The Soros Threat

Forward Observer
By James K. Glassman

The Soros Threat

George Soros, the 38th richest person in the world according to Forbes, says that defeating President George W. Bush in 2004 is "the central focus of my life." In an eye-popping interview recently with the Washington Post, he argued that "America under Bush is a danger to the world."

"When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans." It evokes memories, he says, of the Nazi rhetoric of his childhood in Hungary.

This wild antipathy toward the President is making Soros--who earned his $7 billion as a hedge-fund buccaneer--the single biggest funder of efforts to get Bush out of the White House. The Post figures he has spent over $15 million so far, and he is ready to give more. The 2004 Presidential race, he told the Post, is "a matter of life and death."

In early November, Soros and a partner donated $5 million to the liberal, anti-Bush MoveOn.org. He also gave $10 million to a similar organization, America Coming Together, which aims to mobilize voters in 17 battleground states. And he has promised $3 million to the
Center for American Progress, a new Democratic think tank started by former Clinton aide John Podesta.

Soros has always fancied himself an intellectual as well as a moneymaker, and he wants desperately to be taken seriously.
His first attempt came in 1997 with a weird, discursive article in the Atlantic Monthly called "The Capitalist Threat." He argued that "the spread of market values into all areas of life" is now the main threat to "open and democratic society."

The man-bites-dog nature of the anticapitalist article from the capitalist mogul brought it attention, but it was so appallingly stupid that it provoked the ire of even the typically mild-mannered, centrist journalist Robert Samuelson of Newsweek. He called Soros "a crackpot" and his essay "gibberish" akin to the "Unabomber's manifesto in its sweeping, unsupported, and disconnected generalizations."

Now Soros is back in the Atlantic with a piece called "The Bubble of
American Supremacy." Here the problem is not so much incoherence as hysteria: "The Bush administration proceeded to exploit the terrorist attack for its own purposes," he writes of the 9/11 terrorist murder of innocents. "It fostered the fear that has gripped the country…and it used the war on terrorism to execute an agenda of American supremacy."

What does Soros propose? Not military action, but "preventive action of a constructive and affirmative nature. Increased foreign aid or better or fairer trade rules," and, of course, "international cooperation."

All of this would be harmless if Soros didn't have billions to spend and the intention to manipulate our politics with them. In the past, it was enough for him to lavish money on leftish causes like drug legalization through the Soros Foundations Network. But a more strident, ideological tone has now become evident.

Soros dubbed his main charity the "Open Society Institute," a reference to the 1945 book, The Open Society and Its Enemies, by Karl Popper (1902-94), who was driven out of his native Austria by the
Nazis. Popper's ideas are complicated, but he stood for what Jonathan Rauch, in a perceptive essay following 9/11, called a free society's "irrepressible effervescence and astonishing durability." These truly are American traits, and ones that the Bush administration has tried to preserve and promote through the kinds of activities that Soros appears to detest: tax cuts, regulatory restraint, and yes, overthrowing tyrants in other parts of the world.

There is irony in Soros's simultaneous embrace of Popper and of the American Left. And hypocrisy in his attitude toward campaign finance regulation: In his foundation's annual report, Soros lauds the McCain-Feingold law limiting donations as an antidote to "a fundamental crisis in democratic self-government." Yet he pours millions into a loophole that lets nonparty groups accept funds without limit.

Let me be clear: Soros earned his money, and he can spend it on whatever he wants. What concerns me is the monstrous hatred Soros has developed toward the President of the United States--hatred shared by others in his social circle.

My guess is that the $15 million Soros has spent is just the beginning. Most voters are blessedly immune to dumb arguments even when they are well-funded. Nevertheless, it would be foolish to take Soros lightly. He is emerging as a great threat not just to the re-election of George Bush, but to our truly open society as well.

The "Alchemy of Finance" contains one of the most arrogant confessions I've ever seen in print, as well as some fascinating insights into how Soros used the misconceptions of economists, finance theorists, and traders who relied on them, to make his pile. Below two bios: "unauthorized" and "authorized" to provide some perspective.

George Soros
http://www.rotten.com/library/bio/business/george-soros/
* Hungarian businessman. Jewish; original family name is Schwartz.
* Net worth estimated at $11B.
* A man of enormous wealth and ability to deploy it in unexpected ways.
* Partner in the Carlyle Group.
* Was the owner of Harken Energy, and bought its declining shares so that George W Bush could make a million dollars. His reason to do that: "political influence."
* As currency speculator, cost the UK a billion dollars in one day.
* Hated by Lyndon LaRouche.
* Member, Council on Foreign Relations.

Timeline
12 Aug 1930 George Soros born, Budapest Hungary.
1944 Hides for a year from the Nazis, after they invade Hungary.
1947 Leaves Hungary for Britain to attend London School of Economics.
1956 Moves to United States.
1969 Establishes Quantum Fund, and dabbles in currency manipulation. Average return of that fund is an astonishing 35% per year, since its inception.
1979 Establishes Open Society Fund, New York City.
16 Sep 1992 In a brazen act of currency speculation, places a hedge bet that the UK will devalue the Pound Sterling. In September this nets him $1B in a single day.
1995 Appointed director, Council on Foreign Relations.
1997 Attacks the currencies of Thailand and Malaysia. A Thai source said: "We regard George Soros as a kind of Dracula. He sucks blood from the people." [Heather Coffin, Covert Action Quarterly.]
2002 Convicted of insider trading, with regards to the stock of a French bank in 1988. Fined $2M.
Nov 2002 Soros is the primary sponsor of Nevada's ballot initiative to legalize marijuana.
12 Sep 2003 "If you impose morality on [business], it means that you are actually with your hands tied behind your back and you're not going to be successful. It's extremely hard to be successful." Interview, David Brancaccio, Now with Bill Moyers.
7 Nov 2003 Moscow offices of the Soros Foundation stormed by forty armed men who seize papers and seal the building, after Soros criticized the recent jailing of one of Russia's oligarchs, Mikhail Khodorkovsky of oil company Yukos. The building's owner claims rent was not being paid, an unlikely explanation.

http://www.soros.org/about/bios/a_soros

George Soros
Founder and Chairman

George Soros was born in Budapest, Hungary on August 12, 1930. He survived the Nazi occupation of Budapest and left communist Hungary in 1947 for England, where he graduated from the London School of Economics (LSE). While a student at LSE, Soros became familiar with the work of the philosopher Karl Popper, who had a profound influence on his thinking and later on his professional and philanthropic activities.

The financier. In 1956, Soros moved to the United States, where he began to accumulate a large fortune through an international investment fund he founded and managed. Today he is chairman of Soros Fund Management LLC.

The philanthropist. Soros has been active as a philanthropist since 1979, when he began providing funds to help black students attend the University of Cape Town in apartheid South Africa. Today he is chairman of the Open Society Institute (OSI) and the founder of a network of philanthropic organizations that are active in more than 50 countries. Based primarily in Central and Eastern Europe and the former Soviet Union—but also in Africa, Latin America, Asia, and the United States—these foundations are dedicated to building and maintaining the infrastructure and institutions of an open society. They work closely with OSI to develop and implement a range of programs focusing on civil society, education, media, public health, and human rights as well as social, legal, and economic reform. In recent years, OSI and the Soros foundations network have spent more than $400 million annually to support projects in these and other focus areas. In 1992, Soros founded Central European University, with its primary campus in Budapest.

The philosopher. Soros is the author of eight books, including the forthcoming The Bubble of America Supremacy (PublicAffairs, January 2004). His other books include George Soros on Globalization (2002); The Alchemy of Finance (1987); Opening the Soviet System (1990); Underwriting Democracy (1991); Soros on Soros: Staying Ahead of the Curve (1995); The Crisis of Global Capitalism: Open Society Endangered (1998); and Open Society: Reforming Global Capitalism (2000). His articles and essays on politics, society, and economics regularly appear in major newspapers and magazines around the world.

The man may be wrong, but he states the anti-Bush case more cogently, and offers more coherent (if still wrong-headed) alternatives, than any of the various Demo-dwarves running against Bush. Soros has exploited several previous bubbles in the financial markets. Given the precarious fiscal condition of the Federal and many state governments, the hemmoraging trade deficit, and weak financial position of many households, he may be onto something: the ability to play our military power card is highly vulnerable to attacks on our ability to pay for that military power. Soros specializes in exploiting these types of fiscal imbalance. An attack on the dollar could do a lot more damage than anything Al Quaida has in its pathetic bag of tricks.

The Bubble of American Supremacy
The URL for this page is http://www.theatlantic.com/issues/2003/12/soros.htm.

A prominent financier argues that the heedless assertion of American power in the world resembles a financial bubble—and the moment of truth may be here

by George Soros
.....
It is generally agreed that September 11, 2001, changed the course of history. But we must ask ourselves why that should be so. How could a single event, even one involving 3,000 civilian casualties, have such a far-reaching effect? The answer lies not so much in the event itself as in the way the United States, under the leadership of President George W. Bush, responded to it.

Admittedly, the terrorist attack was historic in its own right. Hijacking fully fueled airliners and using them as suicide bombs was an audacious idea, and its execution could not have been more spectacular. The destruction of the Twin Towers of the World Trade Center made a symbolic statement that reverberated around the world, and the fact that people could watch the event on their television sets endowed it with an emotional impact that no terrorist act had ever achieved before. The aim of terrorism is to terrorize, and the attack of September 11 fully accomplished this objective.

Even so, September 11 could not have changed the course of history to the extent that it has if President Bush had not responded to it the way he did. He declared war on terrorism, and under that guise implemented a radical foreign-policy agenda whose underlying principles predated the tragedy. Those principles can be summed up as follows: International relations are relations of power, not law; power prevails and law legitimizes what prevails. The United States is unquestionably the dominant power in the post-Cold War world; it is therefore in a position to impose its views, interests, and values. The world would benefit from adopting those values, because the American model has demonstrated its superiority. The Clinton and first Bush Administrations failed to use the full potential of American power. This must be corrected; the United States must find a way to assert its supremacy in the world.

This foreign policy is part of a comprehensive ideology customarily referred to as neoconservatism, though I prefer to describe it as a crude form of social Darwinism. I call it crude because it ignores the role of cooperation in the survival of the fittest, and puts all the emphasis on competition. In economic matters the competition is between firms; in international relations it is between states. In economic matters social Darwinism takes the form of market fundamentalism; in international relations it is now leading to the pursuit of American supremacy.

Not all the members of the Bush Administration subscribe to this ideology, but neoconservatives form an influential group within it. They publicly called for the invasion of Iraq as early as 1998. Their ideas originated in the Cold War and were further elaborated in the post-Cold War era. Before September 11 the ideologues were hindered in implementing their strategy by two considerations: George W. Bush did not have a clear mandate (he became President by virtue of a single vote in the Supreme Court), and America did not have a clearly defined enemy that would have justified a dramatic increase in military spending.

September 11 removed both obstacles. President Bush declared war on terrorism, and the nation lined up behind its President. Then the Bush Administration proceeded to exploit the terrorist attack for its own purposes. It fostered the fear that has gripped the country in order to keep the nation united behind the President, and it used the war on terrorism to execute an agenda of American supremacy. That is how September 11 changed the course of history.

Exploiting an event to further an agenda is not in itself reprehensible. It is the task of the President to provide leadership, and it is only natural for politicians to exploit or manipulate events so as to promote their policies. The cause for concern lies in the policies that Bush is promoting, and in the way he is going about imposing them on the United States and the world. He is leading us in a very dangerous direction.

The supremacist ideology of the Bush Administration stands in opposition to the principles of an open society, which recognize that people have different views and that nobody is in possession of the ultimate truth. The supremacist ideology postulates that just because we are stronger than others, we know better and have right on our side. The very first sentence of the September 2002 National Security Strategy (the President's annual laying out to Congress of the country's security objectives) reads, "The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the forces of freedom—and a single sustainable model for national success: freedom, democracy, and free enterprise."

The assumptions behind this statement are false on two counts. First, there is no single sustainable model for national success. Second, the American model, which has indeed been successful, is not available to others, because our success depends greatly on our dominant position at the center of the global capitalist system, and we are not willing to yield it.

The Bush doctrine, first enunciated in a presidential speech at West Point in June of 2002, and incorporated into the National Security Strategy three months later, is built on two pillars: the United States will do everything in its power to maintain its unquestioned military supremacy; and the United States arrogates the right to pre-emptive action. In effect, the doctrine establishes two classes of sovereignty: the sovereignty of the United States, which takes precedence over international treaties and obligations; and the sovereignty of all other states, which is subject to the will of the United States. This is reminiscent of George Orwell's Animal Farm: all animals are equal, but some animals are more equal than others.

To be sure, the Bush doctrine is not stated so starkly; it is shrouded in doublespeak. The doublespeak is needed because of the contradiction between the Bush Administration's concept of freedom and democracy and the actual principles and requirements of freedom and democracy. Talk of spreading democracy looms large in the National Security Strategy. But when President Bush says, as he does frequently, that freedom will prevail, he means that America will prevail. In a free and open society, people are supposed to decide for themselves what they mean by freedom and democracy, and not simply follow America's lead. The contradiction is especially apparent in the case of Iraq, and the occupation of Iraq has brought the issue home. We came as liberators, bringing freedom and democracy, but that is not how we are perceived by a large part of the population.

It is ironic that the government of the most successful open society in the world should have fallen into the hands of people who ignore the first principles of open society. At home Attorney General John Ashcroft has used the war on terrorism to curtail civil liberties. Abroad the United States is trying to impose its views and interests through the use of military force. The invasion of Iraq was the first practical application of the Bush doctrine, and it has turned out to be counterproductive. A chasm has opened between America and the rest of the world.

The size of the chasm is impressive. On September 12, 2001, a special meeting of the North Atlantic Council invoked Article 5 of the NATO Treaty for the first time in the alliance's history, calling on all member states to treat the terrorist attack on the United States as an attack upon their own soil. The United Nations promptly endorsed punitive U.S. action against al-Qaeda in Afghanistan. A little more than a year later the United States could not secure a UN resolution to endorse the invasion of Iraq. Gerhard Schröder won re-election in Germany by refusing to cooperate with the United States. In South Korea an underdog candidate was elected to the presidency because he was considered the least friendly to the United States; many South Koreans regard the United States as a greater danger to their security than North Korea. A large majority throughout the world opposed the war on Iraq.

September 11 introduced a discontinuity into American foreign policy. Violations of American standards of behavior that would have been considered objectionable in ordinary times became accepted as appropriate to the circumstances. The abnormal, the radical, and the extreme have been redefined as normal. The advocates of continuity have been pursuing a rearguard action ever since.

To explain the significance of the transition, I should like to draw on my experience in the financial markets. Stock markets often give rise to a boom-bust process, or bubble. Bubbles do not grow out of thin air. They have a basis in reality—but reality as distorted by a misconception. Under normal conditions misconceptions are self-correcting, and the markets tend toward some kind of equilibrium. Occasionally, a misconception is reinforced by a trend prevailing in reality, and that is when a boom-bust process gets under way. Eventually the gap between reality and its false interpretation becomes unsustainable, and the bubble bursts.

Exactly when the boom-bust process enters far-from-equilibrium territory can be established only in retrospect. During the self-reinforcing phase participants are under the spell of the prevailing bias. Events seem to confirm their beliefs, strengthening their misconceptions. This widens the gap and sets the stage for a moment of truth and an eventual reversal. When that reversal comes, it is liable to have devastating consequences. This course of events seems to have an inexorable quality, but a boom-bust process can be aborted at any stage, and the adverse effects can be reduced or avoided altogether. Few bubbles reach the extremes of the information-technology boom that ended in 2000. The sooner the process is aborted, the better.

The quest for American supremacy qualifies as a bubble. The dominant position the United States occupies in the world is the element of reality that is being distorted. The proposition that the United States will be better off if it uses its position to impose its values and interests everywhere is the misconception. It is exactly by not abusing its power that America attained its current position.

Where are we in this boom-bust process? The deteriorating situation in Iraq is either the moment of truth or a test that, if it is successfully overcome, will only reinforce the trend.

Whatever the justification for removing Saddam Hussein, there can be no doubt that we invaded Iraq on false pretenses. Wittingly or unwittingly, President Bush deceived the American public and Congress and rode roughshod over the opinions of our allies. The gap between the Administration's expectations and the actual state of affairs could not be wider. It is difficult to think of a recent military operation that has gone so wrong. Our soldiers have been forced to do police duty in combat gear, and they continue to be killed. We have put at risk not only our soldiers' lives but the combat effectiveness of our armed forces. Their morale is impaired, and we are no longer in a position to properly project our power. Yet there are more places than ever before where we might have legitimate need to project that power. North Korea is openly building nuclear weapons, and Iran is clandestinely doing so. The Taliban is regrouping in Afghanistan. The costs of occupation and the prospect of permanent war are weighing heavily on our economy, and we are failing to address many festering problems—domestic and global. If we ever needed proof that the dream of American supremacy is misconceived, the occupation of Iraq has provided it. If we fail to heed the evidence, we will have to pay a heavier price in the future.

Meanwhile, largely as a result of our preoccupation with supremacy, something has gone fundamentally wrong with the war on terrorism. Indeed, war is a false metaphor in this context. Terrorists do pose a threat to our national and personal security, and we must protect ourselves. Many of the measures we have taken are necessary and proper. It can even be argued that not enough has been done to prevent future attacks. But the war being waged has little to do with ending terrorism or enhancing homeland security; on the contrary, it endangers our security by engendering a vicious circle of escalating violence.

The terrorist attack on the United States could have been treated as a crime against humanity rather than an act of war. Treating it as a crime would have been more appropriate. Crimes require police work, not military action. Protection against terrorism requires precautionary measures, awareness, and intelligence gathering—all of which ultimately depend on the support of the populations among which the terrorists operate. Imagine for a moment that September 11 had been treated as a crime. We would not have invaded Iraq, and we would not have our military struggling to perform police work and getting shot at.

Declaring war on terrorism better suited the purposes of the Bush Administration, because it invoked military might; but this is the wrong way to deal with the problem. Military action requires an identifiable target, preferably a state. As a result the war on terrorism has been directed primarily against states harboring terrorists. Yet terrorists are by definition non-state actors, even if they are often sponsored by states.

The war on terrorism as pursued by the Bush Administration cannot be won. On the contrary, it may bring about a permanent state of war. Terrorists will never disappear. They will continue to provide a pretext for the pursuit of American supremacy. That pursuit, in turn, will continue to generate resistance. Further, by turning the hunt for terrorists into a war, we are bound to create innocent victims. The more innocent victims there are, the greater the resentment and the better the chances that some victims will turn into perpetrators.

The terrorist threat must be seen in proper perspective. Terrorism is not new. It was an important factor in nineteenth-century Russia, and it had a great influence on the character of the czarist regime, enhancing the importance of secret police and justifying authoritarianism. More recently several European countries—Italy, Germany, Great Britain—had to contend with terrorist gangs, and it took those countries a decade or more to root them out. But those countries did not live under the spell of terrorism during all that time. Granted, using hijacked planes for suicide attacks is something new, and so is the prospect of terrorists with weapons of mass destruction. To come to terms with these threats will take some adjustment; but the threats cannot be allowed to dominate our existence. Exaggerating them will only make them worse. The most powerful country on earth cannot afford to be consumed by fear. To make the war on terrorism the centerpiece of our national strategy is an abdication of our responsibility as the leading nation in the world. Moreover, by allowing terrorism to become our principal preoccupation, we are playing into the terrorists' hands. They are setting our priorities.

A recent Council on Foreign Relations publication sketches out three alternative national-security strategies. The first calls for the pursuit of American supremacy through the Bush doctrine of pre-emptive military action. It is advocated by neoconservatives. The second seeks the continuation of our earlier policy of deterrence and containment. It is advocated by Colin Powell and other moderates, who may be associated with either political party. The third would have the United States lead a cooperative effort to improve the world by engaging in preventive actions of a constructive character. It is not advocated by any group of significance, although President Bush pays lip service to it. That is the policy I stand for.

The evidence shows the first option to be extremely dangerous, and I believe that the second is no longer practical. The Bush Administration has done too much damage to our standing in the world to permit a return to the status quo. Moreover, the policies pursued before September 11 were clearly inadequate for dealing with the problems of globalization. Those problems require collective action. The United States is uniquely positioned to lead the effort. We cannot just do anything we want, as the Iraqi situation demonstrates, but nothing much can be done in the way of international cooperation without the leadership—or at least the participation—of the United States.

Globalization has rendered the world increasingly interdependent, but international politics is still based on the sovereignty of states. What goes on within individual states can be of vital interest to the rest of the world, but the principle of sovereignty militates against interfering in their internal affairs. How to deal with failed states and oppressive, corrupt, and inept regimes? How to get rid of the likes of Saddam? There are too many such regimes to wage war against every one. This is the great unresolved problem confronting us today.

I propose replacing the Bush doctrine of pre-emptive military action with preventive action of a constructive and affirmative nature. Increased foreign aid or better and fairer trade rules, for example, would not violate the sovereignty of the recipients. Military action should remain a last resort. The United States is currently preoccupied with issues of security, and rightly so. But the framework within which to think about security is collective security. Neither nuclear proliferation nor international terrorism can be successfully addressed without international cooperation. The world is looking to us for leadership. We have provided it in the past; the main reason why anti-American feelings are so strong in the world today is that we are not providing it in the present.

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