Asstd Financial News

Thanks Peter Myers


(1) Car imports down from 700 to 40 vehicles a month in Daytona Beach
(2) World leaders will meet in April to put in place a New World Financial System (NWFS)
(3) Outsourcing?
(4) Tinkering with Inflation measurements may have led to Financial Crisis - Rodrigue Tremblay
(5) Currency Battle Between UK And Europe
(6) Russian-Jewish oligarch 'had RBS loan of £2.5bn written off' - Telegraph
(7) In Detroit, houses are cheaper than cars: just $7,500 (Not $75,000)
(8) US can no longer afford its 1,000 overseas military bases

(1) Car imports down from 700 to 40 vehicles a month in Daytona Beach

From: Stephanie Relfe <> Date: 06.03.2009 06:41 PM

Car sales down to 6% of previous in Daytona Beach

Here is a report from Daytona Beach, Florida.

My husband, Michael, went to get the windshield on our car repaired. The man who worked on it said that another job he has is to check new cars that arrive by ship. Apparently there is often a lot of things wrong with new cars that arrive, before customers see them, like no transmission fluid, wrong mirrors etc., and this mam fixes them. He said that normally 700 vehicles a month come in. Now it's down to 40 a month!!!

(2) World leaders will meet in April to put in place a New World Financial System (NWFS)

From: Joe Bryant <> Date: 05.03.2009 12:11 AM

To date, on economic/financial matters, it has only been possible for agreement to be reached when it is in line with what suits the banking cartel, otherwise known as the 'Money Power'.

It has been the way since 1694 and the Charter that established the Bank of England. BUT that does not mean it must stay that way.

We need to recognise that if the system is to be changed to best ensure the welfare and prosperity of the people then the people will need to exert more pressure on governments than the Money Power does. This is possible because the Money Power only controls about 2% of the votes at election time. The remaining 98% are controlled through the lack factual of information, propaganda and a compliant media.

There is a big job ahead. As with all jobs one needs to make a start or nothing gets done.

The issue of credit, banking and economy has the potential to galvanise populations around the need for a better economic system, one insulated from boom bust situations and recessions. Australia tested such a system between 1913 and 1923. The rest proved to be an outstanding success. The problem today is few people know about this success. Build on the few, make it the majority and the solution will materialise. By far the best time to start this knowledge flow process this is now while the present system cannibalises itself.

We have people Australia-wide ready willing and able to push ahead with the first stages of implementing the solution, but before we do we need a much larger involvement by people of like mind on this particular issue. We also need to as best possible identify the enemy within the patriotic movements.

I visited both sites suggested By John Craig, well written stuff, bur at a glance I could see what was developing was a rehash of theory mistakes made, and as a result I put these aside for, possible, later reading. I am not a lot interested in the failures of the past, but rather, the one outstanding success of the past, that nobody wants to talk about, having had their thinking capacity consumed by what can only be described as a system of economic insanity. Insanity if for no other reason that we keep repeating the same avoidable economic mistakes, which is basically sticking with a system that goes from one private banker-made recession to the next, as regular as clockwork.

Joe Bryant United People Power Australia.

(3) Outsourcing?

From: Howard & Rosemary <> Date: 06.03.2009 06:31 PM

I think it is time that the subject of outsourcing in Australian industry considered the cost savings of outsourcing financial and managerial skills from China. I am certain there are Chinese professionals who would work more efficiently for considerably less remuneration than most Australian corporate executives and especially less than the American executives such as companies like Telstra seem to favor.

Having worked for many years on the factory floor in Australian Industry, it is common knowledge at that level, that the cost of manufacturing in Australia is not dramatically higher than any other country, yet the costs of administration and salaries to senior executives is so outrageously high it has a paralyzing effect on company competitiveness in the World Market. By outsourcing manufacture, the small savings made allow these overpaid executives to continue unchallenged until their salaries finally threaten to bankrupt the company, by which time they have opted for the golden parachute and "for family reasons?" have negotiated a way out of the impending financial disaster, leaving the corporation in "need of financial reform?" another term for financially broke. Of course at that time there is a closing of ranks amongst the "overpaid executives" and some scheme is devised to "save" the company, covering up the real cause of the demise.

Let's wave this in front of "The Masters of the Australian Corporate Sector" and mention "Boys, the game is up, put your marbles back in the bag, you are required in the classroom for lessons", and have these individuals start to behave in an ADULT manner towards your fellow Australians who have the misfortune to TRUST YOU to manage the business they find employment in.

You see it is a simple failure of TRUST, we the workers cannot TRUST you, the GREEDY any longer, to run the companies we depend on to raise our families.

My next effort will expose the "Welfare Sector" and the liars, cheats and thieves who run some of these services.???

(4) Tinkering with Inflation measurements may have led to Financial Crisis - Rodrigue Tremblay

From: John Cameron <> Date: 06.03.2009 04:54 PM

How Tinkering with Inflation Measurements May Have Led to the Current Financial Crisis

by Rodrigue Tremblay

Friday, March 6, 2009

How Tinkering with Inflation Measurements May Have Led to the Current Financial Crisis

by Rodrigue Tremblay

"There are three kinds of lies: lies, damned lies, and statistics." Mark Twain, (1835 - 1910)

"The Cost of Living [has been] replaced by the Cost of Survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that."

John Williams, private economist

"The consumer price index is being understated by at least 1 percent per year."

Bill Gross, professional investor

"... The development of credit derivatives has contributed to the stability of the banking system by allowing banks, especially the largest, systemically important banks, to measure and manage their credit risks more effectively. In particular, the largest banks have found single-name credit default swaps a highly attractive mechanism for reducing exposure concentrations in their loan books...."

Alan Greenspan, Fed Chairman, May 5, 2005

Last February 20th, the U.S. Department Of Labor Bureau of Labor Statistics announced that, on a seasonally adjusted basis, the U. S. Consumer Price Index (CPI) increased by 0.3 percent during the month of January (on a yearly basis). Some independent economists, however, think that the real inflation rate is much higher, possibly as high as 7.52 percent (on a yearly basis). Why is that so?

The CPI is a measure of how much the price level of a basket of representative consumer goods and services, adjusted for predictable seasonal shifts, is supposed to have varied during a month or a year. Such a measure has been provided by the Bureau of Labor Statistics since 1919, covering the period between 1913 and today.

For many people, the CPI is less a measure of inflation than an imperfect measure for adjusting cost of living allowances. It is a technique that plays a central role in computing increases in the Cost Of Living Allowances (COLAs) of various money disbursements, incomes and wages. Some incomes, for example, such as Social Security payments and other entitlements, are statutarily adjusted upwards when the CPI goes up, and such adjustments have a direct influence on one's standard of living.

Economists have long debated the best methods of measuring inflation, especially as it affects the cost of living of various categories of consumers. This is a complex issue that involves statistical methods in calculating price indices, economic principles and notions of social justice. Moreover, not everyone is impacted equally by a rise in the overall level of consumer prices, depending on one's economic and financial situation. For example, for people living in a city and who are renters, a rise in the price of cars or of houses would not have the same predictable effect on them as it would on folks living in a rural area and who own their own homes. And it is not everyone who can deflect the negative impact of a rise in the price of consumer goods on their standard of living by substituting less costly items.

For the period between 1913 and 1982, the formula for measuring consumer inflation in the U. S. was pretty much straightforward. Government statisticians would periodically collect prices in certain identified areas with which the Bureau of Labor Statistics would then construct price indexes. Over time, surveys of consumer expenditures were conducted and the weight of different goods in the index would be adjusted accordingly to reflect people's new buying habits.

In the early 1980s, the Reagan administration feared that the standard CPI index overstated the impact of overall inflation on the cost of living of many recipients of government payments, the most important ones being Social Security outlays. The decision was then made to move away from the objective of having a general consumer price index measuring overall consumer inflation and adopt instead the policy of constructing a cost-of-living index that more closely reflected the true impact of inflation on different categories of consumers. That is why, since 1982, the CPI measurements that the Bureau of Labor Statistics publishes relates more to the cost of living, as defined and periodically revised, than to providing accurate information about the level of general inflation. [As a matter of fact, another government agency, the Bureau of Economic Analysis (BEA), has the responsibility to calculate a price deflator for consumption expenditures and other expenditures as part of the National Income and Product Accounts (NIPA).]

Indeed, in the mid-1990s, substantial changes were made to the CPI index which had the net result of lowering the official measure of consumer inflation. First, increases in asset prices, such as in housing, were only indirectly taken into account. For example, the 2002-2006 real estate bubble hardly registered at all in the CPI because only 'imputed' home rents for home owners were used in the index. At that time, rents were virtually stagnant in many cities due to overbuilding. Secondly, arbitrary downward adjustments were made in the prices of certain goods to reflect their enhanced quality. It is true that cars, TV sets or cellular phones are more performing today than their alternatives in the past, and this raises people's standard of living. However, such goods cost more, and the higher prices are not fully recorded in the CPI. Thirdly, and maybe more debatably, in order to concentrate on the impact of price increases on the true cost of living, it was assumed that consumers adjust to higher prices of certain items by substituting relatively less costly goods when relative prices change. For instance, buyers would be assumed to switch from steaks to hamburgers or from beef to chicken when the price of steaks or beef increases. Similarly, people would tend to switch from high-priced stores to discount stores when their incomes do not follow inflation. It can also be assumed that such forced substitutions are not without inconveniences or hardships for the consumers, and thus could indicate a lowering in their standard of living. Nevertheless, these modifications that lowered the official measure of the CPI were incorporated into new statistics from 1982 on.

Consequently, it has become somewhat risky to rely on official CPI figures to obtain a true assessment of inflation. Because of all the changes made in the CPI index since 1982, the CPI has become less and less a true measure of consumer inflation, even though it may or may not more closely reflect the true impact of inflation on people's cost of living. For the overall economy, it is fair to assume that the true inflation rate is substantially higher than what is reflected in official CPI announcements, and this has a compounding effect overtime.

For its part, since February 17, 2000, the Fed uses a "core" chain-type price index for personal consumption expenditures (CTPIPCE), i.e. a price measure for all items less price increases in food and energy. What is at stake here is the danger that government officials may begin to believe their own official inflation figures which are understated, maybe for good reasons as far as cost of living issues are concerned, but nevertheless severely understated as far as the true inflation rate is concerned. This has the potential for disastrous consequences, not only for the public in correctly judging inflation pressures for investment purposes, but also for public officials in framing policy, especially monetary policy.

The most recent example is provided by the pronouncements that Fed officials made during the crucial 2003-2005 period, when a dangerous housing bubble was building up speed and when financial firms were embarking upon riskier and riskier financial schemes. To a man, Fed officials denied there was any risk of inflation and, contrary to what everybody could see, declared that there was no housing bubble going on.

For instance, on March 1, 2003, the No. 2 man at the Federal Reserve, Fed Gov. Donald Kohn insisted that the extremely low short-term interest rates that the Fed was keeping down had not created a speculative bubble in real estate.

In 2004 and in 2005, Fed Chairman Alan Greenspan himself echoed Mr. Kohn and repeated many times that there was no inflation and that he was in no hurry to raise short-term interest rates from their 46-year low level of 1 percent. In April 2004, for example, in remarks on the economic outlook to the Joint Economic Committee, Greenspan remained unconcerned about inflation, declaring that "as yet, the protracted period of monetary accommodation has not fostered an environment in which broad-based inflation pressures appear to be building", just at a time when the housing bubble was but one year from its final top.

At that time, the old pre-1982 CPI formula, as calculated by private economists, indicated that U.S. consumer inflation was above 8 percent and that a housing bubble and a concomitant stock market bubble were in full swing. Future Fed Chairman Ben Bernanke, then a Fed Board member, echoed his mentor in late 2005 by saying that there was no housing bubble to go bust and that the fact that U.S. house prices were rising four times faster than the economy was "largely [a reflection of] strong economic fundamentals."

But, it is now generally agreed that from 2002 to 2004, the American central bank pursued a monetary policy that was too expansionary and that‚€”plus the lack of government regulation of the credit derivative market‚€”contributed greatly to create the conditions for a major financial crisis. Let us keep in mind that in 2004, the Fed Chairman was publicly recommending that people buy adjustable rate mortgages (ARMs), especially interest-only adjustable-rate mortgages, and other subprime loans instead of safer fixed rate loans.

As a matter of fact, most economists agree that interest rates should have been raised as early as 2002. But Mr. Greenspan implied later that he was forced to play politics with his monetary policy, when he declared on September 17, 2007, in an interview with the Financial Times, that "raising interest rates sooner and faster would not have been acceptable to the political establishment given the very low [official] rate of inflation".

There you have it. What is suggested here is that the push to reelect President George W. Bush, in the fall of 2004, may have played an important role in letting the housing bubble become bigger, thus paving the way for a housing bubble burst in 2005-2006. This is, by the way, on top of the confession that Mr. Greenspan made in interviews promoting his Memoirs (The Age of Turbulence) that he had personally lobbied the Bush-Cheney administration in favor of the unprovoked 2003 U.S. war against Iraq, and that consequently, he was personally tied to the overall political agenda of the Bush-Cheney administration.

When the history of this financial and economic crisis is written, it shall be recorded that the Fed and other government agencies, such as the Securities and Exchange Commission (SEC), did little or nothing to prevent the debt pyramid from reaching the dangerous levels it attained and which is now crashing down, dragging down with it the entire U.S economy and most of the world economies. __

Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@

He is the author of the book The New American Empire. Author's Website:

Check out Dr. Tremblay's coming book The Code for Global Ethics at: *****The French version of the book is now available. See: or: Le code pour une éthique globale

Posted, Friday, March 6, 2009, at 5:30 am

(5) Currency Battle Between UK And Europe

From: lenczner <> Date: 22.02.2009 03:24 PM

<Note: this comes from the same where Evans-Pritchard writes his blog> "The prospect of a currency battle between Britain and Europe loomed larger last night after the man considered to be the international ambassador for the European Central Bank delivered a thinly-veiled swipe at the level of sterling.

ECB's Lorenzo Bini-Smaghi hits out at sterling /By Edmund Conway, Economics Editor

In comments which underline the scale of concern throughout Europe about the sharp decline in the UK currency in recent months, ECB Executive Board member Lorenzo Bini-Smaghi said that EU countries should not allow their currencies to slide in order to gain an economic advantage. The pound has slid by the biggest amount since the demise of the Bretton Woods system in the 1970s - something economists regard as a significant boost for UK exports.

However, Mr Bini-Smaghi said in a speech in Berlin: "The current crisis is bound to raise again the issue of whether a single market like the one we have among 27 countries in the EU can function smoothly when the exchange rate of some of the members is allowed - or even encouraged - to depreciate sharply, possibly distorting competition. "The integrity of the single market itself can be put at risk if the exchange rate is used - and seen to be used - as an instrument to gain competitiveness at the detriment of the others."

Mr Bini-Smaghi also indicated that he was pushing the UK to allow the ECB to become a pan-European financial regulator in the future. He said he expected the UK to agree to proposals which would grant the ECB supervision over banking throughout the continent.

<related links by sender> UK "could experience a crash similar to Iceland" Bailed Out Bank To Add $3 Trilion To UK Debt\ <two following links from the by Ambrose E.P and Bruno Waterfield : > European banks' toxic debts risk overwhelming EU governments Secret EU Document: European bank bail-out could push EU into crisis

* see for example, the 2008 "Declaration: Standards and Strategies for 9/11 Truth" which equates "anti-environmentalism" with "Holocaust Denial" and "Moon Landing Hoax":

On that point, by the way, I appreciate your recent efforts to bring a spirit of real debate and precaution to the Holocaust controversy, especially seeing how "Holocaust Denial" is being used as a symbolic propganda weapon by some green extremists.

(6) Russian-Jewish oligarch 'had RBS loan of £2.5bn written off' - Telegraph

From: Josef Schwanzer <> Date: 20.01.2009 05:15 PM

Russian tycoon 'had RBS loan of £2.5bn written off'

A £2.5 billion loan said to have been given to a Russian oligarch by a British bank and then written off is an example of the alleged practices perpetrated by this country's major lenders which have prompted a surge of political anger.

By James Kirkup and Caroline Gammell

Last Updated: 7:01AM GMT 19 Jan 2009

ABN Amro, a Dutch bank owned by the Royal Bank of Scotland (RBS), apparently lent Leonid Blavatnik the money to help shore up the finances of his troubled chemicals company LyondellBasell.

RBS is just one of the British banks being scrutinised by Government officials, alongside Lloyds Banking Group and Barclays, after lending to foreign nationals left them facing multi-billion pound losses which require another taxpayer funded bail-out.

Officials have discovered that the banks made the majority of their loans overseas, sometimes to companies and individuals whose ability to repay their debts was highly questionable.

In some cases, only 20 per cent of bank lending was British-based, with the rest going abroad.

The past lending practices of RBS ‚€“ of which the taxpayer now holds a majority share ‚€“ have emerged as a particular concern.

Senior Government figures are said to have been infuriated to learn that RBS was part of a group of banks that offered a £2.8billion loan to a firm owned by Oleg Deripaska, a Russian billionaire who last year hosted both Peter Mandelson and George Osborne on holiday in Corfu.

The apparent loan to Mr Blavatnik has now brought the 51-year-old, who divides his time between America, Russia and Britain ‚€“ where he resides in a ¬£41million home in Kensington Palace Gardens ‚€“into the spotlight.

Raised in a Jewish household, he moved from Russia to America at the age of 21 to find a new life, earning an MBA from Harvard. He regularly returned to Russia for business and founded Access Industries in 1986, making his fortune in chemicals and natural resources, including oil, aluminium and coal.

Mr Blavatnik is a director of several companies within the Access Industries portfolio, including LyondellBasell and TNK-BP, a joint oil venture with the British energy group.

Last year, the oligarch ‚€“ referred to as Len Blavatnik in the West ‚€“ was ranked as the 11th richest man in Britain, with an estimated fortune of ¬£3.9 billion.

Another deal that saw RBS buy ABN Amro for nearly £50billion in 2007 has been held up as an example of bankers' recklessness. Officials familiar with RBS's accounts say the sale saddled the bank with huge debts.

The departure from "old fashioned banking" ‚€“ where banks raised money from British savers and then lent it to British firms and homebuyers ‚€“ is being blamed for the current plight of the country's biggest financial institutions.

The Prime Minister, Gordon Brown, at the weekend spoke of his "anger" at the banks' behaviour. Backbench Labour MPs have been even more critical. Tom Harris, a former minister, described British banks as "a national embarrassment".

He said: "We should be pointing our fingers more in the direction of the incompetent leeches who have conspired to bankrupt our banking system."

And the anger is not restricted to the political Left. David Cameron, the Conservative leader, has spoken of the need for "day of reckoning" when bankers should face "the rightful consequences of irresponsible behaviour".

How politicians will act on their growing anger is unclear, but those directors of banks who have not yet been removed may find themselves in the spotlight.

Privately, senior Government sources believe that once the new bail-out package is settled, some of those directors must be held accountable for the banks' troubles.

(7) In Detroit, houses are cheaper than cars: just $7,500 (Not $75,000)

From: IHR News <> Date: 06.03.2009 05:25 PM

Detroit's Outlook Falls Along With Home Prices
Chicago Tribune,0,5435392.story

Detroit's outlook falls along with home prices
Motor City on the brink of bankruptcy, but still 15 people want to be mayor

By Tim Jones |Tribune correspondent

January 29, 2009

DETROIT ‚€” It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card.

The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.

Not $75,000. Remove a zero‚€”it's seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market. ...

If the Obama administration is looking for a city to test new ideas for chronic urban problems, it can look to Detroit, a northern New Orleans without the French Quarter. While bedrock poverty in the Crescent City was violently laid bare by Hurricane Katrina in 2005, Detroit has been quietly slipping into social and economic crisis for 40 years. One-third of the population lives in poverty, and almost 50 percent of children are in poverty, according to data from the Detroit-Area Community Indicators System. Median household income has dropped 24 percent since 2000, according to the Census Bureau.

New York bond-rating houses this month lowered the city's bond rating to junk status, a lowly assessment shared by New Orleans and few others.

On a positive note, Detroit's homicide rate dropped 14 percent last year. ...

Detroit, which has lost half its population in the past 50 years, is deceptively large, covering 139 square miles. Manhattan, San Francisco and Boston could, as a group, fit inside the city's boundaries. There is no major grocery chain in the city, and only two movie theaters. Much of the neighborhood economy revolves around rib joints, hot dog stands and liquor stores. The candidates travel around this sprawling city, some invoking the nostalgic era of Big Three dominance and vowing that Detroit can be great again. ...

"Detroit will never be the great industrial center again," said Kevin Boyle, a Detroit native and author of "Arc of Justice: A Saga of Race, Civil Rights and Murder in the Jazz Age."

"What will it look like?" Boyle said. "I don't know." ==

A house costs less than a car in Detroit

By Alex Spillius in Washington
Last Updated: 1:12AM BST 06 Apr 2007

The mortgage crisis in America has deepened so much that family homes can now be bought for less than £15,200 - the price of a new car.

A four-bedroom home near the original Motown recording studio in Detroit recently sold for £3,700 ($7,000), less than most used cars. A boarded-up bungalow fetched £685, and a three-bedroom house listed for £276,000 attracted just £69,000.

Detroit, which made its fortune on the back of the car industry, now holds a more dubious distinction: the capital of home repossessions.

The decline of its main industry has seen Detroit suffer more than other areas from a crisis that is sweeping the United States and has sent a big chill through the whole economy and global stock markets.

(8) US can no longer afford its 1,000 overseas military bases

From: IHR News <> Date: 06.03.2009 05:25 PM

Too Many Overseas Bases

David Vine | February 25, 2009

Foreign Policy In Focus

In the midst of an economic crisis that‚€™s getting scarier by the day, it‚€™s time to ask whether the nation can really afford some 1,000 military bases overseas. For those unfamiliar with the issue, you read that number correctly. One thousand. One thousand U.S. military bases outside the 50 states and Washington, DC, representing the largest collection of bases in world history.

Officially the Pentagon counts 865 base sites, but this notoriously unreliable number omits all our bases in Iraq (likely over 100) and Afghanistan (80 and counting), among many other well-known and secretive bases. More than half a century after World War II and the Korean War, we still have 268 bases in Germany, 124 in Japan, and 87 in South Korea. Others are scattered around the globe in places like Aruba and Australia, Bulgaria and Bahrain, Colombia and Greece, Djibouti, Egypt, Kuwait, Qatar, Romania, Singapore, and of course, Guant√°namo Bay, Cuba ‚€” just to name a few. Among the installations considered critical to our national security are a ski center in the Bavarian Alps, resorts in Seoul and Tokyo, and 234 golf courses the Pentagon runs worldwide.

Unlike domestic bases, which set off local alarms when threatened by closure, our collection of overseas bases is particularly galling because almost all our taxpayer money leaves the United States (much goes to enriching private base contractors like corruption-plagued former Halliburton subsidiary KBR). One part of the massive Ramstein airbase near Landstuhl, Germany, has an estimated value of $3.3 billion. Just think how local communities could use that kind of money to make investments in schools, hospitals, jobs, and infrastructure.

Even the Bush administration saw the wastefulness of our overseas basing network. In 2004, then-Secretary of Defense Donald Rumsfeld announced plans to close more than one-third of the nation‚€™s overseas installations, moving 70,000 troops and 100,000 family members and civilians back to the United States. National Security Adviser Jim Jones, then commander of U.S. forces in Europe, called for closing 20% of our bases in Europe. According to Rumsfeld‚€™s estimates, we could save at least $12 billion by closing 200 to 300 bases alone. While the closures were derailed by claims that closing bases could cost us in the short term, even if this is true, it‚€™s no reason to continue our profligate ways in the longer term.

Costs Far Exceeding Dollars and Cents

Unfortunately, the financial costs of our overseas bases are only part of the problem. Other costs to people at home and abroad are just as devastating. Military families suffer painful dislocations as troops stationed overseas separate from loved ones or uproot their families through frequent moves around the world. While some foreign governments like U.S. bases for their perceived economic benefits, many locals living near the bases suffer environmental and health damage from military toxins and pollution, disrupted economic, social, and cultural systems, military accidents, and increased prostitution and crime.

In undemocratic nations like Uzbekistan, Kyrgyzstan, and Saudi Arabia, our bases support governments responsible for repression and human rights abuses. In too many recurring cases, soldiers have raped, assaulted, or killed locals, most prominently of late in South Korea, Okinawa, and Italy. The forced expulsion of the entire Chagossian people to create our secretive base on British Diego Garcia in the Indian Ocean is another extreme but not so aberrant example.

Bases abroad have become a major and unacknowledged ‚€œface‚€ of the United States, frequently damaging the nation‚€™s reputation, engendering grievances and anger, and generally creating antagonistic rather than cooperative relationships between the United States and others. Most dangerously, as we have seen in Saudi Arabia and Yemen, and as we are seeing in Iraq and Afghanistan, foreign bases create breeding grounds for radicalism, anti-Americanism, and attacks on the United States, reducing, rather than improving, our national security.

Proponents of maintaining the overseas base status quo will argue, however, that our foreign bases are critical to national and global security. A closer examination shows that overseas bases have often heightened military tensions and discouraged diplomatic solutions to international conflicts. Rather than stabilizing dangerous regions, our overseas bases have often increased global militarization, enlarging security threats faced by other nations who respond by boosting military spending (and in cases like China and Russia, foreign base acquisition) in an escalating spiral. Overseas bases actually make war more likely, not less.
The Benefits of Fewer Bases

This isn‚€™t a call for isolationism or a protectionism that would prevent us from spending money overseas. As the Obama administration and others have recognized, we must recommit to cooperative forms of engagement with the rest of the world that rely on diplomatic, economic, and cultural ties rather than military means. In addition to freeing money to meet critical human needs at home and abroad, fewer overseas bases would help rebuild our military into a less overstretched, defensive force committed to defending the nation‚€™s territory from attack.

In these difficult economic times, the Obama administration and Congress should initiate a major reassessment of our 1,000 overseas bases. Now is the time to ask if, as a nation and a world, we can really afford the 1,000 bases that are pushing the nation deeper into debt and making the United States and the planet less secure? With so many needs facing our nation, it‚€™s unconscionable to have 1,000 overseas bases. It‚€™s time to begin closing them.

David Vine, Assistant Professor of Anthropology at American University in Washington, DC and a contributor to Foreign Policy In Focus, is organizing the Security Without Empire conference that will bring together leading U.S. peace activists and scholars, as well as base opponents from 11 nations from February 27-March 2. He is the author of Island of Shame: The Secret History of the U.S. Military Base on Diego Garcia (Princeton University Press), to be released in April.

Peter Myers, 381 Goodwood Rd, Childers 4660, Australia ph +61 7 41262296

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