Tuesday, September 23, 2008

It's the War Economy, Stupid

by Jeff Huber

(This is a rework/update of two previous pieces that I cobbled together for Military.com, Antiwar.com, etc. It also has some new material, so I hope you enjoy it.)
No nation has ever profited from a long war.

--Sun Tzu
So we're up to $1.8 trillion to finance the Bush Memorial Bailout, huh? Shoot, that kind of money could bankroll 18 more years of our woebegone war in Iraq. Not to worry, though; we can stay in Iraq for as long as it takes to achieve the kind of victory John McCain promises if it takes fifty years, a hundred years, a thousand years or a million years.

The Chinese are a patient people, and they take American Express.

Strategic Reach Around

Folks in the unconscionable right wing media have the serial Bush voters in my neck of Virginia convinced that our economic woes are a direct result of our banks lending money to colored folks. The National Review points the finger at "a bit of legislative arm-twisting much beloved by Sen. Obama and his fellow Democrats" known as the Community Reinvestment Act by which Obama's "celebrated community organizers" forced banks to make bad loans to minorities. National Review doesn't bother to mention that the Community Reinvestment Act was passed in 1977, and the original Act and its subsequent revisions, according to the Federal Reserve, do not "require institutions to make high-risk loans that jeopardize their safety." To the contrary, "the law makes it clear that an institution's CRA activities should be undertaken in a safe and sound manner." National Review also avoided speculating as to how on earth blacks and Hispanics just recently managed to run up $700 billion or more in bad mortgages all by their lonesomes.

What we're actually observing now is an ironic reversal of the strategic equation that led America to the status of global hegemon. Beginning with World War I (and arguably before that), military intervention overseas both enhanced America's position in the balance of global military power and fueled its economic engine. American has essentially maintained a wartime economy since World War II, the conflict that made the United States the powerhouse of the free world. Throughout most of that period we have maintained a full time professional force and augmented it with reservists, militiamen, conscripts and mercenaries. We have also maintained permanent deterrence and first response forces in Europe and Asia as a cornerstone of our Soviet containment strategy.

As a force in being, our post World War II military did a remarkable job of preventing a direct confrontation between the free world and the Soviet Bloc. But when we actually committed forces to combat, most notably in Korea and Vietnam, the results were, to put it kindly, disappointing. I don't say this to disparage the spirit and effectiveness of American troops in battle. Tactically, the U.S. military has been superb, but the manner in which America's political and military leaders (who at this point are virtually indistinguishable) have used it has seldom yielded favorable strategic outcomes.

General Douglas MacArthur squandered the brilliance of his amphibious landing at Inchon when he pressed too far north and goaded China into the Korean conflict. And it's more or less true that American forces were never defeated on the field in Vietnam, but like they say, you can win a thousand battles...

Today, General David Petraeus boasts of "enormous progress" in Iraq because "We have gone from a situation where 14-15 months ago there were 180 attacks a day in Iraq. Now there are on average about 25 attacks a day." Can you for a moment imagine yourself characterizing 25 bombings a day in California as "progress?"

What gains have been made in Iraq came about as a result of Petraeus following the standard operating procedures from his first two tours in that country. As commander in Mosul and later as the officer responsible for training Iraqi security forces, "miracle worker" Petraeus achieved short term gains by handing out guns and bribes like bags of Gummi Worms. Then he grabbed his end of tour medal and got out of Dodge before the time bombs he left behind blew off his successors' baby makers. The "reductions" in violence in Iraq came largely thanks to the payola Petraeus gave Sunni militias to fight al-Qaeda. Heh. That "fighting al-Qaeda" business is going well. In July 2008, more than four years after Petraeus supposedly tamed Mosul, Rupert Murdoch's Sunday Times trumpeted that, "Al-Qaeda is driven from Mosul bastion after bloody last stand." Two months after the bloody last stand, on September 5, the official Operation Iraqi Freedom proclaimed, "Al-Qaeda networks in Mosul set back." Just over two weeks after that, on September 21, the Associated Press heralded, "US military targets al-Qaida in Iraq." This targeting of al-Qaeda occurred after, among other things, a suicide trucker blew up a police headquarters in Mosul. Not my idea of a miraculous outcome, but what the heck? Medals of Freedom for all my friends!

And oh, yeah, Iraq wants us to pack our kit and leave.

Upon taking command of the Iraq theater from Petraeus, General Ray Odierno cautioned that the gains made in Iraq "are fragile and reversible." And do you know what I say? Ha, ha! Do you hear me? Ha, ha, ha! I imagine Odierno plans to spend a lot of time in his new job sitting on his body armor with his legs crossed.

Our puppets in the Bananastans aren't playing by Marquis of Queensbury guidelines either. The worst army in the world (Pakistan's, which has lost every war it ever fought) apparently kicked the best army in the world (ours) out of its country on Monday September 15. General Ashfaq Parvez Kayani, the closest thing Pakistan has to a genuine head of state, said on Wednesday September 10 that “No external force is allowed to conduct operations inside Pakistan.”

Makes you wonder why we spend more on defense than the rest of the world combined if that's all the more good it does us.

Ancient Chinese Open Secret

The Chinese know full well that the Middle East is the traditional graveyard of western superpowers. They have been delighted by our folly in Iraq; they're no doubt approaching Taoist nirvana over the prospect of America digging itself an even deeper hole in the Bananastans, a future that seems set in stone regardless of which political minstrel ingratiates his way into the Oval Office come November.

China watched with amusement for decades as the Soviet Union, with its inferior economic model, tried to compete with us in an arms race. Now, the Chinese spectate from the skybox as we pursue an arms race with ourselves, and pour national treasure down a sand dune, and continue to depend on a form of national power that has become antithetical to our national interest.

You'll listen to the nattering class babble in the infosphere about how our economic woes came about as a result of deregulation, and to some extent they'll be correct.

But what you'll actually be hearing is what it sounds like when your country is losing the kind of war that takes place in the brave new world order it created.


Commander Jeff Huber, U.S. Navy (Retired) writes at Pen and Sword . Jeff's novel Bathtub Admirals (Kunati Books), a lampoon on America's rise to global dominance, is on sale now. Also catch Russ Wellen's interview with Jeff at The Huffington Post and Scholars and Rogues.


  1. Anonymous4:24 AM


    The article you link to about the CRA mentions that it was "substantially revised" in 1995. The conservative press would have it that the CRA of 1977 was there to prevent bad habits that may have harkened back to Jim Crow; that the "revision" of 1995 was about forcing banks to engage in bad business decisions.

  2. Anon,

    Thanks for noting that. The linked article also says, though:

    Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution's individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution's CRA activities should be undertaken in a safe and sound manner.

    Given those statements, which were there before this mess got messier, I don't think there's a legit claim that the bill forces banks to make bad loans to minorities.


  3. Anon,

    Thanks again for the perspective on the CRA issue. Mulling it over led me to address your points in the main text, and hopefully head off the kinds of counter jabs you cautioned against.



  4. I would strongly agree that minority housing is an unlikely source of are financial crisis. First, it takes big money to make really big, bad loans. A number of waterfront condos recently constructed in the Bremerton area are empty and/or in various tight financial straights ranging from foreclosure, to bankruptcy, to conversion to rental property. Secondly, very few minorities have the economic clout--even with the CRA--to both get a lone and find a home outside of "traditional" minority areas. For example, most African Americans are still packed into the Central District in Seattle more than one hundred years after they were "red-lined" there. The reason: an average home on the I-5 corridor is just under $300k--a desirable "modest" home closer to $500k. No one making average or below average money in this area can afford a $300k home even if the lender is certifiably crazy. Washington Mutual isn't on the brink of ceasing to exist because it was a friend of Joe-average--minority or not. WaMu is going to buy the farm because it speculated in a number of extremely risky development ventures and most of these ventures failed leaving the bank holding a worthless note and a bunch of properties no one can afford.

  5. Well stated, John. Thanks.


  6. http://www.hud.gov/news/speeches/presremarks.cfm

    Another excellent post Commander.

    Please see above link for President Bush's remarks to HUD. It is obvious to anyone - with an independent thought process - that this crisis is yet another disaster from this con, swerve, and twist administration.

    Clearly, these remarks of June 18th 2002 are the impetus for the financial collapse of the mortgage segment.

  7. Great link, Emory, thanks.

    "...out of the evil done to America will come some incredible good."

    Land o' Goshen.

  8. Anonymous3:58 PM

    Off topic, but have you heard about this?


    Interested in your thoughts - maybe a new post?

  9. This is very bad. Active Army unit assigned to do domestic law enforcement. Thanks for the tip, Jeg. This will be a PS piece next week.

    (You win a free subscription!)


  10. Anonymous3:52 PM


    I certainly don't want to blame the entire debacle on "people of color."

    Maggie Thatcher found that when poor Brits lived in state owned tenements they were very rough on them, so rough that they had about half of a normal life expectancy. When she sold the appartments to Britain's poor at a cut rate, they began to take really good care of their dwellings, and fight against crime in the neighborhood and all that. I would rather have law abiding and hard-working people get subsidies to help them own houses than have wastrels live in free rentals.

    That said, I think the policy by which minorities were helped to buy houses was seriously flawed, and contributed greatly to the subprime mess.

    Instead of being given direct subsidies, banks were browbeaten into writing loans that made no commercial sense; when the market tightened, these loans went bad, and hurt the banks and the people who had bought houses.

    The language of the CRA may say that it cannot be used to force banks to make bad loans, but you know as well as I do that a country that buys hammers at $600 a pop is not above semantic legerdemain. Here's more:


  11. Anonymous,

    Please don't come here making a blanket statement like "the policy by which minorities were helped to buy houses was seriously flawed, and contributed greatly to the subprime mess" and back it up with nothing but a link to an article by a guy best known for being in favor of the South's secession and a supporter of big tobacco.

    Oh, ignore the part of that last paragraph where I said "please."