By Mike Whitney

January 15, 2010 “Information Clearing House” — The United States and Israel have executed a stealth coup that has precipitated the collapse of Lebanon’s unity government.

Secretary of State Hillary Clinton preemptively torpedoed negotiations between Saudi Arabia and Syria by telling “Saudi King Abdullah and Lebanese Prime Minister Saad Hariri that the U.S. would reject any settlement at the expense of the UN tribunal.” (Tehran Times) Clinton knew that the Saudi-Syria team was close to a “breakthrough” that would have resolved contentious issues related to the investigation of the assassination of former Lebanese Prime Minister Rafik Hariri. She could not allow that to happen because it would derail the US/Israeli plan for regime change and another Israeli invasion of Lebanon.

The UN’s Special Tribunal for Lebanon–or the STL, as it is called–is a US/Israeli invention designed to tarnish Hezbollah by leveling trumped up charges against its members. Tel Aviv and Washington want to connect Hezbollah to the murder of Rafik Hariri in order to brand the nationalist militia a “terrorist organization.” Once the group is convicted on charges of terrorism, Israel will be able to conduct its cross-border attacks with impunity.

According to AFP, the STL’s indictments could be delivered (secretly) as soon as Monday and members of Hezbollah will be implicatd.

AFP: “Citing sources close to the tribunal, the newspaper said on Saturday that prosecutor Daniel Bellemare will present the findings of his probe into the murder to pre-trial judge Daniel Fransen at a hearing behind closed doors in The Hague, where the tribunal is based for security reasons.

“According to several sources close to the office of the prosecutor, the charges target members of Hezbollah,” it said.” (“Hezbollah ‘expected to be named in Hariri probe’, AFP)

Also, it looks like the US and Israel have decided to cast wider net and use the court to implicate Israel’s arch-rival Iran at the same time. This is from Israel’s YNet News:

“Sources say UN tribunal will present evidence showing the murder of former Lebanese premier was committed by Iran’s Quds force and Hezbollah at Khamenei’s order. ‘They considered him Saudi agent,’ source says.

Sources familiar with the investigation into the assassination of Rafik Hariri in 2005 told Newsmax that the United Nations Special Tribunal for Lebanon will accuse Iranian Supreme Leader Ayatollah Khamenei of giving the order to murder the former Lebanese prime minister, according to the Lebanese website Naharnet.” (“Report: Iran ordered Hariri assassination”, ynetnews.com)

Hezbollah’s Secretary General, Hassan Nasrallah knows the game that the US and Israel are playing, which is why he called for an emergency cabinet meeting last week to see if an agreement could be reached that would settle the matter internally. But current Prime Minister Saad Hariri–who is allied to the White House–rejected the idea leaving Nasrallah no choice but to disband the government and call for new elections.

Hezbollah’s action has been sharply criticized in the western media, but it was perfectly legal within the framework of Lebanon’s constitution. Hezbollah and its allies control more than a third of the cabinet which allows them to dissolve the government whenever they choose. Hariri’s collaboration with Washington forced Nasrallah act in a way that served Lebanon’s greater interests.

Hariri has seriously compromised Lebanese sovereignty by allowing foreign powers to rule on a domestic criminal case. Imagine if the shoe was on the other foot, and Lebanese leaders demanded that the investigation into the assassination of President John F. Kennedy not be conducted by the FBI, but by politically-motivated bureaucrats in Brussels. What American president would ever accept such a demeaning offer?

Hariri should have denounced the STL long ago, and he would have if he was not secretly operating as a US/Israeli client. Keep in mind, that, according to recently released memos from Wikileaks, high-ranking officials in the Lebanese government collaborated with US diplomats prior to the 34-day war with Israel in 2006 assuring that 1,400 Lebanese civilians would be killed in the onslaught. Here’s a summary of the memo:

“A classified cable from the US embassy in Beirut has revealed how Lebanon’s ruling March 14 alliance discussed with the US its preparations for a military attack by Israel against its rival Hezbollah….

“According to the dispatch in March 2008, Elias Murr, Lebanon’s defense minister…..told US diplomats how in the event of a military attack by Israel on Lebanon, Israel should avoid damaging Lebanese infrastructure in order to stop public opinion turning against the March 14 Alliance, as had happened when Israel invaded Lebanon in the 2006 war…

“If Israel were to bomb areas under Hezbollah control, Murr made clear that the Lebanese armed forces would not intervene. He said in the course of a two and a half hour meeting over lunch, ‘If Israel has to bomb all of these places in the Shiite areas as a matter of operational concern, that is Hezbollah’s problem.’” (“Lebanon government gave covert support for Israeli attack on Hezbollah”, Jean Shaoul, WSWS)

So, there are collaborators in the Lebanese government and they are helping the US and Israel to subvert the resolution process, undermine Lebanese sovereignty, exacerbate divisions between the factions, and create a pretext for a future Israeli invasion.

And there’s a bigger picture, too; a plot to lure Hezbollah into seizing power in Beirut. This is precisely what Washington and Tel Aviv are hoping for in order to justify another invasion. Here’s an excerpt from an article by former US Ambassador Marc Ginsberg on the liberal website Huffington Post:

“Hezbollah may ironically be on the verge of converting its dastardly assassination of Hariri into a golden opportunity to finally seize full power in Lebanon, by deploying its militia to confront Lebanon’s much more ill-equipped armed forces….Lebanon is increasingly becoming a satellite of Iran, and there is nothing Iran wants more than for Hezbollah to emerge as the only power left standing in Beirut, waiting impatiently to do Iran’s bidding as its frontline Frankenstein against Israel…. (“Firestorm among Lebanon’s Cedars, former US Ambassador Marc Ginsberg)

And here’s more-of-the-same from David Eshel in an article titled “Next Israeli-Arab War Could Begin In Beirut”:

“Israel’s next war could be fought on several fronts and result in far more destruction and casualties on all sides than recent conflicts. So said outgoing Israeli military intelligence chief Amos Yadlin in an address to the Knesset in November. Yadlin believes that despite an unprecedented period of calm for Israel right now—primarily due to its deterrence, alliances with Egypt and Jordan, and peace in the West Bank—there is a strong possibility of a major escalation of hostilities with two neighbors, Lebanon and Syria.

The flashpoint would be an attempt by Hezbollah to overthrow the Lebanese government, with backing from Syria and Iran. An overthrow could be triggered if an investigation by the Special Tribunal for Lebanon (STL) assigns responsibility for the 2005 murder of former Prime Minister Rafik Hariri to Hezbollah….

Should Hezbollah gain control of the country, it would absorb the Lebanese military and its assets and be in a position to menace Israel with its own arsenal of 40,000 rockets, many of which are capable of reaching urban areas including Tel Aviv. Political analysts say Israel would not tolerate such a threat, and sporadic battles would erupt on the border, leading to an all-out war with Lebanon that could eventually include attacks by Syria and by Hamas in Gaza.” (“Next Israeli-Arab War Could Begin In Beirut”, David Eshel, aviationweek.com)

And then there’s this from the Israel Project.org in an article titled “Hezbollah aiming for Lebanon takeover”:

“The Iranian-backed Hezbollah organization with its 40,000 rockets aimed at Israel clearly aims to dominate the country and control the selection of its next leader, analysts believe….Now, the fundamentalist Shiite organization may be on the verge of taking over the entire country. Mustapha Alloush, a member of the political bureau of Hariri’s Future Movement told the Washington Post Hezbollah was trying to “rule Lebanon” and annex it for Iran.

With 20,000 trained fighters, Hezbollah is already much more powerful than the Lebanese army and in 2008 demonstrated its superiority by seizing part of the capital, brushing aside the army’s resistance. “There is currently no force within Lebanon able to stand firmly against the physical power of Hezbollah,” wrote Jonathan Spyer, a senior research fellow at the Global Research in International Affairs Center in Herzliya in the Jerusalem Post.

The impending Hezbollah takeover threatens to destabilize the entire region as well as Lebanon itself…. While analysts do not see an immediate outbreak of hostilities with Israel, few doubt that another confrontation is coming some time down the road….” (“Hezbollah aiming for Lebanon takeover”, Alan Elsner, The Israel Project)

So, is this the plan, to lure Hezbollah into seizing power thus justifying another invasion by Israel?

No one knows for sure, but there’s a lot about the US/Israeli-backed tribunal that doesn’t pass the “smell test”..

By Mike Whitney

November 24, 2010 “Information Clearing House” – Imagine that Yasser Arafat had succeeded in ending Israeli occupation and establishing a Palestinian state in the West Bank and Gaza. Now imagine that 10 or 15 years later, new Palestinian president, Mahmoud Abbas, agreed to hand over control of his country’s budget to the IMF so his people’s future would be controlled by outsiders. Do you think Palestinians would praise Abbas as a patriot or denounce him as a traitor?

Irish Prime Minister Brian Cowen is Mahmoud Abbas. He’s caved in to the demands of foreign capital and transferred control over the nation’s budget to the EU and the IMF. Here’s an excerpt from a November 24, article in Reuters:

“Ireland’s teetering government will announce plans on Wednesday to cut welfare spending sharply and raise taxes to help pay for the country’s catastrophic banking crisis and meet the terms of an international bailout.

The four-year plan to save 15 billion euros is a condition for an EU/IMF rescue under negotiation for a country long feted as a model of economic development that has become the latest casualty in the euro zone’s emergency ward.

Prime Minister Brian Cowen told parliament no final figure had been agreed for financial assistance, “but an amount of the order of 85 billion (euros) has been discussed.

The finance ministry said the austerity plan would be published at 1400 GMT and posted on the official government website.” (Reuters)

This is a black day for Ireland. The Irish people will now face a decade or more of grinding poverty and depression thanks to their venal leaders. As soon as the ink dries on the IMF loans, the second occupation of Ireland will begin, only this time there won’t be armored cars and Paramilitaries in fatigues, but nerdy-looking bureaucrats trained in the art of spreading misery. In fact, the loans haven’t even been signed yet, and already IMF officials are urging the government to cut jobless benefits and the minimum wage. They’re literally champing at the bit. They just can’t wait to get their hands on the budget and start slashing away.

And don’t believe the hype about European unity or saving Ireland. My ass. This is about bailing out the banks. The bondholders get a free ride while workers get kicked to the curb. Here’s a clip from the Financial Times that spells it out in black and white:

“According to data compiled by the Bank of International Settlements, the three largest creditors to the Irish economy at the end of June…were Germany to the tune of €109bn, the UK at €100bn and France at €40bn. These sums amount to 2 per cent of France’s gross domestic product, 4.5 per cent of Germany’s GDP, and 7 per cent of British GDP.”

See? Another bank bailout. Ireland is being asked to cut to social services, slash wages, renegotiate contracts, and dismantle the welfare state so that undercapitalized banks in France and Germany can get their pound of flesh. But, why? They’re the ones who bought the bonds. No one put a gun to their head. They knew they could lose money if Irish banks went south. That’s the risk they took. “You pays your money, and you takes your chances.” Right? That’s how capitalism works.

Not any more, it doesn’t. Not while Cowen’s in charge, at least. The Irish PM has decided to bail them out; make the bondholders “whole again.” But who made Cowen God? Who gave Cowen the right to hand over his country to the IMF?

No one. Cowen is a rogue agent kowtowing to international capital. After he finishes his work in Ireland, he’ll probably join globalist Tony Blair on the French Riviera for a little hobnobbing with the tuxedo crowd.

It’s revealing to watch the way Cowen works, as though the interests of foreign bankers mean more to him than those of his own people. For example, the Green Party withdrew from the government last night calling for new elections, but even though the government is in a shambles, the slippery Taoiseach wants to stay in power long enough to push through a new 4-year budget that will leave Irish workers on the brink of destitution. Who is Cowen working for anyway?

This is from the Irish Times:

“Opposition parties have today stepped up pressure on the Government as it seeks to push ahead with passing next month’s budget.

Fine Gael again called for an immediate general election and said the four-year budgetary plan should only be implemented by a Government which has a proper mandate….

“What is best for the country is that the negotiation about a programme for four years be done by a government which has four years to serve, that has a mandate from the public so that it has the authority and the credibility to not only develop and negotiate it but to implement it. I think that is in Ireland’s best interest,” he said. (“Opposition steps up pressure”, Charlie Taylor, Irish Times)

The prospective belt-tightening measures will include the firing of 28,000 public employees, a boost in property taxes, a 10 percent cut in welfare benefits, and higher taxes on low-wage workers. Cowen believes that taxing low income families is preferable to making billionaire bondholders eat their losses. The whole thing stinks to high-heaven.

Is there a way out for Ireland? Economist Mark Weisbrot thinks so. Here’s what he thinks should happen:

“The European authorities and IMF can loan Ireland any funds needed in the next year or two at very low interest rates….Once these borrowing needs are guaranteed, Ireland would not have to worry about spikes in its borrowing costs like the one that provoked the current crisis….The European authorities could scrap their pro-cyclical conditions and, instead, allow for Ireland to undertake a temporary fiscal stimulus to get their economy growing again. That is the most feasible, practical alternative to continued recession.

Instead, the European authorities are trying what the IMF… calls an “internal devaluation”. This is a process of shrinking the economy and creating so much unemployment that wages fall dramatically, and the Irish economy becomes more competitive internationally on the basis of lower unit labour costs.” (“There is another way for bullied Ireland”, Mark Weisbrot, The Guardian)

It’s all de rigeur for the IMF. It wouldn’t be an IMF program unless someone was starving. That’s the benchmark for success.

Ireland doesn’t need structural adjustment programs when low interest funding and fiscal stimulus can bring the economy back to life. This is politics not economics. The EU and IMF are using the crisis to push through their own agenda. Their real goal is to crush the unions, shred the social safety net, and roll back the gains of the Progressive Era.

The Irish people are left with no choice but to resist. Presently the Cowen government is collapsing. Bravo. Now it’s off to the barricades to see if the damage can be undone. Ireland needs to withdraw from the EU and start fresh. It’ll be a bumpy road at first, but there’s no other way. Economist Dean Baker sums it up like this in an article in The Guardian. Here’s what he said:

“Even a relatively small country like Ireland has options. Specifically, they could drop out of the euro and default on their debt….Like Ireland, Argentina had also been a poster child of the neoliberal crew before it ran into difficulties.

But the IMF can turn quickly. Its austerity programme lowered GDP by almost 10% and pushed the unemployment rate well into the double digits. By the end of the 2001, it was politically impossible for the Argentine government to agree to more austerity. As a result, it broke the supposedly unbreakable link between its currency and the dollar and defaulted on its debt.

The immediate effect was to make the economy worse, but by the second half of 2002, the economy was again growing. This was the start of five and a half years of solid growth, until the world economic crisis eventually took its toll in 2009.” (“Ireland should ‘do an Argentina”, Dean Baker, The Guardian)

The Irish people didn’t struggle through centuries of famine and foreign occupation so they could be debt-peons in the EU’s corporate Uberstate. Like Sinn Fein president Gerry Adams said, “We don’t need anyone coming in to run the place for us. We can run it ourselves.” Right. Tell the EU plutocrats to take their Utopian Bankstate and shove it.

The “dollar debate” on the Internet has been ferocious and emotionally-charged, but sadly lacking in logic. To oppose the “dollar will crash” theorists is like arguing a woman’s right to choose with the fist-waving throng assembled outside an abortion clinic. The results are equally disappointing. To say that “minds are already made up and the issue is settled”, is an understatement. For many, the dollar’s transition from the world’s reserve currency to a Wiemar era Deutschemark is not a question “if” but only of “when”. One reader summed up the distrust that’s felt for anyone who dares to challenge the prevailing dogma like this:

“Mike…..Your article on October 19th 2009 titled “The Dollar will NOT crash,” made all of us in this part of the world who respected your views and opinions feel disturbed and appalled….Then my friend explicated and reminded me, “From the time of Chaim Weizmann’s solicitous and guile behavior towards the politicians, the media and the newspersons, the powerful Zionists lobby had perfected the art of falsity and misrepresentation.”

Uh, okay. So, now opposing the dominant theory not only proves that one is a fool, but also a tool of the “Zionist lobby”?

This is why struggling writers always keep the refrigerator stocked with a hearty malt.

No one can deny that the dollar COULD crash or that it faces stiff headwinds in the years ahead as the fiscal deficits continue to pile up. But let’s not overreact. Japan’s deficits are twice the size of GDP and bond yields are still hovering below 2 percent. In other words, the Japanese are fighting deflation, so no one is particularly worried about inflation. That’s as it should be. In the US, deficits are a paltry 12 percent of GDP, and already people have their knickers-in-a-twist. Even deficits soar above 100 percent ($14 trillion) it’s unlikely that they’ll crush the dollar. But–on the other hand– if the government suddenly stops spending money and running huge deficits; unemployment will skyrocket, banks and businesses will default, foreclosures will rise, and the economy will slip back into a very severe recession. The myth that “You can’t solve a debt problem by creating more debt” is pure bunkum. That’s for people who want to balance the budget at all costs, regardless of its effect on working people. The goal should be to get the economy back on its feet and worry about the red ink later.

Here’s Paul Krugman explaining why the Fed is engineering a weaker dollar:

“Although there has been a lot of doomsaying about the falling dollar, that decline is actually both natural and desirable. America needs a weaker dollar to help reduce its trade deficit, and it’s getting that weaker dollar as nervous investors, who flocked into the presumed safety of U.S. debt at the peak of the crisis, have started putting their money to work elsewhere.

But China has been keeping its currency pegged to the dollar — which means that a country with a huge trade surplus and a rapidly recovering economy, a country whose currency should be rising in value, is in effect engineering a large devaluation instead.

And that’s a particularly bad thing to do at a time when the world economy remains deeply depressed due to inadequate overall demand.” (Paul Krugman, “The Chinese Disconnect” New York Times)

So, if China is so worried about their massive investment in dollars, (as everyone seems to think) then why aren’t they letting their currency rise so the dollar can weaken? It’s because they are more concerned about sustaining demand then problems with the greenback. They’re showing they have more confidence in the dollar than most Americans.

It is true that the dollar has dipped 15 percent since summer, but so what? That just means that people are less scared now then they were after Lehman Bros. collapsed. Here’s a clip from the Economist explaining it all:

“The simplest explanation for the currency’s decline is based on risk aversion. On the days when risky assets fall, the dollar tends to go up. When risky assets rise, the dollar falls. The dollar has fallen fairly steadily since March, a period which has seen stockmarkets enjoy a phenomenal rally. Domestic American investors may be driving the relationship, repatriating funds in 2008 when they were nervous about the state of financial markets and sending the money abroad again this summer because of a perception that the global economy is reviving.” (“Down with the Dollar” The economist, Oct, 2009)

As time goes by, the relationship between stocks and the dollar will change, but for now, the rule is still holds.

So why is this debate about the dollar so important?

Because the majority of people believe that the real problem is the deficits, and not the economy. That’s just flat wrong, and it creates political opposition to more stimulus, which we need. Blame it on the media for convincing people that we are in a recovery and that “green shoots” are sprouting up everywhere. It’s pure fiction. The country could still wind up in a Depression when the stimulus wears off. And it’s wearing off very quickly. (The effects of the stimulus will peak in the Third Quarter)

Consumer credit is contracting at a year-over-year rate of 5 percent. Household balance sheets are in tatters, savings are up, spending is down, and unemployment is headed for 10 percent. Record foreclosures, delinquencies, bankruptcies, and defaults are sucking credit from the system making it harder for the Fed to keep the economy sputtering along. If the Fed cuts off the bloodflow of monetary stimulus, the patient will slip into a deep coma.

Here’s a likely scenario of what could take place in the next few months:

Even though the signs of severe deflation are visible everywhere, investors short the greenback and the dollar plunges to $1.60 per euro. That increases public angst which sets off a firestorm on Capital Hill. The Congress forces the Fed to stop its quantitative easing (QE) program (which has already pumped over $1 trillion into US Treasuries and mortgage-backed securities) and long-term interest rates spike overnight. This puts downward pressure on the housing market and the slump deepens. More jobs are lost, more banks and financial institutions default, perfectly good businesses cannot role over their debt and call it quits, prices fall across the board, the stock market retraces its March lows, and the economy ends up in the ditch.

Think it can’t happen?

Bernanke’s problem, is that all the tools at his disposal are blunt instruments. It’s like performing kidney surgery with a meat cleaver. Dropping interest rates and printing money can stave off deflation, but it also pushes stocks higher than anyone really wants. That leaves traders on the sidelines waiting for a market correction before they jump back in. The same is true of the dollar. Sure, Bernanke wants a cheap greenback to spark exports and reduce household debt, but when the dollar plunges to $1.60 per euro, then the sh** hits the fan and the public outcry forces him to change directions. If the dollar falls any further, the Fed will have to shut down the printing presses altogether and watch while the boat capsizes. The problem is more political than economic.

US policymakers should drop this nonsense about the dollar and deal with the underlying problem itself; lack of demand. That means the focus should be on wage growth and full employment. If that means printing up a couple more trillion; then get to it! Getting people back to work and paying them decently should be job one.

(Note: Title was taken from a comments line on a previous article from Dmark)