At War with Whom? Al-Qaeda?

Some time ago, the right-wing extremists began to complain that President Obama was not protecting the nation’s security. Why, he wouldn’t even say we were at war! Eventually, Obama made an emphatic statement that we are at war, at war with Al-Qaeda. That seemed to end the discussion of whether or not President Obama believes we are at war. But no one seemed to talk very much about what war with Al-Qaeda means.

By saying the war is with Al-Qaeda, Obama was also saying we are not at war with Iraq or Afghanistan. But that’s obvious, isn’t it? Both of those countries have democratically elected (more or less) governments that are allies of the United States. We would not be at war with governments that the United States was instrumental in creating. But if we’re not at war with Iraq or Afghanistan, why do we have troops in there? Al-Qaeda, which is a terrorist organization of perhaps a few thousand, could be anywhere in the world, probably more in Pakistan than in Afghanistan. While it's not clear why we sent troops to Iraq in the first place, there's no war there now. In fact, we’re in the process of withdrawing those troops. And in Afghanistan the fighting is focused on something called the Taliban. So what happened to the war on Al-Qaeda?

What happened to the war on Al-Qaeda was a bit of slight of hand by the Bush Administration. The Taliban, which had taken control of Afghanistan in recent years, was seen to be “protecting” Al-Qaeda in Afghanistan, and therefore became a secondary enemy. At the time, the opposition to the Taliban, the so-called “Northern Alliance,” was already fighting what was in effect a civil war. So the United States developed a plan to join the Northern Alliance effort, force the Taliban out, install a new democratic government, and then destroy the Al-Qaeda movement. Except that somehow that last step seems to have been forgotten. Instead the U.S. shifted its attention to a new war in Iraq. Now Obama has reminded us: our war is really with Al-Qaeda.

Although Obama has appeared to escalate the fighting in Afghanistan, with a build-up of troop strength, it's also clear that he is trying to de-escalate the Taliban involvement in that fighting. Obama has invited members of the Taliban to renounce their support of Al-Qaeda and become involved with the democratic political process in Iraq. The President of Afghanistan, Hamid Karzai, is moving even faster to improve relations with the Taliban, perhaps faster than the U.S. military command would like. At one point, likely in a fit of pique over U.S. policy, Karzai made a peculiar threat to join forces with the Taliban himself. While that is not likely to happen, it is likely that some or all of the Taliban leadership will be absorbed into the Afghan political process.

How this will all play out in the next year or so is, to say the least, very uncertain. But all indications are that, despite the increase in troop strength, Obama wants a political solution to the conflict in Afghanistan. Moreover, as President Karzai does not want civilian casualties, and as the Taliban is essentially a guerrilla force capable of blending in with their civilian countrymen, a military “victory” seems almost impossible. In some shape or form, a political solution to the current fighting in Afghanistan will occur in the next year or two.

Only then can we focus on the real war, with Al-Qaeda.

the Designated Consumer

When the recent real estate bubble burst and the U.S. and the rest of the world fell into the "Great Recession," many people believed the U.S. would again be the "engine" to lead the world out of the recession. China's economy, for example, would be nothing without us, because the U.S. serves as the world's consumer. Without the U.S. to buy Chinese goods, the Chinese economy would go nowhere.

Well, it always seemed to me that just about anyone could be a consumer, but no, many pundits, including some economists, seemed to think that the large U.S. consuming public was the only body that could fill that role. Can't China simply consume its own goods? No, that's an over-simplistic view of the world. China is a producing nation; it can't suddenly become a consuming nation overnight.

Recently, I saw in the news that China is now giving its workers large wage increases. With those increases, the Chinese can start buying some of the consumer goods that they could never afford before. Some of those consumer goods will likely be the products that the recession-bound Americans aren't buying. Meanwhile, the Chinese ecnomy is still growing and still producing goods, and, with their wage increases, the Chinese citizens will be consuming a lot of them. And this may be just the start of the wage increases: Chinese wages are still much lower that those in the western world.

Have we lost our job as the world's designated consumer? What will our new job be?

Growth and Deficits

As the European financial crisis continues, Chancellor Angela Merkel is leading Germany towards spending cuts that will help to reduce the current budget deficit. Other European nations, including Greece, Portugal, Spain and Italy have also begun implementing budget cuts. This is in contrast to the American preference for more stimulus spending to restart the economy and cut the budget deficit through economic growth.

The Bloomberg news service quotes Germany's Finance Minister Wolfgang Shaueble as saying that perhaps the U.S. could use "accelerating growth" to reduce its deficits, but Europe can't count on growth alone to solve its fiscal problems. But Schaeuble was also reported to say that "reducing deficits and strengthening growth" are not mutually exclusive.

Although President Obama has said the United States cannot continue these large deficits for long, there is no indication that an effort to balance the budget has begun. Presumably, the deficit will be addressed after the stimulus has done its job and the economy has recovered. But what if the economy doesn't recover? To say it must recover will not make it happen. Europe, and Germany in particular, seem to have taken the position that creating more debt is not the way to pay off your old debt, later.

In the past the United States has resolved deficits and recessions through "growth," where growth essentially meant producing, selling and taxing more goods and services. This growth came externally by finding foreign markets and internally through a growing population and, more recently, through more borrowing. But now the supply of untapped foreign markets has ended. Rather, those foreign nations are now producing goods to sell to us. Internally, our population growth is slowing and the populace doesn't want any more debt. Isn't it now time to follow the German example and stop trying to borrow prosperity?