DEAD PARROT

Number 32 -- Saturday, July 5, 2003

DP TO TAKE A BREAK

The stories keep coming--faster and faster, if anything--but the writer has to return to his day job. With the issue of July 19, Dead Parrot will suspend publication, first while I take a vacation in a place where the news keeps a respectful distance and then while I resume my work as a teacher. If time and energy permit, I will publish on a monthly or at least an occasional basis, starting sometime in the fall. Meanwhile, the July 19 issue will both follow up on some earlier DP stories and reflect on what it's been like to write about the Bush administration for the past eight months.

WHITHER GLOBALIZATION?

PART TWO: FRANKENFOOD MEETS THE SURRENDER MONKEYS

For all his tiresome jawboning about the inviolable principle of "free trade," Bush supports it only to a point: the point at which key electoral votes come into play. Losing Pennsylvania in 2000 made it necessary to steal Florida, a larceny that Republicans would rather not have to repeat. Hence, on Karl Rove's advice and despite his own contrary campaign pledges, Bush moved to buttress PA's sagging steel industry by imposing tariffs on imported steel. The bet is that if, as a result, Americans have been paying more for their cars when they go to vote in 2004, they will blame it on Osama bin Laden or gay marriage rather than on hypocritical protectionism. In Bush's Brain (reviewed in DP #25), the authors record Rove's amazingly convoluted rationale, sophistry that would win a standing O at the Ministry of Truth. The purpose of protecting steel, Rove told them, was not really to win Pennsylvania but to gain votes in Congress for giving Bush executive fast-track trade authority--"a tool that allows us to broadly expand free trade." (If Pennsylvania should come along for the ride, so much the better.)

When the issue is America's freedom to penetrate foreign markets, Bush becomes the reincarnation of Adam Smith. We wrote last week about how Philip Morris and its administration friends are working overtime to keep American tobacco smoke in Third World lungs. Another front-burner trade topic is genetically-modified food. The cowardly French and other "Old Europe" types, who declined to join the fun in Iraq, are playing the spoilsports again by refusing to import $300 million dollars a year worth of American corn (NY Times, 6/20). A spokesman for our enforcer, trade rep Robert Zoellick, says that the EU "denies choices to European consumers." A spokesman for the American Farm Bureau Federation says that "Countries shouldn't be able to erect barriers for non-scientific reasons." Bush, whose notion of science is such that he probably believes he had a scientific reason for the steel tariffs, says that if the EU rejects American crops, it will be responsible for starving Africa.

In fact, European consumers have chosen; Zoellick simply doesn't like the choice they have made. Whether their resistance to GM food has a rational basis is a complicated and interesting question. The US Department of Agriculture counters all reservations with the bromide that GM strains are not "significantly different" from those bred by traditional means, but the USDA devotes only a minuscule fraction of its biotech budget to risk assessment. Those inclined to be cavalier about what they put in their mouths might think again if they knew that Monsanto's patented NewLeaf potatoes are registered as a pesticide with the EPA.

The outlines of the GM controversy can be found in Michael Pollan's brilliant The Botany of Desire (Random House, 2001) and in Mark Schapiro's "Sowing Disaster? How Genetically Engineered American Corn Has Altered the Global Landscape" (Nation, 10/28/02). Pollan interviewed genetic engineers at Monsanto, visited monster potato farms in Idaho, and grew a stand of NewLeafs in his own garden. Schapiro's investigations took him to both transgenic and conventional cornfields in Mexico and Iowa. Together, they give an impression of an admirably ingenious technology that is fast outrunning caution and control.

The GM promise is that features of different species and even different phyla can be grafted together to produce plants more resistant to all the bad stuff nature throws at them. Bizarre combos such as tomatoes with fish genes that protect them from cold weather and firefly genes that make them glow in the dark give the term "Frankenfood" a certain irresistible logic. Still, the advantages can be great. Corn and potatoes with a gene from Bacillus thuringiensis (Bt) spliced in make insect nibblers drop dead more or less at first nibble and relieve farmers of the need (or perceived need) to shower their fields with deadly chemicals. Against this benefit a number of troubling questions present themselves--questions about the wholesomeness of the food, the environmental impact of growing it, and the proprietary approach of the companies that market the technology. These companies have spent a fortune developing GM foods, and they want the questions to get short shrift.

Bt is a commonly used organic pesticide. No one has been known to get sick from it, but it remains on the surface of ordinary crops and presumably is washed off before consumption. In Bt corn and potatoes, every single cell contains the stuff. You eat them, you eat it. Pollan, after a summer of watching them grow splendidly and thinking about it, could not bring himself to eat his NewLeafs. He considered making them into potato salad for a neighborhood potluck but eventually left them to rot in a bag on the porch.

Environmental impacts are still more worrisome. Genes for resistance to herbicides have been shown to jump from beets and rapeseed plants to the very weeds that the herbicides are meant to kill. Pollen from Bt corn turns out to be lethal to monarch butterflies. Transgenic crops migrate from place to place, corrupting the corn that an Iowa organic farmer could no longer sell as organic and popping up mysteriously in a remote area of Mexico where both it and the pest it targets had been unknown. Worse, aggressive marketing of GM seed encourages vast monocultures, undermining the biodiversity that in traditional small-plot farming formed a barrier against new pests and diseases.

And, naturally, the bugs toughen up after a while. Insect evolution is expected to render the current built-in GM pesticides impotent in a few years. By then Monsanto (and its small corps of competitors--Dow, DuPont, Syngenta, Aventis), operating on the premise that what's not sustainable is replaceable, will have created and patented new strains. The patenting is important. Monsanto wants to own agriculture as it's never been owned before. It wants farmers to be singing "I owe my soul to the company store" as they run their combines. Its contracts prohibit them from the age-old practice of saving seeds from one crop to plant the next with; they have to buy new seeds from Monsanto every year. According to an article in Agribusiness Examiner (5/12), the company has sued 73 farmers for breaching this requirement over the past five years and a farmer from Tennessee is about to start serving an eight-month jail term for hiding seed and lying about it.

All in all, GM food raises as many questions as invading Iraq did (and still does). But Bush doesn't do questions: he does doing, whether it's exercise for the US Army or bonanzas for American companies. Monsanto contributed $63,000 to the RNC between 2000 and 2002 (opensecrets.org). The company's proxy statement, which you can read at sec.gov, reveals that its outgoing president, Hendrik A. Verfaillie, walked off with almost $12 million in total compensation last year, including several million in something known as "phantom share accounts." We're talking leverage here. The monarch butterfly doesn't stand a chance.

DP REVIEWS

The Americans who decided to let Alfried Krupp resume his business in 1951 may have been motivated by a sense of fair play: after all, the United States had its own long history of war profiteering. According to Kevin Phillips, the first great American fortunes were fortunes of war. Of the five richest men in Boston in 1790, four had made their money by sending privateers against English shipping in the Revolution and the fifth had been a supplier for the French fleet. The Civil War provided many new opportunities. "Shoddy," a term that originally denoted a type of cheap fabric made of shredded rags and used to manufacture uniforms, came by extension to describe all cheesy war materiel and the new class of entrepreneurs who hawked it. Profit margins approached 100%, and the number of millionaires in New York tripled between 1860 and 1865. World War I was an orgy of wealth creation for the duPonts, J. P. Morgans, and Charles Schwabs--all of whom, not surprisingly, were among the loudest voices for sending the doughboys over.

Nothing in these sordid annals, however, prepares us for the Carlyle Group. When Eisenhower, in his famous 1959 speech, warned of dangerous collusion between industry and the military, he certainly had something like Carlyle in mind; but decent Ike could hardly have foreseen a single company so colossal in its reach and so twined with conflicts of interest that it would become a military-industrial complex in itself. Enabled by the terrorism hysteria and imperial excursions of the new century, Carlyle represents a quantum leap in the organization of patriotic greed. Business journalist Dan Briody tells the story in The Iron Triangle (John Wiley & Sons, 2003).

Krupp was one firm, with a sole owner in each generation and a dedication to producing things. Dreadful though most of those things were (in addition to cannon, Krupp did a brisk business in such relatively benign items as railroad wheels), there is something sweetly old-fashioned and almost innocent in its devotion to the tangible. Carlyle, in contrast, is an investment bank. It operates by buying and selling other companies, and its staple product is paper: contracts, stock certificates, and, especially, tall stacks of greenbacks. Many of the hundreds of companies Carlyle owns are in the business euphemistically called "defense." Others are in aerospace, telecommunications, and "health." What they do is less important than what they will fetch. No one in Carlyle's legion of chairmen, directors, and advisors is about to go down to the foundry floor, as every Krupp frequently did, for a whiff of molten steel and a chat with the foreman. Carlyle got its start in the air biz, in 1987, by exploiting a tax loophole that permitted failing Eskimo companies to sell their losses to more successful firms, which could then apply them against taxable profits.

The genius strategy that has made Carlyle more successful than other, similar ventures was to specialize in businesses patronized and/or regulated by government and to hire people from government to do the deals. The revolving door has at various times spun into the company's offices such luminous public servants as James Baker III, Richard Darman, Colin Powell, and George H. W. Bush. (Not to seem too partisan, in light of its 84% tilt toward the GOP in campaign contributions, Carlyle has also laid on two Democratic commission chairs: William Kennard [FCC] and Arthur Levitt [SEC].) The obvious advantages of this staffing policy in name recognition, access, and insider info are typified by the fact that Poppy, who has led Carlyle forays to Korea and Saudi Arabia, advises his son on policy in both regions and still receives daily intelligence briefings from the CIA--a conflict so incestuous that even Judicial Watch, a group originally formed to hound Clinton, has denounced it.

The insider of insiders at Carlyle is Frank Carlucci, who became its vice chairman in 1989, six days after ending his term as Reagan's last Secretary of Defense. A roomie and wrestling teammate of Donald Rumsfeld at Princeton, Carlucci began his career at the State Department, where, his critics say, he helped engineer Cold War coups and assassinations in the Congo, Brazil, Zanzibar, and Chile. Subsequently, he held high-level positions in what must be a record number of federal agencies, including the OEO, the OMB, HEW, the CIA, and the National Security Council, before his stint with the DOD. Carlucci was known at the Pentagon as a cost cutter but changed his tune when he moved to the supply side. The United Defense "Crusader" howitzer is a case in point.

United Defense is the company where Bush Jr. played with a battle simulator the day after he played carrier landing (see DP #24: Tin Soldier Marches On). Carlucci's contacts helped Carlyle acquire UD in 1997 for a bid $150 million lower than the competition's. The Crusader, a motorized cannon that could fling 100-pound shells 25 miles at the rate of 10 a minute, had been under development for three years. The Krupps would have loved it, but the US Army was beginning to realize that the weapon had already become an anachronism--the 60-ton behemoth might have stopped a Russian advance through Central Europe but was too heavy for deployment on any available cargo plane to the scattered theaters of colonial wars to come.

But the Crusader was vital to UD and UD was vital to Carlyle, so Carlucci pulled out all stops to keep the program going. He got on the phone to his friends at the Pentagon, almost quadrupled UD's campaign contributions for the 2000 cycle, and spent $1.2 million on lobbying the same year--and lo! the Crusader remained in the defense budget for 2002. According to Carlyle partner William Conway, "No one wants to be a beneficiary of September 11." Reluctantly or not, Carlyle rode that fall's panic to a tidy $237 million one-day profit by taking UD public on December 14, 2001.

The Iron Triangle is no Arms of Krupp. Manchester worked on his book for most of a decade and, without compromising his moral stance, succeeded in evoking from his characters a deep tragic resonance. Briody has no such literary talents. He makes stick figures of the people he writes about, and his text has the marks of haste. As raw information, however, it serves its purpose: a light shined under a rock to reveal the strange worms of the war-making business that nest there.