The Audacity of Dope

There's a million and one reasons Willard Mitt 'Mittens' Romney shouldn't be elected the 45th President of the United States November 6th, but only one reason he won't when looking at the presidencies of the past 20 years. Unfortunately, being a flip-flopping liar who will shapeshift into anything the polls say will help curry favor with a few voters won't hinder him as Obama has proven. Being a plutocrat whose success was solely predicated on winning the genetic lottery thus helping dispel the illusion of the American Dream of social mobility won't hurt him either as the silver spoon he was born with in his mouth was only slightly shinier than Dubya's. Nor will his business record of buying up companies with borrowed money, loading them with debt in order to siphon off as much cash as possible before breaking them up to sell off the pieces and ship the jobs overseas disqualify him as an entire economy based on this kind of short term financial gain for the few at the cost of long term wealth creation for the many is exactly what Clinton created during his time in the White House. Not even belonging to a crazy cult that believes wearing magic underwear marks them off from other mere mortals will make a difference in the land of religious fanaticism. No, being a man around fifty years old with an Ivy League degree and having been a governor or senator, Mitt near perfectly fits the job description to occupy 1600 Pennsylvania Avenue. Yet Mittens won't win as he hasn't broken one federal law that all three of his predecessors did; he's never smoked a joint.

Who's to say if it was the stoner vote that put Clinton, Dubya and Obomber over the top, but it's as likely as anything else to have swayed the few votes that actually matter in the undemocratic electoral college system of selecting the US president. Bill Clinton may have claimed he didn't inhale, but he did enjoy pot brownies. Dubya never denied it, saying, "When I was young and irresponsible, I was young and irresponsible" meaning he did plus lots more. Obama came right out and said, "When I was a kid, I inhaled. That was the point." In fact judging by the legendary exploits of Dubya and the fact that Obomber and his buddies smoked so much ganga they nicknamed themselves the Choom Gang, the next president in 2016 is probably going to be chronic.

Of course Americans have a lot of practice dealing with the cognitive dissonance involved in having a president who has broken the same law that sees about 750,000 people arrested every year. War is peace thanks to such mental gymnastics as preemptive, preventive or preventative war, freedom is slavery thanks to the debt servitude necessary to propel an economic system dependent on financialization and ignorance is strength thanks in large part to the informational overload of the technological revolution. Thanks to the primacy of obedience and the related reverence for authority drilled into them at a young age they don't mind casting their vote while blindfolded to the other choices whose beliefs most likely better align with theirs thus turning their election into a quadrennial Pepsi Challenge where choosing Coke or Pepsi doesn't matter as either way you're still going to get diabetes and die.

Sure, much of the US election circus is nothing but a choreographed carnival to coronate an Obomney or Robama, where only a handful of votes in a thimbleful of states will matter, but Americans in many states do have direct democracy: ballot initiatives and referendum. This November 6th there are ballot measures in seven states to either legalize the sale of medical marijuana or legalize it altogether if you're over 21, taxing and regulating it as they do with alcohol. This is an issue where representative democracy is clearly failing the American people, but fortunately direct democracy takes the power out of the hands of vested interests and returns it to the people. Washington (Initiative 502), Colorado (Amendment 64), and Oregon (Measure 80) will decide whether to legalize the drug's production and sale for recreational use. Massachusetts and Arkansas (first in the south) will vote to catch up with the previous trio and the 14 other states where medical marijuana use is already legal. Meanwhile, in Montana they will be voting to reinstate the 2004 citizen-approved medical marijuana law the state legislature recently repealed. Legalization just missed getting on the ballot in Michigan so the City Commissioners in Kalamazoo voted unanimously to decriminalize weed, saying the new ordinance will help police respond to serious crimes even faster than before based on how it has gone so far in Chicago. Detroit, Flint and Grand Rapids will also ask their citizens whether they'd like to decriminalize possession

How did we get to this wacky world? Constructing elaborate Rube-Goldberg machines to destroy our planet or Nobel Peace Prize winners composing kill lists and remotely killing American citizens, innocent women, children, wedding guests and their rescuers with drones in faraway lands without any declaration of war are less controversial than letting people smoke weed to improve the quality of their lives or just for fun. Even when laws have been passed to legalize medical marijuana and with a president we believed to be progressive sitting in the Oval Office, medical dispensaries and training schools are raided by the feds while state troopers stand by and wave good day to the staff, clients and students. Despite Obomber's 2008 promise "I'm not going to be using Justice Department resources to try to circumvent state laws [on medical marijuana]" his Attorney General, Eric Holder has been doing just that. It was the same Eric Holder who may have helped sink California's Prop 19 to legalize marijuana when he vowed to "vigorously enforce" federal marijuana laws and warned that the government would not look the other way and allow a state marijuana market to emerge a month before the 2010 election. In a rational world we'd design laws that improved our society, finances and health but far too often, and especially in the case of cannabis, it seems these ideals are trumped by politics, emotions and special interests.

"Even if one takes every reefer madness allegation of the prohibitionists at face value, marijuana prohibition has done far more harm to far more people than marijuana ever could."
- William F. Buckley Jr

While hard numbers are hard to come by, the drug war costs well over 6,000 lives a year in the US while in Mexico drug cartels have killed more than 55,000 people in the past six years. Prohibition not only raises prices thus increasing incentives to capture market share, it renders contracts unenforceable and makes it impossible for competitors to use the courts or the police to challenge intimidation or settle disputes; the war on drugs has given us decapitated corpses hung from bridges while the cola wars has simply given us all diabetes. Worse are the number of lives lost to the prison system as half of the 2.5 million behind bars in the US are there for drug offenses, many of them of the low-level, nonviolent variety. In 2010, 1.64 million people were arrested for drug violations - 80% of them for possession. Even worse, it has become a new form of Jim Crow as though blacks use and sell drugs at the same rates as whites, thirteen of them go to jail for every white person who does. It seems obvious but many still don't get that sending potheads to jail destroys lives and families and creates hardened criminals who get turned by the prison culture. Members of the now militarized police force see the senselessness close-up which is why Law Enforcement Against Prohibition (LEAP), a national organization of cops and criminal justice experts dedicated to “speaking out about the failures of our existing drug policies” have become legalization advocates.

Costing this war is as slippery as those waged in Iraq and Afghanistan but it is every bit as expensive. According to Harvard drug economist Jeffrey Miron: "Legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. Of these savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government." Yet according to The Economic Impact of Illicit Drug Use on American Society, last published by the Department of Justice in 2011, enforcing illegal drug laws imposes an annual cost on the American criminal justice system of $56 billion; while incarceration of drug offenders imposes an annual cost of $48 billion for a total of over $100 billion. Back to Harvard's Miron who claims drug legalization would yield tax revenue of $46.7 billion, annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco. Approximately $8.7 billion of this revenue would result from legalization of marijuana and $38.0 billion from legalization of other drugs." Whatever the exact figures, in these times of austerity in which California spends more on its prison system than all higher education this is a huge burden. So big in fact that many states are turning to privatization of prisons which will guarantee occupancy rates, forcing states to maintain or toughen drug and immigration laws in order to keep the beds filled.

Here's what we know about marijuana's impact on our health. Not much thanks to prohibition. In fact we were more aware of its benefits over a century ago. Sure there seems to be a few negatives, heavy use in your teens may shave a few points off your IQ, smoking has been tied to testicular cancer and 9% of those who try marijuana eventually fit a diagnosis of cannabis dependence. But few would advocate teens smoking a few joints a day, cannabis compounds have been shown to stop metastasis in aggressive cancers and the corresponding dependency rates for alcohol and nicotine are 15 and 32%. The "gateway" drug argument claims use leads to more dangerous substances as most people who use other illicit drugs had used marijuana first. Not to bore you with the old causation is not correlation trope but the illegality of weed forces people to come into contact with harder drugs in their illegal dealings and don't forget people often smoke cigarettes or drink alcohol before they latch on to marijuana. Meanwhile, marijuana has significant upsides for individuals with certain illnesses. In glaucoma patients, it can reduce the dangerously high eye pressure that can lead to vision loss. In addition, pot can provide relief from chronic pain, reduce nausea and vomiting from cancer chemotherapy, and limit the severe weight loss that results from AIDS and other diseases. Alcohol abuse kills 75,000 people a year. Legal prescription drugs kill 100,000 people a year. Marijuana kills zero. The statistics for violent crime and accidental death follow the same pattern.

"Hemp is of first necessity to the wealth & protection of the country."
- Thomas Jefferson

The path from being a simple plant mandatory to grow in 1619 Jamestown colony law to Samuel Caldwell and Moses Baca becoming the first Americans busted for pot just over 75 years ago, Oct 2, 1937, is as hazy as the air at a Dylan show in 1966. In between, hemp was the principal crop at George Washington's Mount Vernon, secondary at Jefferson's Monticello, used as part of medicinal preparations beginning in 1839 and "fashionable narcotic" by 1853. Control came slowly over the next 80 years, culminating in prohibition with the passage of the federal Marihuana Tax Act in 1937. First came poison laws in an attempt to regulate pharmaceuticals through labeling to indicate harmful effects of the drugs or prohibiting sale outside of licensed pharmacies and without a prescription. Basically, trying to combat this type of snake oil salesmen.

At the turn of the 20th century, between 2% and 5% of the US population were drug addicts, more than today, the majority hooked on morphine, a legacy of the Civil War and bored housewives duped by door-to-door con artists. The Pure Food and Drug Act of 1906 did more than any subsequent law to fight addiction. In addition to creating the FDA (Food and Drug Administration) it also said certain drugs could only be sold by prescription and habit forming drugs had to be labeled. As Congress did not possess the power to create general criminal laws, a plan was devised to masquerade the regulation and persecution as a tax, leading to the Harrison Narcotics Tax Act of 1914. It created the template for using criminal sanctions to deal with the non-medical use of drugs but only applied to opium, morphine and its various derivatives, and the derivatives of the coca leaf like cocaine; there was no mention anywhere of amphetamines, barbiturates, marijuana, hashish, or hallucinogenic drugs of any kind. More importantly, it did nothing to outlaw possession but set such a high tax on non-medical exchange of the drugs that it made it defacto illegal to have certain drugs.

Control was tightened ad hoc, state by state to restrict all narcotics, including cannabis, as poisons and limit their sale to pharmacies requiring doctor's prescriptions. From 1915 to 1937, some 27 states passed criminal laws against the use of marijuana driven by three factors. Racism, fear of substitution and religious fanaticism. Out west, the influx of Mexican immigrants made them easy prey for populist politicians. Overheard on the floor of the Texas Senate, "All Mexicans are crazy, and this stuff [marijuana] is what makes them crazy." Proponent of Montana's first marijuana law said, "[g]ive one of these Mexican beet field workers a couple of puffs on a marijuana cigarette and he thinks he is in the bullring at Barcelona." In the northeast of the country, the fear was marijuana would be taken up by those who could no longer drink or do morphine. And of course the religious fanatics were in Utah, where the Mormon Church's opposition to euphoriants of any kind was codified by the state legislature as the first criminal law in the US against the use of marijuana in October of 1915. On what should be known as international drug cartel day, the turning point came February 19, 1925, when the International Opium Convention was revised to include among other things, Indian hemp, while leaving the low-THC European hemp uncontrolled.

"Reefer makes darkies think they're as good as white men."
 - Harry Anslinger; US Drug Czar

The mythology surrounding marijuana prohibition has only grown with time. Who hasn't run into a conspiracy theorist blaming it all on William Hearst's use of Yellow Journalism to protect his lumber interests (hemp can also be used to make paper) or a hippie happy to harangue Dupont and the cotton industry for their role in demonizing the hemp plant (yes, makes pretty good clothes, too). The fact is marijuana's current status in America and the world has more to do with one man than all else combined. Harry J. Anslinger was the drug czar under five presidents becoming the first the first Commissioner of the U.S. Treasury Department's Federal Bureau of Narcotics (FBN) on August 12, 1930 and serving until May 1962. By 1936, Anslinger was convinced that America was under assault by a reefer invasion and therefore launched a two-pronged counterattack: a legislative plan to seek from Congress a new law that would place marijuana and its distribution directly under federal control alongside a media campaign to turn a near-harmless, potentially life saving plant into loco weed. His gore file was filled with stories of mild-mannered youths being turned into axe-wielding mass murderers, white female students into sex slaves, and of course Negroes, Hispanics, Filipinos and entertainers seeking the company of those innocent white girls after a single puff of the stuff. The culmination of this propaganda was of course the now infamous film, Reefer Madness.

His legislative assault led to a hearing on national marijuana prohibition in 1937 in which three bodies of testimony were given; Anslinger himself representing the government as head of the FBN, spokesmen from industries that would be affected by a ban on hemp, and representatives from the medical profession. Anslinger's testimony is easily summed up with "Marihuana is an addictive drug which produces in its users insanity, criminality, and death." There were three industrial spokesmen, from the rope, paint and varnish, and birdseed people. The first testimonial irony came from the rope people who told of the cheap supply from the Far East making homegrown uneconomical. Of course shortage of rope to supply warships less than five years later required the government to become the biggest growers in history. The paint and varnish folks said "we can use something else" while only the birdseed people balked and gave us irony number two. When asked "Couldn't you use some other seed?" the birdseen man said, "No, Congressman, we couldn't. We have never found another seed that makes a bird's coat so lustrous or makes them sing so much." For this reason, birds, not people, have been able to enjoy some of the benefits of the plant under the name "denatured seeds".

The two pieces of  medical testimony prove the most puzzling, one from a pharmacologist, the other, a doctor/lawyer representing the AMA (American Medical Association). The former claimed to have had three dogs die after he injected the active ingredient in marihuana into the brains of 300 canines. Unfortunately, the active component, THC,  wasn't isolated until 1964, so who knows what he shot into their craniums. When asked by a Congressman, "Doctor, did you choose dogs for the similarity of their reactions to that of humans?", the pharmacologist replied, "I wouldn't know, I'm not a dog psychologist." The latter medical testimony, from Dr. William C. Woodward was short, sweet and succinct, "The American Medical Association knows of no evidence that marihuana is a dangerous drug." To understand why the two Congressmen then told him, "Doctor, if you can't say something good about what we are trying to do, why don't you go home?" and "Doctor, if you haven't got something better to say than that, we are sick of hearing you", one must remember the political situation of the time. Both Congressmen were Democrats who held a grudge against the AMA as they had opposed every piece of Roosevelt's New Deal legislation introduced from 1932 through 1937.

It was August 20th at 5:45pm in the pre-air-conditioning world of Washington, DC when the debate on national marijuana prohibition took place in Congress. No one was there. Well, a few Republicans, one of whom from upstate New York stood up before the bill was passed on "tellers", "Mr. Speaker, what is this bill about?" To which speaker Rayburn replied, "I don't know. It has something to do with a thing called marihuana. I think it's a narcotic of some kind." To which the New Yorker, a Republican as much on the side of the AMA for the last 5 years as the Democrats were against, followed up, "Mr. Speaker, does the American Medical Association support this bill?". At which point a committee member jumped up and said, "Their Doctor Wentworth [remember it was Woodward] came down here. They support this bill 100%." Good enough for the Republicans. Good enough for America as the bill then passed on and when the bill passed the Senate without debate or recorded vote and President Roosevelt signed it, the US had national prohibition with the federal Marihuana Tax Act.

More irony? Well, the La Guardia Report (yeah, the mayor of NYC La Guardia), the first in depth study into the effects of smoking marijuana came out just seven years later, it systematically contradicted claims made by the U.S. Treasury Department that smoking marijuana results in insanity, and determined that "the practice of smoking marihuana does not lead to addiction in the medical sense of the word." The next big surge in this war came with Nixon who not only upped the ante on the war in Vietnam but more egregiously committed the country to wage "total war against public enemy number one in the United States, the problem of dangerous drugs" regardless of the cost, in dollars or lives. Not only did he oversee the implementation of the Controlled Substances Act in 1970, he also ensured the war would be well funded and armed with the creation of the Drug Enforcement Agency (DEA) in 1973. Republicans continued to bask in the law and order glory under Reagan, when Nancy was handed the skillet in the Just say no, This is your brain on drugs campaign. The same story continues to this day with millions of lives lost or destroyed simply to uphold an outdated, falsely propogated belief that profits the wicked, just as any war. Despite all the propaganda, a record-high 50% of Americans said last year the use of marijuana should be made legal, up from 46% the year before.
 
Marijuana prohibition keeps police officers busy on the beat, courts jammed with marijuana offenders, and jails packed with prisoners convicted of violating marijuana laws. Unquestionably, these laws have helped make America great, nay, the greatest in the world... at penning people in cages. Not only does America lead in sheer number of prisoners, it has the highest incarceration rate in the world, too. The prison-industrial-complex that has grown to catch, judge and accommodate the millions behind bars along with the tobacco, pharmaceutical and alcohol industries, have a lot of profit incentive to keep things the way they are. It should come as no surprise that the biggest financial contributor to Smart Colorado, the supposedly family-friendly group leading the fight against the marijuana legalizing Proposition 64, is Save Our Society from Drugs, a Florida-based nonprofit founded by Mel and Betty Sembler who once led drug rehab centers shut down over wide-ranging child abuse scandals. With the coming votes in the western trifecta of states comes the hope of a domino effect and an end to a system that destroys lives to fill up treatment centers and pad private prison profits.

Alcohol offers a good parallel with weed though its trajectory from legal euphoriant to not and back again was much steeper. Though the US didn't go completely dry until the 18th Amendment came into force at midnight, January 16, 1920, after being ratified by 36 states, about 65% of the country had already banned alcohol. Just as alcohol can lead to strange bedfellows, so did the prohibition movement: xenophobes, industrialists, women's rights activists and religious zealots. Anti-German wartime sentiment tied in with the push to use grain to make bread for soldiers instead of beer turned Milwaukee's brewers into "the worst of all our German enemies," and the Anti-Saloon League dubbed their beer "Kaiser brew." Henry Ford described prohibition as "the greatest force for the comfort and prosperity of the U.S." while John D. Rockefeller saw it as a way of strengthening the monopoly of his Standard Oil by eliminating the alternative of ethyl alcohol to power cars. Alcohol's obvious link to wife beating and child abuse drove the development of the Woman's Christian Temperance Union. 

Of course history has shown that turning temperance into prohibition was a big mistake as thirteen long violent years followed in yet another sad parallel with modern drug policy. While most of the gangland style violence and overt corruption spread by bootleggers of the prohibition era played out at home, most of it that has resulted from drug laws takes place south of the border, out of sight of middle America. Perhaps this explains why the anti-prohibition forces only took thirteen years to win while the perverse drug laws have been around almost a century. The Association Against the Prohibition Amendment (AAPA) formed in 1919 even before prohibition and was so successful that by the time the 21st Amendment ending national alcohol prohibition went into effect December 1933, more than a dozen states had already opted out. This same slow creep is hopefully being emulated by the marijuana legalization movement. A final parallel: the spark for the repeal movement was the onset of the Great Depression in 1929. Could the not-so-great depression do the same? "Beer For Prosperity" became the anti-Prohibition battle cry as few could deny the obvious truth that legalizing beer would create thousands of new jobs virtually over night. At the same time, desperately-needed new government revenue would be generated in the form of beer taxes. Sounds kind of familiar doesn't it?

If legalization comes to the US, they won't be the first. Everyone knows about the Netherlands being a drug haven but few speak about the annual prevalence of marijuana use for people age 15-64 being just 5.4% there compared to 13.7% in the US. The contrasts in figures are even starker for heroin, cocaine and opiates. Even fewer talk about the success of decriminalization in Portugal. Quietest of all is the revolution being seen in Central and South America, where most of the loss of life in this war has occurred. It's not just the leftist governments either; Guatemalan President Otto Pérez Molina, a 30-year military veteran whose campaign slogan was "Iron fist, head and heart", angered Washington in September by proposing drug legalization at the UN General Assembly. This came on the heels of a dozen Latin American leaders avoiding using the term legalization by calling to reduce demand for drugs by exploring "regulatory or market oriented options", an act of linguistic prestidigitation favored by Mexican President Felipe Calderon to avoid pissing off Uncle Sam. Even President Juan Manuel Santos of Colombia, which has received almost $9 billion in aid from the US to fight the cartels, has said he's open to legalization. However, the race to sanity seems set to be won by Uruguay where a bill has been introduced to legalize the production and sale of marijuana under a state monopoly thanks to its flower-farming former leftist guerilla president, Jose "Pepe" Mujica.
 
So while the world watches the presidential returns November 6th to see who will be sleeping in the White House for the next four years, the people of Colorado, Oregon and Washington will be choosing whether to not only make their lives better but also those in Chihuahua, Durango and Sinaloa, the three Mexican states where drug cartels will be most harmed by legalization, losing up to 30% of their earnings from traffic to the US. There's a few other interesting citizens' initiatives to keep an eye on, particularly California's Proposition 37 which would require products containing GMOs to be labeled. Opponents, Monsanto that is, are spending millions to argue that giving people information would scare them into buying non-GMO products. Well, um, yeah, I guess that's the point. Maine, Maryland and Washington will be having up-or-down votes on legalizing same-sex marriage while Minnesotans face a measure to constitutionally take away gay couples rights as 30 states have already done. And don't forget Florida and Maine choose whether to tighten control over women's uteruses (uteri?). 

"When you return to this mundane sphere from your visionary world, you would seem to leave a Neapolitan spring for a Lapland winter - to quit paradise for earth - heaven for hell! Taste the hashish, guest of mine - taste the hashish!"  
 - Alexander Dumas

Polls show Washingtonians and Coloradans likely to vote yes while Oregonians might not be ready to make the leap. What will it mean if these states legalize marijuana? The Obama administration has already showed its disdain for the will of the people by raiding medical dispensaries all over the west, so one can imagine an even stronger reaction to people smoking pot for recreational purposes and given his religious zealotry, Romney has predictably made it clear he'll fight weed tooth and nail. While parroting the same old refuted marijuana myths,  former drug warriors predict a constitutional showdown between the states and feds. With so many powerful forces profiting from prohibition, yes votes in any or all three states will only be a victory in one battle with many more to come. Hopefully the anti-prohibition movement will continue down the same successful path as the last 70 years ago when Beer Day parades saw 100,000 turn out in NYC and 40,000 in Detroit to cheer the legalization of beer, Obama will magically turn into the progressive we believed him to be four years ago and the media will turn from demonization to pressing for legalization. Just as scientists are now restarting research into LSD, MDMA and psilocybin (found in magic mushrooms) after a 40 year federally imposed hiatus and discovering new benefits, new medical uses for marijuana will also help the push. Regardless of the vote, it'll be a cat and mouse game for the foreseeable future in which the cats have the guns but the mice have the reason...

 

Coming to a Consensus

Way back in time, before there was Twitter, before the perpetual recession had come, in 2007 the International Monetary Fund (IMF) had a mere $2 billion in lending commitments on its books. Two billion. Avatar made that in seven weeks. That's the monthly increase in the cost of the Afghanistan war this year. From its inception at Bretton Woods in 1945, the fund had been transformed from an instrument to promote and facilitate trade between its member nations into an object of hate, letters spoken together with derision from Bangkok to Buenos Aires. Well, here we are in a world of two billion tweets a month with much of it stuck in near economic depression where the IMF has $195 billion in loans on its books. This week central bankers and finance ministers from around the world are gathering at IMF headquarters in Washington DC for the IMF and World Bank annual meeting and they'll be on their best behaviour. You see, with about $900 billion at its disposal, the IMF has been charged with saving liberal capitalism.

It's a mixed up muddled up shook up world as we stumble headlong into the second decade of the 21st century but what I'm finding hardest to swallow is the rejuvenation of the IMF's image. There was a reason it only had a couple of billion in loans a few years back; it had lost its legitimacy in the international community. It had morphed from a cold war tool to support dictatorships in South America into a neo-colonial boot across the throat of Africa before becoming a purveyor and destroyer of capitalist dreams beyond the Berlin Wall and finally the instigator of global economic turmoil even further east. By first denying credit to elected governments led by 'left leaning' types such as Allende, Goulart or Ortega who may not have followed Washington's orders then supplying it to dictators that overthrew them, the likes of Pinochet, Branco and Samosa, the IMF was a good soldier in the fight against the Red Menace. Countries such as Senegal have found they are better off following the Beijing Consensus to Washington's nasty version. Privatization and market liberalization that was gonna make everyone rich following the collapse of the commie regime was unleashed without the proper legal framework (read: government institutions, is that irony?) bringing the world Russian billionaire oligarchs, some of whom managed to move to London to buy football teams before the Putin authoritarian backlash. Others languish in prison. The last bit of credibility seemed to evaporate with the steam from hot money that poured into the opening of financial and capital markets ordered by the IMF as a remedy to East Asia's downturn in 1997 transforming a hiccup into worldwide crisis.

It's no coincidence that the three biggest debts on the IMF's books as of August 2010 belong to Romania, the Ukraine and Hungary each owing over $11.7 billion, almost six times the total of outstanding loans three years ago. October 3rd saw the 20th anniversary of the reunification of East and West Germany which heralded the triumph of capitalism over communism, good over evil, opportunity over captivity. Some 8% of the world's population that had lived under the Soviet Communist system traded in one form of enslavement for another as IMF experts marched in to preach the gospel of a new religion, market fundamentalism, as a substitute for the old, Marxism (Well, a twisted Leninism/Stalinism/Gorbachevism?). For the western powers (ie. the banksters) the sudden opening of an untapped, unregulated market was a once in a lifetime opportunity as it lacked the most fundamental building blocks of efficient markets such as anti-trust laws or property rights. This lack of government regulation allowed those who knew which vodka to buy Yeltsin (answer: any) to prosper as most of the population suffered. Americans saw shock therapy through the lens of Reagan's victory putting a McDonald's on Red Square while the reality was the percentage of Russians living in poverty using the $2 standard skyrocketed from 2% in 1989 to 23.8% less than a decade later. The IMF brought Mercedes traffic jams to Moscow but 40% of the country now had to live on less than $4 a day.

The IMF was created to smooth financial crisis when they occur yet seems to have been the cause of political and economic disease as often as the cure. Yes, Virgina, there have been other crises before this latest one and they are coming ever more frequently, powerfully and lingery. That's not a word, but they tend to drag on, with recoveries marked with ever less, and painfully slow, job creation. Our hopes for recovery are resting on the drug dealer of debt that turned many of us into junkies in the first place as much of the world is relying on the IMF pit bosses to keep the casino open. The next crisis is already written into the loopholes lobbied into the financial regulation bill in the US. The last not yet complete judging by ever widening bond spreads in Europe which highlight the uselessness of trying to save the euro by propping up PIGS with more debt and occasionally issuing reports on their progress to soothe jittery markets. An optimist will say the protests in Seattle in 1999 or the street battle in 2001 in Genoa may have lit the fire under the IMF to change its ways. But it seems just the names have changed in this truly grim fairy tale where only the banks get paid as we double down on SDRs instead of structural adjustment loans and implement austerity programs in place of job cuts.

Not being able to know who the bad guy really is helps keep us interested in the story and allows the cycle of crisis to continue. The Greeks, banks, Irish, Al-Qaeda and the government all played a role in putting us in a situation where cuts are going to be necessary along with tax hikes but the biggest baddie in the financial press these days seems to be China. Sure, China's on board, what with the G20 and now a Special Advisor to the Managing Director at the IMF, their cash is needed, but the boss is still European and Canada has a bigger vote than Russia, or Brazil and Mexico combined. The US still has a veto power with over 16% of the vote, as major policy decisions require a supermajority of 85%. For these past 20 years much of the world has gone along with what the IMF prescribed, often having no choice, accept or perish, but there has been growing evidence that there might be another path to choose and many are taking it.

About ten before the fall of the Berlin Wall, in 1978 the Chinese government began making economic reforms that have brought in a hitherto unknown combination of mixed ownership, basic property rights, and heavy government intervention. On the surface, what distinguished this new capitalism seemed to be the level of government intervention. While this is true, what surprisingly sets Washington and Beijing apart is flexibility. While America opts for nostalgia and ideology instead of pragmatism and progress, the winning model of capitalism is being made in China, like so much else in the world these days. A two-party political system is no better, in fact worse, than a one-party state when both parties are under the control of lobbyists and one of them is bought and paid for by a major media outlet. Whereas the neoliberals and neocons invade nations financially and militarily through loans and bombs in order to exploit their resources, the Beijing Consensus simply builds them infrastructure in exchange for their riches. Roads and hospitals for copper and rare earth metals. Risk capital instead of lives. Seeing the game slipping away, the west, America in particular, is trying to find a scapegoat, blaming the winner for playing the game better.

So we'll continue hearing a lot about the yuan (renminbi? still don't understand the difference) being undervalued while not criticizing too directly as we're still offering the open hand of the G20. After all, it'll be good to spread the blame when things fall apart. The Chinese understand that it wasn't American style management skills that made the US the global economic leader for the past century but a combination of luck and directing the resources of the country in a productive manner. Think of the big money makers of the past century and their connection with government. From the direct to the indirect in the big picture and in the details. Militarily not only conquering markets that needed to be rebuilt after winning world wars or friendly invasions but also directly employing and educating soldiers along with buying and selling all those weapons of war. Boeing, General Electric and Haliburton anyone? All this spending and the hydrogen bomb gave a head start to the computing industry and even gave us the internet. Detroit wouldn't have had the run it did if an interstate system hadn't been built to handle all those cars criss-crossing the continent. There's no secret to China's success, it's much the same recipe America used when it understood that since market forces cannot even do something as simple as finance home mortgages it shouldn't be trusted to restore and maintain full employment, reduce global imbalances or prevent the destruction of the environment while preparing for a future without fossil fuels. China's doing it while somehow being both more overt and less conspicuous. Not wasting energy pretending to be what it's not at home and forcing their ideas on others abroad.

The success of the Chinese approach to modernization has struck the developing world as attractive and the developed as amazing. As the calls to control deficits grow louder and governments are told to cut more jobs, raise retirement ages and lower subsidies while bailing out banks, the Chinese will keep building the things we need and using the proceeds to fund the debt the IMF has ensured we're addicted to. While Chinese Premier Wen Jiabao's in person offer of support to Greece (obviously in exchange for market access) was being gratefully accepted, the head of the IMF issued ominous warnings of a currency war being waged by those Chinese. In Europe the cracks are growing as "You can't have a monetary union without a reasonably coordinated fiscal policy" - Orwellian for a true supergovernment from that same IMF director, Dominique Strauss-Kahn. It gets worse in America where most of the public has been convinced that all things government or intellectual are bad - insert your own Palin 2012 vice presidential nominee here and imagine the outcome. Richard Nixon is attributed Milton Friedman's misquote that "We are all Keynesians now" after breaking the gold standard and reluctantly accepting John Maynard's economic ideas. The IMF was built upon that economist's ideas but I get the feeling that the next great shift in economics will have most of us saying "We are all Chinese now".

How to lose friends and influence

"Reputation, reputation, reputation! O I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial."

- Shakespeare, Othello, Act 2 Sc. III

The Harvard University professor Joseph S. Nye Jr. first coined the term "soft power" back in 1990 to describe the ability of a political body, such as a state, to indirectly influence the behavior or interests of other political bodies through cultural or ideological means. It's now identified as the third form of power that nations can wield, with the other two being "hard power", military might, along with economic strength. Power is the ability to influence the behavior of others to get the outcomes one wants; you can coerce others by threatening them with a stick, you can induce them with payments, or you can simply attract or co-opt them. The year 1990 could be seen as a high water mark for the USA for all three forms of power: the symbolic defeat of communism with the fall of the Berlin Wall the previous year, the US and its allies were about to unleash the 'Desert Storm' invasion of Iraq and the poor deprived citizens of Moscow were finally able to order their first Big Mac. American hegemony was sealed, the new world order of American led globalization would usher in a new era of peace and prosperity. However, Russian bombers may soon be stationed in Cuba as naval battle groups are sent to Venezuela to perform joint exercises, while Chinese investors are exchanging ideas with Brazilian ethanol producers and Iran can sit tight in the knowledge that the security council will block any meaningful resolution against it at the UN. So, what's happened here?

While the US military hasn't been overwhelming in its performance in Iraq or Afghanistan, you can't deny that it is still the unquestionable hard power force in the world. The trouble is that the group of people who have come into power over the last 20 years or so have seen American military preeminence as a passport to do what they want. This view, that Charles Krauthammer has called “the new unilateralism" holds that the United States is so powerful that we can do as we wish and others have no choice but to follow. They have used that view as a way of applying American military power to all sorts of problems. As for soft power, well the current administration has finally come around in the past couple of years to admit that it is relevant. As recently as 2004, then US Secretary of Defense Donald Rumsfeld professed to not even understand the term soft power, claiming popularity was too ephemeral to be measured. When the actions of the current administration are combined with the popularly held view that they didn't even enter power democratically, the effects are easy to see in a growing tide of anti-Americanism. Oh oh, I'm feeling quite ranty, this could be a long post, bear with me.

That we have come to a point where outright purchases of private sector companies is not only proposed but accepted by many who claim to be defenders of free markets bodes ill for the future of American society - Ron Paul
The most important source of US power for the past century has been its financial weight. Now that the market roller coaster of the past week has resulted in what is essentially the nationalization of the financial industry, that era has officially ended. Time magazine went so far as the refer the the US as the United States of France. Although history may look back at these events as the turning point, the loss in economic power has been a long time coming. On October 26, 2000 you could buy a Euro with 82.52 US cents. While it has bounced off its low, the markets told the US about its confidence in the economy Monday as the Euro rose to US$1.4824 in afternoon trading, up from the $1.4470 on Friday. Meanwhile oil was up over $25 at one point, but settled for a $16.37 gain to end at US$120.92 and gold shot up $44.30 to settle at US$909 an ounce. In that fateful year of 1990, the US also moved from a negative to a positive current account balance as it managed to record its last positive figure in 1991, just shy of $3 billion. This essentially means that the US has been buying more goods (and services) from abroad than it is selling, with the flow of foreign funds into the US financing the difference. In other words, foreigners are purchasing such things as US Treasuries, shares in companies, and even firms or property. The deficit is precisely the amount foreigners must acquire in US denominated assets to keep the dollar from falling. Up to now, foreigners have been willing to finance the shortfall because of their belief in the American way. The past week not only has investment banking died, the American way could die with the proposed banking bailout package, result, goodbye dollar as the world's currency.

The typical knee-jerk reaction to the above problem has been to point the finger at China. Their currency is undervalued, or they aren't importing enough American products. However it's China that is winning the power war where it really matter as coincidentally they have the world's largest current account surplus, $370 billion. Hard power, they've definitely got that. Soft power we can start with the Olympics, where, although the shine was tainted a bit by the Tibet protests, still was an overwhelming success in the world's opinion. Beijing aggressively courts the governments of countries with diplomacy, trade deals, debt forgiveness, and aid packages. China's no questions asked policy is diametrically opposed to that of the US and the EU and has resulted in a spreading Chinese influence globally. Right now, your kids wear Chinese clothes and play with Chinese toys. It is not at all inconceivable that their kids will listen to Chinese pop and prefer Chinese movies. The inhabitants of southeast Asia are already doing so. At least there's always the lingua franca of English to fall back on, right? Wrong, the Chinese are working hard to change that in their favour too. In 2005, China's education ministry announced a new initiative to boost Chinese-language teaching in American universities and language institutes around the world. Beijing University, China's most prestigious, announced a visiting-scholars fund to encourage foreign PhDs to study in China. More than 110,000 overseas students from 178 countries studied in China in 2004. This figure marked a ten-year high, and an increase of over 40 percent from 2003. "There's a belief that to get ahead, it would behoove you to go to China, in the same way that ten years ago people said the same about the United States.

While the US has focused on using its military to secure influence, particularly in respect to oil, China has signed oil and gas exploration contracts around the world; with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba in the Americas; in the Central Asian states such as Uzbekistan and Turkmenistan, and China's oil exploration interests extend to Burma, Vietnam, and Malaysia in southeast Asia; imports of crude oil also constitutes the bulk of China's imports from African states. The Chinese approach to foreign relations is officially termed "noninterference in domestic affairs." Unlike the hypocritical policies of the US, China doesn't mix business with politics and argue that such attempts by foreign nations to discuss democracy and human rights violate the rights of a sovereign country. While the US disregards international law in places like Iraq or Guantanamo while trying to twist other nations into following their vision of the world, China has its Tibet but doesn't force its ideals on others. As a result, examples of the growth in Chinese influence are not hard to find, even outside their traditional sphere of influence:

South America:
In Argentina, following their disastrous effects “neo-liberal” economic policies backed by Washington and the International Monetary Fund, “You cannot understand the miraculous Argentine recovery after the financial crisis of December 2001 without considering the boom in soy exports to China”. In Bolivia, China will invest $1.5 billion in the onshore oil and gas sector as well as showing interest in developing its largest tin mine, Huanuni. In Chile, China will set up a joint venture with the state copper company, Codelco. Meanwhile, a Chinese-led consortium bought oil and pipeline assets for $1.4 billion in Ecuador. The story is even bigger in Brazil and Venezuela. Farmers have been rushing to plant soy on the fringes of the Amazon rainforest in an attempt to satisfy China's voracious appetite. As for the ethanol politics in Brazil, maybe you can learn more here. It has also imported millions of tons of oil and iron ore from Brazil and has signed a deal to help construct a major natural gas pipeline. Finally in Chile, 2006 saw the Bachelet government sign a free trade deal with China in an effort to boost sales of copper, fruit, and fish oil. The Chilean president boasted of figures showing a $1.4 billion increase in trade between the two nations last year. “When Chile considers how to continue its development, Chile thinks big,” Bachelet remarked. “And to think big means to think China.”

Africa:
In Africa, where the game was once ideological, it has become purely financial. Che Guevara no longer stalks the Angolan countryside. Where once the government of China would build a 1,100-mile-long railway across Tanzania to support a communist brother, today it's all about profit. The continent sits on 90% of the world’s cobalt, 90% of its platinum, 50% of its gold, 98% of its chromium, 64% of its manganese and one-third of its uranium. It is rich in diamonds, has more oil reserves than North America, and has been estimated to hold 40% of the world’s potential hydroelectric power. Africa is now supplying a third of the oil fuelling China’s economic boom. Angola has overtaken Saudi Arabia as China’s largest supplier of oil. Trade hit $55 billion last year, up 40% from the year before. It is expected to top $100 billion in 2010. China has overtaken Britain as Africa’s third-largest business partner and is fast catching up with France. In Angola, which exported roughly 465,000 barrels of oil per day to China in the first six months of 2007, Beijing secured a major stake in future oil production in 2004 with a $2 billion package of loans and aid that includes funds for Chinese companies to build railroads, schools, roads, hospitals, bridges, and offices; lay a fiber-optic network; and train Angolan telecommunications workers. Sudan, with its vast oil reserves, is the number one recipient of Chinese investment, and sells some two-thirds of its oil to Beijing, while receiving arms in return. Whether rebuilding the infrastructure in Addis Ababa, or building a railway line linking Khartoum to the Red Sea, the common theme across the continent seems to be that China offers "no-strings" aid, a marked contrast to Western donors who impose conditions on aid and tie trade sweeteners to human rights issues. Robert Mugabe said, “We have turned east, where the sun rises, and given our backs to the West, where the sun sets." OK, it's Mugabe, but even a respected leader like President Festus Mogae of Botswana, who may run the best-managed country in Africa said, "China treats us as equals, while the West treats us as former subjects,” he has said. “That is the reality. I prefer the attitude of China to that of the West.”

Of course China also continues to sell arms to Sudan, among other African countries. In the period from 2003 to 2006, China's arms sales to Africa made up 15.4 percent ($500 million) of all conventional arms transfers to the continent. Notable weapons sales include those to Sudan, Equatorial Guinea, Ethiopia, Eritrea, Burundi, Tanzania, and Zimbabwe. Beijing has also sent Chinese military trainers to help their African counterparts. Arms sales and military relationships help China gain important African allies in the United Nations, including Sudan, Zimbabwe, and Nigeria, for its political goals, including preventing Taiwanese independence and diverting attention from its own human rights record. The Congressional Research Service reports that China views these sales as a means of "enhancing its status as an international political power, and increasing its ability to obtain access to significant natural resources, especially oil" (PDF). Africa registered 5.8 percent economic growth in 2007, its highest level ever, in part because of Chinese investment. Experts say the roads, bridges, and dams built by Chinese firms are low cost, good quality, and completed in a fraction of the time such projects usually take in Africa. China also contributes peacekeepers to UN missions across Africa, including Liberia and Darfur. It has cancelled $10 billion in bilateral debt from African countries, sends doctors to treat Africans across the continent, and hosts thousands of African workers and students in Chinese universities and training centers.

Iran:
Again, here the Chinese are winning the game based on what were once American rules. While the US threatens with the stick and carrot, China has won the game of influence. Where the US supported the Shah and paid the price, China doesn't meddle, it does business. Back in 2004 Sinopec group signed a $70 billion deal for Iranian oil and gas over the next 20 years. Annual bilateral trade has reached $20 billion. In September Chinese President Hu Jintao met with Iranian President Mahmoud Ahmadinejad, a man the US refuses to talk to. Result, the blocking of American resolutions to punish the Iranian government for going forward with their nuclear program. "We mutually complement each other. They have industry and we have energy resources" said Ali Akbar Salehi, Iran's former representative to the International Atomic Energy Agency. China has no wish to see democracy flourish in the Middle East and has no problems dealing with the world's only theocracy.

Venezuela:
A category onto itself thanks to Hugo Chavez, his trip to China this week is what got me thinking about this post. While the US loathe him, they need him, well, his oil at least, as Venezuela is the 4th largest exporter of oil and 3rd largest exporter of gas products to their market, gobbling up about half of Venezuela's total exports...for now. After first stopping in America's other favourite nation, Cuba, Chavez arrived in Beijing while most world leaders were converging on New York, about which Chavez commented, "It's much more important to be in Beijing than in New York." It's too bad really, as you may recall his 2006 tirade against the US at the UN meeting in which he referred to Dubya as the devil. He hit the ground running in Beijing, announcing plans to build refineries and a fleet of oil tankers as part of a plan to double oil exports to China by 2010. On November 1st China will launch Venezuela's first satellite and according to Chavez will also be selling them a couple dozen fighter planes. Of course this follows Chavez' last trip to China a couple years ago when trade agreements were signed which Chavez referred to as the "Great Wall" against American hegemonism. In return China promised to back Venezuela's bid to join the UN security council (which eventually went to Panama), build houses for 20,000 people as a contribution towards Mr Chávez's policy of reducing homelessness, help build a fibre optic network, modernise a gold mine and develop railways and farm irrigation systems. After Beijing, Chavez plans on visiting Moscow, Belarus, Portugal and France.

So, what's my point? Take my adopted home country of Poland as an example. To a Pole, the US has always been the promised land, where an entrepreneur (a French word by the by) could start with nothing and wind up rich through hard work and business savvy. This vision has given the US a huge supply of soft power, influence. The bailout package now before Congress represents a serious threat to this ideal. The Fannie Mae and Freddy Mac bailouts already brought a nationalized housing market, AIG insurance, the last thing the beacon of free markets needs now is a socialized banking system. Capitalism will always have winners and losers. Just as war results in casualties (another problem the west can't seem to face), business involves bankruptcies. Instead of subsidizing corporations, the US needs to refocus its efforts on regaining its former position in the eyes of the world; China and to a lesser extent Russia are making huge inroads around the world. Even the head of the Pentagon, the hard power centre of the US, Secretary of Defence Robert Gates has argued for more funding for soft power activities. A trillion dollars can buy a lot of friends, why use it to reward failure and increase the power of the central banking system? Thomas Jefferson wrote: "The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

The rain in Spain falls mainly on the ...?

Let's not generalize and call it an American thing. Maybe it's a Republican thing. Let's be even more specific, it must be a presidential candidate for the Republican party thing, as the lack of understanding of the world outside US borders does seem to be a recurrent theme. In a scene reminiscent of good ol' Dubya while running for president, John 'McBush' McCain didn't seem to know who the president of Spain was yesterday while being interviewed by a Florida affiliate of Spanish radio network Union Radio. When asked whether he would invite Socialist Prime Minister Jose Luis Rodriguez Zapatero to the White House if he won in November, McBush replied: "All I can tell you is that I have a clear record of working with leaders in the hemisphere that are friends with us and standing up to those who are not. And that's judged on the basis of the importance of our relationship with Latin America and the entire region." You know, he's not sure if Spain is a friend or not, let alone where Spain is located.



Of course McBush's handlers jumped to his defence, with his foreign policy advisor Randy Scheunemann claiming McBush's refusal to confirm that he'd meet with Zapatero was deliberate, lumping Zapatero together with 'radical' South American leftist leaders such as Chavez and Morales. Listen to the whole interview though, the interviewer tries to clarify McBush's statement many times. When she finally realizes the poor man is lost after the above quote she goes as far as saying: "I'm talking about the president of Spain". Really, it's lose-lose for the McBush spin camp. Either he confused where Spain was or who Zapatero was, or he feels that the friendship between Spain and the US is on a par with such countries as Venezuela and Bolivia, who have of course just recently expelled their respective American ambassadors. Maybe we should scratch the surface a little more to reveal another possible truth: The Bush doctrine will be continued if we see 4 more years of McBush. Four more years of "with us or against us". You see one of Jose Luis Rodriguez Zapatero's campaign promises in the Spanish presidential election was to pull Spanish forces out of Iraq, something he did upon entering office in 2004. Since that time, the relationship between the two countries has cooled considerably as Bush punishes a country and its leader for doing what the majority of the people wanted. But wait a minute, the man formerly known as McCain said back in an April interview that as president he would seek to repair relations with Spain. Now, I'm really confused, who is McBush and what does he believe?

Let's wind this up then with some sad geography facts. Shortly after Hurricane Katrina, one-third of young Americans recently polled couldn’t locate Louisiana on a map and nearly half were unable to identify Mississippi. Step outside the US, and it gets worse as early in the illegal Iraq invasion, in 2002, one in seven, about 13%, of Americans between the age of 18 and 24, the prime age for military service, could find Iraq, while 17% could find Afghanistan. Four years of war later, with the accompanying TV coverage to 'educate' the masses, and 63% could not find Iraq or Saudi Arabia on a map of the Middle East, and 75% could not point out Iran or Israel. 44% couldn't find any one of those four countries. It's the attitude toward knowledge of the outside world that's most astounding as fewer than 30% thought it important to know the locations of countries in the news and just 14% believe speaking another language is a necessary skill. I guess it must be nice to live in a glass cage, you get what you deserve, go on, vote McBush for four more years of ignorance.

How Al-Qaida Saved South America?

"We found those realms in such good order that there was not a thief or a vicious man, nor an adulteress, nor were they an immoral people, being content and honest in their labour...

We have destroyed by our evil behaviour such a government as was enjoyed by these natives... Owing to the bad example we have set them in all things, that these natives from doing no evil have turned into people who can do no good...

There is no more I can do to alleviate these injustices than by my words ... in which I beg God to pardon me..."

Masio Serra de Leguizamon

Last of the Conquistadors

Cuzco, 18 September 1589

Living a world away, one can't be blamed for sometimes losing track of what's going on in that other America, somewhere below the Panama Canal, the twelve independent nations that make up what I know as South America. The Spanish weren't the first to try to impose their way of life on others, and the US won't be the last, but both have definitely had a profound impact on the politics of these countries.

With the election of Fernando Lugo, leader of the Patriotic Alliance for Change, as president of Paraguay, the political transformation of South America can now be called nothing short of revolutionary. Every country short of Colombia now has a president that can be called left-leaning at the very least. This is a situation that could never have happened in the 20th century as the US control ranged from subtle influence to outright coup d'etats to place those they wished to have in power in the presidential offices across most of the continent.

Even before the conquistadors arrived in the 16th century, South America had a long history of contact between their civilizations, sometimes peaceful and of course often violent. However, the arrival of the Spanish brought this destruction to a whole new level. Their destructive path first through the West Indies, then into Central America and finally South America is well documented, but it's still hard to grasp the scale of death caused by their search for new wealth. Germ warfare (smallpox), cultural genocide (the Catholic church) and of course good old-fashioned war, decimated a once thriving culture and finally completely wiped out the indigenous cultures in less than 200 years. Eventually European colonial infighting, Simon Bolivar and finally the US brought about the end of Spanish rule in the Americas, leaving just one power to chart the destiny of an entire hemisphere opening the door to Manifest Destiny.

The Monroe Doctrine of 1823 was brought into existence to protect the new nations of the Americas from the evil European powers, but in typical world power ageing process, benevolent protection turned to aggression through the right of intervention to help "stabilize" a country through amendments to the doctrine such as the Roosevelt Corollary of 1904. 1898 saw a double victory for the US; they put an end to Spanish influence defeating them in the Spanish-American war and then as a bonus Britain gave up their rights to build a canal across the Central American isthmus and thus handed control of the entire hemisphere to the US. This also marked the beginning of American imperialism in South America as Colombia, which was then in control of Panama, refused to sell the rights to the canal for a mere ten million dollars (reportedly they wanted twenty-five million). America's answer, as became their modus operandi when governments refused to give them what they want, support for a Panamanian revolt, which emerged victorious and then gave America the right to build the canal as a gesture of gratitude.

The long history of direct and indirect involvement ranges the entire spectrum from friendly advice to CIA operations, troop deployment and nuclear threat (in Uruguay!) and is far too long a list to get into here. However, the new millennium and the post 9/11 world has brought with it a new threat. With the US bogged down in Iraq and Afghanistan in a search for the world's most elusive man, resources may be stretched too tight, or perhaps they are just too distracted to notice what is occurring to the political landscape of South America(a little out of date). OK, not all of the new leaders are as anti-American as Hugo Chavez in Venezuela, but it's not hard to see a theme developing on the continent. From Lula's unionist roots in Brazil to Tabare Vasquez' first measure as president of Uruguay, the restoration of diplomatic ties with Cuba, a huge shift has occurred. I for one am excited to see what this vast continent does with it's new found freedom. Will Chavez really become the next Simon Bolivar? Will China or India replace the US as the main influence in the region. One way or another it seems as though were witnessing another stone in the wall of American hegemony being removed.