Academic Papers, September 2010

Roots of the 2008 “Crash” of the Global Capitalist Financial System

By Hassan Ali El-Najjar, Ph.D.

This paper was presented in the annual meeting of the American Sociological Association in Atlanta, on August 15, 2010.

Abstract
 
In this paper, I investigate the roots of the 2008 perceived “crash” of the global capitalist financial system, in its center, the United States.
 
I argue that the so-called “crash” was nothing more than a necessary measure to end the financially chaotic period of the Bush administration (2001-2008). The chaos was caused by the cash-saturated financial markets as a result of about $4.3 trillion dollars issued by Congress to finance the so-called “War on Terror.”
 
I first investigate the relationship between the military spending and the national debt, increased in that period of time, in order to explain the roots of the perceived crash.
 
Then, I discuss how the $4.3 trillion were given away as lucrative defense and security contracts, thus shedding some light on who the real beneficiaries were. In other words, I’m attempting to explore the relationship between launching wars and reaping huge fortunes. 
 
 Further, I argue that the so-called “crash” was not real. Rather, it was an orchestrated event, planned and executed by the senior economic and financial officials of the Bush administration, adopted completely by the Obama administration, and automatically approved by the representatives of the two parties in both chambers of Congress in both administrations.
 
I also argue that the power elite, who represent the ruling capitalist class in the US,  who also control the military-security-industrial complex, planned and executed the Bush “War on Terror” in order to reap this huge fortune in few years.
 
The paper draws on the world systems theory as well as on the conflict perspective, particularly the power elite theory of C. Write Mills, who argued of an alliance between top business, military, and political leaders for the benefit of their own class and to the detriment of society. It also draws on the work of William Domhoff, which has supplemented the Mills work.
 
Introduction
 
     When President George W Bush Jr. took Office at the beginning of 2001, the US national debt was about $5.674 trillion. By September of 2008, the Bush administration added about $4.3 trillion to the national debt, increasing it to $10.024 trillion (Table 1).[i]
 
     In this paper, I investigate the roots of the 2008 perceived “crash” of the global capitalist financial system.
 
     I argue that the so-called “crash” was nothing more than a necessary measure to end the financially chaotic period of the Bush administration (2001-2008). The chaos was caused by the cash-saturated financial markets as a result of about $4.3 trillion dollars issued by Congress to finance the so-called “War on Terror.”
 
     I first investigate the relationship between the military spending and the national debt, increased in that period of time, in order to explain the roots of the perceived crash.
 
     Then, I discuss how the $4.3 trillion were given away as lucrative defense and security contracts, thus shedding some light on who the real beneficiaries were. In other words, I’m attempting to explore the relationship between launching wars and reaping huge fortunes. 
 
      Further, I argue that the so-called “crash” was not real. Rather, it was an orchestrated event, planned and executed by the senior economic and financial officials of the Bush administration, adopted completely by the Obama administration, and automatically approved by the representatives of the two parties in both chambers of Congress in both administrations.
 
     I also argue that the power elite, who represent the ruling capitalist class in the US,  who also control the military-security-industrial complex, planned and executed the Bush “War on Terror” in order to reap this huge fortune in few years.
 
     The paper draws on the world systems theory as well as the conflict perspective, particularly the power elite theory of C. Write Mills, who argued of an alliance between top business, military, and political leaders for the benefit of their own class and to the detriment of society. It also draws on the work of William Domhoff, which has supplemented the Mills’ work.[ii]
Military Spending and Wars
 
     The US military spending started to increase dramatically during the Reagan two terms of office in the 1980s. The justification was winning the Cold War against the Soviet Union through arms race. When the Soviet Union collapsed in 1989, the US power elite started looking for another front to justify the continuation of the highest military spending in the world. They chose the Middle East as the new frontier because of two main reasons which would help recruit supporters for the continuation of the high military spending, namely serving US oil interests and maintaining Israeli hegemony.
 
     Israeli leaders concluded early in the 1980s that in order for them to continue their imperialist dominance in the Middle East, the whole region had to be reshaped in a way that weakens Arab and Muslim states and divides them into small entities.[iii]  Iraq was chosen as a target by Israeli leaders as early as 1988 because it was portrayed as a threat to the Israeli hegemony in the oil-rich region.[iv]  The Iraqi invasion of Kuwait was the golden opportunity the US power elite were waiting for to justify the US invasion of the Middle East, and consequently the continuation of the highest military spending in history.
 
     The US forces did not withdraw from Kuwait and the Arabian Peninsula after the eviction of the Iraqi forces from Kuwait, in 1991. They withdrew from Saudi Arabia only after the US invasion of Iraq, in 2003, but they have stayed in all the other five small Arabian Gulf states ever since.
 
     A 13-year sanctions regime was imposed on Iraq to soften it for the invasion, which was launched in 2003. The invasion and occupation of Iraq and Afghanistan have cost the US $1.5 trillion in one estimate. However, this was part of the $4.3 trillion of the wider militarization effort, called the “War on Terror,” which was launched during the Bush administration to help Israel maintain its hegemony while serving US oil interests (Table 1).[v]
 
Military Spending and the US National Debt
 
     Higher military costs ultimately lead to more national debt. Before President Reagan had taken office, the U.S. national debt was about $900 billion. During his two terms in office, he tripled it to about $3 trillion. That is why Reagan is adorned by the military-security-industrial complex.[vi] Adopting the same policies, President Bush Sr. added about $1.2 trillion more to the US national debt. The U.S. direct military spending during the Reagan and Bush Sr. administrations (1981-1993) amounted to about $3.95 trillion, which demonstrates the close relationship between military spending and the national debt. The U.S. military spending to win the Cold War (1945-1991) cost the American people about $12.8 trillion (Table 2). It represented about 46.2 percent of the personal income of the American taxpayers during these years.[vii] The Cold War and its national debt offspring have been a bonanza for the wealthy and the powerful in the military-security-industrial complex, who sold their highly expensive products to the Pentagon.
 
     Following the collapse of the Soviet Union in 1989 and the 1991 Gulf War, beneficiaries of the US military-security-industrial complex argued for a new Cold War, in which Muslim fundamentalists would replace defeated communists as the new enemies.[viii] 
 
     Maintaining military spending on the Cold War level has reinforced the interests of the US ruling class. In fact, the 1991 Gulf War boosted American militarism, which was logically expected to decline in importance at the end of the Cold War. The Bush Sr. administration opted for war instead of a peaceful resolution for the Iraqi-Kuwaiti crisis. This reflected the continuation of the influence of the military-security-industrial complex on war decision-making. The military budget continued to claim huge amounts of money even without a threat of any enemies throughout the 1990s, denying the poor the services and the assistance they need and deserve.
 
     It is true that the direct annual military spending in the U.S. began to decline after the end of the Cold War and the 1991 Gulf War. However, it was steadily increasing (Table 2).
 
     Even in 1992, when the Cold War was over, about 44 percent of the federal tax revenues were spent on the military establishment. This amounted to about $419 billion out of the $944 billion of taxes collected by the federal government.[ix] Although direct military spending started to decrease, it still claimed the highest percentage of the federal budget. In 1996, out of a total U.S. budget of 1.5 trillion dollars, over 17 percent, or 261 billion dollars, was earmarked for military spending. In comparison, roughly 1.5 percent was allotted for Aid to Families with Dependent Children, and another 14 percent was paid as interest on the national debt.[x]
 
     The US military spending was still about $276 billion, in 1997, $268.3 billion in 1998, $270.6 billion in 1999, $280.8 billion in 2000, and $304 billion in 2001. Other military outlays made total military spending more than half a trillion dollars a year. Outlays for the military and defense functions of the Department of Energy reached about $265.5 billion in 1999, $274.1 billion in 2000, and $277.5 billion in 2001. Finally, the budget authority for 2001-2005 was expected to exceed $1.6 trillion, without the sharp increases after September 11, 2001.[xi]
 
     Surprisingly, this excessive military spending was not protested or criticized by the general public or by the Congress despite the huge national debt problem, which is clearly attributed to it. In fact, the five major wars that the United States fought throughout the 20th century, in addition to the Reagan’s escalation of the Cold War, were reflected in the major hikes in the national debt. In 1900, there was a relatively a small national debt of about $2.13 billion that slowly grew until it reached about $5.71 billion in 1917. Then, it jumped to about $14.59 billion in 1918, in response to World War I military spending. In 1942, the year America entered World War II, the national debt was $72.42 billion. But it jumped to about $136.69 billion in the following year and continued to increase until it reached about $269.42 billion, in 1946. While the third war, in Korea, did not lead to a large increase in the national debt, it kept it at a higher level than during World War II. In 1954, a year following the end of the Korean War, the national debt reached about $278.74 billion despite the post-war economic prosperity. The fourth war, in Vietnam, contributed to doubling the national debt. In 1975, the year the war ended, the national debt reached about $576.64 billion (Table 3).
 
     Despite these steady increases, the national debt was still very little in comparison to the unbelievable continuous increases since the Reagan administration. By the end of the Carter administration, in 1980, the national debt reached $930.21 billion. However, by the end of the Reagan administration, in 1988, the national debt increased to about $2.602 trillion. The trend continued during the Bush administration so that in 1992, the year Bush left the White House, the national debt reached about $4.064 trillion. It is obvious that the 1980-1992 drastic Cold War arms race, during the Reagan and Bush Sr. administrations, was the prime factor that led to this unprecedented increase of the national debt. The high military spending during the Clinton administration continued, in order to enforce the sanctions and embargo regimes imposed on Iraq and to maintain the US military presence in Arabia. During the same period, the US national debt reached about $5.7 trillion by March 2000 (Table 3).
 
     Actually, the Clinton administration increased the national debt to even higher levels than those reached during the previous Republican administrations. While the debt was increased by 35.7 percent during the Reagan administration and by 64 percent during the Bush administration, it was increased by 70.9 percent during the Clinton administration. In addition to that, President Clinton competed with his Republican predecessors in surrounding himself with war hawks who favor more military spending, and consequently more national debt. He selected Al Gore as his Vice President, after the latter’s 1990 war-authorization vote in the Senate. He even appointed a hawkish Republican Senator, William Cohen, as a Secretary of Defense as if there were no Democrats who could perform the functions of that position. Crippled by the consequences of his successive sexual scandals during his two terms in office, he conceded foreign policy to the pro-Israel “experts” in his administration. The highest ranking among these were Dennis Ross and Madeleine Albright in the State Department, Sandy Berger in the NSC, and William Cohen in the Department of Defense. Moreover, when Al Gore had his chance as a Democrat presidential nominee in 2000, he selected Joseph Lieberman, as his Vice President. Like Gore, Lieberman was one of the few Democrats in the Senate who broke the Party line and supported the Bush Sr. administration by voting for the 1991 Gulf War. He broke the Party line again in 2006, by running as independent and actually to be re-elected with Republican support.
 
     Democrats and Republicans continued to serve the capitalist class and compete in solving its problems, particularly dealing with the consequences of its military spending, wars, and national debt. In November of 2008, directly after elections, the Bush administration Secretary of the Treasury, Henry Paulson, announced a plan to bail out the corrupt banking industry. The predominantly Republican Congress approved of it in few days.
 
     The pre-dominantly Democratic Congress rubber-stamped the same plan during the early days of the Obama administration, in 2009, with only changing the name of the Secretary of the Treasury to Timothy Geithner, this time. However, the Bush administration’s Secretary of Defense, Bob Gates, stayed the same as did the Chairman of the Federal Reserve, Ben S. Bernanke. However, Democrats in the White House and in Congress started a new spree of borrowing to bail out the auto industry and other industries in what became known as the Obama administration’s stimulus package.
 
     The two main political parties in the US have demonstrated that they are the two wings of the same capitalist class, maintaining its grip on power and guarding its interests, indeed.[xii]
 
Planning the “War on Terror”
 
     With the advent of George W Bush Jr., military spending has reached unprecedented stage in history. The eight direct military spending budgets of his administration (2001-2008) have totaled more than $4 trillion. The US national debt for the period extending from September of 2000 to September of 2008 also totaled more than $4.3 trillion, which is pointing to the clear relationship between the US military spending and the US national debt (Table 1).
 
     This huge military spending during the Bush administration (2001-2008) was justified by the administration as a response to September 11, 2001 attacks on the US. However, the US invasion and occupation of Iraq, which caused most of the costs, had nothing to do with these attacks, as stated by the investigative bipartisan Committee.
 
     In fact, the US invasion of Iraq was planned and summarized in a document, published by representatives of the pro-Israel US power elite in 1996, known as “A Clean Break: A New Strategy for Securing the Realm” It was not only the blue print of the US invasion and occupation of Iraq but also of extending the war in the Middle East and around the globe, in what became known as the “War on Terror.”[xiii]
 
     The major signatories of the document became the senior officials of the Bush administration who executed the US invasion and occupation of Iraq in 2003 and the “War on Terror” around the world, in implementation of what they wrote in the document, calling on Israel to reorder the Middle East for its own security.[xiv]
 
Jeffrey Steinberg (2003) also detailed how they occupied the senior positions of the Bush administration and became in charge of its wars around the world. The objective was reversing the peace course, which was started by Rabin and Arafat. Peace would be detrimental to their aspirations of a global Zionist-Israeli empire.[xv]
 
     To fund these wars, the Bush administration asked the Congress almost annually to increase the national debt, which amounted to about $4.3 trillion by September 2008. The lucrative defense and security contracts accorded to members of the capitalist class guaranteed their approval and participation in the “Clean Break” global “War on Terror.” However, this plunder turned to be also a financial war against the future generations of Americans who will be responsible to pay the national debt.
 
Corruption in the Financial System
 
     These huge amounts of money were given away in the form of lucrative defense and security contracts. Ultimately, the money reached the banks saturating the financial market, which led to the corruption in lending to the housing industry.
 
     As a result of the availability of these amounts of money in just few years, banks were looking for borrowers by any means, ignoring the regulations that would guarantee the ability of borrowers to pay back their loans.  
 
     There were many stories in the media about the corrupt practices of the largest financial and lending institutions, such as AIG, Freddie Mac and Fannie Mae. The corruption extended to investment companies, such as Lehman Brothers, and even to individuals in high ranking positions in the financial system, such as Bernard Madoff of the Stock Market, who claimed to have lost $50 billion of his clients’ investments.
 
Conclusion
 
    I have compared the US military spending and the US national debt since the beginning of the 20th century. The data presented demonstrated a clear relationship between military spending and the national debt, particularly since the Reagan administration.
 
     The power elite have planned their war on Iraq in the 1990s and executed it together with its extension called “War on Terror, during the Bush administration (2001-2008). Their representatives in Congress funded the War by borrowing about $4.3 trillion, adding them to the US national debt.
 
These huge amounts of money were given away in the form of lucrative defense and security contracts. Ultimately, the money reached the banks saturating the financial market, which led to the corruption in lending to the housing industry.
 
The federal government had to step in to bring the financial system to order by still giving away more borrowed money to the corrupted institutions.
 
Thus, it was neither a crash nor a crisis. Rather, it was a planned endeavor by the power elite to enable their capitalist class to extract trillions of dollars from the future generations of Americans, through their control over the federal government. It has worked and may be repeated in the near future.
 
 

Dr. Hassan El-Najjar teaches Sociology and Anthropology. He presented this paper during the annual meeting of the American Sociological Association in Atlanta, on August 15, 2010.

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TABLE 2   U.S. MILITARY SPENDING, 1945-2000 (IN 1995 US$ BILLIONS)  --------------------------------------------------------------------------------------------- YEAR    $        YEAR   $       YEAR    $       YEAR   $       YEAR   $  ---------------------------------------------------------------------------------------------- 1945  922.8  1958  295.7  1971  307.9  1984  312.1  1997  297.7 1946  519.0  1959  288.9  1972  284.5  1985  337.3  1998  289.7 1947  134.4  1960  281.4  1973  254.6  1986  356.9  1999  290.5 1948   83.8  1961  288.4  1974  239.3  1987  364.2  2000  301.7 1949  112.9  1962  297.0  1975  237.5  1988  365.8  2001  329.0 1950  122.2  1963  288.5  1976  229.6  1989  369.2  2002  362.1 1951  220.2  1964  290.9  1977  228.3  1990  351.6  2003  456.2 1952  384.4  1965  264.9  1978  228.8  1991  361.3  2004  460.5 1953  407.0  1966  296.5  1979  233.0  1992  323.1  2005  552.6 1954  375.4  1967  354.6  1980  241.6  1993  304.4  2006  617.2 1955  316.0  1968  386.8  1981  255.9  1994  284.2  2007  622.4 1956  296.4  1969  366.0  1982  276.7  1995  271.6  2008  647.2 1957  303.3  1970  341.4  1983  297.5  1996  298.1  2009  --------  ---------------------------------------------------------------------------------------------- COST OF THE 1948-1991 COLD WAR: $12,800,000,000,000.                                                                 ($12.8 trillion).  ----------------------------------------------------------------------------------------------- Source: Center for Defense Information (1996: 17).            * 2003 and 2004: www.cdi.org/news/defense-monitor/dm.pdf

 

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References
 
Center for Defense Information. 2000. U.S. Military Spending.
            Washington, D.C.: CDI. http://www.cdi.org
 
Center for Defense Information. 1996. The Defense Monitor. Volume
            35(6). Washington, D.C.: CDI.
 
Center for Defense Information. 1996. 1995 CDI Military Almanac.
            Washington, D.C.: CDI.
 
Domhoff, William. 1974. “Bohemian Grove and Other Retreats: A study in ruling
           class cohesiveness.” New York: Harper & Row.
 
El-Najjar, Hassan Ali. 2001. “The Gulf War: Overreaction & Excessiveness.”
          Dalton, Georgia: Amazone Press.
 
Hess, Markson, and Stein. 1996. Sociology. New York: Allen & Beacon.
 
Lewis, Charles. 1998. “The Buying of the Congress.” New York: Avon
Books.
 
Lewis, Charles. 2000. “The Buying of the President.” New York: Avon
Books.
 
Marullo, Sam. 1993. Ending the Cold War at Home: From Militarism to a
            More Peaceful World Order. New York: Lexington Books.
 
Mills, C. Wright. 1956. “The Power Elite.” New York: Oxford University Press.
 
SIPRI. 2005 &1996. SIPRI Yearbooks 2005 & 1996: Armaments, Disarmaments, and
            International Security. Stockholm, Sweden: SIPRI (Stockholm
            International Peace Research Institute).
 
U.S. Department of State. 1998.
      http://www.state.gov/www/global/arms/bureau_ac/
      wmeat98/w98tbl1.pdf

Doctor Hassan El-Najjar teaches Sociology and Anthropology. He presented this paper during the annual meeting of the American Sociological Association in Atlanta, on August 15, 2010.

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Notes

[i] See tables of the US national debt issued by the US Department of the Treasury at:
 
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
 
[ii] William Domhoff strongly defended this argument during the 102nd  ASA annual meeting in New York, on August 13, 2007. He was the discussant of four papers presented in Session 444 of the Political Sociology Section. Two of the papers presented lent a strong support for this argument.
 
The first paper was presented by Michael Dreilling and co-authored by Derek Darves. It was titled, “corporate Unity in American Trade policy: A network analysis of corporate dyad political action. The paper demonstrated corporate influence on US government to pass NAFTA and PNTR (with China).
 
The second paper was titled, “Restructuring the Power Elite: The advance of the Evangelical Movement,”  and presented by D. Michael Lindsay. The paper demonstrated the existence of a network among the Power Elite, through interviews with corporate business leaders, executive branch senior officials, and evangelical leaders.
 
Domhoff also discussed a paper presented by Mark S Mizruchi, titled, “Power Without Efficacy: The Decline of the American Corporate Elite.” Mizruchi argued against the Mills-Domhoff thesis (as argued in their books mentioned in the references) of the existence of a tight-net inner circle of the power elite. Domhoff disagreed with him so did most of the participants.
 
The author of this paper spoke in support of the power elite thesis giving a short summary of how American oil companies, the seven sisters, got together and created one company to negotiate on their behalf with the British oil companies in order to enter the lucrative Middle Eastern oil market.
 
When the British refused, American corporate leaders used their influence on the American government to pressure the British government. This resulted in the American oil interests becoming strongly represented in the Middle Eastern oil market, since the beginning of the 20th century. Their influence over US foreign policy cannot be ignored and has been maintained ever since.
 
[iii]  The Zionist Plan for the Middle East: A Strategy for Israel in the Nineteen Eighties By Oded Yinon   at:
http://www.ccun.org/Opinion%20Editorials/2009/December/27%20o/The%20Zionist%20Plan%20for%20the%20Middle%20East%20A%20Strategy%20for%20Israel%20in%20the%20Nineteen%20Eighties%20By%20Oded%20Yinon.htm

[iv] Yitzhak Rabin, Shimon Peres, Dan Shomron (El-Najjar, 2001:210).
 
[v] Speaking to the 102nd ASA annual meeting in New York, Representative Conyers of New York said that the total cost of the Iraq war has already reached $1.5 trillion.
 
 
[vi] The military-security-industrial complex includes those who benefit directly or indirectly from increasing military and security spending. On top of these are owners and workers of the military industries, weapon systems, contractors, researchers, professors and journalists who receive direct or indirect funding from the military industry, security industry, and the Pentagon.
 
[vii] Center for Defense Information (1996).
 
[viii] El-Najjar, Hassan, “The Gulf War: Overreaction & Excessiveness” (2001: 314-319).
 
[ix] In 1992, the federal military spending included $295 billion as direct military spending, $33 billion in Veteran’s benefits, $7 billion for military foreign aid (mainly to Israel and Egypt), $5 billion for military NASA and Coast Guard costs, and $79 billion for the military’s share of interest payments due to past borrowings (Marullo, 1993: 157).
 
[x] Hess, Markson, and Stein (1996: 347-348).
 
[xi] Center for Defense Information (2000).
 
[xii] Lewis (1998, 2000).
 
[xiii] The Clean Break document: “A Clean Break: A New Strategy for Securing the Realm.” http://www.iasps.org/strat1.htm
 
[xiv] See Wikipedia for details, at: http://en.wikipedia.org/wiki/A_Clean_Break:_A_New_Strategy_for_Securing_the_Realm

According to the report's preamble,[1] it was written by the Study Group on a New Israeli Strategy Toward 2000, which was a part of the Institute for Advanced Strategic and Political Studies. Former United States Assistant Secretary of Defense Richard Perle was the "Study Group Leader", but the final report included ideas from James Colbert, Charles Fairbanks, Jr., Robert Loewenberg, Douglas Feith, David Wurmser, and Meyrav Wurmser
 
United States foreign policy

Brian Whitaker reported in a September 2002 article [7] published in The Guardian that
"With several of the Clean Break paper's authors now holding key positions in Washington, the plan for Israel to transcend its foes by reshaping the Middle East looks a good deal more achievable today than it did in 1996. Americans may even be persuaded to give up their lives to achieve it."
John Mearsheimer wrote in March 2006 in the London Review of Books that the 'Clean Break' paper
"called for Israel to take steps to reorder the entire Middle East. Netanyahu did not follow their advice, but Feith, Perle and Wurmser were soon urging the Bush administration to pursue those same goals. The Ha’aretz columnist Akiva Eldar warned that Feith and Perle 'are walking a fine line between their loyalty to American governments ... and Israeli interests'."[8]
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[xv]   “Cheney Behind New Mideast War Drive: Return of `Clean Break'” by Jeffrey Steinberg. October 17, 2003 Issue of the Executive Intelligence Review (EIR). *

APPENDIX

With very little fanfare, in September David Wurmser moved over from the State Department office of arms control chief and leading war-party agitator John Bolton, to the Old Executive Office Building, working directly under Vice President Dick Cheney and his chief of staff Lewis "Scooter" Libby. Wurmser's move was highly significant, given that the former American Enterprise Institute and Washington Institute for Near East Policy neo-conservatives was one of the primary authors of the now-infamous 1996 "A Clean Break" document, which spelled out the current joint Mideast war strategy of the Ariel Sharon government in Israel and the Cheney cabal inside the Bush Administration in the United States.
 
Just days after Wurmser joined the Vice President's "shadow national security council," the Bush Administration—at Cheney's urging—made an abrupt shift in policy towards Syria, a shift that has now brought the entire Mideast region to the brink of war and chaos—worse, even, than the fiasco of the American occupation of Iraq, which military experts are increasingly describing as "our new Vietnam" (see page 60).
 
At an American Enterprise Institute event on Oct. 7, Leo Strauss acolyte William Kristol, the publisher and editor of the Weekly Standard, candidly admitted that he was miffed that the United States had not already moved beyond the Iraq war to the "next regime change" of "the next horrible" Middle East Arab "dictator"—Syrian President Bashar Assad.
 
`A Clean Break' Revisited
Turn the clock back seven years. On July 8, 1996, Richard Perle, currently a member, and formerly the head of the Defense Policy Board in the Don Rumsfeld Pentagon, delivered a document to the new Israeli Prime Minister, Jabotinskyite Benjamin Netanyahu. Perle, and a team of American neo-cons, had been tasked by Netanyahu—through the Israeli think tank, the Institute for Advanced Strategic and Political Studies (IASPS)—to draft a strategy for abrogating the Oslo Accords and overturning the entire concept of "comprehensive land for peace," in favor of a jackboot policy of U.S.-Israeli-Turkish raw military conquest and occupation.
 
The short policy memo, which Netanyahu, and his successor-Likud Prime Minister Ariel Sharon, totally adopted as the core strategy of their administrations, spelled out a four-pronged attack on the peace process and the entire Arab world. It has become a self-evident truth that, since the Bush "43" and Sharon governments came into power simultaneously in early 2001, "A Clean Break" has been the guiding strategic doctrine of both—particularly following the irregular warfare attacks on New York and Washington on Sept. 11, 2001.
 
The Perle-Wurmser policy document demanded: 1) Destroy Yasser Arafat and the Palestinian Authority, blaming them for every act of Palestinian terrorism, including the attacks from Hamas, an organization which Sharon had helped launch during his early 1980s tenure as Minister of Defense. 2) Induce the United States to overthrow the Saddam Hussein regime in Iraq. 3) Launch war against Syria after Saddam's regime is disposed of, including striking Syrian military targets in Lebanon, and targets in Syria proper. 4) Parlay the overthrow of the Ba'athist regimes in Baghdad and Damascus into the "democratization" of the entire Arab world, including through further military actions against Iran, Saudi Arabia, and "the ultimate prize," Egypt (see Documentation following for the "Clean Break" report).
 
On Oct. 5, for the first time in 30 years, Israel launched bombing raids against Syria, targetting a purported "Palestinian terrorist camp" inside Syrian territory. The bombing immediately raised fears that Sharon is preparing a nuclear strike, most likely against Iran. A senior Israeli intelligence source told EIR that Sharon's action was clearly backed by the "pro-Sharon" crowd in Washington, led by Vice President Dick Cheney and Deputy Secretary of Defense Paul Wolfowitz: "They continue to be committed to their basic plan: Destroy Iran and Syria, and make Israel the dominant power in the region, and drive the Palestinians across the Jordan River." The source added that there "is obviously an agreement in Washington to do nothing." In a press conference a day after the Israel attack on Syria, President George W. Bush said Sharon had the right to "defend his own people," and then added, "We would be doing the same thing."
 
'Clean Break' Who's Who

In addition to arch-chicken-hawk Richard Perle, the other participants in the "Clean Break" exercise now constitute the hard core of the neo-con apparatus poisoning the Bush Administration.
 
The principal author of "Clean Break" and a series of follow-on IASPS strategy papers elaborating the new balance of power schema for the Middle East, was David Wurmser, now in the Office of Vice President Cheney. Wurmser's wife, Meyrav Wurmser, another of the "Clean Break" authors, is the head of Middle East policy at the Hudson Institute, a neo-con hotbed, heavily financed by Lord Conrad Black, owner of the Hollinger Corporation and sugar-daddy to Richard Perle, who was installed by Black on the Hudson Institute board as soon as the London-based publisher poured a pile of cash into the think tank at the start of the Bush "43" Presidency. Meyrav Wurmser received her doctorate at George Washington University, by researching the life and works of Vladimir Jabotinsky, the founder of Revisionist Zionism and a self-professed fascist. Before coming to Hudson, she headed the Washington office of the Middle East Research and Investigation Project (MERIP), of Col. Yigal Carmon, a retired Israeli Army Intelligence careerist, who is hard-wired into the U.S.A. neo-con gang.
 
Meyrav Wurmser has taken the point in promoting the overthrow of the House of Saud and the American military occupation of the Saudi Arabian oil fields, through a string of Hudson Institute policy papers, commentaries, and seminars.
 
Hudson has also played a pivotal role in the drive for war against Syria and Lebanon, as spelled out in "Clean Break." On March 7, 2003, Hudson sponsored a forum addressed by Gen. Michel Aoun, who was Prime Minister of Lebanon from 1988-1990, and who is pushing a military action against Syria, right out of the pages of "Clean Break."
 
Other authors of the 1996 war scheme were: Douglas Feith, now Assistant Secretary of Defense for Policy, and the overseer of the Office of Special Plans "information warfare" unit, which was instrumental in the black propaganda campaign to sell President Bush and the U.S. Congress on the Iraq war; and Charles Fairbanks, Jr., a longtime friend and disciple of Deputy Defense Secretary Paul Wolfowitz, dating back to their graduate studies under Leo Strauss at the University of Chicago. Fairbanks is now at the Johns Hopkins University School of Advanced International Studies.
 
From Words to Warfare
 
On Sept. 16, just as David Wurmser was going to Cheney's office to replace Eric Edelman, a longtime Wolfowitz protégé now tapped to be the new U.S. Ambassador to Turkey, the Syria war drive was seriously launched. Chief arms control provocateur John Bolton was given the green light to testify before a House International Relations subcommittee hearing on Syria and Lebanon. That testimony had been held up for several months, as the result of a direct intervention by the Central Intelligence Agency, which issued a highly unusual white paper challenging many of Bolton's planned allegations of Syrian current involvement in terrorist operations and pursuit of weapons of mass destruction.
 
The fact that Bolton was given the go-ahead to Capitol Hill signalled that Cheney had scored a tactical victory over those in the Bush Administration who were promoting a dialogue with Damascus. In fact, Bolton's provocative testimony undercut quiet efforts, then under way, to establish fresh channels of cooperation between the United States and the Assad government.
 
The day after Bolton's appearance, the same House subcommittee continued the anti-Damascus rant, by hosting General Aoun and rabid chicken-hawk Daniel Pipes, who demanded an immediate confrontation with Syria.
 
This public display of venom in Washington was all the signal that Ariel Sharon needed. On Oct. 5, Israeli Air Force jets bombed a Palestinian camp deep inside Syrian territory, ostensibly in retaliation for an Islamic Jihad suicide bombing in Haifa the day before. However, the Sharon war cabinet had approved a Syrian bombing six weeks earlier. The Bolton appearance and the promotion of Wurmser into Cheney's inner sanctum just served as the green light.
 
To make the linkage between the Israeli actions and the Cheney-led Bush Administration tilt even even more transparent, on Oct. 8 the White House announced that it would no longer oppose Congressional passage of the Syrian Accountability and Restoration of Lebanese Sovereignty Act, the equivalent to the 1998 Iraq Liberation Act which set in motion the drive towards war against Saddam Hussein.
 
This time, Sharon and Cheney do not intend to wait five years to get their war. Unless they are stopped, their timetable is to have Israel launch war on Syria by November 2003. And heaven help the American GIs in Iraq if Sharon and Cheney get their way. As Lyndon LaRouche has demanded, "Beast-man" Cheney needs to be dumped from power within the next 30 days; and, along with him, the entire neo-con cabal. As Bush "41" and Karl Rove must understand by now, Cheney and his gang of "Clean Break" fanatics are the albatross around George W. Bush's neck, and time is running out.
 
* This article appeared in the October 17, 2003 issue of Executive Intelligence Review.
 
 

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