Archive for ‘USA’ Category
Posted on 13:57, June 28th, 2012 by Pablo
On June 20 New Zealand Defense Minister Jonathan Coleman and US Secretary of Defense Leon Panetta signed the Washington Declaration, which specifies priority areas of cooperation between the militaries of both countries. The Washington Declaration is a follow-up to the Wellington Declaration signed by New Zealand and the US in November 2010 (with Secretary of State Hillary Clinton and Foreign Minister Murray McCully doing the honors). The first was a general statement of principle with regard to New Zealand-US security cooperation and bilateral foreign relations. The follow-up provides more detail on the specific areas in which military cooperation will occur. These are counter-terrorism, maritime patrol, anti-piracy operations and humanitarian relief. The details of the logistics involved in those areas have not been finalized and/or made public, and in the case of counter-terrorism operations they are not likely to be divulged beyond a general statement. This has as much to do with New Zealand public sensitivities as it does with US public opinion or classified operational details (for example, the role of the NZSAS in joint counter-terrorism operations with US forces).
What is different in the Washington Declaration is that the military-to-military bilateral relationship is now taking concrete shape, whereas the Wellington Declaration was a diplomatic opening rather than a definitive outlining of military areas in which joint operations and exercises will occur.
Robert Ayson described the relationship as a defacto alliance between the US and New Zealand. Professor Ayson used the phrase because the US and New Zealand are not entering a formal alliance agreement but a “strategic partnership.” An alliance is essentially a contract with mutual obligations; a partnership is a looser arrangement in which obligations are voluntarily assumed but not contractually defined, binding or specified. Partnerships can be reviewed and modified on a case-by-case or temporal basis, whereas alliances commit the parties to treaty-strength obligations that require a major diplomatic rupture for them to be abrogated. This distinction theoretically gives the US and New Zealand a greater degree of flexibility in their relations with each other on military issues. That is diplomatically advantageous for New Zealand, which seeks to preserve its image and reputation for foreign policy independence, and also avoids domestic voter backlash to the resumption of something akin to the ANZUS alliance so spectacularly undone by New Zealand’s 1985 non-nuclear announcement. The Labour, Green and Mana parties, in particular, would have been very resistant to the restoration of a formal military alliance with the US, so on political grounds the strategic partnership agreement works out very well domestically as well as bilaterally.
In practice, the strategic partnership with the US aligns New Zealand with other “first tier” US security partners in the Western Pacific Rim such as Australia, Thailand, Singapore and the Philippines. This is important for the New Zealand Defense Force (NZDF) as it seeks to integrate more closely with Australian Defense Force operational doctrine, training and equipment (as was suggested by the NZDF 2010 Defense White Paper) at a time when Australia and the US are deepening their bilateral security ties (evident in the recently announced agreement to forward base a US Marine rapid response force in Darwin). Ayson is right in that the NZDF will now be working side by side with the US military on a regular and continuous basis in specified areas (such as the upcoming RIMPAC naval exercises that the Royal New Zealand Navy (RNZN) has joined for the first time in two decades), although NZ will have a little more leeway in refusing US requests to join in foreign conflicts than if it had signed a formal alliance agreement that required both parties to come to their respective defense.
The resumption of near-complete bilateral military ties between New Zealand and the US is not a surprise. The 5th Labour government (1999-2008) started the rapprochement with the US post 9/11, and the National governments that followed it have openly embraced the prospect of finally overcoming the post-ANZUS freeze in security relations (with the exception of intelligence-sharing, which never suffered the curtailment of ties seen in military relations). Labour was wary of being seen as getting too close to the US, since that could jeopardize its reputation for an “independent and autonomous” foreign policy stance, particularly amongst non-aligned and small states. National prefers to embrace the US more whole-heartedly, in part because of the belief that there will eventually be economic as well as military benefits in doing so (such as via the Transpacific Partnership trade agreements currently being negotiated by the US, New Zealand and seven other Pacific Rim states). The idea behind National’s approach appears to be to use the improved military ties with the US as a hedge against the rise of The People’s Republic of China (PRC) by countering or balancing increased economic dependence on the PRC with the strengthening of economic and military ties with the US and other pro-Western nations along the Pacific periphery. National seems to believe that this balancing act (or straddling of fences), continues the tradition, or at least appearance of independence in foreign affairs.
That may be a mistake because independence in foreign affairs is most often predicated on neutrality with regards to foreign conflicts or great power rivalries. In aligning itself more closely with the US on military matters, New Zealand loses that appearance of neutrality in international security affairs. The New Zealand Foreign Affairs and Defense ministries may believe that this is the best hedge against attempts by the PRC to exploit its economic relationship with New Zealand (since the PRC is clearly the dominant partner in the bilateral Free Trade Agreement (FTA) with New Zealand and has much leverage on New Zealand when it comes to Chinese market access as well as exports and investment from the PRC to New Zealand). Balancing economic dependence on China with strengthened security ties with the US (and its allies) may appear to National to be the best way of New Zealand having its cake and eating it.
Strengthening of political ties with the US is part of National’s larger policy of reaffirming diplomatic alignment with traditional partners. The belief is that New Zealand shares more in terms of core values with these traditional partners due to the Anglo-Saxon liberal democratic traditions that bind them together, rather than the mixed Confucian-Communist values that underpin the core beliefs of the Chinese political elite (or the Islamic beliefs of New Zealand’s Middle Eastern trading partners). Even if the PRC was to continue growing economically at a pace similar to the last decade (which now seems improbable), it seems prudent under this logic for National to reaffirm its Western heritage, joint vision and general orientation until such a time as China and other non-Western authoritarian states begin to open up politically. Reaffirming political ties to the US and other traditional allies does not undermine New Zealand’s position with Asian democracies like India, South Korea, Taiwan or Japan, or with Southeast Asian democracies (such as they are) like Malaysia, Indonesia and the Philippines. All of these countries, as well as Southeast Asian authoritarian states such as Singapore and Viet Nam, fear the rise of China as a military power and/or economic hegemon in the Western Pacific, and therefore welcome any counter-balancing efforts on the part of the US and its strategic partners and military allies. The political alignment with the US also fits in line with the foreign policy approaches of Australia and the UK, and reasserts New Zealand’s position within that informal alliance structure (Canada is part of it as well).
There are benefits for both the US and New Zealand in this restored relationship. The benefits for New Zealand are that the NZDF will get to conduct exercises and operations with the most hardened, experienced and technologically advanced military in the world. That will expose it to the latest in US strategic doctrine and tactics. It may also result in the US providing military equipment to and training opportunities for New Zealand that it otherwise could not afford. It will reassure New Zealand of the implicit US defense guarantee in the event that New Zealand were to be threatened or attacked (to include economic coercion by the likes of the PRC). It may lead to closer economic ties, although that remains an open and much debated question (there is a large literature on security partners being preferential economic partners because of the mutual trust and dependence established between them. Most of that literature was written during the Cold War and things changed after it ended, but now with the emergence of the PRC and other powers some of those old assumptions are being resurrected and reviewed, especially in the US).
For the US the agreement is win-win. It gets an immediate benefit from securing another strong security partner in the South Pacific, one that has considerable “local knowledge” and relative influence in South Polynesia. This accords with the shift in US strategic emphasis to the Asia-Pacific, which is part of a long-term strategy of ring-fencing Chinese attempts at blue water expansion into the region. In signing New Zealand to a bilateral military partnership similar to those of other Western Pacific states, the US has moved to establish a security cordon in the region, something that also serves as a force multiplier in the measure that US strategic partners commit military assets to a common cause. New Zealand’s reputation as an honest broker in international affairs gives it diplomatic cover in this effort.
More importantly, after 25 years of estrangement and New Zealand foreign policy independence, at least with regard to international security affairs, the US has finally broken down New Zealand’s resolve and returned it to the fold. Post 1985 wooing of New Zealand began during the Clinton administration and continued with his successors. 9/11 accelerated the reconciliation (under a Labour government), and the Wellington Declaration codified it. In many respects, the US’s ability to re-gain New Zealand’s signature on a bilateral military-security agreement is a triumph of long-term great power diplomacy: after years of distance it secured junior military partnership from a small democratic state that prides itself on its modern history of foreign policy independence. To be sure, fluid global conditions since 1990 have contributed to the evolution in US-New Zealand bilateral relations, but at present it appears that the US has finally managed the contretemps of New Zealand non-nuclearism with diplomatic aplomb and to its ultimate benefit.
The negatives for New Zealand could be that the US will pressure it to increase its spending on defense, now below 1 percent of GDP, to something more in line with Australia’s two percent per annum. This would be on a par with other US strategic partners and around the NATO average, but will be politically unpalatable amongst New Zealand voters, who tend to under-appreciate defense when compared with education, health and welfare. Thus any such request will be politically thorny for a New Zealand government. However, the US can leverage the fact that the NZDF is not “pulling its weight” in the strategic partnership (the Australians already say this).
For example, although the Washington Declaration speaks about closer bilateral military cooperation in the areas of maritime patrol and anti-piracy, New Zealand has very little in the way of long-range patrol and interdiction capabilities. Specifically, New Zealand only has two blue water ANZAC-class frigates, two off-shore patrol vessels and six long-range P-3 patrol aircraft, and its multi-purpose ship, the HMNZS Canterbury, spends more time in port being repaired than at sea, As for its logistical lift capability, not only is the HMNZS Canterbury unreliable, but the RNZAF C-130 fleet, at five aircraft, is also small and already stretched in terms of its operational readiness. Thus the US and Australia can pressure New Zealand governments to increase spending on defense so as to be able to perform the responsibilities and tasks that are expected of it as a strategic partner in the areas designated as joint priority.
There is the risk of being drawn into US conflicts that have nothing to do with New Zealand or an imminent threat to it. Even if New Zealand has leeway in terms of refusing a US request to get involved in a non-immediate foreign conflict, once bilateral military ties are established and consolidated they constitute a source of leverage on the part of the US since any retaliatory cancellation or disruption of the bilateral relationship will hurt the NZDF more than it will the US military. Moreover, the bilateral diplomatic backlash from a public refusal to work with the US in a foreign conflict theater could overcome any domestic and international support for the move.
There is also the more immediate issue of diplomatic fallout over the partnership. The more that New Zealand is seen as aligning itself with the US on security matters, the more US rivals such as Russia, the PRC, and various Latin American and Middle Eastern states will see it as a tool of US foreign policy and military strategy. Even other “independent” states like Uruguay, Finland, Costa Rica, Estonia and Turkey may begin to recast their view of New Zealand as an honest broker in international affairs. That is why National’s belief that its fence-straddling or hedging strategy will continue the image of independence may not work out to be the case, which could have adverse diplomatic consequences.
(The original version of this essay appears at 36th-Parallel.com)
Posted on 21:25, May 10th, 2012 by Lew
Today the President of the United States of America came out (if that’s the right term) in support of gay marriage. Hours later, The leader of the New Zealand Labour party did likewise. The responses they got could hardly have been more different. Obama’s statement was greeted with a worldwide ripple of excitement; Shearer’s with a localised wave of criticism. Aside from the obvious difference in scale, we can make some sense of the difference in valence by looking at two main factors: the content of their respective messages in political context; and the media and moment in which they were made.
Substance and political context
Allowing for the differences in political context, Obama’s and Shearer’s statements were reasonably similar. Both expressed support for gay marriage in principle, with reservations about implementation. In Obama’s case, the reservations were constitutional. The President can’t unilaterally pass an act permitting gay marriage; it has to go through two federal houses and most aspects of marriage are still, ultimately, determined by the states. Obama’s statement was symbolic and aspirational. First of all, it was a means of defining who he is, politically — a rebuttal of suggestions that he is timid or not liberal enough, and a means of illustrating a sharp distinction between his administration and the caricatured culture-war conservatism of his Republican opponents. It was also an opportunity to reinvigorate the American political left. David Frum said it well:
(You should read Frum’s whole piece, it’s short and articulates clearly why this was a strategic coup.)
Shearer’s statement was, if anything, less equivocal than Obama’s; he merely said that he “would like to see the detail of any legislation before giving formal support”. In purely rational terms, that’s totally reasonable; nobody signs a blank political cheque. Much of the criticism has centred on the assumption that any such law would be introduced by Labour, so Shearer would not only get to see it but would get to vet it before declaring support. This isn’t really so; Labour are in opposition, and barring extreme exigencies they will be for at least 2.5 years to come. Given the Greens’ long-standing commitment to gay marriage and remarkable success in the member’s ballot, there’s a better-than-even chance that a hypothetical same-sex marriage bill drawn at random would be theirs.* There are plenty of potential pitfalls in such a bill, if badly drafted, and it is reasonable to hold reservations.
Other criticism of Shearer has centred on the argument that Obama’s political context is much more hostile to gay marriage, and his declaring in favour of it constitutes a genuine act of political bravery, while it’s a rather less contentious issue here. Also not entirely fair; of course, that difference in political context exists, but Obama is in power, and (largely due to Republican infighting) in political ascendancy, while Shearer is in opposition and in the doldrums. It is also very unlikely that any gay marriage bill would pass the current NZ Parliament, especially now that social-conservatives like NZ First are back in.
So on the merits, criticism of Shearer for appending this seemingly-innocuous qualifier seems a bit unfair. But there are two better explanations for hostility: first, he misread his medium; and more importantly, he misread the moment.
The medium and the moment
Obama made his statement in a medium and situation that afforded him considerable control over how his message would be transmitted and received, and that enabled him to articulate his position both from a personal perspective and politically. Good Morning America was a sympathetic venue; morning TV is warm and nonconfrontational, on the ABC network even more so than usual. It is not strictly time-controlled and interviewers generally do not play hardball. Its audience is more liberal, more female, and more inclined to respond favourably to expressions of personal warmth and reflection such as this one.
Shearer chose Twitter to make his announcement — the most constrained medium possible, one that permits no contextualisation, no emotional or personal connection. Given his performance to date as leader of the opposition, and the NZ Twitter left’s activist bias, it’s probably also one of the more hostile media open to him. It’s not talkback, but in some ways it’s worse: a lot of people who really want to like you, but are already frustrated and disappointed and are beginning to despair can be a harsher audience than your outright enemies. Twitter also means that you are expected to be spare and to the point, and to only include detail that is significant. By hedging, he signalled that his position was not firm or genuine. The medium is the message, so the inclusion of an obvious redundancy like “need to see the detail” when characters are so limited doesn’t look like understandable prudence, it looks like fuzzy-headed waffly-thinking at best, or political cowardice at worst. David Shearer mistook a platform for slick, aspirational one-liners as the venue for earnest political positioning.
And that leads to the most crucial point of all: Shearer misread the political moment. Obama’s declaration in personal, philosophical terms of his “evolution” from someone who did not support gay marriage to someone who does was a watershed moment, a genuinely epochal event: when the President of the United States of America supports your cause, all of a sudden it looks a lot more like happening. A loud shot was fired in the culture wars; it instantly became global news, and with the news came a wave of liberal euphoria. This was, as Russell Brown noted, the best possible moment to note Labour’s progressive history and rededicate to the goal of marriage equality, but it was not a time for wonkish quibbling about details, or careful delineation of party policy. The moment was one of joy, of celebration, of possibility — of hope and change — and any response had to be congruent with that. Shearer’s wasn’t. The contrast jarred, and made the other, lesser, deficiencies in the message and its presentation more evident.
Substance, context, medium and moment. You can’t really afford to be without any of these, but if you’re trying to catch a wave of public sentiment, you really have to get your moment right.
This is symptomatic of Labour’s ongoing failure to articulate its vision: a lack of mastery of the tools and techniques at their disposal. Shearer’s lack of authenticity and his inability to speak clearly and unequivocally from his own position, that I touched on in my last post on this topic, was depressingly evident in this episode, and it may be that he’s still being tightly managed. A more concerning possibility is that this is the real David Shearer: lacking in virtù, like his predecessor.
But despite everything, I think this was a good experience for Labour — hopefully it has demonstrated to them that sometimes being timid is worse than being silent. If “go hard or go home” is the only lesson they take from today, it will have been worth it.
* Hypothetical, because none are in the ballot at present, though I expect that to change soon. Idiot/Savant drafted one some years ago, and it would not be an hour’s work to get it in.
All internet architecture has the potential for use as a Signals Intelligence Intercept platform (SIGINT). Data mining already occurs at the mid-range of IT frameworks, such as when Facebook collects personal information on users for consumer research (or more nefarious) purposes. Cell phones have GPS trackers, which requires software. The range of data-mining already at play in the commercial field is extensive. It therefore should come has no surprise that States also have an interest in data-mining, but for military, diplomatic and intelligence purposes.
If mid-level IT platforms such as FB and numerous other private agents can data-mine extensively with or without the consent of those whose personal information is being accessed, then it stands to reason that providing the basic support infrastructure for IT operations gives the provider even more opportunities at such. In a liberal market environment there are standards of conduct and protocols developed to restrict the unfettered access to private information. But what happens when a state capitalist enterprise is the provider of basic IT infrastructure?
In market capitalist systems the state serves the interests of capitalists by framing the legal and governance frameworks so as to encourage competition on an ostensibly level regulatory playing field. In state capitalist systems capitalists serve the interests of the state above and beyond their particular commercial interests. This is seen in European fascism, Latin American national populism, and in Asian developmentalism such as that of Singapore.
Huawei is the product of a state capitalist system. It was founded by and is led by former PRC intelligence officers. Although Huawei claims to be 100 percent employed owned, that is true only because the one-party authoritarian regime than rules China continues to maintain that it is Communist, which means that all employees are owners. Huawei has been designated as one of the seven national economic treasures that are considered to be essential strategic assets for Chinese power projection, and as such are subject to the strategic dictates of the ruling party. All of this is well known, and having independent local Huawei operators fronted by non-Chinese managers cannot disguise that fact, particularly when all of the components and associated hardware are engineered and made in the PRC.
The US and Australia have decided to bar Huawei from providing IT technologies to strategically important sectors of their IT markets. The US specifically excludes Huawei from any defense or security related contracts, and for that reason Symantec decided to sell its interest in Huawei USA. The Australians feel that their National Broadband Network (NBN) is too precious an asset to be opened to Huawei. They say they have their reasons, and that those reasons have to do with national security.
NZ has just signed off on several broadband infrastructure contracts with Huawei. The question is whether those responsible for the decision were aware of the US and Australian position and if so, why they choose to ignore it. The UK and Canada have allowed Huawei civilian IT contracts, which is important because they are part of the Echelon SIGINT and TECHINT network that binds the “5 eyes” parties together (along with the US, Australia and NZ). In the UK Huawei was awarded contracts for civilian IT, but that was followed by the government communications security agency running an extensive and costly forensics accounting of Huawei systems in order to ensure its cyber security, and even then cannot guarantee that the system is safe as far as covert “backdoor” entryways are concerned. This had something to do with the Australian decision.
95 percent of attempted probes into US corporate and security IT systems originate in the PRC. In the PRC all internet access is tightly controlled and monitored. Huawei is a leading provider of the IT systems used in the PRC, to include the firewalls used to censor foreign content and the tracking devices used to monitor internal dissent. Although all of this is circumstantial, this is the non-classified reason why US security agencies have decided that the company serves as a SIGINT front for the PRC. Add to that concerns about Huawei activities in foreign SIGINT gathering, and what you have is a reason to ban it from competing for security related contracts.
Of course, this could all be a corporate driven plot to preserve market share in the face of superior Chinese efficiency. Or, it could be racism. Or it could be part of the Trilateral Commission efforts to extend its world hegemony. I am agnostic on the exact reasons, but whatever they are, I sure do hope that someone in the National government was briefed by the GCSB and/or SIS on what they were. After all, as full intelligence partners with the US and Australia, one would think that these agencies would have received some of the classified details of why the US and OZ have their doubts about Huawei, and that these agencies would have dutifully reported to at least the Minister for Security and Intelligence, John Key, on the nature of these concerns.
Mind you, if the concerns about cyber espionage are true, I do not fault the PRC a bit for doing so. As an emerging great power with global economic interest and no intelligence sharing network such as Echelon on which to rely (unless one thinks that intelligence sharing with North Korea and Burma is a good counterpart to Western intelligence networks), then the PRC must–and I do mean MUST–develop its own human, signal and technical intelligence capabilities in the measure that its global interests grow. That is just the way the game is played in international security affairs.
The major sea lanes of communication between Latin American and Australasian primary good and raw material suppliers and the Chinese mainland pass through the South Pacific. It would therefore be remiss of the PRC not to seek to ensure the security of these vital channels, and one part of doing so is to have a better intelligence “grip” on what goes on in the countries through and in which they are situated. To put it in Brooklyn-ese: they gotta do what they gotta do because no one else is gonna do it for them.
That is why it would be helpful to hear a “please explain” response from Mr. Key on the matter.
Postscript: It turns out that as early as 2008 the concerns of NZ intelligence partners about Huawei were discussed in US embassy cables from Canberra (which were sent to the US embassy in Wellington, among other places). In 2010 the SIS and GCSB informed him that they could not guarantee that the broadband infrastructure would not be compromised if Huawei was awarded the UFB contract. For reasons as of yet unexplained, he choose to ignore the warnings. As it also turns out, India and South Korea have banned Huawei from critical IT infrastructure projects. Thus it seems that concerns about Huawei are not just a Western plot born of anti-Chinese xenophobia and a desire to protect market share for western businesses, but part of a wider conspiracy amongst China-haters of all stripes. Mr Key, however, is not one of those, and his meetings with Huawei executives at the 2010 Shanghai Expo is proof of that. (Note to readers: all of this has been discussed in the NZ mainstream media the past week, and the 2008 embassy cables were published by Wikileaks).
The objective of war is to marshall organized violence in order to intimidate or defeat an adversary for the purpose of imposing a political outcome against its will. Wars can be offensive or defensive in nature, preventative, pre-emptive or reactive, and can be waged out of necessity or choice (necessary defensive wars being the most justified under jus ad bellum standards). The point is to use enough lethal force to secure a preferred political end-game. In recent years this has given rise to something known as “effects-based strategy,” whereby military planners think of a desired tactical effect and plan their deployments accordingly. I shall not detour into how the “fog of war” and an adversary’s will and preparation play a role in determining real, as opposed to desired combat effects. Suffice it to say that the idea that one can go to war with an eye to a specific effect is problematic, and that is even more true at a strategic level than it is on the battlefield.
Instead, let us consider Iraq as an exercise in effects-based war-mongering. Leave aside the bogus WMD justifications for attacking Saddam Hussein’s regime. Let’s look at the real reasons and see how well the invasion and occupation of Iraq achieved those ends.
Dreamt up by the feverish minds of the neo-conservative Project for a New American Century (which included Cheney, Rumsfeld, Perle and Wolfowtiz among its members), the invasion of Iraq was designed to remove a stable but hostile authoritarian regime in order to replace it with a US-friendly regime that would give US companies privileged access to Iraq’s oil supplies (with fuel retail prices coming down as a result) and which would allow the permanent stationing of US troops on its soil. US military assets in Iraq would come from the transfer of troops and weapons from Europe and Saudi Arabia, since the former’s presence was made unnecessary by the end of the Cold War and the latter were a source of hatred in Islamicist circles and a potential source of domestic instability for the House of Saud. The idea was to create a land-based aircraft carrier in Iraq, numbering up to 100,000 troops with a full complement of weapons, in order to intimidate Iran and Syria while bringing fight against al-Qaeda to home soil. Having such a force forward-deployed in Iraq would also reduce rapid response times to other theaters, Central Asia in particular.
This scenario (the strategic “effect”) rested on the assumption that Hussein’s successors would be compliant if not democratic, that Iraqi Shiia and Kurdish populations would welcome US troops even if the Sunni population did not, that Baathists could be purged from the public bureaucracy without loss of efficiency and that any resistance could be defeated with overwhelming force. It assumed that Iran would be intimidated by the move. In order to produce the “effect” the war would have to be successfully prosecuted through its four phases (stage, thrust, seize and hold), and the international community would have take up the task of post-war nation-building as soon as Saddam’s statues had dropped from their pedestals.
Very little military input was sought in the making of these assumptions, and none of them proved correct.
Instead, Sunni and Shiia Iraqis violently resisted the occupation while the Kurds turned to in-fighting and irredentist actions in Turkey, the post-Saddam government (although elected and laboriously installed) has proven corrupt, unstable, unreliable and less than obsequious to American demands, the Iraqi armed forces dissolved into the resistance and have not yet reconstituted, the public bureaucracy collapsed and national infrastructure destroyed, both yet to be resurrected, all while Iran strengthened its influence in Iraq as well as in the broader Gulf region.
The last item is important. The US enemy d’jour, Iran, is in a better geopolitical position today as a direct result of the occupation next door (which allowed it to funnel advisors and material to Shiia resistance groups, particularly the Mahdi Army). Iraq is no longer a buffer between the Persian and Sunni Arab worlds, but instead is contested ground. Meanwhile, the Arab world is convulsed by domestic dissent to the point that US backing is not enough to stave off popular protest or Iranian influence amongst Shiia minorities in the region. As for the human cost, 4500 US troops were killed in the nine year occupation, more than 30,000 have been wounded (with many of those suffering catastrophic injuries that would have been fatal in previous wars), and more than 100,000 Iraqi civilians are estimated to have died through no fault of their own as a direct consequence of the war. Corruption and ill-discipline infected the ranks of US civilian and military personnel as the occupation wore on, to the point that Abu Ghraib and Blackwater excesses are among the most potent images left in its wake. There is no permanent US military base in Iraq.
So what was the overall effect of this effects-based war?
Iran is regionally stronger now than before the invasion. Its influence in Iraq is greater now than before 2003. The Malaki government in Baghdad is neither democratic nor pro-US and instead is more susceptible to Iranian influence than ever before. The Kurds have not proven to be reliable US proxy counter-weights to Sunni and Shiia factions in Iraq, and instead have fomented trouble with a key US ally, Turkey. The Assad regime in Syria is in trouble but the US had nothing to do with that and can do nothing to force a preferred outcome there. The Sunni Arab street is in revolt against US-backed regimes. Anti-US forces elsewhere have learned from the Iraq resistance and modified their tactics accordingly (the use of IEDs being the single most important lesson now shared by jihadis and others world-wide). The Afghan occupation–which was the only post 9/11 US military action that enjoyed broad international support and which was largely neglected during the height of the Iraq conflict–now languishes even as it spills over into Iran in the guise of stealth spy drones and special forces incursions.
While the US has been preoccupied with its wars, major rivals China and Russia have found opportunity to re-arm and expand their spheres of influence relatively unchecked (the 2008 Ossetian-Georgian war being an example). There has been an epidemic of post-traumatic stress disorder issues within returning US service ranks, and the US public has grown tired of fruitless war rather than proud of it as the “liberating” gesture that it was supposed to be (or sold as). Oh, and the US teeters on the edge of bankruptcy as a result of deficit war spending and the price of gas at the pump (which soared after the invasion) is at record highs while Russian and other non-US companies negotiate contracts with Iraqi oil suppliers.
From a US strategic standpoint, the invasion made the regional situation worse, not better. The attack on Iraq was legally unjustified, ill- conceived, based on false assumptions and counter-productive in the end. Although military skills were honed and weapons advancements made, by any political measure the US is in a weaker position in the Middle East than it was before the invasion, and its major rivals are demonstrably stronger at a time when the entire region is less stable now than it was in early 2003.
Unless one subscribes to the view that preventative wars of choice are waged by the US in order to fuel the military-industrial complex, the Iraq War was a defeat. Although orderly, the circumstances of US military withdrawal from Iraq were not of its choosing, and the political situation it left behind is unstable, deteriorating and not protective of US interests. One does not have to be a Realist to understand that many lives were wasted in armed pursuit of an impossible effect in Iraq (although it was US realists who argued the most vigorously against the invasion in the months before it happened). It was, in other words, a cluster**k of epic proportions.
Doing things for effect is not the same as doing things right, or being right. The US going to preventative war in Iraq by choice and for effect was not right and was not rightly done. It was wrong and criminally stupid to do, and no amount of patriotic gloss can alter that fact.
Some say that reality TV is a stained-glass window on society. In the US the concept began with the show “Cops,” now in its gadzillionth year. It gave rise to the Survivor and Amazing Race series, singing and dancing shows, celebrity this and that, cooking disasters of various sorts, adventure and survival programs, motorcycle and automobile customizers, the antics of sexual deviants, cheaters and lumpenproletiarians of various ethnicities (e.g. “Jersey Shore”), Bridezillas and vapid Housewives from various places, dumb and dumber idiots doing an assortment of Darwin Award misadventures, animal attacks, plus a variety other examinations of the detritus of US life. However, the recent turn in reality programming offers a dark reflection of the economic malaise gripping the country.
In recent months the reality concept has focused on the impact of economic misery, albeit from a tangental angle. The most popular shows, led by those on a channel called “True TV–not reality, but actuality”–are those that cover the flow-on effects of econonic hardship. These are led by several shows about vehicle repossession agents, but also include shows dedicated to pawn shops, gun dealers, auctioneers, hoarders and down on their luck gold prospectors. The television angle is not on the economic condition of the participants but on the behavioural effects produced by the consequences of personal economic misfortune: fights, tears, breakdowns and other human drama. Like watching train wrecks, these shows cater to morbid interest and pervese delight in other’s misfortune, which may say something about the state of US social cohesion. I confess to finding some of those involved strangely fascinating, and there is some dark humor involved, but my overall sense is that these shows are a bit too close to the truth to be entirely easy to watch.
I am not sure what to make of all this, but it could do conservative US policy makers some good to watch these shows, simply for them to see, should they wish to, the human face of the negative impact of the feral economic policies of the last decade.
NB: I am winding up my tour in the US this week, and other than one mention of the US-Russia game have seen and heard zero in the US media about the RWC. What I did read is thatWayne Mapp said that the SAS was “sort of” involved in the latest terrorism incident in Kabul. Note to “Dr.” Mapp: that is like being “sort of” pregnant.
Otherwise, and in spite of the RWC, it will be great to be home.
Ron Paul was booed at the recent Tea Party GOP candidate’s debate when he said that Americans should think about what motivated the 9-11 attacks. Rick Santorum had already said that the US was attacked because the terrorists hated “American exceptionalism” and the freedoms it brings, a comment that brought cheers from the audience. Even admitting that the audience was full of Tea Party adherents, what is disturbing is that this sentiment–that the US was attacked for its freedoms and that the underlying causes of the attack are reducible to that–is generalized throughout the population.
Neither Paul or other thoughtful commentators have justified the attacks (and I am not referring to the Ward Churchill variant of commentary). They have simply sought to open debate on the nature of US actions that could prompt such an act of premeditated violence against the symbols of US power and the innocents caught in them. For that, they have been accused as anti-American traitors and terrorist sympathisers.
The hard truth is that Americans simply do not want to reflect on the impact of US foreign policy in general, and on its role in setting up the conditions in which the 9/11 attacks were carried out. Scholars (most notably Chalmers Johnson) have used the term “blowback” to describe the unintended effect of US neo-imperialism. But this is not acceptable in American political discourse because, in spite of its myriad problems, the narrative being sold is that the US remains the “shining house on the hill” that can do no wrong and whose impact on global affairs is always benign. Thus two wars of occupation are considered to be acts of bringing freedom and democracy to backwards places, even if the majority of citizens in those places openly oppose the presence of US troops. Extrajudicial rendition and enhanced interrogation techniques on “unlawful combatants” and a host of innocents are justified as necessary for freedom to prevail in the Islamic world. There is a hallucinatory aspect to the way in which US foreign policy and international behaviour is construed, and it is disturbing that so many average Americans buy into that construction.
Admittedly, Ron Paul calling for a reflection on what motivated the 9/11 attackers in a presidential candidate’s debate held on September 12 a decade after the attacks shows poor political judgement, for which he will be punished electorally. Equally understandable is that right-wingers in the US would seek to cloak all US actions in the mantle of righteousness. But it is profoundly alarming that even after ten years a majority of Americans appear to believe that the attacks were unprovoked, or at a minimum inspired by some form of jealousy on the part of Islamic evil-doers. It is also alarming that in the present political context no Democrat is going to disabuse the American public of that notion.
It may be hard to swallow, but the US public needs to understand that there is a direct link between US actions abroad and the resentment it breeds. It needs to understand that this resentment is long standing in some parts of the world (I am most familiar with Latin America), and that the desire to strike back is deeply embedded in many places. It needs to take pause and reflect on this cold fact in order to begin to address what the US international role properly should be. Many Americans think that it should act as the global policeman, not only because other states cannot but because this is what politicians and the mainstream press tell them that is the role it should play. But that view is not universally shared overseas, where moral authority, diplomatic leadership and economic exchange is more highly valued than carrying (in Teddy Roosevelt’s terms) a big stick.
Better yet, with its economy hollowed out and its military stretched across the globe fighting to preserve a status quo increasingly under siege, perhaps it would be wise for the US public to drop the blinders and reflect on the fact that it many ways the US is starting to look like the USSR in the 1980s–a military power increasingly left without the economic or political foundation to regulate the international system rather than simply clinging on to a role it once had, and which may never be again (remembering that the difference between a superpower and a great power is that the former intervenes in the international system (often using war as a systems regulator) in order to defend systemic interests, while the latter intervenes in the international system in order to defend national interests). Only by confronting the truth about the nature and impact of its actions abroad will the US be able to begin the process of re-establishing its international reputation, if not status.
That, it seems to me, is the root question that needs to be addressed a decade on from 9/11.
I will be traveling to a family reunion in Boston during the September 11 commemorations, so will not be doing much posting during that time. What I will do now is briefly opine on what the US public might reflect upon a decade on after the attacks.
It is clear that, in terms of security against large-scale terrorist attacks, the US is safer. The price for that safety, from the indignities of airport security to the infringements on civil liberties and constitutional rights allowed by the Patriot Act and attendant legislation, is something that Americans take for granted, even if large gaps still remain in the defense against a committed and well-organised attack against mass targets (one need only to see shopping mall security to get an idea of the potential targets such places represent). By and large the US public is resigned to living in an age of fear, and go about their business willfully ignoring the myriad aways in which it is being surveilled, eavesdropped, video monitored and otherwise treated as a nation of suspects. Such, as they say, is the price for freedom.
The US has also become the most fearsome military force on the planet, with a level of combat experience and lethal technologies that exponentially exceeds that of any other country or combination of countries. For all their rise as important powers, when was the last time China, India or Russia were capable of sustaining two prolonged wars of occupation half way across the globe for years on end? What rivals, such as Iran or North Korea, have the ability to bring sustained multi-layered force to the battlefield, and which of these countries has a cadre of combat-hardened 30 year old field commanders and enlisted personnel capable of wreaking organised havoc at a tactical level? The answer is none. The US is a war machine par excellance, and allies and adversaries are well aware of this fact.
But the US has paid a price for its war-mongering. Having engaged in torture and the killing of thousands of innocents in the Muslim world in its pursuit of those responsible for 9/11 (and some who were not, such as Saddam Hussein), the US has lost much diplomatic stature and respect in the international community. It no longer represents the so-called “shining house on the hill” that all people aspire to. It is now just another great power bullying its way, with little to none of the moral authority it used to claim just ten years ago. Nor is it much liked, not only in places that have been traditionally exhibited antipathy to it such as Latin America, but now even amongst the community of liberal democracies that it ostensibly leads. The situation is so dire that even the Russians feel compelled to critique the US on issues of democratic governance and values. That is a sorry state indeed.
The ongoing commitment to unilateral pre-emptive war has exacted a toll on the US economy. More Americans are out of work than anytime since the late 1970 (the overall unemployment rate is over 9 percent and the unemployment for some sub-groups such as young Afro-American men exceeds 16 percent). More Americans are devoid of affordable health care since before World War Two. The dream of secure home ownership, the foundation of the American Dream as much as the quarter acre pavlova paradise is in NZ, is less attainable for the majority than at any time during the last fifty years. Crime rates have crept back up after record lows in the late 1990s. Political, class and ethnic divisions are at their sharpest in a quarter century. Polarisation, not solidarity and communitarianism, are the hallmarks of US society today. There is more to this litany of despair, but the point is that the US may still be proud, but it is bowed. It may be physically safer from foreign attack than ever before, but it is also more insecure than at any time since the war of 1812.
The mood, from what I can gather speaking with friends and family across the country, is sombre. This contrasts sharply with the historical sense of US optimism, if not idealism, that existed prior to 9/11. A friend of mine, a former Pentagon official, drew the analogy this way: the US went on a bender from the mid 1990s until 2008, only pausing in its partying ways during the weeks after 9/11 while the immediate damage was assessed. It now saddled with a massive hangover and the need to sober up by living within its diminished means. Although the Fox News and Tea Party crowd will engage in the usual jingoistic patriotism and shout that “we are still number one” to all and sundry, for the vast majority the anniversary will be ignored, be spent quietly, or be cause to reflect on what once was, and is no more.
Thus, my questions for the day are this. Is the US more or less strong than it was on 9/11/2001? Are its people more or less secure than they were on that terrible day? And if not, why is that, especially since al-Qaeda has been largely routed as a large scale irregular fighting force and Osama bin Laden is dead?
The answer, I reckon, lies within the US itself.
I arrived in Miami just as Hurricane Irene turned northeast, sparing Florida but pounding the Mid- and North Atlantic seaboard. From what I saw of the outer fringe of the storm when it was a category 3 hurricane–5 meter frothing waves, high gusting winds and torrential (sometimes horizontal) rain, the folk up north were lucky that the storm weakened as it hit colder water and made landfall. Not surprisingly, many complained about the mandatory evacuation measures that were put into place, arguing that it was over-kill given the downgrading of Irene to a category 1 storm, even though the flooding and winds that did reach the major population centers clustered along the East Coast caused more than 30 deaths, major damage to property and infrastructure, and prolonged power outages that affected over 5 million people. Just like those who flocked to the shoreline to see the big surf, it is as if they simply cannot understand the implications of what was originally headed their way. In many ways, this reflects the general state of US politics at the moment.
The current political climate in the US is dominated by the Republican primary campaign. Truth be told, it has all the aspects of a circus side-show, freaks and all. There is Michele Bachmann, she of the “always on high beam” glazed stare and Cold War apocalyptic views with the closet queen husband who claims that he converts homosexuals to heterosexuality through prayer (giving a whole new meaning to the phrase “laying on of hands”). There is Rick Perry, a W. Bush wanna-be Texas governor who does not believe in man-made climate change and endorses creationist interpretations of evolution. There is a black guy with a slave name (Herman Cain) who ran a chain of pizza shops and seems to think this is enough experience to run the country. There is the evergreen Ron Paul, who looks better over time in the measure that his party candidates increasingly evidence pre-reconstruction beliefs. There is Newt Gingrich, serial adulterer and engineer of the last government shutdown, pontificating about a return to “constitutional values” ( he must be thinking about the founding father’s penchant for liasions with female slaves). There is millionaire Mitt Romney, once again attempting to recast himself in a right-wing image, this time as a Tea Party supporter. Romney and another candidate, John Huntsmann, are both Mormon former governors of states that in no way reflect the larger society in which they exist (Massachusetts is an unsually liberal state, while Utah is unusually conservative). Behind this motley suit-clad crew are the ranters and ravers, led by Sarah Palin and Glenn Beck, who want to bomb Iran, Venezuela, North Korea, Pakistan and any other place the communist-socialist, islamofascist, feminazi, ecoterrorist gay-lesbian secular humanist alliance is taking hold.
The GOP is a party now governed by its rump, in the guise of the Christian fundamentalists and Tea Party anti-government activists (who in spite of their claimed belief in self-reliance are strangely silent on the issue of accepting federal aid to the hurricane disaster zones, perhaps because Bachmann and televangalist Pat Robertson both claimed that the hurricane and the earthquake that preceded it on the East Coast were acts of God designed to warn politicians to be fiscally prudent and morally conservative). It is a party that has congressional leaders that openly gloat that their primary objective is to make the Obama administration fail, even if it takes forcing government agency closures as arguments over budgetary matters continue at an impasse (the agreement on the debt ceiling is only a temporary measure). This includes trying to tie federal disaster relief to budget cuts in other areas. It a party that is openly disloyal and disrespectful of the presidency, and which has open champions on conservative media outlets that are equally disrespectful and delusional in their approach to “correcting” the multiple ailments afflicting the country. These people dream of an Ozzie and Harriet la-la land where Negros, Hispanics, Arabs and other non-whites know their place.
The trouble for this crowd of neo-cons, bible-bashing fundies, xenophobes, racists, isolationists, revanchists and neo-imperialists (and yes, there is a bunch of contradictions layered in there) is that their proposed solutions to the US malaise avoid the major issue and in fact will serve to exacerbate it: growing class differentials, both in income and opportunity. In the US today, the top 400 individual income earners control as much of the national wealth as the bottom 60 percent of the population. This is what I have called in the past the “Brasilianisation” of US society, where income inequalities become monumental, except that now Brazil is thriving and growing its middle class by using the type of state-managed macroeconomic policies so reviled by the American Right, to the point that it beginning to look like what the US once was (no insult to Brazil intended).
Yet the Tea Baggers and GOP want to continue tax breaks for the upper ten percent of the population and corporations (some of whom have paid no net tax in the last five years) while drastically reducing public funding for so-called “entitlements” like universal health care, welfare, education and infrastructure development. The new scapegoats, along with the traditional targets of brown-skinned immigrants, are public sector employees, who now are being targeted for layoffs and redundancies at both the state and federal level. A major target are public school teachers, whose pensions are considered to be a major drain on state coffers (in spite of the fact that these employees paid a significant percentage of their salaries into their pension funds).
Behind all of this is open hatred of unions to the point that some GOP candidates want to eliminate them entirely. Bachmann, for example, wants to disestablish the National Labor Relations Board, a non-partisan oversight body established by FDR as part of the New Deal that encourages the right to collective bargaining and union representation in the workplace (but not closed shops). Anti-union governors have emerged in several states (most notably in Florida, Minnesota and Wisconsin) using union-bashing as a populist tool in pursuit of fiscal reform. Given president Obama’s conciliatory and compromising stance vis a vis GOP demands (some have called it a sell-out), cracks in the Democratic support base are starting to show, with the labor movement, Congressional black caucus and Hispanic leaders all denouncing his retreat from the “progressive” (as much as you can be in the US) policies on which he campaigned. This augers poorly for his re-election chances in 2012, although given the dog-and-pony show that is the GOP candidate list, he remains the default option.
Of course, these same reactionaries want the US to maintain a global military presence (now in more than 80 countries) that can strike at any adversary, real or imagined (recall the invasion of Grenada under a previous Republican president). They fail to understand that keeping a global war machine requires and exceptional level of public funding through taxation, and that the 100+ trillion dollar US public debt is in large measure due to the Bush 43 administration’s deficit-spending pursuit of two wars of occupation (one of necessity, one of choice) that is currently costing 1 million dollars per deployed soldier per day (one only has to think of the logistics lines and cost of equipment to see how these figure tallies up).
Rather than push to withdraw or downscale the US foreign military presence these same folk preach about the need to maintain the US role as global policeman, particularly in light of the re-emergence of China and Russia as strategic rivals along with the threats posed by states such as Iran and other middle powers that fail to adhere to US dictates. They deny that they are imperialists, but in order play the role of world cop the GOP is willing to sacrifice the roots of domestic stability, in the form of an equitable tax base and the robust provision of public goods and services.
This brings up what the GOP and Tea Party extremists cannot see and what their policies will aggravate: class conflict. The US has always been good at deliberately down-playing class conflict in favour of racial tensions, cultural differences and issues of social choice. During times of plenty, say the 15 year period between 1993 and 2008, the underlying class divisions in US society could be more readily submerged by these distractions, making the electorate easily manipulable by the corporate-political elite that benefited the most by the macro-economic policies of the last two decades. But in the last three years, as the same economic elites who plunged the US economy into recession were awarded corporate bail-outs by both the Bush 43 and Obama administrations, millions of “ordinary” Americans have lost their jobs, their homes and their future prospects. Now, rather than providing the federal safety net as a stop-gap against further social dislocation and the unrest that it brings, the GOP is successfully pressuring the federal government to remove key components of the fundamental social contract that has underpinned US society since the 1960s.
The proposed conservative roll back ignores the fact that what got the US out of the Great Depression, the New Deal, was founded on a federal job creation program, and that the Great Society of the 1960s was rooted in the expansion of civil rights tied to equal opportunity access promoted and enforced by the federal government. Instead, the American Right has adopted a “survival of the fittest” approach in no small part because they are the fittest to survive given who their economic benefactors are. The reality is that their proposed remedies are exactly the opposite of what has worked in the past to revitalise the economy and will have negative consequences far in excess of whatever benefit they hope to achieve.
What the GOP, Tea Baggers and the frothing-at-the-mouth media conservatives are blind to is the fact that their policies will accentuate class differences, leading to increasing alienation and dispair amongst those for whom the American Dream no longer exists. One only need to look at the UK riots to understand where such policies lead to, yet the likes of the infamous Koch brothers (billionaires who are funding the Tea Party movement) continue to push for policies that reduce the ability of the federal government to help those at the bottom of the socioeconomic totem pole.
There is irony in the fact that the Tea Party movement is made up of mostly white middle and working class people yet advocates tax and fiscal policies that openly favour the rich and corporate interests instead of their own. In fact, the Tea Party movement is backing policy prescriptions that are a thinly veiled attack on the working poor and lower middle classes as much as they are a coddling of the wealthy. But then again, false consciousness is a common feature of declining class fractions confronted with the evolution of society in which they no longe matter, as they seek to cling to a nostalgic version of the past in which they served as the motor force of the economy and culture. They no longer are, and the conservative correctives will ensure that it stays that way.
The bottom line is that like the fools who ignored warnings about the hurricane, the American Right is plunging the country towards its worst nightmare: the day in which class conflict emerges out into the open and cannot be disguised by so-called “culture wars” and the other customary diversions that have been used successfully in the past. When that day comes not only will the discourse of politics be different. So too will be social interaction, which will begin to adopt centrifugal rather than centripetal characteristics as the fabric of society begins to fray.
NB: A note for Lew: you will be interested to know that television advertising in the US increasingly sees the use of military personnel (or actors protraying armed service people) in a variety of huckster roles, from selling donuts to cars to anxiety medicine. Most of the military personnel being potrayed (including female soldiers) are depicted as being from the enlisted ranks, as a common touch with the consuming masses. Since you are the media analysis guru I shall leave it to you to ponder the implications of the military presence in US advertising, but if it is true that advertising reflects more general social preferences, trends and mores, then from my non-expert vantage point it sure looks like the militarisation of public discourse is near complete (which only will make the impending clash of class interests that more alarming).
Market responses to the US debt crisis and financial downgrade have been like king tides as of late, and inevitably speculation centers on the possibility of a “double dip” global recession (this speculation is more than rhetorical. Gold and other precious metal prices have spiked overt the last three weeks as investors flee the stock, bond, commodity and currency markets). There is much talk, some fearful and some hopeful, of a global meltdown of epic proportions. The argument goes that downgrading the US credit rating devalues US Treasury bonds and the dollar, which slows US private investment at home and abroad, decreases domestic consumption, increases unemployment and generally prolongs the recession begun in 2008. This ripples negatively across the globe given the interconnectivity of commodity chains and the central role of the US in them. Be it on the Left or the Right, the belief in state bankruptcy is taken as an article of faith.
The reality is different. What is happening is a fiscal crisis of the Western State rooted in a cyclic crisis of capitalism. Arguments about the blown-out US public debt obscure the fact that it is the result of the same conditions that produced the 2008 recession and which are at root the cause of the next one. For the last thirty years the ‘bubble” of private debt was replicated by the US Government, in the last decade under the strain of simultaneously fighting two prolonged low intensity conflicts. In Europe public debt was in part procured in order to compensate for private debt (via the provision of subsidized entitlements). Capital was lent on looser and looser terms as interest payment calculations came to rival returns on productive investment as the dominant macroeconomic logic. The market in financial derivatives boomed, then busted, bringing with it a crisis in small scale property ownership at the same time that major manufacturers were being bailed out by the US government.
There is a difference, however, between the private sector and the State when it comes to fiscal crises. The analogy between States and firms is overdrawn. Firms go bankrupt; States do not. States may default on loans and suffer the indignities of downgrading by financial institutions, but they do not go out of business. The reason is simple. States with a presence in the global economy may fail but they do not cease to exist.
Modern states are political entities with other measures of power beyond economic resources, are rooted in historical and cultural ties within more or less fixed borders, have distinct political systems and political regimes that govern them, and are therefore sheltered from the hard realities that beset wayward market agents in a globalised system of production, service and exchange. More importantly with regard to the social and political relations of production, the modern nation-state supercedes the market at any specific moment even while being generally subject to its rhythms and dictates. It is, after all, a capitalist type of state that is not reducible to the productive apparatus.
Imagine even if the US defaulted on its current obligations. Its credit rating would fall further in parallel with the value of its currency, but how long will that last? Even if the US fails its financial obligations, it would be the markets that push for a debt restructuring favourable to it. As the core of the global economy, the US is simply too big to fail because its financial collapse would reverberate widely and deeply through the world. In fact, with the exception of undeveloped failed states and microstates with minimal economic resources to promote, virtually all modern states can survive a fiscal crisis and default.
Take Argentina, which in 2000 defaulted on its foreign loans, uncoupled its currency from the US dollar and then renegotiated the terms of its obligations. Since most of the outstanding balance was interest rather than principal, foreign creditors were eventually forced to settle on terms favourable to the Argentines (about 60 cents on the dollar lent). The weakened Argentine peso stimulated commodity exports and attracted foreign investment in resources and primary goods. In spite of endemic corruption, political interference and a multitude of market inefficiencies, over the last five years Argentina has averaged growth rates in excess of six percent and attracted the highest levels of foreign investment ever even while maintaining a large public deficit.
Greece, the poster child of all that is supposedly wrong with governments and societies that do not couple entitlements with production, is another such case. What would happen if Greece defaulted on its recently rescheduled loans? Will it cease to be? what it could do is drop out of the Eurozone, replace the Euro with the much less expensive drachma, and print money to fund its domestic obligations. Somee foreign investors may flee, but local capitalists will continue to engage the domestic market, people will continue to consume, albeit at lower rates with regards to imported goods, tourists will still flock to see the historical sites and visit the islands, and the country will continue to exist. In fact, should it be successful at restructuring its economy on more internally-focused terms out from under the straitjacket of Eurozone obligations (say, by making its tax collection system more rational and efficient), it could serve as a model for the other “PIGS” nations—Portugal, Ireland and Spain—as well as Italy.
It was Northern European, mostly German capital, directly and channeled through the European Central Bank, which sought to recycle in the European periphery the super-profits accrued during the last two decades of derivative market expansion. These are the creditors who took the risk in the PIGS and who now demand debt repayment schedules rooted in austerity measures and privatization programs. They are also the beneficiaries of a strong Euro, unlike the weaker Southern European economies now under siege. Should debtor countries in Europe decide to reconfigure their economies around a devalued national currency a la Argentina, the European Union will be finished as a currency regulator. Here the sub-regional ripple or contagion effect makes each of the PIGS too big to fail, something that is magnified in the case of the US. Loss of credit rating and a high debt to GDP ratio, in others words, does not translate into State bankruptcy.
The larger point is that states can default but they cannot be bankrupted because they are not solely economic agents but instead sovereign political actors with interests that transcend a financial bottom line. They can be upgraded and downgraded as financial risks, but even if investment falls and inflation rises, they will not disappear. Think of Brazil and Argentina in the late 1980s when inflation ran at over 1000 percent per year. Did they disappear? Did all foreign investment dry up? Did local markets crash?
Truth be told, capitalism, led by finance capital, was on overheated overdrive for the two decades before 2008, only slowing down briefly after events such as 9/11, even when objective conditions advised against the maintenance of the macroeconomic policies private agents used to calculate the speed of their returns. Western States emulated private agent logics, whereas Asian banks and sovereign wealth funds were less keen to adopt derivatives-led financial approaches backed by increasingly unsecured loans (although some of that did creep into Asian markets as regional economies attracted Western investment).
Here is where global networks come in. Rather than wage war on States with economies in default, other States that are debt free or less indebted work to cover their investments, and those of their private agents, in the debtor States. This means that even if private agents in the debtor States fail as a result of their market excesses or miscalculation, and State treasuries do n not have enough reserves to cover their debts, States remain open for business, perhaps even on more favourable terms depending on the nature of sovereign debt restructuring agreements (public debt for equity swaps are one measure that can improve State efficiencies as a result of restructuring). Inefficient producers are expelled from the market; inefficient States muddle along.
The entire Western capitalist combine was due for a retrenchment given the downward slope it has been on since spending, both public and private, exceeded productive output in material goods and services. So long as money could be made off of lending money and risks were passed on to increasingly lower-level actors, early 21st century capitalism saw States tax and spend without coherent productive purpose (which mirrored the approach of the financial markets). This was a good political calculation but not a sound economic grounding for future productive growth within current capitalist parameters. Thus the turn towards private sector retrenchment in 2008, with public sector retrenchment now following.
We hear about the demise of various States because they can no longer afford to repay what they have borrowed in order to maintain whatever it is that is considered precious to national identity and political stability–public goods and entitlements in Europe, a war machine in the US. Retrenching Western States may not be able to provide these services in the measure they used to, but thy remain (however diminished) as linchpins of an international system that has its origins in the Treaty of Westphalia rather than Bretton Woods or the Washington Consensus. States are the ties that bind that global system of exchange, and Western States continue to have a central role in it even as the system moves towards increased multipolarity.
Markets and politicians alike need to be cognizant of this fact, because as Keynes pointed out, it is political conditions, not economic conditions, that are the best guarantors of long-term investment. Rather than the economic particularities of a given investment climate at a specific moment in time, political stability offers better conditions for secure future private return. A stable national polity is the best guarantee of profit even if the public books are not balanced. That is the political cost for the social peace that is the basis for economic stability.
Ironically, it was the short-term focus of the macroeconomic logics that propelled the “bubble” that led first to the financial crisis of 2008 and now to the current conditions of political impasse and social instability in many liberal democracies. That is where the convergence of the fiscal crisis of the Western State and the cyclic crisis of capitalism can lead to liberal democratic State failure: when it produces a crisis of legitimacy of the political elite, often confused with regime crisis, that once rooted in and superimposed on the economic downturn and social unrest constitutes an organic crisis of the State. The UK evidences these type of pre-conditions.
Rather than demand zero-sum tax cuts and a diminished State role in guaranteeing the social relations of production, the priority of the market during a State fiscal crisis should be to to express confidence in the State because delegitimisation of the latter is an absolute guarantee of disasterous market consequences for the private actors involved with them in the event that they are overthrown or fragment. That is where market ideologues have failed in their basic obligation: to help foster the political and socio-economic conditions in which stable rates of private return are generated. Instead, they are exacerbating the crisis with their jitters, demands and panic trading. This will not lead to an organic crisis in most liberal democratic states (which will muddle along), but it could produce legitimacy crises in newly democratic states or those with significant social cleavages. Even then the prospect of State, as opposed to regime or private sector failure, is unlikely.
All of which is to say that when it comes to the fiscal crises of modern Western States, this too shall pass.
Posted on 14:24, May 24th, 2011 by Pablo
One axiom of mediation is that the parties sincerely want to settle their dispute and realise that mutual concessions will have to be made in order to do so. Another is that the mediator has to be procedurally and substantively neutral–s/he has no interest in the specific terms of the result and is bound to procedurally enforce the rules on negotiations as well as externally enforce the settlement (which in effect makes the latter a contract between the disputants).
This is why Barack Obama’s latest attempt at mediating the Israel-Palestinian conflict is doomed.
In order to establish a semblance of neutrality, he proposed that Hamas recognise Israel’s right to exist in exchange for Israeli acceptance of the (post-conflict) 1967 borders as the basis for negotiations on a two-state solution. He said that mutually agreed upon land swaps would form the basis for the contract. Neither Hamas or the Israeli government accepted the offer and instead rejected it outright. Although it is possible that Obama’s initiative is just the opening gambit in a more delicate elaboration, it is also quite possible that this was his best offer, which is now dead in the water.
The problems with the proposed deal are many. With regards to the US, it is clearly not an impartial mediator. Whether the administration of the moment wants to or not, the power of the pro-Israel lobby and Israel’s strategic connections (intelligence sharing, weapons acquisitions and covert political maneuvering) ensure that the US will support it as the default option. To that can be added the fact that the US has designated Hamas as a terrorist organisation and openly supports Fatah as the legitimate representative of Palestinian interests even though the latter lost its electoral mandate to Hamas some years ago. By any measure the US is not impartial, neutral or objective, so its role as a mediator is reduced to pressuring Israel to engage limited concessions in the hope that Hamas will take the bait and offer significant concessions of its own. That will not happen. And yet no other country has offered to step into the breach, and it is doubtful that any other country (the UK? Germany? France?) would be acceptable to both parties.
As for the principles, they have no real interest in cutting a deal that binds them over the long-term. Politics in Gaza and Israel are dominated by fundamentalist discourses that see the conflict as a zero-sum struggle where the “other” is seen as sub-human and inherently evil. Both governments are divided and weak, the Palestinians visibly so but the Israelis no less so in spite of their veneer of unity. Corruption has become a major problem on both sides, which delegitimates their standing as honest interlocutors and representatives of their respective constituencies.
Moreover, both Israel and the Palestinians have foreign partners who overtly or covertly work to prolong the impasse and low intensity warfare because it is seen as serving their geopolitical objectives (Iran and Saudi Arabia come to mind). Then there are the weapons merchants and others who see profit in fighting and who do not wish to see the source of that profit end. One might argue that there even are NGOs and humanitarian agencies that have a vested organisational interest in an unresolved armed standoff that provides them with the opportunity to “do good.” In other words, the constellation of interests that favour the continuation of the Israeli-Palestinian conflict outweigh those that sincerely seek a durable peace.
Which is why Obama’s initiative will not prosper. But there is a factor now at play that may make the US role irrelevant and actually force a hole in the diplomatic logjam obstructing resolution of the Palestinian “question:” the Arab Spring. Although it has yet to result in democracy anywhere in the Arab world, the groundswell of popular protest against authoritarianism has been a game-changer (of sorts). The change is in the acceptance of non-violent mass resistance as the preferred method of voice and redress. Not only does this strategy explicitly turn its back on jihadism. It also forces regimes to either up the ante and engage in mass repression (such as in Syria), or attempt to reform-monger in a way that maintains elite interests while offering more avenues of representation and service to the populations in question. Most importantly, though, it forces the Arab world to reappraise the regional status quo, specifically with regard to the status of Palestine, in such a way that it will make it increasingly less tenable for Israel to continue its policy of illegal settlements and armed force. With popular demands for a harder line on Israel emerging in places like Egypt, the pressure is on for the “reformist” leaders to reconsider the options with regard to Palestine. In addition, the use of (mostly) non-violent passive resistance against Israel such as the Nakbar protests on the Israeli-Syrian border forces it to show its authoritarian stripes (as it did in killing a half dozen of the cross-border protesters) or live up to its supposedly democratic principles when confronting unarmed protest.
Given Israel’s current political climate, it may well ignore all democratic pretense and fire away at will against peaceful demonstrators. But that is a short-term solution. The longer-term impact of the Arab Spring will be to force increased accountability on Arab regimes, which in turn will require them to adjust their approaches to Israel and Palestinians in ways that will not uphold the status quo ante. Should that happen, then it will be Israel that will be forced to make the first significant move with or without US backing, and it will do so not out of a sense of idealism but because it has pragmatic self-interest in doing so. After all, Israel is the stronger actor in this conflict. It has less to lose and much to gain when offering a genuine unilateral concession, in the beginning of what game-theorists call a “tit-for-tat” strategy (that is, it opens with a cooperative move then mirrors the adversaries’ response). It may take a few iterations and more concessions to elicit a cooperative response from Hamas, and the outcome could still result in failure, but that is how the game will have to be played if there is any hope of reaching a negotiated compromise.
Hardline Zionist talk notwithstanding, the best guarantee of Israel’s long term security given the changes underway in the Arab world is not superior counter-force as a deterrent. Instead, the solution that guarantees Israel long-term security is diplomatic, and that involves over-riding hardline interests in pursuit of diplomatic flexibility. There will be domestic consequences when it does make the first move, which will have to involve the unilateral eviction and withdrawal of newer settlements on occupied Palestinian land (think of the precedent of violent resistance by illegal settlers to the limited evictions undertaken by the Israeli government to date), and Hamas and Fatah will have to agree on a commensurate response if negotiations are to advance to the point of establishing a blueprint for dual statehood (which is the only realistic option and where recognition of Israel’s right to exist comes in). None of this will be voluntarily generated by the elites currently in office, not will it be the US that breaks the impasse and brokers the deal. Instead it will be the extension of the Arab Spring into Gaza and Israel that may offer the best hope for a diplomatic opening in pursuit of a durable peace, and should that opening come, it will be endogenous rather than exogenous in nature.
Although it is hard for the Obama administration to do given the imperial hubris that infects US domestic politics and foreign policy, the best thing it can offer is to quietly encourage the Arab Spring, openly condemn repression, seek broader international consensus and let events take their course. Or, as a senior Israeli intelligence official told me a few years ago (and I roughly paraphrase from memory here), “although conditions are not favorable to negotiations at the moment, there will come a time when both sides realise that theirs is an unhappy marriage, but it is for the children’s sake that they stay in it and make it work.” That moment may shortly be upon us, and it will be the “children” who force the issue.