Category: Foreign Relations

It Works, and It Saves the Taxpayer Money, So Let’s Make it Illegal

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I am referring to the state-owned bank of North Dakota, which will be made illegal by the Trans-Pacific Partnership (TPP):

Clearly, from Wall Street’s perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street’s stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate “non-tariff” barriers including regulations that create “unfair” competition with state-owned financial enterprises.

 Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because “foreign bankers could claim the BND stops them from lending to commercial banks throughout the state,” according to an analysis by Sam Knight in Truthout. How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.

The nickel tour on BND is that it is a state-owned wholesale bank (it only makes loans to other banks), and the state keeps its money in an account there.

It generates significant savings, and significant savings for the taxpayer, and its senior executives are paid less than the President of the United States.  (The most highly paid executive is paid about ½ that of POTUS.)

Also, the bank provides a financing alternative to bond sales managed by Wall Street firms.

Considering the Obama administrations neoliberal philosophies, along with its predilections toward direct and indirect government subsidies for the TBTF banks, I’m inclined to believe it.  Particularly since that is what the Obama Administration’s point person is explicitly saying the trade agreement:

Publicly owned enterprises, for example, are being targeted by negotiators. One such entity in the United States that has been the subject of considerable interest in recent years is the Bank of North Dakota (BND) – the only fully publicly owned financial institution in the country. The BND, which is only allowed to lend wholesale, was a stabilizing force that helped keep the already energy-rich state insulated from the shock of the financial crisis (Alaska, for example, didn’t fare as well). It has also brought a small fortune to the state’s treasury – $340 million in net tax gain between 1997 and 2009. Legislators in at least 13 different states have proposed studying or emulating the North Dakota model – state-owned development of central-bank style institutions guaranteed by tax revenue. But if the TPP is passed, that option might not be available. [Chief TPP Negotiator for the Office of the US Trade Representative Barbara] Weisel said that State Owned Enterprises (SOE) are routinely “competing directly with private enterprises, and often in a way that is considered unfair.”

 “Some of the advantages that can be conferred on State Owned Enterprises are things like preferential financing,” Weisel said. “Those are things that wouldn’t be provided to private companies – preferential provision of goods and services provided by a government.”

 She said that “State Owned Enterprises – which in some cases can comprise a significant percentage of an economy – can be used to undermine what we’re otherwise trying to gain from this free trade agreement.”

What they are “trying to gain” with this agreement is to replace democracy with unregulated markets (aka looting).

Call your Congresscritter and tell him that you are absolutely opposed to the TPP.

Yes, Virginia, the Trans Pacific Partnership Sucks Wet Farts from Dead Pigeons

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It is a wet dream of Wall Street and IP holders.

The post is too long to summarize, but the Angry Bear goes through and summarizes the low points.

These are things like investors can sue in an extranational and secret courts for losses from:

  • Strikes.
  • Public protest.

The latter is the most serious.  If your protest can result in a multibillion dollar judgement against your county or state,  they will shut you down, constitution or no.

Tell your Congresscritter to vote no.

Because they Do Not Want to Pay to Get Screwed

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It appears the the Russians are not going to be extending additional credit to Cyprus, nor are they going to drop the interest or extend the loans that they have already made.

Felix Salmon is perplexed:

Paul Murphy, watching Cypriot finance Minister Michael Sarris returning empty-handed from Moscow, says that “Medvedev and co could not have played a worse hand during this crisis — and it’s not immediately clear why”. His point is that the most likely outcome right now — he calls it “popping the red pill” — is that big depositors at Laiki Bank (read: rich Russians) are likely to lose some 40% of their money. Since that will make Russia very unhappy, why is Russia doing nothing to prevent it?

I don’t pretend to understand Russian politics, but this move seems to me to be a classic high-risk, high-aggression play; think of Medvedev as a geopolitical hedge-fund manager or poker player, and it begins to make a bit more sense.

Firstly, it’s worth noting that Russia is actually moving backwards on the amount of help it’s likely to extend to Cyprus. When the bailout plan was first announced, it included Russia extending its existing €2.5 billion loan to the country by five years, as well as reducing that loan’s interest rate. Now, Russia is refusing to agree even to that.
More generally, Russia is taking an absolutist stance with respect to Cyprus. No, we won’t restructure the money you owe us. No, we won’t buy a bank off
you. No, we aren’t interested in your natural-gas reserves. And underlying it all, of course, an unspoken — and all the more powerful for being unspoken — physical threat to any Cypriot who causes powerful Russians to lose billions of euros.

I think, and noted in the comments, that there are a number of motivations for the Russians:

  • Medvedev and Putin believe that Frau Merkel (sound of horses whinnying) will demand a haircut of the Russians under any circumstances, both for political advantage, and because of the natural hostility of former residents of Warsaw Pact nations, who will gladly cut their nose off to spite the Russian face.
  • The second reason is that if the ultra-rich Russia tax evaders get dinged, in the future, they may decide to keep assets in, and pay taxes in Russia, because they see the cost of taxes being less than the cost of an IMF and an EU determine to f%$# them.
  • The third reason is that the Russians have been VERY concerned about their western near-abroad for centuries, it’s where they have been invaded from, and they feel that any expansion of the EU presages and expansion of NATO, which they see as a ring of steel intended to threaten them. If Cyprus, and honest hardworking depositors get boned, it is far less likely that places like the Ukraine, Georgia, Moldova, etc. will join the union.

Note that the reasons above are orthogonal, so it might be all of the above.

I do think that any tighter government integration in the EU will have to include some sort of government structure which prevents German hegemony, something like the bicameral structure of the US Congress, because this whole “Germany runs Europe” thing is working about as well as it did the last time.

I Like the Way that This (These) Guy(s) Think

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This proposal for Cyprus is brilliant:

So TMM propose the Cypriot Government do the following  – they’ll have to do it very quickly to avoid the ECB panicking and pulling back the ELA cash lent against dodgy collateral. Once done, the ECB will not be able to do anything about it.

  1. Transfer all bank deposits & unencumbered assets from the existing Cypriot banks to new bank holding companies: e.g. Cyprus Phoenix Bank. This should include the transfer of IT infrastructure, the branch network & any tangible assets like real estate (e.g. the banks’ HQs).
  2. Let the old banks go bankrupt, leaving the ECB with EUR 9bn of losses and wiping out both the subordinated & senior bondholders (EUR 1.75bn).
  3. These new banks are now adequately capitalised & under EU law, the ECB will not be able to prevent their participation in Target 2 via the Central Bank of Cyprus. The ECB may well kick & scream, but there will be nothing they can do about it.
  4. Domestic Bills/Bonds haircut by 80% for non-Cypriot banks. Although their non-bank ownership is small, every little helps, & using JPM’s ownership estimates, this would produce ~EUR 820m.
  5. The international bonds under UK (with a 75% CAC hurdle) are certainly tough to PSI, but let’s all be realistic, there’s no money left & government debt is at astronomically large amounts of GDP. TMM believe that Cyprus will be more successful than market punters reckon in restructuring this debt. And of course, they can also just unilaterally default on the debt. Again, an 80% haircut here sounds realistic, producing EUR 3.04bn.
  6. Adding the Gas reserve privatisation (which JPM estimate at EUR 4.2bn), TMM have found EUR 18.9bn. 
  7. Cyprus could also, of course negotiate with the Russians to restructure the EUR 2.5bn loan, and if they are able to get say 20% NPV reduction on this, they could make the terms on the international bond restructuring less-onerous.

I’m not a fan of the proposal to privatizing the gas reserves, I think that it’s stupid to sell the future for pennies on the dollar, but otherwise I like it.

It appears legal, and it legally f%$#s the powers that be of finance, and it doesn’t make the people of Cyprus pay for their banksters fraud.

Them that broke the world should pay, but that will never happen.

It’s Our War in Syria Now

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We may not be supplying arms directly, but United States has just plucked someone no one has heard of in order to have “their man” in charge of the insurgency:

Syria’s main exile opposition coalition elected a naturalized Syrian-born American citizen early Tuesday to be the first prime minister of an interim Syrian government, charged with funneling aid to rebels inside Syria and offering an alternative to the government of President Bashar al-Assad.

By choosing Ghassan Hitto, 50, an information technology executive who lived in Texas until recently, the Syrian opposition coalition concluded months of contentious efforts to unite behind a leader, under pressure from the United States and its allies, which demanded that the opposition set up clear chains of command as a condition of increasing aid to the rebels.

Mr. Hitto, a relative unknown in opposition politics who rose to prominence recently through efforts to improve the delivery of humanitarian aid, was far from a unanimous choice. After a day of maneuvering and voting on Monday that lasted into early Tuesday, he won 35 votes, just three more than Assad Mustafa, a former agricultural minister under Mr. Assad’s father and predecessor, Hafez al-Assad.

Mr. Hitto faces formidable challenges in his quest to to establish administrative authority over areas of northern Syria that have been secured by the rebels.

(emphasis mine)

If you don’t think that this guy was hand picked by the US State Department, the CIA, and the Pentagon, then I have a bridge in Brooklyn to sell to you.

BTW, when you look at the history of exiles chosen by the US to rule, Achmed Chalabi and Hamid Karzai come to mind, the history is not pretty.

As the saying goes, “ない愚かさはない薬です”.*

*Pronounced in Japanese, “baka ni tsukeru kusuri wanai”, which means, “There is no medicine for stupidity.” Apologies for any inaccuracies in the text, I do not know Japanese.

This is Fascinating

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An analysis by Robert Parry suggests that both Watergate and Iran Contra were about covering up collusion to subvert US foreign policy for electoral advantage, something that the less sophisticated amongst us might call treason:

………

A favorite saying of Official Washington is that “the cover-up is worse than the crime.” But that presupposes you accurately understand what the crime was. And, in the case of the two major U.S. government scandals of the last third of the Twentieth Century – Watergate and Iran-Contra – that doesn’t seem to be the case.

Indeed, newly disclosed documents have put old evidence into a sharply different light and suggest that history has substantially miswritten the two scandals by failing to understand that they actually were sequels to earlier scandals that were far worse. Watergate and Iran-Contra were, in part at least, extensions of the original crimes, which involved dirty dealings to secure the immense power of the presidency.

Presidents Richard Nixon, George H.W. Bush and Ronald Reagan photographed together in the Oval Office in 1991. (Cropped from a White House photo that also included Presidents Gerald Ford and Jimmy Carter.)

In the case of Watergate – the foiled Republican break-in at the Democratic National Committee in June 1972 and Richard Nixon’s botched cover-up leading to his resignation in August 1974 – the evidence is now clear that Nixon created the Watergate burglars out of his panic that the Democrats might possess a file on his sabotage of Vietnam peace talks in 1968.

………

Similarly, Official Washington and many mainstream historians have tended to dismiss Ronald Reagan’s Iran-Contra scandal as another case of some overzealous subordinates intuiting what the President wanted and getting everybody into trouble.

………

So, while congressional and federal investigators looked only at how the specific 1985-86 arms sales to Iran got started, there was no timely attention paid to evidence that the Reagan administration had quietly approved Israeli arms sales to Iran in 1981 and that those contacts went back to the days before Election 1980 when the hostage crisis destroyed Carter’s reelection hopes and ensured Reagan’s victory.

The 52 hostages were not released until Reagan was sworn in on Jan. 20, 1981.

Over the years, about two dozen sources – including Iranian officials, Israeli insiders, European intelligence operatives, Republican activists and even Palestinian leader Yasser Arafat – have provided information about alleged contacts with Iran by the Reagan campaign.

And, there were indications early in the Reagan presidency that something peculiar was afoot. On July 18, 1981, an Israeli-chartered plane crashed or was shot down after straying over the Soviet Union on a return flight from delivering U.S.-manufactured weapons to Iran.

In a PBS interview nearly a decade later, Nicholas Veliotes, Reagan’s assistant secretary of state for the Middle East, said he looked into the incident by talking to top administration officials. “It was clear to me after my conversations with people on high that indeed we had agreed that the Israelis could transship to Iran some American-origin military equipment,” Veliotes said.

In checking out the Israeli flight, Veliotes came to believe that the Reagan camp’s dealings with Iran dated back to before the 1980 election. “It seems to have started in earnest in the period probably prior to the election of 1980, as the Israelis had identified who would become the new players in the national security area in the Reagan administration,” Veliotes said. “And I understand some contacts were made at that time.”

When I re-interviewed Veliotes on Aug. 8, 2012, he said he couldn’t recall who the “people on high” were who had described the informal clearance of the Israeli shipments but he indicated that “the new players” were the young neoconservatives who were working on the Reagan campaign, many of whom later joined the administration as senior political appointees.

I really don’t think that “treason” is too strong a term here.

The assertion here is that the Watergate break-in was about trying to find files implicating Nixon in deliberately extending the war for electoral advantage, and the arms deliveries to Iran were payback for holding the Tehran embassy hostages from being released until after the elections.

It does provide some context to the “Third Rate Burglary” the brought Nixon down.

There were files on his interference, and he could not find them because a Johnson aide had taken them with him, and he was desperate to ensure that they would not be used against him in the 1972 elections.

Considering the 30,000 American deaths, and the million+ dead Vietnamese, Nixon and his merry band of rat-f%$#ers (their term) had to have been in a panic about this.

Speculation About the Pope’s Abdication Gains Mainstream Currency

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The speculation about why the Pope is stepping down has hit Reuters:

Pope Benedict’s decision to live in the Vatican after he resigns will provide him with security and privacy. It will also offer legal protection from any attempt to prosecute him in connection with sexual abuse cases around the world, Church sources and legal experts say.

“His continued presence in the Vatican is necessary, otherwise he might be defenseless. He wouldn’t have his immunity, his prerogatives, his security, if he is anywhere else,” said one Vatican official, speaking on condition of anonymity.

“It is absolutely necessary” that he stays in the Vatican, said the source, adding that Benedict should have a “dignified existence” in his remaining years.

Vatican sources said officials had three main considerations in deciding that Benedict should live in a convent in the Vatican after he resigns on February 28.

Vatican police, who already know the pope and his habits, will be able to guarantee his privacy and security and not have to entrust it to a foreign police force, which would be necessary if he moved to another country.

“I see a big problem if he would go anywhere else. I’m thinking in terms of his personal security, his safety. We don’t have a secret service that can devote huge resources (like they do) to ex-presidents,” the official said.

It could be nothing, but my guess is that we are going to hear the drip, drip, drip of all of this for months.

I actually have a bit of sympathy for him.  Benedict was left with the mess that John Paul created.  (It’s pretty clear that JPII gave then Cardinal Ratzinger instructions to cover up the allegations when he was head of the Inquisition Congregation for the Doctrine of the Faith.)

Britain’s Cameron Calls for Referendum on EU Membership

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He wants to get back some of the powers that have gone to the EU, but the big story is that he is calling for a referendum on leaving the EU:

David Cameron has said the British people must “have their say” on Europe as he pledged an in/out referendum if the Conservatives win the election.

The prime minister said he wanted to renegotiate the UK’s relationship with the EU and then give people the “simple choice” between staying in under those new terms, or leaving the EU.

The news was welcomed by Eurosceptics who have long campaigned for a vote.

France and Germany both warned the UK could not “cherry pick” EU membership.

During noisy Prime Minister’s Questions exchanges in Parliament, Labour leader Ed Miliband said Mr Cameron was “running scared” of the UK Independence Party, whose poll ratings have been rising.

It’s not just the UKIP. It’s also the right wing of his own party who is Euroskeptical, though the Lib-Dems, his junior coalition partners are strongly pro-EU, so he’s got a nasty balancing act.

As to how the vote goes?  My prediction is that the vote won’t ever happen.

I think David Cameron will find a way to declare victory and so not hold the vote.

Then again, my powers of prognostication suck wet farts from dead pigeons.

Why Are We Supplying Arms to Bahrain?

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If anything, the crackdown on dissent in Bahrain is worse than in Syria, because of the overtones of ethnic cleansing against the Shia (At least the Syrians oppress everyone equally), and we are arming them:

Despite Bahrain’s bloody crackdown on pro-democracy protesters, the U.S. has continued to provide weapons and maintenance to the small Mideast nation.

Defense Department documents released to ProPublica give the fullest picture yet of the arms sales: The list includes ammunition, combat vehicle parts, communications equipment, Blackhawk helicopters, and an unidentified missile system. (Read the documents.)

The documents, which were provided in response to a Freedom of Information Act request and cover a yearlong period ending in February 2012, still leave many questions unanswered. It’s not clear whether in each case the arms listed have been delivered. And some entries that only cite the names of weapons may in fact refer to maintenance or spare parts.

For all the evil that the rulers in Syria have done, they have not arrested doctors for treating protestors that came into their emergency rooms, and they haven’t demolished mosques of other sects, as the the Al Khalifa monarchy has done in Bahrain.

Both regimes should be replaced by something that better serves the needs of their citizens, but we are letting the House of Saud dictate our priorities, and surprisingly, they oppose a secular regime run largely by non-Sunnis, and they support a Sunni monarchy like themselves.

The real problem here is that the Arab monarchies will eventually fall, either violently in the manner of the Romanoffs of Russia, or peacefully, in the manner of the House of Windsor in the UK, and the more that we prop them up, the bigger the backlash when they fall.

Iran’s transition from US ally to foe, which derived directly from our unqualified support of a despot, would not suit our interests, nor the interests of the people in that part of the world.

My rule of thumb here is that if the House of Saud is for it, I’m against it.

They Want Us Gone, Let’s Leave

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The Afghans want us gone:

Days after Afghan President Hamid Karzai and President Obama seemed to agree on the future role of U.S. forces in Afghanistan, a division has emerged over one of the American military’s most prized defense programs.

Top Afghan officials said Obama’s pledge last week to remove U.S. troops from Afghan villages should apply to Special Operations forces charged with training the Afghan Local Police. But U.S. officials said they assumed that the policy would apply only to traditional military operations and would include an exemption for the police trainers, whose mission they see as critical to security throughout Afghanistan.

The dispute underscored just how difficult negotiations over a long-term security partnership could be during the next year. The disagreement, like others before it, centers on the fundamental question of what will keep Afghans safe: U.S. officials say the local police program thwarts insurgents, but Karzai insists that it invites attacks.

The broader Afghan interpretation of the troop withdrawal, which Afghan officials said they believed would happen within weeks, would derail much of the Special Operations forces’ mission in Afghanistan and halt the expansion of the fastest-
growing Afghan security force, one that has cost hundreds of millions of dollars.

We’ve lost the war. Our allies don’t want want us there any more. It’s just time to go.

What the Hell Is Cameron Doing With the EU?

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He is due to give a speech in Brussels demanding that some powers be returned to Britain, most notably those dealing with criminal justice, immigration, and foreign workers.

Truth be told, I think that he is trying to walk a tight rope. A large majority of the Tories, and (if polls are correct) most of the rest of the country, are inclined to favor an exit from the EU, so he’s attempting a number of things:

  • He wants to take the wind out of the sails the right wing nativist UK Independence Party, which is on a path to reduce the Tories’ Liberal Democrat coalition partners to 4th place and irrelevance.
  • He wants to pacify his own right wing.
  • He wants to put Labor leader Millibrand in the position of supporting the EU which is an unpopular position.

Truth be told, with what Merkel is looking to do, I would be a Euroskeptic myself:

It is understood that Merkel, the only EU leader who has been calling for a revision of the Lisbon treaty to underpin new governance arrangements for the eurozone, has given up on the idea of a major treaty revision for the moment.

 The German chancellor is said to have decided it is fruitless to push for a treaty revision in the face of strong opposition from France and elsewhere. Instead she has decided to try to stabilise the eurozone by setting up what are described as “work streams” in three areas. These cover banking union, the subject of the last EU summit where Cameron won guarantees for Britain; greater fiscal co-ordination among eurozone members; and labour market reform across the EU.

(emphasis mine)

If I lived in the EU, the idea that the Germans, who have no statutory minimum wage,, and a long history of dubious treatment of immigrants, would be driving “labor market reforms” it would fill me with dread.  It translates into f%$#ing the ordinary working bloke.

Of course, David Cameron is a member of the Conservative party, so “f%$#ing the ordinary working bloke”, is kind of an article of faith for him.

I still maintain that the real problem with the EU is German hegemony in the EU, because they have much like the Bourbon Kings, “They had learned nothing and forgotten nothing.”

In the lame poodle category, Cameron is saying that the US has given its permission for him to ask for this.

Britain’s “special relationship” with the US looks increasingly like a relationship between a prostitute and a pimp.

That’s Gonna Leave a Mark

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One of the “journalists” at Fox News asked a really stupid question alleging that Hillary Clinton was faking being sick to avoid testifying before Congress, and State Department spokesman Phillippe Raines “apologized” for this:

“Toria, can you expand on why Secretary Clinton can’t testify on Thursday about this? It seems that she has not been available to testify on the Benghazi situation on some very key dates, including the Sunday after 9/11 and now this Thursday.”

I just called them and read them the riot act for putting such misleading, accusatory, and absolutely asinine words in your mouth. Because after what we and her doctors explained over the weekend regarding her health, you couldn’t possibly have been insinuating the ulterior motives that question implies. No way. No credible journalist would do that without any basis whatsoever. But even more so, I really went to bat for you with folks here and told them that while I know the media can often be incredibly self-involved, there is no way you, an informed reporter, would equate one’s testifying before the United States Congress – made up of duly elected Senators and Representatives empowered by Article I of our Constitution – with going on tv. I don’t know Chris Wallace all that well, but I’m pretty sure he wouldn’t place his television show on par with one of the three branches of our government. And therefore, saying that this has happened on multiple ‘key dates’ is simply a blatant lie and grossly misleading to the public.

Anyway, our sincere apologies. If you send us what you really said, I’ll make sure it’s properly reflected.

This is just a thing of beauty.

DPRK Finally Gets a Launch Half Right

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North Korea’s satellite is actually in orbit, though it appears to be tumbling out of control:

After 14 years of trying, North Korea has finally joined the countries capable of launching a satellite into orbit. But the success was short-lived. The nation’s space program is also experiencing the bitterness of the failure to keep its spacecraft stable.

North Korea succeeded Dec. 11 on its six attempt to orbit what officials there call an Earth-observation satellite. The U.S. led a group of nations , including Russia and China, that warned North Korea not to proceed with the mission. China has since expressed “regret” over it.

The launch technology can also be used to support the country ‘s ballistic missile program .

A U.S. defense official suggests the satellite is tumbling in its polar orbit. Strategic Command, which tracks orbiting objects, referred questions to the Pentagon. A spokeswoman there said she would not comment on classified intelligence matters.

One observer who tracked the spacecraft with night-vision goggles said it was “flickering” and produced an intermittent trace on a time-exposure photograph, which could suggest tumbling.

What is significant here is not the ballistic missile capability that this shows, because this rocket science isn’t exactly ……… rocket science.

Yes, I know, it technically is rocket science, and from an engineering and technical perspective it is significant, but a ballistic missile aimed at the west coast would need to impart less than ½ the kinetic energy to the payload.

It’s been clear that this has been well within the Kim’s capabilities for years.

What is significant is now that any attempt to prevent testing related to ballistic missiles will now have to clearly show that it is not almost entirely related to weapons.

While there is support in the international community to prevent the development of explicitly military long range rocket capability, the idea that the United States, it’s NATO allies, Russia, China, Israel, etc. should be allowed to hold a hegemony on such a technology will be anathema to most other nations in the world.

This is particularly true because the only nation put at threat by this, though South Korea and Japan are clearly at risk from shorter ranged rockets, is the United States.

Canada Drops F-35

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The news that Canada has decided to cancel its purchase of 65 F-35 Joint Strike Fighters is a stunner.

It’s the first cancellation, and Canada is more than a customer, it is also one of the original 9 nations that formed the JSF consortium:

The F-35 jet fighter purchase, the most persistent thorn in the federal government’s side and the subject of a devastating auditor-general’s report last spring, is dead.

Faced with the imminent release of an audit by accountants KPMG that will push the total projected life-cycle costs of the aircraft above $30 billion, the operations committee of the federal Cabinet decided to scrap the controversial sole-source program and go back to the drawing board, a source familiar with the decision said.

This occurred after Chief of the Defence Staff Thomas Lawson, while en route overseas, was called back urgently to appear before the committee, the source said.

The decision is sure to have ripple effects around the world, as any reduction in the number of aircraft on order causes the price to go up for all the other buyers. Canada is one of nine F-35 consortium members, including the United States.

………

Last spring, Ferguson ignited a political firestorm when he reported that the top-line cost cited by the Conservatives in the 2011 election campaign — $9 billion for 65 planes, or $15 billion including maintenance and other life-cycle costs — was $10-billion below the Defence Department’s internal estimate.

Even the internal figure of $25.1 billion was suspect, critics said, because it assumed a 20-year life cycle. The longevity of the Lockheed-Martin-built aircraft, according to the Pentagon, is 36 years.

KPMG’s audit, due out next week, has confirmed the contention, long made by critics such as former assistant deputy minister (materiel) Alan Williams, that the F-35 program’s real cost would be much higher than any previously stated government estimate, sources say.

H/t Christina Mackenzie at the Ares blog.

Understand also that the KPMG analysis almost certainly ignored the elephant in the room, the fact that for any nation operating the F-35, they will be opening themselves up to potentially extortionate charges for support from from the prime contractor over the life of the program, because of the highly integrated, and completely closed, architecture of the aircraft:

It is not often that governments are afforded the luxury of looking into the future before they irrevocably commit to a course of action that will have momentous long-term consequences.

Yet, this is just what the debate about the future of Britain’s fleet of Apache attack helicopters provides, not just to its own government, but also to other European governments as they prepare to order, at great cost, the US-made F-35 Joint Strike Fighter.

Britain’s problem is that it operates the AH-64D Longbow version of Apache, while the US Army is upgrading to the AH-64E Block III version. This means that “essential technical support for the British Apache fleet will be withdrawn from 2017,” as the Daily Telegraph reported Dec. 5, leaving Britain with the choice of either upgrading all or part of its Apaches to the new version, or retiring them after 2017 as they drift into early obsolescence.

………

Whether they realize it or not when they buy a US-made weapon, that is how the system works: US forces only support the weapons they operate, so it’s either keep up or drop out, and in this case either scrap your weapons or see them fade away into technical and operational irrelevance.

The other side of the coin, obviously, is that buyers of US weapons are always assured of having access to the very latest versions, improvements and upgrades decided by the US military.

………

Each time the US military decides a modification or upgrade to its F-35s, foreign customers will have to follow suit, at whatever cost Lockheed and the Pentagon decide, or else see their aircraft become obsolete as US technical support shifts to the newer version.

In fact, the situation will be infinitely more serious in the case of the F-35, as export customers will not have access to the aircraft’s source codes, nor to its more advanced maintenance methods and equipment, because all but the most basic maintenance will be carried out by Lockheed Martin in its own facilities in the United States.

Foreign operators of the F-35 will have to pay to play. But it is probable that European governments do not fully understand this consequence of buying into a major US program.

European buyers of the F-16 in the 1970s – which now all intend to buy the F-35 – were not faced with a similar situation because they had assembled their F-16s in Europe; because software source codes were not an issue at the time; and because the United States had a vested interest in keeping allies’ fighters as effective as possible during the Cold War, when profits took a back seat. None of these circumstances exist today.

Unlike the case of the UK’s AH-64Ds, the architecture of the JSF is such that if you opt out of the upgrade, and Lockheed will stops supporting that model of the aircraft, you won’t simply have an aircraft that is obsolete or obsolescent, you will have an aircraft which cannot fly, because the customer will not be allowed to have tools to maintain it.

Your $100 million dollar aircraft has become a door stop.

As an aside, one wonders whether there is will be an “off switch” on export models of the F-35.

Certainly, if I were directing foreign military sales at the Pentagon, I would demand such a feature, at least for those aircraft shipped to non NATO allies.

Seriously, The Republicans Must Be Running Out of People to Piss Off………

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So now they have decided to go after the disabled.

The Republicans in the Senate just killed a treaty on rights of the disabled:

The Senate rejected a United Nations treaty aimed at banning discrimination against individuals with disabilities Tuesday, falling five votes short of the two-thirds needed in a 61-38 vote.

 The U.N. Convention on the Rights of Persons With Disabilities calls on participating countries to work to attain equality in access to education, healthcare and more, and was based largely on the Americans with Disabilities Act of 1990. It was negotiated by President George W. Bush’s administration in 2006 and has since been signed by President Obama. So far, 126 countries have ratified the treaty.

 The treaty, which passed through the Senate Foreign Relations Committee before an attempt to ratify it through a voice vote fell flat in August, had a broad base of support, with Sens. John Kerry (D-Mass.) and John McCain (R-Ariz.) standing next to each other Monday to implore senators to join their cause.

 Former Sen. Bob Dole (R-Kan.), backed by his wife, fellow former Sen. Elizabeth Dole (R-N.C.), attended Tuesday’s vote to urge the treaty’s ratification. The former Senate majority leader looked on from his wheelchair as senators voted from their desks instead of approaching the room’s podium.

 But many Republicans, who accounted for the 38 opposing votes, have been vocal in their opposition to the treaty, which they say infringes on U.S. sovereignty.

It appears that was as a result of the tinfoil hat conspiracy theories from the “whacko, my parents are first cousins, X-Files wannabe, black helicopter, tinfoil hat wearing, stupid, dim-witted, thinks pro wrestling is real,” lunatics*from the right wing of the home schooling movement that now defines the Republican base.

*Sorry, I think that I just channeled the comedian Denis Leary.

This Was Foreseeable

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In response to the PA seeking, and getting, non-member state status granted by the UN General Assembly, Israel has announced plans to expand settlements around Jerusalem:

Israel is moving forward with development of Jewish settlements in a contentious area east of Jerusalem, defying the United States by advancing a project that has long been condemned by Washington as effectively dooming any prospect of a two-state solution to the Israeli-Palestinian conflict.

A day after the United Nations General Assembly voted overwhelmingly to upgrade the status of the Palestinians, a senior Israeli official said the government would pursue “preliminary zoning and planning preparations” for a development that would separate the West Bank cities of Ramallah and Bethlehem from Jerusalem. If such a project were to go beyond blueprints, it could prevent the creation of a viable, contiguous Palestinian state.

The development, in an open, mostly empty area known as E1, would connect the large settlement town of Maale Adumim to Jerusalem. Israeli officials also authorized construction of 3,000 housing units in parts of East Jerusalem and the West Bank.

The timing of the twin actions seemed aimed at punishing the Palestinians for their United Nations bid, and appeared to show that hard-liners in the government had prevailed after days of debate over how to respond. That represented a surprising turnaround, after a growing sense that Israeli leaders had acceded to pressure from Washington not to react quickly or harshly.

A UN General Assembly resolution, and $12.75, will get you a Starbucks latte, so the value to the Palestinian Authority is primarily as an tool for its internal struggle with Hamas, and as way to position itself in a slightly more favorable footing in negotiations with Israel.

As to the Israeli plans, it’s value to Netanyahu and the Likud government is as a tool for political advantage against Kadima or Labour in elections, and as as way to position itself in a slightly more favorable footing in negotiations with the PA.

On the plus side, neither action involves either side lobbing rockets at  each other.

Whiney Beotch of the Day: John McCain

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Just in case you don’t know, the entire Republican Jihad over Susan Rice and Benghazi is about two things: They desparetely want a real Obama scandal, and they realize that if they kill her nomination to replace Hillary Clinton as Secretary of State, then the likely alternative is John Kerry, which would open up the other Massachusetts Senate seat, to a run by Scott Brown.

Leading the charge are Lindsay “Mincing Fool” Graham, and John “McCrankypants” McCain, and now we find out that McCain skipped a classified briefing on Benghazi in order posture in front of the press:

I have to tell you something that just happened on Capitol Hill, and that is our senate producer Ted Barrett just ran into John McCain and asked about something that we’re hearing from Democrats, which is John McCain is calling for more information to Congress, but he had a press conference yesterday instead of going to a closed briefing where administration officials were giving more information. Well, Ted Barrett asked John McCain about that, and it was apparently an intense very angry exchange and McCain simply would not comment on it at all.

(Emphasis original)

John McCain seems to have spent most of his entire political career in a fit of pique directed at people who he thinks unfairly kept him from becoming president.

Wanker.

We’ve Always Been at War with Eastasia

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The Pentagon is claiming that Iranian aircraft fired on a US drone while in international airspace:

Iranian warplanes shot at an American military surveillance drone flying over the Persian Gulf near Iran last week, Pentagon officials disclosed Thursday. They said that the aircraft, a Predator drone, was flying in international airspace and was not hit and that the episode had prompted a strong protest to the Iranian government.

 The shooting, which involved two Russian-made Su-25 jets known as Frogfoots, occurred on Nov. 1 and was the first known instance of Iranian warplanes firing on an American surveillance drone. George Little, the chief Pentagon spokesman, said the Defense Department’s weeklong silence about the episode was a result of restrictions on the discussion of classified surveillance missions. He answered questions about it during a Pentagon news conference on Thursday only after it had been reported by news organizations earlier in the day.

 Even so, the failure to disclose a hostile encounter with Iran’s military at a time of increased international tensions over the disputed Iranian nuclear program — and five days before the American presidential election — raises questions for the Obama administration. Had the Iranian attack been disclosed before Election Day, it is likely to have been viewed in a political context — interpreted either as sign of the administration’s weakness or, conversely, as an opportunity for President Obama to demonstrate leadership.

………

 “Our aircraft was never in Iranian airspace,” Mr. Little said. “It was always flying in international airspace.”

Yeah, right.