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Marching for Terror

Anti-war protestors or Pro-terror advocates?
Hello? Anybody home? After my colleague Armando Iannucci's stirring call to non-arms on Thursday, I expect you're out on the march. But, on the off-chance you're reading this over breakfast while waiting for the paint on your placard to dry, I'd ask you to reconsider.

I understand you and Armando and the distressingly large number of my Daily Telegraph and Spectator confreres, plus spouses and offspring, who'll be joining you on this march, are in favour of "peace". Armando, countering the hawks' argument that Saddam is stalling and "this can't go on for ever", put it this way:
"Wait a minute. This may sound stupid, but why can't it go on for ever? What precisely are the disadvantages of this form of stalemate going on for a very, very long time?"

Why not ask an Iraqi what the disadvantages of stalemate are? As far as Saddam's subjects are concerned, the "peace" movement means peace for you and Tony Benn and Sheryl Crow and Susan Sarandon, and a prison for them. I was in Montreal last week, which has the largest Iraqi population in North America. I've yet to meet one who isn't waiting eagerly for the day the liberation of their homeland begins. Then they can go back to the surviving members of their families and not have to live in a country where it's winter 10 months of the year.

They're pining for war not because they like the Americans, or the Zionists, or me, but because they understand that, as long as there's Saddam, there's no Iraq. Saddam has killed far more people than Slobo, Iraq has been far more comprehensively brutalised than Kosovo. Marching for "peace" means marching for, oh, another 15 years of Saddamite torture and murder, followed by a couple more decades under the even more psychotic son, until the family runs out of victims to terrorise, gets bored and retires to the Riviera.

It's easy to say it's up to the Iraqi people to get rid of Saddam. That theory worked well in the days when all the peasants had to do was storm the palace and dodge the muskets. It doesn't work against a man who can poison an entire village from the air. Marching for "peace" means marching against the Iraqi people: it's the equivalent of turning them away as, to their shame, many free nations in the 1930s turned away refugees from Germany.

But perhaps, as is the case with many marchers, your priority isn't the Iraqi people living in bondage under an Iraqi dictator, but the Palestinian people living in bondage under a Zionist dictator: fine, whatever, you're entitled to your point of view. But you ought to know that, as long as Saddam sits in Baghdad, there will never be a Palestinian state. Never. Chance of the "Palestinian Authority" becoming a fully fledged People's Republic: zero.

Saddam serves as principal sugar daddy to the relicts of suicide bombers and neither Israel nor America is going to agree to a Palestinian state where the prime business opportunity is strapping on the old explosives belt and telling Baghdad where to mail the cheque. We're talking cold political reality here: keeping Saddam in power may stymie the crazy Texans, but also those downtrodden Palestinians. If you're serious about them, you might want to think that one through.

Thirdly, "Stop the War" is a slogan that showed up too late. You can't stop it now; it's already started. Even if the ricin factories and the NBC suits in the mosque and the live grenades at Gatwick haven't persuaded you, you can tell something's up from the uncertain tone of the Government's once-confident voice: they've run up against something they don't know how to spin.

Do you really think not invading Iraq will make all the bad stuff go away? Do you honestly believe the fig-leaf argument that, because Saddam is a nominally secular Ba'athist socialist, the Islamists would have nothing to do with him? He recently donated enough blood to have a full-length copy of the Koran written in it: that makes him less of a "secular" leader than Charles Kennedy, don't you think? You don't have to believe that if you don't want to. But your argument depends on giving both Saddam and al-Qa'eda the benefit of far more doubts than their prior behaviour warrants. Your line is basically: we can't really be sure he'd sell suitcase nukes to terrorists until one goes off in Birmingham. Then you and Armando will say, oh, OK, maybe there's a link after all - unless, of course, you're among the dead.

I don't claim to understand the depth of opposition to Tony Blair. It must be frustrating to switch on the television every night and see Blair planning to save the world when he can't even do anything about the crummy hospitals and lousy trains and rampant crime. But sending a million Valentines to a monster to spite your own hard-hearted master is not the answer.

Today's demo is good for Saddam, but bad for the Iraqi people, and the Palestinian people, and the British people. One day, not long from now, when Iraq is free, they will despise those who marched to keep them in hell.

Previous story: Heavy traffic is a sure sign of a living city
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Invasion of Iraq--Reasons Behind It 14.Feb.2003 18:40

Aspects of India's Economy

this is an OUTSTANDING, **MUST** READ, excellent summary of Iraq's history, along with the US economic and geopolitical interests, and the Euro-(vs. US dollar-)based oil economy that threatens US hegemony over hydrocarbons.

The entire report is about 90 pages long--DON'T MISS IT!

[perhaps two of the most informative sections regarding the US situation are II. Home Front in Shambles, and III. Military Solution to an Economic Crisis--THESE ARE *BRIEFLY* EXCERPTED BELOW]


Table of Contents:

Why this Special Issue: India as a Pillar of US Hegemony

Behind the Invasion of Iraq (a summary)

Western Imperialism and Iraq

I. From Colony to Semi-Colony
II. Towards Nationalisation
III. The Iran-Iraq War: Serving American Interests
IV. The Torment of Iraq
V. Return of Imperialist Occupation

The Real Reasons for the Invasion of Iraq—and Beyond

I. The Current Strategic Agenda of the United States
II. Home Front in Shambles
III. Military Solution to an Economic Crisis

Rehabilitating Colonialism


I. US Declares India a Strategic Pillar
II. The Pages Ripped out by the US from the Weapons Report


II. Home Front in Shambles

Even as the US prepares to launch an invasion of Iraq (and perhaps of other countries as well), its economy is trapped in a recession with no clear prospect of recovery. True to their character, the world's giant media corporations have not seen it fit to explore the causal connection between these two outstanding facts.

. . .

Crisis of overproduction in full bloom
It is in times of economic setback that the press returns to earth. The Chicago Tribune recently published a series of articles on the current crisis, drawing on a wide range of interviews with employers, employees and economic analysts. The first piece in the series is titled: "The Economics of Glut. Bloated industries put the economy in a bind. Glut is making it harder to shake off the recession." (William Neikirk, 15-18/12/02) The article begins: "The world's auto industry can now produce 20 million more cars than consumers can buy." Citing instances also from telecommunications and dot-coms, the Tribune discovers that "economists call the phenomenon overcapacity.... businesses can produce far more than we need. Supply has simply outstripped demand. When that happens, production slows, equipment sits idle, costs go up, workers are laid off and investments are postponed. The capacity glut exists on a scale that this country and many others haven't seen for decades, and it at least partially explains why it is so difficult for the American economy to shake off a recession that by all measures seemed mild."

The Tribune sees a swamp of excess capacity in airline, auto, machine tool, steel, textile, and high-tech industries, even commercial space and hotel rooms. According to the Federal Reserve, manufacturers are using only 73.5 per cent of capacity, far below the 80.9 per cent average of 1967-2001, and 3.5 percentage points below the level during the 1990-91 recession. In an effort to attract customers, airlines have slashed their fares to five-year lows; United Airlines, the second largest in the country, has filed for bankruptcy; and Boeing says its deliveries of aeroplanes will be down 28 per cent this year.

. . .

Investment now not responding to stimuli
When the authorities conceded in late 2001 that recession had already set in, they ascribed it partly to the September 11 attacks and exuded confidence that it would be brief. The necessary measures were in fact already in motion: Lower interest rates and tax cuts were meant to induce businesses and consumers to spend more, and so boost demand for firms' products and services, in turn giving a fillip to investment. However, despite the passage of a 10-year tax reduction package of $1.35 trillion, and the Federal Reserve's slashing interest rates 12 times over 13 months, the 'recovery' is pallid.

"Even more unsettling", says the Tribune, "is the fact that falling prices—or deflation—have taken hold in the manufacturing sector. Prices of goods have been dropping as a global excess capacity has developed. There are some indications that deflation is beginning to spill over into the services sector, in areas like retail trade, which is indirectly related to manufacturing. The U.S. hasn't had a generalized deflation since the Great Depression in the 1930s. In a deflationary environment, people postpone purchases in anticipation that prices could be lower in the future. Demand drops. Profits spiral downward. Jobs are lost. Retrenchment sets in."

. . .

Endemic to capitalism
How do such overcapacities develop? Capitalists invest in order to earn a profit, and how much they invest, in which industries, using which technologies, and so on are determined by the prospect for profits. In the course of competing with one another to grab market shares and to maximis their profits, capitalists must continuously expand their productive capacity. The purpose of production under capitalism is to accumulate more capital.

However, in this process the growth of productive capacity soon outstrips demand. (Seriously redistributing income throughout society would no doubt increase demand, but it would take away profits from capitalists, going against the very reason for existence of investment under capitalism.) As demand weakens, the profitability of investment declines; capitalists therefore cut back on investment; demand for investment goods suffers, and, as workers get retrenched, demand for consumer goods further weakens. This is how recessions come about.

. . .

The biggest bubble in America's history
Under capitalism, as we mentioned above, profitability ultimately determines investment, but under monopoly capital the day of reckoning can be put off for some time with the help of state intervention (physical, fiscal and financial). US corporate profitability, it now emerges, turned dramatically downward in 1997 in the face of worldwide overcapacity. Brenner points out that "Between 1997 and 2000, at the very same time as the much-vaunted US economic expansion was reaching its peak, corporate profits in absolute terms and the rate of return on capital stock (plant, equipment, and software) in the non-financial corporate economy were falling sharply—as recently revised figures show, by 15-20 per cent in both cases!"

Despite this share prices soared, fuelled by cheaper and cheaper funds as the Federal Reserve repeatedly loosened interest rates. What took place was the biggest credit boom in US history. The wealthy, finding the prices of their shares soaring, consumed more. Corporations borrowed and bought back their shares, pushing up their share prices further and thus getting access to cheap funds. With these funds they made massive new investments. No doubt, profitability kept plummeting, but unscrupulous auditors were hired to dress the books. Among the 27 major corporations so far found guilty of such practices are such stars as AOL Time Warner, Enron, Worldcom, and Xerox. The two top US banks, Citigroup and J.P. Morgan Chase, as well as Merrill Lynch, and the country's top auditing firm, Arthur Andersen, are also deeply implicated.

In the words of the Economist (28/9/02),

"This is no normal business cycle, but the bursting of the biggest bubble in America's history. Never before have shares become so overvalued. Never before have so many people owned shares. And never before has every part of the economy invested (indeed, overinvested) in a new technology with such gusto. All this makes it likely that the hangover from the binge will last longer and be more widespread than is generally expected....

"The most recent bubble was not confined to the stockmarket: instead, the whole economy became distorted. Firms overborrowed and overinvested on unrealistic expectations about future profits and the belief that the business cycle was dead. Consumers ran up huge debts and saved too little, believing that an ever rising stockmarket would boost their wealth. The boom became self-reinforcing as rising profit expectations pushed up share prices, which increased investment and consumer spending. Higher investment and a strong dollar helped to hold down inflation and hence interest rates, fuelling faster growth and higher share prices...."

The outcome has been catastrophic:

"Since March 2000 the S&P 500 index [an index of share prices] has fallen by more than 40 per cent. Some $ seven trillion has been wiped off the value of American shares, equivalent to two-thirds of annual GDP. And yet share prices still look expensive [i.e. they will fall more]....."

Yet to hit bottom

. . .

It is worth summing up the points made above:

The US, and indeed the world economy, is suffering from a crisis of overproduction.

In order to stave off recession, the US central bank has been boosting demand by pumping in unprecedented amounts of credit.

The US has the funds to do this because foreigners put their savings in US dollar assets.

The US's overall global supremacy and in particular its control over oil have sustained its status as the safest harbour for international capital.

However, the US's ability to soak up the world's savings is a double-edged sword. If foreigners, who hold half or more of all the US currency, should decide to dump the dollar, its value would plummet, leading to yet more capital flying from the country.

In order to prevent that happening, and to get foreign capital to return, the US would have to raise its interest rates steeply.

But if that were to be done, given the vast addition to US debt since 1980, this time round a steep US interest rate hike could cause a crash heard round the world. This would happen because debt-laden American corporations and consumers would be unable to service their debts, so their assets would flood the market; asset prices would collapse, and banks—swamped with worthless assets instead of income—would in turn collapse. In short, there is a threat of a new Great Depression.

Implications of the euro
In the 1970s, there was no alternative to the dollar. On January 1, 1999, an alternative arose in the form of the euro, the new currency of the European Union (EU). Of course, investors did not immediately flock to the euro. The euro stuttered at birth, falling 30 per cent against the dollar by the end of 2000. In the last year, however, it has picked up sharply, and in recent months has remained at parity with the dollar (ie about one euro per dollar).

The euro has become attractive for three reasons.

First, since the EU is a large imperialist economy, about the same size as the US, it is an attractive and stable investment for foreign investors.

Secondly, since foreign investors' holdings are overwhelmingly in dollars, they wish to diversify and thus reduce the risk of losses in case of a dollar decline: they are increasingly nervous at the size of the US debt mountain and the failure of the US government to tackle this problem.

Thirdly, certain countries smarting under American military domination sense that the rule of the dollar is now vulnerable, and see the switch to the euro as a way to hit back.


III. Military Solution to an Economic Crisis

Indeed the US has taken the contrary course. It plans to reverse the various trends mentioned above by seizing the world's richest oil-producing regions. This it deems necessary for three related reasons.

1. Securing US supplies: First, the US itself is increasingly dependent on oil imports—already a little over half its daily consumption of 20 million barrels is imported. It imports its oil from a variety of sources—Canada, Venezuela, Nigeria, Saudi Arabia, even Iraq. But its own production is falling, and will continue to fall steadily, even as its consumption continues to grow. In future, inevitably, it will become increasingly dependent on oil from west Asia-north Africa—a region where the masses of ordinary people despise the US, where three of the leading oil producers (Iraq, Iran and Libya) are professedly anti-American, and the others (Saudi Arabia, Kuwait, the United Arab Emirates) are in danger of being toppled by anti-American forces. The US of course doing its best to tie up or seize supplies from other regions—west Africa, northern Latin America, the Caspian region. And yet the US cannot escape the simple arithmetic:

"The US Department of Energy and the International Energy Agency both project that global oil demand could grow from the current 77 million barrels a day (mbd) to 120 mbd in 20 years, driven by the US and the emerging markets of south and east Asia. The agencies assume that most of the supply required to meet this demand must come from OPEC, whose production is expected to jump from 28 mbd in 1998 to 60 mbd in 2020. Virtually all of this increase would come from the Middle East, especially Saudi Arabia.

"A simple fact explains this conclusion: 63 per cent of the world's proven oil reserves are in the Middle East, 25 per cent (or 261 billion barrels) in Saudi Arabia alone...

"Although Asian demand for oil is expected to grow dramatically in coming decades, no other economy rivals that of the United States for the growth of its oil imports. Over the past decade, the increase in the US share of the oil market, in terms of trade, was higher than the total oil consumption in any other country, save Japan and China. The US increase in imports accounts for more than a third of the total increase in oil trade and more than half of the total increase in OPEC's production during the 1990s. This fact, together with the fall in US oil production, means that the US will remain the single most important force in the oil market." ("The Battle for Energy Dominance", Edward L. Morse and James Richard, Foreign Affairs, March-April 2002; emphases added)

Given its growing dependence on oil imports, the US cannot afford to allow the oil producing regions to be under the influence of any other power, or independent.1

2. Maintaining dollar hegemony: Secondly, if other imperialist powers were able to displace US dominance in the region, the dollar would be dealt a severe blow. The pressure for switching to the euro would become irresistible and would ring the death knell of dollar supremacy. On the other hand, complete US control of oil would preserve the rule of the dollar (not only would oil producers continue to use the dollar for their international trade, but the dollar's international standing would rise) and hurt the credibility of the euro.

In the 1990s the major OPEC countries, after two decades of discouraging or prohibiting foreign investment in oil and gas fields, raced to invite foreign investment again to carry out massive new developments. In the late 1990s Venezuela, Iran, and Iraq struck massive deals with foreign firms for major fields. Even Saudi Arabia invited proposals for development of its untapped natural gas reserves, a move that oil giants responded to with alacrity in the hope the country's mammoth oil fields too would later be opened to foreign investment. However, American firms were shut out of Iran and Iraq by their own government's sanctions; French, Russian and Chinese firms got the contracts instead. Chavez's increasing assertiveness threatens to shut American firms out of Venezuela as well. The Saudi deal—which the American firms were to lead—stands cancelled, apparently because of the Saudi government's fear of public resentment. Thus, if it does not invade the west Asian region, the US stands to lose dollar hegemony by losing control of the major oil field development projects in the next decade.

3. Oil as a weapon: Thirdly, direct American control of oil would render potential challengers for world or regional supremacy (Europe's imperialist powers, Japan and China) dependent on the US. It is clear the US is following this policy:

As mentioned above, French, Russian and Chinese firms will get evicted from Iran and Iraq once the US troops enter.

The US has gone to great lengths to frustrate alternatives to its Baku-Ceyhan pipeline (which is to run from the Caspian through Turkey to the Mediterranean). With the US invasion of Afghanistan, the US has set up a chain of military bases in Central and South Asia—Pakistan, Afghanistan, Kyrgystan, Tajikistan, and Uzbekistan, with military advisers in Georgia as well.

The US is about to send two battalions of Marines to help suppress the insurgency in Colombia; it is training a new brigade to protect Occidental Petroleum's pipeline in that country. At the same time it is actively organising the overthrow of the elected Chavez government in Venezuela.

The Institute for Advanced Strategic and Political Studies, an Israeli lobby group that met President Obasanjo of Nigeria in July 2002, claims the US is on the verge of a "historic, strategic alignment" with west Africa and that the region is "receptive to American presence". The institute has advocated the setting up of a US Gulf of Guinea military command: the island of Sao Tome, south of Nigeria and a possible site for a naval base, hosted a visit from a US general in the same month. The activity comes while the Nigerian government is considering leaving OPEC, and developing its oil trading relationship with the US instead. The region already provides 15 per cent of US oil imports, and these are set to rise to 25 per cent by 2015 ("US takes good look at west African oil", Michael Peel, Financial Times, 25/7/02)

A look at the relative dependence of various imperialist powers on oil imports is revealing. The UK is a net oil exporter, thanks to the North Sea. The US imported, in 2000, 9.8 million barrels a day of its 19.5 million barrel requirement—that is, about half. By contrast, Japan imported 5.5 out of 5.6 million barrels; Germany 2.7 out of 2.8; France 2.0 out of 2.1; Italy 1.8 out of 2.0; and Spain 1.5 out of 1.5. ("Top Petroleum Net Importers, 2000", US Energy Information Administration, www.eia.doe.gov) In other words, these countries imported 90 to 100 per cent of their oil requirements. They would therefore be very vulnerable to blackmail by a power which is able to dictate the destination of oil.

The current US policy is not entirely novel. In the aftermath of World War II, the US had invested large sums in rehabilitating the devastated economies of Europe—what was known as the 'Marshall Plan'. However, it used the Plan in order to dictate changes in European economies that made them switch from using their own coal to using oil which American oil majors in west Asia were in the best position to supply.

A major consideration in the US's great oil grab is its desire to check China. In coming years, China, like the US, will become a major importer of oil and gas: it is projected to import 10 million barrels a day by 2030—more than eight per cent of world oil demand. (The US currently imports a little over 10 million barrels of its daily requirement of 20 million barrels.) As China attempts to arrange its future oil supplies, it finds itself checked at each point by the US:
i) Since the mid-1990s, China has been pressing for a gas pipeline from the Caspian region to China. With a view to building a security-cum-economic organisation for the proposed pipeline, China took the initiative to form a group called the "Shanghai Five" (later six) consisting of China, Russia, and the relevant central Asian states (Kazakhstan, Kyrgyzstan, Tajikistan, and later Uzbekistan). The declared basis for the group was to control fundamentalism and terrorism in the region (stretching to China's westernmost Xinjiang province). However, with the US's invasion of Afghanistan, and the installation of its forces in the very countries who were to be in the Shanghai grouping, China's initiative was sabotaged. On a visit to Iran, Chinese president Jiang Zemin declared that "'Beijing's policy is against strategies of force and the U.S. military presence in Central Asia and the Middle East region'.... Beijing would work together with developing nations to counter American 'hegemonism.'" ("China opposes U.S. presence in Central Asia", Willly Wo-Lap Lam, CNN, 22/4/02)

ii) In 2002, Chinese firms have bought two Indonesian fields for $585 million and $262 million, respectively. Indonesian president Megawati Sukarnoputri has visited China twice since becoming president in 2001, hoping to bag a $9 billion contract to supply liquid natural gas to power industries in southern China. ("China Races to Replace US as Economic Power in Asia") No surprise that the US has stepped up its activities in the vicinity of Indonesia—forcing the Philippines to accept its "help" in hunting fundamentalists, patrolling the Malacca straits in tandem with the Indian navy, and pressing Indonesia to accept US `cooperation' in suppressing Al Qaeda elements in Indonesia itself. A December 2001 RAND Corporation presentation to a US Congress committee on "threats to the security and stability of Southeast Asia and to US security interests in the region" said that the "primary area of concern is China's emergence as a major regional power.... China's assertiveness will increase as its power grows". It speculated that "conflict could be triggered by energy exploration or exploitation activities", and recommended the creation of a "comprehensive security network in the Asia-Pacific region." Discarding the then US cover that it was hunting for a handful of Abu Sayyaf guerrillas in the Philippines, RAND Corporation says that "the US should provide urgently needed air defence and naval patrol assets to the Philippines to help Manila re-establish deterrence vis-a-vis China and give a further impetus to the revitalization of the United States-Philippine defence relationship.... the US should expand and diversify its access and support arrangements in Southeast Asia to be able to effectively respond in a timely way to unexpected contingencies. After all, six months ago, who would have thought that US armed forces would be confronted with the need to plan and execute a military campaign in Afghanistan?" The Bali terrorist blast may prove a happy entry point for the US into Indonesia.

iii) Finally, like the US, China cannot avoid reliance on west Asian oil. China has struck oil field development deals with the very countries in west Asia hit by US sanctions—Iraq, Iran, Libya and Sudan. With this entire region now to be targeted in the impending invasion, China's deals are sure to meet the same fate as its central Asian pipeline. Hardly surprising, then, that "Chinese leaders believe that the US seeks to contain China and [the US] is therefore a major threat to its [China's] energy security", as the US-China Security Review Commission's report points out. ("China digs for Middle East oil, US gets fired up", Reuters, 24/9/02)

The thrust is clear: Once it has seized the oil wells of west Asia, the US will determine not only which firms would bag the deals, not only the currency in which oil trade would be denominated, not only the price of oil on the international market, but even the destination of the oil.

Aspects of India's Economy
Nos. 33 & 34: Behind the Invasion of Iraq

Why This Special Issue:
As the US Goes to War against Iraq,
It Declares India a Pillar of its Hegemony in Asia

Readers of Aspects will no doubt be surprised at the fact that we have chosen to bring out a special issue apparently not on any aspect of India's political economy, but on the impending US assault on Iraq. However, we believe the two—India's political economy and the most important current world development—are connected, and as the current offensive drive unleashed by the US worldwide proceeds, the implications for our region will become clearer.


just a thought 14.Feb.2003 19:02


While I didn't actually finish this article, I don't care to, I must point out the writers own words: "..can go back to the surviving members of their families.." Are you aware of the mass killing machine the us military is??? Do you know how many people we killed in viet nam?? Or how many we killed in Gulf War 1??? Thats what we're protesting against; not the removal of Hussein. You need to re-evaluate your ideas of why we take to the street.

Another copy and paste right wing troll 14.Feb.2003 19:41

Two can play at this game

America on the Auction BlockBy Molly Ivins
San Jose Mercury News
The state of the union is that money talks and public policy is sold to the highest bidder. Those who give money in political contributions -- less than one-tenth of one percent of the U.S. population gave 83 percent of all campaign contributions in the 2002 elections -- get back billions in tax breaks, subsidies and the right to exploit public land at low prices.

This system in turn costs ordinary Americans billions of dollars, not to mention the costs to health, safety and the environment, and the cost of not having enough money for good schools.

Public Campaign, the group working for public financing of political campaigns, has put together some information, available in poster form at www.publiccampaign.org -- and perhaps the most depressing thing about it is the size of the payoffs for relatively small investments in political campaigns.

For example, the top corporations that paid zero taxes from 1996 to 1998 -- including AT&T, Bristol-Myers Squibb, Chase Manhattan, Enron, ExxonMobil, General Electric, Microsoft, Pfizer and Phillip Morris -- gave $150 million to campaigns from 1991 to 2001. Public Campaign reports they got $55 billion in tax breaks from legislation to gut the alternative minimum tax and billions in rebates to select corporations. Public Campaign also notes that we paid with a huge shift in who pays more into the federal treasuries: Three times as much money now comes from working people's payroll taxes as from corporate tax payments.

The entire system of taxation is regressive. The only way the spinners of damn lies and statistics can get away with claiming that the rich pay more in taxes is because they count only the income tax, which is progressive. But sales taxes, excise taxes, import tariffs, payroll taxes and the whole burden of state taxes, which are notoriously regressive in states like Texas, give an entirely different picture.

The Consumer Expenditure Survey prepared by the Bureau of Labor Statistics, which I found in the Jan. 21 New York Times, shows that the burden from nearly all forms of taxation -- income, excise, sales, property and payroll -- is spread fairly evenly up and down the scale. The poorest fifth, with an average income of $7,946, has a cumulative tax rate of 18 percent (those are the folks so memorably referred to by The Wall Street Journal as ``lucky duckies''). The richest fifth, with an average income of $116,666, now pays 19 percent in cumulative taxes -- and that of course goes down under the Bush plan. The percentages for the three middle quintiles are 14, 16 and 17.

There is double taxation throughout the system, yet President Bush is concerned only about the ``double taxation'' of dividends. The poorest fifth of Americans have an average of $25 in dividend income; the richest fifth has $1,188. Yet $364 billion out of a $674 billion ``economic stimulus'' plan is for ending taxes on dividends.

The big winners in our cash-and-carry system of government are corporate special interests. Public Campaign finds that for a mere $48.9 million in campaign contributions, from 1989 to the present, the managed health care and health insurance companies got protection from lawsuits by patients who have been denied medical care, and defeat of proposed laws that would make it easier for patients to choose their own doctor and would get their emergency room visits reimbursed.

For a lousy $318.7 million in contributions, the resource-extracting industries (oil and gas, mining, electric utilities, chemical manufacturers and timber) got $33 billion in tax breaks in pending energy legislation; a weakened Superfund toxic clean up law; freedom to remove the tops off mountains, and dump the waste in valleys and streams; lax regulation of energy markets; and other regulatory relief, such as not having to close high-pollution smokestacks.

As Kevin Phillips reports in ``Wealth and Democracy,'' the entire top 1 percent, over 1 million families, increased their average net worth by 75 percent during the 1990s. The net worth of the middle quintile, adjusted for inflation, declined 10 percent between 1983 and 1995, and rose briefly in 1998 and 1999, only to slide back after 2000.

``Wage earners in the United States collectively ended the decade with less pension and health coverage, as well as with the Industrial West's least amount of vacation time, shortest maternity leaves and shortest average notice of termination,'' says Phillips.

The Bureau of Labor Statistics says the typical American worked 350 more hours per year than the typical European, the equivalent of nine work weeks.

That's the state of the union.