3-23-05, 10:17 am

With every passing day it becomes increasingly apparent that the crisis of US imperialism is deepening. There were those who assumed blithely that the re-election of George W. Bush would give US imperialism a longer lease on life but it seems the opposite is occurring. Indeed, Washington seems to be falling victim to the malady that ultimately undermined its immediate predecessor, the once heralded British Empire: 'imperial overstretch,' to use the term coined by Yale historian, Paul Kennedy, i.e. the resources of US imperialism are stretched to the limit in a vain attempt to keep the lid on the planet’s majority which is yearning for deep-seated change.
Writing in London’s Guardian on January 27, 2005, former Clinton aide Sidney Blumenthal cited the sobering words of Lt. General James Helmly, chief of the US Army Reserve, who lamented that as a result of the quagmire in Iraq, his units were '‘in grave danger of … rapidly degenerating into a broken force.’' More than 40 percent of US forces in Iraq are composed of these 'volunteer' units who did not contemplate such onerous duties when they enlisted; thus, 're-enlistment is collapsing.' The US has a 'military in extremis,' says Congresswoman Ellen Tauscher.

US fatalities in this war have increased fivefold since May 1, 2003 when President Bush declared an end to major combat operations. The number of wounded has increased seven fold. At the close of 2003 the US authorities estimated that the number of insurgents were a mere 5,000. Yet recently General Mohammed Abdullah Shahwani of Iraqi intelligence has estimated that this number has mushroomed to over 200,000, confirming the dire words of CIA Director Porter Goss, who told Congress recently, that Iraq has become a magnet for 'jihadists' from all over the world. Though it was argued in the LA Times on November 30, 2004 that Washington has intentionally inflated the size of Al Qaeda and the forces beholden to Osama bin Laden for its own malevolent reasons, it can hardly be denied that the illegal invasion of Iraq has been a shot in the arm for so-called 'Islamic fundamentalism.'

Scrambling for answers, US imperialism has veered toward science fiction of late. How else to explain the February 16, 2005 report in the New York Times that the Pentagon is investing heavily in developing military robots to fight their future wars of aggression. 'They don’t get hungry,' said Gordon Johnson of the Joint Forces Command at the Pentagon. 'They’re not afraid. They don’t forget their orders. They don’t care if the guy next to them has just been shot. Will they do a better job than humans? Yes,' he added emphatically. Perhaps. Yet this macabre scheme ultimately only reveals the desperation of US imperialism in crisis.

One of the major objections – among many – to the use of military robots is how their deployment could lead to even more human rights violations since these machines would have no conscience and, thus, would be more capable of engaging in mass slaughter. In fact, it is bracing to contemplate 'troops' who would exceed the present US forces in marauding rampages. Recently Mehemet Elkatmis, head of the human rights commission of the Turkish parliament accused US imperialism of committing 'genocide' in Iraq. 'Never in human history,' he wailed 'have such genocide and cruelty been witnessed.' Such rhetoric from a member of the ruling elite of the erstwhile US ally, Turkey – a nation whose entry into the European Union has been backed by Washington on the premise that Ankara would then serve US interests – suggests what a blunder the invasion of Iraq has become for US imperialism. These comments also serve to underscore the rising opposition to Washington’s imperialist brigandage in oil-rich Iraq.

The brazen attempt to loot the oil-wealth of this predominantly Arab nation reflects US imperialism’s deepening crisis. Central bankers globally are seeking desperately to diversify out of the dollar, thus ending what has amounted to easy loans to the US Treasury. Indeed, the advent of the euro – the common currency of the European Union – and its challenge to US imperialism is only the most visible aspect of this tendency. On November 29, 2004 Financial Times reported that 'the share of the US dollar in world foreign currency holdings fell to 63.8 percent at the end of 2003 from 66.9 percent at the end of 2001. Meanwhile, the euro’s share has risen from 16.7 percent to 19.7 percent during that period.'

This same journal reported on January 24, 2005 that the 'members of the Organization of Petroleum Exporting Countries OPEC have cut the proportion of deposits held in dollars from 75 percent to 61.5 percent in the past three years.' At the annual Davos forum in Switzerland in January 2005, where the global elite come to meet and greet, jaws dropped when Chinese leader, Fan Gang announced that his nation had lost faith in the US dollar and its 'first priority' was to diversify into other currencies, e.g. the euro. The dollar, he said, was 'no longer… seen as a stable currency and is devaluating all the time.'

If this trend continues it could mean a sharp plunge in the dollar’s value, creating a huge hole in the accounts of central banks holding dollars – e.g. Japan and the US in particular – with results resembling a depression. The price of imports – cars, consumer electronics, etc. – would rise sharply. The real estate market – which has become a piggybank for numerous families in the US – would suffer grievously. Even if this does not occur, peril still rests in the fact that – as the December 4, 2004 New York Times announced – 'central banks' in 'Asia are holding America’s purse strings,' suggesting that this nation’s fate is dependent upon the kindness of strangers. The overall decline of the dollar – a precipitous drop that, intriguingly, coincides with the November election, as if the international community were holding their own referendum on the GOP – sheds light on Bush’s February 2005 visit to Brussels, headquarters of the EU. The German leadership had announced even before his February arrival that they thought that NATO – where Washington dominates – had outlived its usefulness and that US-EU channels were the preferred avenue for the trans-Atlantic relationship. France agreed. This epochal announcement was greeted with stunned disbelief in Washington.

Likewise, Wall Street was startled when German-based software giant, SAP, announced that it was going after the market share of US-based Oracle in the profitable market of business applications. This blunt challenge incensed Oracle founder, Larry Ellison, the nation’s third richest man behind Bill Gates and Warren Buffett. This battle bids fair to be even more hostile than that now existing between the EU’s Airbus and the US’s Boeing, a conflict that has been marked by ever more contentious acrimony.

The gulf between Washington and Brussels cannot be bridged easily, as in many ways it involves jousting for imperialist hegemony. Brussels argues that it is on the side of the angels, however, pointing to Washington’s reluctance to adhere to the strictures of the International Criminal Court or its hostility toward the Kyoto treaty on global warming. All 25 members of the EU have signed this accord that US imperialism rejects – though the website of Washington’s own Environmental Protection Administration declares: 'rising global temperatures are expected to raise sea level and change precipitation and other local climate conditions. Changing regional climate could alter forests, crop yields and water supplies…. Deserts may expand into existing rangelands and features of some of our National Parks may be permanently altered.' Yet, like a latter day Nero, Bush fiddles while sea levels rise. This has upset Brussels tremendously. One would think that with relations with Brussels deteriorating that Washington would seek to 'balance' this trend with improved relations with Moscow. Yet the Cold War reflex – apparently – has yet to be extinguished, as Washington continues irritating Moscow, most recently seeking to use a Houston court to block Russia’s attempt to seize the assets of the privately owned oil giant Yukos – which had garnered its ill-gotten booty by looting the state sector as the former Soviet Union was collapsing. Perhaps in response Russia announced recently that foreign-owned companies might not bid for the nation’s most lucrative natural resources this year – an edict widely seen as aimed at ExxonMobil and ChevronTexaco.

Yet with all this tension raging between Brussels-Moscow, on the one hand, and Washington, on the other, perhaps the most potentially contentious conflict exists between US imperialism and the Communist Party of China. This is somewhat anomalous since this Asian giant has become a major creditor of the US, buying US Treasury bills in profusion, not to mention a major site for US foreign investment and a leading supplier of the ever ubiquitous Wal-Mart.

Yet despite these ramified ties, both Pentagon chief, Donald Rumsfeld and CIA honcho, Porter Goss, have issued stern warnings of late about the supposed growth of Beijing’s military and the alleged threat it poses to China’s rebel province of Taiwan – and, ultimately the US itself. Bush’s trip to Brussels was marred by the EU’s intention to lift the arms embargo against China – proclaimed in 1989 – a move that Washington sees as a direct threat to the already besieged US military. Likewise, the same month that Bush made his ill-fated trip to Brussels, Chinese leader Tang Jiaxuan met with Russian President Vladimir Putin, where the former termed Moscow his nation’s 'main partner for strategic cooperation.' 'This is the first time ever,' he proclaimed portentously, 'that China is establishing a mechanism of national security consultations with another country.' Already China is the number one customer of Russia’s still sizeable arms industry and is expected to make purchases in the billions during this year alone. Significantly, the February 3, 2005 edition of the China Daily noted that 'the Russian-Chinese military exercises set for later this year…were seen by many observers as Russia’s response to the cooling of relations with the United States and other western nations, most recently over the presidential election in the Ukraine.'

And just as a court in Houston sought to stop Moscow 're-nationalizing' Yukos, China agreed to provide up to $6 billion in loans to the Russian state bank Vnesheconombank (VEB) to help state oil firm Rosneft finance its purchase of Yukos assets.

Such episodes underscore why future historians may mark 2005 as the year when US imperialism finally awakened to what it had wrought when it made the fateful decision to forge an alliance with China against the former Soviet Union, thus opening the door to capital pouring into this Asian nation and a remarkable transformation of its economy, not to mention altering profoundly the global correlation of forces.

Thus, just as the recovery of the Japanese economy after the ravages of the Pacific War led to numerous scare stories in the press about how this nation presented a mortal danger to the continued hegemony of US imperialism, today Beijing has assumed the role formerly played by Tokyo, the chief difference being that the role of the Chinese Communist Party in this process has added a peculiar poignancy since US imperialism’s proudest accomplishment is the so-called 'death of communism.' Few have noticed that a Communist Party continues to rule the planet’s largest nation – with the most sustained growth rates.

Thus, on December 6, 2004 Business Week carried a typical story of fright: 'The China Price. They are the three scariest words in US industry. In general, it means 30 percent to 50 percent less than what you can possibly make something for in the US…. Makers of apparel, footwear, electric appliances and plastic products, which have been shutting US factories for decades, know well the futility of trying to match the China price. It has been a big factor in the loss of 2.7 million manufacturing jobs since 2000,' said this journal, which typically, has sought to overlook the blunders of US management in this process.

The Economist may have exceeded the hysteria of its trans-Atlantic competitor, informing its upscale readers on January 8, 2005 that the Communist Party decided some years ago that 30-50 of its best state firms should be built into ‘national champions’ or ‘globally competitive’ multinationals by 2010… the most impressive are the resources groups. Three big oil companies, PetroChina, Sinopec and CNOOC, are aggressively buying overseas and building pipelines across central Asia to satisfy China’s fuel demands…. Shanghai-based Baosteel, China’s top steel producer, already sits on the Fortune 500 list of the largest global companies by sales…like Baosteel, Chalco, China’s leading aluminum group, and Yanzhou Coal, the largest listed coal producer, are relatively new companies with similar ambitions. China Minmetals, the biggest base metals company, has gone further with its recent approach to buy Noranda, a Canadian copper and nickel miner, for a reported $7 billion.

A startled New York Times reported on December 6, 2004 that by 2034, 'bank assets in China would surpass those in the United States…from steel to oil to cars to credit cards, China is poised to become the world’s biggest producer and market for many goods and services.' China, it was said nervously, 'has come to terrify many foreign business executives.'

China’s enormous footprint is remaking the global economy and is stretching its tentacles to these shores. Appliance manufacturer, Haier, has set up shop in South Carolina and is a major employer of labor in the conservative Palmetto State. China International Marine Containers, a large shipping company based in Shenzen, recently bought a bankrupt manufacturer of trailers in Monon, Indiana. It is the largest private employer in the town.

Bold Beijing has moved into the so-called backyard of US imperialism, investing heavily in nickel production in socialist Cuba and supplying consumer goods, e.g. televisions. In February 2005 Chinese Vice President Zeng Quinghong and several of his fellow leaders, made an impressive swing through the Caribbean doling out cash for investment projects. Thus, in Trinidad – birthplace of the late great US communist leader, Claudia Jones – which contains the region’s largest and most prosperous economy, Beijing approved a $25 million soft loan allowing business-persons there to buy Chinese products and machinery. The interest rate? A mere two percent. This budding Asian superpower also agreed to buy additional amounts of asphalt from Trinidad. In Guyana China is building a multi-million dollar conference center adjacent to the secretariat of the Caribbean Community.

Most controversial from the viewpoint of US imperialism are the deals China inked with Venezuela. The 125 strong Chinese delegation signed 19 agreements covering agriculture, technology – and oil. The deals involved the construction of a railroad in eastern Venezuela and the purchase of radar to tighten security on its border with Colombia – where US 'advisors' have decamped in growing numbers.

President Hugo Chávez, whose nation to this point has been a major supplier of petroleum to the US, has declared that he seeks to change this state of affairs. Already there are 15,000 medics from socialist Cuba in his country and in turn Caracas sends 53,000 barrels of oil a day to Havana: this has upset US imperialism to no end. It is suspected that Caracas may be interested in re-directing its enormous oil reserves to China – and, reportedly, urgent consultations are being held in order to address the logistical barriers to this eventuality.

The bold Chávez has also moved to deepen relations with neighboring Brazil, particularly in the strategic area of oil – also a key priority for the former Texas oilman now occupying the White House. In turn China has become Brazil’s third largest export market as 70 China-based firms have been established in this largest of South American nations and Brazil in response has invested in more than 300 projects in China.

Oil is the 'glue' that is binding Cuba-China-Venezuela and Brazil and it is also what concerns a White House dominated by oil interests. Colombia is being primed as Washington’s base of subversion against this gathering quartet and it is there that Occidental Petroleum of California has invested heavily. When insurgents there assaulted one of their oil fields in that nation’s Arauca province, Washington promptly dispatched US 'advisors' there to train Colombian soldiers in counterinsurgency in a maneuver that may cost US taxpayers $100 million at a time when funds for housing and veterans’ benefits are on the chopping block. In short, our tax dollars are being used to subsidize a police guard for Occidental, a multi-billion dollar corporation that could easily afford the costs involved. Similarly, trade-union leaders in Colombia have been murdered in the hundreds in recent years, a development that hampers the organizing of Occidental workers.

Yet it is Iran – not Colombia – that is viewed in Washington as an 'outpost of tyranny.' Simultaneously, a 'major new alliance is emerging between Iran and China,' according to the Washington Post of November 17, 2004. The two allies signed a preliminary accord worth $70 billion to $100 billion by which China will purchase Iranian oil and gas and help develop Iran’s Yadavaran oil field, near the Iraqi border. Earlier this year China agreed to buy $20 billion in liquefied natural gas from Iran over a quarter-century…in turn China has become a major exporter of manufactured goods to Iran, including computer systems, household appliances and cars.

This trade was 'weakening the impact on Iranian policy of various US economic embargoes.' Washington is upset that the European Union has been reluctant to endorse a militant US posture toward Teheran but, instead, has favored negotiation of differences concerning Iranian development of nuclear energy. At the same time, the US itself refuses to adhere to the nuclear Non-Proliferation Treaty which calls on those that develop nuclear weapons to draw down their stocks over time. Instead, US imperialism is developing 'bunker busting' weapons that require ever more sophisticated nuclear technology. US imperialism views nuclear weapons like the British Empire once viewed the 'gatling gun,' i.e. as the ultimate weapon that will intimidate other nations, hence its outrage at Iran, the EU – and China.

In Zimbabwe, another 'outpost of tyranny' according to Washington, the impact of similar embargoes has likewise been blunted by a burgeoning relationship with China, with the bulk of its main export crop – tobacco – now headed for China.

As one traverses the globe, it is easy to understand why Bush administration officials have seen fit to denounce China despite the extensive economic ties between the two nations, for Beijing is standing frontally in the path of US imperialism.

Even Israel, which heretofore has been seen as one of the most reliable allies of US imperialism, is beginning to hedge its bets. This may shed light on why the American Israel Public Affairs Committee (AIPAC) – one of the most influential lobbies in Washington – is presently being investigated by a federal grand jury and why Prime Minister Ariel Sharon has begun to make noises about removing settlements. Thus, Washington is demanding that Israel confiscate parts of Harpy drones they have sold China, which were sold in the 1990s. These unmanned aircraft that can stay in the air for seven hours, fly to a distance of 550 kilometers and crash into radar and US imperialism sees anti-aircraft batteries as a major weapon for China against the US or its allies. This dispute follows closely on the heels of a controversy surrounding the Phalcon, a tactical surveillance system that monitors airborne and surface targets and gathers signal intelligence. It was to be installed in a Russian-made IL-76 aircraft. Israel was equipping the plane for China when it buckled under enormous pressure from Washington and cancelled the deal. Treating Israel as if it were the 51st state, Pentagon hard-liner Douglas Feith demanded that Israel fire Defense Ministry Director General Amos Yaron. Interestingly, Feith resigned shortly thereafter.

This dilemma faced by Israel is not unique. Long-time US ally Australia is facing a similar problem, as it seeks to maintain a close relationship with Beijing and Washington, a feat which is becoming increasingly difficult. Even neighboring Canada is facing this problem, as China is seeking to invest in the oil-rich tar sands of Alberta. 'James Monroe' must be 'spinning in his grave,' said the conservative Weekly Standard of February 7, 2005, referring to the 'Monroe Doctrine' and its demand that other powers stay out of this hemisphere. This right-wing journal of opinion, controlled by the media baron, Rupert Murdoch, seemed to become apoplectic in reporting that a state-owned firm in China was plotting a '$13 billion takeover of Unocal,' a US-based giant.

It was noted that: 'Russia and China are using state-owned companies that are not bound to profit-maximize to achieve their long-term goal of weaving a web of relationships that will stand them in good stead in any diplomatic confrontation with the United States.' Seething with rage it wondered, 'whether America can continue to rely on its private sector to provide us with comparable clout is no longer certain. After all, when companies that have to maximize profits compete with companies that seek to maximize influence and power, the latter will engage in projects that the former simply cannot.'

This idea of state-owned firms challenging US based corporations at a time when the 'death of communism' was thought to have buried such developments for all time, has stoked outrage.

The interests of international oil companies – such as BP, ExxonMobil and the other ‘majors’ – are increasingly being challenged by the growing power of oil-producing governments such as Libya when striking deals reported the Financial Times on December 9, 2004.

Ambitious national oil companies from countries such as Russia, India, Malaysia Brazil and Algeria are also expanding international operations…government-owned companies control 72 percent of the world’s oil reserves, 55 percent of its gas reserves and half of its production of oil and gas…there is a belief that aggressive national oil companies from China, India and elsewhere will be able to outspend their international rivals when paying for licenses, and accept lower returns on capital, because their investments are driven more by their governments’ desire to secure energy supply than by a need to keep shareholders happy.

Hence, if the Cold War is redefined as a battle between private capital and the public sector, it is easy to see that US declaration of triumph in this conflict is as wildly premature as Bush’s May 2003 declaration that major combat in Iraq had come to a close.

This prospect of competing with the public sector – frightening for US imperialism – no doubt caused Dave O’Reilly, chair and chief executive of ChevronTexaco, to proclaim, 'we’re seeing the beginning of a bidding war for Middle Eastern oil between east and west,' he said in a veiled reference to the challenge provided to US imperialism by state-owned Chinese oil companies and their Indian counterparts.

This sentiment has caused the acolytes of imperialism to fret that China is invading oil-rich Africa, heretofore a happy hunting ground for imperialism. A China-Africa Business Council reckons that two-way trade was some $18 billion between the two in 2003, a nine-fold increase on 1999. China only recently provided a $2 billion soft loan to oil-rich Angola – a major supplier of oil to the US – in exchange for 10,000 barrels of oil per day. Reportedly, similar deals are being brokered with oil-rich Gabon and Nigeria. Chinese firms have spent some $100 million of late investing in Zambia’s copper mines, which have been abandoned by European and North American firms. In Sierra Leone, a nation – like neighboring Liberia – that has been virtually abandoned by its erstwhile patrons in London and Washington, China has become a major force in the economy in fisheries, construction and agriculture. Thus, US imperialism increasingly views China as a major barrier to its hegemony. But it is not just China, even the EU is cooling toward the US, not least because of reluctance to continue the anti-Beijing arms embargo. Erstwhile allies like Israel and Australia are seeking to develop relations with Beijing. Slowly but surely US imperialism is awakening to the grim reality that sharp contradictions with the Chinese Communist Party continue to persist. It is evident that the US is out of step with a world that refuses to move as far to the right as Washington. As a result, the world is declaring a loud 'no' to US imperialism, in tones that are destined to become ever louder and more insistent.