cj> Chossudovsky: Bagdhad bombing & globalization


Richard Moore

Date: Mon, 19 Feb 2001 20:58:26 -0400
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To: "Bruna's list" <•••@••.•••>
From: •••@••.••• (Jan Slakov)
Subject: Chossudovsky: Bagdhad bombing & globalization

From: "Janet M Eaton" <•••@••.•••>
Date: Mon, 19 Feb 2001 18:13:54 +0000
Subject: Bombing of Bagdad helps Wall Street -Chossudovsky

    War and globalization go hand in hand. Militarisation is an
    integral part of the neoliberal agenda. The build-up of the
    defense budget contributes to beefing up the "Big Five" US
    defense contractors, while denying financial resources to
    civilian programs including health, education and social
    welfare not to mention the rebuilding of America's
    deteriorating urban infrastructure.
                 -- Prof. Michel Chossudovsky,  Feb 19  


[1] U.S. Military to Control Space & the Global
Economy -By Prof. Karl Grossman 

[2] Militarism a Facilitator for Globalization 
By Barbara Lochbihler, 
Women's International League for Peace and Freedom. 

[3] Report - on Conference on Globalization and Culture of Peace,
Barcelona By Steven Staples, International Network on Disarmament and
Globalization http://www.indg.org/Barcelon.htm

[4] The International Network on Disarmament and
Index to numerous papers on  globalization and militarism:

fyi- janet 
---------- Forwarded message ----------
Date: Mon, 19 Feb 2001 13:59:54 -0500
From: Michel Chossudovsky <•••@••.•••>
Subject: Bombing of Bagdad helps Wall Street

How War and Globalization Support American Business.

As Billions  Flow to Oil and Defense Companies 



Michel Chossudovsky

Professor of Economics, University of Ottawa, 

author of The Globalization of Poverty, second edition,
Common Courage Press, 2001.

This article can also be consulted at Emperors-clothes.com
at http://emperors-clothes.com/articles/choss/bombs.htm

On Friday February 16th, spurred on by the dot-com implosion
and the climactic downfall of Nortel Networks Corporation,
the World's leader in fiber optics, the value of high tech
stocks plummeted on Wall Street in turbulent trading. The
NASDAQ stock index declined by more than five percent to a
record low.

But it could have been much worse.  Did the bombing of
Baghdad pull Wall Street out of danger?  In fact it did more
than that. It put billions of dollars into the deep pockets
of Defense contractors and oil companies?


In the days leading up to the February 16 near-meltdown,
stock market analysts had warned of a worst case scenario.
High tech stocks were heavily overvalued.

But that day at 1.00pm, a few hours before trading closed on
the New York Stock Exchange, American and British warplanes
bombed Baghdad in what the Pentagon described as "a routine
mission of self-defense."

Routine self defense? The US media applauded. And on Wall
Street, brokers did more than applaud; they gasped with
relief. For in a cruel irony, the bombing raids had saved
the day. As one British financial analyst noted with

"..the American market didn't collapse. It didn't plummet.
Indeed, the fall was less than one per cent. This was a
routine day - unless you happened to live in Baghdad." (1)

Meanwhile, with telecom and computer stocks in the doldrums,
financial and defense analysts had been working hard to
rebuild  "confidence in the stock market":

"Makers of the nation's warfare technologies along with Wall
Street analysts and industry consultants spent a week
bragging about new opportunities and the likelihood of
changes to Pentagon policy that would foster growth after 15
years of strained budgets. What's more, defense and
aerospace stocks ended on a high note, climbing amid a broad
market slump as 24 U.S. and British warplanes struck Iraqi
military targets using various long-range, precision-guided
weapons." (2)

In the last hours of trading on the 16th, defense stocks
spiraled; oil and energy stocks boomed following news that
Iraq's oil industry might be impaired. The value of Exxon,
Chevron and Texaco stocks shot up. Harken Energy Corporation
--in which George W. Bush served as company director and
corporate consultant before entering politics-- gained 5.4%
by the end of trading. Harken Energy happens to be a key
player in Colombian oil (with a multi-billion dollar US
military aid package under "Plan Colombia" on hand to
protect its investments). Harken Energy CEO Mikel Faulkner
is a former business associate of George W.


The February 16th meltdown was already being predicted at
the close of trading on the 15th.  Business analysts on the
evening news said that a major "correction" in the value of
high tech stocks was "inevitable". The financial press had
previously hinted that the US defense industry could also
take a beating if the new Bush Administration were to
curtail military procurement.

A few days earlier, Lockheed Martin (LMT) --America's
largest defense contractor-- had announced major cuts in its
satellite division due to  "flat demand" in the commercial
satellite market. A company spokesman had reassured Wall
Street  that Lockheed "was moving in the right direction" by
shifting financial resources out of its troubled commercial
(that is, civilian) undertakings into the lucrative
production of advanced weapon systems.

For weeks, defense contractors had been actively lobbying
the new Administration. On Tuesday February 12th, President
Bush promised to hike defense spending based on "a
comprehensive review of the military." According to The New
York Times (12 February 2001), George W. Bush said:

"he planned to break with Pentagon orthodoxy and create 'a
new architecture for the defense of America and our allies,'
investing in new technologies and weapons systems rather
than making 'marginal improvements' for systems in which
America's arms industry has invested billions of dollars."

On the 14th, he confirmed  "a $2.6 billion increase in the
Pentagon's budget as a 'down payment' on new-weapons
research and development." (3)

And two days later Baghdad was bombed by the US Air Force.

The raids were a signal to Wall Street that Bush's promise
"to revitalize the nation's defense" should be taken
seriously. Had the Bush administration decided otherwise,
Lockheed Martin's listing on the New York Stock exchange
might well have experienced the same fate as that of Nortel.
 In fact, while (civilian) high tech stocks (quoted on the
NASDAQ) had plummeted, Lockheed Martin stocks ended the day
up a comfortable 1.6%.

Meanwhile, the F-22 Raptor high tech fighter jet was already
scheduled --pending the Administration's final approval-- to
be assembled (at an estimated cost of $60 billion) at
Lockheed Martin Marietta's plant in Georgia:

"Defense Secretary Donald Rumsfeld was an F-22 advocate
before joining the Bush administration, and Lockheed
officials said Thursday [February 15th , one day before the
raids on Baghdad]  they are confident Rumsfeld will support
the technologically advanced plane." (4)

The message to financial markets was crystal clear: the bear
market was hitting "civilian" high tech stocks including
Nortel, Dell Computers and Hewlett Packard; but defense
industry listings --including Boeing, General Dynamics,
Lockheed Martin, Northrop-Grumman and Raytheon (the "Big
Five" defense contractors) -- remained  "safe" and 
"promising." (i.e. "a good place to put your money").  Wall
Street analysts had concluded --without batting an eyelid--

"with the Bush administration's focus on defense, there is
optimism the industry is on target to outperform the market
again this year." (5)

The new buzz phrase on Wall Street is that --despite the
slow-down of the US economy-- defense stocks constitute "a
safe-haven shelter from the dot-com implosion". More
generally, the assumptions underlying Bush's new defense
budget are considered  "good for business": no wonder
pension funds and institutional investors are busy changing
the structure of their portfolios!


War and globalization go hand in hand. Militarisation is an
integral part of the neoliberal agenda. The build-up of the
defense budget contributes to beefing up the "Big Five" US
defense contractors, while denying financial resources to
civilian programs including health, education and social
welfare not to mention the rebuilding of America's
deteriorating urban infrastructure. Whereas defense
production has spiraled, recession has hit the sectors of
the US economy which produce "civilian" consumer goods and
services. The U.S. domestic economy increasingly hinges on
the military industrial complex and the sale of luxury goods
(travel, leisure, luxury cars, etc.) And this satisfies the
financial establishment irrespective of the needs of
ordinary people.

The bombing raids on Baghdad were certainly intended to
intimidate countries committed to ending the sanctions on
Iraq.  But more generally, "missile diplomacy" is applied to
enforce American political and economic domination under the
guise of what is euphemistically called "the free market."

"The hidden hand of the market will never work without a
hidden fist McDonald's cannot flourish without McDonnell
Douglas, the designer of the F-15." (6)

And America's war machine is used to support the conquest of
new economic frontiers. In the Middle East, the Balkans and
Central Asia, the US military is positioning itself directly
and through NATO not only to support the interests of the
Anglo-American oil conglomerates, which are working hand in
glove with defense contractors in lucrative joint ventures,
but to further colonize the former Soviet Union and Asian
countries. Meanwhile, spiraling defense spending pours
wealth into the military industrial complex at the expense
of civilian needs.


(1) Sunday Mail, London, 18 February 2001.
(2) Reuters, 16 February 2001. About 80 warplanes were
involved, of which 24 were strike aircraft. See Financial
Times, 17 February 2001.
(3)  "Bush Vows To Modernize Military After Pentagon Review Is
Completed", The Bulletin's Frontrunner, 14 February 2001.
(4) Dave Hirschman, "F-22's Fate to be Decided Next Month; Not
on hold: Bush's Defense Review won't delay Judgment on
Raptor", The Atlanta Journal and Constitution, 16 February
(5) The Nightly Business Report, NPR, 19 February  2001.
(6) Thomas L. Friedman, "A Manifesto for the Fast World," 'New
York Times
Magazine', Mar. 28, 1999.)

(C) Copyright by Michel Chossudovsky, Ottawa, February 2001.
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Richard K Moore
Wexford, Ireland
Citizens for a Democratic Renaissance 
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