Unregulated Greed has Destroyed the Capitalist System

There is much to agree with and plenty to argue against with here but the view point needs to be read.

1                    The break up of AT&T was not a mistake.  I will take it further, at some point. All super large organizations need to be subdivided on some rational basis.  ATT&T actually did an excellent job in that regard.  Others may well make a hash out of it.

My reasoning is simple.  Cheaper access to more money through size is usually a serious error because it ultimately lowers the real return that management may achieve.  There are exceptions, yet Warren Buffet has found his point of resistance.  It is vastly more profitable to nurture many small companies that are then spun out, as actually happened under ATT&T.

Besides, the digital age was happening and the wall of monopoly barriers needed to be pulled down as fast as possible.  This way it took less than a decade and prevented billions of dollars been diverted to monopoly profits and paychecks.

2          Off shoring is a problem hugely driven by the failure of the US to reform its tax code.  By not imposing a VAT tax, the USA gives every other country an economic advantage. That encourages the transfer of manufacturing offshore.  Solve that and much of the problem will fade as a far leveler playing field will exist.

Right now a company has an equal opportunity to place a factory in the US or India.  Cheap labor is one of a very short list of deciding factors but tax on sales is an immediate claim on cash flow.  It you are in the USA you pay it on all exports now, often before you get paid.  It you are in the rest of the world, you pay it also, but you offset it with tax you pay on costs.  This is a huge and immediate advantage that can not be dodged.

Since most investments are initially deemed as risky, the corporation that plans to export will find it more prudent to build were this drag does not exist.

Otherwise, stop counting their jobs and observe that our incomes have not risen appreciably since 1980, yet our purchasing power from the same dollar bill has leapt ahead, not in specifics but in the expansion of cheaper choices.

3          Yes, greed must be regulated.  Except the pigs have the coin to buy off the politicians who are ill educated economically and are all suckers to begin with.  Tell me how to change that now.

"Unregulated Greed has Destroyed the Capitalist System": The Big Things That Matter And The Little Things That Annoy

By Paul Craig Roberts

URL of this article: www.globalresearch.ca/index.php?context=va&aid=20587

I write about major problems:  the collapsing US economy, wars based on lies and deception, the police state based on “the war on terror” and other fabrications such as those orchestrated by corrupt police and prosecutors, who boost their performance reports by convicting the innocent, and so on.  America is a very distressing place. The fact that so many Americans are taken in by the lies told by “their” government makes America all the more depressing.

Often, however, it is small annoyances that waste Americans’ time and drive up blood pressures. One of the worst things that ever happened to Americans was the breakup of the AT&T telephone monopoly. As Assistant Secretary of the US Treasury in 1981, if 150 percent of my time and energy had not been required to cure stagflation in the face of opposition from Wall Street and Fed Chairman Paul Volcker, I might have been able to prevent the destruction of the best communications service in the world, and one that was very inexpensive to customers. 

The assistant attorney general in charge of the “anti-trust case” against AT&T called me to ask if Treasury had an interest in how the case was resolved.  I went to Treasury Secretary Don Regan and told him that although my conservative and libertarian friends thought that the breakup of At&T was a great idea, their opinion was based entirely in ideology and that the practical effect would not be good for widows and orphans who had a blue chip stock to see them through life or for communications customers as deregulated communications would give the multiple communications corporations different interests than those of the customers. Under the regulated regime, AT&T was allowed a reasonable rate of return on its investment, and to stay out of trouble with regulators AT&T provided excellent and inexpensive service.

Secretary Regan reminded me of my memo to him detailing that Treasury was going to have a hard time getting President Reagan’s economic program, directed at curing the stagflation that had wrecked President Carter’s presidency, out of the Reagan administration.  The budget director, David Stockman, and his chief economist, Larry Kudlow, had lined up against it following the wishes of Wall Street, and the White House Chief of Staff James Baker and his deputy Richard Darman were representatives of VP George H.W. Bush and did not want s substantial Reagan success that would again threaten the Republican Establishment’s hold over the party. Baker and Darman wanted to be sure that George H. W. Bush, and not Jack Kemp, succeeded Ronald Reagan, and that required a muted Reagan success that they could claim as theirs for moderating an “extremist” program. 

]I told Secretary Regan that if I had another deputy assistant secretary, I could reach a reasonable conclusion whether the breakup of AT&T was sensible. He replied that he was sure that was the case, but that once I had three deputies the headlines in the Washington Post and New York Times, Business Week, Newsweek, and so on, would be: “Supply-sider builds empire at Treasury.”  He said it would sink me and that without me he could not get the President’s economic program out of the President’s administration. “Which do you want to do,” he asked, “save AT&T or cure stagflation?”

Curing stagflation gave America twenty more years. Ironically, the good times started to erode when Reagan’s other goal was accomplished and the Soviet Union dissolved in 1990. “The end of history” resulted in India and China opening their labor markets to American capitalists, who began producing offshore with foreign labor the products that they sold to Americans. The labor costs savings pushed up corporate profits, shareholders’ returns, and managerial bonuses. But it deprived Americans of middle class incomes and wrecked the balance of trade. The US income distribution and the trade deficit worsened.

Many progressives blame the worsening income distribution  on the Reagan tax rate reductions, but the real cause is the offshoring of manufacturing, industrial, and professional service jobs, such as software engineering.

None of us in the Reagan administration foresaw jobs offshoring as the consequence of Soviet collapse. We had no idea that by bringing down the Soviet Union we would be bringing down America. During the Reagan years India was socialist and would not allow foreign corporations, had they been interested, to touch their labor force. China was communist and no foreign capital could enter the country.

However, once the Soviet Union was gone from the earth, the remaining socialist and communist regimes decided to go with the winners. They opened to Western corporations and sucked jobs out of the developed West.

But this is a different story. To get back to deregulation, nothing has worked for the consumer since deregulation. Deregulation permitted corporations to impose their costs of operation on customers without having to send them a bill. For example, corporations use voice recognition technology to keep customers from salaried customer representatives. I remember when a customer with a problem could call a utility company or bank and have the problem immediately corrected.

No more. There was an error in my phone bill today, which I had corrected without result on two previous occasions. As everyone knows by now, it takes 10-15 minutes, usually, to get a live person who can actually fix the problem.  After listening to sales pitches for 12 minutes, I got a live person. Once the problem was understood, it was pronounced to be an upper level problem out of his hands. I waited another 10 minutes while he tried to reach a superior who had the code to fix the problem that the phone company had produced in my account. The entire time I listened to product advertisements. 

How many times has this happened to you?

Whoever invented these artificial voice capabilities is the enemy of mankind. Whomever a customer calls--utilities, credit card companies, banks, whatever, the customer gets a voice machine. Some voice machines never tell the customer how to get a live person who can, on occasion, actually fix the problem.

In my opinion, the strategy behind the endless delays is to cause the customers to give up, slam the telephone down and play the higher incorrect bill as it is cheaper in time and frustration to correcting the problem and being billed in the correct amount. These ripoffs of the customer are produced by Wall Street pressures for higher earnings. 

The frustrations, of course, multiply when one reaches an offshored service somewhere in the Third World. The incentive is to hang up and to pay the excessive bill so that phone, internet, or credit card services are not cut off

Had Don Regan and I known that the high speed Internet was in our future and that American corporations would use it to destroy the jobs traditionally filled by US university graduates, possibly we would have decided to save the regulated telephone monopoly and to deliver the economy over to stagflation.

The reason is that sooner or later something would have been done about stagflation, but nothing whatsoever has been done about offshoring. Saving the economy from offshoring would have been a greater achievement than saving the economy from stagflation. However, in my time stagflation, not offshoring, was the problem.

I regret that I did not have a crystal ball.

Deregulation proponents will say that the breakup of AT&T gave us cell phones and broadband, as if foreign regulated communication companiesand state monopolies do not provide cell phone service or high speed Internet connections. I can remember attending corporate board meetings years ago at which the European members had digital cell phones with which they could call most anywhere on earth, while we Americans with our analogue cell phones could hardly connect down the street.

What deregulation did was to permit Wall Street to push the deregulated industries-- phone service, airlines, trucking, and later Wall Street itself-- to focus on profits and not on service. Profits were increased by curtailing service, by pushing up prices and by  Wall Street creating fraudulent financial instruments, which the banksters used America’s reputation to market to the gullible at home and abroad. 

Consider air travel. Admit it, if you are my age you hate it. The deterioration in service over my lifetime is phenomenal. Studies in favor of airline deregulation focused on short flights between A and B and concluded that small airlines serving high density areas were more efficient because they were not regulated. What was left out of the analysis is that regulated airlines served low density areas and permitted free stopovers. For example, if one was flying from the US to Athens, Greece, the traveler could stopover in London, Paris, and Rome without additional charges. Moreover, passengers were fed hot meals even in tourist class. In those halcyon days, it was even possible to travel more comfortably in tourist class than in first class, because flights were not scheduled in keeping with full capacity. Several rows of seats might be unoccupied. It was possible to push up the arm rests on three or four center aisle seats, lay down and go to sleep.

Perhaps the best benefit of regulated air travel for passengers was that airlines had spare airliners. If one airplane had mechanical problems that could not be fixed within a reasonable time, a standby airliner was rolled out to enable passengers to meet their connections and designations. With deregulation, customer service is not important. The bottom line has eliminated spare airliners.

With deregulated airlines, Wall Street calls the tune. If your flight has a mechanical problem, you are stuck where you are unless you have some sort of privileged status that can bump passengers from later fully booked flights. “Studies” that focus only on discounted ticket price omit major costs of deregulation and thereby wrongly conclude that deregulation has benefited the consumer.

When trucking was regulated, truckers would stop to provide roadside assistant to stranded travelers. Today, with deregulated trucking, every minute counts toward the bottom line. Not only do truckers no longer stop to aid stranded travelers, they travel at excessive speeds that endanger automobile drivers. Trucks have expanded in size, weight and speed. Trucks raise the stress level on interstate highway drivers and destroy, at taxpayers expense, the roads on which they travel.

Conservatives and especially libertarians romanticize “free market unregulated capitalism.” They regard it as the best of all economic orders. However, with deregulated capitalism, every decision is a bottom-line decision that screws everyone except the shareholders and management. 

In America today there is no longer a connection between profits and the welfare of the people. Unregulated greed has destroyed the capitalist system, which now distributes excessive rewards to the few at the expense of the many.

If Marx and Lenin were alive today, the extraordinary greed with which Wall Street has infected capitalism would provide Marx and Lenin with a better case than they had in the 19th and early 20th centuries.

Focus Fusion Update

depend on secondary devices working in the protocol environment.  See my many postings on the topic focus fusion.

Let us be serious.  We are witnessing a real creditable effort to produce fusion power that is arguably plausible.

Lawrenceville Plasma Physics Dense Plasma Fusion Project Updates

AUGUST 09, 2010

Lawrenceville Plasma Physics (LPP) is trying to achieve commercial nuclear fusion.

LPP is trying to get up to 100,000 joules in each pulse. 60 such pulses would be 6 million joules per second, which if converted at with only about 20% loss would be equal to a 5 megawatt generator. The generator would cost about $200,000 and enable power to be generated 50 times cheaper than today.

Lawrenceville Plasma Physics (LPP) completed testing the new spark plugs that they had designed.

1.      The first good news is that, with the Lexan insulators and tungsten pins, the spark plugs have lasted through over 200 shots without breaking

2. the amount of current we are producing per firing capacitor has improved. We have achieved 1 MA at 27 kV with only 8 capacitors firing, something that required all 12 capacitors with the old spark plugs. We believe that the large size of the tungsten pins and the better distribution of current has reduced the inductance of the switches and led to the increase in current, which makes us more confident that we can reach the design current for FF-1 of 2.8 MA.

3. Despite careful adjustment of the spark gaps, the simultaneity of firing with the new spark plugs is worse than with the old ones, and on average, only five switches are firing on the trigger. We believe we know the cause and cure of this problem. We have ordered this new power supply, which will increase the charging voltage on the trigger from 20 to 40 kV and will arrive near the end of August. We think that by doubling the rate of rise of the trigger pulse, we will be able to get the trigger voltage up to at least 20 kV before it shorts. That, together with the capacitor voltage of 30 kV, should get us to the 50 kV needed to fire all of the switches together. Another Dense Plasma Fusion project in Las Vegas is working reliably with higher voltages. The best switches cost a lot and are complicated to maintain. On the other hand, spark gap switches (our kind) with much higher trigger voltages—120 kV vs our current 20 kV—have been made to function reliably recently

.


The LPP team is also reporting on readings from three x-ray photo-multiplier tubes.

From these numbers, we can calculate the product n^2V (where n is density and V is volume) for both the electrons and the ions. Both numbers are the same, 1.1+-0.1x10^35/cm^3. This is a strong indication that the X-rays and neutrons come from the same plasma, the plasmoid. It is also a good indication of how our instruments are designed to supplement and confirm each other, so that every measurement we take will be checked by at least two instruments

Biochar for Carbon Sequestration Study

This work is on a recent study done to evaluate the effect that adoption of biochar throughout the globe may have in terms of carbon sequestration.

The take home is that present regimes could comfortably handle up to fifteen percent of the CO2 produced and vented presently.

However, the real certainty is that we will be exiting the fossil fuel business over the coming century.  We are witnessing the first moves there in the massive emergence of successful wind energy production.  The real break will be fusion energy when we master that art.  In the meantime, Geothermal and solar will also emerge now at a great clip.

When we exit the fossil business also reforest the maximum open land which will massively increase the globe’s biomass, we are likely to swiftly create a CO2 deficit and will need to burn fossil fuels to make up the difference.

1.8 billion metric tons of carbon applied to land at say ten tons per acre will produce 200 million acres of fully involved terra preta soils.  This works out to be around a quarter million square miles per year.  Of course, in time we can just keep on adding carbon to fully involved soils but that then will not likely be necessary.

Also, as I have already posted, logistics and handling issues will likely make corn husbandry as the go to crop for this.  Most other crops simply produce too little usable waste.

And in spite of the ongoing chatter about using waste wood, it is not the first choice in terms of soils.  Most likely there the biochar will be screened for a fines fraction while the balance is used as a fuel for which it is well suited.

Offsetting greenhouse gas emissions using charcoal

By Darren Quick

00:11 August 11, 2010

http://www.gizmag.com/biochar-to-offset-greenhouse-gas-emissions/16006/

According to a new study, as much as 12 percent of the world’s human-caused greenhouse gas emissions could be sustainably offset by producing biochar, a charcoal-like substance made from plants and other organic materials. That’s more than would be offset if the same plants and materials were burned to generate bioenergy, says the study. Additionally, biochar could improve food production in the world’s poorest regions as it increases soil fertility.

Biochar is made by decomposing biomass like plants, wood and other organic materials at high temperature in a process called slow pyrolysis – a form of incineration that decomposes organic materials by heat in the absence of oxygen. Normally, biomass breaks down and releases its carbon into the atmosphere within a decade or two. But biochar is more stable and can hold onto its carbon for hundreds or even thousands of years, keeping greenhouse gases like carbon dioxide out of the air longer.

Other biochar benefits include: improving soils by increasing their ability to retain water and nutrients; decreasing nitrous oxide and methane emissions from the soil into which it is tilled; and, during the slow pyrolysis process, producing some bio-based gas and oil that can offset emissions from fossil fuels.

The carbon-packed substance was first suggested as a way to counteract climate change in 1993. Scientists and policymakers have given it increasing attention in the past few years and this new study conducted by a collaborative team from the Department of Energy’s Pacific Northwest National Laboratory (PNNL), Swansea University, Cornell University, and the University of New South Wales, is the most thorough and comprehensive analysis to date on the global potential of biochar.

The study

For their study, the researchers looked to the world’s sources of biomass that aren’t already being used by humans as food. For example, they considered the world’s supply of corn leaves and stalks, rice husks, livestock manure and yard trimmings, to name a few. The researchers then calculated the carbon content of that biomass and how much of each source could realistically be used for biochar production.

With this information, they developed a mathematical model that could account for three possible scenarios. In one, the maximum possible amount of biochar was made by using all sustainably available biomass. Another scenario involved a minimal amount of biomass being converted into biochar, while the third offered a middle course. The maximum scenario required significant changes to the way the entire planet manages biomass, while the minimal scenario limited biochar production to using biomass residues and wastes that are readily available with few changes to current practices.

The researchers found that the maximum scenario could offset up to the equivalent of 1.8 petagrams – or 1.8 billion metric tons – of carbon emissions annually and a total of 130 billion metric tons throughout in the first 100 years. Avoided emissions include the greenhouse gases carbon dioxide, methane and nitrous oxide. The estimated annual maximum offset is 12 percent of the 15.4 billion metric tons of greenhouse gas emissions that human activity adds to the atmosphere each year. Researchers also calculated that the minimal scenario could sequester just under 1 billion metric tons annually and 65 billion metric tons during the same period.

Making biochar sustainably requires heating mostly residual biomass with modern technologies that recover energy created during biochar’s production and eliminate the emissions of methane and nitrous oxide, the study also noted.

Biochar and bioenergy

Instead of making biochar, biomass can also be burned to produce bioenergy from heat. Researchers found that burning the same amount of biomass used in their maximum biochar scenario would offset 107 billion metric tons of carbon emissions during the first century. The bioenergy offset, while substantial, was 23 metric tons less than the offset from biochar.

Researchers attributed this difference to a positive feedback from the addition of biochar to soils. By improving soil conditions, biochar increases plant growth and therefore creates more biomass for biochar productions. Adding biochar to soils can also decrease nitrous oxide and methane emissions that are naturally released from soil.

http://images.gizmag.com/inline/biochar-0.jpg

However, the researchers say a flexible approach including the production of biochar in some areas and bioenergy in others would create optimal greenhouse gas offsets. Their study showed that biochar would be most beneficial if it were tilled into the planet’s poorest soils, such as those in the tropics and the Southeastern United States.

Those soils, which have lost their ability to hold onto nutrients during thousands of years of weathering, would become more fertile with the extra water and nutrients the biochar would help retain. Richer soils would increase the crop and biomass growth – and future biochar sources – in those areas. Adding biochar to the most infertile cropland would offset greenhouse gases by 60 percent more than if bioenergy were made using the same amount of biomass from that location, the researchers found.

On the other hand, the authors wrote that bioenergy production could be better suited for areas that already have rich soils - such as the Midwest – and that also rely on coal for energy. Their analysis showed that bioenergy production on fertile soils would offset the greenhouse gas emissions of coal-fired power plants by 16 to 22 percent more than biochar in the same situation.

http://images.gizmag.com/inline/biochar-1.jpg

Sustainability

The study also shows how sustainable practices can make the biochar that creates these offsets.

“The scientific community has been split on biochar,” says PNNL’s Jim Amonette. “Some think it’ll ruin biodiversity and require large biomass plantations. But our research shows that won’t be the case if the right approach is taken.”

The researchers’ estimates of avoided emissions were developed by assuming no agricultural or previously unmanaged lands will be converted for biomass crop production. Other sustainability criteria included leaving enough biomass residue on the soil to prevent erosion, not using crop residues currently eaten by livestock, not adding biochar made from treated building materials to agricultural soils and requiring that only modern pyrolysis technologies – those that fully recover energy released during the process and eliminate soot, methane and nitrous oxide emissions – be used for biochar production.

“Roughly half of biochar’s climate-mitigation potential is due to its carbon storage abilities,” Amonette said. “The rest depends on the efficient recovery of the energy created during pyrolysis and the positive feedback achieved when biochar is added to soil. All of these are needed for biochar to reach its full sustainable potential.”

The study, "Sustainable biochar to mitigate global climate change," appears in the journal Nature Communications.

Updating the Global Middle Class

This item is a fresh reminder of the shear power of the S curve.  Largely everyone on the Globe today is actually on the curve at some point or another. A huge mass of Chinesse are entering the full acceleration phase and will create a huge internal demand.  The same is also true for India and possibly now Brazil.

There is one practical effect.  The supply excess US currency denominated credit out there will be sponged up far faster than anticipated and the damage caused by the first global financial crisis will be quickly repaired outside the USA.

It is noteworthy that foreign investors are now focused on resources because of this.  The world needs a number of huge copper mines to be commissioned.  Little of that will also flow into the US because the states are mostly viewed unfriendly to mining at all.  To start with, most lands are still managed under the original 1877 mining law and is a huge problem.  The rest of the world has mostly learned to welcome major mining companies, not least because artisan miners pay no taxes and massively damage the environment.

An inevitable billion man middle class will need a ten fold increase in raw material availability.

Update on the Global Middle Class

AUGUST 11, 2010

http://nextbigfuture.com/2010/08/update-on-global-middle-class.html/

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The Emerging Middle Class in Developing Countries by Homi Kharas of the Brookings Institute Middle class definition used is those spending $10-100 per day. Some interesting things to notice is that the projection is for the world economy to get to 200 trillion in 2005 dollars by 2036 up from about 70 trillion now. Asia will be over half of the world economy. North America will go from about 26% now to about 12%, which will be the same as central and south America. By 2024-2030, the dominant share of the middle class economy from India and China and the rest of Asia will established according the Kharas forecast. It would then be a shift from the lower end of the middle class range to the upper part.

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Why WW II Ended in a Mushroom Cloud

The story presented for the closing days of the Second World War was always a little too pat.  This plausibly puts a different perspective on the situation and the concerns determining policy in the last days of the war.

It certainly served US interests to demonstrate the actual power of the atomic bomb.  I can not believe that anyone had a proper appreciation of the actual future role of the bomb itself but they certainly needed to convince the soviets not to exploit their strategic advantage.  Recall that communist doctrine called for a global communist polity that certainly included all of Europe.  The swift repositioning of surrendering German armies alongside western forces and Patten’s comments at the time shows us just how dicey it all was.

The atomic bomb made further Soviet gains impossible and put Stalin emotionally on the defensive.  As this article makes clear, Japan’s last hope evaporated with the Soviet declaration of war.  Their swift surrender was inevitable long before any American forces hit the beach and the US did have the option of landing in Korea instead and linking up with the Soviets while Japan starved and their Army was destroyed in China.

The A bomb was a game changer and the Soviet Union failed to win the Atomic peace.  This was not an obvious conclusion to make in 1945 when prior to the Second War the soviet economy had outstripped everyone else’s.

Why World War II ended with Mushroom Clouds

65 years ago, August 6 and 9, 1945: Hiroshima and Nagasaki

By Jacques R. Pauwels

URL of this article: www.globalresearch.ca/index.php?context=va&aid=20478

“On Monday, August 6, 1945, at 8:15 AM, the nuclear bomb ‘Little Boy” was dropped on Hiroshima by an American B-29 bomber, the Enola Gay, directly killing an estimated 80,000 people. By the end of the year, injury and radiation brought total casualties to 90,000-140,000.”[1]

“On August 9, 1945, Nagasaki was the target of the world's second atomic bomb attack at 11:02 a.m., when the north of the city was destroyed and an estimated 40,000 people were killed by the bomb nicknamed ‘Fat Man.’ The death toll from the atomic bombing totalled 73,884, as well as another 74,909 injured, and another several hundred thousand diseased and dying due to fallout and other illness caused by radiation.”[2]

In the European Theatre, World War II ended in early May 1945 with the capitulation of Nazi Germany. The “Big Three” on the side of the victors – Great Britain, the United States, and the Soviet Union – now faced the complex problem of the postwar reorganization of Europe. The United States had entered the war rather late, in December 1941, and had only started to make a truly significant military contribution to the Allied victory over Germany with the landings in Normandy in June 1944, less than one year before the end of the hostilities. When the war against Germany ended, however, Washington sat firmly and confidently at the table of the victors, determined to achieve what might be called its “war aims.”

As the country that had made the biggest contribution and suffered by far the greatest losses in the conflict against the common Nazi enemy, the Soviet Union wanted major reparation payments from Germany and security against potential future aggression, in the form of the installation in Germany, Poland and other Eastern European countries of governments that would not be hostile to the Soviets, as had been the case before the war. Moscow also expected compensation for territorial losses suffered by the Soviet Union at the time of the Revolution and the Civil War, and finally, the Soviets expected that, with the terrible ordeal of the war behind them, they would be able to resume work on the project of constructing a socialist society. The American and British leaders knew these Soviet aims and had explicitly or implicitly recognized their legitimacy, for example at the conferences of the Big Three in Tehran and Yalta. That did not mean that Washington and London were enthusiastic about the fact that the Soviet Union was to reap these rewards for its war efforts; and there undoubtedly lurked a potential conflict with Washington’s own major objective, namely, the creation of an “open door” for US exports and investments in Western Europe, in defeated Germany, and also in Central and Eastern Europe, liberated by the Soviet Union. In any event, American political and industrial leaders - including Harry Truman, who succeeded Franklin D. Roosevelt as President in the spring of 1945 - had little understanding, and even less sympathy, for even the most basic expectations of the Soviets. These leaders abhorred the thought that the Soviet Union might receive considerable reparations from Germany, because such a bloodletting would eliminate Germany as a potentially extremely profitable market for US exports and investments. Instead, reparations would enable the Soviets to resume work, possibly successfully, on the project of a communist society, a “counter system” to the international capitalist system of which the USA had become the great champion. America’s political and economic elite was undoubtedly also keenly aware that German reparations to the Soviets implied that the German branch plants of US corporations such as Ford and GM, which had produced all sorts of weapons for the Nazis during the war (and made a lot of money in the process[3]) would have to produce for the benefit of the Soviets instead of continuing to enrich US owners and shareholders.  

Negotiations among the Big Three would obviously never result in the withdrawal of the Red Army from Germany and Eastern Europe before the Soviet objectives of reparations and security would be at least partly achieved. However, on April 25, 1945, Truman learned that the US would soon dispose of a powerful new weapon, the atom bomb. Possession of this weapon opened up all sorts of previously unthinkable but extremely favorable perspectives, and it is hardly surprising that the new president and his advisors fell under the spell of what the renowned American historian William Appleman Williams has called a “vision of omnipotence.”[4] It certainly no longer appeared necessary to engage in difficult negotiations with the Soviets: thanks to the atom bomb, it would be possible to force Stalin, in spite of earlier agreements, to withdraw the Red Army from Germany and to deny him a say in the postwar affairs of that country, to install “pro-western” and even anti-Soviet regimes in Poland and elsewhere in Eastern Europe, and perhaps even to open up the Soviet Union itself to American investment capital as well as American political and economic influence, thus returning this communist heretic to the bosom of the universal capitalist church.

At the time of the German surrender in May 1945, the bomb was almost, but not quite, ready. Truman therefore stalled as long as possible before finally agreeing to attend a conference of the Big Three in Potsdam in the summer of 1945, where the fate of postwar Europe would be decided. The president had been informed that the bomb would likely be ready by then - ready, that is, to be used as “a hammer,” as he himself stated on one occasion, that he would wave “over the heads of those boys in the Kremlin.”[5]  At the Potsdam Conference, which lasted from July 17 toAugust 2, 1945, Truman did indeed receive the long-awaited message that the atom bomb had been tested successfully on July 16 in New Mexico. As of then, he no longer bothered to present proposals to Stalin, but instead made all sorts of demands; at the same time he rejected out of hand all proposals made by the Soviets, for example concerning German reparation payments, including reasonable proposals based on earlier inter-Allied agreements. Stalin failed to display the hoped-for willingness to capitulate, however, not even when Truman attempted to intimidate him by whispering ominously into his ear that America had acquired an incredible new weapon. The Soviet sphinx, who had certainly already been informed about the American atom bomb, listened in stony silence. Somewhat puzzled, Truman concluded that only an actual demonstration of the atomic bomb would persuade the Soviets to give way. Consequently, no general agreement could be achieved at Potsdam. In fact, little or nothing of substance was decided there. “The main result of the conference,” writes historian Gar Alperovitz, “was a series of decisions to disagree until the next meeting.”[6]

In the meantime the Japanese battled on in the Far East, even though their situation was totally hopeless. They were in fact prepared to surrender, but they insisted on a condition, namely, that Emperor Hirohito would be guaranteed immunity. This contravened the American demand for an unconditional capitulation. In spite of this it should have been possible to end the war on the basis of the Japanese proposal. In fact, the German surrender at Reims three months earlier had not been entirely unconditional.

 (The Americans had agreed to a German condition, namely, that the armistice would only go into effect after a delay of 45 hours, a delay that would allow as many German army units as possible to slip away from the eastern front in order to surrender to the Americans or the British; many of these units would actually be kept ready - in uniform, armed, and under the command of their own officers – for possible use against the Red Army, as Churchill was to admit after the war.)[7] 

In any event,Tokyo’s sole condition was far from essential. Indeed, later - after an unconditional surrender had been wrested from the Japanese - the Americans would never bother Hirohito, and it was thanks to Washington that he was to be able to remain emperor for many more decades.[8]

The Japanese believed that they could still afford the luxury of attaching a condition to their offer to surrender because the main force of their land army remained intact, in China, where it had spent most of the war. Tokyo thought that it could use this army to defend Japan itself and thus make the Americans pay a high price for their admittedly inevitable final victory, but this scheme would only work if the Soviet Union stayed out of the war in the Far East; a Soviet entry into the war, on the other hand, would inevitably pin down the Japanese forces on the Chinese mainland. Soviet neutrality, in other words, permitted Tokyo a small measure of hope; not hope for a victory, of course, but hope for American acceptance of their condition concerning the emperor. To a certain extent the war with Japan dragged on, then, because the Soviet Union was not yet involved in it. Already at the Conference of the Big Three in Tehran in 1943, Stalin had promised to declare war on Japan within three months after the capitulation of Germany, and he had reiterated this commitment as recently as July 17, 1945, in Potsdam.

 Consequently, Washington counted on a Soviet attack on Japan by the middle of August and thus knew only too well that the situation of the Japanese was hopeless. (“Fini Japs when that comes about,” Truman confided to his diary, referring to the expected Soviet entry into the war in the Far East.)[9] In addition, the American navy assured Washington that it was able to prevent the Japanese from transferring their army from China in order to defend the homeland against an American invasion. Since the US navy was undoubtedly able to force Japan to its knees by means of a blockade, an invasion was not even necessary. Deprived of imported necessities such as food and fuel, Japan could be expected to beg to capitulate unconditionally sooner or later.    

In order to finish the war against Japan, Truman thus had a number of very attractive options. He could accept the trivial Japanese condition with regard to immunity for their emperor; he could also wait until the Red Army attacked the Japanese in China, thus forcing Tokyo into accepting an unconditional surrender after all; or he could starve Japan to death by means of a naval blockade that would have forced Tokyo to sue for peace sooner or later. Truman and his advisors, however, chose none of these options; instead, they decided to knock Japan out with the atomic bomb. This fateful decision, which was to cost the lives of hundreds of thousands of people, mostly women and children, offered the Americans considerable advantages. First, the bomb might force Tokyo to surrender before the Soviets got involved in the war in Asia, thus making it unnecessary to allow Moscow a say in the coming decisions about postwar Japan, about the territories which had been occupied by Japan (such as Korea and Manchuria), and about the Far East and the Pacific region in general. The USA would then enjoy a total hegemony over that part of the world, something which may be said to have been the true (though unspoken) war aim of Washington in the conflict with Japan. It was in light of this consideration that the strategy of simply blockading Japan into surrender was rejected, since the surrender might not have been forthcoming until after – and possibly well after - the Soviet Union’s entry into the war. (After the war, the U.S. Strategic Bombing Survey stated that “certainly prior to 31 December 1945, Japan would have surrendered, even if the atomic bombs had not been dropped.”)[10]

As far as the American leaders were concerned, a Soviet intervention in the war in the Far East threatened to achieve for the Soviets the same advantage which the Yankees’ relatively late intervention in the war in Europe had produced for the United States, namely, a place at the round table of the victors who would force their will on the defeated enemy, carve occupation zones out of his territory, change borders, determine postwar social-economic and political structures, and thereby derive for themselves enormous benefits and prestige. Washington absolutely did not want the Soviet Union to enjoy this kind of input. The Americans were on the brink of victory over Japan, their great rival in that part of the world. They did not relish the idea of being saddled with a new potential rival, one whose detested communist ideology might become dangerously influential in many Asian countries. By dropping the atomic bomb, the Americans hoped to finish Japan off instantly and go to work in the Far Eastas cavalier seul, that is, without their victory party being spoiled by unwanted Soviet gate-crashers. Use of the atom bomb offered Washington a second important advantage. Truman’s experience in Potsdam had persuaded him that only an actual demonstration of this new weapon would make Stalin sufficiently pliable. Nuking a “Jap” city, preferably a “virgin” city, where the damage would be especially impressive, thus loomed useful as a means to intimidate the Soviets and induce them to make concessions with respect to Germany, Poland, and the rest of Central andEastern Europe.

The atomic bomb was ready just before the Soviets became involved in the Far East. Even so, the nuclear pulverization of Hiroshima on August 6, 1945, came too late to prevent the Soviets from entering the war against Japan. Tokyo did not throw in the towel immediately, as the Americans had hoped, and on August 8, 1945 - exactly three months after the German capitulation in Berlin - the Soviets declared war on Japan. The next day, on August 9, the Red Army attacked the Japanese troops stationed in northern China. Washington itself had long asked for Soviet intervention, but when that intervention finally came, Truman and his advisors were far from ecstatic about the fact that Stalin had kept his word. IfJapan’s rulers did not respond immediately to the bombing of Hiroshima with an unconditional capitulation, it may have been because they could not ascertain immediately that only one plane and one bomb had done so much damage. (Many conventional bombing raids had produced equally catastrophic results; an attack by thousands of bombers on the Japanese capital on March 9-10, 1945, for example, had actually caused more casualties than the bombing of Hiroshima.) In any event, it took some time before an unconditional capitulation was forthcoming, and on account of this delay the USSR did get involved in the war against Japan after all. This made Washington extremely impatient: the day after the Soviet declaration of war, on August 9, 1945, a second bomb was dropped, this time on the city of Nagasaki. A former American army chaplain later stated: “I am of the opinion that this was one of the reasons why a second bomb was dropped: because there was a rush. They wanted to get the Japanese to capitulate before the Russians showed up.”[11] (The chaplain may or may not have been aware that among the 75,000 human beings who were “instantaneously incinerated, carbonized and evaporated” in Nagasaki were many Japanese Catholics as well an unknown number of inmates of a camp for allied POWs, whose presence had been reported to the air command, to no avail.)[12] It took another five days, that is, until August 14, before the Japanese could bring themselves to capitulate. In the meantime the Red Army was able to make considerable progress, to the great chagrin of Truman and his advisors.

And so the Americans were stuck with a Soviet partner in the Far East after all. Or were they? Truman made sure that they were not, ignoring the precedents set earlier with respect to cooperation among the Big Three in Europe. Already on August 15, 1945, Washington rejected Stalin’s request for a Soviet occupation zone in the defeated land of the rising sun. And when on September 2, 1945, General MacArthur officially accepted the Japanese surrender on the American battleship Missouri in the Bay of Tokyo, representatives of the Soviet Union - and of other allies in the Far East, such as Great Britain, France, Australia, and the Netherlands - were allowed to be present only as insignificant extras, as spectators. Unlike Germany, Japan was not carved up into occupation zones. America’s defeated rival was to be occupied by the Americans only, and as American “viceroy” in Tokyo, General MacArthur would ensure that, regardless of contributions made to the common victory, no other power had a say in the affairs of postwar Japan.

Sixty-five years ago, Truman did not have to use the atomic bomb in order to force Japan to its knees, but he had reasons to want to use the bomb. The atom bomb enabled the Americans to force Tokyo to surrender unconditionally, to keep the Soviets out of the Far East and - last but not least - to force Washington’s will on the Kremlin in Europe also. Hiroshima and Nagasaki were obliterated for these reasons, and many American historians realize this only too well; Sean Dennis Cashman, for example, writes:

With the passing of time, many historians have concluded that the bomb was used as much for political reasons...Vannevar Bush [the head of the American center for scientific research] stated that the bomb “was also delivered on time, so that there was no necessity for any concessions toRussia at the end of the war”. Secretary of State James F. Byrnes [Truman’s Secretary of State] never denied a statement attributed to him that the bomb had been used to demonstrate American power to the Soviet Union in order to make it more manageable in Europe.[13]

Truman himself, however, hypocritically declared at the time that the purpose of the two nuclear bombardments had been “to bring the boys home,” that is, to quickly finish the war without any further major loss of life on the American side. This explanation was uncritically broadcast in the American media and it developed into a myth eagerly propagated by the majority of historians and media in the USA and throughout the “Western” world. That myth, which, incidentally, also serves to justify potential future nuclear strikes on targets such as Iran and North Korea, is still very much alive - just check your mainstream newspaper on August 6 and 9!

Jacques R. Pauwels, author of The Myth of the Good War: America in the Second World War, James Lorimer, Toronto, 2002

Notes

[1] http://en.wikipedia.org/wiki/Hiroshima.

[2] http://en.wikipedia.org/wiki/Nagasaki.

[3] Jacques R. Pauwels, The Myth of the Good War: America in the Second World War, Toronto, 2002, pp. 201-05.

[4] William Appleman Williams, The Tragedy of American Diplomacy, revised edition, New York, 1962, p. 250.

[5] Quoted in Michael Parenti, The Anti-Communist Impulse, New York, 1969, p. 126.

[6] Gar Alperovitz Atomic Diplomacy: Hiroshima and Potsdam. The Use of the Atomic Bomb and the American Confrontation with Soviet Power, new edition, Harmondsworth, Middlesex, 1985 (original edition 1965), p. 223.

[7] Pauwels, op. cit., p. 143.

[8] Alperovitz, op. cit., pp. 28, 156.

[9] Quoted in Alperovitz, op. cit., p. 24.

[10] Cited in David Horowitz, From Yalta to Vietnam: American Foreign Policy in the Cold War, Harmondsworth, Middlesex, England, 1967, p. 53.

[11] Studs Terkel, "The Good War": An Oral History of World War Two, New York, 1984, p. 535.

[12] Gary G. Kohls, “Whitewashing Hiroshima: The Uncritical Glorification of American Militarism,” http://www.lewrockwell.com/orig5/kohls1.html.
[13] Sean Dennis Cashman, , Roosevelt, and World War II, New York and London, 1989, p. 369.