agog

The Age of Turbulence, Alan Greenspan, 2007

Memoirs of a Naive City Kid
Confessions of a Naked Bad Numbers Ideologue Zealot
Pray with us to the Invisible Hand that Steadies the Economy

Was there something about George Washington High School where Alan Greenspan and Henry Kissinger were classmates that produces ethically challenged citizens with zero empathy?

Enrolled in a PhD program at Columbia in 1950, Greenspan apparently managed to navigate the campus without meeting a single liberal professor. His doctoral adviser Arthur Burns admonished his students “Excess government spending causes inflation.” Greenspan learned econometrics which he treats like a religion from Jacob Wolfowitz, father of Paul, architect of the new Iraq and discredited former president of the World Bank. Not satisfied with his conservative professors in the liberal hotbed that was Columbia see, Greenspan develops a thirty year admiration for Ayn Rand and still calls himself a libertarian Republican. Greenspan was sorry that Soviet hating Rand did not live to see the economic collapse of the Soviet Union. Greeenspans spends many pages gloating over the demise of central planning on her behalf. He particularly enjoyed Putin’s economic adviser wanting to talk to Greenspan about Rand.

On the origins of Greenspan’s notorious Fedspeak, he offers this book inscription written by his father:

May this my initial effort with constant thought of you branch out into an endless chain of similar efforts so that at your maturity you may look back and endeavor to interpret the reasoning behind these logical forecasts and begin a like work of your own.

The skill is obviously inherited. On his honeymoon:

Venice, I realize is the antithesis of creative destruction. It exists to conserve and appreciate a past, not create a future… The city caters to a deep human need for stability and permanence as well as beauty and romance… Silicon Valley is without question an exciting place to work, but its allure as a honeymoon destination has, I would guess, thus far gone largely unrecognized.

Chinese learn creative destruction during .com bust

He spends a lot of time talking about creative destruction as a driving force for economic expansion. It is a little like Blood and Guts Patton’s grunt’s comment; “Yeah, his guts, my blood.” The costs of creative destruction are largely borne by the worker, the little guy who gets crushed in the process. Yet Greenspan is highly skeptical of social safety nets to protect the falling workers. He talks about cultural differences where Germany, France, Italy, and Japan are more sensitive to the plight of the workers. He seems proud that Americans can be so indifferent to suffering in the greater interest of economic expansion.

Greenspan becomes FED Chairman 3 days before Black Monday. Guess he didn’t have time to perfect his Fedspeak yet.

He formed a close working relationship with Clinton’s Bob Rubin and Larry Summers and the Clinton era resulted in record budget surpluses projected to increase indefinitely into the future. By 2006, the national debt would be totally paid off. Greenspan and Bush’s about to be fired treasury secretary Paul O’Neill worried about what to do with the huge surplus. It is strange that someone who can’t figure out what to do with the government surplus strongly recommends private social security accounts where every busy American gets to figure out how to invest his surplus (retirement funds), especially since the retiree won’t be able to borrow his way out of a fiscal mess and will starve if they guess wrong.

Evidence of his incredible political (and social) naivety is given in this summation from the New York Times in 2001 concerning his testimony to Congress:

Just as his hedged backing of Mr. Clinton’s plan provided invaluable political cover… as [the Democrats] voted to increase taxes, his guarded endorsement of a tax cut today gave new impetus to the efforts by Republicans to push thought the biggest tax cut since the Reagan administration.

A monumental failure of econometric measurement and projection was about to occur. Tax Receipts for 2002 shrunk from estimates by $376 billion. Of this only $75 billion could be attributed to Bush tax cuts. Most of the rest was due to blown estimates of revenue from capital gains as stocks went south taking stock options with them. A projected debt to the public of $1.2 trillion under Bush policies, by 2006, turned into a debt of $4.8 trillion. Oops! That’s a 400% projection error! No apologies.

Most of what supported consumer spending through this period was housing. Greenspan lauds the increase in home ownership to 69% in 2006 due to low mortgage interest rates while seemingly overlooking the sub prime variable rate mortgages that from the very beginning were ticking time bombs. So much for an econometrician’s forecasting ability.

Shenzhen Built by FDI

Greenspan spends several chapters gloating over the failures of socialism in Europe and India and the collapse of central planning in the Soviet Union and Eastern Europe. He spends several chapters on China, the Asian Tigers, and India, where economic progress is almost all due to direct foreign direct investment (FDI) which requires special zones and protection of property rights (profits) whereby foreign capital can take advantage of local low wages. Vietnam is the current record holder of highest ratio of FDI to GPD at 61%. India is 6%, Pakistan is 9% China is 14%. The Asian economic miracle is all about foreign capital seeking cheap labor.

His Latin American chapter is largely a lament that populism which led to such reforms as nationalized oil in Mexico in the 30’s and in Venezuela today has had such dire consequences throughout the region. Despite huge disparities in wealth between the few and the many, capitalism should be allowed to play out for the good growth of the economy. He forgot to mention that a rising tide raises all boats (and drowns the vast majority of the population without life rafts). Fedspeak apparently doesn’t allow mantra spouting.

He also talks a lot about a phenomenon known as the Dutch disease whereby any country with a valuable natural resource such as gold, diamonds, or oil has its economy skewed as a result as is economically harmed by the resulting distortions. The affected country’s foreign exchange value of its currency is driven up making other exports less competitive. Even Britain was affected by North Sea oil in this way.

Here are highlights from his more misguided pronouncements and predictions (I’m 81. I was paid $8 million to write this. What do I care.)

On Health Care and Medicare He has clearly not read The Health Care Mess. Based on state studies, it is estimated that 25% of health care costs go directly to HMOs that produce no health care. So 4% of GDP may go directly to an administrative function of no benefit to the health of the nation and even worse that inhibits access to health care. If this is correct, then HMOs consume the same portion of our wealth as our entire military industrial complex, that is, defense. Greenspan, the numbers man with 18 years unique access to detailed actual numbers, should know this but doesn’t talk about it. Instead:
* The cost of health care is being driven up by technology (No supporting evidence.)
*The Boomers will bury the Medicare program. It will need extensive gutting with 100% copays (HMOs pocket the government subsidy and the patient pays everything!)
On Increased Income and Wealth Disparity
* Hope that growing dissatisfaction doesn’t lead to populism and policies that might ruin the economy.
* Import more educated work force from abroad who will be grateful for their pittance pay.
On Energy from Oil He obviously has not read Twilight of Oil
* Oil production will peak in 2050. (Sorry, it has already peaked)
* Speculators control of oil supplies has grown sixfold in the last 2 years. Speculators stabilize supply and prices. (You’re kidding?)
* A stable Iraq will produce large quantities of oil. (Yeah, right!)
* OPEC has 3/4 of the world’s oil reserves led by Saudi Arabia’s 260 billion barrel reserve. (Reserves are mythical.)
* Exploration will find more oil. (The last major finds were made in 1969. Clinton bit on this one.)
* Domestic oil producers should invest in refineries (Why, when oil is running out?)
* We will never ween ourselves of oil. (We will when we run out.)
On Alternate Energy He has obviously not read Oil and Alternatives
* Build more nuclear power plants (Ignore the shortage of nuclear fuel.)
* Wind and solar is good only for small scale deployment. (No evidence.)
* The market is buying fuel efficient cars (Have you visited an SUV infested shopping mall parking lot lately?)
* Hybrids are too quiet. (He recommends adding big engine sound effects.)

Windmill Dike

On Global Warming
* Build dikes. The Dutch have done it for years. (He’s not kidding!)
* Rename Glacier Park
* We will never reduce greenhouse gas emissions. (Live or die by those fossil fuels.)
* Hurricane Katrina disrupted our oil supply.

Enron Award 2001

Greenspan was awarded the Enron Prize in 2001 as the company collapsed. Having served on many board of directors for fortune 500 companies, he is not at all critical of interlocking directors, CEO appointed board members, the insider racket that is modern corporate top management, only of management that can’t make a profit.

On Corporate Governance
* If Corporations make huge profits why shouldn’t CEO’s get huge rewards.
* Sarbanes-Oxley that makes the CEO liable for accounting fraud goes too far.
* Whistle blowers are the best way to expose bad governance. (And ruin the whistle blower)
* The best way to remove bad management is the corporate takeover, probably hostile.

Greenspan is a throwback with his Adam Smith invisible hand and Ayn Rand brand of liberalism. The invisible hand is his crutch for explaining all the things he doesn’t understand and all the monetary policy moves that failed during Paul Volcker’s and Greenspan’s terms as FED chairmen. Volcker tried everything to control inflation and at the end we still had speculators in Miami buying condominiums with 18% mortgages and 12% savings accounts. When inflation and interest finally dropped, the Savings and Loan industry collapsed and Black Monday happened.

When Long-Term Capital Management was collapsing in 1998 Greenspan and the Fed along with Rubin and Summers called on Wall Street giants to rescue the ailing hedge fund monster. When do you sit back and watch the invisible hand at work like the Savings and Loan collapse and when do you step in to intervene in the madness? For evidence that the global economy may be shakier than we think see the Shaky Globe.

Greenspan doesn’t discuss Republican runaway spending and record deficits as playing a role in leveling the market plunge after the dot com bust. Eventually, without any apparent help from monetary or government policy, the invisible hand of the benevolent father reached down to rescue and stabilize the economy. If you can’t believe your numbers and models and your political party abandons your principles, you have to believe something. You can be an idealogue where mere facts don’t matter, or you can be an econometric numbers man. You can’t be both and judging from this book, Greenspan chose to be an idealogue.

Adam smith himself only mentions the invisible hand three times but true believer Greenspan calls on it at least seven times in his book, almost like a prayer.

The modern libertarian looks, not to Adam Smith and Ayn Rand for inspiration but to John Nash and his disciples. The game theorists devised artificial adversarial games that could be analyzed mathematically. They found that the outcomes of their games were maximized when every player acted according to their individual self interest. Game theory was quickly adopted by libertarians and applied to economics. Charles Wilson old “What’s good for General Motors is good for the country.” was transformed by game theory libertarians into “What’s good for a country’s greedy corporate managers is good for the country.” Individual greed benefits everyone. For a frightening look at the effects of metricizing everything and applying the adversarial game theory approach pioneered by John Nash and first applied to economics see The Trap.

Greenspan is someone who made numbers almost a religion. How could he get so many numbers so wrong for so long? And why are so many pronouncements without statistical support? And why aren’t the reviews calling him on his errors and omissions? How could he be so audacious, with his track record, as to predict the future which he does in the final chapter The Delphic Future? This oracle is blind.

Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, Matthew R. Simmons, 2005

Here’s a sleeper only discovered after watching the recent Sundance channel apocalyptic documentary A Crude Awakening: the Oil Crash which heavily featured comments by energy expert Matthew Simmons.

A Crude Awakening makes some startling revelations about alternate energy sources. Hydrogen fuel is 50 years away from solving the problems of production, storage, and distribution. Hydrogen today requires five times the energy to produce that it supplies. If all automobiles in the world were replaced by hybids tomorrow, the oil supply would extend another two years at best. Replacing current electric generation facilities with nuclear power would require the building of 10,000 nuclear generators that would run out of fuel in 10 years, far sooner than oil. Biofuels have the potential to replace only a negligible quantity of oil. The apocalyptic documentary points out that we are now dependent on oil not only for power, transportation, and heat, but for the very food supply needed (chemical fertilizers) to support our exploding population. Ironically, without oil, the crops needed to produce biofuel cannot be grown. Solar energy is virtually the only viable alternative, but solar energy will require massive investments in research to make it viable on a large scale. Today solar energy is half the efficiency of oil but will soon be as efficient to produce. Wind power is also economically viable but not on a large scale.

Without oil we may be reduced to the population and lifestyles that existed at the beginning of the 20th Century. But evolution only goes one way; forward. What will life look like without oil? If global warming doesn’t get us first, we’re about to find out.

A Crude Awakening openly accuses the Bush administrations of starting a very expensive war in Iraq simply to assure access to a continuing supply of Middle East oil. Oil at any cost. Future and continuing oil wars as oil becomes scarce are one of the forecasts of the documentary.

We have now come to understand that Sadam’s weapons cache was a figment of our brilliant intelligence imaginations. To the people who got us into the Iraq war, the important intelligence probably did not concern the mythical weapons at all but concerned the equally mythical 115 billion barrel proven Iraqi oil reserve. Yet the Kirkuk oil field was discovered in 1927 and is now 78 years old, poorly maintained, and damaged repeatedly by sabotage. It is very unlikely there is anything approaching 115 billion barrels of proven reserve oil in Iraq. Evidence from next door Kuwait is that the world’s best technology from Chevron-Texaco has been unable to revive production in old fields.

Matthew R. Simmons is an oil expert and an industry investment insider. His book does not deal with the environmental impact of oil consumption such as global warming see and here. In fact his only mention of environmentalists is to note their impact on U.S. oil exploration on both coasts and Alaska. No, here is an expert calling attention to the failure of other so called energy experts to understand much less predict the future of oil exploration, production, and demand beginning with the start of big oil after WWII. The failures of the experts to understand oil rivals the failures of the CIA to understand the world over the same period.

Abd al-`Azīz Āl Sa`ūd 1876-1953 First King of Saudi Arabia father of all kings

In the 1930’s oil sold at the unbelievable price of 10 cents a barrel. When oil stabilized at around $1 a barrel after WWII, experts predicted worldwide economic collapse if oil ever went above this level. The brief OPEC oil embargo of 1973 sent prices to $12 from which they continued to climb through the Iranian Revolution in 1979 to peak at $40 in 1980 after which it dropped into a $12-$20 range until 1998. Prices are now setting records above $80 a barrel. None of this was predicted and the impact on the world economy is unknown. So much for the experts.

If anything, we might conclude that oil is such a cheap energy source compared to anything else that demand is almost perfectly elastic, that is, demand continues to rise and is almost completely insensitive to the price. In the perhaps near future, not only price but armed conflict and force will determine who gets the remaining shrinking supply.

Pilgrims to Mecca were the major source of Saudi revenue before oil

This book focuses on oil reserves, particularly in Saudi Arabia and predicts a rapid decline in worldwide oil production that no price can remedy. No major oil discoveries have been made since 1969 when the Prudhoe Bay, Caspian Sea, and North Sea deposits were discovered. With modern exploration technologies including seismic surveying and computer modeling Simmons argues it is unlikely that there are large undiscovered reserves left somewhere in the world.

Saudi Arabia gets most of its oil from six super-giant oilfields led by Ghawar at 174 miles long and 16 miles wide by far the largest oil field in the world which has alone produced 55 billion barrels of oil to date. To tap these enormous super-giants, very few wells were drilled. To increase or decrease production, operators simply turned the values of these few wells. The American operators, knowing they would soon lose control of the fields to the Saudis greatly increased production starting about 1970. The Saudis took control of oil in 1979, producing through their giant national Saudi Aramco, the largest oil company in the world. Saudi Aramco is a world class company that still employs 8,000 western petroleum experts. Their technology is state of the art. Unfortunately, in 1982, Aramco and the oil ministry made the decision to keep production and reserves secret. Other OPEC members followed and today our knowledge of true production and reserves is limited.

As an example of the unintended consequences of this secrecy, in 1997 OPEC announced increases in quota for all members. A market myth grew to fill the data vacuum created by production secrecy that there was a glut of oil. By 1999, accompanied by an Economist cover article “Drowning in Oil”, prices plummeted. The resulting myths to explain the glut included secret oil reserves and lost tankers wandering the oceans. Oil experts arose everywhere including a company Petrologistics claiming to have spies in every oil port counting the movement of tankers. Petrologistics was one guy working out of his apartment over a bakery in Geneva.

We know that Saudi reserves, said to be 110 billion barrels in 1978 when American oil companies handed over control to Aramco, grew to 260 billion barrels by 1988. These figures have no substantiating details and were probably woven out of whole cloth. During this period, from 1978 to 1988 46 billion barrels had been produced. Simmons believes these almost 200 billion barrels of new proven oil reserves are imaginary. Simmons also notes these supposed reserve discoveries were all made before the technological breakthroughs of 3D seismic analysis. Of Aramco and Saudi oil secrecy Simmons notes:

History has frequently shown that once secrecy envelops the culture of either a company or a country, those most surprised when the truth comes out are often the insiders who created the secrets in the first place. Such surprises may well have occurred within the ranks of Aramco and even at Saudi Arabia’s Petroleum Ministry.

Don’t smoke your own dope!

To get to the truth of Saudi oil production and reserves, Simmons made a close study of more than 200 technical papers published by the Society of Petroleum Engineers (SPE). Many of these papers were written by Aramco scientists and engineers and Simmons wondered why they were allowed to be published when careful reading would contradict official oil statements. I suspect the country is proud of this world leading company and feels its own prestige is enhanced by allowing its technologists to contribute and attend conferences.

You would have to be a specialist to understand most of these papers although Simmons does his best to educate us in the fundamentals of oil production and geology and to summarize and translate the technical papers but its still tough going unless you have a background in petroleum and geology. Greatly simplified, oil is found underground under high pressure. The pressure is sufficient to force the oil to the surface through vertical wells. If oil is overproduced, the pressure drops and there is a risk of oil being lost. To maintain pressure, water is injected via water injection wells. In 1956 40,000 barrels of water per day were being injected. By 1998 12 billion barrels a day were being injected into the two biggest fields. The initial water came from salt water aquifers. Starting in the 70s salt water from the Persian Gulf was piped to the fields for injection. As oil is depleted, more and more water is mixed with the oil extracted. The ratio of oil to water varies but recently about 1/3 has been water. Special processing is required to remove the salt water from the oil. To maintain production Aramco has done extensive horizontal drilling out from the main vertical wells. Care must be taken not to drill through fissures which might water out the well. Papers also describe insoluble tar layers encountered and studies of the effects of changing pressure on seismic activities (narrowing or widening of fissures). These 200 papers, covering research and events over all the major oil fields of Saudi Arabia paint a picture of maturing fields and ever increasing problems trying just to maintain production.

These papers report problems with production consistent with aging oil fields near the end of their productive life. They wrestle with the major problems: When will the giant field water out leaving billions of barrels of oil still in place? Can new technologies recover the oil left behind? What would be the cost of new technology? Can a few remaining years be stretched to a few decades? Simmons major conclusions rely on two factors known to be true outside of secret OPEC and Russia:

First, Eight super giant oilfields including Prudhoe Bay fields and North Seas fields have exhibited the same lifetime production pattern of increased production followed by the peak followed by a decline toward zero. The time frame of useful productivity is typically twenty years with the sole exception of Slaughter in Texas that has lasted sixty years and is still producing. Typical are reserve estimates from Prudhoe Bay. Aramco’s super giant fields have been in production for fifty years.

Second, no giant or super giant oil fields have been discovered since 1969 despite improved exploration technology. That is long enough with enough serious effort to project that the era of discovering giant oil fields is past. These last discovered giants all quickly reached their maximum production and then plummeted to enter secondary or tertiary production phases which is much more expensive and produces far less oil. Simmons believes Saudi and other Middle East production is in decline or soon will be.

The Saudis themselves have periodically increased production to stabilize worldwide oil supplies, for example after the Iranian revolution and resulting drop in Iranian production, and during Iraq’s invasion of Kuwait, the gulf war, and oil disruption in Kuwait. Simmons gives elaborate explanations how increased production from Saudis super giants has damaged the fields, increasing the difficulty of future extraction, and reducing the amount of oil that will ever be extracted from these fields. This is called the risk of overproduction.

Simmons does not believe Aramco can increase production to meet further shortfalls in production elsewhere but most experts naively believe the Saudis can produce any amount they choose. Oil production in much of the world, including the U.S. where production peaked in 1970 is in decline. Where will the oil come from to meet increased demand even in the next few years? Simmons doesn’t know.

Simmons also points to the social impact of oil on producing countries. There were 4 million Saudis in 1970 when the price of oil starting climbing rapidly. The Saudis were able to greatly improve the standard of living for their citizens with subsidized or free social services. Unfortunately, their Wahhabist brand of Islam encouraged birth with an average of 6.3 children per household resulting in a population explosion approaching 30 million today. Even at today’s prices and levels of production oil revenue per Saudi is one fifth what it was in 1970. Oil and petrochemicals dominate the Saudi economy and neither require much labor. Without developing other sources of employment, the country is left with massive unemployment and the few jobs that exist are often taken by foreign nationals who are willing to work at menial jobs Saudis are unwilling to take. But even sophisticated Norway, huge beneficiary of North Sea oil, will need to plan carefully for when the oil runs out.

Legacy of Ashes, the History of the CIA, Tim Weiner, 2007

A 500 page history using recently released documents and extensive interviews, Weiner concludes that the gross incompetence of the current American intelligence community is not new, they have been incompetent since their beginning in WWII. Our impressions have until now been based on rumor, speculation, and revealed screwups. With this book we have the full history in agonizing, painful detail.

Americans are incurious people, terrible at languages and ignorant of other cultures. For most of our history, America has been staunchly isolationist, wanting nothing to do with foreign intrigues. During WWII America relied heavily on British intelligence. The wartime OSS was largely an adjunct of British intelligence. After the war, a small cadre of mostly Ivy League OSS officers tried to build an American intelligence service. Throughout the CIA’s history they have never been able to find or attract talented agents and the history of intelligence gathering is almost non existent. America had no idea what was happening in the Soviet Union or Communist China. The Russian atomic bomb, the first space rocket, the Chinese invasion of Korea were all total surprises to our intelligence gatherers. When Stalin died in 1953 the CIA was clueless what might happen. On the other hand, foreign powers found easy access to American intelligence, infiltration our service freely and feeding false information at will.

Weiner focuses the early history on three cowboys not much interested in intelligence gathering but keenly interested in covert operations, Frank Wisner, Allen Dulles, and Richard Helms. Their approach was to spend money to buy people and elections, to arm badly trained insurgents and then send them to their deaths in Russia, Eastern Europe, and China. One operative, nationalist general Li Mi, stranded in northern Burma was given money and guns. Li Mi refused to fight the Chinese communists and instead built a heroin drug empire in the area known as the Golden Triangle. The CIA had to start another war twenty years later to wipe out his drug empire.

In 1950, the CIA launched a fifteen year research program originally code named artichoke and later ultra to test heroin, amphetamines, sleeping pills, LSD, and “special interrogation techniques” for mind control. Some subjects were kept in Panama. One army employee test subject jumped out a hotel window in New York. Richard Helms later destroyed all record of these programs.

An early story of the Berlin tunnel reveals the pattern. The CIA committed 350 agents to dig a 1467 foot tunnel from American Berlin into East Berlin and to tap into a cable communications link. The tunnel was completed in 1955 and an army of translators decoded the tens of thousands of voice and telex messages. After 11 months, the tunnel was uncovered and an international uproar ensued. From documents released in 2007 we discovered that the Soviets had learned from a mole about the tunnel before it was even dug and were systematically feeding bad information to the CIA until they decided to create an incident over the tunnel itself. The Americans’ big coup was a disaster from the start.

During WWII the British SOE operations returned three out of four agents sent behind enemy lines to conduct covert operations see. The CIA has lost virtually every agent ever dropped into covert operations. Of these deaths the cavalier, urbane, Allen Dulles said;
Allen W Dulles

You have got to have a few martyrs. Some people have to get killed.

The agencies first “success“, was the overthrow of the elected Iranian government of Mohammad Mossadeq to preserve British oil rights in Iran. The CIA planned to return the weak willed Mohammad Reza Shah Pahlavi to power but he kept disappearing. In one bizarre coincidence. Allen Dulles ran into Pahlavi checking into the same luxury hotel in Rome. The CIA had lost track of him. The coup that restored the Shah was almost an accident. For the twenty years of Pahlavi’s reign in Iran, he was known throughout the country as the CIA’s Shah.

The CIA’s next “successes“, was the overthrow of the Arbenz government in Guatemala. Cowboy diplomat and CIA associate Jack Peuifoy said of his visit to Guatemala City;

I have come to Guatemala to use the big stick. I am definitely convinced that if the President (Arbenz) is not a communist, he will certainly do until one comes along.

The coup was again almost accidental but the result was forty years of military rule, death squads, and repression. The CIA was also responsible for the assassination of Trujillo in the Dominican Republic in 1961, personally sanctioned by JFK.

Following WWII the CIA was willing to work with anyone anti-Communist. This included former Nazis and Hitler youth throughout Germany and Eastern Europe. These efforts were largely futile as the Nazis were widely hated by everyone.

More successful were the recruitment and support of two Japanese war criminals. Nobusuke Kishi signed the declaration of war against the US in 1941. After his release from prison Kishi masterminded the conservative misnamed Liberal Democratic party that dominated Japanese politics for fifty years. Kishi’s prison cellmate was Yoshio Kodama was a gangster who amassed a personal fortune of $1,750,000 running black markets in occupied China during the war. Together, the war criminal cell mates ran crime and politics in post war Japan. All with the support and financial assistance from the CIA.

The CIA’s record of total failure in intelligence gathering was finally broken when Allen Dulles succeeded in infiltrating, bugging, and planting false information in the offices of Senator Joseph McCarthy who was upset that communists had been so successful in planting spies within the CIA. Dulles succeeded in discrediting McCarthy. Dulles said of his operative, James Angleton, in the McCarthy case; “You have saved the republic.”

In Feb 1956 Nikita Khrushchev delivered a speech to the 20th Congress denouncing Stalin. It took Angleton three months to get a copy of the speech from the Israelis who provided almost all intelligence, however biased, on the Middle East. The CIA immediately began broadcasting the speech via Radio Free Europe but were oblivious and ignorant of the ensuing political crisis in Poland, Hungary, and Egypt. When finally informed, Dulles and the CIA totally misrepresented these events to the President. The CIA knew nothing of Israel’s plan for war against Egypt and of Britain’s plan to use the war as a excuse to seize the Suez canal. Dulles advised the President that the Hungarian uprising meant that Khrushchev’s days were numbered. The CIA had one person in Hungary, Frank Wisner, who had no agents, no Hungarian speakers, no contacts with the rebels, no weapons, no plans, nothing except Radio Free Europe which they used to give the appearance of a full scale revolution. Wisner left Budapest for Vienna. Dulles reported to the President that 80% of the Hungarian army had joined the rebels. He was wrong, the rebels had no arms and the Russians crushed them.

By 1957, the Middle East and it oil became the front line in the cold war. Eisenhower did not believe that those in the Middle East would be able to successfully run free governments. He decided that the best course was to promote the idea of an Islamic Jihad against communism. “We should be everything possible to stress the holy war aspect” (Eisenhower). The CIA would deliver guns, money, and intelligence to King Saud of Saudi Arabia, King Hussein of Jordan, President Chamoun of Lebanon, and President Said of Iraq; “These four mongrels were supposed to be our defense and communism and the extremes of Arab nationalism in the Middle East”. The CIA spent the next decade trying unsuccessfully to overthrow the government of Syria. When the CIA ran into trouble in Iraq they eventually threw support behind the emerging Ba’ath Party where Saddam Hussein would rise to the top.

In 1957, Eisenhower ordered the CIA to overthrow the non aligned Sukarno regime in Indonesia where oil had been discovered, and where the communist party was gaining strenth. The resulting attempt was a total failure with an American bomber pilot captured with full identification and records of his missions. The CIA backed off and Sukarno stayed in power for seven more years while the communist party gained strength. Indonesia, following Hungary drove covert operator Frank Wisner over the edge into insanity and he was committed and subjected to shock treatment.

Frank Wisner

The CIA’s best analyst, Abbott Smith,wrote in 1958:

We had constructed for ourselves a picture of the USSR, and whatever happened had to be made to fit into that picture. Intelligence estimators can hardly commit a more abominable sin.

The CIA, defense department, and military contractors convinced Eisenhower that the USSR had over five hundred ICBMs pointed at the West. In reality they had four.

Frank Wisner was replaced as head of clandestine operations by Richard Bissell on Jan 1 1959, the same day Fidel Castro came to power in Cuba. In December Bissell was ordered to remove Castro from Cuba. Bissell and his second in command Richard Helms hated one another. The players from the successful Guatemala coup were brought together and the invasion group of chatty Cubans was sent to Guatemala for training. Nixon, facing a touch presidential race, asked them to hold off an invasion until after the election. In the meantime, the CIA backed the overthrow of Patrice Lumemba in the Congo by Joseph Mobutu. He ruled for thirty years, stealing billions and slaughtering thousands to preserve power.

Kennedy won a tight election and was told by his father Joe to retain J Edgar Hoover and Allen Dulles because they knew Kennedy family secrets including a wartime affair of John with a Nazi spy. Kennedy assumed that Eisenhower had approved the Bay of Pigs invasion and Bissel did not tell him otherwise nor that Bissel believed the invasion would fail. The invasion without proper air support was a disaster.

An autopsy of the Bay of Pigs, the Tailor Board heard the following testimony from CIA pioneer General Walter Bedell Smith:

A Democracy cannot wage war. When you go to war, you pass a law giving extraordinary powers to the President. The people … assume when the emergency is over, the rights and powers that were temporarily delegated to the Chief Executive will be returned… When you are at war, cold war if you like, you must have an amoral agency which can operate secretly…

JFK, after the debacle at the Bay of Pigs, moved covert operations to the control of brother Bobby who launched almost as many covert operations in three years as Eisenhower launched in eight years.

When JFK was killed, LBJ, Nixon, Ford, and others including the CIA worried that Fidel Castro was behind the murder. LBJ once said “Kennedy was trying to get Castro, but Castro got to him first.” The Warren Commission that included Gerald Ford was never told that RFK had ordered the assassination of Castro and had made several attempts including poison and a mafia hit man. Castro had a mole in the CIA and presumably knew of all these attempts.

Spy Kim Philby

James Angleton’s old friend and tutor in counterintelligence, Kim Philby, defected to Moscow in 1963. The paranoid Angeton, seeking redemption after Philby, believed that KGB defector Yuri Nosenko knew something about JFK’s murder. Nosenko was imprisoned and tortured for five years until the CIA finally decided he was telling the truth and knew nothing.

Immolated Monk

Among covert CIA operations, Vietnam stands out. The CIA created a government under Catholic Diem who started oppressing the Buddhists more than he fought the communists. The embarrassed CIA, tired of watching images of burning Buddhist monks and nuns on TV and newspapers, arranged for his removal, starting a long succession of CIA puppet governments set up and removed one after the other.

A supposed incident in the Gulf of Tonkin where two American destroyers were attacked was used by LBJ to push through the Gulf of Tonkin Resolution of August 7, 1964 authorizing war in Vietnam. The incident never happened but the lie only came fully to light in 2005. Intelligence about Hanoi during the war was non existent. The CIA estimated enemy troop levels at 500,000 in 1966 but this was reduced under military and diplomatic pressure to 299,000. At 500,000, the actual number, the Americans would never win the war. While pretending to negotiate an end to the war Nixon and Kissinger simply stalled until Americans were forced out in 1975. Neither ever intended to end the war despite Nixon’s campaign promises in 1968 and 1972 to end the war if elected.

Covert operations were taking place in Thailand, where a CIA backed political party, elections, and military government was created in 1965.

The CIA paid an annual subsidy of $180,000 directly to the Dalai Lama and established Tibet Houses in New York and Geneva. Their attempts over twenty years at a cost of millions of dollars to train insurgents to harass the Chinese in Tibet killed numerous insurgence and resulted in capture of a single satchel of Chinese military documents. See the CIA’s secret war.

Covert operations continued in Indonesia, where attempts to overthrow Sukarno were given a boost as the aging Sukarno joined forces with the communists to remove key military leaders in 1965. Five generals were assassinated, The CIA recruited and funded Indonesian diplomat Adam Malik who together with a central Java sultan and army general Suharto and a political movement the Kap-Gestapu, launched a civil war in which 500,000 Indonesians were killed and 1 million arrested, Suharto began his long standing military dictatorship and Malik became foreign minister and eventually President of the UN General Assembly. For forty years the CIA denied involvement in this massacre.

Tony Poe’s Troops

Covert operations in Laos focused on the Ho Chi Minh Trail through the country, where the CIA coordinated American bombing and headed geurilla forces involving tribal Hmong fighters. Notorious CIA operator Anthony Poshepny known as Tony Poe, was the probable model for Colonel Walter E. Kurtz in the movie Apocalypse Now. Like Kurtz, the CIA believed Poe mad. Like Kurtz, Poe had his fighters cut off the ears of dead enemy combatants. Unlike Kurtz, Poe was left alone to fight as he saw fit.

Tony Poe

In Latin America the CIA was backing the leaders of eleven nations, providing money, weapons, and military training. The CIA sent agents in the hunt for Che Guevara and in 1967 he was found and killed in Bolivia.

Helms and LBJ

LBJ finally appointed Richard Helms as Director of the CIA. James Angleton, who the Israelis had given the 1956 Khrushchev speech, now received complete details of the upcoming 6 day war of 1967 when the Israeli military overran the entire area. This intelligence coup was the high point of CIA prestige. They totally missed the 1973 Yom Kipper war because no one told them about it before hand. On balance, Angleton’s paranoia concerning Soviet infiltration of the CIA meant that the CIA remained almost totally blind to Soviet events throughout his tenure at the agency. If Angleton ever learned anything, he often kept it to himself telling no one else.

Helms and Nixon

When Nixon came to power Richard Helms formed the Covert Operations Study Group in 1968. Among their findings (secret of course);

Covert operations can rarely achieve an important objective alone…At best, a covert operation can win time, forestall a coup, or otherwise create favorable conditions which will make it possible to use overt means to finally achieve an important objective.
On balance, exposure of clandestine operations costs the U.S. in terms of world opinion. To some, exposure demonstrates the disregard of the U.S. for national rights and human rights; to others it demonstrates only our impotence and ineptness in getting caught…Our credibility and our effectiveness in this role (expanding the international rule of law) is necessarily damaged to the extent that it becomes known that we are secretly intervening in what may be (or appear to be) the internal affairs of others.

Henry Kissinger

The only recommendation of the group adopted by Nixon was to appoint Henry Kissinger to direct covert operations. One of Kissinger’s covert successes was the overthrow of democratically elected Salvador Allende in Chile in 1973 after three years of effort. Chile, which had been a democracy since the 1930s was thrown into a violent repressive military dictatorship under Pinochet. In 1976 Pinochet arranged to blow up a car with some enemies only forteen blocks from the White House. Pinochet’s reign of terror lasted seventeen years. Today survivors of Pinochet’s Caravan of Death are pursuing Kissinger in the courts of Chile, Argentina, Spain, and France.

The CIA backed a rogue Greek general Ioannidis who started a Greek Turkish war over Cyprus. The intense Watergate investigation brought light and heat on CIA operations greatly weakening the agency. During this time, the extent of CIA domestic surveillance came out. Seymour Hersh of the New York Times broke the story of CIA domestic spying on anti Vietnam war forces in 1974. During the investigations that followed Angleton said:

Angleton

It is inconceivable that a secret arm of the government has to comply with all the overt orders of the government.

From Nixon’s time forward, CIA intelligence was generated (made up) for political purposes and had little to do with reality. This continued into the ridiculous claims about Soviet military power to support the Reagan star wars initiatives. An assessment by John Huizenga in 1971 sums up;

I really do not believe that an intelligence organization in this government is able to deliver an honest analytical product…and have it taken at face value… I think that intelligence has had relatively little impact on the policies that we’ve made over the years. Relatively none. ..The intelligence effort did not alter the premises with which political leadership came to office. They brought their baggage and they more or less carried it along.

Under Carter, the CIA missed the overthrow of the shah of Iran by a fanatic ayatollah and the Soviet invasion of Afghanistan. They not only missed them, they were in denial that these things could happen. The CIA didn’t even know who Khomeini was. In 1979 a group of Iran students and followers of Khomeini stormed the American embassy. CIA agent Daugherty, captured in the raid remembers;

It had been difficult enough for them to accept that the CIA would post an inexperienced officer in their country. But it was beyond insult for that officer not to speak the language or know the customs, culture, and history of their country.

The hostages in Iran were released when Carter left the White House in 1981. Iranians seized other hostages and Reagan indicated his willingness to sell arms to Iran for hostage release. Delirious, Iran seized more hostages. In the most boneheaded scheme in CIA history, the agency spun off money from arms sold to Iran to give to the Nicaragua contras. The complex scheme leaked and the ensuing scandal did more to damage the CIA than Nixon’s Watergate.

Carrying on the grand tradition, the clueless CIA watched the fall of the Berlin wall in 1989 live on CNN along with the rest of us. With the collapse of the Soviet Union, the CIA all but ceased to exist. The fall of the Soviet Union had an impact “analogous to the effect of the meteor strikes on the dinosaurs.” Well said!

Aldrich Hazen Ames

In 1994 Aldrich Hazen Ames, CIA agent since 1967 was arrested. Ames was a Soviet mole since 1985, giving up virtually all agents operating behind the iron curtain. Most were executed. No wonder the CIA had no intelligence on the Eastern Block.

The CIA went on to miss the nuclear tests in India and Pakistan in 1998; and the bombings of three embassies in Africa and the attack on the USS Cole by Al Qaeda. They then provided bad actionable intelligence leading Clinton to bomb a Pharmaceutical plant in the Sudan, the Chinese embassy in Serbia, and an empty Al Qaeda training camp in Afghanistan. The CIA became so gun shy after these debacles that they passed up numerous opportunities to send agents to assassinate Osama Bin Laden in Afghanistan.

The CIA failures to uncover the 9/11 attacks and the false intelligence generated to support war with Iraq were the final straws. Bush sent conservative political hack Porter Goss to dismantle the service. All senior and liberal agents were sacked and replaced by fellow conservative political hacks. Intelligence and covert operations moved to the Defense Dept. and State Dept. and to private beltway bandits who have built a $50 billion intelligence industry out of the ashes.

Personal Conclusions

Eisenhower warned Truman, Kennedy, and Johnson that war cannot be won without good intelligence. In Korea, Vietnam, Iraq, and Afghanistan, we did not and do not have good intelligence. Maybe it is time to admit certain truths. We can start with an admonishment from Richard Helms;

Richard Helms

The only remaining superpower doesn’t have enough interest in what’s going on in the world to organize and run an espionage service.

The following are my personal conclusions after reading this well researched book and should not be confused with Weiner’s own conclusions.

First, democracy and war are incompatible and a President should only be given war powers under very extreme circumstances such as those that existed in WWII and have not existed in the cold war or since. Having war every few years to enhance executive power is dangerous and perhaps fatal to our democracy. All other conflicts should be handled through diplomacy and international organizations.

Second, espionage requires deception and amoral judgments, in addition to language and cultural skills that are basically and perhaps fortunately rare skills hard for Americans to acquire. Those capable of deception are equally capable of deceiving themselves, the American people and the President. Judging from the CIA, they tend to be rogue characters impossible to harness. If possible, Americans should devise ways of acquiring intelligence without relying on espionage.

Third, covert operations should be banned altogether. Most of todays international conflicts find their origins in our own past covert actions and many of the weapons used and trained personnel involved in today’s conflicts were provided and trained under cover of American covert activity. This continues to be true throughout the world including Afghanistan and Iraq. Covert actions during the cold war invariably supported fascist right wing extremists all over the world and the repercussions of their repressions are still felt today and will be felt for some time. Covert operations did more to encourage Islamist Jihadist radical extremists than Middle East oil money supporting extremist madrasas. What goes around comes around.

In summary, An open democratic society is incompatible with a government that operates, even in part, in secret. The government must remain completely transparent throughout all its parts and to its people. A government with secrets is a danger both to itself and to everyone else.

As an aside, some of Barack Obama’s recent remarks about actionable intelligence to capture or kill Osama Bin Laden brings back nightmare images from Clinton’s mis targeted bombings. I hope Obama takes the time to carefully study this book before making further foreign policy pronouncements.

Dreams from My Father, Barack Obama, 2004

First published in 1995 before Obama won his first election as a state of Illinois Senator, this is not your typical political biography, just as Obama is not your typical politician.

Obama was born in Honolulu in 1961 early in Hawaii’s statehood. His mother’s parents were from Kansas, his grandfather serving WWII in Patton’s army but seeing little actual fighting, his grandmother working in an aircraft manufacturing plant in Wichita. After the war the grandparents moved to Texas then Seattle, then Honolulu where his grandfather worked as a furniture salesman. Obama seems to view them as Midwest conservatives and a bit bigoted but they seem pretty progressive, open, and tolerant. They received no end of teasing from Obama and his mother for voting for Nixon in 1968.

His mother attended the U of Hawaii where she met, fell in love, and married an African student, supposedly the first to attend the U of H. The African, the original Barack Obama, a Luo from Kenya, was already married and with two children. When he was accepted to Harvard graduate school, he left his American wife and son behind.

Obama’ s mother then met, fell in love, and married an Indonesian foreign student probably an East-West Center grantee. In 1967 Obama and his mother accompanied the Indonesian known here only as “Lulu” back to Djakarta. Obama attended a Catholic then a Muslim school. He learned Indonesian.

In 1965 Indonesia saw the overthrow of the Sukarno government to be replaced by the military rule of Suharto. The violence of the overthrow soon erupted in a mass scale slaughter of as many as 500,000 mostly ethnic Chinese living in Java. The excuse was that the Chinese were sympathetic to the Communist government in China but the real reason was the hatred of their success and dominance in business. Lulu was soon drawn into ethical compromises and shady dealings and Obama’s mother worried about Lulu’s influence over Obama. In 1971 she send Obama back to Hawaii to live with his grandparents.

An influential business associate of his grandfather got Obama, age 10, accepted to the prestigious Punahou prep school in Honolulu. At this point Obama’s future was assured. Hawaii is multi-ethnic without any one group having complete dominance; The Japanese are dominant in politics and government bureaucracy; the Chinese in banking and finance whites as the heads of corporations. Punahou reflects this distribution. There were maybe three black students at Punahoe at the time. Obama could have relaxed into his white heritage and intelligence but instead started to obsess about his black roots. This is probably due to his father’s abandonment and absence of other black influences in Hawaii. He talks about U of H basketball which became prominent for a couple of years in the early 70’s when a white former NBA player became coach and recruited an all black team from the military ranks then in Hawaii. The team won enough in its second year to get invited to the NIT tournament gaining national recognition. With this, the coach was able to recruit some top mainland players (come to beautiful tropic Hawaii with no racial bigotry), several of which went on the NBA careers. Obama took up basketball and became a Punahou (not exactly a powerhouse) player.

Punahou Campus

Obama’s search for roots in Hawaii took him to military base black parties, to reading Harlem renaissance writers like Langston Hughes and later Chicago’s James Baldwin and Malcolm X. He listened to Billie Holiday and Stevie Wonder. His father returned to Honolulu briefly when Obama was 10 and spoke at Punahou.

Obama’s grandfather played checkers in Ali’i park and had a wide variety of friends including an old black poet living in a shack in Waikiki. The poet gave Obama wise advice just as Obama was leaving Hawaii for college;

You’re not going to college to get educated. You’re going to get trained. They’ll train you to want what you don’t need. They’ll train you to manipulate words so they don’t mean anything anymore. They’ll train you to forget what it is that you already know. They’ll train you so good , you’ll start believing what they tell you about equal opportunity and the American way and all that shit. They’ll give you a corner office and invite you to fancy dinners, and tell you you’re a credit to your race. Until you want to actually start running things, and then they’ll yank your chain and let you know that you may be a well-trained, well paid nigger, but you’re a nigger just the same.

Obama went to college in Los Angeles and New York. His father died when he was in New York, age 21, and he didn’t take a planned trip to Kenya at that time. Instead he took a job for a while then became a political community organizer in South Chicago. He decided to return to law school at Harvard but took some time to travel in Europe and finally go to Kenya to meet his family for the first time.

The remainder of the book is an account of his trip to Kenya and meeting members of his extended family and their complex relationships. His grandmother was able to give him a clear picture of the lives of his grandfather living in British controlled Kenya and of his father. The picture was very different from the idealized, false picture Obama had built in his mind. A Kenyan historian tells Obama;

You know, young black Americans tend to romanticize Africa so. When your father and I were young, it was just the opposite - we expected to find all the answers in America. Harlem. Chicago. Langston Hughes and James Baldwin. That’s where we drew our inspiration. And the Kennedys - they were very popular. The chance to study in America was very important. A hopeful time. Of course, when we returned we realized that our education did not always serve so well. Or the people who had sent us. There was all this messy history to deal with.

One of the strangest things in this biography is the absence of Obama’s mother. She is obviously the most important influence on Obama’s development as a moral and ethical liberal yet she hardly appears at all and one gets very little sense of her as an independent character. Its like the anchor that made Obama possible got lost in his search for a mythical black heritage that turns out to be largely illusionary in light of the true story from Kenya. But finally, the honesty, humility, and openness of this account comes through and leaves one to wonder what will become of this unusual character.

The Audacity of Hope, Barack Obama, 2006

This book is dedicated to Obama’s mother and maternal grandmother. In his chapter on faith he acknowledges the influence of his mother on his life.

And yet for all her professed secularism, my mother was in many ways the most spiritually awakened person that I’ve ever known. She had an unswerving instinct for kindness, charity, and love, and spent much of her life acting on that instinct, sometimes to her detriment. Without the help of religious texts or outside authorities, she worked mightily to instill in me the values that many Americans learn in Sunday school: honesty, empathy, discipline, delayed gratification, and hard work. She raged at poverty and injustice, and scorned those who were indifferent to both.

Unlike his secular mother, as an adult Obama felt the need to be baptized in a moderate protestant church.

This second book is largely a polemic by professor Obama on various subjects; political parties, values, the constitution, opportunity, faith, race, the world. Still peaking through are occasional glimpses of the personal candor and humor of the first book; wrestling with whether to fly on personal jets rather than commercial airlines; temptations to engage candidate and fellow Harvard man, Alan Keyes, a mess of a politician perfectly capable of losing his own race without any help from Obama; the megalomania of politicians in general himself included and still able to see the humor in this; family get to gathers resembling mini-UN meetings with one relative resembling Margaret Thatcher.

In the family chapter, Obama voices his doubts about being a good father having grown up without one. He acknowledges his debt to his wife, Michelle, he enjoys the stability of her own family. Michelle, on her part, seems to enjoy the relative chaos and adventure of Obama’s wide ranging relatives.

The Shadow of the Great Game The Untold Story of India’ s Partition, Narendra Singh Sarha, 2006

Written by a lifetime Indian diplomat and onetime aide-de-camp to Lord Mountbatten, this is the well researched account of the partition of India to create Pakistan in 1947. The book was the number one bestseller in India. The Great Game is the name used to describe the rivalry and strategic conflict between the British Empire and the Russian Empire for supremacy in Central Asia from about 1813 until 1907. The term was popularized by Rudyard Kipling in his work Kim. Sarila believes that the most important factor leading Britain to support the creation of Pakistan after WWII was their fear of Russian Soviet expansion into the Middle East and South Asia. Britain came to believe that the British dominion, Pakistan, envisioned by Muhammad Ali Jinnah would be a continuing ally, source of troops, base of operations, in their attempt to contain the Soviet Union. Congress Party president Jawaharlal Nehru, insisted on the non alignment and neutrality of an independent India.

Mahatma Gandhi

The great Mohandas Karamchand Mahatma Gandhi comes off here as an ineffective loose canon. He is reported to have said in June 1940 to the Viceroy of India Linlithgow, who thought he must be senile;

Let them (Nazis) take possession of your beautiful Island, if Hitler chooses to occupy your homes, vacate them, if he does not give you free passage out, allow yourself, man, woman, and child to be slaughtered.

The next day Gandhi wrote a letter to Linlithgow;

You are losing: if you persist it will only result in greater bloodshed. Hitler is not a bad man. If you call it off to-day he will follow suit. If you want to send me to Germany or anywhere else I am at your disposal.

At this time Gandhi said that he “…expected the Jews to pray for Hitler, who was not beyond redemption.” A biographer Robert Payne comments:

In the quiet of the ashram the greater quiet of the gas chambers was inconceivable; he did not have and could not have any imaginative conception of their plight, nor had he much conception of dictatorships.

Gandhi also wrote to Hitler in December 1941:

In the non-violent technique there is no such thing as defeat…I had intended to address a joint appeal both to you and Signor Mussolini

Gandhi had supported the British during the Boar War and during WWI but since had developed his ideas of satyagraha (non-violence) and Indian mass movement using traditional Hindu religious techniques such as fasting. He spent most of his time in his ashram. He became enormously popular in India and in the West but was unprepared for the realities of WWII. He remained ineffective and tragically outside of decision making through the key period.

In the meanwhile, and without Congress interference, the British to able to recruit as many soldiers as they could train, over 2.5 million throughout the war. During the war, India’ s role as a market for British goods declined, but the requirements for fighting manpower became the colonies chief value to Britain. 35% of Indian soldiers were Muslims and 50% of all soldiers came from one province the Punjab.

Nehru and Gandhi

Jawaharlal Nehru, pushed by his father, Motilal Nehru, to become President of the Congress Party, and named by Gandhi his legal successor, comes off here as a longwinded, indecisive, ineffective, naive, almost innocent politician. The entire Congress Party withdrew from the British created Federal government in 1939 after demanding a British promise of complete independence for India after the war.

Winston Churchill was notorious for his hatred of India and Gandhi. Throughout the war, British leaders had no intention of losing India as a colony. The British leaders perhaps foresaw a gradual transition over forty or fifty years, of India into a Commonwealth nation like Canada or Australia.

FDR saw WWII as demonstrating the need of Europe to divest themselves of their colonies immediately after the war. Since the US lost the Philippines to Japan early in the war, Churchill met this advocacy with some skepticism:

The concern of the Americans with the strategy of a world war was bringing them into touch with political issues on which they had strong opinions and little experience…states which have no overseas colonies or possessions are capable of rising to moods of great elevation and detachment about the affairs of those who have.

Britain had divided India into eleven administrative provinces. There were still 350 princely states in India with Hyderabad the size of France and Rajasthan even larger. Muslims made up a quarter of the population of India, about 90 million as a whole and were in the majority only in the British provinces; the NorthWest Frontier, Punjab, Sind, Baluchistan, and Bengal, with about 30 million. None of these provinces was in favor of partition.

Muhammad Ali Jinnah

Muhammad Ali Jinnah was a secular non practicing Muslim living in Bombay, a dandy lawyer married to a beautiful younger Parsi (the most westernized of Indians originating in Persia 1000 years ago and having their own religion and traditions) woman. Jinnah was so ignorant of Muslim traditions that he scheduled a lavish dinner for a visiting British dignitary during Ramadan, a period of Muslim fasting. Sarha characterizes Jinnah as a megalomaniac.

Jinnah’ s Muslim league was in decline, capturing only a quarter of the votes in all Muslim elections. He latched onto the idea of partition in a desperate attempt to gain personal power. Sarha discovered that Churchill and Jinnah carried out a secret correspondence over some years via a person living in the Churchill household. For Jinnah partition was a power play, for Churchill and the British authorities in India the idea that the princely states and provinces might choose to divide from India after the war was the old British strategy of divide and conquer. Churchill also made this concession to appease FDR. The Congress leaders refused to compromise their position of full independence and remained outside the process.

In July 1942, believing that the axis powers (Germany, Italy, Japan) would win the war, a furious Gandhi initiated a Quit India, ratified by the Congress in August, demanding that the British grant immediate independence to India and leave. The British reacted by arresting the leaders and putting down demonstrations and riots. Gandhi lost even the support of the Labour Party in Britain with this move:

If you persist in demands which are at this moment impossible to grant, you will cripple your cause and humble the influence of us who are your proud and faithful advocates.

To regain some support Gandhi initiated a fast in February 1943 from prison. Unimpressed, Churchill wired Linlithgow; I understand Gandhi has glucose in his water could you confirm? FDR conveyed to London the message that “Gandhi should not be allowed to die in prison.”

Sarha portrays Gandhi’s later life as pathetic and futile stating that the last great service Gandhi gave for India was in 1932 where he successfully opposed holding separate elections for the lower castes (separate elections were held for Muslims since 1907.) Today the lower castes make up 20% of the population and wield great political power.

Field Marshal Wavell

In 1943 a new viceroy was appointed, Field Marshal Wavell, an upper middle class military man with victories over the Italians in North Africa and stunning defeats against the Japanese in Singapore, Malaysia, and Burma. The vice royalty was considered by Churchill an honorable retreat for a man “eminently suited to run a provincial country club.” Wavell came to the job with extreme animosity toward the Congress party. He had suffered the defection of 50,000 Indian troops to revolutionary Subhash Chandra Bose, a Congress member, in Malaysia and sabotage of military facilities in the Congress Quit India campaign.

By 1944 Wavell came to the conclusion that the best way forward was to build up Jinnah and create a British dominion, Pakistan, where British forces could maintain bases including the ports at Karachi and Dacca and from which it could continue to recruit military forces.

After the war much had changed. An Indian scholar writes:

The growing role of strategic air power and the vital importance of Middle Eastern oil had transformed British policy in Asia. For over a century, British policy in the Gulf had largely been shaped by the strategic interests of her Indian Empire. This was no longer the case… By 1947, the tables had been turned - Britain’ s strategic interests in the Gulf and Middle East had become a major factor in her South Asia policy.

1945 brought a number of pressures and changes. The Labour Party won the election in Britain. The Americans dropped the Atom bomb on Japan ending the war and leading the Americans to increase pressure on Britain to eliminate their colonies. A major famine swept India due to both lack of resources and the growing incompetence of the British Raj; The British colonies were costing the government 2 billion pounds annually which the British had to borrow from America.

Labour believed they could work effectively with Nehru and Congress. Unfortunately Labour also appointed two pro-Jinnah cabinet members to key Indian positions, one a former aid to Linlithgow, the other a close associate of Churchil. Wavell remained viceroy. The official Labour policy was:
1 Britain must maintain bases of operation in India to counter the Soviets.
2 Partition is the only way to guarantee 1 since Congress will not promise to cooperate with Britain on foreign policy.
3 Partition must not be attributed to Britain.

Indian Partition Map

In February 1946 Wavell introduced his blueprint for Pakistan, shown in green on the map, dividing Punjab to pacify the Sikhs with Gurdaspur and Amristsar their holy city remaining in India, and dividing Bengal to pacify the Hindu majority in Calcutta. The provinces to remain in India are shown in orange. No provision was made for the fate of the princely states, uncolored on the map.

Nehru sent a typically longwinded letter to the British in January 1946 giving his position which is quite clear; the fate of India should be left to plebiscites in the provinces; Jinnah’ s support is shallow and could be overcome easily; Muslim majority provinces are unlikely to vote for partition; Indians are prepared to struggle against Britain for independence.; Nehru would prefer a negotiated settlement.

Muslim elections in India in 1946 showed Jinnah’ s Muslim league strong in Hindu dominant provinces and weak in the designated Pakistan provinces where the Muslims were already in control.

Jawaharlal Nehru with Sir Stafford Cripps

In March 1946 Labour Prime Minister Clement Richard Attlee sent a delegation headed by Sir Stafford Cripps to negotiate with Nehru and Congress with instructions to avoid Gandhi. Their goal was to get Congress to agree to a truncated Pakistan and enable the British to avoid blame and responsibility for the partition while assuring their military bases. The attention of this delegation made Congress leaders, promised control of a provisional government to oversee the transition to full independence, complacent while giving Jinnah the opening to launch direct violent action to force British acceptance of Pakistan. Attlee achieved his objective to:
1 put Congress leaders in charge of the interim government where they would be placated but blamed for any failure.
2 put on record the disadvantages of Pakistan scheme to later whittle away at Pakistan in later negotiations with Jinnah.
3 give the world the impression that Britain and Labour are trying to keep India united.

In July 1946 Jinnah opted out of the agreement and in August launched a violent attack against Hindus and Sikhs in Bengal and Bihar the only provinces controlled by the Muslim League. In the ensuring violence 5000 were killed and 20,000 injured. Wavell did not hold Jinnah responsible but used the violence to advance his views that Muslims and Hindus can’t coexist and partition is necessary.

Nehru assumed the position of prime minister of the provisional government and a new Congress leader emerges, Sardar Patel, a tough, practical politician. Patel advocated focusing Congress attention on the British, preventing the princely states from breaking with India and limiting the scope and damage of the Muslim League without direct confrontation. Wavell, in August 1946, believing that the British could hold out for no more than 18 months, submitted his plan for British withdrawal from Congress controlled provinces and the princely states. Wavell pressured Nehru into accepting Jinnah and the Muslim league into the interim government without Jinnah’ s agreeing to the principles of the government or promise calling off violent actions, thus enabling Jinnah to undermine the Nehru government from within.

The British had divided the NWFP province, designated to be part of the new Pakistan into two administrative parts, the settled Pathan regions including the cities, and the area of the nomadic Pathan tribes. The boundary with Afghanistan was drawn up in 1893, the Durand line, but the border has still not been accepted by Afghanistan. The British controlled the nomadic area through “subsidies”, a small cadre of tribal experts, and 10,000 troops. Their policy of control was always the less seen the better. The Amir of Kabul warned; “if at any time a foreign enemy appears on the boundaries of India these frontier tribes will be your worst enemy.” Over 30 major invasions of India have come through this area over the last 2000 years.

The NWFP considered Jinnah a pawn of the British and consistently supported the Congress party as long as they remained unseen. The naive Nehru decided to visit this province in October 1946. The tribes met him with hostility and demonstrations. Wavell said of the visit “Nehru’s visit more than anything else made partition inevitable.”

Lord Mountbatten

In March 1947 Louis Mountbatten, navy rear admiral and former supreme commander of southeast Asia was named viceroy. He has often been blamed for partition but like the good soldier he was, he was simply carrying out orders, if creatively. His charter:
1 fix responsibility for the division of India squarely on Indian shoulders.
2 persuade Congress leaders to give up NWFP and persuade Jinnah to accept a much smaller Pakistan.
3 Ensure that India remain a member of the British Commonwealth.

The Mountbattens and Gandhi

After meeting Nehru and V. P. Menon, Mountbatten decided to leave item 3 til last. Mountbatten, pretending to oppose partition, asked immediately to meet with Gandhi who had been ignored by previous viceroys. Gandhi became a regular source of information about Congress matters. Gandhi offered the suggestion that Jinnah be asked to form a new interim government. Mountbatten ignored Gandhi. Sarha points out that had Gandhi made this offer in 1928 and not in 1947 and Jinnah had become president of the Congress Party instead of Nehru, Jinnah, a more able and intelligent politician would have had his ambitions satisfied and the question of partition may never have arisen.

Mountbatten persuaded Jinnah that his strength lay with British support. Jinnah begs;

I do not care how little you give me as long as you give it to me completely…you must realize that the new Pakistan is almost certain to ask for Dominion status.

The British plan was that elected members of assemblies in each province be given a free choice of independence or affiliation with the new All-India Constituent Assembly. This presented a problem in NWFP, which would choose affiliation as its assembly stood. Olaf Caroe Britain’ s expert on tribal affairs had been appointed Raj Governor of NWFP. Mountbatten convinced Nehru to accept a new province wide referendum on the question since Congress may have lost its mandate since the last election.
Bengal, with its distinct culture and own language would certainly choose to be independent.
The deal as understood by go-between V. P. Menon was now;
1 the Wavell plan for a smaller Pakistan.
2 immediate transfer of power.
3 under the Act of 1935, the independent states would automatically become Commonwealth nations without Assembly action.
4 If India accepts the truncation of NWFP, Mountbatten will persuade the princes to join one or another state and not opt for independence.

This would mean 90% of princely territories would become part of India offsetting the loss of NWFP.

V. P. Menon had been born in the princely state of Cochin (now Kerala) and as the most able Indian tactician, draftsman, and negotiator, played a key role in total absorption of the princely states into India.
V. P. Menon became Mountbatten’ s closest adviser and believed that all territorial issues and boundaries should be resolved before independence to avoid instability and chaos after the hand-over. V. P. Menon raised this issue with Nehru in May 1947 and Nehru agreed.

Mountbatten revealed to Nehru the current British plan for the hand-over, which might have led to the Balkanization of India, should many provinces and princedoms choose independence from India. Faced with the original plan and the possibilities of Balkanization, Nehru was quick to understand the benefits of V. P. Menon’ s alternative to try to resolve all decisions and boundaries before the hand-over. Mountbatten then approached Gandhi with the plan saying it should be called Gandhi’ s plan. Gandhi agreed and intervened with the All-India Congress committee on June 14, 1947. His intervention was decisive.

Mountbatten with V. P. Menon’ s assistance then went one by one to the princely states threatening them with Muslim League inspired violence if they did not agree to join India or Pakistan. They succeeded without a single princedom choosing independence. Maharaja Hari Singh of Kashmir, a friend of Mountbatten surprised him by choosing to accede his kingdom to India, although a majority of the kingdom’s population was Muslim. This set off a series of events and wars between India and Pakistan that continue to this day.

Independence of India and Pakistan was celebrated on August 14, 1947.

Delhi Refugee Camp

Not covered in this book were the massive displacements, violence and deaths caused by partition. As of 1951, 7,226,000 Muslims went to Pakistan from India while 7,249,000 Hindus and Sikhs moved to India from Pakistan. About 11.2 million or 78% of the population transfer took place in the west, with Punjab accounting for most of it. 5.3 million Muslims moved from India to West Punjab in Pakistan. 3.4 million Hindus and Sikhs moved from Pakistan to East Punjab in India. Elsewhere in the west 1.2 million moved in each direction to and from Sind. Deaths were estimated at 1 million but may have been as high as 1.5 million.

There have been three wars between India and Pakistan since independence. In 1971 a civil war in East Pakistan split the country apart to form the new nation of Bangladesh. India and Pakistan became nuclear powers in 1998 increasing the risks in future warfare between the two.

Two years after leaving India Wavell said in 1949:

There are two main material factors in the revolutionary change that has come over the strategical face of Asia. One is air power, the other is oil…The next great struggle for world power, if it takes place, may well be for the control of these oil reserves…This may be the battleground both of the material struggle for oil and air bases, and of the spiritual struggle of at least three great creeds - Christianity, Islam, Communism - and of the political theories of democracy and totalitarianism.

Around such lofty principals do people suffer, become refugees, and die.

Connected: 24 Hours in the Global Economy, Daniel Altman, 2007

A compact 255 pages this is a wide ranging exploration of topics in the global economy; synergies; good governance and independence of central bankers; corruption; money supply; stock markets; oil; stability; intellectual property; disruptions like weather events. Using the gimmick of first person accounts of their workday June 15, 2005 by various global actors we get an idea the the wide range of activity and complexity of the global economy. These first person narratives by some global economy globetrotters reminds us of the assessment of B. H. Bahbra’s diplomat Burnham:

They know so little. They are so small, so stupid, so arrogant, empty and assured, without even the wealth or empire which gave us our assurance. They travel without tasting. They look but do not see.

Google Earth Develops a Wobbly Spin

Altman asks if the financial system is becoming more vulnerable to the actions of a few. He sites the employee of private Swiss bank Julian Bar who stole virtually all client records, 169 megabytes worth.

In 1995 employee Nicholas Leeson in Singapore singlehandedly destroyed 233 year old investment bank Barings through his derivative trades. In 1996, Leeson published his autobiography, Rogue Trader. The book was later made into a film starring Ewan McGregor. Leeson today is a professional gambler and has written a second book on how to deal with stress.

In 1998 Long-Term Capital Management, a hedge fund masterminded by two Nobel Laureate economists lost so much on its interest rate bets that it had to be rescued by the Federal Reserve and a group of Wall Street giants. The Fed believed that letting LTCM go under would have destabilized the entire worldwide financial community.

In 2002 currency trader John Rusnak cost his employer, Allied Irish Bank nearly $700 million in secret losses.

In 2005 a broker at Mizuho Securities in Tokyo entered an order to sell 610,000 shares of a stock at 1 yen each instead of 1 share of stock at 610,000 yen. The trade could not be reversed. Cost to Mizuho; $224 million.

Wall street has had to implement a system which automatically stops all trading if the market makes too big a move. Program electronic trading reacts instantly and automatically (without human intervention) to big falls in prices. Again, this shows how unstable the global financial system is today.

Altman speculates about what would happen if a rogue employee at Moody’s suddenly downgraded the US Treasury Notes and Bonds by a single notch. This single individual action could automatically trigger an electronic sell off on such a massive scale as too destabilize the the entire world and put the US government at risk of insolvency, unable to borrow to cover its massive indebtedness.

Crude: The Story of Oil, Sonia Shah 2004

This 175 page book is a condensed look at oil, its history and future. It is packed with fact and detail and doesn’t miss much. Sonia Shah has now taken on the Pharmaceuticals in a new book See our previous post

Unholy Trinity (Big Oil Big Auto Big Tire), the Presidents, and the American Consumer

Oil, Auto, and Tire have for more than a century marketed ever larger, more expensive, gas guzzling, unsafe, products to a willing American public. In 1930 they banded together to take over and eliminate electric streetcars from American cities. Once in control, they removed the rails to be sure streetcars would never return. In 1947 GM, Standard, and Firestone were convicted of collusion to remove streetcars and fined $10,000 collectively.

New York City Streetcar

Around 1969, OPEC raised oil prices fourfold and threatened to limit supplies to the friends of Israel. Nixon wanted to invade the oil producers but was bogged down in Vietnam. Gerald Ford started the program to hoard oil in the “Strategic Petroleum Reserve”. Many Americans followed his example, burying large gas tanks of hoarded gas in their backyards.

A second wave of fear was triggered by the overthrow of the Shah of Iran in 1979. Carter announced that the U.S. would use any means to secure Gulf oil. American consumers went into full panic, spending hours or even days in gas lines to top up their tanks.

American Presidents, dependent on the Unholy Trinity for campaign money and terrorized by public reaction to the threat of gas shortages, worked overtime to assure an adequate supply of the addictive stuff. Initially the moves were positive with Carter’s “gas guzzler tax” and increased mileage requirements. California led the way to tighter emissions requirements. By the late 1980’s the U.S. was well on its way toward energy self sufficiency.

Hummer

Then the Unholy Trinity struck again; this time with the SUV. Large vehicles requiring large tires are far more profitable than smaller more efficient vehicles. Somehow the public was convinced that these totally impractical, dangerous, unreliable monsters were “safer” because of their 4 wheel drive and massive size. Self sufficiency went out the window as profits soared for the Unholy Trinity. The SUV falls into a regulatory loophole which allows them to emit 5 times the pollutants of normal vehicles. To get around mileage requirements, big auto built over 1 million dual fuel vehicles which are able to burn ethanol. Since Americans are unable to buy ethanol this was curious. The manufactures were using ethanol fuel to pass EPA mileage standards tests, even though the vehicles using gas would get far lower mileage.

Suez, Valdez, and a Negligent Industry

Suez from Space Valdez Spill Oily Bird

In 1956 Nasser seized the Suez canal in Egypt forcing oil to shipped around the horn of Africa. This started a boom in building ever larger single hulled tankers to haul the stuff. (Most ships are double hulled for safety) Then in 1989 the Exxon Valdez hit a reef and spilled 250,000 barrels of oil. The resulting lawsuits and bad publicity caused all big oil to conceal the ownership of their tankers and operate them through foreign flags like Panama, Bahamas, Liberia. The result is no government oversight or inspections, poor or no maintenance and inadequately trained and under-payed crews. The Valdez itself was repaired, renamed, and now operates in the Mediterranean. A few days ago, a court greatly reduced the damages owed by Exxon for the Valdez.

The same negligence is found throughout big oil. Offshore rigs are neglected and continue to collapse or otherwise kill their workers. Pipelines leak, refineries blow up, spills occur.

Piper Disaster BP Refinery Disaster

Reserves in a Dying Industry

Oil production is in decline in virtually every country in the world. Where production is increasing, it will peak within a few years. Then why does the industry continue to tout its vast reserves to the public? For example, they project Greenland with a reserve of 47 billion barrels, the equivalent of the North Sea reserve, even though not one barrel has been found or is likely to be found in Greenland.
Big Oils internal reserves estimates are secret and available only to the CIA. They undoubtedly show the truth, that oil is fast running out.

The publicity surrounding Caspian Sea oil and Alberta tar sand oil make it sound like our problems are over. The Caspian Sea oil has yet to be found even though pipeline construction continues and the Alberta oil is nearly useless and is plagued by enormous production problems to say nothing of the environmental impact where Alberta stands to lose much of its water and all its trees.

The internal reality is reflected in the fact that no U.S. refinery has been built since 1975 and the entire infrastructure of off shore platforms, pipelines, tankers, etc. is in dismal repair.

Co opting the Universities, Lying about Global Warming

Big oil spends about 3% of revenues on research compared to 20% for typical technology companies. Some of this largess is given as strings attached grants to universities; primarily to the U of Texas, U of Tulsa, and Stanford. The seismic and other research supported by these grants is not shared with the public. Big oil treats the universities as if they were private labs. These grants are important to the universities, of course, and when big oil needed “scientists” to counter the research showing overwhelmingly the fact and implications of CO2 increases on global warming and climate changes, several professors were ready to sell their souls.

Public media has shockingly chosen to treat the conclusions of the entire scientific community against the opinions of a handful of hack academics in the pockets of big oil as equal sides in a serious debate about the reality of global warming. Hence the confusion of the general public mind on the whole question of global warming and its potential impact. See our recent climate change post

The military and Big Oil in the World

The British made the decision to convert all their ships to oil in 1912 even though Britain has no oil. As the worlds preeminent imperial power, Britain had no doubt that they could get all the oil they needed from the Middle East using military force where necessary. In WWII FDR and Churchill divided middle east oil between them with the U.S. taking Saudi Arabia’s oil.

The U.S. military today is the world’s largest consumer of oil. Fuel supply lines form the biggest and most expensive part of modern warfare. A fundamental tenant of warfare is to have permanent bases of operation near any theater of war.

Abrams Tank in the Desert

It is no accident that George W’s VP is the former head of Haliburton, and that Condoleeza Rice is the only secretary of state to have an oil tanker named after her. When Saddam Hussein signed oil exploration and drilling contracts with Russia and China it was time for big oil and the U.S. military to move in. The Bush administration first coded their plan Operation Iraq Liberation (OIL) but soon thought better of the name. To this day journalists and media do not talk about permanent military bases and securing oil in the debate about the Iraq war.

Scenes from Iraq War

In the developing world, the discovery of oil has almost always resulted in worsening conditions for the people. The pattern is for big oil to do a deal with a small elite who enrich themselves in return for providing security for oil (killing anyone who gets in the way). When fighting and destruction occur, such as in Nigeria, western media (including the prestigious BBC, Financial Times, Reuters, New York Times, etc. mis portray the events as internal tribal warfare or insurgency, anything but protest against big oil which is destroying homes and livelihoods.

Alternate Energy Sources

A measure of efficiency for energy sources is to compare the ratio of amount of energy produced against the energy required to produce. In the early days, oil had an unbelievable ratio better than 100 to 1. With todays declining reserves, the ratio has fallen to 23 to 1. This still compares favorably to hydro power at 11 to 1; coal 9 to 1; and nuclear power at 4 to 1.

Solar Plant Solar Electricity Wind Power

Solar energy has a ratio of 1.9 to 1 reflecting the high cost of producing solar panels. Wind power is about the same. Further research and building large scale production plants could improve the ratios for these renewable sources of energy.

Big Oil seems to look to natural gas for their future survival. Natural gas is cleaner burning but cannot be transported easily or for long distances. Overlooked by big oil in its promotion of natural gas is that any natural gas leaks pour methane gas which is far worse than CO2 into the atmosphere. At 3% leakage (the industry is near this level now), methane equals CO2 in its overall impact on global warming. As natural gas is developed and as existing pipelines and equipment age, we can expect methane to overtake CO2 as the major source of warming.

Natural Gas Pipeline Leaks

Producing Ethanol from corn requires almost as much energy from oil as would be saved and wouldn’t significantly reduce CO2 emissions unless the ethanol plants somehow trapped the CO2. Then there is the question of how and where to store the trapped CO2. Ethanol also requires new pipelines and delivery technology because is mixes itself with water unlike gas. Big oil is clearly not interested in this investment yet they have a monopoly on retail outlets (gas stations).

Centralized hydrogen producing plants similarly require large consumption of energy and the delivery problems are even worse than for ethanol.

The current favored Bush plan, resulting in grants to the big three automakers is to produce vehicles that turn gas directly into hydrogen. These cars would be no more efficient or less polluting than existing hybrid vehicles but the government subsidies seem to assure that they will be built.

Gas Hydrogen Honda

Conclusion: Apocalypse?

So are we headed for the end of life as we know it? Certainly. Will we all kill ourselves in the process? Don’t know. At present, in spite of Al Gore’s best efforts, there is little will to change our consuming behavior. Massive changes in our attitudes and behavior is the only way changes will be affected. The power of the Unholy Trinity and the struggle for their very survival will continue to throw enormous forces into the political process and consumer marketing. Only individual consumers by modifying their behavior are in a position to withstand these forces.

The Body Hunters, Sonia Shah 2006

Sonia Shah has written a thorough and disturbing history of the pharmaceutical industry that makes John Le Carre’s The Constant Gardener (Ebook at) look pretty tame. Le Carre wrote the forward to Shah’s book.

Shah’s book focuses on the ethical debate which led to the Nuremberg Code after WWII and to the Declaration of Helsinki in 1975. The pharmaceutical industry including some prominent researchers and supposed regulators continue to insist that testing new drugs against a placebo is the only way to get scientifically valid and meaningful results even though administration of placebos means some subjects get no treatment at all. The Declaration of Helsinki requires that new drugs be tested against the best available treatments.

Pharmaceutical companies need the placebo testing because their new offerings are mostly me-too drugs that are not better than existing approved drugs. Shah documents one case where Eli Lilly wanted to sell Xigris for $7,000 up to $21,000 per treatment of Sepsis, a resistant infestation killing many patients in intensive care. The best available treatment is corticosteroids, old generic drugs costing $50. Eli Lilly knew it couldn’t best the old drug so conducted a group of tests against placebos in developing countries. They then cherry picked the trial with the best results to get approval. One unfortunate trial showed Xigris patients died more often than the placebo patients. These negative results were buried by presenting the results at the conference in Seattle in October 2004 where Viagra was introduced. Eli Lilly was still able to sell $200 million of this wonder drug in 2004. They had been hoping for sales in the billions by aggressive advertising and by intimidating doctors and hospitals. Xigris News

Shah documents a U.S. study where a healthy 19 year old college student was paid $3600 to test a new antidepressant. She was given up to six time the recommended dosage and committed suicide. Her family is suing but is unlikely to prevail.

Shah recommends enforcement of some simple reforms. First, enforce the requirement that new drugs be tested against the best available treatment. Testers currently argue that in developing countries test subjects have no treatment options due to poverty or lack of health care so placebo testing is justified. This simple reform would force pharmaceutical companies to develop drugs that are truly better than existing treatments and should result in treatment breakthroughs.

Second, enforce true informed consent by the test subjects. Informed consent requires the the full extent of the risks including all possible side effects be explained to and understood by test subjects. The consent forms in the developing world are written in English and it is clear the verbal explanations are totally misleading. Even in the developed world, informed consent is not enforced.

Third, require the pharmaceutical companies to make continued treatment available to test subjects after the trial. Today, testers in the developing world simply leave the patients with nothing at the end of their trial, even if the treatments are needed to keep the subjects alive.

Thin Ice: Unlocking the Secrets of Climate in the World’s Highest Mountains, Mark Bowen 2005

One of the best books on global warming comes thinly disguised as