Internet, and he volunteers at homeless shelters. He welcomes constructive correspondence at or via his blog, Thomas Paine's Corner, at


January 17, 2007



Mission Accomplishhed:
36 Measures Implemented in First 100 Days of Bachelet Administration


1. Raising the age of eligibility for the bonificación al contrato de aprendizaje (on-the-job training subsidies) program to 25, and we will increase subsidies for workers to 50% of minimum wage.

This bill was sent to Congress on May 3, 2006.

2. Sending Congress a bill establishing that the government will shoulder a portion of the pension contributions for low-income young people with formal work contracts. The Presidential Advisory Council on Pension Reform will address this matter.

3. Allowing hourly work contracts for young people, so that all young people who study can work as well.

A new system will be implemented, in two phases: an online job listing (by June 2006) and the opening of a Labor Intermediation Office for job placement (by the end of July 2006).

Websites like and three mobile computer labs will increase access to these benefits.

4. Allocating 300 million pesos available in the budget to re-adjust the lowest public pensions, which will benefit a million pensioners.

This was the first bill introduced by President Bachelet, and became Law no. 20,102 (upon its publication in the official State newspaper) on May 5, 2006.

Pensions have been re-adjusted for a million people belonging to low-income households.

5. Making sure that seniors receive automatic access to Supplementary Pensions. This type of pension will now be a right; there will no longer be any waiting lists for it.

Law no. 20,102 included provisions to offer 25,000 people automatic access to Supplementary Pensions.

6a. Sending Congress a bill to make sure that family welfare benefits and subsidies are paid to mothers. A bill for was sent to Congress on May 12, 2006, and is currently under debate.

6b. Creating subsidies for caretakers of disabled people and bedridden seniors.

A program to improve the quality of care for bedridden seniors was included as part of a larger program to offer ongoing family training. This bill is set to benefit 104,000 people.

13. Creating a code for non-discrimination and good workplace practices in the public sector, which can also be adopted by private companies on a voluntary basis. We want an end to discrimination in the labor world.

The President ordered all government organisms and services to implement a code of conduct and a non-discrimination policy, in order to promote better labor conditions and provide ways for both women and men to balance their work and family lives.

14. Sending Congress a bill guaranteeing the right to childcare for all children of working women.

President Bachelet says, "Chile is a country that is focused on protecting its people, starting with those who need it the most. And the name for this protection of early childhood is ‘Chile Grows with You;’ since Chile is growing, we want our children to benefit from it as well,"

This matter is being examined by the Presidential Advisory Council on Early Childhood Policies.

15. Opening 60 Family Healthcare Community Centers throughout Chile, prioritizing those areas that have experienced large increases in their need for healthcare services.

This measure will allow approximately 240,000 people to receive priority access to healthcare, receiving personalized medical attention in their neighborhoods. In the long term, this measure is expected to increase preventive care, encourage healthy lifestyles, and lessen wait times for healthcare.

16. Increasing the number of illnesses whose treatments are covered under the AUGE healthcare plan to 40. A pilot program is currently underway in which all 40 illnesses are covered, and 45,000 people have received treatment through the pilot plan. On July 1, all Chileans afflicted by all 40 illnesses will have access to treatment.

17. Guaranteeing free medical care in public hospitals to everyone over 60.

135,000 seniors between the ages of 60 and 64 will now receive free medical care in all public health establishments. Previously, only seniors 65 and older had access to this benefit.


20. Subsidies for businesses who hire at-risk youth, to pay for up to 50% of the minimum wage of these workers’ salaries for one year.

This program will allow 1,500 young people, currently unemployed and enrolled in the Chile Solidarity program, to get jobs and skills. These young people will be able to raise their status in society and receive an income.

They will be able to apply for a job at their local Labor Intermediation Office.

31. Implementation of “More Work” programs in Valparaíso, Coronel, San Antonio and Talcahuano, in order to soften the difficult economic transition currently underway in those cities.

This program will help find new jobs for many people who found themselves unemployed due to the closing of businesses that are no longer profitable in those cities. The government programs will create 11,500 jobs in those four areas. The programs are already underway.


7. Creating subsidies to finance daycare for all children under four from the lowest-earning 40% of Chilean households.

This issue is currently being studied by the Presidential Advisory Council on Early Childhood Policies.

8. Creation of 20,000 new spaces for public pre-kindergarten education, and we will open 800 new daycare centers throughout Chile, which will benefit 20,000 children.

20,000 new spaces were opened for pre-kindergartners. To date, 230 daycare centers (belonging to both the JUNJI and the Integra Foundation) have been opened, and 800 new ones will have been opened by December 2006.

9. Making the differentiated subsidies bill a high priority for Congressional debate—doubling the subsidies offered in the bill. Once passed, it will benefit more than 400,000 children from pre-kindergarten to fourth grade.

This is currently under debate in Congress, on the fast-track.

10. Raising the number of students receiving loans and grants for higher education from 110,000 to 160,000 in order to ensure that the poorest 60% of students will have their tuition expenses 100% covered.

This goal has been met, and surpassed. 171,000 low-income young people will receive government loans and grants to attend accredited Chilean universities and other post-secondary institutions.

11. Consolidating the different university scholarships offered into a national scholarship program that will take into account both tuition and living expenses.

A website is now online ( to allow students to apply for all government student aid available in one place. New grants for living expenses will now be offered, as well as new merit scholarships that will benefit 9,000 needy students.

12. Offering students the opportunity to either partially or completely pay off their student loans by participating in public service projects in outlying areas of the country.

This bill was sent to Congress on June 15, 2006. Students with government loans and government-guaranteed private loans will be able to participate.

26. Requiring that everyone studying to be an English teacher study abroad for one semester in an English-speaking country, and offering government financing for it.

100 people will benefit from this measure in 2006, and a total of 900 people will benefit from it between now and 2010, 600 of them in private universities.

27. Creating an exchange program so that more teachers from English-speaking countries can come and teach in Chile.

In 2006, 59 full-time and 200 part-time volunteers from abroad will be located in 75 schools in both urban and rural areas. By 2010, 40% of schools will have these volunteers.

28. Creating a program to allow the top 1,000 graduates of Chilean universities each year to study for doctorates in the best universities in the world.

In 2006, the existing number of scholarships of this type, 600, will be increased to 1,000. Students will be able to study in more areas, although more students will be sent to study certain subjects of strategic importance to Chile.


21. Launching a plan to support entrepreneurs, including centralizing bureaucratic procedures, digital literacy training, accounting help, personalized account executives for those launching businesses, and better financing schemes.

For now, 670,000 small business owners are expected to benefit from this initiative, which amount to approximately 30% of all small business owners in Chile.

Commenting that "concern for small businesses is a priority for national development," President Bachelet attended a ceremony to award 111 female entrepreneurs from all over the country venture capital seed money for small businesses from SERCOTEC, the government’s Technical Cooperation Service. Each entrepreneur would receive two million pesos on average, and would receive training and ongoing guidance carried out by consulting firms in each region for six months.

22. Sending Congress a plan to simplify the tax structure for small- and medium-sized businesses, as laid out in Michelle Bachelet’s government agenda.

A bill to do this was sent to Congress on June 15, 2006. 291,000 business owners will benefit from it.

23. Guaranteeing that the government will pay its service providers within a maximum of 30 days.

The Finance Minister signed a directive ordering all public agencies to comply with this new regulation.

24. Sending Congress a bill to increase sentencing for white-collar criminals and double enforcement of such crimes.

This bill was sent to Congress on June 13, 2006. The measure will also increase the responsibilities of the Free Competition Tribunals, changing their proceedings, increasing regulations and creating new instruments to allow the government to detect cartels.

25. We will create a fund to pay for job re-training or provide business start-up funds for adults over 40 years of age who lose their jobs.

2,800 people will receive funding for this in the Coquimbo, Araucanía and Metropolitan (Santiago) Regions in 2006. People participating in the program will receive training and then will either be able to receive a job or start a small business.

32. Creating new Regional Development Agencies in each region, with provincial offices.

Ten agencies will be open by July 10, 2006, coordinating different producers in each region and generating development plans.


18. Creating a Ministry of Public Safety to coordinate all State agencies in their efforts to fight and prevent crime.

A bill to do this was sent to Congress on June 15, 2006.

19. Increasing the number of Carabineros Police on the streets by 1,500 officers a year for four years.

This bill became Law no. 20,104 upon publication in the State newspaper.

29. Appointing a Minister of the Environment for the first time in Chilean history.

A bill to do this was sent to Congress on May 10, 2006. It has been passed by the Senate.

30. Beginning a major urban renovation program, identifying 200 neighborhoods throughout Chile in need of improvement.

Neighborhoods in Santiago like El Volcán (in Puente Alto), Santa Adriana (in La Florida) and Villa Portales (in Quinta Normal) will benefit from this program. In Concepción, we will focus on neighborhoods like Boca Sur and Pedro de Valdivia Bajo, and in Valparaíso, we will focus on neighborhoods like Placilla and Rodelillo.

In 2006, work will begin in 75 neighborhoods. 100,000 families will benefit from the improvements. This will be a cooperative effort between residents, Housing Ministry officials and local authorities.


33. Transitioning towards a professional, voluntary military corps, increasing the number of professional soldiers to 2,000 and the number of female volunteers to 1,000.

By 2010, there will be 5,000 professional soldiers, allowing for military service to become voluntary. To date, 986 women have volunteered for military service, and 2,000 professional soldiers have joined the Army.

34. Creation of a Citizen Service program as an alternative to compulsory military service. This program will create a space for young people from different social backgrounds to interact and contribute high-impact social services to various communities.

A bill to do this was sent to Congress on June 15, 2006. This service will last for two years, and can be done either in Chile or abroad.

35. Replacing the current binominal electoral system with an electoral system guaranteeing competition, governance and representation.

A bill to do this was sent to Congress on June 15, 2006.

36. We will apply a system of automatic electoral registration for citizens 18 and over.

Currently under debate in Congress, awaiting reports by Interior Government and Finance Committees.


January 17, 2007

[Although the author of this article fails to connect the dots between America's centralized financial systems and the military industrial complex and other oppressive institutions, his analysis of the power of the ruling elite is required reading. --CB]

By James Petras



In the broadest and deepest sense, understanding how the US political system functions, the decisions of war and peace are taken, who gets what, how and why, requires that we address the question of ‘Who rules America?’ In tackling the question of ‘ruling’ one needs to clarify a great deal of misunderstandings, particularly the confusion between those who make governmental decisions and the socio-economic institutional parameters which define the interests to be served. ‘Ruling’ is exacting: it defines the ‘rules’ to be followed by the political and administrative decision-makers in formulating budgetary expenditures, taxes, labor and social legislation, trade policy, military and strategic questions of war and peace. The ‘rules’ are established, modified and adjusted according to the specific composition of the leading sectors of a ruling class (RC). Rules change with shifts in power within the ruling class. Shifts in power can reflect the internal dynamics of an economy or the changing position of economic sectors in the world economy, particularly the rise and decline of economic competitors.

The ‘rules’ imposed by one economic sector of the RC at a time of favorable conditions in the world economy, will be altered as new dominant economic sectors emerge and unfavorable external conditions weaken the former dominant economic sectors. As we shall describe below the relative and absolute decline of the US manufacturing sector is directly related to the rise of a multidimensional ‘financial sector’ and to the greater competitiveness of other manufacturing countries. The result is an accelerating process of liberalization of the economy favored by the ascending financial sectors. Liberalization in pursuit of unregulated flows of investments, buyouts, acquisitions and trade increases the financial sector’s profits, commissions, incomes and bonuses. Liberalization facilitates the financial sector’s acquisition of assets. The declining competitiveness of the older ruling class manufacturing sector dependent on statist protectionism and subsidies leads to ‘rear-guard’ policies, attempting to fashion an unwieldy policy of liberalization abroad and protectionism at home.

The answer to the question of who rules depends on specifying the historical moment and place on the world economy. The answer is complicated by the fact that shifts among ‘sectors’ of the ruling class involves a prolonged ‘transitional period’. During this period declining and ascending sectors may intermingle and the class members of declining sectors ‘convert’ to the rising sector. Hence while power between economic sectors may change, the leading class groupings may not lose out or decline. They merely shift their investments and adapt to the new and more lucrative opportunities created by the ascending sector.

For example, while US manufacturing sector has declined relative to ‘finance capital’, many of the major investment institutions have shifted to the new financial ‘growth sectors.’ Concomitantly, the converted sectors of the ruling class will shift their policies toward greater liberalization and deregulation, thus severely weakening the rear-guard demands of the uncompetitive manufacturing sector. Equally important within the declining economic sectors of the RC, drastic structural changes may ensue, to regain profitable returns and retain influence and power. Foremost of these changes is relocation of production overseas to low wage, low tax, non-union locations, the introduction of IT technology designed to reduce labor costs and increase productivity, and diversification of economic activity to incorporate lucrative financial ‘services’.

For example General Electric has moved from manufacturing toward financial services, relocated labor intensive activity off-shore and computerized operations. Through these moves the distinction between ‘manufacturing’ and financial capital has been made obsolete in describing the ‘ruling class’.

To the degree that older manufacturing capitalists retain any economic and political weight in the RC, they have done so via sub-contracting overseas to Asia and Mexico (General Motors/Ford), invested in overseas plants to capture foreign markets, or have been converted in large part into commercial and importing operations (shoes, textiles, toys, electronics and computer chips).

Locally based manufacturers which remain in the RC are largely found among military contractors living off the largesse of state spending and depending on the political support of congressional and trade union officials, eager to secure employment for a shrinking manufacturing labor force.

During this transitional period of rapid and all-encompassing changes in the ruling class, enormous financial opportunities have opened up throughout the world. As a result of political tensions within the ‘governing class’, key policymakers are drawn directly from the most representative institutions of Wall Street.

Key economic policies, especially those which are most relevant to the RC, tend to be overwhelmingly in the hands of tried and experienced top leaders from Wall Street.Despite (or because of) the ascendancy of various sectors of financial capital in the RC, and their agreements on a host of ‘liberalizing’ economic policies, they are not homogeneous in all of their political outlooks, party affiliations, or their foreign policy outlook. Most of these political differences are questions of small matter – except on one issue where there is a major and growing rift, namely in the Middle East. A sector of the RC strongly aligned with the state of Israel supports a bellicose policy toward the Jewish state’s adversaries (Iran, Syria, Hezbollah and Palestine) as opposed to another sector of the RC favoring a diplomatic approach, directed toward securing closer ties with Arab and Persian elites. Given the highly militarized turn in US foreign policy (largely due to the ascendancy of neo-conservative ideologues, the strong influence of the Zionist Lobby, and the instability and failures of their policies in the Middle East and China) the RC has pressed for and secured direct control over foreign economic policy.

The tensions and conflicts within the RC – especially between the Zioncons and the ‘free marketeers’ – have been papered over by the enormous economic benefits accruing to all sectors. All RC financial sectors have been enriched by White House and Congressional policies. All have benefited from the ascendancy of ‘liberalizing regimes’ throughout the world. They have reaped the gains of the expansionary phase of the international economy. While the entire ruling financial, real estate and trading sectors have been the main beneficiaries, it has been the financial groups, particularly the investment banks that have led the way and provide the political leadership. Ascendancy of Financial Capital ‘Finance capital’ has many faces and cannot be understood without reference to specific sectors. Investment banks, pension funds, hedge funds, savings and loan banks, investment funds are only a few of the operative managers of a multi-trillion dollar economy. Moreover each of these sectors have specialized departments engaged in particular types of speculative-financial activity including commodity and currency, trading, consulting and managing acquisition and mergers. Despite a few exposés, court cases, fines and an occasional jailing, the financial sector writes its rules, controls its regulators and has secured license to speculate on everything, everywhere and all the time. They have created the framework or universe in which all other economic activities (manufacturing, retail sales and real estate) take place.

‘Finance capital’ is not an isolated sector and cannot be counterposed to the ‘productive economy’ except in the most marginal ‘local activity’. In large part finance capital interacts with and is the essential driving force in real estate speculation, agro-business, commodity production and manufacturing activity. To a large degree ‘market prices’ are as influenced by speculative intervention as they are by ‘supply and demand’. Equally important, the entire architecture of the ‘paper empire’ (the entire complex of inter-related financial investments) is ultimately dependent on the production of goods and services. The structure of power and wealth takes the form of an inverted triangle in which a vast army of workers, peasants and salary employees produce value which becomes the basis for near and remote, simple and exotic, lucrative and speculative financial instruments. The transfer of value from the productive activities of labor up through the ladder and branches of financial instruments is carried out through various vehicles: direct financial ownership of enterprises, credit, debt leveraging, buyouts and mergers. The tendency of ‘productive capitalists’ is to start-up an enterprise, innovate, exploit labor, capture markets and then ‘sell-out’ or go ‘public’ (stock offerings). The financial sector acts as combined intermediary, manager, proxy-purchaser and consultant, capturing substantial fees and expanding their economic empires and… preparing the way to higher levels of acquisitions and mergers… ‘Finance capital’ is the midwife of the concentration and centralization of wealth and capital as well as the direct owner of the means of production and distribution. From exacting a larger and larger ‘tribute’ or ‘rent’ (commission or fee) on each large-scale capital transaction, ‘finance capital’ has moved toward penetrating and controlling an enormous array of economic activities, transferring capital across national and sectoral boundaries, extracting profits and dumping shares according to the business, product and profit cycle.

Within the ruling class, the financial elite is the most parasitical component and exceeds the corporate bosses (CEOs) and most entrepreneurs in wealth and annual payments. It falls short of the annual income and assets of the super-rich entrepreneurs like William Gates and Michael Dell.

The financial ruling class is internally stratified into three sub-groups: at the top are big private equity bankers and hedge-fund managers, followed by the Wall Street chief executives, who in turn are above the next rung of senior associate or vice-presidents of a big private equity funds who is followed by their counterparts at Wall Street’s public equity funds. Top hedge fund managers and executive have made $1 billion dollars or more a year – several times what the CEO’s make at publicly traded investment houses. For example in 2006 Lloyd Blankfein, CEO of Goldman Sachs, was paid $53.4 million, while Dan Ochs, executive of the hedge fund Och-Ziff Capital paid himself $220 million dollars. That same year the Morgan Stanley CEO received $40 million dollars, while the chief executive of the hedge fund Citadel was paid over $300 million dollars.

While the ‘hedge fund’ speculators receive the highest annual salaries, the private equity executives can equal their hundreds of millions payments through deal fees and special dividend payments from portfolio companies. This was especially true in 2006 when buyouts reached a record $710 billion dollars. The big bucks for the private equity bosses comes from the accumulating stake executives have in portfolio companies. They typically skim 20% of profits, which are realized when a group sells or lists a portfolio company. At that time, the payday runs into the hundreds of millions of dollars.

The subset of the financial ruling class is the ‘junior bankers’ of private equity firms who take about $500,000 a year. At the bottom rung are the ‘junior bankers’ of publicly traded investment houses (‘Wall Street’) who average $350,000 a year. The financial ruling class is made up of these multi-billionaire elites from the hedge funds, private and public equity bankers and their associates in big prestigious corporate legal and accounting firms. They in turn are linked to the judicial and regulatory authorities, through political appointments and contributions, and by their central position in the national economy.

Within the financial ruling class, political leadership does not usually come from the richest hedge fund speculators, even less among the ‘junior bankers’. Political leaders come from the public and private equity banks, namely Wall Street - especially Goldman Sachs, Blackstone, the Carlyle Group and others. They organize and fund both major parties and their electoral campaigns. They pressure, negotiate and draw up the most comprehensive and favorable legislation on global strategies (liberalization and deregulation) and sectoral policies (reductions in taxes, government pressure on countries like China to ‘open’ their financial services to foreign penetration and so on). They pressure the government to ‘bailout’ bankrupt and failed speculative firms and to balance the budget by lowering social expenditures instead of raising taxes on speculative ‘windfall’ profits.

The Dance of the Billions: Finance Capital Reaps the Profits from their Power

Speculators of the world had a spectacular year in 2006 as global equities hit double digit gains in the US, European and Asian markets. China, Brazil, Russia and India were centers of speculative profiteering as the China FTSE index rose 94%, Russia’s stock market rose 60%, Brazil’s Bovespa was up 32.9% and India’s Sensex climbed 46.7%. In large part the stock markets rose because of cheap credit (to speculate), strong liquidity (huge financial, petrol and commodity profits and rents) and so-called ‘reforms’ which gave foreign investors greater access to markets in China, India and Brazil. The biggest profits in stock market speculation occurred under putative ‘center-left’ regimes (Brazil and India) and ‘Communist’ China, which have realigned themselves with the most retrograde and ‘leading’ sectors of their financial ruling class.

Russia’s booming stock market reflects a different process involving the re-nationalization of gas and petroleum sectors, at the expense of the gangster-oligarchs of the Yeltsin era and the ‘give-away’ contracts to European/US oil and gas companies (Shell, Texaco). As a result huge windfall profits have been re-cycled internally among the new Putin era millionaires who have been engaged in conspicuous consumption, speculation and investment in joint ventures with foreign manufacturers in transport and energy related industries.

The shift toward foreign-controlled speculative capital emerging in China, India and Brazil as opposed to ‘national and state’ funded investment in Russia accounts for the irrational and vitriolic hostility exhibited by the western financial press to President Putin.

One of the major sources of profit-making is in the area of ‘mergers and acquisitions’ (M&A) – the buying and selling of multinational conglomerates, with $3,900 billion in deals for 2006. Investment banks took $18.8 billion dollars in ‘fees’ leading to multi-million dollar bonuses for ‘M&A’ bankers. M&A, hostile or benign, are largely speculative activity fueled by cheap debt and leading to the greater concentration of ownership and profits. Today it is said 2% of the households own 80% of the world’s assets. Within this small elite, a fraction embedded in financial capital owns and controls the bulk of the world’s assets and organizes and facilitates further concentration of conglomerates. The value of speculative M&A on a world scale is 16% higher than at the height of the ‘DOTCOM’ speculative boom in 2000. In the US alone over $400 billion dollars worth of private equity deals were struck in 2005, three times higher than the previous year.

To understand who are the leading members of the financial ruling class one needs only to look at the ten leading private equity banks and the value and number of M&A deals in which they were engaged:

Private equity rankings by M&A deals (Year to Dec 20 2006)


Value ($bn)Number
Texas Pacific81.911
Bain Capital Partners74.79
Thomas H Lee Partners53.46
Goldman Sachs51.25
Apollo Management44.97
Kohlberg Kravis Roberts44.53
Merrill Lynch35.93
Cerberus Capital Management28.64
Industry Total402.61,157

(Financial Times 12/27/2006 p13 - FT montage: Bob Haslett

The crucial fact is that these private equity banks are involved in every sector of the economy, in every region of the world economy and increasingly speculate in the conglomerates which are acquired.

In the era of the ascendancy of speculative finance capital it is not surprising that the three leading investment banks, Goldman Sachs, Lehman Brothers and Bear Stearns reported record annual profits, based on their expansion in Europe and Asia, and their transfer of profits from manufacturing and services to the financial sector. For the year 2006, Goldman Sachs (GS) recorded the most profitable year ever for a Wall Street investment bank, on the basis of big (speculative) ‘trading gains and lucrative investment in the world’s worst sweatshops in Asia. GS reported a 69% jump in annual earnings to $9.54 billion dollars. Lehman Brothers (LB) and Bear Stearns (BS) equity banks also recorded record earnings. LB earned a record $4billion for the year. SB earned a record $2.1 billion dollars. For the year Lehman set aside about $334,000 dollars per junior banker, while top speculators and bankers earned a big multiple of that amount.

For the year 2006 investment banking revenue reached nearly $38 billion dollars compared to $25 billion dollars in 2004 – an increase of 34% (Financial Times Dec. 13, 2006 p.15).

The dominance of finance capital has been nurtured by the speculative activity of the controllers and directors of state-owned companies. ‘State’ ownership is an ambiguous term since it raises a further more precise question: ‘Who owns the state’? In the Middle East there are seven state-owned oil and gas companies. In six of those companies the principal beneficiaries are a small ruling elite. They recycle their revenues and profits through US and EU investment banks largely into bonds, real estate and other speculative financial instruments (FT Dec 15, 2006 p.11). State ownership and speculative capital, in the context of closed ‘Gulf-State’ type of ruling classes, are complementary, not contradictory, activities. The ruling regime in Dubai converts oil rents into building a regional financial center. Many Jewish-American-led Wall Street investment banks cohabitate with new Islamic-based investment houses, both reaping speculative returns.

Much of the investment funds now in the hands of US investment banks, hedge funds and other sectors of the financial ruling class originated in profits extracted from workers in the manufacturing and service sector. Two inter-related processes led to the growth and dominance of finance capital: the transfer of capital and profits from the ‘productive’ to the financial and speculative sector and the transfer of finance capital overseas, in the form of take-over of foreign assets now equivalent of around 80% of the US GDP. The roots of finance capital are embedded in three types of intensified exploitation: 1) of labor (via extended hours, transfer of pension and health costs from capital to labor, frozen minimum wage, stagnant and declining real wages and salaries); 2) of manufacturing profits (through higher rents, inter-sectoral transfers to financial instruments, interest payments and fees and commissions for mergers and acquisitions); and 3) via state fiscal policies by lowering capital gains taxes, increasing tax write-offs and tax incentives for overseas investments and imposing regressive local, state and federal taxes.

The result is increasing inequality between, on the one hand, senior and junior bankers, public, private equity, investment and hedge fund directors, and their entourage of lawyers, accountants and, on the other hand, wage and salaried workers. Income ratios range between 400 to 1 and 1,000 to 1, between the ruling class and median wage and salary workers is the norm.

Crisis of the Working and Middle Class – (Begin to Worry the Ruling Class)

Living standards for the working and middle class and the urban poor have declined substantially over the past thirty years (1978-2006) to a point where one can point to a burgeoning crises. While real hourly wages in constant 2005 dollars have stagnated, health, pension, energy and educational costs (increasingly borne by wage and salary workers) have skyrocketed. If extensions in work time and intensification of work place production (increases in productivity) are included in the equation, it is clear that living (including working) conditions have declined sharply. Even the financial press can write articles entitled: “Why Ordinary Americans have Missed Out on the Benefits of Growth” (FT November 2, 2006 p.11).

Financial and investment banks are in charge of advising and directing the ‘restructuring’ of enterprises for mergers and acquisitions by downsizing, outsourcing, give-backs and other cost-cutting measures. This has led to downward mobility for the wage and salaried workers who retain their jobs even as their tenure is more precarious. In other words, the greater the salaries, bonuses, profits and rents for the financial ruling class engaged in ‘restructuring’ for M&As, the greater the decline in living standards for the working and middle class.

One measure of the enormous influence of the financial ruling class in heightening the exploitation of labor is found in the enormous disparity between productivity and wages. Between 2000 and 2005, the US economy grew 12%, and productivity (measured by output per hour worked in the business sector) rose 17% while hourly wages rose only 3%. Real family income fell during the same period (FT November 2, 2006 p.11). According to a poll in the fall of November 2006, three quarters of Americans say they are either worse off or no better off than they were six years ago (FT November 3, 2006 p.13).

The impact of the policies of the financial ruling class on both the manufacturing and service sectors transcends their profit skimming, credit leverage on business operations and management practices. It embraces the entire architecture of the income, investment and class structure. The growth of vast inequalities between the yearly payments of the financial ruling class and the medium salary of workers has reached unprecedented levels. The financial elite receives something in the range of a ratio of 500 up to 1000 times that of an average worker, depending on how narrowly or broadly we conceive of the financial ruling class.

Members of the financial ruling class have noted these vast and growing inequalities and express some concern over their possible social and political repercussions. According to the Financial Times (December 21, 2006), billionaire Stephen Schwartzman, CEO of the private equity group Blackstone warned “that the widening gap between Wall Street’s lavish pay packages and middle America’s stagnating wages risks causing a political and social backlash against the US’s ‘New Rich’”. Treasury Secretary and former CEO of Goldman Sachs, Hank Paulson admitted that median wage stagnation was a problem and that amidst “strong economic expansion many Americans simply are not feeling (sic!) the benefits” (FT November 2, 2006 p. 11).

Ben Bernanke, Chairman of the Federal Reserve Bank testified before the Senate that “inequality is potentially a concern for the US economy…to the extent that incomes and wealth are spreading apart. I think that is not a good trend” (Ibid). In 2005 the proportion of national income to GDP going to profits, rents and other non-wage and salary sources is at record levels – 43%. Inequality in the distribution of national income in the US is the worst in the entire developed capitalist world. Moreover studies of time series data reveal that in the US inequality increased far greater and intergenerational social mobility was far more difficult in the US than any country in Western Europe. The growth of monstrous and rigid class inequalities reflects the narrow social base of an economy dominated by finance capital, its ingrown intergenerational linkages and the exorbitant entry fees ($50,000 per annum tuition with room and board) to elite private universities and post-graduate business schools. Equally important, the political power of finance capital and its ‘associated’ conglomerates wield uncontested political power in the US in comparison to any country in Europe. As a result the US government redistributes far less through the tax and social security, health and educational system than other countries. (ibid)

While some financial rulers express some anxiety about a ‘backlash’ from the deepening class divide, not a single one publicly supports any tax or other redistributive measures. Instead they call for increases in educational up-grading, job retraining and greater geographical mobility, though it is precisely among the educated middle class which is suffering salary stagnation.

Neither the Democratic Party majority in Congress, nor the Republican-controlled Executive offer any proposals to challenge the financial ruling class’s dominance nor are there any proposals to reverse its most retrograde policies causing the growing inequalities, wage stagnation and the increasing rigidity of the class structure. The reason has been reported in the Wall Street Journal and the Financial Times: An overwhelming chunk of the funds that Democrats raise nationally for election campaigns comes either from Wall Street financiers or Silicon Valley software entrepreneurs. (FT November 3, 2006 p. 13). The Democratic congressional electoral campaign was tightly controlled by two of Wall Street’s favorite Democrats, Senator Charles ‘Israel First’ Schumer and Congressman Rahm Immanuel, who selectively funded candidates who were pro-war, pro-Wall Street and unconditionally pro-Israel. Democrats slated to head strategic Congressional committees like Zion-Lib Barney Frank have already announced they have ‘good working relations’ with Wall Street.

The Financial Ruling Class Also Governs

Ruling classes rule the economy, are at the top of the social structure and establish the parameters and rules within which the politicians operate. More often than not few actually engage directly in congressional politics, preferring to build economic empires while channeling money toward candidates prepared to do their bidding. Only when an apparent division occurs, especially within the Executive, between the interests of the ruling class and the policies of the regime will elite members of the ruling class intervene directly or take a senior executive position to ‘rectify’ policy.

Ruling Class Political Power: Paulson Takes Over Treasury

Several sharp divergences occurred during the Bush regime between finance capital and policymakers. These policies prejudiced or threatened to seriously damage important sectors of the financial ruling class. Theses include: 1) the aggressive militarist and protectionist policies pursued by senior Pentagon officials and ‘Zion-con’ Senators toward China; 2) the political veto by Congress of the sale of US port management to a Gulf State-owned company and of a US oil company to China; 3) the failure of the Bush regime to secure the privatization of social security and to weaken the regulatory measures introduced in the aftermath of the massive corporate (Enron and World Com) and Wall Street swindles and 4. the need to put a check on the uncontrolled growth of fiscal deficits resulting from the Middle East wars, the ballooning trade deficits and the weakening dollar.

The headlines of the financial press (FT December 4, 2006 p.3) spell out finance capital’s direct intervention into key White House policy making:

“Goldman Sachs Top Alumni Wield Clout in White House”and“Former Bank Executives Hold Unprecedented Power within a US Administration”

US financial and manufacturing ruling classes have long influenced, advised and formulated policy for US Presidents. But given the stakes, the risks and the opportunities facing the financial ruling class, it has moved directly into key government posts. What is especially unprecedented is the dominant presence of members from one investment bank – Goldman Sachs. In late November 2006, Goldman Sachs (GS) senior executive William Dudley took over the Federal Reserve Bank of New York markets group. Hank Paulson, ex-CEO of GS is Treasury Secretary – explicitly anointed by President Bush as undisputed czar of all economic policies. Reuben Jeffrey, a former GS managing partner is the chief regulator of commodity futures and options trading, Joshua Bolten, White House Chief of Staff (he decides who Bush sees, when and for how long – in other words arranges Bush’s agenda) served as GS executive director. Robert Steel, former GS vice chairman, advises Paulson on domestic finance. Randall Fort, ex-GS director of global security, advises Secretary of State Rice. The ex-GS officials also dominate Bush’s working group on financial markets and financial crisis management. The investment bankers wielding state power will control the Bush regime’s biggest housing giants (Fannie Mae and Freddie Mac), tax policy, energy markets – all issues that directly affect the investment banks. In other words, the financial banks will be ‘regulated’ by their own executives. The degree of finance capital’s stranglehold on political power is evidenced by the total lack of criticism by either party. As one financial newspaper noted: “Neither Mr. Bush nor Goldman have been criticized by Democrats for holding too many powerful jobs in part because the investment bank (GS) also has deep ties to Democrats. Goldman represented the biggest single donor base to the Democrats ahead of this (2006) year’s mid-term election”. (FT December 4, 2006)

Among Paulson’s first moves was to organize a top level delegation to China and a working group to work on forming a ‘strategic partnership’. Its task is to accelerate the ‘opening’ of China’s financial markets to penetration and majority takeovers by US operated investment funds. This represents a potential multi-trillion dollar window of opportunity. By seizing the initiative Paulson hopes to undercut the anti-China cohort of neo-con, Pentagon and White House militarists, as well as backwater backers of Taiwanese independence and Congressional chauvinist demagogues like Senator Schumer who threaten to undermine lucrative US-Chinese economic relations.

To lower the fiscal deficit, Paulson proposes to ‘reform’ entitlements - reduce spending on Medicare and Medicaid and to work out a deal with the Democrats to privatize Social Security piecemeal.

Where finance capital has not been able to fashion a coherent economic strategy is with regard to Washington’s Middle East wars. Because of the pull of the Zionist Lobby on many of leading lights of Wall Street – including its unofficial mouthpieces – the Wall Street Journal and the NY Times – Paulson has failed to formulate a strategy. He sis not even pay lip service to the Baker Iraq Study Group report’s proposal to gradually draw down troops for fear of alienating some key senior executives of Goldman Sachs, Stern, Lehman Brothers et al who follow the ‘Israel First’ line. As a result, Paulson has to work around the Lobby by focusing on dealing with the Gulf city-state monarchies and Saudi Arabia in order to avoid another disastrous repetition of the Dubai Port management sale. Paulson above all wants to avoid Zionist political interference with the two way flow of finance capital between the petrol-financial-banking complexes in the Gulf States and Wall Street. He wants to facilitate US finance capital’s access to the large dollar surpluses in the region. It is not surprising that the Israeli regime has accommodated their wealthy and influential financial backers on Wall Street by drawing a distinction between ‘moderate’ (Gulf States) with whom they claim common interests and ‘Islamic extremists’. Israeli Prime Minister Olmert has directed his zealots in the US-Jewish Lobby to take heed of the refinements in the Party Line in dealing with US-Arab relations.

Nevertheless with all its concentrated political power and its enormous wealth and economic leverage over the economy, Wall Street cannot control or avoid serious economic vulnerabilities or possible catastrophic military-political events.

The Future of the Financial Ruling Class

What is abundantly clear is that one of the main threats to world markets – and the health of the financial ruling class – is an Israeli military attack on Iran. This will extend warfare throughout Asia and the Islamic world, drive energy prices beyond levels heretofore known, cause a major recession and likely a crash in financial markets. But as in the case of the relationships between Israel and the US, the Zionist Lobby calls the shots and its Wall Street acolytes acquiesce. As matters now stand, the Jewish Lobby supports the escalation of the Iraq war and the savaging of Palestine, Somalia and Afghanistan. It has neutralized the biggest and most concerted effort by big name centrist political figures to alter White House policy. Baker, Carter, former military commanders of US forces in Iraq have been savaged by the Zionist ideologues. Under their influence the White House is putting into practice the war strategy presented by the ‘American’ Enterprise Institute (a Zioncon thinktank). As a result parallel to Bush’s appointment of Paulson and Wall Streeters to run imperial economic policy, he has appointed an entire new pro-war civilian military-security apparatus to escalate and extend the Middle East wars to Africa (Somalia) and Latin America (Venezuela).

Sooner or later a break between Wall Street and the militarists will occur. The additional costs of an escalating wars, the continual ballooning debt payments, huge imbalances in the balance of payments and decreasing inflows of capital as multi-national repatriate profits and overseas central banks diversify their currency reserves will force the issue. The enormous and growing inequalities, the massive concentration of wealth and capital at a time of declining living standards and stagnant income for the vast majority, gives the financial ruling class little political capital or credibility if and when an economic and financial crisis breaks.

With foreign investors owning 47% of all marketable US Treasury bonds in 2006 compared to 33% in 2001 and foreign holdings of US corporate debt up to 30% today, from 23% just 5 years ago, a rapid sell-off would totally destabilize US financial markets and the economic system as well as the world economy. A rapid sell-off of dollars with catastrophic consequences cannot be ruled out if US-Zionist militarism continues to run amuck, creating conditions of extended and prolonged warfare.

The paradox is that some of the most wealthy and powerful beneficiaries of the ascendancy of finance capital are precisely the same class of people who are financing their own self-destruction. While cheap finance fueling multi-billion dollar mergers, acquisitions, commissions and executive payoffs, heightened militarism operates on a budget plagued by tax reductions, exemptions and evasions for the financial ruling class and ever greater squeezing of the overburdened wage and salary classes. Something has to break the cohabitation between ruling class financiers and political militarists. They are running in opposite directions. One is investing capital abroad and the other spending borrowed funds at home. For the moment there are no signs of any serious clashes at the top, and in the middle and working classes there are no signs of any political break with the two Wall Street parties or any challenge to the militarist-Zionist stranglehold on Congress. Likely it will take a catastrophe, like a White House-back Israeli nuclear attack on Iran to detonate the kind of crisis which will provoke a deep and widespread popular backlash of all things military, financial and made in Israel.

James Petras is author of 18 books on politics. He is a member of the Canadian Dimension collective.


January 15, 2007

[Truth To Power is pleased to announce the addition of several new authors of articles to be featured on Baker's Blog in this location on the site. Our first is by William Kotke.--CB]

The planetary elite are compelled to continue on their path of growth leading toward planetary domination. The international bankers through their control of the industrial world's privately owned central banks maintain a tether on the money system through their control of the U.S. dollar as the currency of international trade. One important mechanism that allows this is that the largest item in international trade - oil - is sold in dollars. In order to insure the continuance of the dollar economy, they must be able to choose which currency oil is sold for or control the oil - or both. The center of the empire, the U.S., is maintained by debt as the petrodollars and other dollars come into the U.S. at the rate of at least two-and- a-half billion per day (purchasing U.S. government bonds) in order to continue the cycle, which keeps the empire and its military power expanding As the elite carry out their strategies of domination they are racing against time. The monster trends of Peak Oil and energy exhaustion, climate change-- which will severely disrupt the seasons of growth in the food supply system, the weakness of the dollar and ecological collapse are pursuing them. An exponentially growing world population with growing material consumption based on dwindling resources and a dying planet won't work, but they have no other option to maintain their power and profit.

Seeds of Change

As the industrial system spins toward exhaustion, seeds of change are sprouting at the base. The people at the base are not revolting in order to take the power that the elite have but are revolting to take power over their own lives. In Argentina, after the Neoliberal apparatchiks collapsed the economy and devastated the middle class leaving massive unemployment, the workers began to take over the factories and run them themselves, with all employees receiving the same wage. The great documentary, "The Take", details the story of one factory take-over by the employees against a background of over two hundred factory take-overs. Earlier, the people at the base had begun to move when the courageous Mothers of the Plaza de Mayo began to organize and demonstrate. These were women who had family members disappeared and were demonstrating in the face of a vicious fascist military dictatorship which is estimated to have murdered at least thirty thousand people. The courage of the mothers was an important factor in bringing down the fascists and spreading courage and inspiration to the working people.

The economy had crashed under the military dictatorship and then after electoral politics was reorganized, the economy revived to some extent and then it crashed again under the auspices of the Neolibs in the IMF and World Bank. President Carlos Menem who had acquiesced to them was tagged as the culprit.

In the final scenes of the documentary, "The Take", Menem had gone down in disgrace, and a new election was being prepared. Suddenly, the new factory worker/owners saw that the political class had gone down to central casting and thrown up a slate of the same tired old political characters. Even Menem ran again, though Nestor Kirchner won.

When the film makers questioned the worker/owners about this they symbolically shrugged their shoulders. The machinations of electoral politics performed by the political/financial class had become only marginally relevant to them. They had taken power in their neighborhoods, on the factory floor, and in the head office.

The Mondragon Cooperatives

The Basque people exist in Northern Spain, centered in the Pyrenees mountains. Their culture and population exist partly in France and partly in Spain. They are an ancient people and one of only several peoples of Europe who have a language that is not Indo-European, the grain-eating patriarchal herders who invaded Europe from Central Asia thousands of years ago. The Basque culture, centered in the mountains, is land-based in small, fertile, productive farms and hamlets. Though cities and towns have grown up in some areas, the cultural roots exist in a system in which each small farm was inherited within the famil, and the surname of each member of the family was the same as the ancient name of the farm. This and the manner of farming and interaction were inherited from the ancient past.

In addition to the land-based culture, the Basques in the Twentieth Century had become significant industrialists with their iron mines, industries, and international trade. This was mixed with the chaos of the Spanish Civil War and the establishment of Francisco Franco as the head of the Spanish fascist state. The economic environment was not welcoming to innovation during the Franco regime as the fascist state was led by financiers and politicians who had a foot in both realms much like in the present United States. Nonetheless, the Mondragon cooperative movement grew out of this soil. As described in the classic study, We Build The Road As W e Travel, by Roy Morrison, eleven young people purchased a small bankrupt factory that produced paraffin cooking stoves. The year was 1954. Since that time the Mondragon cooperative movement has grown to tens of thousands of workers and dozens of enterprises networked together and anchored by their own bank the Caja Lboral Popular, owned by the enterprises.

Growing out of this context, the individuals are not simply farm cooperative workers, industrial workers or even bank workers, but the movement has a wider and deeper reach. One of the guiding principles of the movement is equilibrio. Morrison says:

The Mondragon cooperative system is informed by an essentially ecological consciousness. Ecology, conventionally defined as the relationship of living things to their environment, is understood here to encompass social as well as biological reality and their interaction. Today, Mondragon=s ecological consciousness is manifested not primarily through environmentalism, but through the practice of a social ecology: the pursuit of equilibrio is fundamentally connected to the basic ecological principle of diversity and unity, or, in social terms, freedom and community. Its promise is basic change that will harmonize both social life and the relationship between the social and natural worlds.

Writer Steven Curtis Jackobs says, " Basque leadership styles are non-authoritarian, involve consensual processes, and are aimed at harmonizing the group's feeling for collective ends with possible suspicion and lack of trust. A neighborhood=s elected representative does not simply wield power, but builds consensus for group projects. This process often encounters problems of suspicion arising from individual and class differences. These are reflected in the relative difficulty of establishing agricultural cooperatives and point to the non-utopian nature of the Basque situation."

Ten percent of the cash flow of the network is invested in the communities and in charitable institutions, while another principle is to maintain as little spread between the bottom wage and the top as possible. In this amazing movement from the base, coming out from under a fascist political/financial class as it did, the Mondragon cooperatives show a way to build resilient community social institutions. This social health will be valuable as we head into the future of the exhaustion of industrial society and its fragmentation.

These areas are only a portion of the movement of people at the base who are acting to protect and enhance their communities even under the trampling impact of raw industrial capitalism. India especially, has a number of home-grown movements attempting to protect and strengthen their local social fabric. One would be remiss not to mention the cooperatives of the state of Kerala in India and of the many grassroots movements that the amazing eco/feminist Vandana Shiva has been associated with and has publicized.

Beyond Oil

In 2003, Richard Heinberg published his seminal book, The Party's Over: Oil, War and the Fate of Industrial Societies. His study concerns the observation that the production of crude oil will peak and then begin to decline to its end. At this point most of the oil producing countries of the world have declining production. Heinberg, who is a faculty member at New College of California, Santa Rosa campus, projects that we are now at the peak of world production of crude oil. This, as he suggests, will have immeasurable impact on the exponentially exploding world population living on oil. He also suggests that this will collapse the capitalist economies which must have growth in order to survive.

Following the publication of his book, he and others who were also following these trends have swung into action to notify the world=s populations of the impending apocalypse. Many are now involved. The flagship organization of this effort is the Post Carbon Institute, led by Julian Darley. Under the umbrella of this organization a Relocalization network has been organized, . The effort of these local groups is to examine and take action concerning the local community life support systems with the obvious view that soon the outside energy supports will decrease or stop.

With amazing speed this network has mushroomed. There are now 138 community groups in twelve countries. The relocalization group in Willits, California, is one of the cutting edge points. Their project teams are assessing and taking action on all points of the community=s survival support areas. Their teams are focused on eight areas; business, culture/education, energy, food, health, shelter, transportation and water.

Each of their project team's focus is quite comprehensive. For example the Business project team's focus is, a Sustainable Mix of Businesses in our area, Business Financing, Small Business Incubation, Finding productive uses of Waste Streams from Business (preferably as raw material for another businesses), Employment, Vocational Training, Local Market Structures, Local Currency, and Bartering Systems.

Their Food project team at this point has three areas on which they focus: The Mainstreet Community Garden, the Gleaners and Brookside Energy Farm, Willits, California | Energy Farm. This year the Gleaners have collected tons of food from the local area and donated it to local charities and food banks. Their Brookside farm is in full production, and a salient point there is the installation of a micro-hydro system.

We all know the numbers of the percentage of the population in the old days who were agrarian and produced food and the small percentage now who produce the food for industrial citizens. We are members of the industrial society. We purchase our survival systems with money. We do not go out to the back forty and cut some wood for our wood cookstove and heater. We are a population whose survival systems are huge organizations that stretch to ethereal heights which we cannot see and only vaguely understand and over which we have little control. But the base is moving to protect itself and the relocalization effort offers great encouragement.

William Kotke is widely traveled and published. His most recent book, prior to Planet Garden: The Present Phase Change Of The Human Species, was the underground classic, The Final Empire: The Collapse of Civilization and the Seed of the Future. He has been a journalist, a radio script writer, a pamphleteer, a novelist, an essayist, and has had many articles published in periodicals.


January 14, 2007

By Joe Martin

An interview with William Pepper, King family attorney


There's a good chance that you missed the trial of the century, the twentieth century, that is. It took place in Memphis, Tennessee in 1999. It was a civil trial in which a jury comprised of six whites and six blacks heard four weeks worth of testimony from 70 witnesses and concluded, after deliberating for about an hour, that elements of the government of the United States conspired to murder Martin Luther King Jr., whose family was awarded damages totaling $100. There was some mainstream media reaction: mostly to disparage the evidence, or to completely dismiss the trial and its disturbing conclusions. There were few, if any, comments from elected officials at any level of government. The silence, as they say, was deafening. This extraordinary civil trial would never have happened if not for the courage and persistence of one man: William F. Pepper. An American lawyer, an expert on international human rights, and a seminar leader on that subject at Oxford University, Pepper became close to King during the last year of his life. It was the insanity of Vietnam that brought the two men together.

During the Vietnam War, Pepper journeyed to that battered Asian land, and out of his experience he rendered a powerful essay, The Children of Vietnam. The piece appeared in the journal Ramparts in January, 1967. Up until that time, King and Pepper had never met. On perusing that issue of Ramparts, King encountered Pepper's shocking photos: Vietnamese children, horrifically scorched by napalm dropped from US planes. King was sickened by what he saw. He had long been very uncomfortable with the war, and Pepper's article convinced King that the time had come for him to formally declare his opposition to the madness. Though it would anger and upset many of his closest supporters, it was a step King now felt utterly compelled to take. And King well knew it was a step fraught with risk.

On April 4, 1967, exactly one year before his assassination, King gave his eloquent Riverside Church speech in which he came out unconditionally against the war in Vietnam. In the course of the strenuous year ahead, King would consider a run for the presidency as an alternative peace candidate to the two major parties. And he would begin laying the groundwork for his most radical and far-reaching campaign to date: the Poor People's Campaign. All would be shattered when a shot rang out on an April evening in Memphis in 1968. That fatal shot is still echoing throughout our world, a world immersed in the cauldron of military madness while the wretched of all the earth, by the hundreds of millions, go homeless, go hungry, and die of disease and despair. Pepper was in Seattle recently to discuss the implications of King's assassination and the civil trial he helped to bring about, all of which are examined in detail in his stunning new book An Act of State, The Execution of Martin Luther King (Verso, 2003).

Joe Martin: The official story pertaining to Martin Luther King's death is that a lone gunman, a criminal and racist named James Earl Ray, took one rifle shot at King and succeeded in killing him. Ray, the story goes, managed to flee the scene of the crime and for over two months avoided arrest until he was apprehended in England. Eventually, he confessed to the crime and remained imprisoned until his death a few years ago. End of story. What lead you to question this scenario? William Pepper: Oh, I didn't question it right away; in fact, I pretty much accepted the tale that James was the shooter, acting on his own, and that there was little else to prove. Deeply saddened and discouraged, I'd left politics entirely after Martin's death. It wasn't until 1977 that I became aware that something was not right about the official line.

What rekindled your interest?

Martin's old friend, Ralph Abernathy, called me and said that he wanted me to go with him to talk to Martin's alleged killer. This took me by surprise, but I told Ralph that I would go along. Prior to our meeting, I decided to read up on the case. I was frankly intrigued on first encountering James. It turned out that he was not a vehement racist, and, interestingly, he knew little about guns. In fact, he told me that he once had shot himself in the foot. He was rather shy and docile in his demeanor. In 1969, days after he confessed to the crime, James made a retraction and declared his innocence. Right then, he asked for a trial. James had been given very inept legal assistance at that time. During our first meeting in 1977, I heard from James a very different story about the death of King. I began to wonder if the official story we'd been told about Martin's death might be less than truthful. And at this first meeting, we had even brought along a body language specialist from Harvard. We wanted this specialist to observe our interview and tell us if there was anything suspicious in James' expressions that might indicate he was conning us. There wasn't anything. When it was over, the meeting had lasted five hours, both Ralph and I concluded that James had not killed Martin. At that point, I began my own investigation into Martin's assassination. Eventually, years later, I would become James' attorney.

What did you unearth as you undertook your own investigation?

I found out a lot that I had not expected to find. In the post-9/11 age, every American citizen needs to know about the shadowy political underside of this nation. The real story behind Martin's death lays bare this violent and anti-democratic underside. By 1968, Martin had become a true nonviolent revolutionary. He had moved his focus from civil rights to human rights. He had come out firmly against the war in Vietnam. He wanted to restore critical domestic programs hindered by the siphoning off of dollars for the war. He wanted to help bring about a peaceful social revolution in the United States. Martin wanted to restructure the economic apparatus of American society. He wanted to work for the redistribution of wealth in this country. He was about to challenge the fundamentals of American capitalism. It was the greatest risk he ever took. He would be killed as a result.

How was King going to undertake this challenge?

He devised the idea for a Poor People's Campaign that would culminate with a march on Washington, DC. Martin envisioned half a million impoverished Americans of every color, the wretched of the republic, and their supporters pouring into the nation's capital to demand economic justice, an end to their suffering. This vast panoply of the poor would not simply march and demonstrate for a day or two and then disperse. They would stay indefinitely in DC. They would encamp, become an extensive tent city, and reside in the capital of the United States until the federal government met their demands. This proposal caused some people in Washington to absolutely panic. The US Army was convinced that the indigent throng would soon transmogrify into an angry and rebellious mob. There was no way those in power were going to allow this to happen. Martin would be killed first.

So if James Earl Ray didn't do the killing, who did?

Around the time Ralph and I met James, the government itself was reinvestigating the deaths of both Martin and John F. Kennedy. The House Select Committee on Assassinations concluded that there was no conspiracy to kill King. But the many volumes of evidence and related materials pertaining to Martin's death were a trove of information, of leads that should have been followed up. Predictably, the Department of Justice was indifferent. The government accepted the conclusions and dissolved the Committee. Most Americans, of course, were unlikely to pore over this wealth of material that contained a lot of troubling questions. I was determined to find out the answers. I had concluded that James was innocent, that he was set up to be the fall guy. Eventually, after many years of thorough investigation and analysis, I would conclude that Martin Luther King was assassinated by individuals in the Memphis Police Department and underworld figures, all working in some sort of coordination with covert factions of the US government and military.

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