The biggest Mafia Don of them all

In Hollywood films, the term “protection money” refers to money that organized crime extorts from a business, ostensibly for providing protection.  In fact, the Mafia is not protecting business at all; they are threatening them and then extracting money in exchange for not carrying out their threats.

In the 21st century, the US government has become one of the world’s largest criminal gangs, extorting money from weaker countries.  Our government claims the moral high ground, insisting that our rules are based on ethical principles when we put sanctions on rogue nations like North Korea and Iran.  But that’s not what’s actually going on; the foreign policy excuses merely provide a fig leaf for the US to use its muscle to steal money from other countries.

President Donald Trump thinks America is being ripped off. “We have spent $7trn—trillion with a T—$7trn in the Middle East,” he told a crowd last year, exaggerating slightly. “You know what we have for it? Nothing. Nothing.” To right this perceived wrong, Mr Trump has long favoured seizing Iraq’s oil. But after he hinted at the idea with the Iraqi prime minister (who demurred), his aides admonished him. “We can’t do this and you shouldn’t talk about it,” said H.R. McMaster, the national security adviser at the time, according to reports. Still, Mr Trump may be getting what he wants from Iraq in other ways.

I’ve often been critical of Trump, but I must grudgingly give him credit here for being honest, unlike his advisors.  While we are no better than the old-fashioned imperialist powers that tried to loot resources from weaker nations, Trump’s advisors have found more subtle ways to achieve his mercenary objectives:

When America reimposed sanctions on Iran last year it gave some countries extra time to stop buying Iranian oil before they would lose access to the American market. Most were given 90-day exemptions. In November Iraq, which shares a long border with Iran, was given half that time to cut off electricity and gas imports. As it negotiated for extensions, American companies made a push for Iraqi contracts. In December, Rick Perry, the energy secretary, led America’s largest trade delegation to Iraq in over a decade. “It was a quid pro quo,” says an oilman. “You give us priority and we’ll give you an exemption.”

The strategy seems to be working. General Electric, an American company, has muscled in on a big contract to upgrade Iraq’s decrepit electricity grid, which had been earmarked for Siemens, a German firm. American companies have also signed deals to supply Iraq with grains and poultry, important Iranian exports. Chevron and Exxon, American oil giants, have avoided the inconvenience of a bidding process by negotiating directly with Iraq’s oil ministry for large concessions. A previous Iraqi government put off a decision on Exxon’s bid to help boost Iraq’s oil export capacity and build a desalination plant. Now it is said to be a priority.

We claim that these sanctions are necessary to prevent Iran from developing nuclear weapons.  But while its (supposedly) essential that Iran not get nukes, it’s even more crucial that the lucrative deals available in Iraq go to US companies, not German companies.

The NYT reports that the same process is going on with 5G networks, where the US is trying to pressure foreign countries to avoid using Huawei equipment:

The White House’s focus on Huawei coincides with the Trump administration’s broader crackdown on China, which has involved sweeping tariffs on Chinese goods, investment restrictions and the indictments of several Chinese nationals accused of hacking and cyberespionage. President Trump has accused China of “ripping off our country” and plotting to grow stronger at America’s expense.

Mr. Trump’s views, combined with a lack of hard evidence implicating Huawei in any espionage, have prompted some countries to question whether America’s campaign is really about national security or if it is aimed at preventing China from gaining a competitive edge.

Administration officials see little distinction in those goals.

“President Trump has identified overcoming this economic problem as critical, not simply to right the balance economically, to make China play by the rules everybody else plays by, but to prevent an imbalance in political/military power in the future as well,” John R. Bolton, Mr. Trump’s national security adviser, told The Washington Times on Friday. “The two aspects are very closely tied together in his mind.”

Tied closely together?  I’m no fan of Bolton, but give him credit for honesty.  And Trump also chimed in on the issue.  After Meng Wanzhou was arrested by the Canadians (at our behest), we stabbed Canada in the back by hinting that she might be released if China gave us a better trade deal:

President Donald Trump has linked Ms Meng’s legal fate to the prospects of America getting a good deal in trade talks with China.

Unfortunately, no one told Trump he was supposed to keep his mouth shut; that the US wasn’t supposed to admit to our actual motives:

US officials argue that their criminal case against Huawei, which erupted when Ms Meng was detained by Canadian officials late last year, and the trade talks are on two separate tracks and have nothing to do with each other.

Western media outlets were then shocked and horrified that the evil Chinese had the temerity to arrest Canadian citizens in retaliation.  How dare they politicize this important national security issue!  Of course the Chinese government was wrong in this case, but where is the outrage against the US government?  “That’s right Canada, go out on a limb and arrest this important Chinese executive for us, but we’ll let her go if the Chinese do a trade deal where they promise to buy our goods instead or yours.”

The French firm Alstom was involved in bribing countries such as Indonesia to get lucrative deals selling power equipment.  That’s unfortunate, but it’s certainly none of our business.  Of course that didn’t stop the US from arresting a French executive and throwing him in jail.  What happened next is interesting:

According to executives there at the time, Alstom first explored a deal with GE just after Mr Pierucci’s guilty plea in July 2013. Legal pressure on Alstom, and on Mr Pierucci, seemed to ease once it became possible that much of his employer would come under GE’s ownership. For one thing, the arrest of executives stopped. The fourth to be detained in the case, while in the American Virgin Islands, was seized one day before news of the deal became public on April 24th 2014. Two months later, in the same week that Alstom’s top brass signed off on the sale to GE, Mr Pierucci’s long-standing bid to be released on bail was approved, after 14 months inside.

There is no suggestion of wrongdoing by GE itself, merely that American supremacy in imposing anti-corruption norms globally may have given American firms an advantage. GE had an edge over non-American firms vying to buy Alstom’s assets, such as Siemens of Germany and Mitsubishi of Japan, insofar as their legal departments may have been less well-versed in negotiating American legal settlements.

That mattered. In the purchase agreement, GE agreed to pay whatever fine was meted out to Alstom Power for past wrongdoing, even though the fine the French firm faced also related to past activities of other parts of the group. Foreign rivals interested in joining the bidding would also have to gauge the size of that potential legal liability, but may have been at a disadvantage: GE, like other American firms, employs multiple former DOJ staffers, according to their LinkedIn profiles. . . .

An American group such as GE could also help Alstom navigate judicial waters. Lawyers for GE conferred with the French firm’s lawyers ahead of its agreement with the DOJ, long before the deal formally closed. The DOJ settlement mentions how GE promised to “implement its compliance programme and internal controls” at Alstom. In American courts, such assurances may carry more weight coming from well-known local firms, not foreign ones.

The US is becoming increasingly effective at using its financial and military clout to extract resources from other countries.  Look for the Europeans to retaliate with huge fines imposed on our tech firms.  More than one country can play the nationalism game.

PS.  When did it become OK to endorse nationalism?  During the first 60 years of my life, nationalism was pretty universally viewed as evil, by both the left and the right.  It was seen as a cause of both WWI and WWII, not to mention destructive trade wars and lots of other bad things.  Now we suddenly have a president who is a self-avowed nationalist:

In Berlin, meanwhile, diplomats have been poring glumly over The Virtue of Nationalism, a book by the Israeli writer Yoram Hazony, which Mr Mitchell had told them was the key to the Trump administration’s Europe policy.

Mr Hazony’s book — published in 2018 to fervent applause from conservative commentators in the US — purports to provide the theoretical gloss on Mr Trump’s tweets: nationalism as the cure to “liberal imperialism”. The two main “empires” he has in mind are post-cold war, liberal-interventionist America and the EU.

Teutonic brows are furrowing presumably at passages from the book such as this: “The European Union is a German imperial state in all but name . . . Should the United States ever withdraw its protection . . . a strong European executive will be appointed by Germany.” Mr Hazony goes on to write that a “German-dominated EU” is an “imperial order”, that “will work to delegitimise and undermine the independence of all remaining national states”.

Never mind that this is spectacularly misinformed about the status of nation states in Europe or Germany’s power over them and the EU. Repress, if you can, the realisation that Mr Hazony thinks the EU could succeed where the Nazis failed. And try to ignore the question implied by both Messrs Pompeo and Hazony: to what imaginary golden age of nationalism exactly should Europe’s clock be turned back? 1989? 1945? 1918?

But the nationalism “bench” in DC still seems pretty thin, and hence Trump ends up stocking his administration with lots of traditional Republicans like CIA National Intelligence director Dan Coats, who just informed Congress that Trump’s views on Iran, Syria and North Korea are deluded:

North Korea is unlikely to abandon its nuclear weapons because the regime views the bombs and their missile delivery systems as critical to its survival, according to the worldwide threat assessment from the US intelligence committee. . . .

In justifying his decision in December to remove military forces from Syria — which prompted the resignation of defence secretary Jim Mattis — Mr Trump said the US had “defeated Isis in Syria”. But the intelligence community made clear in its assessment on Tuesday that the threat from the terrorist group remained.

“While Isis is nearing territorial defeat in Iraq and Syria, the group has returned to its guerrilla warfare roots while continuing to plot attacks and direct its supporters worldwide,” Mr Coats told the committee. “Isis is intent on resurging and still commands thousands of fighters in Iraq and Syria.”

Mr Coats also said the intelligence community “do not believe Iran is currently undertaking activities we judge necessary to produce a nuclear device” even after Mr Trump withdrew the US from the 2015 nuclear agreement.

Trump keeps appointing what he himself calls the “best people”, like Dan Coats and Jerome Powell, and then keeps telling us what idiots they are:

Donald Trump has accused his own intelligence services of being “naive” about Iran after top US security officials contradicted his statements about the dangers of the nuclear threat posed by both Iran and North Korea.

Naive?  Say what you will about Trump, we’ve never had a funnier president.




12 Responses to “The biggest Mafia Don of them all”

  1. Gravatar of Michael Sandifer Michael Sandifer
    30. January 2019 at 19:15

    Apparently, you have a problem with mercantilism and crony capitalism.

  2. Gravatar of Benjamin Cole Benjamin Cole
    30. January 2019 at 19:25


    What a post.

    I think I agree, but in a broader sense: Yes, multinationals heavily influence, even dominate, US foreign, trade and military policies.

    A spooky thought: Huge companies often make money by colluding with government. No secret there. Indeed, it is hard to tell when a government is “shaking down” down a company, or being “corrupted” by a company.

    Example: A Los Angeles property developer who wants a lucrative zoning exemption must ladle money around to the right people, and then gets the lucrative exemption. Did the developer corrupt the process, or was the developer “shaken down”? Hard to say.

    Today, multinationals make money by colluding with the Communist Party of China, which has provided a large manufacturing base, and promises a large consumer market.

    Of course, an Apple, or BlackRock, GM, or Wal-mart must appease the Communist Party of China, as they make profit only at the behest of Beijing.

    So, we can expect (heavily compromised) multinationals, so influential in the making of US foreign, trade and military policy, to weigh in heavily on Sino-US relations.

    Other multinationals appear to foment US involvement in various quagmires, such as Iraq, Afghanistan, Syria and the latest is Venezuela. The US is best pals with the Saudi Arabians. Khashoggi is forgotten already. Never discussed are 1 million Uighers in concentration camps.

    Lots of serious scholars (non-conspiracy theorists) have pondered the “perma-state” or “deep state,” “double state” or “national security state” that makes foreign policy, and has a monopoly on information, no matter who is President.

    Even if the strong-willed (and often nutty) Trump is President.

    Trump will gone in 2020, if not before.

    The perma-national security and foreign policy state will still be in DC.

  3. Gravatar of Brian Donohue Brian Donohue
    30. January 2019 at 23:36

    BREAKING NEWS: General Smedley Butler, recipient of TWO Congressional Medals of Honor, releases “War Is A Racket”.;view=1up;seq=9;skin=mobile

  4. Gravatar of Benjamin Cole Benjamin Cole
    31. January 2019 at 02:42

    BTW, when Trump says the US spent $7 trillion on the Mideast, it may not be an exaggeration.

    Iraq and Afghanistan: The US$6 trillion bill for America’s longest war is ……
    May 25, 2017 – In addition to nearly 7,000 troops killed, the 16-year conflict in Iraq and Afghanistan will cost an estimated US$6 trillion due to its prolonged …


    Brian Donahue:

    Remember the words of Pat Buchanan: “What starts off as a noble cause then become politics. Then it becomes a business, and then a racket.”

  5. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    31. January 2019 at 07:28

    Trump is funnier than the guy who redefined the word ‘is’?

  6. Gravatar of E. Harding E. Harding
    31. January 2019 at 11:39

    You’re finally getting it, Sumner.

  7. Gravatar of Doug M Doug M
    31. January 2019 at 13:13

    When it gets down to it how is any government fundamentally different from the mafia. You pay tribute, and they don’t put you in jail.

    Okay, they can say that they were elected rather than self-appointed, and that gives them a fig-leaf of moral authority.

    The remaining monarchies are just warlords with better clothes.

  8. Gravatar of Pyrmonter on Scott Sumner | Catallaxy Files Pyrmonter on Scott Sumner | Catallaxy Files
    31. January 2019 at 22:31

    […] a similar background, he parts ways with Steve Kates on the merits of the current US government.  One of his more recent posts will chime with those who recall the Doomlord’s work on the state as a stationary […]

  9. Gravatar of George Wilson George Wilson
    1. February 2019 at 11:41

    Why can’t we just follow the law. Iraq is a sovereign nation, Iran is a sovereign nation and so is Venezuela and Syria. International law dictates what country does what and the rules of war, even in a civil war. Trump reneged from the Iran deal, he is the party at fault. The US intervention in Syria was illegal and Russia and Iran have a right to defend Assad because the sovereign state of Syria invited them in for assistance. It’s wrong and grotesque to kill civilians but at some point we have to look at ourselves. If contacts go to Germany so be it. We live in a democracy we choose to blindly follow the hawks into a stupid war and Europe followed. We killed over a million Iraqis in the process. We don’t deserve anything and should be ashamed. We should take personal responsibility and vote to elect leaders that make better decisions. The situation in Venezuela and Central America is a direct result of illegal US intervention in Latin America. The sheer shortsightedness is astounding, locking us into perpetual and shockingly casual conversations over the next illegal expedition without concern of how it will impact us financially or how many will perish in the process. Why not give following international law a try?

  10. Gravatar of Lorenzo from Oz Lorenzo from Oz
    1. February 2019 at 14:51

    “When did it become OK to endorse nationalism? During the first 60 years of my life, nationalism was pretty universally viewed as evil, by both the left and the right. It was seen as a cause of both WWI and WWII, not to mention destructive trade wars and lots of other bad things.”

    Hmmm. When was nationalism previously big? The C19th. What is similar about now compared to the C19th? Globalisation, cultural dislocation and mass migration. So, a rhetorical question, really?

    Also, blaming either world war on nationalism is really bad history. Yes, states used nationalism to mobilise their populaces, but the big issue in both wars was unaccountable power. The notion that the EU *as a political project of ever greater union* is a “solution” to what led to either world war is to get history quite wrong. But demonising popular sentiments is really useful — if you are creating unaccountable power.

  11. Gravatar of Carl Carl
    4. February 2019 at 15:09


    I think it’s fair to say that nationalism was “a” cause of the two world wars. The trigger of the First World War was Serbian nationalism. Konrad Adenauer and others formed the EU expressly to prevent a reprise of the kind of nationalism (e.g. National Socialism) that they believe tore apart Europe in the Second World War.

    What do you mean by “unaccountable power?” Non-democratic governments? Power imbalances? Something else?

  12. Gravatar of Xu Xu
    25. August 2019 at 18:36

    Scott does not seem to understand the difference between nationalism and realism, nor does he seem to understand that protectionism is not nationalism. A dictionary is a really useful tool, and I suggest using it to understand the differences between these political words and preferably as quickly as possible. Futhermore, the US is bankrupt. Economists like Scott thought it would be such a wonderful idea to give away all our jobs to enrich southeast and east asia, and – oh yeah, increase profits for the 1% since they could cut labor by 80%. Sounds like a brilliant win for the middleclass, right? This is why people with a brain, and who werent smoking the retarded ricardy pipe in the 90s, like bernie, ross perot, and trump, scratched their heads in disbelief. They say, “But things are cheaper at the stores”. Um, yeah thats great logic if you still have a JOB! Lol. Meanwhile they will tell you: “dont worry because ricardo said it would all work out”: Ricardo was an 18th century buffoon who had no friggen clue what he was talking about. In retarded ricardy’s world we should just all work at making hotdogs and hamburgers and hollywood movies, and then export that garbage to the world because its our amazing comparative advantage. All the other jobs we will just let china have. That is mind blowing logic. Its so incredibly brilliant that I just got a massive headache from reading it… yeah not really.. not only is it moronic, but even if he was right you still would not want to go that route. 1) people are not going to be happy. 2) brain drain in industries – some of which pertain to national security (kind of need smart people around, #nerds matter).

    Now that we know it was a total and complete disaster our nation is in panic mode to find a reset button. We have a generation of people who cannot even do basic mathematics, never mind build the next generation of artificial intelligence. We have to hire chinese and indians for those jobs. Everyone can say: “Thanks Scott”

    Re foreign policy: Scott believes in free markets, equitable transactions, and that everyone is so noble and righteous – um, what dream world has Scott concocted for himself after 40 years behind a desk. Gee whiz. You cannot promote capitalism and then say “but where are the mom and pop stores, why is there so much cronyism, why do we take advantage of the poor and helpless – um, that is the very nature of capitalism. Are you an economist, or was that degree just handed to you for your extraordinary ability to be “wrong”. Golly.

Leave a Reply