Terror Drugs with No Mention of Larger Context'>NYT Covers the War on Terror Drugs with No Mention of Larger Context

This NYT article, which describes how the US has adopted the Special Forces approaches used in Iraq and Afghanistan to fight the drug trade in Central America, rather bizarrely makes no mention of the larger context–growing opposition in Latin America to the War on Drugs as such. On the contrary, the NYT suggests there is consensus about drugs unlike the Cold War disagreements that existed when Oliver North built similar bases in Honduras to fight the Contras.

Narcotics cartels, transnational organized crime and gang violence are designated as threats by the United States and Central American governments, with a broader consensus than when that base was built — in an era when the region was viewed through a narrow prism of communism and anticommunism.

“The drug demand in the United States certainly exacerbates challenges placed upon our neighboring countries fighting against these organizations — and why it is so important that we partner with them in their countering efforts,” said Vice Adm. Joseph D. Kernan, the No. 2 officer at Southern Command, which is responsible for military activities in Central and South America.

Compare that formula–US demand creates the need for us to set up Forward Operating Bases out of which our Special Forces can operate–with that offered by Guatemala’s right wing President, Otto Pérez Molina, in his calls to legalize drugs. [This is my very rough translation.]

In part, we have seen an unequal struggle [against drugs] because America is not cooperating with Central America as it should on this problem.

[The fight against drugs] is a shared responsibility that has different levels and degrees that each country must take.

The US is the largest consumer and the final destination of all the drugs passing through Central America and therefore it has the greatest responsibility.

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The US Attempts to Retain Control Over the Financialized Playground

I’m a big fan of Kevin Phillips’ arguments about how increased financialization of their economies lead to the decline of the Spanish, Dutch, and British empires in succession; his latest book warned that Wall Street crash might represent our tipping point. But I’ve been wondering what happens to a globalized world that is that financialized, as we have now. My impression is that it might be different this time around, partly because the world is so interconnected that most of the world has, for better or worse, been integrated into the same financialized system.

As James Galbraith described in his book Inequality and Instability, the the last several decades can be understood as the US first extracting wealth from the rest of the world, and only then turning to the American consumer to do to it what it had already done to developing countries.

First, the massive rise of inequality in the global economy from 1980 to 2000, with a peak in most countries–including the United States–in the millennial year, is a fundamental reflection of the concentration of income and wealth among the richest of the rich, and the corresponding financial fragility affecting everyone else. Crises, and especially debt crises, are thus not new or sudden; in global perspective we see that they have cascaded across the world for a generation, hitting Latin America and African in the early 1980s, the Soviet Union and its satellites in the late 1980s and through the 1990s, and much of Asia in the late 1990s.

Through this period inequality rose in the United States, but the prevalence of external crises also meant that the United States benefited throughout from its position as a refuge for capital. In the 1990s capital flowed in, especially to the benefit of investors in the technology sectors, whose investment euphoria produced a general nationwide prosperity right up to the initial crash of the technology sector–and its NASDAQ stock index–in March and April 2000.

The problem facing the incoming administration of George W. Bush in January 2001 was thus twofold. Externally, there was little scope remaining for extracting capital from the rest of the world. Every region that was open to crisis, with the possible exceptions of China and India, had already had one. Internally, the appeal of the major American leadership sector had worn out.

Galbraith describes how Bush tried first war and then American consumers to sustain growth, which brought about the financial crisis.

The financial crisis (and the world economic crisis it engendered) thus represented not so much the natural outgrowth of rising inequality as a further phase; it was the consequence of a deliberate effort to sustain a model of economic growth based on inequality that had, in the year 2000, already ended. By pressing this model past all legal and ethical limits, the United States succeeded in prolonging an “era of good feeling,” and in ensuring that when the collapse came, it would utterly destroy the financial sector.

In short, you can’t separate the current global system from the US efforts to sustain its financialized empire.

But the big players in the developing world are getting cranky with US efforts to sustain its hegemony over that financialized system.

The view was expressed by Wang Jisi, a high level Chinese insider, in this Brookings report documenting the roots of Chinese-American distrust (see also this NYT article on the report).

Since 2008, several developments have reshaped China’s views of the international structure and global trends, and therefore of its attitude toward the United States. First, many Chinese officials believe that their nation has ascended to be a firstclass power in the world and should be treated as such. China has successfully weathered not only the 1997-98 Asian financial crisis but also the 2008-09 global financial crisis; the latter, in Chinese eyes, was caused by deep deficiencies in the U.S. economy and politics.

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