September 4 -  Our World

Every year when the new semester begins, I feel a sense of excitement -- the halls are full again, people scurrying to classrooms, I'm meeting new students, getting reacquainted with old, signing people into class, and helping first year students learn what college is all about.  My whole life since I was five has seen September as the real start of the 'new year.'  There was only one exception: 2001. I was on sabbatical that fall, and so I missed this start of the year excitement (though, to be sure, September 2001 had its share of other excitement).  No matter how long I do this job, I always look forward to the new year beginning!

In case people stumble on this blog from my classes or just exploring faculty web pages, my goal is to provide commentary and reflection on our world.  The most common topics are foreign policy, international affairs, and sometimes 'meaning of life' issues.  This is my place to speculate, give my opinions, and have a record of my thoughts on the issues of the day 'in real time' -- while they happened.  The blog started the first time I co-taught the Children and War class, originally as a way of sharing class thoughts with those students.  If you read the 2004 early entries they were often shorter, more time passed between entries, and more focused on the topics of the class.  After that class was over, I kept the blog going, in large part so my children (now very young) will have a record of my thoughts on world issues and events (I have a private journal for thoughts on my family).  Keeping it public helped discipline me to keep writing, especially as I found that others were reading it.

Over time I settled on a format where I begin with a short title, and then write what is somewhat like a short article about a particular topic.  I don't do more than one entry a day, and usually only on week days.   There isn't a capacity here for people to comment (and if there were it would be moderated, given the often perverse style of commentary on political blogs), but I'll respond and perhaps post e-mails if someone has a reaction.

I'll begin today with a quick statement about how I see our world at the start of fall 2007.  It seems to me that we are at a pivotal point, confronting three crises.  The first is a crisis of sustainability.  We've built our political economy on a foundation of oil and manufacturing.  On numerous levels, this is in peril.  Oil supplies may be at peak production while demand soars, suggesting higher prices and perhaps global recession or worse.  The rise of China as a major manufacturer gives it new strengths, while the US current accounts deficit goes into dangerous territory and American debt (especially consumer) is at unsustainable levels.  This could all go south very quickly.  The second crisis is a crisis of politics.  Confronted with new dangers such as terrorism, and challenges from the developing world, the US has responded with primarily military means.  So far this seems to have done more harm than good, helping rather than hurting extremist groups, and weakening western solidarity and dividing the US.  Can we not think of a more creative way to deal with a world in transition?  Finally we have a crisis of meaning.  We in the West seem focused on life in terms of material gain or loss.   We brush aside spiritual and ethical concerns either by positing some kind of organized religion or pretending that science can answer all question.  There is a whole other side of life -- of existence -- our culture seems loathe to explore.  Why does life have value and meaning?  What is success, what is the 'good life?'

Most of my blog entries will connect to these crises in some way, though sometimes I go off on my own tangent.   So let the semester begin, and my "real" blogs will start again tomorrow.

September 6 - The End is Near for the Iraq "war"

Too optimistic?  Well, today a column by Charles Krauthammer came out, essentially acknowledging what I (and many others) have been saying for some time: a partition of Iraq is probably the only viable end game to end the current quagmire that will minimize the risk of a bloodbath.  I've made that argument in this blog a number of times, but to find myself on pretty much the same page as Krauthammer suggests to me that the "clarity on Iraq" I talked about a few months ago is even more pronounced than before.  If an anti-interventionist critic of American foreign policy and a pro-interventionist neo-conservative hawk start to make the same kind of prognosis, then there is a good chance we're on the right path.  To be sure, I was making the argument a lot earlier, and people like Joe Biden recognized this long before I came to that conclusion, but I'm sensing that we may finally be seeing a way out of this foreign policy fiasco.

Krauthammer argues: "Nonetheless, we need some central government. The Iraqi state may be a shell, but it is a necessary one because de jure partition into separate states would invite military intervention by the neighbors -- Turkey, Iran, Saudi Arabia and Syria."

Here, I'm a bit skeptical.  Will the existence of what he admits will be a very weak central government, whose reach would probably only extend to Baghdad, really be enough on its own to keep out the militaries of other states?  Probably not; we can expect the Saudis and the Iranians to be active in helping their "side," but that need not turn into violent conflict; indeed, Saudi-Iranian diplomacy would likely lead both sides to see it's not in their interest to have this turn into a major conflict.

Krauthammer knows that the question now is how to make it happen, and he correctly notes that as messy as it might be, having the partition being done "on the ground" is far more likely to last than if it was done "top down," especially under the leadership of the United States or other outside powers.  He also tries to salvage the whole operation, claiming that a divided Iraq, while no where close to the dream they had of some kind of democratic Iraqi Republic, is still better than Saddam's brutal dictatorship.  He assumes, I believe, that given the nature of Saddam's Iran -- a tiny Sunni fraction controlling Iranian oil wealth and subjugating the majority Shi'ite -- some kind of major violent process was inevitable.  We were the spark that ignited it, and while we were wrong to think we'd be able to control and manage it, it was still the right thing to do.  I think that could be a dangerous position to take.

First, we don't know what partition will mean, so it's by definition too early to make comparisons.  If this leads to a regional Sunni-Shi'ite war, then clearly leaving Saddam in power until he either was deposed by a coup or died a natural death might ultimately have been better for the region.  He was de-fanged by 2003, and by that time pretty much a petty tyrant.  We also don't know that the assumption that a violent clash was inevitable with or without American intervention is valid.  If not, then perhaps Iraqis would have been better off under Saddam awhile longer rather than experience the chaos and destruction of the last four years.  Finally, we need to be very clear about all the violence, risks, and instability our invasion caused.  This was an invasion of a country that had already been defeated, weakened by sanctions, and under constant surveillance due to the no fly zone regime.   If we start assuming that, despite being outsiders with different cultural and political norms, we can make the call that it's OK to attack and disrupt societies because if they are ruled oppressively by claiming that the outcome will ultimately be "better,'

I suspect that Krauthammer senses a looming "Iraq syndrome" in which Americans will be increasingly skeptical of foreign intervention, adapting policy stances diametrically opposed to the neo-conservative perspective.  He hopes he can paint any conclusion of the episode not involving a bloodbath as "better" than keeping Saddam in power in order to minimize the post-Iraq shift in policy.  I doubt he'll be able to do it.  But that debate will come, and we'll have plenty of time for it.  For now, it seems like we're moving towards a partition, and perhaps one which can be done in a way to allow American forces to leave (perhaps leaving some for peaceful duty in Kurdistan) and Iraq to avoid chaos.  The problems of corruption and repression, however, will even in the best case scenario be harder to deal with.

September 10 - Spinoza, quantum mechanics, and free will

Baruch Spinoza had a philosophy that was very complicated and in some ways odd.  He rejected the dualism of people like Decartes, in favor of a philosophical monism.  That meant that all was made up of the same stuff, indeed, it comes forth as a rather pantheistic view where all is connected and all is determined.   This determinism means that nothing is truly under our own control, there is no free will, and the secret of life is not to let external circumstances -- things that go wrong, actions by other people, anger over some injustice -- to cause us pain or emotional distress.  We can never master that, but at least the knowledge that what happens is what must might make it easier.

With quantum mechanics and the idea of probability rather than determinism, Spinoza's approach could be radically altered.  Every possibility is determined -- all that can exist, does at some level -- but our own experience is but just one possible actualization of the myriad of probabilities.  This opens the door to free will; we can't chart a path not already determined possible, but we can choose from within the realm of possibilities, at least to some extent.  So how much free will do we have?  Do we have any control, or are we just riding the storm out?

Spinoza noted how much stress and anxiety people can create for themselves by worrying over something they can’t control, or obsessing over some event, detail, or action. Life is a balance. Psychologists might talk about chemicals and neural processes, a poet might talk about the balance between thought and faith. But as creatures evolved for life in a jungle or steppe, people strive to maintain that balance in a strange world of urban pressures, expectations, and questions of self-worth. It seems to me that the key to maintaining that balance is to, following a mix of Spinoza and quantum mechanics, decide that we can control only two things.  And, if we keep these things relatively under control, then we can have faith that somehow the rest of life will take care of itself.

The first thing we control is how we react to and interpret a situation. This control is, however, hard to obtain. Usually we react without thinking, and interpret reality based on scripts from past situations and conditions. One can go through life that way, never really taking control over the process of how we confront reality. Of course, a psychologist would say that real control is an illusion – cognitive biases haunt us all, and our cognitive maps cannot go beyond what we’ve experienced. Fair enough. But within that set of constraints we can be reflective and calm when something happens, we can learn not to have a knee jerk reaction, not to assume the worst or let our mind go wandering into the morass of what might happen (or worse, what should have been done differently by ourselves or others). Letting go of guilt from the past is necessary to obtain that control. We shouldn’t let ourselves feel guilty about things in the past – no matter how serious or bad they were, they’re over, we’re here now. And the key to being able to do that is forgiveness. If you can’t forgive others, you can’t forgive yourself. So it’s necessary to be a truly forgiving person, to let go of guilt, and then to learn calm and reflection when confronting situations – even for something that requires immediate action calmness is better then panic, it keeps one clear headed. Then we have to think about the situation, question various possibilities and interpretations, and be willing to see the situation from other perspectives, understand other peoples’ points of view, and reflect on it in an almost detached manner. A lot of work, but with practice it can be done, and then while one can’t shed ones experiences and unnoticed biases completely, we can have much more control over how we interpret and react to situations.

The second thing we control is the choices we make. Again, this control is usually sacrificed – often we make choices by rote response.  One key is to take responsibility for our choices, and not the consequences. The consequences, if bad, are to learn from the next time we make a choice, but the choice itself is what we made.  If we take responsibility for the consequences, then we’re adding into the mix choices of others, things outside our control, how others reacted, etc.  That causes us to carry a burden far heavier than it should be.  Those factors that yield consequences not things we’re responsible for, though we can learn how certain choices seem to affect others or ourselves.

Once we make a choice, we need to own it. Even if we are convinced it was a bad choice, it was the choice at the time. My choice, my responsibility, I can’t undo it, I won’t regret it (and definitely not feel guilt), but I will learn from it. If one does encounter guilt (say, you lied to your spouse and feel horrible about it), that’s a present condition that you’re encountering, and thus can be dealt with by a choice (to tell the truth or not) and by taking responsibility for past choices made.

I've never really liked the determinism in Spinoza's philosophical monism, but he was writing in an era which would also give us Newton and the clockwork universe.   And, there is something compelling to his almost Buddha like approach to life (the Buddha said that life was suffering, and suffering was caused by attachments).  I think, though, such determinism can be questioned not just philosophically, but scientifically through quantum mechanics.  I admit, I'm not a philosopher or a physicist, my speculation here is playful and harmless.  But somehow, I think it works, at least for me.

September 11 - Plus ca change, plus c'est la meme chose

In 1789 a revolution in France swept the monarchy of Louis XVI, and the new leaders were determined to break sharply from the past.  The old monarchy was authoritarian, corrupt, let the people starve while they lived in opulence, and had become bankrupt.  In my Comparative Politics course I used this example today to compare views on politics from various thinkers -- realists such as Hobbes and Machiavelli, Liberals such as Locke, Mill and Smith, and finally conservatives like Edmund Burke.  The idea is to get students to think about different ways to view human nature and the role of politics so we can understand different perspectives on governance.

So I described Burke's 1790 argument that the French revolution was doomed to failure because: a) reason does not give us any answers to what is best -- issues of 'best' or 'right' governance are value based and rely on assumptions and beliefs that can't be obtained through reason; and b) social stability is based on shared cultural norms and customs, with effective governance coming when the system of government is complimentary to and connected with those customs, traditions and norms.  Sure enough, in France people couldn't agree on where "reason" would lead, and soon battles were fought against different groups claiming to have the right answer.  Moreover, while the revolutionaries were anti-clerical and even threw dirt into the Notre Dame cathedral to signify their opposition to superstition and church power, most citizens were not ready to have their religious and spiritual beliefs yanked away from them in the name of reason and revolution.  In the resulting chaos people yearned for someone to restore their traditional values and bring stability.  They found that person in Napoleon Bonaparte, who then went on to conquer Europe before he was finally defeated.

One student quickly noted that what I was describing for France at the end of the 18th century was similar to the situation in Iraq.  We overthrew an unjust authoritarian regime, and then thought that it would be best to give them a government which, according to our use of reason, seems like it would be not only superior, but accepted: a liberal democracy.  Iraqis would enjoy their freedoms, gain prosperity with the end of tyranny, and become a model for the rest of the region.  Just like those French revolutionaries in 1789, there was faith that human rationality would triumph, and that this would mean adoption of and in fact strong support for a democracy closely allied with the US.

Burke certainly would have seen what was coming.  Iraq's political culture had been shaped by misrule by the Ottomans, followed by a century of violence and chaos.  Sectarian differences between Shi'ite, Sunni Arab and Sunni Kurds were intense and historical.  Oil and a culture of corruption built around oil exists throughout the region.  The fundamental building blocks upon which a stable democracy is constructed: tolerance of dissent, rule of law, acceptance of peaceful competition, willingness to transfer power -- were all lacking.  With the insights of a conservative philosopher from 217 years in the past we could have expected and perhaps avoided the current debacle in Iraq.  Even our democracy took over a century to overcome cultural residues of slavery, women as second class citizens with no voting rights, and institutionalized racism even after slavery ended.  The idea other countries can just jump to where we are regardless of their culture and history seems on its face absurd.  Yet that kind of error is easy to fall trap to, especially if one doesn't understand history and its lessons.

There is a sense that Americans still think that since our democratic norms and institutions work so well for us, it's self-evident that it would be good for others to adopt them.  I personally am a strong proponent of democracy and individual liberties.  Yet Burke has a lesson we need to take seriously: things change at their own pace, and if reason and good intentions race ahead of cultural norms, things can get worse rather than better.  That at the very least should make us humble about trying to somehow 'change the world,' especially with force.  And it reinforces why its important for citizens to understand history, philosophy, and become well educated.  

September 12 - The General and the Ambassador

Yesterday I got a chance to listen to a large share of the testimonies of Ambassador Crocker and General Petraeus to the Senate Foreign Relations Committee (I didn't get a chance to listen to their testimony to the Armed Services Committee).  It was very interesting, and again seems to point to a growing consensus about Iraq.

First, they did not defend the decision to invade Iraq, and did not counter attacks by especially Democratic Senators on that decision (the Democrats were careful to note that their criticisms were directed at President Bush, and not the two testifying.  They clearly had one message: whatever the wisdom of the original policy, given where we are now, this is what we think best for moving forward.  That still doesn't satisfy most of us who think the war has been a disaster, but it conveys a sense of realism about the situation that allows me to trust that the people on the ground, especially Petraeus and Crocker, understand the situation and aren't driven by the fantasies of spreading democracy or using American power to shape the region.

Second, they gave pretty good information, from what I could tell, and were up front that Iraqi stability depends upon Iraqis themselves doing what is necessary to bring about political reconciliation.  If the Iraqis don't come through, then the mission can't succeed and, presumably, the US will leave.  They did posit tactical successes of the surge policy, though they didn't overstate these and acknowledged that improvements in some regions like Anbar province were internal Sunni issues, with Sunni tribes getting tired of atrocities by al qaeda.  Obviously, it's not like they've embraced us as true allies.  They also gave some clear measures to look for in terms of success -- militias have to be weakened, ethnic cleansing has to stop and in fact people have to start coming back (Baghdad was 65% Sunni before the war, it's now 75% Shi'ite due to sectarian violence).  These are things that have to start happening soon; they made it clear that they believed that the "surge" had created enough stability for political change to now take place. 

Those questioning the two made clear the fact that the public needs to realize that we wouldn't be facing these difficult choices if not for the disastrous choice of invading Iraq.   Success has been defined down so far that simply avoiding catastrophe is now seen as progress.  Clearly the situation we face today wasn't worth what will almost certainly be over $1 trillion spent, thousands of American lives, tens, maybe hundreds of thousands of Iraqi lives, a divided country at home, an overstretched military, a strengthened al qaeda using Iraq as a recruiting tool, and frayed alliances.  Crocker and Petraeus didn't really question or counter those claims; they kept the focus on the current policy (even though some Republicans seemed to want them to be more vigorous in defense of the war as a whole).  Also, the questions and answers essentially set up a very interesting situation next year, just as the election cycle heats up.  While the Ambassador and the General could reasonably claim that it's too early to judge the political progress, they also made clear that the progress has to develop.  If by April there isn't much progress on that front, the surge will likely be seen as a failure. 

Chances are that there will be ambiguous claims of progress by April, and as the surge ends there will be a heated debate about what to do.  President Bush might undercut the debate by announcing major troop reductions and an attention to pull out completely within a  few years (or, perhaps, embrace partition and keep some forces in more peaceful Kurdistan).  In that case the Republican nominee will be relieved to be able to embrace a pullout from Iraq and avoid that being a centerpiece of the campaign.  Otherwise, it could be a very interesting election year.

Bottom line: I think the testimony yesterday to the Senate was useful, interesting, and for the most part straight forward and honest.  It avoided the kind of claims of success of the past which severely damaged the Bush administration when those claims didn't bear out.  That said, while it's good to hear some straight talk about current tactics and policy, the larger issue of whether this strategy is worth it and how exactly we'll be able to move towards a more effective policy in the Mideast went untouched.  Those larger issues are the more important ones, and so far it's not clear that the Bush Administration has much vision, or the ability/desire to dramatically alter course.  Nonetheless, the Ambassador and the General offered good, insightful testimony..   

September 13 - Power and Politics

Plato argued that the people who want political power are precisely those who should not be given it.  A desire for power over others is usually a sign that someone wants to exploit others or benefit oneself, clan or family.   Yet, as we near another election cycle, it's clear that if you don't have a yearning desire for power, you can't make it in politics.

Now, to be sure, I don't want to paint all candidates for all offices with too broad a brush.  Many people are driven by ideals and values to be politically active.  Gandhi and Hitler were both politicians, but clearly they were driven by different political and psychological motives.  The problem we have is to determine in advance what kind of leader someone will be, or to even recognize bad leadership as it's happening.  Hitler's propaganda and apparent success at peaceful diplomacy and economic recovery generated massive support from Germans who as late as 1939 clearly did not want a war. 

An open democracy with a strong media can help, but if those in power don't like what the media is saying, they can do all they can to ridicule and belittle media sources, creating distrust for the media.  And, of course, in today's media world corporate control over the media means they want profits first, and that drives how they report the news, and how willing or unwilling they are to report unpleasant truths.  Blogs and internet sources may provide more unfiltered information and ideas, but that lack of a filter creates its own problem.   How do you know what you read is accurate or even serious?

And in this, size matters.  Most of us know we can become very informed and effective in state and especially local politics.   Unfortunately the federal government has sucked resources and powers away from states and localities, meaning that more and more is decided in venues where our influence is limited.   With politicians and parties now scripted, our power is not through political action but in the answers we give pollsters, or participation in a focus group sponsored by a political party or candidate.  Even then the emphasis is less on what political action is best and more on how to market candidates and parties.

Power in the hands of those who want power usually means an expansion of power.  Hence the power of the federal government expands, America develops an extremely large military (half the world's military budget) and injects itself around the world to try to shape results and 'defend' our interests.  Yet "defense" becomes "offense," and the exercise of power, whether intrusive into people's everyday lives or intrusive into the lives of people in other states, becomes defined as necessary for the good of the country.  The people are less part of a deliberative process then the subject of a marketing campaign.   Driven by necessity opposition groups mimic this process, and soon it's not so much a question of "how should this country be governed," but one more akin to "should I have Coke or Pepsi?"

I don't see any solution to this except to devolve power away from the central government towards state and local government.   Republicans talk about 'federalism' and 'states' rights,' but in practice they centralize power just as quickly as the Democrats.   Democrats, citing the civil rights movement and the abortion debate tend to distrust 'states' rights,' and argue that the federal government is needed to protect individuals.  The trouble is, just because the federal government may have been necessary to fight 1960s racism doesn't mean all centralization is good.  To be sure, smaller doesn't necessarily mean less corrupt, look at Mayor Daley's Chicago or Louisiana's political history.  Still, smaller polities are usually less dangerous than larger ones.

So I come to the conclusion that we have a flawed democracy.   I'm not overly optimistic our system can handle the challenges coming ahead and retain our commitment to individual liberty.  But there is some good news: we were more flawed in the past.  We had slavery, women couldn't vote, racism was institutionalized, and Hoover's FBI was horribly intrusive.  We've overcome problems in the past.  We've never had such a powerful government before, and I believe that the task of the internet generation will be to turn this centralization process around.  Perhaps technology will give us the tools to do so.   There is no solution to the problem of power and politics; Aristotle persuasively argued that Plato's philosopher-king would at some point become a tyrant.  But keeping the use power as accountable and transparent as possible can help, and centralization of power works against that.

September 14 - Meanwhile, behind the scenes

As Americans worry about the war in Iraq and other hot button issues, the world economic situation gets murkier and more troubling.  And, since most people don't really have much understanding of economics, this gets ignored.  Yet what's happening in world credit and currency markets may have a more profound impact on our lives than anything going on in Iraq or the Mideast (though, to be sure, all of this is interconnected).

Take, for example, the credit problems caused by the sub-prime housing credit crisis.  On its face it seems to be no big deal -- OK, some people took loans they can't pay back so they'll default and lose their property.  Well, that's a risk you take when you buy something you really can't afford, and speculate that it will go up enough in value that you'll make out OK.  But the impact of this has been a crisis throughout global credit markets, and Treasury Secretary Hank Paulson says that this will take longer to resolve than either the Russian default, Asian crisis and Latin American credit crisis.  In other words, this is a global issue as well as a domestic one.

I've already written about the domestic impact: our economy has been kept going by consumer spending, which has been continuing due to the every increasing value of housing.   People have taken out home equity loans to the point that there is less potential liquidity in people's homes (people owe closer to the value of their home) than ever before.  Thus the halt in housing value increases means consumer spending is likely to dip.  Add that to a recent jobs report that shows a decrease in job growth, and things look bad for the near future.  But this housing crunch has also had a profound impact on banks throughout the world, including crises in German banks.   These markets are global, rather than local, and the 'crisis of confidence' in credit markets will impact the world economy.  If credit is harder to get, then that stymies growth more, adding to the problems.

Of course, the short term response is to cut interest rates.  Make money cheaper, so that more people can qualify and the interest rates are lower.  But that has its own problems.  First is the worry about inflation.  I think that's not really a threat now, but any time interest rates are cut for a reason other than to respond to macroeconomic trends that's a concern.  Second, there has already been a direct impact on the dollar, which has hit all time lows against the Euro.  Cuts in interest rates devalue the dollar, which is weaker than at any point since the Bretton Woods system of economic institutions was created after World War II.

Meanwhile oil rises to $80 a barrel (the weak dollar does help inflate the price a bit), while OPEC announces a rather meager production increase of 500,000 barrels per day, starting in November.  This suggests OPEC thinks that any economic slow down caused by high oil prices will not be severe enough to bring down demand significantly, or perhaps production capacity isn't as high as people believe.  If analysts like Matthew Simmons are correct, most OPEC states may be producing at capacity, and even the Saudis may have difficulty sustaining any production increase.  If that's true, then oil prices will only continue to rise until a point where the world economy is so slowed that demand corresponds to diminishing supplies.  That sounds bland, but the real world implications could be severe.

So while people debate about terrorism and Iraq, a more severe danger may be on the horizon, and it's one we can't defeat with military power.  If the 21st century marks the end of the fossil fuel era with a major economic readjustment, we may find ourselves wishing we were only worried about terrorism or wars on foreign lands.

September 17 - Seductive illusions

Watching the political debate about the Iraq war makes me think that we are likely not to learn the proper lessons from this conflict.  War hawks have been shifting the goal posts and defining success down, hoping to, in the end, get an outcome that they can say "still is better than Saddam," and thus justify the whole mess.  War opponents charge the administration with lying, and paint a picture of a corrupt set of officials wanting to pad the profits of Haliburton and various oil companies, ruthlessly expanding American imperial power.   Believing that the country has been hijacked by lying corrupt corporate insiders, they call for impeachment and protest.  I'm not cynical enough to believe that explanation either.  The two sides are talking past each other and both missing the point.

For over twenty years the US has had a dilemma, one made starkly clear when the Shah of Iran was overthrown in 1979 and oil producing states took over full control of production.  The world runs on oil, western economies are dependent upon oil, and if oil supplies were disrupted or the price increased dramatically it could cause recession or worse.  In a worst case scenario, political instability could spread even within the West.  However, the governments of most oil producing states, especially those in the Mideast, are repressive and backwards.   Saudi Arabia, the country with the most reserves, has an anachronistic regime unlikely to last.  We rely on these regimes however, and we prop them up.  By propping them up, we set ourselves up for disaster.  The Shah of Iran was our best friend in the region and we gave him massive amounts of military aid.  When he fell, those who replaced him had contempt and disdain for the US, and our best friend of 28 years ago remains today one of our most dangerous foes.

The attack on September 11, 2001 added to the urgency; not only was our policy of supporting corrupt authoritarian oil producing states unsustainable in the long run, but it also helped fuel anger and terrorism.  In an era of globalization, organizations like al qaeda can only be expected to increase their capacity to act and wreck havoc with the western economy, perhaps spurring revolutionary change in the Mideast.  And, given our intense support for current regimes, revolutionary change would probably be anti-American in nature, and threaten the very core of the western economy.   It's hard to overstate the danger that could cause.

So what if we can be the ones to spur revolutionary change, and use our power to guide that change?   Maybe that's one way to get out of the conundrum.  The idea is extremely seductive, and Iraq looked like a vehicle to bring about the change.  Iraq was weakened by years of surveillance, no fly zones, economic sanctions, and a weapons inspection regime that destroyed much of its military infrastructure.  Saddam no longer controlled the Kurdish north, and if the majority Shi'ite population was unleashed, that group -- 65% of the Iraqi population -- would be thankful to the US and quickly get rid of the control exercised by Saddam and the Sunni Arab minority (20% of the population).  If the US removed Saddam, showered Iraq with reconstruction money, and helped them develop a system that recognized their individual rights and ruled without repression, why wouldn't the Iraqis be overjoyed?  And if the US could prove how democracy could transform a state effectively, that would offer another model of change, an alternative to repression on the one hand or religious extremism on the other.  We would be using military force, but it would be to not only assure that oil flows are stable, but to help the people of the region achieve rights and autonomy.  Acting in self-interest would help others and show the power of democracy and markets!

One can see how seductive such an illusion could be.  It would solve our decades long dilemma about the future of oil, undercut terrorism by bringing about a change that would give people hope, and reassert the superiority of our system of government.   All we had to do was have the will to topple Saddam.   To that end the war simply had to be "sold."  Whether it was about WMD or terrorism or Saddam's threat, the idea was if you could get the chance to do it, no one would question it later once its successes were made clear.   So yeah, they may have lied, manipulated information or at the very least been selective in their approach.  But they believed that it was worth it to spread democracy and transform the region.

Alas, reality runs on its own terms, and the culture and history of a state is more important than our theories of what the Iraqi people should want or welcome.  Ethnic division, corruption, a legacy of violent authoritarianism and anger over past conflicts is hard to overcome, and the US completely miscalculated the impact of an invasion.  That's the lesson we need to learn: the limits of using military power to bring out desired political outcomes.   We have to learn not to fall victim to illusions, especially seductive ones, when dealing with issues involving violence and destruction of the sort war entails.  The road to hell, they say, is paved with good intentions.   The vehicle for traveling that road often comes in the form of a seductive illusion.

September 18  - Iran again...

For over a year now we've heard the case being made that war with Iran is coming before President Bush leaves office.  If you believe the reporting of Seymour Hersh, the President has already decided that he can't leave the next President the problem of an Iran with nuclear weapons.   Ten years ago we were also on the verge of war with Iran.

Though this isn't talked about much, President Clinton was preparing for a war in Iran too, responding to aggressive Iranian intelligence activity in the 1990s, Iranian support of terrorist attacks which killed Americans, and even a death threat to Anthony Lake, Clinton's national security advisor.  The war never happened.  They realized Iran could respond in ways that could create real pain for the US, and that short of invading and deposing the regime, any military action would probably create more problems than it would solve.  Still, Clinton was ready to go to war, if the military outlook had not been so bleak.  Instead they choose covert pressure which was somewhat effective.  (Ronald Reagan, by contrast, thought Iran was a potential friend up to the end, even after the Iran-Contra scandal came out).

What has changed?   First, Iran is actively supporting militias in Iraq, undercutting American efforts to achieve stability.  The dirty secret that the President doesn't want to admit to is that Iran is so entrenched in Shi'ite strongholds and political movements that many believe it is almost certain that Iraq will emerge as an ally to Iran once the US leaves, even if Iraq achieves stability.  We will have then fought a war to strengthen Iran, a tragically ironic twist of fate.  Second is that Iran is pursuing nuclear technology in order to develop nuclear weapons.  While publicly the administration claims this means they may attack Israel, that isn't the real concern.  Everyone knows that Israel has the capacity for massive retaliation, and the Iranian government isn't suicidal.  Rather, the fear is that this will shift the balance of power in the region towards Iran, who as a middle power with ties to China and Russia could exercise increasing influence in the region.  This would pressure pro-American Arab states, and could risk a regional civil war.  Moreover, while Iran won't hit Israel with nuclear weapons, Iran would have a deterrent capacity against Israel, meaning that it could more aggressively use groups like Hezbollah to create havoc and threaten the Israeli state.

The first point is undeniable, but is it worth the risks of war?  In essence the Sunni insurgent who said that Iran and the US are fighting a proxy war in Iraq is right, we're both in Iraq trying to shape the outcome.   The US is in full force and visible, Iran is acting in a covert, shadowy way, but we're playing the same kind of game, albeit with different goals.  Iranian involvement doesn't per se justify war.  So what about the nuclear threat, and the threat of a stronger Iran with an Iraqi ally?  Neither outcome is inherently destabilizing.  First, Iraq after America leaves will still be predominately Arab, and it's not at all clear that Iran will be able to treat it as some kind of loyal ally.  Moreover, despite ties between Iran and Hezbollah, Hezbollah has also shown signs of independence and fought against efforts by Syria and Iran to control or "use" them.  Syria and Iran have an alliance of convenience, but that could change as well.  In short, there are numerous ways to deal with a geopolitically stronger Iran short of actual war.

The other side of the equation is equally murky.  The current thinking seems not to be an effort at regime change but rather to launch assaults over the Iranian border in response to Iran's support of Shi'ite militias in Iraq.  The thinking is that Iran would do something to retaliate, and we'd use that as an excuse to escalate.   But that could be disinformation, designed to thwart Iranian retaliation to cross border attacks in advance, essentially telling them 'we can use this as an excuse to really hit you hard so don't you dare hit back.'  It could also be a general scare tactic meant to pressure the Iranians into changing their policies.   But if it comes to it, escalation in this scenario means massive bombardment of the entire Iranian infrastructure, meant to cripple the regime and cause the people to rise up and overthrow the theocracy.    The best way to describe that strategy is to note that it is based on what the topic of yesterday's blog was: a seductive illusion.  The notion that if we bomb, destroy and kill the anger of the populus will be on its own leaders has been disproven many times, most recently in Iraq and Kosovo.   If the bombing was less effective than theorized and the regime more resilient than the Administration hopes, the response could be an unleashing of terror across the region, and an assault on oil flows coming from the Persian gulf.  There could be unrestrained activity in Iraq as well, and the region could spiral into a regional war as oil prices skyrocket.  The result would devastate the western economy, decrease stability in the Mideast, and probably embolden and enable Islamic extremist groups working throughout the region.

Countries that launch wars rarely come out ahead.  If the US chooses to start a war with Iran, it will be a path full of risk, based in part on another seductive illusion about what military power can achieve, a war of choice rather than necessity.  As inconvenient and potentially dangerous as a stronger, nuclear Iran might be, it's not a situation that we can't handle without war.  Nuclear deterrence still works, Iran is a regional power, not a super power, and it has its own internal problems.  There is a regional balance of power, including China and Russia.  So attacking Iran would be unnecessarily risky.  It might work, it might cause another quagmire, or it might cause absolute disaster for the US and the region.  It's not worth the risk, or the lives that would be lost or disrupted by bombing either directly or through the loss of an infrastructure the Iranian people depend upon.  The only groups unequivocally helped by such a war would be Sunni extremists like Bin Laden.  I don't think he deserves our help.

September 20 - Cambodia

Every semester my World Politics class starts with an intense look at the Cambodian genocide of 1975-79, designed to get students to think about the humanity behind the statistics, confront the dangers of ideological extremism, contemplate the causes, and think about what the world should do in such a case.  We end the course looking at the Rwandan genocide, albeit in a slightly different light.  By the end of the course they will have had a semester of learning about international relations, and thus will bring that knowledge to bear to analyze what happened and what was done or not done in Rwanda, for Cambodia it's a first glimpse, so students simply react and reflect.

The case is even more poignant now because President Bush has made direct reference to Cambodia in defending his desire to stay in Iraq.  In a weird twist of fate the President has gone from saying that Iraq is nothing like Vietnam, and that those who make the analogy are simply wrong, to using an analogy to the Vietnam war to justify continuing in Iraq.  By leaving Vietnam, the President argued, we assured not only atrocities by the North Vietnamese after the war against the south, but the rise of the Khmer Rouge in Cambodia.   We then were not in a position to stop it.  He argues that leaving Iraq would cause similar kinds of devastating atrocities.

The argument he makes is both deceptive and misleading.  The atrocities in Vietnam after the war and the rise of the Khmer Rouge in Cambodia were caused by our presence in Vietnam, not our exit.  The bombing and invasion of Cambodia aided Khmer Rouge recruitment and increased their support from people who didn't care about the ideology but agreed with their hatred of America and its support for the Lon Nol government.  By helping South Vietnam engage in years of conflict against the North, we aroused the anger and passion that led to recriminations against many in the South when the war was over.  Our soldiers fought and died not to stop communism or protect America, but to create conditions whereby such atrocities were made likely.  In essence, Kennedy, Johnson and Nixon engaged in policies that abused members of the American military and disrupted a region of the planet in a way that created chaos when we left.  I do not see anyway that staying longer would have helped (the war had drug on already for nearly a decade), and it might have even spread the chaos. 

In Iraq, of course, the situation is different.  The idea that mass atrocities are a certainty if we leave sooner rather than later is a dubious assumption.  It's possible, and we should leave in a way to try to limit that possibility, but there are many reasons to expect that the level of sectarian violence will remain limited, and certainly not lead to something akin to the Cambodian genocide.   There are regional actors with a strong desire for stability in Iraq, and the Sunni-Shi'ite relationship in general has not been one of intense conflict.  It has little in common with Rwanda's Tutsi-Hutu division, and even less in common with the communist utopianism of Pol Pot, who used ideology to rationalize mass murder.  So the argument that we must stay to avoid mass atrocities is very weak and extremely alarmist.  It assumes we can "fix" the problem with means that so far have only exacerbated the problem.

A misleading part of the argument is the assumption that in cases of genocide the US can and should take on the role of being the world cop.  While many on all sides of the political spectrum decry the lack of involvement in places like Rwanda, it seems to me only common sense that no public and no state will want to put its peoples' lives on the line to solve a bitter and violent dispute by people on the other side of the world, fought in a way that has no impact on our lives here.  In a world of sovereign states, you won't find individual states taking the lead to stop genocides or atrocities, whether in North Korea, Darfur, Rwanda, Bosnia, Cambodia or elsewhere.

That does not mean nothing should be done.  Instead, the only way we'll ever see the world acting to stop such things is if the international community comes together, legitimizes action, shares burdens, and creates a sense that this is a necessary humanitarian intervention.  Only then can publics be convinced that such action is worth risking the lives of their young people, only in such a circumstance will international humanitarianism trump national interest.  If the President is really concerned about humanitarian issues in Iraq, the goal should be a strong push for the United Nations to take over the mission, with strong US, Russian and Chinese support.  That won't happen, because the US doesn't want Russia and China involved; the oil stakes are too high and the government distrusts of the motives of those other states.  China and Russia won't get involved on American terms, they would demand part of the decision making. 

The comparison of Iraq to Vietnam as a rationale to stay in Iraq fails.  On its own terms, the fear of chaos spreading in Iraq is enough to justify us being careful how we leave, and perhaps leaving more slowly than would otherwise be the case.  But ultimately it is not up to us to guarantee Iraq's security and future -- and the attempt to do so may make things worse rather than better.

September 21 - Clear Thinking on Terrorism

I've noted in the past that compared to Cold War's threat of nuclear destruction, the threat posed by terrorism is mild.  Indeed, it is irrational to fear terrorism, given the low probability that one will be a victim of a terrorist attack.  You're far more likely to have a car accident or health problem.  Yet terrorism is presented as this menace to American society, a rationale for warfare and aggression.  Some people go so far as to say we shouldn't leave Iraq because that might "embolden" terrorists.  Such a shallow and silly rationale demonstrates that people often don't stop to think through a situation.

One man with immense experience and who would probably make a solid President demonstrates clear thinking on the threat terrorism poses.  Former Secretary of State Colin Powell said recently:

"What is the greatest threat facing us now?  People will say it's terrorism. But are there any terrorists in the world who can change the American way of life or our political system? No. Can they knock down a building? Yes. Can they kill somebody? Yes. But can they change us? No. Only we can change ourselves. So what is the great threat we are facing?"

Terrorism seeks to alter the behavior of states by creating panic and uncertainty.  After 9-11 the government went into overdrive imagining every possible scenario in which a terror organization could find a weakness in our security, fearing that terror organizations would find them first.  Government power was expanded, we launched an offensive war against Iraq, and the rhetoric of fear was effectively used to keep the public in line and supportive. 

At one level, one could argue that the attacks of 9-11 were extremely effective.  The US is now divided by the war, the cost of Iraq is likely to be in the trillions, oil prices have skyrocketed, America's alliances have been frayed, and we're stuck in a quagmire that hurts our image, helps terrorists recruit, and costs American as well as Iraqi lives.  Nothing anyone could have done to us in 2001 could match the  damage we've done to ourselves through these policies.   We have hurt ourselves far more than al qaeda or any other state could.

But at another level, our system's strength shines through.  The rhetoric of fear and uncertainty gave way to critical reflection.   By embracing debate and valuing opposition, we assure that critical voices are heard.  Most Americans now are skeptical of the actions in Iraq and much of what's been done in the 'war on terror.'  We were thrown off balance, but seem to be regaining common sense.  The fear mongers who want to "bomb Mecca" or wax poetic about some 'World War III' or 'long war' are increasingly on the margins.  People have regained their balance, and recognize that it's a complex and dangerous world, but we need not give into fear and paranoia.

There is a lesson here.  Terrorists can certainly strike again.  As Powell notes, they can potentially kill people, destroy buildings, and do damage -- perhaps with the stunning visuals and dramatic effect as 9-11.  But next time we need to keep our wits about us.  They can't really threaten our core values and principles, they are using terrorism because they are fundamentally weak.  They don't represent Islam, the Arab world, or any other mass population.  They are small, extremist groups with limited appeal.  They can't defeat us.  They can goad us into self-defeating actions if we let them, so next time, let's make sure we don't let them.

September 24 - Essentially American

Some have criticized the fact that Columbia University is allowing Iranian President Ahmadinejad to give a public talk.  The criticism is misguided on two fronts.  I'll start with the most fundamental: academia is defined by and must respect a clear and free exchange of ideas especially those ideas we might not like.  One problem in America is that people tend to hang out with and read writings of like minded folk.  Rather than listen to opposing views, they belittle or ridicule them, creating a sense of groupthink.  This happens on both sides, and the result is a political discourse that is more about emotional trash talking than real debate.  People often fall into patterns of dismissing views because of who makes them or where they were stated ("oh, well, that 'good news' about Iraq was on Fox, which is pro-war" or "well, that story was in the liberal New York Times"), rather than really engaging ideas.  People focus on being other-critical rather than self-critical.  If they read what the other side says or does, it's to gather ammo against them, rather than truly listen to or engage that position.  In fact, with political discourse defined as a 'them vs. us' game, self-critical thinking seems like 'giving in' to 'them.'  

Academia has to be above that.  We have to listen to all views and respond with substance.  It can be a holocaust denier, a Ku Klux Klan member, or someone promoting a religious perspective.  Here at UMF we have a long tradition of that kind of academic tolerance.  When a Christian Coalition speaker came to talk about the issue of gay rights, I heard students say some of them were furious, angry, and felt like punching him.  But they didn't -- they asked tough questions and were polite.  The emotion can be there, but it has to be put second to the academic values of reason and evidence.

This means that students or audiences should not protest or shout down speakers they dislike, at least not during the presentation or discussion.  Hold protests later, before hand, or outside the event if you must, but the fundamental values of academia demand that we listen to all views.  While there has to be some standard (e.g., Joe Schmoo off the street can't just come in and expect to pontificate in front of the whole campus community), such as notability, relevance, or support by a student organization, the standards cannot be about political correctness or worries about someone "offending."  Free speech should be as absolute as possible on campuses and in the academic world.  Columbia is right to engage Ahmadinejad, and not simply dismiss him as "one of them" to be ridiculed and insulted.

The second point is that it's hard to know what would disqualify him.  He's questioned the existence of the holocaust.  OK, engage him on that.  He says Israel should not exist.  Well, gee, the Saudis and much of the Arab world don't even have Israel on their maps and believe it is an illegitimate country.  He's not alone there (and he hasn't threatened them, like some people claim).  Compare that to the rhetoric of regime change and 'axis of evil,' and he's not any more bombastic than the early Bush administration (though the American President has learned to tone down his rhetoric, hopefully the Iranian President will learn that too).  He denies supporting terrorism and attempting to gain nuclear weapons, though it seems pretty clear that Iran has a history of supporting terrorism and could well be trying to develop nuclear weapons.  Engage him and other Iranian leaders on that front.  To be sure, he's not the center of power in Iran -- that would be the guardian council -- but it can't hurt to let him talk.

One of the interesting episodes in the Cold War was the Nixon-Khrushchev 'kitchen debate.'  Khrushchev was not Stalin, but he was part of a system that had killed 20 million of its own citizens in purges, had established an empire in Eastern Europe, and supported dictatorships as it built nuclear weapons and challenged the US.  Yet Nixon engaged him on the crucial issue of economic efficacy, and in so doing gave us a glimpse at what would ultimately cause the Soviet Union to collapse.  To engage other ideas and political leaders is necessary, and what Columbia is doing is essentially American.   And, if the rest of the country seems willing to surrender American values to the emotion and rhetorical excess of political mudslinging, academia has to maintain this core value of free speech and engagement of opposing ideas. 

September 25 - The real danger from Iran

A lot of people writing about Ahmadinejad's speech focus on him, his rhetoric and claims he's crazy and may attack Israel in a fit of fanaticism if Iran were to develop nuclear weapons.  There is a threat, but it's far more subtle and indeed more difficult to counter than just seeing one man as a potential Hitler.

A fundamental error in foreign policy analysis is to assume an opponent to be suicidal and crazy. The Iranian foreign policy over the last 28 years has been not at all suicidal and crazy, but shrewd and patient. They will not risk their regime simply to take out Israel with nuclear weapons, weapons that will kill Palestinians as well as Israelis. Their goal for these weapons is twofold: deterrence, and to leverage themselves into being a dominant regional power. Iran sees itself competing in the region not so much with Israel, but with China and Russia for influence in Central Asia, and with the US for influence in the Mideast. Nuclear weapons would assure no American inspired regime change, scare off Israeli strikes, and give them leverage with Russia and China. Of course, if the US or Israel attacks, they could well use whatever they have, though their delivery systems are poor.

Now, if you would like a more realistic scenario. There are three actors linked, but still able to act independently. Hezbollah is the most dangerous, supported by Iran and Syria (though controlled by neither — they’ll do what’s necessary to get Syrian and Iranian support), and virulently anti-Semitic. Hezbollah’s goal, especially after Israel failed to critically weaken them in 2006, is to establish a base of operations in Lebanon that can join with Palestinian forces to launch an uprising against Israel. If Iran actively supports this at a far greater level than in the past, this could become an existential threat for Israel. At the same time, Syria’s goal is more focused: they want the Golan Heights back, and they worry about being overshadowed by Iranian power and Hezbollah. Iran is also considered a threat by the Sunni states, especially Saudi Arabia, Jordan and Sunnis in Iraq. There is a power struggle going on, with the Arabs resenting Iranian efforts to gain power in their region.

OK, this is dangerous stuff. But it’s not insane stuff, any practitioner or student of power politics will recognize these kinds of situations.

US national interest is first, assure stable flow of oil so that the world economy does not get shocked into depression. Iran’s geo-strategic position gives them the power to threaten that, but our massive military power gives us the capacity to deal a crushing blow to the Iranian economy. At this point, neither side believes it can benefit enough from acting against the other, so each are deterred. Iran does what it can get away with, which is to arm various militias in Iraq in order to assure that once the US leaves, the militias can prevent any kind of pro-American government from being established. They will probably succeed at that (which is one reason I favor partition).

Second interest: Find a way to create a Palestinian state that is viable, but does not threaten the security of Israel. President Bush has been clear on this as a priority almost since the beginning. This has proven difficult because the PA was immensely corrupt and lost popularity, while Hamas has refused to endorse the PA’s recognition of Israel’s right to exist. Hamas gets support from Saudi Arabia, and both are suspicious of Iran and Hezbollah. Hamas has also been under immense pressure, and knows they may not win the next election if they can’t make things better. So this is very difficult, but not impossible to improve. And, of course, Hamas wouldn’t want Palestine to be nuked by the Persians, nor would any Arab!

So yeah, tough problems, balances of power, competing interests, and some dangerous fundamentalism included. But Ahmadinejad’s rhetoric shouldn’t be overhyped. He lost a lot of clout because of that rhetoric in Iran, and he is not the one who would make a decision about any kind of military force. The power is with the Guardian Council and the Supreme Leader. And, in recent elections for the body who would choose the next Supreme Leader, Ahmadinejad’s party did very poorly, virtually assuring that an extremist will not be named to that position.   Iran considers themselves in a position of strength vis-a-vis the US, but they don't want war with us. They know that we can do considerable damage, and the things they would do to respond would undercut a lot of what they achieved in their effort to become a regional power. Also, the Iranians, who are not Arab but majority Persian need to stress anti-Israeli rhetoric because they are trying to appeal for support from a largely Sunni Arab world, and this is one issue that can generate sympathy for Shi’ite Persians. Political rhetoric needs to be taken in context. Israel of course does not want Iran to become a regional power, and greatly fears (as they should) the Hezbollah-Syrian-Iranian nexus.

But if it comes to all out war,  the world could well fall into economic depression as oil prices skyrocket, terror and extremism will spread, and Israel will be in more danger than in any of their 20th century wars with the Arabs. So we need both diplomacy/engagement and strength to try to avoid that happening.

September 26 - And I think to myself, what a wonderful world...

Today is my 'busy day' so this will be short.  

The leaves are changing.  Living out in the country, in the woods, near a stream, with hiking/ATV trails connected to our back yard (we use them to hike; luckily ATVs are loud enough that you get warning when they come by), I feel I live in paradise.  I know I've said that before, but it's so satisfying to sit on  the deck and watch our two young boys (ages 4 1/2 and 21 months) play in the dirt and sand, explore what's on trees, chase the frogs that cross the back yard, and come in for their baths covered in dirt and grass stains.  That is how growing up should be!   There are times when I look at them, laughing, throwing rocks or pushing their trucks around, that the beauty of the scene, their joy, and the way the sun is shining gives me a strong sense of satisfaction, love, and contentment.   Sometimes this world is simply, overwhelming, wonderful.

September 27 - Is the dollar overvalued?

We are hearing continuing reports of new dollar lows against the Euro, and the Canadian dollar has shockingly caught up in value to its American cousin, ending at least for awhile the time when Canadian goods seemed cheaper by comparison.   Right now it takes $1.42 to buy a Euro (a dollar will get you .70 Euro -- 70 European cents).  Also, the rising oil prices we experience are affected by the dollar; over the past six or seven years oil prices have gone up far less in Europe, thanks to the increasing value of the Euro.

The common reaction is that this is a short term reaction to the problems of the subprime lending market, and the collapse of the housing bubble in the US.  Housing inventories are overstocked, and thus it has become a buyer's market.   The thinking is that this will bring buyers into the market, seeing they can get housing bargains, especially now that the fed has dropped interest rates.  US existing home sales went down 4.3% in August, and the Conference Board's consumer confidence index fell from 105.6 in August to 99.8 in September.  Last month also saw a surprising drop in jobs, though hopefully this isn't indicative of a trend.

The idea that the dollar now, in the midst of a burst speculative bubble and its after effects, is overvalued seems ridiculous.  The dollar has reached record lows and thus one could argue it is probably under valued in terms of the structural health of the American economy.  Now would be a great time to buy dollars, the theory goes, just as speculation in Euros would have been extremely profitable back in 2000.

But perhaps something bigger is in play.  The US has maintained a huge current accounts deficit for years, starting way back in the eighties (up until then we had a surplus).  Now it is up over 6% of GDP, a figure that is unsustainable for most economies.  This deficit means a capital account surplus in the form of investment from aboard in American stocks, bonds and bank papers.   Yet if the dollar's fall causes investors to wonder if American investments make sense, and seek to diversify to Europe, Asia or elsewhere, or if countries decide to alter their balance of foreign currency reserves, more dollars could be dumped on the market.  The result could be a currency crisis not unlike that suffered in Asia in 1997, as capital account surpluses (meaning current account deficits) caused a crash of local currencies.  This was exacerbated by "contagion," or the fact that interdependent economies affect each other.  It took tremendous effort by the US and western institutions to stop this from going out of control, but the damage was limited.

What if that happened to the world's largest economy?  What kind of contagion would follow?  Could international financial institutions "rescue" the US the same way Asia was rescued?  What if OPEC moves towards pricing in Euros; would that create more concern about the stability of the dollar?

I'm not expecting a crash any time soon, though one can't rule out this crisis spinning out of control.  The world knows the danger posed by an American economic collapse, and thus the cost of dumping American investments and currency may well outweigh the risk of losing value by holding on.  And, if you think the currency will bounce back, now is not the time to sell.  Still, that current accounts deficit lingers, like a raw, open wound.   At the very least, it suggests a diminishing role of the US in the world economy as we move further into the 21st century.

September 28 - The Decline of America

In Iraq not only is the US desperately trying to figure out a way to stabilize the situation as, despite some cautiously optimisitic comments from Gen. Petraeus, the grim reality is that bad news still far outweighs good news.   In places like Diyala province where some Sunnis started to cooperate with the US against al qaeda, that cooperation is in danger.  Most important, government corruption and inefficacy remains endemic and political reconciliation virtually non-existent.  Shi'ite militias remain powerful, the Kurds remain determined to hold on to autonomy, and no one knows what will happen if the US leaves.   Meanwhile the US is starring down Iran, with threats to use air power.  Iran, with the knowledge that the US military is already overstretched and American support for more war is virtually nil feels no compulsion to change its policies.  In Afghanistan instability is the norm, opium production skyrocketing, and violence continues.

Back home the bursting of the housing market bubble may finally end the period of "long speculation" associated with the time from the mid-eighties to the present.  This is the time frame in which the US debt crew, it's current accounts deficit grew, and we went from being on balance a creditor state to a debtor state.  Is this how it feels and looks when a great power declines?

The interesting thing about human nature is even experts often don't see disaster looming around the corner before it hits.  I remember watching CNN-FN back in the late nineties (a short lived CNN financial news network which itself is testament to the dominance of the stock market for American life in the late ninetie), and talk about a stock market bubble was dismissed by grandiose claims of the Dow going up to 30,000 or 100,000, and a new economy where technology-driven productivity improvements would yield huge profits for investors.  These were economists, top analysts, people who should have known better.   I moved most of my retirement account investments to bonds in mid-1999.   As I told some students, 'Americans haven't been this optimistic since 1928.'   So the inevitable happened, the stock bubble collapsed.  Alan Greenspan came to the rescue, lowered interest rates, and kept them low, in part as a response to the uncertainty after 9-11.

And the economy didn't go into deep recession!  Economists and pundits talked about how strong and resilient the American economy is, especially the American consumer.  What was driving this, keeping our economy going, making sure 2000 was not 1929?  Home equity loans.  Low interest rates and cheap credit spurred property speculation.  The experts said "there are ups and downs, but everyone needs a home, property is real, it's a safe investment.'  Quick buck programs taught how to "flip" properties, and expand property wealth.  Even average folk started to see their homes as the equivalent of ATMs -- why not take out some equity and have some fun?  Get that new SUV, go on vacation, pay down those nasty credit card bills.  Credit cards, recognizing the bonanza and hoping to get consumers to make purchases now rather than later created grand incentives -- 0% interest for six months, 3.99% interest for two years, and in some cases 0% interest for the life of the balance (now THAT is a good deal, as long as you don't ever use your credit card again).  But while some used this wisely, many found cheap money addictive, consumer spending continued, homes rose in value, and the economy seemed healthy.

Well, so much for that.  The Fed can lower interest rates again, but the housing market isn't going to recover soon, and without home equity loans nothing will stimulate consumer spending as the dollar falls, credit markets face a crisis of confidence, and there is a real threat of recession.  Add this together and you can't help but wonder if we aren't seeing a great power in real, perhaps steep decline.  Politically we're learning our capacity to get our way through military power is severely diminished.  Both Kosovo and Iraq taught us the fundamental limits of air power.   Our ground forces are overstretched by one mission against a small group of insurgents in a country that had been weakened by sanctions and war.  We react to world events with the bombast of a super power at its height, perhaps out of anger and fear over 9-11 terrorism, but are brought to earth by reality.  Add that to sudden and real economic vulnerability, and now is the time to be concerned.   We used to comfort ourselves that the rest of the world needed our markets, but China now has diversified and sells as much to Europe as it does us (and has expanded trade to Russia and other Asian states), while Europe relies very little on the American market.

So what to do in a dangerous world?  Recognize a clear lesson of history: great powers in decline make things worse when they act like they still are at the top of the heap.  Great powers in relative decline need to avoid military engagements and instead build up diplomatic support and cooperation.  The Soviets did the former and collapsed; the British did the latter, and relatively successfully shifted towards becoming a middle power.   As we head into a marvelous autumn weekend I wonder if these days will sometimes be remembered as the last days of American claims to dominance.  People will marvel that we never saw it coming.