U.S. Prestige: Bushwhacked and Disempowelled (by American Poodles) (Apr 20, 2002)

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TiM GW Bulletin 2002/4-4

Apr. 20, 2002

Sharon Bites the Hand Thad Feeds Him as Israeli Atrocities Gradually Emerge into Public View, Even on American TV

U.S. Prestige: Bushwhacked and Disempowelled (by American Poodles)

“Enough Is Enough” - We Must End U.S. Aid to ALL Terrorist States That Use It to Kill Innocent Civilians, Including Israel; It’s the Law!; Israel's Economic Intifada

Sharon Bites the Hand Thad Feeds Him as Israeli Atrocities Gradually Emerge into Public View, Even on American TV

“Enough Is Enough” - We Must End U.S. Aid to ALL Terrorist States That Use It to Kill Innocent Civilians, Including Israel; It’s the Law!

PHOENIX, Apr. 20 - America’s global prestige has become the latest victim of the Middle East conflict. The “world’s only remaining superpower”-aura has been “bushwhacked” and “disempowelled” by two American poodles in charge of our foreign policy.

George W. Bush and Colin Powell have shown themselves as dilatants at diplomacy. They allowed the head of a Washington client-state to thumb his nose at them and get away with it. That’s much worse than if America had been snubbed by a formidable foe. For, “he who pays the piper calls the tune.” At least that’s how things are supposed to work.

Not in American-Israeli relations. Instead, the Israeli piper known for his death marches predictably carried out atrocities against civilians - even right under the nose of our visiting Secretary of State.

Using American weapons and money against innocent civilians is not only barbaric on a humanitarian level, it is against U.S. law. Killing defenseless people is the essence of terrorism. And when it is done as a part of a state policy, it is even more despicable than the individual suicide bombings against innocent Israelis. Kind of like organized crime vs. individual criminal acts.

Yet there has not been a peep about it, either from the Secretary of State, or from Congress that passed such laws. Nor from our President, looking more like a presidential poodle with each passing day. Bush and Powell have now evidently joined the coterie of Israel’s lapdogs in Congress.

“See no evil, hear no evil, speak no evil?” That just about sums up their Israel policy (see the two cartoons).

Ironically, that’s also what summed up Madeleine Albright’s policy. But don’t take our word for it. Here’s what Madam Halfbright’s boss at the time, Bill Clinton, said about her during his first meeting with the then newly-elected Russian president, Vladimir Putin (see “Clinton Makes Fun of His Secretary of State,” June 7, 2000):

“As the Russian president, Vladimir Putin shook Albright's hand before a meeting on Sunday (June 4), Bill Clinton tried to explain the meaning of the three brown pins depicting monkeys on the lapel of her jacket. They represent, "see no evil, hear no evil, speak no evil," Clinton said. "That's Madeleine's entire foreign policy," he added.”

In affairs of empires and global power plays, allowing weakness to be seen in public is an unforgivable sin. A superpower must never expose its soft underbelly. The moment it does, all sorts of critters will start nibbling at it.

What will be the consequences of the Bush-Powell peace mission’s failure? Enormous.

First, as long as Sharon is seen as yanking his chain, Bush can kiss goodbye any hopes of forming a coalition with Arab states - against Iraq or anywhere else. So his “war on terrorism” is “on hold,” if not dead in water altogether.

Second, by putting the U.S. squarely in Israel’s corner - by acquiescing to Sharon’s pullout timetable after having told him over weeks to get out of West Bank “now” and “without delay” - Bush can also kiss goodbye any future role Washington can play as an honest broker in any “peace process.”

The entire world, and not just the Arab countries, has now seen that, when Bush comes to shove J, it’s the U.S. and Israel against the world. American independence is also dead in water. The whole world has now seen that Bush’s foreign policy is being shaped by Israel, not the other way around.

Yet America’s interests are not the same as Israel’s interests. We’ve already paid a heavy price on September 11 because of our support of Israel. The only country that has so far benefited from our subsequent “war on terrorism” has been Israel. We are fighting Israel’s sworn enemies in distant lands, while Israel takes care of business closer to home. Had September 11 not happened, right now most Americans would be more worried about the basketball and hockey playoffs than about Israel or the Middle East.

Should we go to war against Iraq again, which was Washington’s game plan before the latest West Bank warfare broke out, we also would be fighting a war on Israel’s behalf. The only country that Saddam Hussein can threaten is Israel. He is no threat to America. And he knows better than to use his weapons of mass destruction (if he has them), because when we respond, there might not be a Baghdad or Iraq anymore, let alone Saddam.

Getting sucked into another Middle East war on Israel’s side, which may escalate into a global “civilization war” against Islam, is decidedly NOT in America’s interests. It would detract from our “war on terrorism,” meaning a war against smallish thugs, like Al Qaeda or the Taliban. It would be a lose-lose doomsday scenario that only warmongering madmen in Tel Aviv might have concocted as their suicidal last wish.

Yet that’s the way we seem to be sliding, thanks to the spinelessness of the Bush administration and of our Congress.

Once again, don’t take our word for it. Here’s what Israel’s prime minister reportedly said about it last October.

According the Israeli Hebrew radio Kol Yisrael, Wednesday (Oct. 3, 2001), (foreign minister Shimon) Peres warned Sharon that refusing to heed incessant American requests for a cease-fire with the Palestinians would endanger Israeli interests and turn the US against Israel. At this point, a furious Sharon reportedly turned toward Peres saying, "every time we do something you tell me America will do this and will do that . . . I want to tell you something very clear: Don't worry about American pressure on Israel. We, the Jewish people, control America, and the Americans know it."

Really? Funny that our President and Congress never tell us that when they ship billions of American taxpayer dollars and military aid to Israel every year (about $100 billion all told, we are told, since 1948). Or when they forgive its debt to us.

And here we thought that our elected representatives work for us - the American people. And that the bank (U.S. Treasury) sets the terms of a loan or a gift, not the recipient. Guess we have to think again…

Maybe most "Americans" didn't know back in October who "controls America." But they can sure see it now.

Six months ago, Sharon eventually backed down and apologized (see "Sharon Comes Back to Heel," Oct. 7, 2001). This time, however, he is challenging and humiliating Bush and the White House openly and publicly. And is winning so far…

What kind of a man is Israel’s prime minister, nicknamed “The Bulldozer” for his ruthlessness and dogged determination? Sharon, 74, is a soldier-politician whose career has been marred by persistent accusations of war crimes. What he did in the last three weeks in West Bank is what he has been doing most of his adult life.

Here’s an excerpt from an Apr. 16 Los Angeles Times report by Tracy Wilkinson, filed form Jenin, West Bank:

“Intense combat usually leaves buildings with innumerable bullet holes or gaping gashes caused by rockets and artillery. Here, the buildings have been demolished, apparently to clear a path for tanks to enter the camp more easily. The army has not fully explained the wreckage, other than to describe the Jenin operation as ferocious house-to-house combat in which militants fought from homes in the camp's center and set off scores of explosions that did considerable damage.

The practice is not a new one for Israeli Prime Minister Ariel Sharon, whose nickname is "The Bulldozer" because of his hard-driving style.

Forces commanded by him leveled homes in the West Bank village of Kibya in 1953 in retaliation for the slaying by Palestinians of a Jewish woman and her two children. Sixty-nine people were killed in the houses, about half of them women and children. Sharon said at the time that he believed the homes were empty. The episode earned Israel its first formal U.N. condemnation.”

When Israel invaded Lebanon in 1982, Sharon was also held indirectly responsible for a massacre of Palestinian refugees by Israel's Christian Phalange allies at the Sabra and Shatilla camps. Some eyewitnesses said Israeli army bulldozers helped dig mass graves for more than 800 dead. That cost Sharon his job as Israel's defense minister, and is the basis of war crimes charges filed by 29 survivors in a Belgian court.

Perhaps less well known is that Sharon joined the Haganah (an organization that fought for establishment of the Jewish state) at a tender age of 14. At the time, the Haganah and its offshoots, Irgun Zvai Leumi and the Stern Gang, were considered terrorist organizations that bombed Arab bus stops, attacked Arab villages and killed quite a few Britons while fighting to end the British Mandate of Palestine.

Two other former prime ministers of Israel, Menachem Begin and Yitzhak Shamir, were leaders of the Irgun and the Stern Gang respectively. Among the atrocities these groups committed was bombing the King David Hotel and massacring 250 Arab villagers in Deir Yassin.

Sharon’s mortal enemy, Yasser Arafat, was another former terrorist to emerge as a “statesman” worthy of addressing the U.N. National Assembly, visiting the White House, and cavorting with various U.S. and international leaders. Before lapsing back, of course, into his present day status - somewhere between a martyr, a statesman and a terrorist - but definitely an Israeli prisoner.

So one safely conclude that some of Israel's earliest patriots, including Sharon, were no different than the Palestinians they call terrorists today.

Given all this ancient history of violence, and Sharon’s killer pedigree, when a man nicknamed The Bulldozer was elected prime minister in February 2001, Israel had clearly voted for war. The Oslo, Camp David or any other peace accords were dead letters. That should have been obvious even to the uninitiated, let alone to the Bush foreign policy team.

So if the Bush administration really wanted to continue the “peace process” that they inherited when they took office, the first thing they should have done was to get tough with Sharon. They should have let Sharon know that if he tries again some monkey business, like extraterritorial “incursions,” or killing civilians while hunting down suspected terrorists, Washington would cut off all aid to Israel.

Which is exactly what a U.S. President with some “cojones” did back in 1956. That’s when Dwight Eisenhower ordered Israel’s prime minister Ben Gurion to get out of the Sinai - or else! (Israel had invaded and occupied the Sinai, just as it now did to the West Bank).

As Eric Margolis, a generally pro-NWO Toronto Sun columnist, put it in his Apr. 14 piece:

“Had Bush Eisenhower's integrity or genuine patriotism, he would compel Sharon to accept the wise Saudi peace plan and forget dreams of recreating biblical Greater Israel. This would be a boon to Jews and Arabs alike.

But Bush junior is no Eisenhower. His dithering over the Mideast has made the United States appear both helpless and a tacit supporter of Israel's West Bank repression - and made America the potential target of more terrorist attacks from the enraged Arab world.”

But just as Bush Junior is no Eisenhower, Sharon is no Ben Gurion. Thanks to tens of billions of dollars of U.S. financial and military aid, Israel is now in a much more powerful position than it was 46 years ago.

So if Bush’s threat of unilateral action against Israel were not enough, the U.S. could have backed the U.N. sanctions against it, just like those that were imposed on Yugoslavia in May 1992, under much foggier and less grievous circumstances.

What did Bush do instead? He welcomed Sharon at the White House with open arms like an old

pal (see the Mar. 20, 2001 photo on the right, which is also available at the White House photo gallery - just click on the picture to go there). Their “friendship” apparently goes back a few years to Bush’s first and only visit to Israel, when Sharon acted almost as Dubya’s tour guide.

So would this personal rapport be the reason Bush so grossly misjudged Sharon? If so, that may be yet another example of our Cowboy’s naiveté in foreign relations. But Bush was never elected president because he knew the name of Lithuania’s prime minister, or even where Zimbabwe was. It was his handlers’ job to prevent the humiliating loss of face and prestige that our country has now suffered.

Furthermore, a case could be made that Bush could be considered Sharon’s accomplice in the mass murders that occurred after Bush had declared (Apr. 4), “enough is enough,” and that Israel must withdraw from West Bank “without delay.” Yet the President sent Powell to Jerusalem via “a slow boat to China” (it took him eight days to get there!). This gave Sharon a chance to kill more Palestinians (not that Sharon stopped even when Powell arrived, as we saw earlier).

Even generally pro-Israeli media, such as MSNBC, noted on Apr. 9 that the Bush delay “was intended to give Sharon more time to complete his mission” (Brian Williams).

But “a funny thing happened on the way to the Forum…” Faced with a mounting evidence of Israel’s war crimes against civilians, some of the American establishment media have finally found their backbones. Even the notoriously pro-Israel CNN showed pictures of the utter devastation at the Jenin refugee camp, along with a fair and balanced report about what had happened.

"I just think what we are seeing here is a terrible human tragedy," William Burns, assistant secretary of state for the Near East, told Reuters today (Apr. 20) in the camp's flattened center. "It's obvious that what happened here in the Jenin camp has caused enormous human suffering for thousands of Palestinian civilians," said Burns, the most senior U.S. official to visit the camp since Israeli forces pulled out on Friday (Apr. 19).

Terje Roed-Larsen, the UN special envoy, said simply: "We have expert people here who have been in war zones and earthquakes and they say they have never seen anything like it. It is horrifying beyond belief." [The Scotsman (Edinburgh) - April 19, click here at our web site to read the full story].

The Thursday night (Apr. 18) MSNBC “Hardball” program was nothing short of spectacular. The uncensored truth finally burst out in full force on major public American airwaves. The Hardball host, Chris Matthews, and Pat Buchanan, his guest, double-teamed one of the most notorious pro-Israel Washington “hawks” - Richard Perle. And they made minced meat of this warmonger’s arguments. Not used to having a spade called a spade, all Perle could do is squirm and smile and try to duck Matthews probing questions, and Buchanan’s searing broadsides.

(Rather than go through that Hardball program blow-by-blow, we suggest you try to get a transcript of it when it is available. We’ve been checking at the MSNBC web site in the last two days, and have written to Hardball, too, but have not been able to get one yet).

Elsewhere around the world, even Washington’s European allies (read normally NWO vassals) have been distancing themselves from the Bush administration Israel policy. On Wednesday (Apr. 10), the European Union's Parliament called for the 15-nation bloc to "suspend immediately" its trade and cooperation agreement with Israel, according to an Associated Press report filed from an EU foreign ministers meeting in Spain (click here at our web site - to read the full AP story).

Furthermore, several European countries are considering an arms embargo against Israel. Here’s an excerpt from an Apr. 10 World Tribune report about that:

“So far, Belgium, Britain, France, Germany and Italy are said to be considering a weapons embargo against Israel. Belgian Foreign Minister Louis Michel has already announced that Brussels would end all military sales to Israel. Belgium is a supplier of light weapons for security forces.

Industry sources said such countries as Britain and Germany have already slowed down or halted the export of weapons or components to Israel. This has included equipment for Israel's Merkava Mk-4 main battle tank.

"We can confirm there is a delay in giving export licenses from Germany for various components," an Israeli Defense Ministry statement said.

The Defense Ministry has ordered parts for the Merkava's GD 883 engine and transmission. Israel is Germany's seventh largest defense client and has purchased 177 million euros in such tank and submarine systems in 2000.

German officials acknowledge that Berlin has withheld components for the Merkava since January. They said that in all Germany has blocked 120 export licenses.”

In the end, what Sharon is succeeding in doing is hurting Israel first and foremost. Already, scores of Israeli businessmen are grumbling because of an informal and voluntary international embargo is starting to bite into their pocketbooks (see Item 2 of this TiM Bulletin). This may turn out to be a stronger “peace movement” than any pressure Washington or the opposition MPs are exerting on Sharon.

As for Sharon, we hear there is a vacancy sign on some prison cells at the Hague War Crimes Tribunal. Wonder why Madam Kangaroo (Carla Del Ponte) isn’t scouring for massacre evidence in Jenin, as she was in Kosovo? Or badgering the Israeli government to turn over Sharon, as she did to Washington’s quislings in Belgrade?

Plenty. Maybe we can lend our President the backbone he seems to be lacking, as he is purporting to be leading the nation in the “war on terrorism.” And prop him up for a confrontation with a “bought and paid for” pro-Israel Senators and Congressmen.

This is the year midterm elections are being held. There is a list of 63 Senators and 227 Congressmen who have reportedly received money from the Israeli lobby in (click here at our web site to see it). The list is by no means comprehensive, as some American politicians vote for Israel appropriations by rote, so the Israeli lobby doesn’t have to waste money on them. But it’s a start.

Go down the list and try to find any names from your state or congressional district. And then vote the traitors out of office! These are the disloyal politicians who have been putting America’s security and lives at risk by blindly supporting Israel, even when this “ally” clearly acted against America’s interests. And our President’s wishes. Such as now. Israel did not just snub and humiliate one George W. Bush. It did that to the Office of the President of the United States of America.

Bush may be clumsy in international affairs. Dubya may be not so bright in other matters, either, compared to other presidents in whose footsteps he is walking. But by golly, he is OUR President. WE put him into office. So if he doesn’t have the smarts or is lacking the backbone, it is up to US to stand up and prop him up, including against a corrupt Congress.

After all, isn’t that how “United We Stand” is supposed to work? When somebody is down, you pick him up and cheer him on…

PHOENIX, Apr. 20 - Regular TiM readers may recall our report Israel’s Hi-Tech Goes Bye Tech (Jan 25, 2002), contributed to TiM by UPI’s Skopje, Macedonia-based correspondent, Dr. Sam Vaknin. He has now sent us another column on the economic repercussions of Israel West Bank “incursion.”

SKOPJE, Apr. 15 - A Danish firm, SID, as it was canceling an order with an Israeli supplier, dispatched to it this unusually blunt message: "When the soldiers of the Israeli army brutalize the areas of the Palestinians ... we do not feel it is the time to do business with your country. We hope this ugly war will end soon."

Consumer boycotts of Israeli products are being touted - often through the Internet - from Belgrade to Moscow and from Copenhagen to Brussels.

Alarmed by this unprecedented erosion in their international image, Israeli industrialists donated food, clothing, and medicines to the inhabitants of the still-smoldering refugee camp in Jenin. The Israeli Electricity Company has contributed four transformers to the East Jerusalem Electricity Company, intended to help mend the ravaged grid in Tul-Karem. These gestures are aimed at ameliorating the EU's wrath as it convenes Apr. 15 in Luxembourg - together with Russia - to debate possible trade sanctions against Israel.

The European Parliament and the Belgian ministry of foreign affairs have already recommended to the Council of Ministers to suspend the EU's Association Agreement with the beleaguered state. It provides Israel with favorable terms and privileged access to its largest trading partner. The country exported about $8 billion of goods to the EU in 2000.

An effective, though unofficial, arms embargo is already in place. Israel complained that Germany withheld shipment of spare parts for the Merkava tank. Other EU countries banned the export to Israel of all military gear that can be used against civilians.

Belgium denied rumors regarding a unilateral boycott of Israeli goods, including diamonds. It will act, it muttered ominously, only in tandem with all other EU members. Belgium exports circa $4 billion of rough diamonds annually to Israel's diamond industry.

The EU is unlikely to revoke the agreement - but it is likely to invoke its human rights provisions in bilateral "consultations" with the Jewish state. Despite its warm endorsement of deeper American involvement in the region, the EU is competing with the ubiquitous USA for clout - mainly of the economic sort - in the Middle East. A joint EU-US-Russian statement, issued in Madrid last week, was followed by Colin Powell's trip and a re-assertion of America's (reluctant) dominance. In a desperate effort to remain relevant, Germany has floated its own peace plan.

Next week's round in the Barcelona Process of co-operation between the EU and 12 countries of the Mediterranean Basin is likely to be an awkward affair. Israel is invited - as well as all its Arab adversaries, including the tattered Palestinian Authority. It is difficult to envision a free trade pact between all the participants by 2010 - the end goal of the Process.

But EU sanctions may be the least of Israel's concerns. Its economy seems to be imploding. Small business debts, worth some $5 billion (out of $15 billion outstanding), may have gone sour. Bank Hapoalim, Israel's largest, has lately undershot Bank of Israel's (the Central Bank) capital adequacy ratio of 9 percent - and misreported it. Small businesses constitute one fifth of the asset portfolio and two fifths of the operating profit of Bank Leumi - Israel's second largest bank. Last year, bad debt allowances in the banking sector almost doubled to $1 billion.

Israel's Minister of Finance, a lifelong political activist, wavers between levying a compulsory war "loan" and drastic cuts in budget spending. The Director General of the Ministry, Ohad Marani, is less ambiguous. Cuts in government spending would have to amount to about $2.1-2.5 billion to offset the gaping hole left by the fighting.

No one bothers to explain how could expenditures be so pervasively cut in mid-fiscal year. The Treasury talks about freezing "populist" laws which cost the budget about $200 million annually. But even if political hurdles to such an unpopular move are overcome - this is less than one-tenth of the cuts needed in order to constrain the deficit to 3 percent of Israel's fast contracting GDP.

In the year to January, Israel's industrial production dropped by 10 percent and its GDP by 3.5 percent. Last year's budget deficit reached 4.6 percent of GDP. The trade deficit will top $5 billion this year - compared to $3.7 billion last year.

More likely, taxes - including VAT - will have to continue to be raised after climbing steeply in 2001. In a speech to the Israeli Venture Association Conference in Tel-Aviv, on April 14, Marani gloomily warned of a "financial collapse" and an "economic crisis".

Dan Gillerman, the affable president of the Federation of Israel's Chambers of Commerce, warned against raising taxes: "Such a move would give a final blow to the economy's backbone, especially as the same population that pays taxes also does reserve duty, and is economically productive."

The government's chief economic advisor by law, the Governor of Bank of Israel, David Klein, is a much-respected economist and technocrat. Yet, he is on the verge of resigning. He bitterly complains of being isolated by Treasury officials. He was quoted in "The Jerusalem Post" as saying:

"There is a total lack of communication between the Finance Ministry and Bank of Israel. The Treasury has not included me in any discussions over the economic package. I am not a partner in debate on the deficit target or discussions over new taxes."

The Minister of Finance promises to present an economic plan to the Knesset in two weeks time. While he procrastinated, a survey of 575 businesses, conducted by the central bank, documented a sixth consecutive quarter of economic slowdown.

Domestic orders were sharply reduced - though exports held stable. Surprisingly both the hi-tech sector (including telecommunications) and traditional industries fared better than mid-tech manufacturing. Perhaps because they were battered senseless in the last two years and have nowhere to go but up.

For the first time since 1998, Israeli firms also expect higher inflation and accelerated currency depreciation. The New Israeli Shekel has depreciated by almost 15 percent in the last few months.

This - and a sharp reduction in inventories - are the two lonely sprouts in this economic wasteland. The devaluation has rendered many Israeli products competitive exactly when a global recovery has commenced. A massive inventory builddown will translate into a sharp upswing once the economy recovers.

Still, Dan and Bradstreet's index of purchasing managers plunged below the 50 percent line last month, indicating a contraction in the activities of manufacturers. Domestic demand shrank by 3.5 percent and exports have yet to pick up the slack. The employment component of the index stood at a dismal 45 percent.

Klein, the Governor of Bank of Israel, warned, though, that further depreciation might result in additional interest rate hikes, following a recent dizzying shift from easing to tightening. He has little choice. The March CPI figure may have been a low 0.5 percent (2.4 percent in the 12 months to March) - but future figures are likely to be higher than the 0.3-0.4 percent forecast by pundits and government alike.

Inflation was already catapulted by depreciation cum deficit spending to an annual 4 on a quarterly basis, up from 1.4 percent last year and an average of 2.7 percent in the last three years. Should the fighting escalate, Israel may well end up in the familiar 7-11 percent inflation range.

The IMF urges the Israeli authorities to tighten fiscal and ease monetary policy. Hitherto - the December 2001 economic package notwithstanding - they have done exactly the opposite. The IMF blames the shekel's precipitous depreciation on Bank of Israel's sudden departure from gradualist policies when it hastily shaved 2 percentage points off interest rates.

Small wonder that S&P revised Israel's outlook from "stable" to "negative". Only the country's $24 billion in foreign exchange reserves prevented the downgrading of its long-term foreign currency debts from the "A minus" rating they currently enjoy.

The desperation of Israeli businessmen can be gauged from an interview granted by Dov Nardimon, general manager of Israel W&S management consultancy to Israel's leading paper "Yedioth Aharonot". Nardimon pins his hopes on a recovery led by surging demand for old-fashioned military products, such as munitions and gas masks. This will revive the moribund metallurgic, chemical, and electrical industries in 2002-3, he predicted. Growing global security awareness will enhance Israeli defense exports.

Regrettably, he may well be right. Foreign direct investment in February amounted to about $300 million (compared to $200 million in January). The bulk of this amount went to defense-related hi-tech firms.

The American Department of Defense invested about $3 million in Atox - an Israeli R&D firm which is in the throes of developing molecules that suppress the activity of biological weapons.

But with all its woes, Israel is still the undisputed regional economic Gulliver. Its cumulative net capital inflow, in excess of $110 billion, outweighs its GDP. It has more foreign exchange reserves per capita than Japan. Its GDP per capita is a European $17,000. (In 1995, for example, it was $15,800, as compared to Britain’s $19,500, Italy’s $18,700, Ireland’s $15,400 and Spain’s $14,300… - TiM Ed.).

[TiM Ed.: Also check out the Israel section in "China The Real Cold War Winner". As you can see, we wondered what it was that made the tiny Israel attract 20 times more foreign capital per capita than Russia, the world's largest country? And at that, in the middle of a conflict with the Palestinians?].

The real victims of the Intifada are its instigators, the Palestinians. According to the World Bank, the Palestinian economy lost $2.4 billion by December 2001. Israeli economists add another $1 billion in triturated infrastructure and lost earnings since then.

The bulk of the damage is the result of Israeli closures - a manifestly inefficacious defensive measure against proliferating suicide bombers as well as a punitive reflex. Between 120-150,000 Palestinians used to work inside the "green line" separating Israel from the occupied territories - mainly as day laborers in construction workers, in tourism and in restaurants. Yet another 50,000 found employment illegally. Officially the number - and with it remittances - have now dropped to zero. In reality, about 50-70,000 Palestinians still cross the line daily.

The IMF estimates that Israel withholds about $400 million in revenues - mostly VAT and tax receipts - owed to the Authority. As a result, Palestinian tax collection dropped to one fifth its pre-Intifada level. The Authority owes half a billion dollars in arrears. Household savings are utterly depleted and PA GDP dropped 12 percent last year according to the World Bank.

The Palestinian Authority - whose Web site now re-directs to "Electronic Intifada", a counter-spin news page - puts the unemployment rate at 25 percent. The real figure is at least 40 percent. Half the population subsists on less than $2 a day - the official poverty line.

The United Nations Office of the Special Coordinator in the Occupied Territories mostly concurs with these findings.

Had it not been for $1 billion annually doled out by donors as diverse as the EU, USA, Iraq, and Saudi-Arabia - 120,000 civil servants would have joined the ranks of the pulverized private sector and the destitute unemployed.

Israel's trade with the PA - about $3 billion annually - has all but vanished. It was forced to open its gates to unwanted and unskilled African and Asian migrant labor to compensate for the disastrous deficiency in Palestinian semi-skilled labor.

This, perhaps, would be the most lasting lesson of this sorry episode: that the PA is economically dependent on Israel and that no complete separation is a feasible solution. The parties are doomed to swim together or sink together. At this stage, they both seem to prefer sinking.

Dr. Sam Vaknin is also the author of “Malignant Self Love - Narcissism Revisited,” and “After the Rain - How the West Lost the East.” He is a columnist for Central Europe Review, United Press International (UPI) and eBookWeb, and the editor of mental health and Central East Europe categories in The Open Directory. Until recently, he served as the Economic Advisor to the Government of Macedonia. You can check out Dr. Vaknin’s web site at: http://samvak.tripod.com .