Category Archives: Foreign

UAVs, Navy, Satellites, Battle Stars

This post, which I want to keep pretty short, feeds off my post on re-orienting national security priorities.

I read a fascinating paper provocatively entitled “How the US Lost the Naval War of 2015” (PDF), by James Kraska.

It takes a look at what is happening now as the US Navy flounders and the Chinese Navy quickly ramps up, and then suggests what might happen if China decided to sink the USS George Washington in 2015.

What fascinates me about this is that US Navy dominance is sort of seen as a given these days, something not worth worrying about, but naval supremacy has always been a significant factor behind any superpower’s reign of world affairs.  The US gladly took over the mantle of naval superiority and its positive externalities for world security after the United Kingdom found it in their best interest to ally with the US.  The Royal Navy’s battleship-style fleet did not transition well into the age of submarines and aircraft carriers.  The loss of the Suez Canal was a significant barrier, as well.

So the US took over after World War 2 and has since controlled the oceans.  This has enabled it to push an era of free trade and open water travel that has made it cheaper to ship resources than even to fly them, so much that the cost is almost negligent.  In terms of protecting capitalism, having the US superpower in control of the oceans has been incredibly successful.

Now the US focuses more on satellite/overhead imagery, and more recently, on asymmetric warfare.  Which has left several gaps in the American strategic security worldview.

The paper suggests that China could destroy a US carrier, which would have a psychological effect on Americans perhaps bigger than a physical effect, although with a Chinese contractor shutting down the Suez for “repairs” and China throwing up other roadblocks, this could delay the US in appropriately responding its massive, yet diffused fleet into the Pacific.  Control of the Pacific would shift as China’s neighbors, by sheer proximity, would be reluctant to move to counter China’s naval aggression.  What would the US be able to do?

It’s a fascinating paper although obviously it only looks at an American military perspective and not all the other factors:  economic, cultural, etc.

But it also makes me wonder why the US is so focused on a small group of jihadists when there are bigger fish to fry for continued American dominance.

1) It is in the US interest to ensure continued and unfettered control of the oceans, to ensure open trade, safe shipping lines, and access to necessary strategic hold-points like Guam, Hawai’i, Okinawa, Europe, and other navy bases.

Robert Kaplan is associated with the neo-cons but he is an excellent security historian.  What he says about US naval moves against China is that we should focus on building our presence so enmeshed with Pacific interests that China will be more inclined to ally with us than to try to displace us.  This is a strategy akin to the UK realizing it had to partner with the US after WW2, and akin to the argument that alienating Japan before WW2 would push them to attack the US for control of the Pacific.

Some quotes:

“None of this will change our need for basing rights in the Pacific, of course. The more access to bases we have, the more flexibility we’ll have—to support unmanned flights, to allow aerial refueling, and perhaps most important, to force the Chinese military to concentrate on a host of problems rather than just a few. Never provide your adversary with only a few problems to solve (finding and hitting a carrier, for example), because if you do, he’ll solve them.

“Andersen Air Force Base, on Guam’s northern tip, rep- resents the future of U.S. strategy in the Pacific. It is the most potent platform anywhere in the world for the projection of American military power. Landing there recently in a military aircraft, I beheld long lines of B-52 bombers, C-17 Globemasters, F/A-18 Hornets, and E-2 Hawkeye surveillance planes, among others. Andersen’s 10,000-foot runways can handle any plane in the Air Force’s arsenal, and could accommodate the space shuttle should it need to make an emergency landing. The sprawl of runways and taxiways is so vast that when I arrived, I barely noticed a carrier air wing from the USS Kitty Hawk, which was making live practice bombing runs that it could not make from its home port in Japan. I saw a truck filled with cruise missiles on one of the runways. No other Air Force base in the Pacific stores as much weaponry as Andersen: some 100,000 bombs and missiles at any one time. Andersen also stores 66 million gallons of jet fuel, making it the Air Force’s biggest strategic gas-and-go in the world.

“Guam, which is also home to a submarine squadron and an expanding naval base, is significant because of its location. From the island an Air Force equivalent of a Marine or Army division can cover almost all of PACOM’s area of responsibility. Flying to North Korea from the West Coast of the United States takes thirteen hours; from Guam it takes four.

“”This is not like Okinawa,” Major General Dennis Larsen, the Air Force commander there at the time of my visit, told me. “This is American soil in the midst of the Pacific. Guam is a U.S. territory.” The United States can do anything it wants here, and make huge investments without fear of being thrown out. Indeed, what struck me about Andersen was how great the space was for expansion to the south and west of the current perimeters. Hundreds of millions of dollars of construction funds were being allocated. This little island, close to China, has the potential to become the hub in the wheel of a new, worldwide constellation of bases that will move the locus of U.S. power from Europe to Asia. In the event of a conflict with Taiwan, if we had a carrier battle group at Guam we would force the Chinese either to attack it in port—thereby launching an assault on sovereign U.S. territory, and instantly becoming the aggressor in the eyes of the world—or to let it sail, in which case the carrier group could arrive off the coast of Taiwan only two days later.

“During the Cold War the Navy had a specific infrastructure for a specific threat: war with the Soviet Union. But now the threat is multiple and uncertain: we need to be prepared at any time to fight, say, a conventional war against North Korea or an unconventional counterinsurgency battle against a Chinese-backed rogue island-state. This requires a more agile Navy presence on the island, which in turn means outsourcing services to the civilian community on Guam so that the Navy can concentrate on military matters. One Navy captain I met with had grown up all over the Pacific Rim. He told me of the Navy’s plans to expand the waterfront, build more bachelors’ quarters, and harden the electrical-power system by putting it underground. “The fact that we have lots of space today is meaningless,” he said. “The question is, How would we handle the surge requirement necessitated by a full-scale war?”

“There could be a problem with all of this. By making Guam a Hawaii of the western Pacific, we make life simple for the Chinese, because we give them just one problem to solve: how to threaten or intimidate Guam. The way to counter them will be not by concentration but by dispersion. So how will we prevent Guam from becoming too big?

“In a number of ways. We may build up Palau, an archipelago of 20,000 inhabitants between Mindanao, in the Philippines, and the Federated States of Micronesia, whose financial aid is contingent on a defense agreement with us. We will keep up our bases in Central Asia, close to western China—among them Karshi-Khanabad, in Uzbekistan, and Manas, in Kyrgyzstan, which were developed and expanded for the invasion of Afghanistan. And we will establish what are known as cooperative security locations.

“A cooperative security location can be a tucked-away corner of a host country’s civilian airport, or a dirt runway somewhere with fuel and mechanical help nearby, or a military airport in a friendly country with which we have no formal basing agreement but, rather, an informal arrangement with private contractors acting as go-betweens. Because the CSL concept is built on subtle relationships, it’s where the war-fighting ability of the Pentagon and the diplomacy of the State Department coincide—or should. The problem with big bases in, say, Turkey—as we learned on the eve of the invasion of Iraq—is that they are an intrusive, intimidating symbol of American power, and the only power left to a host country is the power to deny us use of such bases. In the future, therefore, we will want unobtrusive bases that benefit the host country much more obviously than they benefit us. Allowing us the use of such a base would ramp up power for a country rather than humiliating it.

“I have visited a number of CSLs in East Africa and Asia. Here is how they work. The United States provides aid to upgrade maintenance facilities, thereby helping the host country to better project its own air and naval power in the region. At the same time, we hold periodic exercises with the host country’s military, in which the base is a focus. We also offer humanitarian help to the surrounding area. Such civil-affairs projects garner positive publicity for our military in the local media—and they long preceded the response to the tsunami, which marked the first time that many in the world media paid attention to the humanitarian work done all over the world, all the time, by the U.S. military. The result is a positive diplomatic context for getting the host country’s approval for use of the base when and if we need it.

“The first part of the twenty-first century will be not nearly as stable as the second half of the twentieth, because the world will be not nearly as bipolar as it was during the Cold War. The fight between Beijing and Washington over the Pacific will not dominate all of world politics, but it will be the most important of several regional struggles. Yet it will be the organizing focus for the U.S. defense posture abroad. If we are smart, this should lead us back into concert with Europe. No matter how successfully our military adapts to the rise of China, it is clear that our current dominance in the Pacific will not last. The Asia expert Mark Helprin has argued that while we pursue our democratization efforts in the Middle East, increasingly befriending only those states whose internal systems resemble our own, China is poised to reap the substantial benefits of pursuing its interests amorally—what the United States did during the Cold War. The Chinese surely hope, for example, that our chilly attitude toward the brutal Uzbek dictator, Islam Karimov, becomes even chillier; this would open up the possibility of more pipeline and other deals with him, and might persuade him to deny us use of the air base at Karshi-Khanabad. Were Karimov to be toppled in an uprising like the one in Kyrgyzstan, we would immediately have to stabilize the new regime or risk losing sections of the country to Chinese influence.”

2) To reinforce naval supremacy will require control of the skies and space.  Orbital satellites provide significant communications for all American forces and commercial interests, and a satellite war would cripple American capabilities.

3) Protecting satellites and increasing outer space security will require something akin to George Friedman’s (CEO of STRATFOR) battle stars (read “The Next 100 Years”), large manned orbital stations that provide armaments and increased surveillance for protecting satellites, providing imagery and comms to the ground, and even shooting down rockets, planes, or attacking ground targets.  Friedman suggests 3 battle stars could be required, orbiting continually in line with the earth’s orbit to always provide overhead support in certain regions.

Says John Reilly in a fair review (read the rest) of George Friedman’s book:

“The section on the Third World War allows the author to wax techno-thrillerish on the matter of mid-21st- century weaponry. We learn a great deal about hypersonic weapons and their ability to blow up unsatisfactory objects anywhere on Earth in a matter of minutes. He has plainly thought a great deal about the military applications of space which, again, he views as an extension of Mahan’s strategy of controlling the world’s trade routes. We get a description of geosynchronous Battle Star observation-and-command stations. (He adopts the term “Battle Star,” without noting the implications of that term for his optimistic view of the military and civilian applications of robots of all kinds.) We also get an excursion to bases on the Moon that sounds not altogether unlike Robert Heinlein’s “The Moon Is a Harsh Mistress.””

4) UAVs will continue to improve in sophistication and lethality, and are already providing extra eyes for American border security (see San Diego), Afghanistan/Pakistan targets, and eventually everywhere.  They are rapidly getting improved optics, more dangerous armaments, higher altitudes, and more time overhead (like these UAVs that can hover instead of do racetracks).  UAVs will probably be complementing increasingly robotic android armies, taking humans off the front lines to be replaced with dispensable robots to do war-fighting and perimeter security.

These seem like very far-off strategic priorities but these must be driven by intentional funding, innovative projects, and understanding by the citizenry of their importance.  I am far more in favor of continued intelligence dominance by the US than I am of attempting to do neo-colonial counter-insurgency and nation-building abroad, when domestic security and international respect for governments would suffice in building networks against terrorist plots.

There are plenty of other questions, too, such as whether it would be bad for China to compete with us or take over the seas.  Or what the impact would be of increased naval presence in the Pacific (see below the long comment about Guam).  Or whether alternatives are viable (building floating bases instead of using land).  I’d like to see more discussion on all of that below, if you could take the time.

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Filed under Foreign, Globalization, Military, Policy, Security, Terrorism/Insurgency

Reorienting National Security Priorities

Below is my plan for reorienting American security priorities, which I think are currently misaligned, often conflicting, and outdated.  This is not a plan for innovation, or financial reform (which is one of the most pressing national issues), or for progressivism.  It’s a plan to increase the long-term durability of homeland security.

Politics, as I’ve learned in my brief 2 years here in DC, is something too complex for me to understand within the realms of my attention span.  What may seem like a good (or even easy) idea to implement has to be palatable to the seething mass that is Congress, and must please interest groups, and must come at an opportune time.  The horse trading, budget proposals and approvals, and distortions that are involved in any federal level issue are over my head.  That alone is part of the reason I’m inclined to start up a small business one day and avoid such bureaucratic nightmares.

Also with regards to politics, President Obama’s style appears to be to go out of his way to allow affected parties to kibbitz and argue and debate an issue until consensus is reached.  This is frustratingly evident for the Commander-in-Chief’s wait-and-see attitude towards the Afghanistan run-offs and having Afghanistan as a credible partner before deciding what to do next with troop levels.  It should not take a national debate to know that 1) any general in charge will press for continued war in Afghanistan and 2) Afghanistan is the graveyard of empires.

My thoughts on President Obama’s style are that his job as an executive is not to dither (as Cheney would say), but to be a decider (as Bush the Younger would say). (that said, Cheney could have benefited from being more of a ditherer while Bush the Younger could have been more thoughtful in his decidering)

President Obama’s waiting can be seen as weakness, lack of certitude (does he really need to consider whether gays should serve in the military openly?), and lack of leadership.  Leaders lead through making tough decisions quickly, firmly, yet cool-headedly.  In the military, we were taught as sergeants and even as junior enlisted that making a bad decision is better than making no decision at all.  President Obama is coming up on 9 months in office and the people are getting impatient.

After having witnessed how DC works, I’ve noticed that when an Administration puts its weight behind a policy, or puts more funding into a certain area, businesses and non-profits react swiftly and with commitment.  If President Obama said tomorrow we are moving to solar power, even energy companies would play ball.  Scouts would immediately be hitting the phones and pavement to come up with the best contract proposals to win that money.  The argument that the nation has to be “ready” for change seems more obstructionist than realistic to me.  America is and always will be an unabashedly capitalist country that passionately desires chasing and obtaining the money.

Complaints that an active executive branch seems like a command economy/government  are crying wolf — companies and non-profits have no problem immediately shifting priorities.  Why should the government be less adaptive, less competitive?  So this gives me hope that an executive who makes forthright decisions would succeed in implementing this plan, regardless of the politicking that would follow it.

With these things in mind, I’ve tried to think of ways in which a current President could push through using executive powers a plan that would be hard for even Congress to stall.

1) Gays in the Military. First, the Commander-in-Chief should dictate that LGBTs (Lesbian, Gay, Bisexual, Transgender) must be allowed to openly serve in the military.  This is justified to the Jacksonians by saying that we need all the talent and strength and volunteers we can get to fight today’s wars.  Once the word comes down, the heads of each service will find a way to implement the policy.  The “problem” of how to integrate LGBTs is not a reason to delay equal treatment of citizens willing to fight. [note:  it would be up to states to decide whether to allow gay marriages, correct?]

2) Universal Human Rights. Allowing gay servicemembers provides a well-publicized opening for which President Obama can reaffirm the American Dream for all people by promoting the spirit of the Universal Declaration of Human Rights, sure to please the Wilsonians (who are concerned with equality) and Jeffersonians (who are concerned with preserving individual freedoms and federalism).  Abroad, a nation that pugnaciously defends, once again, taking in your tired, your poor, your huddled masses, as the Statue of Liberty shouts forth, will be a siren call the way it used to be for people all over the world who believe in the idea of freedom and opportunity, of life, liberty, and happiness.

3) Ending “Wars”. The Commander-in-Chief should withdraw all occupation military forces from Iraq and Afghanistan, thanking the military publicly for its professional service, but stating that America’s mission has changed and that he bears full responsibility for such a decision and no one else.  Programs and celebrations to re-integrate oft-deployed servicemembers back into society will strengthen long-stressed military families.

4) Drug Legalization. The President should legalize all drugs and fund rehab missions for addicts, heavily regulating drugs instead, including imports filtered from Afghanistan and south and central America.  This will cut the knees off drug cartels (Sinaloa, Juarez, La Familia) and enforcer organizations (Los Zetas) in Mexico, who are raising havoc for the Mexican government.

5) New Immigration Policy and Improved Border Security. President Obama, with fewer forces deployed, can focus his Department of Homeland Security and border resources towards an immigration policy that encourages highly-skilled immigrants to come to study, research, work, and live, and which allows more poor immigrants in than before, but with improved documentation.  The President should divert resources freed from Iraq and Afghanistan into helping secure Mexico both through a relaxed drug policy and through cooperative security to arrest drug cartel members.  Mexico is the soft underbelly of American superpower status and its well-being as a successful, secure, happy nation is in our national interest.  The Minute Men, who constitute a Jacksonian tradition in the southwest, should be lauded for their efforts in helping to watch the border, but with improved border security and accountability, their services won’t be needed as much and they can return to their normal lives.

6) Naval and Space Dominance. The Commander-in-Chief can re-assert the nation’s priority towards maintaining naval dominance.  The Commander-in-Chief and the President can look to the Earth’s orbit to assure future American dominance of outer space satellites and future space command platforms.  Much of the reason the US has gained global power is through its taking over full control over the seas from the British.  In the future, control of space will be of utmost importance to US commerce, intelligence, and security, as we are and will be heavily reliant on satellite observation and communication.  Hamiltonians will enjoy continued open-seas security for free trade, while the defense sector will enjoy moving into outer space for improved national security.  The US military will have a lighter footprint in sovereign nations, decreasing the threat of intractable insurgencies.

7) Downgrading Terrorism’s Priority. Terrorism as a long-term priority is not ranked high for the US internally, given the lack of proximity to terrorist-supporting failed nations.  However, its threat should be even more reduced once troops are redeployed from Iraq and Afghanistan, both of which are considered backyards for the global insurgency.  Lacking a near enemy in the US, insurgents will turn to civil war and/or a problem for Iran, Russia, the Stans, India, and Pakistan.  Al-Qaeda will lose much of its rallying cry.  Just think:  could we return to days before the TSA security theater where we have to remove shoes, belts, and dignity at airports?

8) Energy Independence. American energy independence will further mollify Al-Qaeda’s support base.  Pouring money into solar power in particular, which comes to us in an infinite supply, must be our way forward.  Reduced reliance on foreign oil weans us off OPEC and in particular Saudi, an apostate kingdom as Al-Qaeda would refer to it.  Al-Qaeda sees Saudi as being propped up by America in order to be raped for its oil.  US independence from Saudi whim removes the US from the least-braindead of Al-Qaeda anti-American animus.

9) Make New Friends or Strengthen Old Friendships. Returning to being that of a more honest diplomatic broker of peace, the US can step up efforts to ally itself with key regional pivot powers like Iran, Japan,  and Turkey, who constitute influential geopolitical power upon large swathes of the globe.  Pakistan, where the real terrorist threat is, can be more of a priority for American security and diplomacy, since foreign fighters have been long supported by the Taliban and the Pakistani ISI.  It is in the US’s interest to decouple these organizations from Al-Qaeda, while at the same time helping Pakistan to secure its nuclear arsenal from political and physical instability.

The end result of all these moves is that we have a larger, more diverse population base of productive Americans and a fresh stream of immigrants to contribute to the innovation economy.  We have safer borders and a stronger base in North America.  We have fewer albatrosses around our neck so that walking softly and carrying a big stick, being an arsenal of democracy, will be in line with our modern national security priorities.  By downgrading terrorism as a priority, we force other nations to deal with their near-border insecurities, while improving our response to naval superiority, domestic terrorist investigations, immigration policy, and a decreasing drug war threat.

Is this possible politically?  The main problem is that these steps above, taken individually, would not make much sense.  But under an integrated strategy, these steps would make sense to all the political schools of thought that exist within the US.  The only people who would stand to lose from these moves are of course incumbent interests, such as defense contractors who profit from foreign wars, and the Republican party, which has lost its philosophical moorings and which functions right now as nothing more than obstructionists wanting President Obama to fail.

The irony is that the strategy above would actually appeal to fiscal conservatives and to social libertarians, since the wars would end, homeland security would reach less into our private lives, and federal agencies wouldn’t be so stressed for funding from supporting failing drug/terror/border security/diplomacy policies.  The conservatives would find their voice backed up by national policy.

And of course the progressives would benefit because they’ve also ended wars, reduced the pressures of the drug war in Mexico on immigration and jailing for drugs, and ensured a rhetoric of equality for all human beings.

As for the companies and Republicans, well, both will do what they’re supposed to do:  they will re-form around where the profit, financially and politically, is.

It is the American DNA to be fleet, adaptive, innovative, and competitive.  This is the security strategy to encourage that.

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Filed under Energy, Foreign, Government, International Affairs, Military, Policy, Security

US Forces “Volunteer” to Leave Iraq

It’s interesting to live through the times of American occupation of Iraq.  What the Bush Administration sees as a necessary move, not without its faults, that has eventually led to a nascent democracy, is nothing short of tragically comic.  What we see as “giving peace in the Middle East a chance” will in future history books be seen as imperial overreach, classic quest for respect, influence, and resources, and geopolitics.

It’s clear Americans long gave up on this “war” and no longer want any part of it in any sense except to support the troops, whatever that means anymore. (I suspect “support the troops” is akin to wishing a homeless guy well when you see him but walk on by nervously, hoping he doesn’t attack you).  It’s clear the rest of the world thinks our occupation of Iraq is foolish and naive, and some countries and non-state actors think it’s wonderful that we’re willingly spending blood and treasure on an endeavor that’s going to hurt us for decades to come.

It’s also clear that we’ve learned nothing about Islam, Arabs, history in the Middle East, the international system, or democracy as a result of meddling with Iraq.  Which is perhaps the most tragic thing, given that we’ve invested so much in the damn place.  But I guess when Madoff, the Big 3, big banks, and the Bush Administration take us for fools and we hardly put up a fight, we deserve the pains of our own negligence and ignorance.

So what’s going on in Iraq now?

The US and Iraq “agreed” on the terms of American military withdrawal from Iraq recently.  The full document of the agreement between the US and Iraq can be read on Scribd.

The US is required to leave all Iraqi cities by June 30, 2009.  It is then required to remove all military forces (in which the document goes into elaborate definition of what that consists of) by the end of 2011.  Which is still a full 3 years from now, I might add.

Sounds great, right?  Pretty simple and realistic?

Well, the Sadrists refuse to acknowledge the passing of this agreement by the Iraqi Parliament and Al-Maliki.  Their logic is that the deal would be legitimizing American presence in Iraq, and therefore they disapprove.  Juan Cole has a further breakdown of the various Iraqi parties’ takes on the agreement and on federalism vs. central government.

Real Iraqis do not want us in their country (although they do want security).  The only ones who want us there have interests in keeping us there.

Everyone knows this deal is a farce.  The US does indeed want to remove most of its troops, and thankfully through electing Obama, this seems more of a reality.  But there is no way the US is giving up too much of its military presence in Iraq.  It will continue to provide “technical advisors” and “trainers” for Iraq’s military, air force, and intelligence.  Intel and the central government will undoubtedly be strongly influenced by the CIA and other covert operations.  The US has built massive bases and is still working on a brand-new embassy.  These will require logistics, support, and maintenance.

Iraqis know that the US isn’t going away soon.  It may not be clear (even to Americans) what the US wants from Iraq, but it’s pretty clear nothing good or stable will come out of it.

Meanwhile, Iraq is not going to improve.  If someone says the surge worked, you can just stop trusting anything else they say.  Baghdad is “calmer” now because it’s been walled off and because ethnic separation has already occurred.  The number of troops that were added are not commensurate with numbers needed to be able to quell violence — through the rest of the world or through the rest of history.  It seems as though the US bought off the Sunnis to get them to play ball in getting rid of Al-Qaeda, who should have always been an unwelcome presence in Iraq.

People still don’t get why Bush was so bad.  This guy is dumb.  He is happy watching the illusion of elections and democratic government, but he has no understanding of what all that actually entails.  As long as people go through the motions of voting, he thinks it’s progress.  When it comes to what happens afterwards, like the election of someone he doesn’t like, or massive violence and calls of fraud, he doesn’t know what to do with it.

This is why we’re supposed to elect people who understand politics, regional sensitivities and political levers, and maybe even a little knowledge of economics.  It bothers me that people claim Bush is devious and sneaky; he’s clearly not.  He’s a well-meaning buffoon who’s a puppet of the long-time buddy network he installed underneath him (look at how long Cheney, Rumsfeld, Negroponte, et al have been in the game of Machiavellian imperialism).

He’s happy with Iraq, even though Al-Maliki’s Iraq is somewhat akin to a banana republic, without the bananas.  Al-Maliki is on shaky ground and you can bet as soon as he can, he’s going to wipe out any resistance within his government as soon as the US looks the other way (as he did with “former Ba’athists”, the new red-headed stepchild in Iraq and, more recently, with Sunni coup collaborators).  So if you’re Sunni, better watch out.  If you’re Iranian, welcome!  If you’re Kurdish, you’re hoping everyone ignores you so you can continue to slink on by and come closer to a modern Kurdistan.  Until Turkey decides it’s going to take the same opportunity to throw Kurdistan against the wall like Russia did with Georgia.

Doesn’t it piss you off that Bush is clueless about this stuff?  When has he talked about how the Sunnis in Saudi (his friends, I might add) and the Gulf states and Pakistan feel threatened by the strongly Iranian-influenced Iraq?  Bush has completely depleted all of our political capital and armament to do anything more in the Middle East.  The US public won’t stand for further meddling in the Middle East, and all the international players involved in the region realize that the US has no sway there once its military leaves.

In other words, it’s going to be a bloody, messy fight in the Middle East once we leave.  And we will watch cluelessly with our mouthes agape, wondering why those damn Ay-rabs can’t all just get along.  Al-Maliki and the Sunnis will go at it after we leave.  Any vacuum of power will invite Al-Qaeda and other global insurgency groups back in.

The irony is that it seems as though Iraqi politics is pretty interesting on its own, and the most powerful interests in Iraq (like, for instance, the highest grand cleric, Al-Sistani) are trying to push for a sovereign, independent, democratic government.  But the US is determined to be the “peacekeeper” and state-builder, so it’s decided to stay.  The biggest railroading issue in Iraqi politics is, of course, American occupation, but from our lens, we see it as keeping the place from descending into chaos.

As Bill Easterly, development economist, would call it, this is the white man’s burden.  We feel as though it’s upon us to fix everyone else so they can be perfect just like us.  We spend trillions of dollars on other countries, with no accountability from those who are affected by it, and let the automotive industry in our own country eat it.  Not that we should bailout the automakers, but we sure do wrangle a lot more with smaller amounts of money for our own peoples’ education and well-being than we do about the trillions spent fixing countries we don’t understand.

This shit is never-ending.  When will we realize that the best thing we can do is to not get involved?  Are you looking forward to two decades from now when we’re stuck with a bunch of damaged, hurting veterans and an Iraq situation that’s still chaotic?  This is the same stuff you read about in foreign policy history books where the colonizers drew arbitrary borders for entire peoples and then wondered why it didn’t work out.

I hope that this all will not happen, but the underlying currents of neo-imperialism, interventionism, paternalism, love for war and oil, and more, still run strong and are indefatigible in American politics, even after Obama’s being selected president.

Again, I have to be amazed at how we’re now willfully “leaving” Iraq under an “agreement”, which basically, when translated, amounts to us running with our tail between our legs now that the US public wouldn’t take it anymore (after even a Democratic Congress refused to answer the peoples’ wishes to withdraw).

Of course, the warmongerers (most of whom have never been in a combat environment) out there will call this cowardice and emboldening the enemy.  Well, too bad.  If employing the democratic support of your people to support your foreign wars is too difficult, then maybe the point is that the war isn’t actually worth it?  To argue differently is to question democratic rule by the people.  The flip side of that, if you are a pragmatic warmongerer, is that you shouldn’t start a fight you know you won’t be able to finish, even if you think it’s worth it.

I thought it was fitting that an Iraqi journalist threw his shoes at Bush.  An educated Iraqi who’s in a professional line of work throws whatever he can, given the opportunity.  That’s about as much of a condemnation as you can get.  Bush may see it as bizarre and an outlier event, but that shows how out of touch he is with the world he should be the most powerful leader of.  I would venture to say that a high percentage of the people who saw the event (regardless of nationality, color, creed, etc.) identified instantly with the journalist and knew EXACTLY what he meant.

Are we going to be ready for the pent-up resentment and hostility that will come out after we “withdraw”?  History shows that it’s never pretty when the lid comes off a boiling political pot.  An Iraqi journalist got his ribs cracked and sustained other injuries.  Saddam was filmed during what was basically a Shi’ite execution.  And these events were under US supervision!

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Filed under Foreign, Government, Iraq, Military, Policy, Politics, Security, War

Interesting Economic Datapoints

So I’m done with this semester and I was just watching C-SPAN2, which was covering the Senate vote on the automaker bailout.  The vote failed 52-35 or so.  Dow futures were down -325 around the time of the vote.

I am still cash but am getting a bit more antsy to buy than I was before.  I have an “I know it when I see it” approach to bottoms and tops, so I’m waiting for that feeling again.

But it’s clear that the economic outlook is not good, with record unemployment numbers, commodity and energy shocks, and real bloodshed within the old American industries like media, auto, and finance.  Tech and internet has not been immune, but their companies are still announcing improvements and new products…

AMZN

I bought AMZN at 36.5 one day but got shaken out at the end of the day by climax selling.  Since then, AMZN rallied and touched 54-55 as the market bounced off fresh lows a few weeks ago.  What a pain that was to watch.  The rally came off Obama’s announcement of the next economic team, but it’s unclear whether there’s correlation there.

AMZN should announce the next Kindle soon, and it has been opening up its web services platform up even more.  The next generation of Kindle will suck people like me in to buying digital books (and probably be the last time I buy actual books en masse) and any increase in consumer demand will grease all of AMZN’s cloudy wheels.

TED Spread

The TED spread tracks the spread between inter-bank loans and US treasury bills and is a measure of liquidity in the credit markets — if there’s a high spread, then banks aren’t lending because it costs too much to do so.  Here’s the chart:

08_12_11_ted

After the initial credit shock when Bear Stearns folded in Augustish, 2007, you can see that the spread spiked up to about 200 basis points.  From then, the market stabilized until Septemberish of this year, when all the Fannie, Freddie, Lehman, AIG, etc. crap happened.

The market was on the brink of collapse until the Fed and Treasury decided to do whatever it took along with a massive finance bailout.  Until the public money was sure to flow in, the TED spread spiked up to 450 basis points — essentially no money was flowing anywhere within the private banking sector.

The spread then fell and has stabilized as the market’s continued to sink.  Now 200 basis points seems to be an agreed-upon number, but note that it is only back to where we were after the first credit shocks.  The normal TED spread was well below 100 basis points up until 2007.

In other words, there’s still substantial risk and unwillingness to lend.

[Note:  On Tuesday, Dec. 17th, the Fed cut rates essentially to 0%, which should reduce the usefulness of looking at the TED spread since the Fed is essentially acting like another lender…]

Treasury Bills

On Tuesday, for the first time ever, three-month treasury bill interest rates went negative!  This means that, for a brief period, people were willing to PAY the government to hold their money instead of seeking a return elsewhere.  That is, people didn’t even want a return ON their money; they just wanted a return OF their money!

Later, the government managed to sell $30bil worth of T-bills at 0% interest.  Which is still ridiculous.  Here’s the chart:

08_12_11_tbills

From The Sun's Financial Diary

These are rare times…we keep seeing records being broken, aberrances being observed for the first time, red-flag indicators going off everywhere.

Iceland

Iceland’s finance-dominated stock market completely collapsed.  Here’s the chart:

08_12_11_iceland

Icelanders are devastated.  There’s pretty much nothing left.  But to add insult to injury, the index, which had been hovering in the 600’s, just plunged down to the 300’s this week after another major bank failed.

Oil

Here’s the thing about oil.  Everyone who’s been predicting peak oil soon and all these ridiculously paranoid and apocalyptic scenarios were made to look like experts over the summer when oil prices spiked to the $140’s and gas hit $4/gallon.  A lot of financial risk management and analysis reports were written up until now, assuming continued high oil prices.

Of course, oil has since crashed.

08_12_11_oil

In other words, these knuckleheads don’t know what they’re talking about, or where oil prices are going next.  The term “black swan”, I should add, really pisses me off.  Geez.  Enough with Taleb!

Certainly the shock of oil prices has everyone rattled.  The instability of prices along with Obama being elected will hopefully be enough to spur long-term energy innovations to get us out of this fucking mess.  The time for US energy independence is now.  Especially if we really believe in protecting national security, not to mention national (and global) stability.

My position on oil is that its days are numbered as the major energy source, but it will still be needed for many products and as one of many sources of energy, even after we’ve converted heavily away from petroleum.

I also do not believe peak oil is soon.  I believe oil bedevils much of our foreign policy and is tied to our adventures with Israel and the Middle East and South America.  I believe we have in our own hands the ability to rid ourselves of these albatrosses.

I believe the chart above correlates extremely well with the “war” in Iraq, starting in 2003.  I am not sure what happened this summer in 2008.  I know that the Status of Forces agreement started hitting Iraqi politics around the same time but the massive oil spike could have been a climax of worldwide fear.  I don’t know.  The Iraq “war” seems to be all but over now that the SOFA passed and Obama is in, and I think oil is pricing that news in.  Oil has always correlated well with foreign wars.

What Next?

It’s amazing what we as Americans are willing to inflict upon ourselves.  All of this is solvable, and we know approximately what the causes are.  Until Obama got elected, we refused to acknowledge it.  Here’s hoping that Obama can translate a good plan into action. But it will be hard to generate political action when so many interests are set against it, even if it means saving our economy.

In the meantime, the economy and financial markets are still a mess, even after a bunch of layoffs have helped companies streamline.  Will those frictionally unemployed turn into structurally unemployed?  With little emphasis on job re-training, and a prolonged recession, one might think so.

Something does not feel right at all out there in my gut, making me suspicious to put my money forth, and we have yet to deal with the next big financial bomb:  consumer credit.  What happens when people, many of whom have lost jobs and have lost a safety net because of Republican idiocy, run out of money to pay back creditors?

[60 Minutes just did a report on the upcoming 2nd mortgage shock:  option arms resets.  They will balloon homeowners’ monthly expenses and look to be as bad as the first shock.  Watch the entire video for more.

07-10-24d_mortgage-resets-comprehensive

The light-green reflects the damage we’ve dealt with already, and the light-yellow and yellow are what’s still to come.  Sobering.]

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Emergence of New Systems

Last week the National Intelligence Council released its 2025 Global Trends report and naturally our Georgetown MSFS program was pretty interested in looking at it.  The report considers what the major themes and trends will be of the next couple decades and assesses how they will affect different countries, power structures, and ideologies.

It must have sucked for the NIC because at first the report was issued at 33MB and didn’t seem to be uploaded correctly.  It wasn’t until this weekend that the report was fixed and was only 8MB to download.  Lost a lot of readership that way.

Some of the report’s assessments I didn’t exactly agree with.  I felt that it sold international institutions short, saying countries and regions would seek pragmatic concerns — a return to a “mercantilist” and realist perspective — over recommitting to international institutions.  At the very least I think it’s up in the air on that count; Obama’s presence alone (see his calm, thoughtful interview on 60 Minutes) might bring people back to the table, especially with Europe seeking to reassert itself in the midst of its own internal problems with population and economic stagnation and with filling a power vacuum from America’s absence the last 8 years.

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How Bush and Obama Have Shaped My Last Eight Years

Thankfully, the eight years of Bush rule are almost over.  It has been a dark period for the American soul, spirit, and Dream.  Here is a synopsis of the Bush presidency years as seen through my life, documented through my web site and blog.

Pre-Dubya

In 2000, my mind certainly wasn’t thinking about international terrorism, financial crises, gas prices, or the like.  According to my site’s news archives from 2000, when I was 22, the most important topics in my life at that point were Napster and the dotcom bubble.  The bubble had not yet burst, although it started having some rough days.  Oil was hovering around $25-40/barrel.  I had just graduated from college and went to Italy with my dad, and France with my mom.  The dollar was strong and the Euro would continue to get weaker until about 2002, facilitating American travel abroad.  I would daytrade the market for another year and a half.

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Is the US in Decline?

Georgetown’s foreign policy discussions lately have been in love with the question of whether the US is in decline. For the most part, I think most of the experts I’ve listened to have fallen on the side of “not really”.

I tend to agree. My attempt to understand what’s been going on is this: my thoughts aided by Naomi Klein’s “Shock Doctrine”, I believe that the Friedmanites ran out of places to apply their shock and awe, what with South America resisting first, and then Russia, Iraq, and then Afghanistan. The only place left to try was the US, and privatization and starvation of government funding ran amok during Bush rule.

Loosening regulation on the financial markets led to a string of bubbles, resulting in massive redistribution of wealth to the rich and making the system unsustainable. Right now such a large failure of theory is forcing us to reevaluate what the best policies are: on preemptive war, the role of government, the subtlety of good governance (within international development in particular) and regulation.

The US left a lot of countries in its wake. People complain that the US is losing its dominance, but in fact it merely overstretched its bounds under neoconservative attempts to take advantage of unipolarity. The US spurned organizations it helped to create during its darkest hours, like the United Nations, Bretton Woods, and the World Bank. It sought to throw Iraq against the wall as an example to the rest. It pushed radical free market ideology to other countries.

The US is being hurt by its own financial greed, preying upon its own poor, but look at what’s happened elsewhere: Iceland’s stock market fell 76% in one day, heavily reliant on financial services. London has had to nationalize some of its institutions and it would not surprise me if London collapsed to some degree, being a close competitor to NYC in financial service offerings.

The countries our most slack-jawed patriots fear the most are not immune. Russia’s stock market was forced to halt on three occasions, I believe, because of volatility. Putin has gained popularity by bringing the Soviet Bear back to Russia (having thrown Georgia against the wall himself), but his oligopolistic, intimidation government is somewhat hollow and driven by commodity appreciation.

China, which has been fairly modest in its rise, despite our antagonism towards it publically, is also a victim. It depends on foreign demand for its goods, most of which are cheap and have little real value. It has not matured enough yet to wean itself off exports through adding value to its goods. According to an NPR article, it has lost 20 million jobs so far and is in danger of much more. The Shanghai stock market index has plummeted. (By the way, a hilarious paragraph from that article: “Harley Seyedin, the president of the American Chamber of Commerce in South China, says this slowdown was the result of deliberate action by the government.” Think that guy’s a Friedmanite?)

Many other countries lost half their stock market values during this mess as well. Jeffrey Sachs says the real victims won’t be third world countries, but the second world countries dependent upon globalization.

So why do Americans see the world from inside a bubble? Why do they think China (or the EU!) can develop a military to compete with ours? Why do they think China will leave our economy in shambles? China indeed will produce more than us by 2050 (yes, 2050 according to the estimates, which are all we have to go on), but per capita the US will still grow faster.

Now let’s look at the US. Clearly it has its own problems. Financial bankruptcy is a major concern, yes. How will we pay for our retirees or for medical care? How will we generate the political will to modernize our institutions for the internet age? Racism and intolerance has been exacerbated by economic uncertainty and by McCain and Palin standing idly by instead of speaking out against it. (“No, Obama’s not an Arab, he’s a good man.” Hmm.)

But unlike the EU and other large countries, we will continue to have more immigrants coming in, ensuring our replacement rate is sustainable. We have a diversified, innovative economy with no peer in terms of high-valued goods. Ironically the horrible subsidies we give to farmers have wrecked world crop markets enough that in crises we will fare better in terms of having access to raw materials. We still have protected strategic oil reserves that of course Republicans seem to want to tap out so we can be even more vulnerable in terms of national security.

We have the chance to roll out highly productive solar collectors and electric cars before other nations, and INCREDIBLY SOON, if we invest right. How’s that going to affect the Middle East, Russia, and Venezuela? And Canada for that matter?

Our military, although involved in two occupations, could redeploy and then deploy somewhere else and not fail. It is incredibly resilient as long as we can finance it. It can even be argued to provide a common good to international stability, according to Michael Mandelbaum. (highly contentious, but worth thinking about)

Sure, there’s no doubt that Fareed Zakaria is right: this is about the rise of the rest, not the decline of imperial America. But the rise of the rest what we SHOULD want as peaceful, freedom-loving, ultra-competitive Americans: no nations in poverty, more nations contributing to a globalized, efficient, tolerant world. (notice I didn’t assume democratic) And we will lose some of our influence as long as we remain backwards in our foreign policy, but that tide can turn quickly if we provide leadership by example.

So I think the naysaying is overblown. I expect a lot of what I just wrote to turn out to be incomplete or even blatantly wrong, but it is at least framed in a more holistic picture of what the levers are that affect international affairs than just the fact that the US has done some incredibly dumb things.

Besides, Barack Obama is about to win. Do you have any idea how big the fucking party in DC is going to be when he claims victory? Do you have any idea how much this will affect the rest of the world?

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