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390 Barack H. Obama: The Unauthorized Biography

the more than 3,000 centrifuges it already has but could not manufacture more (“Iran ready to
discuss EU’s nuclear offer,” CNN, July 4, 2008)^214 In the midst of these negotiations, Iran launched
a number of medium and short range ballistic missiles. The neocons tried to beat the drum, but the
response of Secretary Gates of the Principals’ Committee was as low-key and placid as could be
imagined: ‘The United States is no closer to confrontation with Iran after Tehran test-fired missiles
it says could reach Israel and U.S. assets in the Middle East, Defense Secretary Robert Gates said
Wednesday. Asked if the United States was any closer to confrontation, Gates told reporters: “No, I
don’t think so.” Gates also said it was “highly unlikely” that Russian air defense missiles would be
in Iranian hands soon. An improved air defense system would make a strike on Iran more difficult.’
(Reuters: “Pentagon chief: US no closer to Iran confrontation,” July 9, 2008)^215 Gates also
mentioned the terrible consequences which any hostilities with Iran would have. The following day,
there were press reports that the US was allowing the Israelis to use Iraqi airspace to ready an attack
on Iran. These reports were quickly denied by the Pentagon. An Israeli attack could not be ruled
out, but there was no doubt that the US and the British were strongly opposed to the idea, which
would undercut Brzezinski’s entire plan of turning Iran against the Russians.


On July 11, 2008, it was reported that Treasury Secretary Paulson had convinced Bush that the
administration policy of hostility to Fanny Mae and Freddie Mac, the twin mortgage lenders whose
debts amounted to some $5.3 trillion, was risking a systemic crisis of the US banking system – a
financial Armageddon. Paulson reportedly told Bush that if he insisted on driving Freddie and
Fannie into liquidation, he would be Hooverized in very short order, long before he left office. At
this point, wheels were set into motion and the Federal Reserve that Freddie and Fannie might get
access to the discount window of the US central bank. This story is highly relevant here because it
shows the degree to which the members of the Principals Committee are now running the
government and telling Bush what to do on most the major issues. A few weeks later, Paulson also
forced Bush to drop his threat to veto a bill to bail out the giant mortgage lenders, a measure
stridently demanded by Wall Street. It is clear that Brzezinski and his fellow oligarchs intend to
maintain and consolidate the current preeminence of the Principals’ Committee under a possible
future Obama administration, and also if McCain becomes president, although that variant is much
less promising for their hopes of giving US imperialism a hyper-demagogic facelift.


NEOCONS DISPLACED BY TRILATERALS, 2006-2008


The erosion of neocon power had proceeded apace, starting around the time of the 2006 US
congressional elections. Around that time, British intelligence began signaling the urgent necessity
of shifting target towards Russia by staging two bombastic intelligence circuses in the form of the
Politkovskaya murder and the Litvinenko affair, both of which were immediately blamed on
Russian President Putin. The British also stepped up their subversion efforts inside the Russian
Federation under the cover of cultural exchanges conduited through the Foreign Office front
organization, the British Council. As a result of the new Democratic majority in the Congress, the
discredited neocon faction leader Rumsfeld was forced out and replaced by Robert Gates, a
Sovietologist who had served as the Russophobe Zbigniew Brzezinski’s office boy at the National
Security Council during 1977, 1978, and 1979. Gates had also been active in Brzezinski’s mujahedin
operations against the Soviets, operations which had been given birth to the CIA Arab Legion, Al
Qaeda. At the end of 2006, the report of the Iraq study group, also known as the Baker-Hamilton
commission, signaled a change in oligarchical policy and with it the beginning of the end of the
neocon dominance in Washington. The Iraq study group recommended that there be no US attack
on Iran, and that negotiations with Syria and Iran be begun immediately. James Baker, a former

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