Re-engage! America and the World After Bush

US's global dominance 'Reduced': It's nearly official!

Thomas Fingar, the U.S. government's highest ranking intelligence analyst, recently told a semi-public audience that he envisions a steady decline in U.S. dominance in the coming decades, according to this intriguing report in today's Wapo. Joby Warrick and the venerable Walter Pincus wrote the WaPo piece. They add that the still unpublished report that Fingar was previewing in his recent speech,

also concludes that the one key area of continued U.S. superiority -- military power -- will "be the least significant" asset in the increasingly competitive world of the future, because "nobody is going to attack us with massive conventional force."

This argument that raw military power-- the one area in which the US still quite clearly outpaces all other world powers-- has rapidly declined in significance (or, one might say, in utility) in recent years is a very important one.  It is certainly, an argument that the country's legislative as well as executive branches should take into good consideration as they ponder the priorities for the already deeply in-the-red US federal budget over the years ahead.

It is also an argument that I have made, very explicitly, in Chapter 6 of Re-engage! America and the World After Bush.

Coincidentally, today's WaPo also has a report, citing congressional budget analysts, that notes that, when the federal budget year ends on September 30, the one-year federal budget deficit will have risen to $407 billion-- "and the next president is likely to face a shortfall [annually, on the current account] in January of well over $500 billion."

All these repeated months and years of deficits add up to the horrendous mountain of accumulated debt that is one of Pres. Bush's primary legacies to the nation-- debt that our children and grandchildren will be laboring under for generations to come. That WaPo article also has a handy graphic charting how the current-account budgets have plummeted from a $236.2 billion surplus in FY 2000 to the expected $407 billion deficit this year.

Back to Fingar. He is a significant voice for calm reason and reality-based analysis within the US government. Back in 2002, when he was the head of analysis in the State Department's Bureau of Intelligence and Research (INR), his was one of the government's few intelligence outfits that stuck to its skepticism regarding the claims that Saddam had ongoing WMD programs. But the INR view (which was shared by many of the professional career analysts in the CIA-- though they were notably unsupported by Mr. 'Slam Dunk' George Tennet) got crowded out on that occasion by the vociferous rantings and fabricated charges raised up by the pro-war ideologues in various other government intel shops, primarily those within Rumsfeld's and Cheney's offices.

As the head of the newly created (and over-arching) National Intelligence Office, Fingar is now the person responsible for the periodic 'National Intelligence Estimates' that aim to provide the very best data, analysis, and conclusions to the President and-- as appropriate-- the public. In doing this job he has worked hard to instill, throughout the whole of the country's unwieldy alphabet soup of official intel agencies, the same standards of rigorous analysis, professional integrity, and accountability that he previously upheld at INR. 

I heard him speak at the New America Foundation a few weeks ago.  He seemed very straightforward and smart. He also seemed very aware that rebuilding the external credibility of the US intelligence agencies, after the travesty of their performance over the WMDs-in-Iraq charges was revealed for all to see, will be every bit as hard (and is every bit as important in a democracy) as rebuilding the internal professional standards and sense of professional pride and morale within all the agencies themselves.

Well, the report that Fingar was previewing in his recent speech, a National Intelligence Council report titled "Global Trends 2025", will apparently be published pretty soon. We should all watch out for it.

Warrick and Pincus explain that the presentation in which Fiongar laid out these argument was given to a gathering of intelligence professionals in Orlando, Florida last Thursday. (I imagine Fingar himself, who is a savvy public-affairs operative, made sure that copies of the transcript fell into Warrick and Pincus's hands.) They write,

"The U.S. will remain the preeminent power, but that American dominance will be much diminished," Fingar said, according to a transcript of the Thursday speech. He saw U.S. leadership eroding "at an accelerating pace" in "political, economic and arguably, cultural arenas."

... In the years ahead, Washington will no longer be in a position to dictate what new global structures will look like. Nor will any other country, Fingar said. "There is no nobody in a position . . . to take the lead and institute the changes that almost certainly must be made in the international system," he said.

The predicted shift toward a less U.S.-centric world will come at a time when the planet is facing a growing environmental crisis, caused largely by climate change, Fingar said. By 2025, droughts, food shortages and scarcity of fresh water will plague large swaths of the globe, from northern China to the Horn of Africa.

For poorer countries, climate change "could be the straw that breaks the camel's back," Fingar said, while the United States will face "Dust Bowl" conditions in the parched Southwest. He said U.S. intelligence agencies accepted the consensual scientific view of global warming, including the conclusion that it is too late to avert significant disruption over the next two decades. The conclusions are in line with an intelligence assessment produced this summer that characterized global warming as a serious security threat for the coming decades.

They write that energy security issues will become more complex and intense (duh!) Also, this:

Nearly absent from Fingar's survey was the topic of terrorism. Since the last such report, the intelligence community has projected a declining role for al-Qaeda, which was deemed likely to become "increasingly decentralized, evolving into an eclectic array of groups, cells, and individuals." Inspired by al-Qaeda, "regionally based groups, and individuals labeled simply as jihadists -- united by a common hatred of moderate regimes and the West -- are likely to conduct terrorist attacks," the 2004 document said.

The new assessment saw a continued threat from Iran, however. Fingar predicted steady progress in the Islamic republic's attempts to create enriched uranium, the essential fuel used in nuclear weapons and commercial power reactors. For now, however, there is no evidence that Iran has resumed work on building a weapon, Fingar said, echoing last year's landmark National Intelligence Estimate on Iran, which concluded that warhead-design work had halted in 2003.

He said Iran's ultimate decision on whether to build nuclear weapons depended on how its leaders viewed their "security requirement" -- whether they thought their government sufficiently safe in a region surrounded by traditional enemies.

Iranians are "more scared of their neighbors than many think they ought to be," Fingar said. But he noted that the United States had eliminated two of Iran's biggest enemies: Iraq's Saddam Hussein and the Taliban regime in Afghanistan.

"The United States took care of Iran's principal security threats," he said, "except for us, which the Iranians consider a mortal threat."

I agree with just about everything Fingar said in the presentation-- though by 2025, I find it highly unlikely that the US will still be the "pre-eminent" power in world affairs. The size of the continuing budget deficits and the continuing lack of a resolution to many chronic US crises-- internally and externally-- more or less precludes that.

But that's a matter of emphasis. In general, his report will be well worth watching for.

Regarding budget, though, I do wonder how much the whole exercise of producing this report has cost US taxpayers? Just imagine, Thomas Fingar could simply have bought a copy of my book-- cover price $14.95-- and covered almost exactly the same range of issues, and reached very similar conclusions....

[This post was cross-posted at 'Just World News'.]

On the economic interdependency of nations

I've recently been doing quite a lot of thinking and writing about the highly interdependent state of the world's major politico-economic nations and blocs. In my recent article in the The Christian Science Monitor on the implications of the Georgia crisis I wrote,

The interests of the world's leading powers are deeply entwined. China and Japan hold large amounts of US debt; Russia supplies much of Europe's energy needs; markets, investments, and production systems criss-cross national boundaries.

This interdependence makes open warfare among them less likely. A war would be devastating for the whole system – especially for the US, whose military is stretched very thin and whose economy relies on overseas oil and loans.

I sent that article to Branko Milanovic, the World Bank economist whose work on global inequality I used a lot in Ch. 3 of Re-engage! And I was really pleased when he came right back to me with an email in which he said he saw matters very differently. He also graciously allowed me to publish on my 'Just World News' blog an article he had written that argued almost directly against my thesis that global economic entanglement increases the chances for global peace.

Milanovic's article, which you can read here, is titled From Global Trade to Global War. In it, he draws on the historical precedent  of the lead-up to World War I to argue that

today the struggle between the West and Russia that threatens the world with not only another cold, but rather hot, war is between the two bands of greedy men, and it involves the riches of the Eurasian heartland (“the world island”) east of the Urals. It is an implacable fight because it is a zero-sum game.

I was very happy to publish his piece on my blog, because I think it's very important to discuss and try to understand these matters. If you go over to where the full article is on JWN, you can see we have the start of a good discussion there already.

And today I just put another post onto JWN on the same theme. This one, titled Rest-of-world saving US from recession?, draws on some fascinating work done by Fred Bergsten and other economists that indicates that continues economic growth in the rest of the world has done a significant amount to save the US economy from full-blown economic recession.

This is not an argument we hear made much in the US today, though I think we should! It's a fascinating argument. Bergsten writes:

Every percentage point by which the rest of the world expands domestic demand faster than internal growth in the US produces gains of about $50bn (€32bn, £25bn) for the US external balance. Weighted by US exports, foreign growth exceeded US growth by about 2 percentage points in 2007 and will do so by an average of about 1.5 points this year and next as decoupling persists. Taken together, these currency and comparative growth factors have already improved the real US trade balance, and hence GDP, by almost $150bn since 2006, with gains of another $150bn or so likely through 2009.

In my blog post there, I give hyperlinks to Bergsten's original artuicle and to a few other handy sources on this topic. I also write a few of my own reflections on how, though the globalization of the world's economies has imposed costs on many groups of people-- within the US and far beyond-- still, on balance it seems to have been a very good thing for humanity. Plus, there are ways that its more egregious inequities and excesses can still be reformed and corrected.

Tell me what you think about these matters-- either here or there.

      

Mahbubani on western hypocrisy, etc.

Attentive readers of Re-engage! will know that I'm quite a fan of Kishore Mahbubani, an extremely smart strategic thinker who was Singapore's ambassador to the UN until a couple of years ago.Recently, he had a great piece of commentary in the Financial Times on "the meaning of the Georgian war."  (Hat-tip to Bernhard of MoA for noting this article.) Mahbubani writes:

Sometimes small events can portend great changes. The Georgian fiasco may be one such event. It heralds the end of the post cold-war era. But it does not mark the return of any new cold war. It marks an even bigger return: the return of history. The post cold-war era began on a note of western triumphalism, symbolised by Francis Fukuyama’s book, The End of History. The title was audacious but it captured the western zeitgeist. History had ended with the triumph of western civilisation. The rest of the world had no choice but to capitulate to the advance of the west. In Georgia, Russia has loudly declared that it will no longer capitulate to the west. After two decades of humiliation Russia has decided to snap back. Before long, other forces will do the same. As a result of its overwhelming power, the west has intruded into the geopolitical spaces of other dormant countries. They are no longer dormant, especially in Asia. Indeed, most of the world is bemused by western moralising on Georgia. America would not tolerate Russia intruding into its geopolitical sphere in Latin America. Hence Latin Americans see American double standards clearly. So do all the Muslim commentaries that note that the US invaded Iraq illegally, too. Neither India nor China is moved to protest against Russia. It shows how isolated is the western view on Georgia: that the world should support the underdog, Georgia, against Russia. In reality, most support Russia against the bullying west. The gap between the western narrative and the rest of the world could not be greater. It is therefore critical for the west to learn the right lessons from Georgia. It needs to think strategically about the limited options it has...

The fourth paragraph there describes something that "westerners" crucially need to be able to understand. Westerners do not monopolize either humankind's smarts, or its sensibilities, or its way(s) of looking at the world. Indeed they (we) are in a distinct minority, and badly need to understand that. Especially given that one of our bedrock values in the world is that of the equality of all human persons.... Well, it still is, isn't it? Mahbubani has a lot more there, too.  Including this:

In the US, leading neo-conservative thinkers see China as their primary contradiction. Yet they also support Israel with a passion, without realising this stance is a geopolitical gift to China. It guarantees the US faces a hostile Islamic universe, distracting it from focusing on China. There is no doubt China was the bigger winner of 9/11. It has stabilised its neighbourhood, while the US has been distracted. Western thinkers must decide where the real long-term challenge is.* If it is the Islamic world, the US should stop intruding into Russia’s geopolitical space and work out a long-term engagement with China. If it is China, the US must win over Russia and the Islamic world and resolve the Israel-Palestine issue. This will enable Islamic governments to work more closely with the west in the battle against al-Qaeda. The biggest paradox facing the west is that it is at last possible to create a safer world order. The number of countries wanting to become “responsible stakeholders” has never been higher. Most, including China and India, want to work with the US and the west. But the absence of a long-term coherent western strategy towards the world and the inability to make geopolitical compromises are the biggest obstacles to a stable world order. Western leaders say the world is becoming a more dangerous place, yet few admit that their flawed thinking is bringing this about. Georgia illustrates the results of a lack of strategic thinking.

* I guess my only criticism of this analysis is over Mahbubani's argument that "Western thinkers must decide where the real long-term challenge is," with the choice presented being a strictly dyadic one between it being "the Islamic world" and it being China. Actually, I don't think the choice is anywhere near as dyadic as this implies (and anyway, the policies that he prescribes for either choice are broadly similar.) But here's the deeper problem: he is still in the mindset at that point of arguing that the "west" needs to identify a main enemy-- or as he says, a "real long-term challenge"-- that is another state or bloc of states. But then, in the last paragraph he goes against that thinking-- certainly, with respect to China-- when he underlines that China, like India, wants to work with the US and west.  And here's an addendum to that: so do most governments in "the Islamic world", and so, indeed do most Muslims... provided this cooperation with the US and the west is on a basis of mutual respect and fair cooperation. Neither China nor the vast majority of members of "the Islamic world" want to overthrow any western governments and dominate their countries, which is what, for a period of time, the Soviet Union aspired to do. So where is the real "long-term challenge" that the west faces? I believe it is the challenge, for Americans, of starting to see themselves (ourselves) as co-equal members of the world community rather than standard-bearers in some kind of existential, life-or-death contest with enemy states that requires us to bear the huge costs of maintaining our bloated military and using it to "keep order" right around the world: 360 degrees, 24/7. And then, oh yes, there are plenty of other, very serious long-term challenges that we and the rest of the world community all face together. Challenges like dealing with:

• climate change;
• global inequality and the suffering of our brothers and sisters in the low-income world;
• weapons proliferation;
• the occurrence of conflict-driven atrocities;
• the anti-humane violence perpetrated by Islamist extremists and others...

So please, while we're facing serious challenges like those ones, let's not, as "westerners," go round the world looking for whole blocs of people and governments to make war on, as well. Kishore Mahbubani was quite right there, in his last paragraph, when he wrote that few western leaders were prepared to admit that their own flawed thinking has been making the world a more dangerous place. But I think the greatest flaw in the thinking of most westerners has been this need to organize the world, and mobilize one's own resources and activities, around the definition of a state or bloc of states as our enemies, to be faced down or toppled with our military power. It is that tendency that has made the world more dangerous for everyone-- ourselves, along with many, many others. Now, we need to adopt the much more realistic stance of aligning ourselves at the side of the world's other six billion people, facing the challenges that confront all of us, together. One final note: A couple of days after reading Mahbubani's article I wrote over at my 'Just World News' blog a post titled The return of geography, which readers here might also find interesting. (The present post was also originally published at JWN, here.)

My 'CSM' article on the implications of the Georgia crisis

This article, which appeared in the August 22 edition of The Christian Science Monitor, uses some of the kind of analysis I use in Ch.6 of the book to look at the implication of the mid-August Georgia crisis for world politics. It starts like this:

The tectonic plates of world politics have been shifting for several years now, and on Aug. 8 the extent of this shift became plain. In Beijing, China held a stunning coming-out party as a world power. Meanwhile, 4,000 miles away, Russia invaded neighboring Georgia, signaling loud and clear that it would no longer be taken for granted.       Russia is back. China has emerged. Suddenly, the United States isn't the world's only superpower.                     How will these three big powers interact in the years ahead, and what does that mean for all of humanity?

Then, it goes on to note the many levels at which the nations of today's world are interdependent and notes other differences between the world power system today and the highly competitive nature of the Cold War system.

The costs of sprawl for family budgets

Via the Sydney Morning Herald, The Oil Drum, and the NYT's Paul Krugman, we have this fascinating graphic of how, in Greater Sydney, Australia, families that live in the new developments that sprawl further away from the city center find that, as global gas prices rise, their gas (petrol) charges will take up an even greater percentage of their annual income than those living closer in:

I think the black areas there are the sea.  The percentages of annual income given there are based on the idea of a liter of gas costing AUS$1.50.

I think it would be handy if planners in some US cities could produce similar graphics...  That would help us understand that present planning norms in the US which-- as in Australia-- encourage sprawl that ends up forcing families into a deep dependency of private autos, need to change.

One of the problems with sprawled out habitation patterns like these is that even if people living in these widely scattered suburbs and exurbs want to use public transportation, it is extremely expensive to provide such services to communities that don't have a basic density of both population and transit ridership.

Long-distance bike-riding , anyone?

Discussing the reduction or elimination of nuclear weapons

Last week I went to a fascinating panel discussion in Washington, DC at which three longtime experts in strategic affairs debated what policies the next US president should adopt regarding our country's own large arsenal of nuclear weapons.  One of the presenters, Barry Blechman of the Henry Stimson Center, made a robust argument that the next president should fairly rapidly bring together all the world's nuclear powers to negotiate an agreement on the elimination of all nuclear weapons by a date certain.

Blechman suggested that this date should probably be at least 20 years or more into the future. But he produced some strong arguments as to why a broad, inclusive negotiation like that might be the best way forward. (More details, below.)

The two other presenters, Arnold Kanter of the Scowcroft Group and Morton Halperin of the Open Society Institute both argued against that proposal. These two men have been members of a continuing study group convened by the DC-based New America Foundation (NAF) that has been looking at the nuclear-policy options for the next president.  Their group-- which spans a fairly broad ideological spectrum-- has not yet reached final agreement on a proposal. But Kanter and Halperin rteported that their group has reached a large measure of agreement on a proposal that, rather than aiming at the kind of worldwide agreement that Blechman talked about, the next president should rapidly announce and undertake a unilateral reduction of the US nuclear arsenals. 

Jeffrey Lewis, the convenor of the NAF group, chaired the panel discussion I was at, which was hosted by the American Academy for the Advancement of Science, and also made a short presentation of his own. He and the two NAF group members explained that the aim of the group's emerging proposal would be to stimulate similar actions on behalf of other nuclear powers, and to reduce the incentive for non-nuclear powers to cross the nuclear-weapons threshold.  Only after the original US reductions had been undertaken, and the international reaction to them gauged, should the US move toward negotiating further reductions with other powers.

The NAF's group plan would thus take considerably longer than Blechman's plan to reach the point of the US engaging in any negotiations over nuclear arms reductions with other powers; and Kanter and Halperin made fairly clear that they thought that even those negotiations should not aim at the complete elimination of nuclear weapons. (At one point, Halperin seemed to get a little carried away when he even referred to "the specter of elimination." Pardon me?)

This panel discussion came just a few days after I'd finished reading Hans Blix's elegantly argued little book titled Why Nuclear Disarmament Matters. Blix, as you may know, is the long-time Swedish arms control negotiator (and former Swedish Foreign Minister) who in 2002-03 was the head of UNMOVIC, the body that the UN set up to monitor, inspect, and verify the state of Saddam Hussein's alleged-- but in the event, no longer existing-- WMD programs.

Echoing an argument I made in Re-engage!, Blix wrote (p.58):

A crucial mark oif a civilkized society is that the citizens have given up the personal possession of arms and conferred upon public authorities a monopoly on the right to possess and use arms in accordance with the law... In the international community, states continue to possess their own arms and the possibility of using them.  We need to identify and promote changes that will transform this community of individually armed states into a society in which the states have disarmed drastically, and common institutions control the use of force in accordance with agreed rules.

Blix is not, obviously, a US citizen.  But one of the recommendations he describes for how the world's nuclear powers should deal with the arsenals they now have is broadly similar to Barry Blechman's.  Blix writes (p.64):

The General Assembly should convene a new World Summit on disarmament, non-proliferation, and the use of weapons of mass destruction by terrorists.  Since thorough preparations would be be necessary, planning should start as soon as possible.

The whole of Blix's little book is well worth reading. Maybe you could get your local library to order in a copy at the same time as they order Re-engage! for their patrons.

But the discussion among Kanter, Blechman, and Halperin was interesting, too.

Kanter explained the background to the NAF group's emerging proposal for unilateral US nuclear-force reductions in the following terms.

1. The reason the US needs nuclear weapons in the current era is because others have or seek them.
2. The primary objective of the US must be to prevent any use of nuclear weapons anywhere in the world, and to prevent the p[roliferation of nuclear weapons technology.
3. Our country's current nuclear policy needs some radical re-thinking.
4. The main reason to change our policy is to affect the judgments and behavior of others.  The goal is to encrouage others, especially the Russians, to take similar steps.
5. The US needs to keep "the capabilityies required to protect our vital interests, and to provide a hedge force against ubncertainties... This rtequires that we keep a nuclear-weapons production/modification complex in operation, that can give us the capability to "respond to the unforeseen."

That was the background to the suggestion of having the three-stage proces of (a) undertaking unilateral reductions; (b) assessing the reactions; and then (c) seeking multilateral negotiations.

Kanter said the group had not yet reached agreement on how bold the unilateral reductions proposed under (a) should be.

Blechman spoke next.  Like Sen. Sam Nunn, Henry Kissinger, and former cabinet members George Shultz and William Perry in their January 2007 op-ed article in the Wall Street Journal, Blechman situated his argument in the context of the greatly increased risks of nuclear proliferation and nuclear terrorism in the modern world.

He also based his argument to some degree on an assessment of the domestic US politics around any proposal to reduce or eliminate the US nuclear arsenal.  He said,

Until now, all the proposals made for arms control by successive presidents have run into foreseeable opposition from at least twenty senators as well as from huge vested interests in this country. But there has never been any equally strong group that has supported these proposals.  What has shown the ability to really moblize people in this country, however, is a proposal to go to zero nuclear weapons.

He noted that the next review conference of the NPT is coming up in 2010, and that the US should be prepared to go to that conference with a compelling proposal.

Regarding the process of reducing the world's nuclear arsenals to zero, he said, "We would do it gradually without harming anyone's security." He also said there would have to be certain conditions attached:

1. All the signatories to the proposed agreement would have to declare all their NW-related facilities.  He noted that some NW possessors, like Israel, might be holdouts at first., but they could be included in the process further along. "At a minimum, though, to make it work, we would need the US, Russia, China, and India to take part."
2. The phased reductions-to-zero of the arsenals of participating states would be monitored and verified by a multilateral agency, "perhas the IAEA."
3. The first states to start reducing their arsenals under this plan should be the US and Russia.
4. The treaty should guarantee access by all countries to peaceful nuclear technology, but would keep all the world's nuclear fuel cycles under multinational, not national, control.
5. There should be specified sanctions for cheaters, including holding personally responsible any of the government officials involved.
6. There shouold be specified "off-ramps" to allow signatories to leave the treaty under certain circumstances, including if the whole treaty seemed to be coming apart.

Blechman also said there might be some role of "a reserve, multilaterally controlled, force of disassembled nuclear weapons," to be retained as an international hedge against future acts of proliferation.

Anyway, he said he and colleagues at the Stimson center are contoinuing to flesh out their proposal, which will be published sometime in the fall. He noted that pursuit of this plan wouldn't rule out thre US also undertaking some unilateral reductions of its nuclear arsenal, or some restructuring of the US nuclear weapons complax-- but the main focus should be on the multlateral negotiation aimed at eliminating nuclear weapons.

After Blechman spoke, Halperin weighed in to say that his proposal would be not just ineffective but also "dangerous." His main argument was this:

If the president proposes this, he wouldn't get anything else done on nuclear weapons... The US political system would be overwhelmed by this.

No-one believes it is realistic to negotiate the elimination of all nuclear weapons!

One of the pieces of evidence he adduced for this last judgment came from Russia. "The Russians probably see a greater need for nuclear weapons now than they did during the Cold War, because their conventinal weapons are so weak."

Though Halperin was firmly opposed to the idea of any rapid or even medium-term move toward elimination of nuclear weapons, he did say that as part of its "opening" unilateral move, the US should move to reducing its nuclear arsenal to "less than 1,000 warheads-- perhaps a lot less."  He also said that if it is generally agreed that the US only has nuclear weapons in order to deter their use by others, then we should publicly announce a "No first use" policy and sign and ratify the Comprehenisve Test Ban Treaty-- while makng sure that the US nuclear arsenal is in fact resilient enough to survive any first use by others.

He also said the US should do a lot to back the nuclear posture considerably away from its present, almost hair-trigger stance. "Most Americans would be astonished to know how ready the US still is to launching a massive nuclear strike."

Anyway, it was all a fascinating discussion.  While doing the research needed for the links above, I found a couple of other really helpful online resources.  The Nuclear Security Project has a new website that provides resources about the continuing campaign by Nunn, Kissinger, Shultz, and Perry to work toward a world free of nuclear weapons.  And the Nuclear Threat Initiative has this handy on-line tutorial on the NPT.

New figures show continuing failure of 'GWOT'

In Chapter 2 of the book I present a chart (Fig.2.1) that displays the numbers of fatalities inflicted worldwide by terrorists, 1998-2006.  Now, the State Department's National Counter-Terrorism Center has just published its report on how the "Global War on Terror" went in 2007, and once again the picture is sobering. Their main page of statistics is here.  Scroll down to see just how badly the GWOT has been going over the past three years.

However, the figures for just those years don't show the size of the contrast between the situation before the US invaded Iraq, and the situation after.  Before 2003, the annual global fatalities from terror never exceeded 5,300.  In 2003 they climbed just above 6,000; and every year since 2004 they have exceeded 12,000, showing a continuing increase each year. 

In 2007, the number reached 22,685.

I have now updated the chart on global fatalities.  You can download it as a Word document from here.

This record provides additional, very tragic evidence to my argument that the way the Bush administration has responded to the challenge posed by the terrorists has not worked. I still strongly maintain that a more effective policy would be based  on (1) solid, but always rights-respecting police work and cooperation among police agencies across borders; (2) a recognition that terrorist violence is a challenge faced by many of the world's peoples, and not just Americans; and (3) pursuit of a holistic, 'human security' approach to building the security of all the world's nations, interdependent as we all are.

The use of massive military force to invade distant countries has not worked.  We are surely smart enough to recognize that we need to try something different?

Ethanol and the U.S. 'National Interest'

Yesterday, Pres. Bush referred to the huge subsidies the US government gives to farmers to grow corn for conversion into ethanol, a car fuel, by saying:

"the truth of the matter is it's in our national interests that our farmers grow energy, as opposed to purchasing energy from parts of the world that are unstable or may not like us."

For many years, those two words "national interest" have been widely used in US political discussions as a kind of conversation-stopping trump card.  "Oh! The 'national interest' is at stake! Then I'd better stop criticizing the president!" -- that was the kind of reaction past leaders sought, and too often won. But who defines this slippery thing called the "national interest", anyway?  In Chap. 7 of  Re-engage!, I write:

[I]n line with the human security precept that true security is people-centered rather than state-centered, we can start thinking about our own country’s national interest in a new, more people-centered way, very different from the “big power” way it has generally been understood until now.

I then go on to ask some questions about how the adoption of this definition of the US "national interest" might actually change many aspects of our relationship with the rest of the world. (Posing queries intended to stimulate further discussion is a very Quaker thing to do. Anyway, I hope you find these queries in my book thought-provoking, when you read them.)

This currently mounting global food crisis is an instance in which we certainly need to adopt the people-centered rather than big-business-centered definition of "national interest".

It is certainly not in our interest, as US citizens, that the activities of our country's very well-funded Big Ag sector and the financial sectors that have been speculating heavily in foodstuffs-- and fuel-- over recent months should be allowed to continue to pursue policies that are driving hundreds of millions of our fellow-humans in poor countries into hunger, and towards outright, directly life-threatening starvation.

These big business sectors need to be effectively controlled and regulated by a political leadership that understands-- finally!-- that the greed of US car-owners should never be allowed to over-ride the right that all the world's men, women, and children have to adequate and assured sources of nutrition. (Elsewhere in the book, by the way, I note that most "rights" activists in the US have focused far too tightly on issues of civil and political rights around the world, and have given short shrift to the frequently far more pressing issues of social and economic rights.)

The Washington Post's smart and thoughtful business columnist Steve Pearlstein has a good column in today's paper  on the role that speculators have been playing in the current food crisis.  For those of you who are interested, the whole of the column is worth reading. (As was his previous column, here. )

Some highlights from today's Pearlstein:

Speculators have always played a prominent role in commodities markets, but in the past year, they have literally overwhelmed them, causing a dramatic increase in trading volume, volatility and prices and disrupting many of the normal relationships between producers and end-users.

Many of these were the same hedge funds and hot-money investors who had gorged on sovereign debt of developing countries, tech and telecom stocks, subprime mortgages and commercial real estate and now needed a new thing to focus on. Others -- including, it is said, some sovereign wealth funds -- looked to commodities as a hedge against the falling dollar. But perhaps the biggest push came from pension funds, foundations and university endowments whose managers had all gone to the same conferences and read the same academic papers, suggesting that a basket of commodity futures would provide a good hedge against stock and bond market declines.

...[T]he Bank for International Settlements estimates that the value of all the derivative contracts traded on the unregulated over-the-counter markets surged from about $3 trillion in the spring of 2005 to more than $8 trillion today. Whatever the number, it's hard to imagine that it wasn't a significant factor in skyrocking prices...

... [T]he only people who don't believe speculation is driving a commodities bubble are the big commodity traders and the commodities exchanges, which are profiting handsomely from the soaring prices and trading volumes, and the regulators at the Commodities Futures Trading Commission, whose economists cannot seem to find statistical evidence that financial investors have had much of an impact on commodity prices.

US citizens need to start acting responsibly and quickly to bring these devastating speculations in basic foodstuffs under some form of rational and accountable control.  This is in our direct interest as a citizenry, since so many of our own citizens are being harmed by the food-price rises.

But in today's irreversibly hyperconnected world it is always, also, in our interest to make sure that actions taken by our government and our fellow-citizens on Wall Street, in Big Ag, and other big-business sectors stop inflicting harm on the world's poorest, most vulnerable people.

(Cross-posted at Just World News.)

A great resource on food scarcity issues

Raj Patel, a South African specialist in development economics, has published an intriguing-looking book on global food issues.  It's called Stuffed and Starved.  I definitely want to read it!  He also has a very informative blog, of the same name, about the global food crisis. (Hat-tip Rami Zurayk.)

In this post, about the food crisis in Haiti, Patel writes,

The fact that Haiti produced more rice in 1984 than it does now isn’t an accident. The fact that the bags of rice to be found in Haiti have US flags stamped on them is no accident. As former secretary of state for Agriculture, Earl Butz, put it: ‘Hungry men listen only to those who have a piece of bread. Food is a tool. It is a weapon in the US negotiating kit.’

And that’s also one of the ironies behind the complaints of institutions like the IMF and World Bank. At the same time as they bemoan the food crisis, they are its architects. They have aggressively prohibited the kinds of policy that might have mitigated the price shock. No grain reserves. No support for domestic agriculture. No tariff barriers. All so that weapon in the US toolkit could be honed a little sharper.

In this post, about the global rice market, he notes that though many rice-eating countries have been hit by massive price increases in recent weeks, China, South Korea, and Japan have not.

He asks,

What distinguishes all three of these countries from others in Asia? First, they have their own domestic production. Second, they augment domestic production with domestic grain reserves. Third, they're only able to do this because they're aggressive and powerful negotiators in international trade agreements. Japan has long held that its rice isn't just a commodity but a way of life.

The political commitment to sustain this way of life, in China, South Korea and Japan, using some Old School economic policy (subsidies, protection, grain reserves) means that in the lean times, these countries will be able to survive. That's great for them - there's no indication that the lean times are going to end any time soon. And it's tough for the weaker countries in Asia, who find themselves cut loose, in the perfect storm that the free market has produced.

Patel's bio says he used to work at the World Bank and has interned at the WTO.  He certainly seems to know a lot about what he's writing about. This page on his website gives a handy list of "ten things that we all can do to promote justice and food sovereignty."  Definitely worth looking at!

 

George Soros on the financial crisis, military spending, and more

I just had the good fortune to participate in a media teleconference organized with legendary financier and social entrepreneur George Soros by the New America Foundation.  Soros was speaking about his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, which was released yesterday exclusively as an e-book, cost $22.95. (Details here.)

Soros is well-known as a big-picture thinker, and one of the things that fascinated me about the teleconference discussion was how he talked about the deep connectedness between many of the issues that are covered in the Re-engage! book.  For example, he said that though he judged that the United States' military spending on its wars in Iraq and Afghanistan had not yet become a huge burden on national economy, this situation was set to change over the years immediately ahead.  The level of these military expenditures will most likely be rising, he said; and this would act as an ever-increasing burden on the national economy and a motor for inflation.

He also, in response to a separate question, identified investment in pro-green technology as one of the best possible ways to provide a broad stimulus to the economy, now that the stimulus effect of consumption by US consumers can no longer play that role.

In the teleconference, he projected a generally cautious optimism that the worst is past in the current global financial crisis.  In his introductory presentation he mentioned a recent "turning point" min this regard, but did not elaborate on that until I asked him to.  He then said his view was that the global financial system "had a moment of truth in early '07.  Then there was a sort of twilight period until August '07, when we did have the turning-point, and now we have the fallout from that and the financial crisis."

He based his argument on a broad analysis of the thinking of the leading participants in world financial markets.  Basically, he said, the dominant thinking in both the US and the UK since 1980 has been that of "market fundamentalism", including the view that controlling money supply is a sufficient way to control not only money markets but also credit markets.  That view, he said, is based on an assumption that all participants are acting on the basis of perfect information (and also, I would add, that they are all acting in good faith toward each other and everyone else.)  But, he continued, the assumption about perfect information has now been shown to be false; and the imperfections in the information base of leading investors then allowed the rise of "bubbles" at two different levels: the US-based housing bubble, which we have all seen, and also a supervening "super-bubble" affecting the world credit markets as a whole...

He expressed himself as generally hopeful (though by no means certain) that the worst is now past, and that the US authorities will step in with appropriate actions to minimize the negative fallout from the financial crisis. However, in an op-ed in yesterday's Financial Times, he also warned that there are still serious risks ahead:

the authorities ought to prepare for the next shoes to drop. I shall mention only two. There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45,000bn (£23,000bn). To put it into perspective, that is about equal to half the total US household wealth and about five times the national debt. The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred...

The other issue is rising foreclosures. About 40 per cent of the 6m subprime loans outstanding will default in the next two years. The defaults of option-adjustable-rate mortgages and other mortgages subject to rate reset will be of the same order of magnitude but occur over a longer period. With single family home sales running at an annual rate of 600,000, foreclosures will overwhelm the market and cause prices to overshoot on the downside. This will swell the number of homeowners with negative equity who may be tempted to turn in their keys. The fall in house prices will become practically bottomless until the government intervenes. Cutting foreclosures should be a priority but the measures so far are public relations exercises.

My own judgment of the probability that we are "past the worst" in the current crisis is more pessimistic than George Soros's.  This is based not only on information of the kind  he provides there but also on my evaluation of the readiness of the U.S. Congress to undertake a meaningful intervention in the financial arena.

In today's Washington Post, Dana Milbank provided a great public service when he wrote a report of the Senate Banking Committee's hearings into the Federal Reserve's $30 billion bailout of teetering investment firm Bear Stearns in which he listed each member of the committee according to how much money they have received from securities and investment firms.  Hence, he refers to Committee Chair Sen. Chris Dodd of Connecticut not in the usual way as (D-CT) but as  (D-$5,796,000).

The biggest receiver there seemed to be Sen. Chuck Schumer of New York, described by Milbank as (D-$6,162,000).

Milbank was basing his designations on data provided by the Center for Responsive Politics, whose very helpful website is here. Their page on political donations made by securities and investment firms is here.

Regarding George Soros, meanwhile, I have to say I find him a fascinating person with considerable-- if not always well-organized-- intellectual talents. In December 2003, he published a book titled The Bubble of American Supremacy, whose title alone is food for considerable thought. In an article he published based on the book, he made these very accurate observations:

The supremacist ideology of the Bush Administration stands in opposition to the principles of an open society, which recognize that people have different views and that nobody is in possession of the ultimate truth. The supremacist ideology postulates that just because we are stronger than others, we know better and have right on our side. The very first sentence of the September 2002 National Security Strategy (the President's annual laying out to Congress of the country's security objectives) reads, "The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the forces of freedom—and a single sustainable model for national success: freedom, democracy, and free enterprise."

The assumptions behind this statement are false on two counts. First, there is no single sustainable model for national success. Second, the American model, which has indeed been successful, is not available to others, because our success depends greatly on our dominant position at the center of the global capitalist system, and we are not willing to yield it.

Anyway, I'll be looking for his new book with interest.