Wall Street's Manipulated Stock Market Rally

By Matthias Chang

Global Research, March 26, 2009
FutureFastForward.com

The numbers that have been bandied about is beyond the comprehension of the average Joe Six-Packs. I cannot even figure out $500 billion, what more $500 trillion. Ninety per cent of government leaders are also unable to figure out the enormity of the global debt sink-hole.

So, I have accepted the fact that 97 per cent of Americans will just accept whatever explanations and excuses thrown at them by President Obama, Fed Bernanke and Treasury Geithner for bailing out the banks and failing to prevent the implosion of the economy by summer of 2009.

Obama inherited the mess created by war criminal Bush, aided and abetted by Alan Greenspan, Bernanke and Geithner, so he can be excused for there is nothing that he can do at this late hour to change the outcome. But the rest should be lynched!

In the last two years, in several articles, I drew your attention to the fraudulent securities that have been peddled by the global banks and how they have caused the present grid-lock in the global financial system. In essence, these securities – MBS, CDOs, CLOs, etc. were all fraudulent papers. Whatever mortgages underlying these papers, were over-valued and now they have shown to be worth at the most 10 to 20 cents on the dollar.

There have been suggestions that if all these papers were to be shredded and the debts written off, the global banks’ balance sheet would be wiped clean of such toxic assets. In the result the economy would restart and the good old days of cheap credit and unrestrained consumption would usher another boom!

This is a fairy tale.

In the old days, when the hoodlums want to kill someone and have him disappear for good, they would tie his legs together and attach the rope to a heavy object or an anchor and throw the poor fellow into the bottom of the lake or sea, never to be seen again. A small weight, say 10 kg is more than enough to drag the body to the bottom!

The current financial system is not unlike the man who has been thrown overboard and being dragged down by the heavy object. The only chance for survival is if the man could somehow loosen the rope and detach the weight from his legs and swim to the surface, if he could hold his breath long enough.

What is this small weight that is dragging the financial system down? And why writing off this particular debt will not save the banks?

Compared to the global derivative market which is valued in the hundreds of trillions, the global stock market by comparison is a midget. But it is this midget that will cause the financial implosion in America and Europe and reverberate across the world.

Let me explain in simple terms.

When the Dow collapsed from the stratospheric high of 14,000 to less than 7,000 recently (though recovered somewhat) and other stock markets also went south in tandem, it was estimated that at the minimum $30 trillion was wiped out.

What are the consequences of such a drastic collapse?

Let me explain in simple terms again.

Take the share price of Citigroup. At the height of the boom, its market capitalization was over $250 billion. Today, it is less than $10 billion.

Let us say that you bought the shares when it was trading at $150. You also borrowed from the bank to purchase the shares. These shares will have to be pledged to the bank as security for the loan. The shares are now trading a few dollars, say $5.

There is just no way that you can repay the loan and or to obtain additional security to “top-up” the value of the security pledged to the bank. Where are you going to get the cash to buy more shares? Shares of other companies that you may own have also collapsed, and their value may not be sufficient to cover the difference. You are dead meat!

The bank is also in deep trouble because there is no way that they can recover the loan from selling the shares, which is worth $5.

There is the added problem that companies, whose shares are traded in the stock exchange, are not worth even at current values because their core business and operations were premised on cheap credit and were therefore highly geared! These companies are in debt to their eyeballs!

They are insolvent, bankrupt!

Try as hard, the Fed and the Treasury will not be able to engineer a stock rally back to 14,000 points. And even if they could, it does not follow that the prices of the shares of specific companies would return to its previous high. In the case of Citigroup back to $200 per share!

There is no way in the next 3 to 5 years for companies whose businesses have collapsed to be able to recover fast enough and to be profitable enough to justify a market value of at least 50 per cent of its previous high. In the case of Citigroup, back up to $100.

That is an example in the financial sector.

In the manufacturing sector, an outfit like General Motors will take at least a decade to recover. Then there are those companies which have out-sourced and or re-located overseas. To restart local production again would take time and vast amount of credit. But would they be competitive, given cheaper cost of production elsewhere?

Corporate America is shutting down.

Stimulus and pump priming will not solve this huge problem.

Millions played at this casino using home equity. Pension funds risked your retirement benefits gambling at this casino and lost. Leveraging, 10, 20 or even 30 times was the norm. There is no money left in the kitty!

Quantity easing or printing money will not solve the problem, because a company’s value and market capitalization can only be enhanced through actual production of goods and services. But the Western economies in the last twenty years were skewed towards consumption and the availability of cheap credit.

Applying common sense, what was missing was the creation of surplus value, which is the result of efficient production, and savings which in turn provide the essential capital for more production and savings.

Nothing illustrates this problem better than the case of a farmer who stops farming because he had so much cheap credit, that he stopped farming. He could now easily purchase all he needed, and earned five times more gambling in the stock market casino than he would earn from farming. He mortgaged his farm to secure the borrowings. He lived and consumed like the rich and famous!

When the casino collapsed, he could not maintain the lifestyle and had to resort to selling heirlooms to survive.

Until and unless the farmer starts farming and pays off his debts, he would not be able to accumulate sufficient capital to resume what was once a profitable business.

In short, the farmer like all the millions of gamblers who have been ensnared by the global casino, are now in the debt trap and being slowly dragged down to the bottom of the lake!

Therefore, pumping hundreds of billions to the banks will not solve the problem.

You can bet your last dollar that when millions are caught in the debt trap and there is no way out, and they see billions been given to the Wall Street fat cats, lynching parties will be the order of the day!

The Count Down has started.


Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

For media inquiries: crgeditor@yahoo.com

© Copyright Matthias Chang, FutureFastFroward.com, 2009

The url address of this article is: www.globalresearch.ca/PrintArticle.php?articleId=12909

Counterpunch--Brian Cloughley: Tilting at Afghan Windmills

Don Quixote, the main character in a novel by the Spanish writer Cervantes in 1605, spent a lot of time on horseback, armed with a lance, attacking windmills which he thought were menacing giants.

“Just then they came in sight of thirty or forty windmills . . . And no sooner did Don Quixote see them that he said to his squire, “Fortune is guiding our affairs . . . Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich, for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless.”

“What giants?” asked Sancho Panza.”

President Eisenhower inherited the Korean war from his predecessor and then negotiated a cease-fire. President Lyndon Johnson took over Vietnam from his predecessor and committed his country to eventual humiliating defeat. And almost fifty years later President Barack Obama has been gifted the Afghan debacle by a moron who spent most of his catastrophic eight years tilting at windmills in “righteous wars.”

The First, Second and Third Afghan Wars were waged by the British between 1839 and 1919 in three disastrous campaigns totaling nine years. The Fourth resulted in the degrading defeat of Russia in 1989 when its troops had to leave after a decade. And now the Fifth Afghan War is being conducted by America and some allies from 2001 to . . . Well, when? It’s seven years, and counting.

What happens now that Mr Obama is in command?

Last month the US General Petraeus said that a surge like the one he ordered in Iraq would not work in Afghanistan, and that it is essential that Afghans not view foreign forces as conquerors. “You do need to tenaciously pursue the enemy and the extremists . . . But you also need to be building, and to develop, and . . . help and to partner.”

Does anyone believe that President Karzai is an equal partner of the so-called “coalition” forces in his country? Does anyone imagine there is deference by foreign forces to the government of Afghanistan? (If President Karzai flies in an Mi-17 helicopter it is piloted by an Afghan. But if there is an American on board the pilot must be American and it must be a machine that is serviced by US technicians. Does nobody realize how much this sort of arrogant colonial condescension is resented?)

Karzai has protested about the bungled cowboy airstrikes that have killed hundreds of his people but the only effect his complaints have had is to make Afghans despise him for being feeble and to have Washington even more determined to have him replaced.

Petraeus is right, in that development is essential. But the foreigners running Afghanistan do not have enough troops to control the country and the Afghan army is nowhere near ready to do so. So there can’t be much development carried out (although billions of dollars have vanished), simply because there is a lack of stability.

There is no point in building something if the nasties can promptly destroy it.

A long time ago I served in the Australian Task Force in Vietnam. We were supposed to “win hearts and minds” but, alas, lost them completely. We went round the villages building little windmills. Splendid contraptions that pumped up water for fishponds and so forth. And on the vanes of the propellers we stenciled little yellow kangaroos, announcing that Australia supported windmill democracy (or something). And a couple of days after we erected one of them, imagining ingenuously that we were winning the hearts and minds of the local people, along would come the Viet Cong and blow it up.

Then after a while the Viet Cong became a bit more savvy. They left the windmills alone – and told the villagers that the first person to make use of one would be killed. This had the effect of leaving stark standing monuments to the total impotence of the foreign soldiers.

It was very effective psychological warfare. Even the half million foreign soldiers in South Vietnam, a country (66,000 square miles) a quarter the size of Afghanistan (250,000 square miles; 80,000 foreign troops; 17,000 more US troops to come this year), together with a Vietnamese army of 410,000 could not guarantee the existence of a few windmills.

We used to have a military principle that remains relevant : Take and Hold Ground. It comes down to this : If you can’t hold the ground you’ve taken, then what is the point in taking that ground? You can’t defend windmills if you leave the place in which you built them and then let the enemy come in to take control. In that case, your soldiers have died for nothing.

In Vietnam these windmills twirled and hummed, insensible and useless in the rustling wind, as memorials for souls.

The “coalition forces” propaganda machine in Afghanistan would have us believe that things are going fairly well. But this war is a disaster. Every other day we are told that dozens of ‘Taliban’ are killed. And for every one who is killed (and many are ordinary tribesmen who hate foreign invaders and resist them energetically, as they have done for centuries), another ten? – fifty? – hundred? – are motivated to join the resistance to the foreign intruders. Just as they did, with energetic support from Washington, when Russians occupied their territory.

It is all very well having lots of foreign troops roaming round Afghanistan killing people (of whom many are civilians – over 700 last year), but as in Vietnam it is hearts and minds that matter. President Obama has some hard decisions to make, because the US and its allies went in to Afghanistan without doing the basic arithmetic of the number of troops required to perform the tasks the foreign politicians gave them. Unless there are enough soldiers to take and hold ground to ensure that aid projects work, there is no point in staying there.

* * *

A proposal for “civil defense forces (CDF)” in Afghanistan has been endorsed by two clever academics, Messrs Matthew P Dearing and Matthew C DuPee of the US Naval Postgraduate School. Such forces, they write, “will provide a significant measure of needed security and authority in areas of Afghanistan previously unprotected by ANSF [Afghanistan’s National Security Forces]. They will allow community leaders from a variety of tribes and clans to work together in delivering sufficient levels of security . . . ” And so on.

The US Department of the Army Field Manual 31-22 of the Vietnam years “envisions all members of a village being organized for their own mutual support into a village complex. This mutual support not only includes defense but also will include other activities, such as . . . extensions of democratic principles and procedures through such things as the formation of village and hamlet committees.” Oh how starry-eyed we were.

It has all been tried before. It didn’t work in Vietnam and it won’t work in Afghanistan. The notion that tribal militias (or even “civil defense forces”) will allow “community leaders from a variety of tribes and clans to work together in delivering sufficient levels of security” is naive.

Tribes in Afghanistan can’t agree on the time of day. They hate each other. And the only thing that is drawing them together in temporary alliance is hatred of foreign soldiers and profits from corruption, heroin production and smuggling. The hearts and minds of the tribes are otherwise engaged.

Will Mr Obama construct a new strategy? Or will he tilt at windmills?

Brian Cloughley's book about the Pakistan army, War, Coups and Terror, is to be published in the US by Skyhorse next month. His website is www.beecluff.com.

A favorite excerpt from author, poet and songwriter Ursula LeGuin

"...he now understood why the army was organized as it was. It was indeed
quite necessary. No rational form of organization would serve the purpose.
He simply had not understood that the purpose was to enable men with machine
guns to kill unarmed men and women easily and in great quantities when told
to do so. Only he still could not see where courage, or manliness, or
fitness entered in."

--Ursula LeGuin
More Quotes and Lyrics

Because that wealthy 2% lead the national conversation through control of the media

"When is a tax cut for 98 percent of taxpayers portrayed as a tax increase?

When some of the small handful of people whose taxes will go up happen to control the nation's news media."—Jamison Foser, in his latest column for Media Matters, which is a must-read.

By Melissa McEwen, Shakespeare's Sister

HIGH SPEED, HIGH COST, HIGH INCOME RAIL

Sam Smith

There's nothing wrong with high speed rail except that when your country is really hurting, when your rail system largely falls behind other countries' because of lack of tracks rather than lack of velocity, and when high speed rail appeals more to bankers than to folks scared of foreclosing homes, it's a strange transit program to feature in something called a stimulus bill.

One might even call it an $8 billion earmark.

I watched this development with a sense of deja vu. Long ago, I was a rare critic of DC's Metro subway plans, not because I was against mass transit, but because it was a highly inefficient way of spending mass transit funds compared to light rail or exclusive bus lanes. At the time we could have had ten times as many miles of light rail for the same price of the subway system.

The other day I was struck by Metro bragging about its record ridership during the Obama inauguration. I was one of the few people in town who noticed that Metro had finally achieved what it had, at the beginning, promised the federal government would be normal. We needed a first black president to get that many riders. Further, Metro doesn't even have the capacity to handle that many people on a regular basis.

Other problems I correctly projected included the fact that Metro wouldn't really compete with the automobile but with its own bus lines, that it was more of a land development than a transit scheme, and that auto traffic would increase as the subway encouraged new buildings but that a majority of the new users of these buildings would still come by car.

I mention these examples because they illustrate the sort of complexity that transit planning involves, a complexity that rarely gets any attention in the media or by politicians. There's nothing like something as streamlined as a bullet to make everyone put away doubts, analysis and comparisons and just sit back and say, "Wow."

The problem became permanently embedded in my mind after I asked a transportation engineer to identify the best form of mass transit. His immediate answer: "Stop people from moving around so much." So simple, yet so wise and so alien to almost every discussion of the topic you will hear.

If we were really smart, we would be spending far more effort, for example, on redesigning neighborhoods so travel isn't so necessary. What if every urban neighborhood had minibus service to help people get to necessary services? Or a business center with high quality video conference and other equipment so that more people could work at home often?

Instead we are planning to spend $8 billion so that people who already travel more than they should can do it faster and easier.

Of course, there are plenty of political reasons for this. The extraordinary power of the highway lobby remains undiminished, as does the fear of the trucking industry that freight trains might take a major portion of their business away albeit making more sense economically and ecologically.

One map of proposed routes shows not only high speed service to Las Vegas, home of the Senate majority leader, but a surprising number of routes spreading out from the Chicago of Barrack Obama and Rahm Emanuel.

Admittedly these are just proposals. But the power and pressure are there. For example, Howard Learner, president of the Chicago-based, high speed rail pushing Environmental Law Policy Center, notes that the Federal Railroad Administration thinks a plan connecting Chicago and 11 other cities is the project most shovel ready.

Wrote Jon Hilkevitch in the Chicago Tribune: "The ambitious project proposed for the Midwest would cover 3,000 miles in nine states. All lines would radiate from a hub in downtown Chicago. The cost of a fully completed Midwest network is estimated at almost $8 billion. . . Modern, comfortable, double-deck trains with wide seats and large windows would churn along at top speeds of 110 m.p.h. The faster trains would shave hours off trips, delivering passengers from one downtown to another hundreds of miles away. Amtrak trains in most of the Midwest now operate at up to 79 m.p.h., although average speeds are much slower, especially around Chicago due to freight traffic." And there's also the plan to electrify the route between San Jose and Nancy Pelosi's San Francisco.

The truth is that conventional rail and bus riders aren't powerful enough to get what they need. Even upscale liberals prefer air or high speed rail. In the end, there's no strong constituency for the ordinary rider.

As a result of such things, we can expect more than a fair share of hype and hokum as the high rail projects get underway. But here are a few real things to also keep in mind:

Building new conventional rail lines would have had a much stronger effect on the economy than merely speeding up existing routes. Beyond the benefits of construction and the system itself, there would be the economic opportunities created along the route, just as happened when we first built rail and our country at the same time. Philip Longman in an excellent Washington Monthly article, writes, "Railroads have gone from having too much track to having not enough. Today, the nation's rail network is just 94,942 miles, less than half of what it was in 1970, yet it is hauling 137 percent more freight, making for extreme congestion and longer shipping times."

When moving freight, speed is just not that important. An example can be found in a towboat pushing more freight up the Mississippi River than all the steamboats of Mark Twain's time. Why does this lethargic system work so well? Simply because it's not the speed but the capacity that matters. As long as what's on the barges keep coming, how fast it comes doesn't really matter.

Passenger rail capacity is also important. We don't know what the real capacity of these high speed systems will be but we can guess that the railroads won't have large numbers of spare trains waiting around for the Christmas season. Conventional rail uses easily coupled old equipment to adjust for peaks, but high speed rail is so expensive that it is more likely to fall short. For example, Trains for America describes the problem with the high speed Acela: "The trains now run with an engine at each end. While that step speeds turnarounds when the Acela finishes its route and then reverses direction, reconfiguring trains to add coaches would be 'very difficult and very time consuming,' spokeswoman Karina Romero said. Amtrak also doesn't have any spare Acela passenger cars, so extending the trains would require buying more custom-built coaches, she said."

The trucking lobby. Philip Longman notes that "In a study recently presented to the National Academy of Engineering, the Millennium Institute, a nonprofit known for its expertise in energy and environmental modeling, calculated the likely benefits of an expenditure of $250 billion to $500 billion on improved rail infrastructure. It found that such an investment would get 85 percent of all long-haul trucks off the nation's highways by 2030, while also delivering ample capacity for high-speed passenger rail. If high-traffic rail lines were also electrified and powered in part by renewable energy sources, that investment would reduce the nation's greenhouse gas emission by 38 percent and oil consumption by 22 percent."

High speed trains can become a pollution problem. The progressive journalist George Monbiot has reported: "Though trains traveling at normal speeds have much lower carbon emissions than airplanes, Professor Roger Kemp of Lancaster University shows that energy consumption rises dramatically at speeds above 125 miles per hour. Increasing the speed from 140 to 220 mph almost doubles the amount of fuel burned. If the trains are powered by electricity, and if that electricity is produced by plants burning fossil fuels, they cause more CO2 emissions than planes."

Where the Japanese model stumbles. A letter to the Cleveland Plain Dealer points out that "The population density of the major fast-train-using countries averages two-plus times that of Ohio (Japan's is 3.3 times); gasoline prices are 2.2 times the Ohio price; airport congestion is worse; and regulated airfares to convenient airports are higher than comparable U.S. destinations. What's more, arrival at a train terminal in a European or Japanese city often places you within walking distance of the major commercial and tourist locations. Not so in the United States. . . I have used high-speed trains many times and they are great, but building and operating them would be a major financial drain in Ohio."

The cost factor: Based on the only example we have in the United States, high speed rail is substantially more expensive and serves a wealthier class of riders. For example, making a reservation on one conventional Amtrak train from Washington to NYC today would have cost $52 less than the high speed Acela. More startling is that conventional business class is $16 cheaper than Acela even though in conventional business class you get more leg room, much more space to stow your gear, a free newspaper and free coffee and soft drinks. And all this costs you is one extra half hour ride under more pleasant conditions.

Cost of building high speed routes. Here's what the NY Times had to say the other day: "[The stimulus bill] will not be enough to pay for a single bullet train, transportation experts say. And by the time the $8 billion gets divided among the 11 regions across the country that the government has designated as high-speed rail corridors, it is unlikely to do much beyond paying for long-delayed improvements to passenger lines, and making a modest investment in California's plan for a true bullet train. In the short term, the money - inserted at the 11th hour by the White House - could put people to work improving tracks, crossings and signal systems." A completed California system alone is expected to cost about $45 billion.

A major reason for the high cost: building exclusive tracks for the high speed trains. Even though Acela, for example, can theoretically hit 150 miles an hour, it only averages 84 mph between NYC and Washington, in part because of stops and in part because it uses improved conventional tracks. It only hits full speed on about 35 miles in Massachusetts and Rhode Island.

But this raises an important and almost entirely undiscussed question. Is the huge expense of exclusive track high speed rail preferable to spending the money on expanding conventional service to many times more passengers?

Ridership - Costs are changing, however, thanks to other problems. Back in August, the Boston Globe cheerfully reported:

"Amtrak may add cars to its Acela, the fastest US passenger train, and raise fares as riders fill coaches on the Washington-to-Boston route, chief executive officer Alexander Kummant said. Demand for the high-speed service also may spur Amtrak to levy a surcharge to help buy additional equipment, Kummant said."

But with the new year, Trains for America was telling a different story:

"While Amtrak ridership, generally speaking, has continued to look fairly healthy despite the poor economy and lower fuel prices, the same cannot be said of the its Acela high-speed service on the Northeast Corridor. The recession has led to a decrease in business travel, prompting the company to reduce Acela fares in order to bring in more leisure travelers. From Bloomberg: 'Amtrak will offer one-way nonrefundable Acela business-class tickets for as low as $99 between New York and Washington, down from $133 or more, and as low as $79 between Boston and New York, from $93 or higher. The prices are available for travel from March 3 through June 26 and tickets must be purchased 14 days in advance.

'Acela ridership dropped about 14 percent in January from the same month a year ago, and about 10 percent for the four months ending in January from the same period last year, spokesman Cliff Cole said in a telephone interview from New York.'

"If anything, this highlights the huge variation in the services Amtrak runs. Standard routes, and in particular those considered long-distance, have continued to see high levels of ridership. One wonders if many travelers aren't fleeing air carriers and high-speed services like Acela for a cheaper, if longer, journey on a train."

Even before the downturn, however, the Acela ridership reports were less than stunning. For example, in the last fiscal year the conventional northeast coast regional service rose 9.5% while Acela ridershp only went up 6.5%. Seventy percent of the ridership along the northeast corridor remained with the slower, cheaper trains.

Meanwhile other conventional service was booming. The Keystone Service, which operates between Harrisburg, Philadelphia, and New York City, rose 20 percent. The Downeaster, operating several times daily between Portland, Maine and Boston, Mass., grew 31 percent, despite being slower than an express bus because of all of its stops. Chicago-Wisconsin Hiawatha service was up nearly 26 percent. And the Kansas City to St. Louis route grew more than 30 percent.

Some other traditional train routes that grew more than twice as much as the high speed Acela: Oakland-Sacramento, Northern California's Capitol Corridor service, and Chicago-San Antonio.

Other uses: - Philip Longman, in his Washington Montly article, reminds us of alternative uses of conventional rail that seldom get mentioned. Some past examples: "The Pacific Fruit Growers Express delivered fresh California fruits and vegetables to the East Coast using far less energy and labor than today's truck fleets. . . . The Railway Express Agency, which attached special cars to passenger trains, provided Americans with a level of express freight service that cannot be had for any price today, offering door-to-door delivery of everything from canoes to bowls of tropical fish to, in at least one instance, a giraffe. . . . High-speed Railway Post Office trains also offered efficient mail service to even the smallest towns which is not matched today. In his book Train Time, Harvard historian and rail expert John R. Stilgoe describes the Pennsylvania Railroad's Fast Mail train No. 11, which, because of its speed and on-board crew of fast sorting mail clerks, ensured next-day delivery on a letter mailed with a standard two-cent stamp in New York to points as far west as Chicago. Today, that same letter is likely to travel by air first to FedEx's Memphis hub, then be unloaded, sorted, and reloaded onto another plane, a process that demands far greater expenditures of money, carbon, fuel, and, in many instances, time than the one used eighty years ago. . . Another potential use of steel wheel interstates would be auto trains."

The big advantage of high speed rail is that the media, politicians and upper class love the idea and are happy to promote it without asking any of the hard questions. But it's worth remembering that after Washington and San Francisco blew huge sums on subways, city planners finally got wise and started looking at less expensive transit systems that were more efficient in every regard except speed. And so, Washington is today finally working towards having its first light rail route in 47 years.

Finally, there is a lot of talk about how the Obama administration is a second New Deal. But the first New Deal would never have spent huge sums on super trains for the better off; it would have expanded decent if unexotic rail service for ordinary folks. Today you can hardly even get Democrats to talk about such things.

The Rest of Paul Harvey's Story

Paul Harvey is an American icon. I must admit that my introduction into the world of journalism and radio news media in particular was shepherded by Harvey, since I began to listen to KGO in 1979 while slaving away at Shugart Associates, building floppy-disc drives. I did find his voice and his little homilies quite comforting - until I started to listen closely. Over the two-year period that I worked there and listened to Paul Harvey's broadcast every day, I began to realize that he was extremely conservative and possibly fascist. I became very critical of every show, including his shameless shilling for whoever was paying him the most to advertise their product, and came to realize that I really didn't like his ideology at all. I will still thank him for the beginnings of my political education, however. This post from FAIR lays out Mr. Harvey's world-view quite succinctly.--Pete

by Jim Naureckas, FAIR

On the death of radio's Paul Harvey, it's hard for me not to think of his June 23, 2005 broadcast as his most revealing moment.

That's the episode where he delivered this memorable rant (Extra! Update, 8/05):

After the attack on Pearl Harbor, Winston Churchill said that the American people…he said, the American people, he said, and this is a direct quote, "We didn’t come this far because we are made of sugar candy."

And that reminder was taken seriously. And we proceeded to develop and deliver the bomb, even though roughly 150,000 men, women and children perished in Hiroshima and Nagasaki. With a single blow, World War II was over.

Following New York, September 11, Winston Churchill was not here to remind us that we didn’t come this far because we’re made of sugar candy.

So, following the New York disaster, we mustered our humanity...and we sent men with rifles into Afghanistan and Iraq, and we kept our best weapons in our silos.

Even now we're standing there dying, daring to do nothing decisive, because we’ve declared ourselves to be better than our terrorist enemies--more moral, more civilized.

Our image is at stake, we insist.

But we didn’t come this far because we’re made of sugar candy.

Once upon a time, we elbowed our way onto and across this continent by giving smallpox-infected blankets to Native Americans. That was biological warfare. And we used every other weapon we could get our hands on to grab this land from whomever.

And we grew prosperous. And yes, we greased the skids with the sweat of slaves.

So it goes with most great nation-states, which--feeling guilty about their savage pasts--eventually civilize themselves out of business and wind up invaded and ultimately dominated by the lean, hungry up-and-coming who are not made of sugar candy.

To Harvey, in other words, failing to use nuclear and biological weapons because we feel guilty about genocide and slavery means that we're "made of sugar candy." And this will mean the end of U.S. civilization.

It's hard to know how to respond to that worldview, or to the fact that the person who promulgated it was one of the most popular and longest-running personalities, other than to note that he was taking Churchill out of context. Churchill followed up his observation--which was made about the "peoples of the British empire," not about Americans--with the vow that "we shall never descend to the German and Japanese level," meaning the Nazis and the World War II-era Japanese Empire. Harvey seemed genuinely worried that we wouldn't descend to that level soon enough.

See also Extra!: "The Right of the Story: Harvey Peddles Tall Tales--With a Conservative Kick" (9-10/97) by Dan Wilson.