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Crouching Tiger, Tumbling U.S. Economy
By Heather Wokusch
China, Sun Tzu and Iraq's oil
“Opportunities multiply as they are seized.” Sun Tzu, Chinese author and military strategist, c. 544-496 BC
Bush and Cheney may be declaring “Mission Accomplished” now that the Iraqi Cabinet has approved the draft of an oil law granting foreign companies unprecedented access to the country’s fields.
But Beijing is having the last laugh.
Just last week, Chinese oil company officials arrived in Baghdad to revive Hussein-era contracts for developing Iraq’s oil, specifically, the Ahdab oil field in south-central Iraq. Hundreds of millions of dollars and a reduction in Iraq’s Chinese debt are already on the table.
It wasn’t supposed to work this way. The U.S. had a major role in developing Iraq’s proposed oil law, with its scandalous long-term agreements enabling foreign oil companies to plunder the nation’s most precious resource. Yet despite the U.S. “investment” of more than 35,000 dead or wounded troops and over 400 billion dollars to secure access to Iraq’s oil for itself, China is poised to sign the first major contract.
China also recently announced plans to strategically refocus its one trillion dollar foreign-currency war chest. Rather than continuing to rely on U.S. Treasury bonds, which yield relatively small returns and risk dollar depreciation, Beijing is expected to increasingly snap up natural resources and energy assets across the world.
It’s no wonder that China is ditching the U.S., which currently faces a national debt of almost nine trillion dollars, growing at the rate of $2.04 billion dollars per day. The subprime housing bubble threatens rising defaults and decreased stateside consumption, while the personal savings rate for Americans fell to a shocking negative in 2006, the worst level since the Great Depression.
It isn’t in China’s interest for the U.S. to crash and burn economically, but neither is propping up dollar indefinitely, especially if it ceases to be the oil transaction currency standard. The danger, however, is that if China divests of dollars in earnest, other countries will follow suit. The Bush administration’s disastrous fiscal policies, not to mention lack of transparency regarding money-supply data, have already caused Central Banks internationally to begin quietly diversifying away from the greenback.
China’s inevitable rise was predicted in a 2005 National Intelligence Council report, warning: “In the same way that commentators refer to the 1900s as the ‘American Century,’ the 21st century may be seen as a time when Asia, led by China and India, comes into its own. A combination of sustained high economic growth, expanding military capabilities, and large populations will be at the root of the expected rapid rise in economic and military power for both countries.”
Which brings up a potential U.S. attack on Iran. In late 2004, the governments of Beijing and Tehran signed agreements valued at up to $100 billion for China to develop and purchase Iranian oil and gas. In the aftermath of a U.S. military strike on the country, the status of those contracts might be called into question.
But as the famed military strategist Sun Tzu once noted, “There is no instance of a country having benefited from prolonged warfare.” Instead, he advised waiting quietly as an enemy self-destructs, then sweeping in to reap the profits, an effective plan for Beijing during the Bush years.
'Real ID' threatens everyone's privacy
"We are, after all, for the first time in the history of a liberty-loving nation, creating a national identification card … with all the ramifications of that. … Real ID was stuffed into the supplemental appropriations bill for Hurricane Katrina and the troops in Iraq, so of course, we had to vote for the bill, but we had no chance to amend it — no debate, no hearing, and no consideration of other alternatives, And now we impose on the states an $11 billion unfunded mandate. … I would say we wouldn't be doing our job if we didn't stop and think about what we've done."
Sen. Lamar Alexander's recent comments about the Real ID Act echo the widespread bipartisan resistance to this new law.
In 2005, Congress passed the Real ID Act, a law that proposed a sea change in how states issue driver's licenses. In essence, the law would federalize all state departments of motor vehicles and turn our driver's licenses into national identity cards. The burdens of compliance are onerous and guarantee longer lines, higher fees and huge bureaucratic and financial nightmares for state government.
However, the real nightmare of Real ID is the law's assault on our privacy rights. The law mandates a central, interlinked database containing a wealth of personal information, including name, address, date of birth, biometric information and an assigned identification number. Over time, the database will inevitably become the repository for more and more of citizens' personal data and will be used for an ever-wider set of purposes, moving us closer to a surveillance society.
Vulnerable to thieves
Linking the Real ID information to a central database makes our private information vulnerable to identity thieves. Real ID requires the DMV to store scanned copies of all documents presented as part of the application process. A single break in the security of this system at any of the thousands of DMV offices across the country could potentially compromise the personal information and documents of millions of Americans.
It's not often that the ACLU agrees with Sen. Alexander, but he got it right when he said that the two-year delay could be used to re-examine Real ID, explaining "It's not insignificant that there are privacy concerns. Big Brother government is a big problem."
In addition, Real ID remains an unfunded federal mandate. The federal government estimates the cost of implementing Real ID at over $11 billion. Yet the government has pledged only $130 million toward the states to comply with that effort.
Concerns about privacy, security, cost and implementation are fueling a growing national revolt against Real ID. In January, Maine became the first state to pass a resolution rejecting participation in the Real ID scheme. Last Thursday, Idaho passed a resolution to opt out of Real ID.
Real ID is built on the false premise that this attack on privacy and security will make our nation more secure. But the truth is that Real ID does little to make us safer. Tennesseans must join the rebellion now and call on their elected officials to end the real nightmare that is Real ID.
Halliburton's Dubai move sparks US political ire
Justin Cole / AFP | March 12, 2007
WASHINGTON - Halliburton's decision to move its base from Texas to Dubai sparked a political firestorm Monday as Senator
Hillary Clinton and other top Democrats expressed outrage at the oil services giant.
Halliburton, headed by
Dick Cheney from 1995 to 2000 before he became vice president, said Sunday it was relocating to the United Arab Emirates to capitalize on the Gulf region's booming energy market.
"Does this mean they are going to quit paying taxes in America?" asked Clinton, a US presidential candidate.
"They get a lot of government contracts, is this going to affect the investigations that are going on? Because we have a lot of evidence of misuse of government contracts and how they have cheated the American soldier and cheated the American taxpayer," Clinton, speaking in New York, said of Halliburton.
The firm and its former KBR subsidiary, which is being spun off, have endured several contracting controversies and investigations since Halliburton was awarded a no-bid 2.4 billion dollar contract to supply the US military on the eve of the US-led invasion of
Iraq in 2003.
KBR agreed last year to pay the US government eight million dollars to settle fraud claims related to an Army supply contract. Halliburton's Nigerian operations have also come under US government scrutiny in recent years.
"It's an example of corporate greed at its worst," said Democratic Senator Patrick Leahy (news, bio, voting record), chairman of the Senate Judiciary Committee.
"At the same time they'll be avoiding US taxes, I'm sure they won't stop insisting on taking their profits in cold hard US cash," Leahy charged.
Halliburton spokeswoman Melissa Norcross said, however, that Halliburton would still remain incorporated in the United States and that there would be no layoffs as a result of its move.
"As such, we anticipate absolutely no tax benefits from this decision," Norcross said.
Halliburton's chief executive, Dave Lesar, will move his office from Houston, Texas, to Dubai, but Norcross said other top officers would remain situated in Houston.
Halliburton said it was relocating to Dubai for business reasons and that Lesar would oversee a ramped-up effort to win regional oil services contracts and related business.
Democratic Senator Byron Dorgan (news, bio, voting record) said he would seek a congressional review of Halliburton's announcement.
"I want to know, is Halliburton trying to run away from bad publicity on their contracts? Or are they trying to set up a corporate presence in Dubai so that they can avoid the restrictions that currently exist on doing business with prohibited countries like
Iran?" Dorgan questioned.
Karen Lightfoot, a spokeswoman for Democratic Congressman Henry Waxman (news, bio, voting record), said the lawmaker might seek a hearing in the House of Representatives.
"This is a surprising development. I want to understand the ramifications for the US taxpayer and national security," Waxman, the chairman of the House Oversight and Government Reform Committee, said.
Halliburton said that over 38 percent of its 13 billion dollar oil-field services revenue was generated from the eastern hemisphere.
It also said its move to the United Arab Emirates was the next step in a strategic plan unveiled in 2006 to boost its business with national oil companies in and around the Gulf.
Houston mayor Bill White was supportive of Halliburton's move.
"The mayor says he understands the nature of the decision," said Frank Michel, a spokesman for White. "He doesn't think it will negatively impact Houston or our status as an international energy center."
Halliburton's move is likely to bolster the image of Dubai as an up-and-coming business capital. The city is undergoing a construction bonanza, especially of luxurious tourist hotels.
The UAE's rulers are vying to develop Dubai as a corporate, tourism and financial hub lying between Europe and Asia. The kingdom neighbors oil-rich Saudi Arabia to its west and Oman to its east, while its northern coastline nestles the Gulf across a stretch of water from Iran.
However, its move may also spur critics of US regulation who say corporate reform laws of recent years have become too onerous and are harming the US' business environment.
Halliburton's stock closed up 17 cents at 32.19 dollars. It operates in 70 countries and has over 45,000 employees. Home