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HOW MODERN MONEY WORKS — Economist Alan Nasser presents a slashing indictment of the vicious nature of finance capitalism; The Bio-Social Facts of American Capitalism: David Price excavates the racist anthropology of Earnest Hooten and his government allies; Is Zero-Tolerance Policing Worth More Chokehold Deaths? Martha Rosenberg and Robert Wilbur assay the deadly legacy of the Broken Windows theory of criminology; Gaming the White Man’s Money: Louis Proyect offers a short history of tribal casinos; Death by Incarceration: Troy Thomas reports from inside prison on the cruelty of life without parole sentences. Plus: Jeffrey St. Clair on how the murder of Michael Brown got lost in the media coverage; JoAnn Wypijewski on class warfare from Martinsburg to Ferguson; Mike Whitney on the coming stock market crash; Chris Floyd on DC’s Insane Clown Posse; Lee Ballinger on the warped nostalgia for the Alamo; and Nathaniel St. Clair on “Boyhood.”
A Bloody Farce

Ukraine, MH 17, and the Charge of the Atlanticist Brigade

by PETER LEE

The bloody farce in the Ukraine took another ugly turn with the shootdown of MH 17.

And to be ugly about it, if the rebels shot the plane down, it shouldn’t matter very much except as a horrible and unexpected catastrophe in a war zone and an overwhelming tragedy to the survivors of the victims on board.  Call it an accident, collateral damage, manslaughter, there is no credible version of events in which it was intentional mass murder or terrorism, either by the rebels or Russian technicians that, according to the Ukrainian government, possessed the ability to operate the elderly but complex anti-aircraft systems fingered in the attack.

Recall the US shootdown of Iran Air Flight 655 in 1988 by the USS Vincennes.  It was also an ugly business.  The Iran Air jet was on a standard civilian flight path with its transponders on; the Vicennes through some bit of naval derring-do had actually intruded into Iranian territorial waters when it shot the plane down (something that was only admitted by the US three years later).  290 people died, the US never apologized, but eventually paid out some money to smooth things over, not in a particularly classy way, according to a 2002 account:

The US had compensated non-Iranian victims about 2.9 million dollars (not acknowledging any responsibility) but nothing to Iranian family members. In 1996, a 131.8 million dollar settlement was reached that included the ignored families (61.8 million). Seventy million was to be put into bank accounts and used to “pay off private U.S. claims against Iran and Iran’s expenses for the Iran-U.S. Claims Tribunal, which is handling the claims.” The US stated it was for claims “involving banking matters, not the airliner,” while Iran said that 30 million was for the plane.

The shootdown was accompanied by the usual quotient of dishonest denial and blame shifting.

The following day, the Pentagon held a news conference on the incident. After originally having flatly denied Iran’s version of the event, saying that it had shot down an F-14 fighter and not a civilian aircraft, the State Department (after a review of the evidence) admitted the downing of Iran Air 655. It was claimed that the plane had “strayed too close to two U.S. Navy warships that were engaged in a battle with Iranian gunboats” and, according to the spokesman, that the “proper defensive action” was taken (in part) because the “suspect aircraft was outside the prescribed commercial air corridor” (Washington Post).

That it “strayed” from its normal, scheduled flight path is factually incorrect. And so was the claim that it was heading right for the ship and “descending” (emphasis, mine) toward it—it was ascending. Another “error” was the contention that it took place in international waters (it did not, a fact only later admitted by the government). Incorrect maps were used when Congress was briefed on the incident.

In an interesting sidebar, the “planeful of naked corpses” conspiracy canard (for which Western journos have repeatedly mocked a Ukrainian rebel militia leader who was, presumably, dumbfounded by the grotesque carnage of the crash) was first deployed by right wing US radio commentators to accuse Iran of staging a provocation by flying a plane of naked corpses at the Vincennes.

The Iran Air shootdown was classified as a goof—although the Iranians declared it rose to the level of criminal misconduct (and have been accused of engineering the Lockerbie bombing as retaliation)–and the captain of the Vicennes was condemned by his fellow officers as a reckless dingbat, per Wikipedia:

Commander David Carlson, commanding officer of the USS Sides, the warship stationed near to the Vincennes at the time of the incident, is reported to have said that the destruction of the aircraft “marked the horrifying climax to Captain Rogers’ aggressiveness, first seen four weeks ago.”[39] His comment referred to incidents on 2 June, when Rogers had sailed the Vincennes too close to an Iranian frigate undertaking a lawful search of a bulk carrier, launched a helicopter within 2–3 miles (3.2–4.8 km) of an Iranian small craft despite rules of engagement requiring a four-mile (6.4 km) separation, and opened fire on small Iranian military boats. Of those incidents, Carlson commented, “Why do you want an Aegis cruiser out there shooting up boats? It wasn’t a smart thing to do.” He also said that Iranian forces he had encountered in the area a month prior to the incident were “…pointedly non-threatening” and professional.[40] At the time of Rogers’ announcement to higher command that he was going to shoot down the plane, Carlson is reported to have been thunderstruck: “I said to folks around me, ‘Why, what the hell is he doing?’ I went through the drill again. F-14. He’s climbing. By now this damn thing is at 7,000 feet.” Carlson thought the Vincennes might have more information, and was unaware that Rogers had been wrongly informed that the plane was diving.[41]

Craig, Morales & Oliver, in a slide presentation published in M.I.T.’s Spring 2004 Aeronautics & Astronautics as the ”USS Vincennes Incident”, commented that Captain Rogers had “an undeniable and unequivocal tendency towards what I call ‘picking a fight.’” On his own initiative, Rogers moved the Vincennes 50 miles (80 km) northeast to join the USS Montgomery. An angry Captain Richard McKenna, Chief of Surface Warfare for the Commander of the Joint Task Force, ordered Rogers back to Abu Musa, but theVincennes helicopter pilot, Lt Mark Collier, followed the Iranian speedboats as they retreated north, eventually taking some fire:

…the Vincennes jumps back into the fray. Heading towards the majority of the speedboats, he is unable to get a clear target. Also, the speedboats are now just slowly milling about in their own territorial waters. Despite clear information to the contrary, Rogers informs command that the gunboats are gathering speed and showing hostile intent and gains approval to fire upon them at 0939. Finally, in another fateful decision, he crosses the 12-nautical-mile (22 km) limit off the coast and enters illegally into Iranian waters.[42]

Captain Rogers was not officially censured for the shootdown; instead, two years later he was awarded the Legion of Merit for his services while captain of the Vincennes and soon after retired.

There you have it.

So, by the ordinary standards of murderous military ineptitude, the fallout from the MH 17 tragedy would be disorganization and denial, an exhaustive and time-consuming investigation, a belated acknowledgment of responsibility, no legal consequences, and the application of some financial emollient eight or so years down the road.

This is obviously Putin’s goal, whether or not rebel forces were complicit (which I should say is not yet a slam dunk, despite the declarations of the US government), an objective which the US and many of its allies are determined to deny him.

There have been several attempts to frame the accidental shootdown as an episode of Putin barbarism that places him and his government beyond the civilized pale and in the fatal zone of illegitimate pariah state upon whom demands can be made, and whose calls for due process can be swept aside, and fair game for whatever principled skullduggery the democratic powers can concoct.

The first and, to be blunt, most ludicrous episode was “corpse gate”, an attempt to depict the militias, and by extension their purported puppetmaster, Putin, as inhumanly callous in their treatment of the remains of the nearly 300 people that had fallen from the sky.

The militias were clearly overwhelmed by the vast disaster scene and the question of how to secure it properly.  No doubt there was looting—an endemic problem at all crash sites, even in the civilized United States—and possibly the idea of diddling with evidence and getting the black boxes into friendly Russian hands.  As to the disgusting drunkenness allegedly exhibited by some militia members, crash scenes are horrible, they can be extremely traumatic, and it is not out of the question that some militia members turned to alcoholic oblivion to deal with the scenes they had witnessed.

But the media tried to latch on to the idea that the militias were committing a crime against humanity by dragging the rotting bodies hither and yon through the 88-degree heat and eventually loading them into refrigerated rail cars.  In this effort the militias worked together with emergency services of the Ukranian government, which somehow made it on site, a fact that was ignored in the accusations of militia barbarism.  Once the body bags were put on the train, there was also some attempt to flay the militias for not immediately pulling the train out of the station, even though the root problem seems to have been the Ukrainian government’s inability to come up with dispatch instructions.moral02-4

Then there was “destruction of evidence gate”.  Again, beyond the militias’ fiddling with luggage and removal of bodies, there is no credible reportage that they were attempting to tamper with the key evidence: the immense debris field of plane wreckage.

On US ABC News, an aviation expert, John Nance, pointed out that the key forensic evidence to be gleaned from the crash site would be shrapnel impact on the airframe, which would indicate what struck the plane (SAM, air to air missile or whatever) and where, and is available in abundance across the crash site.  The black box recorders would be unlikely to yield useful information on the instantaneously catastrophic event itself, nor would the bodies.

The key evidence for the overall investigation will be the surveillance records of US and Russian satellites and radars, which should be able to identify where the missiles came from, as well as addressing accusations that Kyiv fighters were shadowing the jet, etc.

If indeed MH17 was destroyed by a surface to air missile at 30,000 feet, the culprit would appear to be a BUK mobile air defense battery, a Soviet product extensively deployed across the remains of the USSR.  The Russians have them—and the Ukrainian government has accused Russia of shuttling units across the border in order to do the dirty on Ukrainian military aircraft.  The rebels might have captured one or more units; it’s unclear whether the Ukrainian military actually disabled them before abandoning them, as they claimed.  The Ukrainian government also has its own working BUK units; despite government denials that there was any need to deploy anti-aircraft batteries in the east, AP had photographs of a Ukrainian BUK battery trundling through Slavyansk in early July to protect its ATO units against potential Russian airstrikes.

The Russians have already distributed a fair amount of evidentiary chaff of varying quality, claiming that a Ukranian BUK radar was switched on at the time of the incident; Robert Parry’s US defense sources are also telling him there’s a suspicion that a Ukrainian BUK battery was responsible.

So, in an ordinary investigation, plenty of he said/she said, fog o’ war, bluster, obfuscation and the prospect that a mutually acceptable story will be sorted out months if not years down the road.

As to the “restricting access to crash site gate” the subject of much indignant huffing and a newly-minted UNSC resolution (which Russia supported) this appears to be a canard.

Most Western journalists in the field have reported that they easily passed through rebel checkpoints and wandered unrestricted through the crash site (one journo was castigated for actually rifling through a victim’s luggage to illustrate his video report), and noted that, if anybody was delaying the arrival of the international investigatory team, it was the Ukrainian government (which held 100+ international experts in Kyiv until “security issues” could be sorted out).  Further cognitive dissonance was assured when Kyiv forces launched several attacks in Donetsk, not exactly conducive to the ceasefire intended to facilitate the investigation, and also endangering the passage of the “corpse train” that everybody was, at least a couple days ago, so worked up about.

To date, the US strategy seems to be to crank up the indignation machine by whatever means come to hand, in this case excoriating Russia for obstructions of the investigation that aren’t occurring, in order to justify immediate further sanctions that would short circuit Russia’s desire for a conventional, legalistic, and protracted investigation.

As of this writing, the international experts have arrived at the crash site, the rebels, after some unedifying back and forth, have coughed up the black boxes, and there seems to be little that the West can currently complain about.

But the United States is perhaps considering this unpalatable contingency.

Will it demand an immediate and intrusive inventory of Russian and rebel BUK units “or else”?  Hold Russia responsible for non-appearance of rebel witnesses/suspects?  Issue a pre-emptive US declaration that the culprits have been identified, coupled with a demand to produce them?  Or content itself with the boilerplate declaration that Russia is not doing enough to rein in the east Ukrainian militias? We shall see.

By now, I think sanctions are an end in themselves for US Russia policy.

My outsider’s impression is that the US foreign policy for Russia has been pretty much captured by doctrinaire anti-Russians in a diplomatic and military deep state that pretty much permeates and survives every incoming administration.  The Russia desk has had a reasonably good run since the collapse of the Soviet Union, and I think today the prevailing idea is that oligarch anxieties about the sanctioning of their overseas assets will soon reach a tipping point (see this article about “horror of the oligarchs”), and the “Atlanticists”, perhaps led by that nice Mr. Medvedev, will club together against Putin’s “Eurasianists” and pull the plug on his dreams of confronting the West as an equal and opposite force.

Maybe Putin will need more of a shove—he’s an ex-KGB guy with multiple assets in the Russian elite and his current approvals are running over 80%–but there’s an app for that: intensified sanctions.

So sanctions, and more sanctions.  Sanctions for Crimea, sanctions for succoring the separatist uprising, now sanctions related to the plane crash.  Sanctions that will never go away, no matter what Putin does, as long as he stays in power.

Best case, some combination of popular and elite revulsion pushes Putin from power and a new regime approaches the West as supplicant.  Worst case, Russia = Venezuela, neutered by perpetual sanctions, vitriol, economic and political warfare, and subversion.

The key point, at this stage, is for the US to get European buy-in—especially from Angela Merkel, who is demonstrably less than enthusiastic about having a constitutionally dysfunctional relationship with Russia (and not enamored of the continual political heat brought by revelations of US spying)—so that the US is isolating Russia, and not the other way around.

My sense of the situation, especially from the Asian perspective, is that the US is in danger of overplaying its hand, indeed that it has a bad case of tunnel vision in which it is fixated on the goal of sticking it to Putin at the expense of US global interests.

With its almost comical insistence that “the world” is uniting against Russia (which only counts if “the world” is defined as the Atlantic democracies and their close allies and China, India, et. al. are excluded) and, even more damagingly, the US insistence on peddling the Russia = the world’s greatest monster story even as the United States condones the catastrophic and much more bloody Israel incursion into Gaza, the US is accelerating the natural trend toward disintermediation of America in significant chunks of the global diplomatic and economic system.

The PRC occasionally comes in for mockery for its alleged hubris in wishing to elevate the Chinese RMB to the status of an international currency.  However, I don’t think the PRC’s near term objective, or even desire, is to assume the glorious but extremely onerous burden of displacing the US dollar as the international reserve currency.

Instead, I think there are tactical as well as strategic forces in play, inspired in part by Russia’s sanctions miseries as well as the PRC’s own experiences with covert as well as overt US financial sanctions relating to China’s Iran and North Korea transactions, which date back to the George W. Bush years.  The PRC approach reflects the difficulty of sustaining strict capital controls on a national currency when China’s economy is increasingly open to the world; and the risk that a more freely-trading Chinese currency can bring to the PRC in its current competition and incipient clash with the United States.

So the PRC internationalizes the yuan in a series of bilateral agreements with key trading partners, so that its financial transactions increasingly exit the dollar and are less vulnerable to US and Western sanctions; it tries to push its investors to look for adequate returns in friendly regions rather than dumping excess funds in Western financial centers; and it cracks down on corruption and capital flight so that its oligarchs will be less exposed to financial and legal blackmail in places like London and the United States. And for that matter, it offers the enticement to global financial centers of profitable, high-volume trading in yuan, a fungible benefit that can be diverted somewhere else if a jurisdiction turns unfriendly.

And the Xi Jinping regime must take into account the possibility that the outrage and sanctions machine, so intensively deployed against Russia over Ukraine, will be employed against the People’s Republic of China.

The United States is backing off from its stated “honest broker” position in the South China Sea to a tilt toward China’s adversaries, offering the possibility of direct confrontation over the PRC’s maritime claims and use of the sanctions regime to punish PRC misbehavior.  Taiwan is inexorably bumping along to a political confrontation between the pro-mainland KMT and pro-independence DPP and student forces, which will offer the US government, if so inclined, a chance to ditch the One China policy and stand up to the PRC militarily and with sanctions.

And, finally, there is Hong Kong.

With that wonderful synchronicity that liberals adore (and their adversaries roll their eyes at) the three UK China-bashing prestige liberal organs—the Independent, the Guardian, and the Financial Times—all recently editorialized that Great Britain should “stand up” to the PRC on behalf of the people of Hong Kong on the issue of whether candidates for the Hong Kong chief executive should be chosen by full suffrage (instead of nominated by a pro-mainland committee).  If Xi Jinping decides now is not the time to countenance defiance of the PRC within China’s borders and cracks down on the sizable number of pro-democracy activists and supporters, sanctions would appear to be the inevitable consequence.

So one consequence of the singleminded US campaign against Russia is that it is being driven into the arms of the PRC; another is that the PRC is making its ability to resist sanctions a national priority.  The US Atlanticists may succeed in either subduing Russia to Western tutelage or simply expelling it from the European sphere; but what about the Pacific?

Peter Lee wrote a ground-breaking essay on the Chinese military in the current issue of CounterPunch magazine. He edits China Matters.