www.modbee.com

Interesting scenario presented by Dorrie Whitlock ("Chilling scenario," Letters, March 3), but there are a few "minor" differences between Iraq and Venezuela.

Which country did Venezuela invade and ravage? And how many of its Scud missiles landed on a country not even involved in the war to drive it out? After being driven out of the country it invaded, did Venezuela spend the next 12 years breaking 16 U.N. resolutions? When did it use weapons of mass destruction against its own people? Does its leader give $25,000 to the families of suicide bombers?

If you have answers to those questions, I'll support your hypothetical German invasion of Venezuela.

WILLIAM STREET Ceres Posted: March 12, 2003 @ 06:00:15 AM PST

sg.biz.yahoo.com Wednesday March 12, 10:23 PM

CARACAS -(Dow Jones)- Venezuela's National Assembly late Tuesday approved a one-year extension, to Mar. 14, 2004 for a tax applied to all financial transactions.

Currently at 1%, the tax rate will drop to 0.75% on July 1, 2003, and to 0.5% on Jan. 1, 2004.

The extension is expected to contribute about 1.5 trillion bolivars ($1=VEB1598) to government coffers by the end of this year, officials have said. This year's budget is a bit under VEB40 trillion.

Venezuela is adjusting its finances after revenues were severely affected by a two-month general strike against President Hugo Chavez's leadership that began Dec. 2.

The action virtually shut down the country's vital oil industry, which accounts for about half of government income, and badly affected tax collections as thousands of businesses, along with the stock market, shut their doors.

Economists have said the government will likely have financing needs of up to 10% of gross domestic product this year as the economy shrinks more than 25%.

The economy shrank about 9% last year.

-By Jehan Senaratna, Dow Jones Newswires; 58212 564 1339; jehan.senaratna@dowjones.com

sg.biz.yahoo.com Wednesday March 12, 10:13 PM By Adam Smallman Of DOW JONES NEWSWIRES

VIENNA (Dow Jones)--OPEC President Abdullah bin Hamad Al Attiyah said Wednesday the group's focus is now on a cut in crude oil output because he is afraid of a collapse in prices.

"What I'm afraid of in coming months with more oil in the market...is how will OPEC manage to avoid a (price) shock," he told Dow Jones Newswires.

At their output policy meeting Tuesday, oil ministers reassured markets they will pump more oil if there's demand. But many are skeptical about how much crude the Organization of Petroleum Exporting Countries and its de-facto leader Saudi Arabia can or want to pump.

OPEC, excluding Iraq, kept their current production ceiling of 24.5 million barrels a day intact.

Looming large are a U.S.-led war against Iraq and a seasonal, second-quarter downturn in crude consumption in the Northern Hemisphere. Oil ministers will be tested BY trying to balance the two over the coming weeks.

"Now the concern is on what we'll do to cut production," Al Attiyah said.

This question was "more realistic and pragmatic" to answer than the issue of spare capacity, Al Attiyah said.

Saudi Arabia's Oil Minister Ali Naimi said Tuesday that the size of a fall in demand may not be as much as expected: "Demand may be the same. Maybe people will be building inventories. We don't know."

The International Energy Agency monthly report Wednesday stick to its second-quarter demand forecasts. It also said high oil prices, tight stock and reduced spare capacity in OPEC has left the global oil market on a knife edge, with very little flexibility to respond to further supply disruptions.

The general strike in Venezuela and fears of war in Iraq have pushed up prices and combined to reduce Organization for Economic Cooperation and Development oil stocks in January to 50 days of forward cover from 55.5 days a year ago, the Paris-based IEA said.

"A further supply disruption would tax a system operating at close to capacity," the IEA report said.

February output from all 11 OPEC members increased by 1.5 million b/d from January to 27.16 million b/d.

OPEC-10 output, excluding Iraq, was also up 1.5 million b/d on the month at 24.67 million b/d.

Output from Saudi Arabia increased 330,000 b/d to an average of 8.85 million b/d in February as the OPEC kingpin boosted supplies to cover for a shortfall in Venezuelan crude.

The IEA estimated Saudi oil output was more than 9 million b/d in the past two weeks.

Wednesday, the Kuwait News Agency reported Kuwait had begun pumping crude at full capacity of 2.4 million b/d. Kuwait's OPEC quota is 1.965 million b/d.

KUNA quoted a Kuwaiti oil official as saying the country won't close any oilfields if there's a war in Iraq.

At Tuesday's meeting, OPEC was anxious not to assume a war against one of its members is inevitable. It scheduled its next meeting three months on June 11 in Qatar, but many OPEC sources say they think they'll meet sooner.

Saudi's Naimi said OPEC must hold an emergency meeting in the event a U.S.-led war breaks out in Iraq, Arabic al-Hayat newspaper reported Wednesday. "If the war occurs, God forbid, then OPEC as a responsible organization must convene and look into the market situation," Naimi said.

The oil markets are unconvinced OPEC can or will pump significant volumes of extra oil into the market to calm prices. For that reason, markets are focused on international events and whether the U.S. and the West's energy watchdog, the IEA, will release their massive reserves.

OPEC's basket of seven crude oils averaged $32.54 a barrel Tuesday, compared with $33.11/bbl Monday.

At 1411 GMT, European benchmark April Brent crude futures on London's International Petroleum Exchange were trading down 23 cents at $33.06/bbl, while April U.S. light sweet crude trading on New York's Mercantile Exchange was down 39 cents at $36.33/bbl.

-By Adam Smallman, Dow Jones Newswires; 44-20 7842-9262; adam.smallman@dowjones.com (Selina Williams in London and Sally Jones in Vienna contributed to this article)

www.prospect.org By Robert Dreyfuss Issue Date: 4.1.03

For months Americans have been told that the United States is going to war against Iraq in order to disarm Saddam Hussein, remove him from power, eliminate Iraq's alleged stockpiles of weapons of mass destruction, and prevent Baghdad from blackmailing its neighbors or aiding terrorist groups. But the Bush administration's hawks, especially the neoconservatives who provide the driving force for war, see the conflict with Iraq as much more than that. It is a signal event, designed to create cataclysmic shock waves throughout the region and around the world, ushering in a new era of American imperial power. It is also likely to bring the United States into conflict with several states in the Middle East. Those who think that U.S. armed forces can complete a tidy war in Iraq, without the battle spreading beyond Iraq's borders, are likely to be mistaken.

"I think we're going to be obliged to fight a regional war, whether we want to or not," says Michael Ledeen, a former U.S. national-security official and a key strategist among the ascendant flock of neoconservative hawks, many of whom have taken up perches inside the U.S. government. Asserting that the war against Iraq can't be contained, Ledeen says that the very logic of the global war on terrorism will drive the United States to confront an expanding network of enemies in the region. "As soon as we land in Iraq, we're going to face the whole terrorist network," he says, including the Palestine Liberation Organization (PLO), Hezbollah, Hamas, Islamic Jihad and a collection of militant splinter groups backed by nations -- Iran, Syria and Saudi Arabia -- that he calls "the terror masters."

"It may turn out to be a war to remake the world," says Ledeen.

In the Middle East, impending "regime change" in Iraq is just the first step in a wholesale reordering of the entire region, according to neoconservatives -- who've begun almost gleefully referring to themselves as a "cabal." Like dominoes, the regimes in the region -- first Iran, Syria and Saudi Arabia, then Lebanon and the PLO, and finally Sudan, Libya, Yemen and Somalia -- are slated to capitulate, collapse or face U.S. military action. To those states, says cabal ringleader Richard Perle, a resident fellow at the American Enterprise Institute (AEI) and chairman of the Defense Policy Board, an influential Pentagon advisory committee, "We could deliver a short message, a two-word message: 'You're next.'" In the aftermath, several of those states, including Iraq, Syria and Saudi Arabia, may end up as dismantled, unstable shards in the form of mini-states that resemble Yugoslavia's piecemeal wreckage. And despite the Wilsonian rhetoric from the president and his advisers about bringing democracy to the Middle East, at bottom it's clear that their version of democracy might have to be imposed by force of arms.

And not just in the Middle East. Three-thousand U.S. soldiers are slated to arrive in the Philippines, opening yet another new front in the war on terrorism, and North Korea is finally in the administration's sights. On the horizon could be Latin America, where the Bush administration endorsed a failed regime change in Venezuela last year, and where new left-leaning challenges are emerging in Brazil, Ecuador and elsewhere. Like the bombing of Hiroshima, which stunned the Japanese into surrender in 1945 and served notice to the rest of the world that the United States possessed unparalleled power it would not hesitate to use, the war against Iraq has a similar purpose. "It's like the bully in a playground," says Ian Lustick, a University of Pennsylvania professor of political science and author of Unsettled States, Disputed Lands. "You beat up somebody, and everybody else behaves."

Over and over again, in speeches, articles and white papers, the neoconservatives have made it plain that the war against Iraq is intended to demonstrate Washington's resolve to implement President Bush's new national-security strategy, announced last fall -- even if doing so means overthrowing the entire post-World War II structure of treaties and alliances, including NATO and the United Nations. In their book, The War Over Iraq, William Kristol of The Weekly Standard and Lawrence F. Kaplan of The New Republic write, "The mission begins in Baghdad, but it does not end there. … We stand at the cusp of a new historical era. … This is a decisive moment. … It is so clearly about more than Iraq. It is about more even than the future of the Middle East and the war on terror. It is about what sort of role the United States intends to play in the twenty-first century."

Invading Iraq, occupying its capital and its oil fields, and seizing control of its Shia Islamic holy places can only have a devastating and highly destabilizing impact on the entire region, from Egypt to central Asia and Pakistan. "We are all targeted," Syrian President Bashar Assad told an Arab summit meeting, called to discuss Iraq, on March 1. "We are all in danger."

"They want to foment revolution in Iran and use that to isolate and possibly attack Syria in [Lebanon's] Bekaa Valley, and force Syria out," says former Assistant Secretary of State for Near East Affairs Edward S. Walker, now president of the Middle East Institute. "They want to pressure [Muammar] Quaddafi in Libya and they want to destabilize Saudi Arabia, because they believe instability there is better than continuing with the current situation. And out of this, they think, comes Pax Americana."

The more immediate impact of war against Iraq will occur in Iran, say many analysts, including both neoconservative and more impartial experts on the Middle East. As the next station along the "axis of evil," Iran holds power that's felt far and wide in the region. Oil-rich and occupying a large tract of geopolitical real estate, Iran is arguably the most strategically important country in its neighborhood. With its large Kurdish population, Iran has a stake in the future of Iraqi Kurdistan. As a Shia power, Iran has vast influence among the Shia majority in Iraq, Lebanon and Bahrain, with the large Shia population in Saudi Arabia's oil-rich eastern province and among the warlords of western Afghanistan. And Iran's ties to the violent Hezbollah guerrillas, whose anti-American zeal can only be inflamed by the occupation of Iraq, will give the Bush administration all the reason it needs to expand the war on terrorism to Tehran.

The first step, neoconservatives say, will be for the United States to lend its support to opposition groups of Iranian exiles willing to enlist in the war on terrorism, much as the Iraqi National Congress served as the spearhead for American intervention in Iraq. And, just as the doddering ex-king of Afghanistan served as a rallying point for America's conquest of that landlocked, central Asian nation, the remnants of the late former shah of Iran's royal family could be rallied to the cause. "Nostalgia for the last shah's son, Reza Pahlavi … has again risen," says Reuel Marc Gerecht, a former CIA officer who, like Ledeen and Perle, is ensconced at the AEI. "We must be prepared, however, to take the battle more directly to the mullahs," says Gerecht, adding that the United States must consider strikes at both Iran's Revolutionary Guard Corps and allies in Lebanon. "In fact, we have only two meaningful options: Confront clerical Iran and its proxies militarily or ring it with an oil embargo."

Iran is not the only country where restoration of monarchy is being considered. Neoconservative strategists have also supported returning to power the Iraqi monarchy, which was toppled in 1958 by a combination of military officers and Iraqi communists. When the Ottoman Empire crumbled after World War I, British intelligence sponsored the rise of a little-known family called the Hashemites, whose origins lay in the Saudi region around Mecca and Medina. Two Hashemite brothers were installed on the thrones of Jordan and Iraq.

For nearly a year, the neocons have suggested that Jordan's Prince Hassan, the brother of the late King Hussein of Jordan and a blood relative of the Iraqi Hashemite family, might re-establish the Hashemites in Baghdad were Saddam Hussein to be removed. Among the neocons are Michael Rubin, a former AEI fellow, and David Wurmser, a Perle acolyte. Rubin in 2002 wrote an article for London's Daily Telegraph headlined, "If Iraqis want a king, Hassan of Jordan could be their man." Wurmser in 1999 wrote Tyranny's Ally, an AEI-published book devoted largely to the idea of restoring the Hashemite dynasty in Iraq. Today Rubin is a key Department of Defense official overseeing U.S. policy toward Iraq, and Wurmser is a high-ranking official working for Undersecretary of State for Arms Control and International Security John Bolton, himself a leading neoconservative ideologue.

But if the neocons are toying with the idea of restoring monarchies in Iraq and Iran, they are also eyeing the destruction of the region's wealthiest and most important royal family of all: the Saudis. Since September 11, the hawks have launched an all-out verbal assault on the Saudi monarchy, accusing Riyadh of supporting Osama bin Laden's al-Qaeda organization and charging that the Saudis are masterminding a worldwide network of mosques, schools and charity organizations that promote terrorism. It's a charge so breathtaking that those most familiar with Saudi Arabia are at a loss for words when asked about it. "The idea that the House of Saud is cooperating with al-Qaeda is absurd," says James Akins, who served as U.S. ambassador to Saudi Arabia in the mid-1970s and frequently travels to the Saudi capital as a consultant. "It's too dumb to be talked about."

That doesn't stop the neoconservatives from doing so, however. In The War Against the Terror Masters, Ledeen cites Wurmser in charging that, just before 9-11, "Saudi intelligence had become difficult to distinguish from Al Qaeda." Countless other, similar accusations have been flung at the Saudis by neocons. Max Singer, co-founder of the Hudson Institute, has repeatedly suggested that the United States seek to dismantle the Saudi kingdom by encouraging breakaway republics in the oil-rich eastern province (which is heavily Shia) and in the western Hijaz. "After [Hussein] is removed, there will be an earthquake throughout the region," says Singer. "If this means the fall of the [Saudi] regime, so be it." And when Hussein goes, Ledeen says, it could lead to the collapse of the Saudi regime, perhaps to pro-al-Qaeda radicals. "In that event, we would have to extend the war to the Arabian peninsula, at the very least to the oil-producing regions."

"I've stopped saying that Saudi Arabia will be taken over by Osama bin Laden or by a bin Laden clone if we go into Iraq," says Akins. "I'm now convinced that's exactly what [the neoconservatives] want. And then we take it over."

Iraq, too, could shatter into at least three pieces, which would be based on the three erstwhile Ottoman Empire provinces of Mosul, Baghdad and Basra that were cobbled together to compose the state eight decades ago. That could conceivably leave a Hashemite kingdom in control of largely Sunni central Iraq, a Shia state in the south (possibly linked to Iran, informally) and some sort of Kurdish entity in the north -- either independent or, as is more likely, under the control of the Turkish army. Turkey, a reluctant player in George W. Bush's crusade, fears an independent Kurdistan and would love to get its hands on Iraq's northern oil fields around the city of Kirkuk.

The final key component for these map-redrawing, would-be Lawrences of Arabia is the toppling of Assad's regime and the breakup of Syria. Perle himself proposed exactly that in a 1996 document prepared for the Institute for Advanced Strategic and Political Studies (IASPS), an Israeli think tank. The plan, titled, "A Clean Break: A New Strategy for Securing the Realm," was originally prepared as a working paper to advise then-Prime Minister Benjamin Netanyahu of Israel. It called on Israel to work with Turkey and Jordan to "contain, destabilize and roll-back" various states in the region, overthrow Saddam Hussein in Iraq, press Jordan to restore a scion of its Hashemite dynasty to the Iraqi throne and, above all, launch military assaults against Lebanon and Syria as a "prelude to a redrawing of the map of the Middle East [to] threaten Syria's territorial integrity." Joining Perle in writing the IASPS paper were Douglas Feith and Wurmser, now senior officials in Bush's national-security apparatus.

Gary Schmitt, executive director of the Project for a New American Century (PNAC), worries only that the Bush administration, including Secretary of Defense Donald Rumsfeld and Vice President Dick Cheney, might not have the guts to see its plan all the way through once Hussein is toppled. "It's going to be no small thing for the United States to follow through on its stated strategic policy in the region," he says. But Schmitt believes that President Bush is fully committed, having been deeply affected by the events of September 11. Schmitt roundly endorses the vision put forward by Kaplan and Kristol in The War Over Iraq, which was sponsored by the PNAC. "It's really our book," says Schmitt.

Six years ago, in its founding statement of principles, PNAC called for a radical change in U.S. foreign and defense policy, with a beefed-up military budget and a more muscular stance abroad, challenging hostile regimes and assuming "American global leadership." Signers of that statement included Cheney; Rumsfeld; Deputy Secretary of Defense Paul Wolfowitz; Assistant Secretary of Defense for International Security Affairs Peter W. Rodman; Elliott Abrams, the Near East and North African affairs director at the National Security Council; Zalmay Khalilzad, the White House liaison to the Iraqi opposition; I. Lewis Libby, Cheney's chief of staff; and Gov. Jeb Bush (R-Fla.), the president's brother. The PNAC statement foreshadowed the outline of the president's 2002 national-security strategy.

Scenarios for sweeping changes in the Middle East, imposed by U.S armed forces, were once thought fanciful -- even ridiculous -- but they are now taken seriously given the incalculable impact of an invasion of Iraq. Chas Freeman, who served as U.S. ambassador to Saudi Arabia during the Gulf War, worries about everything that could go wrong. "It's a war to turn the kaleidoscope, by people who know nothing about the Middle East," he says. "And there's no way to know how the pieces will fall." Perle and Co., says Freeman, are seeking a Middle East dominated by an alliance between the United States and Israel, backed by overwhelming military force. "It's machtpolitik, might makes right," he says. Asked about the comparison between Iraq and Hiroshima, Freeman adds, "There is no question that the Richard Perles of the world see shock and awe as a means to establish a position of supremacy that others fear to challenge."

But Freeman, who is now president of the Middle East Policy Council, thinks it will be a disaster. "This outdoes anything in the march of folly catalog," he says. "It's the lemmings going over the cliff." Robert Dreyfuss

Copyright © 2003 by The American Prospect, Inc. Preferred Citation: Robert Dreyfuss, "Just the Beginning," The American Prospect vol. 14 no. 3, March 1, 2003 . This article may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission from the author. Direct questions about permissions to permissions@prospect.org.

smartmoney.com March 11, 2003

Market Monitor  DJIA  7821.75 269.68   Nasdaq  1340.78 61.54   Rus. 2000  355.44 9.50  LECO 17.30 1.04 6.40%

CLEVELAND (Dow Jones)--Lincoln Electric Holdings Inc. (LECO) warned first-quarter earnings before items could fall as much as 22% from a year ago because of declining U.S. sales and higher pension charges.

In a press release Tuesday, the maker of arc welding products said it expects first-quarter earnings of 32 cents to 34 cents a share, excluding a goodwill charge for a change in accounting principle and certain rationalization charges.

Analysts surveyed by Thomson First Call were expecting earnings of 40 cents a share.

In the year-ago first quarter, Lincoln posted earnings of 41 cents a share, excluding the effect of an accounting change and rationalization charges.

Shares of Lincoln were halted on Nasdaq at $18.98, up 39 cents, or 2.1%. The company's shares fell to a 52-week low of $18.25 on Monday.

Lincoln said the economic and political difficulties in Venezuela have caused the results there to be below expectations.

The company is forecasting flat first-quarter sales compared with year-ago sales of $248.4 million. U.S. sales were down about 5% due to the decline in the demand for welding products in the stagnant U.S. industrial market.

Last month, Lincoln said pension costs would be higher by $15 million in 2003. However, the company said Tuesday the principal reason for the expected earnings decline is lower domestic U.S. market sales, resulting in lower gross profit.

To offset the effect in future quarters, Lincoln said it implemented a program to reduce and eliminate costs, including salaried personnel reductions and organizational consolidations. The benefits of these actions will begin in the second quarter of 2003. A company spokesman wasn't immediately available to comment on these cost-cutting actions.

Lincoln Electric will report first-quarter results on April 16. Company Web site: www.lincolnelectric.com -Stephen Lee; Dow Jones Newswires; 201-938-5400 (END) Dow Jones Newswires 03-11-03 1723ET