money
Corporations
Serve the State: Sanction Policies and the
Power Structure
By James Petras
March
2011
Introduction
One of the key distinctions
between a capitalist and a non-capitalist (socialist,
feudal, absolutist state) economy is the separation
of state and private enterprise. In a
capitalist state, economic enterprises are
supposed to operate according to market
principles, seeking to maximize profits and
expand market shares. The state is supposed
to act on behalf of capitalist enterprises,
ensuring their protection and furthering
their pursuit of profits and markets.
Recent history of foreign
relations provides ample evidence that the
reverse is true: private corporations,
especially banks have been converted into adjuncts
of the US state , serving as transmission
belts of US military policy, by sacrificing
markets, profits and opportunities for future
economic growth.Another important reason for
keeping US multinational corporations out of
a country. Moreover, the state both in the US
and Europe have seized billions in private
investment funds and dispossessed their
owners, in the process scuttling major
financial transactions adversely affecting
the biggest Western financial houses.
The dispossession of
private capitalists and the harnessing of
private firms to state policy have grown in
scope and depth over the current decade,
revealing the growing subordination of
private capitalism to a militarist imperialist
state. Sacrificing private profits and free
markets to the edicts of state officials h as
been implemented via state coercion and
severe sanctions against any transgressors.
How and why the
worlds biggest propagandist of
free enterprise and de-regulated
capitalism has successfully converted major
international financial and industrial
enterprises into tools of foreign
policy at enormous costs to their bottom line
is yet an untold story. Given the enormity
of the historical change in the relation
between state and market, the shift in power
has enormous consequences for peace,
prosperity and freedom.
How the State Dominates
the Market: The Historical
Context
Beginning in the 1990s
under President Clinton and escalating under
Bush and Obama, the US imperial state imposed
economic sanctions first in Iraq and later on
Iran and more recently on Libya. In effect
the state dictated to its petroleum multi-nationals
and biggest banks that they should sacrific
e lucrative investment opportunities,
ongoing profits and markets to serve imperial
state interests. Billions of dollars were
lost during the 1990s, in the face of
Iraq sanctions, forcing many US oil companies
to engage clandestine third party
intermediaries, to secure a reduced share of
the petrol market. The imperial state imposed
severe penalties fines, jailings
and exclusion from the US market to
any of the CEOs and private corporations that
did not abide by the sanctions. Clearly the
state was in command; the corporate ruling
class became the executive committee of the
imperial state.
The sanctions policy
applied to the Middle East under Clinton was
only the beginning; it was deepened and
vastly expanded under Presidents Bush
and Obama, especially after 2004.
The Levey Levy: How
American Zionists Freeze Financial Profits
In 2004 a little noticed
administrative add -on in the US Treasury
Department took place that has had world
historic significance: AIPAC (American Israel
Public Affairs Committee) pressured Treasury
to create the position of
Undersecretary for Terrorism and
Financial Intelligence. Equally
important, under strong pressure from AIPAC,
a zealous Zionist of immense energy, Stuart
Levey was appointed to head the new agency.
Levey used all the
administrative mechanisms in the Treasury,
from threats of penalties, fines and
ostracism, to friendly and hostile persuasion,
to line up US federal and state public and
private pension funds to sacrifice lucrative
investments in targeted countries, most of
whom, lo and behold, were adversaries of
Israeli occupation of Palestine.
Even as Levey was imposing
state constraints over the operations of
private investors in the US, he organized his
entire staff to police the financial world
abroad. Levey and his Zionist allies in the
so-called I srael lobby called on
their Congressional cronies to approve
sanction policies which not only affected US
banks, manufacturers and construction
companies but which penalized any European,
Asian and Middle Eastern bank which had
economic dealings with Iran and other
countries on his list (Cuba, North Korea
among others).
Levey extended the
sanctions to cover firms and investors with
even indirect economic ties to the US: his
secret financial police located funds which
passed from one private bank to another which
had tangential links to US banks and Levey
applied and secured hundreds of millions in
fines against Swiss, Chinese (Macao) English
and other banks. Effectively the US imperial
state via its Undersecretary of Treasury,
harnessed the entire worlds financial
system to serve US and Israeli foreign policy.
Levey is explicit about his role in creating
a state within a state. The US Treasury
is the only Treasury in the world with a
fully f unctioning intelligence office.
He might have added that the US Treasury is
the only Treasury in the world which
sacrifices the economic interests of its
private investors and those of its allies in
pursuit of the interests of a foreign power (Israel).
The Levey regime by leveraging
ties with private US financial institutions
and access to US markets, effectively
controls the financial transactions and
market operations of European, Asian and
Middle Eastern private enterprises.
What appears as
merely a relatively minor administrative post
in Treasury has in fact created an
administrative empire which has effectively
converted private international banking and
manufacturing corporations into instruments
of US and Israeli policy.
In office Levey engineered
the seizure of billions of dollars of
overseas assets of private and public funds
of adversaries. One of his last moves before
leaving office (march 2 011) was to seize $32
billion in Libyan funds using the pretext
that the non-US bank to which the
funds were entrusted invested in US Treasury
notes.
Levey has clearly defined
the new relation between private capital (the
market) and the State: Governments
around the world (sic) see the power of these
types of measures and the relevance of the
private sector to the overall [imperial]
effort and that is something that has changed
in the last four or five years.(my
emphasis) (Financial Times, March 10,
2011, pg. 5).
The measures
that Levey refers to are the state sanctions
and the coercion and penalties applied
to the private sector to ensure their
conformity with imperial and Israeli military
interests at the expense of profits and
markets.
The Visible Hand of the
State
Levey and his Zionist
colleagues have ensured that his state
within a State wil l continue beyond
his tenure in office. He was succeeded by
David Cohen, his former law firm partner and
promoter of the very same Israeli interests.
Levey/Cohen have institutionalized and set in
stone the mechanisms to further imperial
state control over market operations .Cohens
appointment ensures the continuation of the
Zionist dynasty in the State within the
State.
The biggest economic losers
in the state centered sanction
policies pursued by Treasury (read Levey/Cohen)
have been the international banks, petroleum
and gas companies and pension funds. The
banks have lost access to investment funds
and lucrative management fees; the petroleum
companies have lost profits and access to oil
fields. The military-industrial complex has
lost arms sales. The agro-exporters have lost
markets in food deficit oil producers. Who
have been the winners
certainly not the Generals who are engaging
in a third costly wa r when the sanctioners
decided to escalate to the military
option, once their sanctions policies
failed to result in the overthrow of the
Libyan regime.
On the surface the
main winners of sanction policies
are their advocates in the White House,
Congress, Treasury, the leaders of the two
major parties and the ideologues and
Islamaphobes in the mass media. And of course,
the biggest winners of them all are Israel
and their Zionist power configuration
embedded in the key agencies of Treasury, the
key committees in Congress, and their
colleagues in the most influential Middle
East posts in the State Department (James
Steinberg, Mark Grossman, Dennis Ross,
Jeffrey Feltman) and Treasury(Cohen)
If one asks the logical
question why doesnt Big Banking or Big
Petroleum make a fight over policies
prejudicing their economic interests and
subjecting them to the harsh oversight of
Levey/Cohen investigators i n Treasury, the
most reasonable assumption is that they are
not willing to engage in a knockdown fight
with three potent adversaries: the
politically influential Zionists in the
government who design, implement and enforce
sanctions; their counterparts in the
prestigious mass media who support their
policies and the 300,000 active members of
the 52 major American Jewish organizations
who threaten to organize boycott campaigns.
An implausible assumption is that the bankers
and oil majors have become altruistic and
patriotic and are willing to sacrifice
billion dollar deals to serve our
national security as defined by
Levey/Cohen and their cohorts in AIPAC. When
we speak of US sanction
policies or when we read of European
bankers following
Washingtons lead lets
be clear about what state within
the US we are talking about and which
agencies in Washington are ensuring that Eu
ropean banks follow our lead.
While we might not shed
tears about an intrusive government
curtailing the profit-making of Big Oil and
Big Banks, or interfering with free market
operations, let us not forget that the
state within the state that dictates
economic policy is not accountable to our
citizens; moreover, if it dictates foreign
economic policy to the multi-nationals surely
it has no scruples in doing the same to
ordinary Americans. Next on the AIPAC/Levey/Cohen
agenda is a request by Israeli
Prime Minister Netanyahu for an additional $20
billion dollars in aid to ensure
Israels protection from the pro-democracy
movements sweeping the Arab world and to
finance a new batch of settlements in the
West Bank.
Israel needs US aid like
American taxpayers need a hole in their
pockets.According to the latest study of
billionaires published in the March 20 2011 o
f Forbes ,Israel has more billionaires per
capita than any country in the world.
US Approaching Insolvency:
Federal Reserve official
By: Reuters with CNBC.com
March 22, 2011 "CNBC"
-- - The United States is on a fiscal
path towards insolvency and policymakers are
at a "tipping point," a Federal
Reserve official said on Tuesday.
"If we continue down on the path on
which the fiscal authorities put us, we will
become insolvent, the question is when,"
Dallas Federal Reserve Bank President Richard
Fisher said in a question and answer session
after delivering a speech at the University
of Frankfurt. "The short-term
negotiations are very important, I look at
this as a tipping point." But he added
he was confident in the Americans' ability to
take the right decisions and said the country
would avoid insolvency. "I think we are
at the beginning of the process and it's
going to be very painful," he added.
Fisher earlier said the US economic recovery
is gathering momentum, adding that he
personally was extremely vigilant on
inflation pressures. "We are all mindful
of this phenomenon. Speaking personally, I am
concerned and I am going to be extremely
vigilant on that front," Fisher said in
an interview with CNBC. Fisher added that the
U.S. Federal Reserve had ways to tighten its
monetary policy other than interest rates,
including by selling Treasurys, changing
reserves levels and using time deposits.
He added that he does not support the Fed
embarking on an additional round of
quantitative easing."Barring some
extraordinary circumstance I cannot forsee...I
would vote against a QE3," Fisher told
CNBC. "I don't think it's necessary.
Again, we have a self-sustaining recovery."
Copyright 2011 Thomson Reuters