The War in Iraq has already cost the US taxpayer over $500 billion and will cost over $1 trillion – that’s $1,000,000,000,000 – according to official estimates.

http://www.boston.com/news/nation/articles/2007/08/01/analysis_says_war_could_cost_1_trillion/

The war has been almost entirely deficit financed. It has added to the US’ already massive budget and current accounts deficits. The US economy can sustain its massive deficits because the rest of the World is willing to treat the dollar as its currency of note, and accept the value of the eurodollar.

Eurodollar is a term economists coined decades ago to denote dollars held outside the US. It is no longer that apt as most of them are held in Asia now. China alone holds about a trillion dollars – indeed there is a neat argument that China’s willingness to hold vast stocks of US paper has financed the Iraq war. Japan, perhaps surprisingly, also has over $400 billion.

How much money are we talking? Let me put it this way. China could buy all the real estate in London or New York – buy every property in the whole city – and have change. China could buy a controlling interest in every single company in the Dow Jones.

That, however, is not the danger. The danger is that China, Japan and others will come in time to doubt that these huge mounds of paper (OK, virtual paper) really hold the value that they are supposed to hold. They could start to diversify their holdings. The result in the US could rapidly tip towards extreme inflation, among other symptoms. Once the process starts it snowballs – the UK went through the economic trauma of slipping from being the key currency in the last century, largely as the result of expensive wars.

Confidence is a difficult thing, and the process could certainly be sparked by moves to switch major commodity trading to euros. The US is indeed jumpy about that, though the theory that this concern triggered the Iraq war is overblown.

Much of the trillion dollars war cost is redistributive within the United States. It is important to remember that to ordinary people – and to the unfortunate US taxpayer – the War in Iraq may look like an unmitigated disaster, but to easily identifiable groups the whole thing is a great success.

Record oil prices have resulted in obscene levels of profit for the oil companies. Armaments manufacturers have bulging order books and, given urgency of demand, have like the oil companies been able to increase not just profits but profit margins. The privatisation of war has brought massive contracts for those employing the many tens of thousands of mercenaries and the logistic supply contractors.

Like any war, increased career opportunities have opened up for the senior military. This one has been unique in the massive burgeoning of budgets, jobs and promotions within the security services also.

How the system works was outlined 100 years ago by the Liberal economist J.A.Hobson in his great book Imperialism – A Study. Written at the greatest extent of the greatest formal Empire the World has yet seen, Hobson proved, counter to the prevailing wisdom of both supporters and opponents of Empire, that the Empire had cost Britain money, not been a gain at the expense of the colonies. But while the net effect had been to make Britain poorer, the redistributive effect had made the ruling class, military and arms manufacturers much richer, at the expense of everyone else.

Hobson is now almost completely forgotten. In part this is because Lenin, a much lesser thinker, ruthlessly plagiarised Hobson’s work some years later and plastered it over with Communist claptrap. But for me Hobson’s Imperialism is in the same rank as J.S. Mill’s On Liberty, Adam Smith’s The Wealth of Nations and Tom Paine’s The Rights of Man, as essential reading on the foundations of modern political thought.

This blog has been silent for a week because I have been looking at environmental and fair trade projects around Ghana. It does mean that I was not here to say “I told you so”, now it is admitted Blair’s Iran maritime boundary map was a fake. But in my absence I was delighted that the Mail on Sunday published my article about an even bigger deception, the war in Afghanistan:

DYING TO PROTECT THE DRUGS BARONS

This week the 64th British soldier to die in Afghanistan, Corporal Mike Gilyeat, was buried. All the right things were said about this brave soldier, just as, on current trends, they will be said about one or more of his colleagues who follow him next week.

The alarming escalation of the casualty rate among British soldiers in Afghanistan ‘ up to ten per cent ‘ led to discussion this week on whether it could be fairly compared to casualty rates in the Second World War.

But the key question is this: what are our servicemen dying for? There are glib answers to that: bringing democracy and development to Afghanistan, supporting the government of President Hamid Karzai in its attempt to establish order in the country, fighting the Taliban and preventing the further spread of radical Islam into Pakistan.

But do these answers stand up to close analysis?

There has been too easy an acceptance of the lazy notion that the war in Afghanistan is the ‘good’ war, while the war in Iraq is the ‘bad’ war, the blunder. The origins of this view are not irrational. There was a logic to attacking Afghanistan after 9/11.

Afghanistan was indeed the headquarters of Osama Bin Laden and his organisation, who had been installed and financed there by the CIA to fight the Soviets from 1979 until 1989. By comparison, the attack on Iraq ‘ which was an enemy of Al Qaeda and no threat to us ‘ was plainly irrational in terms of the official justification.

So the attack on Afghanistan has enjoyed a much greater sense of public legitimacy. But the operation to remove Bin Laden was one thing. Six years of occupation are clearly another.

Few seem to turn a hair at the officially expressed view that our occupation of Afghanistan may last for decades.

Lib Dem leader Menzies Campbell has declared, fatuously, that the Afghan war is ‘winnable’.

Afghanistan was not militarily winnable by the British Empire at the height of its supremacy. It was not winnable by Darius or Alexander, by Shah, Tsar or Great Moghul. It could not be subdued by 240,000 Soviet troops. But what, precisely, are we trying to win?

In six years, the occupation has wrought one massive transformation in Afghanistan, a development so huge that it has increased Afghan GDP by 66 per cent and constitutes 40 per cent of the entire economy. That is a startling achievement, by any standards. Yet we are not trumpeting it. Why not?

The answer is this. The achievement is the highest harvests of opium the world has ever seen.

The Taliban had reduced the opium crop to precisely nil. I would not advocate their methods for doing this, which involved lopping bits, often vital bits, off people. The Taliban were a bunch of mad and deeply unpleasant religious fanatics. But one of the things they were vehemently against was opium.

That is an inconvenient truth that our spin has managed to obscure. Nobody has denied the sincerity of the Taliban’s crazy religious zeal, and they were as unlikely to sell you heroin as a bottle of Johnnie Walker.

They stamped out the opium trade, and impoverished and drove out the drug warlords whose warring and rapacity had ruined what was left of the country after the Soviet war.

That is about the only good thing you can say about the Taliban; there are plenty of very bad things to say about them. But their suppression of the opium trade and the drug barons is undeniable fact.

Now we are occupying the country, that has changed. According to the United Nations, 2006 was the biggest opium harvest in history, smashing the previous record by 60 per cent. This year will be even bigger.

Our economic achievement in Afghanistan goes well beyond the simple production of raw opium. In fact Afghanistan no longer exports much raw opium at all. It has succeeded in what our international aid efforts urge every developing country to do. Afghanistan has gone into manufacturing and ‘value-added’ operations.

It now exports not opium, but heroin. Opium is converted into heroin on an industrial scale, not in kitchens but in factories. Millions of gallons of the chemicals needed for this process are shipped into Afghanistan by tanker. The tankers and bulk opium lorries on the way to the factories share the roads, improved by American aid, with Nato troops.

How can this have happened, and on this scale? The answer is simple. The four largest players in the heroin business are all senior members of the Afghan government ‘ the government that our soldiers are fighting and dying to protect.

When we attacked Afghanistan, America bombed from the air while the CIA paid, armed and equipped the dispirited warlord drug barons ‘ especially those grouped in the Northern Alliance ‘ to do the ground occupation. We bombed the Taliban and their allies into submission, while the warlords moved in to claim the spoils. Then we made them ministers.

President Karzai is a good man. He has never had an opponent killed, which may not sound like much but is highly unusual in this region and possibly unique in an Afghan leader. But nobody really believes he is running the country. He asked America to stop its recent bombing campaign in the south because it was leading to an increase in support for the Taliban. The United States simply ignored him. Above all, he has no control at all over the warlords among his ministers and governors, each of whom runs his own kingdom and whose primary concern is self-enrichment through heroin.

My knowledge of all this comes from my time as British Ambassador in neighbouring Uzbekistan from 2002 until 2004. I stood at the Friendship Bridge at Termez in 2003 and watched the Jeeps with blacked-out windows bringing the heroin through from Afghanistan, en route to Europe.

I watched the tankers of chemicals roaring into Afghanistan.

Yet I could not persuade my country to do anything about it. Alexander Litvinenko ‘ the former agent of the KGB, now the FSB, who died in London last November after being poisoned with polonium 210 ‘ had suffered the same frustration over the same topic.

There are a number of theories as to why Litvinenko had to flee Russia. The most popular blames his support for the theory that FSB agents planted bombs in Russian apartment blocks to stir up anti-Chechen feeling.

But the truth is that his discoveries about the heroin trade were what put his life in danger. Litvinenko was working for the KGB in St Petersburg in 2001 and 2002. He became concerned at the vast amounts of heroin coming from Afghanistan, in particular from the fiefdom of the (now) Head of the Afghan armed forces, General Abdul Rashid Dostum, in north and east Afghanistan.

Dostum is an Uzbek, and the heroin passes over the Friendship Bridge from Afghanistan to Uzbekistan, where it is taken over by President Islam Karimov’s people. It is then shipped up the railway line, in bales of cotton, to St Petersburg and Riga.

The heroin Jeeps run from General Dostum to President Karimov. The UK, United States and Germany have all invested large sums in donating the most sophisticated detection and screening equipment to the Uzbek customs centre at Termez to stop the heroin coming through.

But the convoys of Jeeps running between Dostum and Karimov are simply waved around the side of the facility.

Litvinenko uncovered the St Petersburg end and was stunned by the involvement of the city authorities, local police and security services at the most senior levels. He reported in detail to President Vladimir Putin. Putin is, of course, from St Petersburg, and the people Litvinenko named were among Putin’s closest political allies. That is why Litvinenko, having miscalculated badly, had to flee Russia.

I had as little luck as Litvinenko in trying to get official action against this heroin trade. At the St Petersburg end he found those involved had the top protection. In Afghanistan, General Dostum is vital to Karzai’s coalition, and to the West’s pretence of a stable, democratic government.

Opium is produced all over Afghanistan, but especially in the north and north-east ‘ Dostum’s territory. Again, our Government’s spin doctors have tried hard to obscure this fact and make out that the bulk of the heroin is produced in the tiny areas of the south under Taliban control. But these are the most desolate, infertile rocky areas. It is a physical impossibility to produce the bulk of the vast opium harvest there.

That General Dostum is head of the Afghan armed forces and Deputy Minister of Defence is in itself a symbol of the bankruptcy of our policy. Dostum is known for tying opponents to tank tracks and running them over. He crammed prisoners into metal containers in the searing sun, causing scores to die of heat and thirst.

Since we brought ‘democracy’ to Afghanistan, Dostum ordered an MP who annoyed him to be pinned down while he attacked him. The sad thing is that Dostum is probably not the worst of those comprising the Karzai government, or the biggest drug smuggler among them.

Our Afghan policy is still victim to Tony Blair’s simplistic world view and his childish division of all conflicts into ‘good guys’ and ‘bad guys’. The truth is that there are seldom any good guys among those vying for power in a country such as Afghanistan. To characterise the Karzai government as good guys is sheer nonsense.

Why then do we continue to send our soldiers to die in Afghanistan? Our presence in Afghanistan and Iraq is the greatest recruiting sergeant for Islamic militants. As the great diplomat, soldier and adventurer Lieutenant-Colonel Sir Alexander Burnes pointed out before his death in the First Afghan War in 1841, there is no point in a military campaign in Afghanistan as every time you beat them, you just swell their numbers. Our only real achievement to date is falling street prices for heroin in London.

Remember this article next time you hear a politician calling for more troops to go into Afghanistan. And when you hear of another brave British life wasted there, remember you can add to the casualty figures all the young lives ruined, made miserable or ended by heroin in the UK.

They, too, are casualties of our Afghan policy.

http://www.mailonsunday.co.uk/pages/live/articles/news/news.html?in_article_id=469983&in_page_id=1770&in_a_source=

I think this is perhaps the most important thing I have published. It is also worth noting that the Mail was the only mainstream paper which would carry at the time my article exposing the fake maritime boundaries map. The Guardian and Independent refused to stand against the “patriotic” flood of lying propaganda. The Mail has since been totally vindicated. I think they deserve full credit for continuing to take challenging material which contradicts the official story.

A bright young Republican, Vitter

Wanted, for God, to be fitter;

So did exercise

On splayed teen thighs

Now bitter Vitter’s in the shitter.

Copyright Craig Murray All Rights Reserved

May only be reproduced after poking your head out of the window and shouting “George Bush is a moron!” at a passing stranger.

This is the only comment I shall make on Campbell’s diaries.

I presume Alasdair Campbell’s Diaries are as truthful and unspun as his Dossier on Iraqi WMD. I took this phrase from the publisher’s blurb on Amazon:

here is Tony Blair up close and personal, taking the decisions that affected the lives of millions

“Affected” appears to be a misprint for “Ended”.

I can guarantee you that there is infinitely more genuine insight into how government operated in the Blair era in Murder in Samarkand than in The Blair Years. Yet since the publication of Murder in Samarkand I have had no BBC TV interview about the book and a single BBC Radio interview, on BBC Radio Scotland. Campbell, by contrast, has had eighteen substantial BBC TV programme features so far in addition to a three part serialisation. Christopher Meyer – whose sales I have now overtaken – also received infinitely more BBC coverage than I, as did Lance Price. The distinction is, of course, that they all supported the invasion of Iraq.

The cheerful news is that Murder in Samarkand has now steamed past 20,000 copies sold, even ahead of the US launch in October and, of course, the film version. It also means we have sold nearly six times as many as David Blunkett, who again got infinitely more BBC coverage – and ten times the advance. So, slowly, word of mouth and reader opinion can counter, to some extent, publicity machines. But remember that publishers reckon an endorsement from Richard and Judy adds at least 200,000 to sales.

I think there needs to be an investigation into the practice by publishers of paying massive advances to politicians, which they know will never be recouped. Blunkett got ten times the advance I did, and he sold a sixth of the books. By my reckoning about ‘193,000 of his advance is still outstanding. Campbell will have to sell over half a million books to reach his advance. These are not commercial deals, they are backhanders from publishers. The deals are reached while people are still in office – therefore, it is a bribe. Blair reportedly put the agreed advance for his memoirs against the Connaught Square mansion. He would have to sell over 6 million copies to clear his advance.

Advances, like loans for peerages, are non-repayable if you don’t clear. This is yet another way our politicos are bought by big business groups. Rupert Murdoch is the largest owner of publishing houses in the UK, followed by German conglomerate Bertelsmann.