Thursday, January 31, 2008

Our amazingly expensive American 'empire'

The Colossus
By Paul Waldman
January 31, 2008 |


In 2007 the DoD budget exceeded $500 billion -- which doesn't include the $170 billion we spent for operations in Iraq and Afghanistan, or military-related spending in other departments (like the Energy Department, where much of the spending on nuclear weapons goes). Although worldwide figures for 2007 are not yet available, the Stockholm International Peace Research Institute's comprehensive data indicate that in 2006, global military spending stood at $1.2 trillion. In other words, we've been spending as much on our military as the rest of the world combined. Our economic dominance may be threatened by the rise of China, India, and the European Union, but when it comes to the instruments of war, nobody else is even close.

Spending that much money takes personnel, of course. There are currently about 1,375,000 men and women in uniform, plus another 671,000 civilians working for DoD, for a total of over 2 million employees. And according to the U.S. Census, another 1.4 million people work in defense-related industries in the private sector -- though we should grant that some of those people produce armaments for the overseas market. After all, America is still the world's leading arms dealer (though Russia is giving us a run for our money).

And if there is any doubt that America is still an empire, consider how far-flung our military power is. According to the Defense Department's 2007 Base Structure Report, we maintain 823 military facilities in 39 foreign countries, and another 86 facilities in seven U.S. territories. According to the document, "DoD occupies a reported 343,867 buildings throughout the world, valued at over $464 billion and comprising almost 2.4 billion square feet." The DoD also owns 32.4 million acres of land (nearly all of it in the U.S.), or over 50,000 square miles, an area about the size of Louisiana (or half of Colorado; or Delaware, Connecticut, New Hampshire, Vermont, Massachusetts, and Maryland combined).

You will not be surprised to learn that the remaining Republican contenders for the presidency all demonstrate a desire to make the military even bigger. John McCain says that he wants "a larger and more capable military," no shock from a man who barely ever met a military operation he didn't support. The one who actually provides some specificity is Mitt Romney, who wants to increase military spending to four percent of Gross Domestic Product. According to the government's current projections, GDP in 2009 will be $15.3 trillion, which means Romney is proposing to boost military spending by about 20 percent, to $612 billion in his first year in office (not counting Iraq). By 2012, four percent of GDP would mean a military budget of over $700 billion. (Incidentally, there is no reason you would want to peg military spending to a particular level of GDP -- after all, if the economy doubled in size, it wouldn't follow that we would need twice as many tanks, guns, and soldiers.)

But even if a Democrat wins the White House, we shouldn't expect any reductions in military spending any time soon. Though the prevailing Democratic wisdom of five years ago -- that the way to appear "strong" on national security is to go along with whatever harebrained scheme Republicans cook up, then hope to change the subject -- has been utterly discredited, no particular vision on military affairs has taken its place, particularly not one that involves overall cuts. The Republican candidates may be offering little but mindless militarism, but the Democrats don't have much to say -- although Barack Obama wants to add 65,000 Army soldiers and 27,000 Marines. A consistent hawk, Hillary Clinton evinces no particular desire to reduce the size of the military either.

As we've learned in the last decade, an extra dollar of military spending doesn't necessarily buy you an extra measure of security; indeed, depending on how you use it, it can make you far less safe. Our worldwide footprint continually creates more enemies; particularly for people or societies that put a high value on pride and honor, the mere presence of foreign troops is an affront, a daily reminder that we are strong and they are weak. As citizens of the empire, it is hard for us to imagine just what it must be like to know that another nation can plant a military base in your homeland. Those governments may be happy to have Americans invested in their security. But it no doubt feels to many ordinary people as though they're shopkeepers, and the resident Mafioso has strolled into their store, stuffed a few items in his pockets, and told them that he'd like to hold some meetings in the back room. Not only that, they'll be hiring his nephew.

Back in 2003, Howard Dean caused an uproar when he said the United States "won't always have the strongest military." After the predictable faux-outrage from his primary opponents, he attempted to explain that he wasn't talking about his potential presidency or even his lifetime. But less than a decade and a half after the end of the Cold War, our permanent military supremacy had already become part of the national identity, something no patriotic American could challenge.

When the only adversary who could seriously threaten us dissolved, we should have given up the pretension that our military is actually involved much in "defense." Outside the of the fevered imagination of the Glenn Becks of the world, no sane person truly believes that if we don't play our cards right, our form of government could be overthrown and we could wind up living in an outpost of the world Islamic caliphate. Red Dawn may have been a silly movie in 1984, but think how ridiculous it would be today to imagine that America's enemies would actually take over our territory and herd us into reeducation camps.

Yet we still pretend that what the military does is "keep us safe." But with the exception of missile defense (a colossally stupid boondoggle that doesn't work, probably won't ever work, and couldn't accomplish its mission even if it worked perfectly, but that's a topic for another day), the portion of our "defense" spending that goes to actual defense is miniscule. Our soldiers, sailors, airmen and marines aren't patrolling our borders and training to defend our cities. What they prepare for, and what they're called to do, is to project our extraordinary military power outward. Some of these missions are noble and some are tragically absurd, but no matter who gets elected in November, it won't be changing for a long time to come.

Survey: 1 million Iraqi deaths

We should all feel very sad and ashamed.

Iraq conflict has killed a million, says survey
By Luke Baker
January 30, 2008 | Reuters

More than one million Iraqis have died as a result of the conflict in their country since the U.S.-led invasion in 2003, according to research conducted by one of Britain's leading polling groups.

The survey, conducted by Opinion Research Business (ORB) with 2,414 adults in face-to-face interviews, found that 20 percent of people had had at least one death in their household as a result of the conflict, rather than natural causes.

The last complete census in Iraq conducted in 1997 found 4.05 million households in the country, a figure ORB used to calculate that approximately 1.03 million people had died as a result of the war, the researchers found.

The margin of error in the survey, conducted in August and September 2007, was 1.7 percent, giving a range of deaths of 946,258 to 1.12 million.

ORB originally found that 1.2 million people had died, but decided to go back and conduct more research in rural areas to make the survey as comprehensive as possible and then came up with the revised figure.

The research covered 15 of Iraq's 18 provinces. Those that not covered included two of Iraq's more volatile regions -- Kerbala and Anbar -- and the northern province of Arbil, where local authorities refused them a permit to work.

Estimates of deaths in Iraq have been highly controversial in the past.

Medical journal The Lancet published a peer-reviewed report in 2004 stating that there had been 100,000 more deaths than would normally be expected since the March 2003 invasion, kicking off a storm of protest.

The widely watched Web site Iraq Body Count currently estimates that between 80,699 and 88,126 people have died in the conflict, although its methodology and figures have also been questioned by U.S. authorities and others.

ORB, a non-government-funded group founded in 1994, conducts research for the private, public and voluntary sectors.

The director of the group, Allan Hyde, said it had no objective other than to record as accurately as possible the number of deaths among the Iraqi population as a result of the invasion and ensuing conflict.

Who is the 'Republican establishment'?

I've heard of the "limousine liberals" who really run the Democratic party, but what the heck is this so-called "Republican establishment" that wants to elect "liberal" Republicans like John McCain, according to Rush Limbaugh? Who are these people, and how did they wrest control of the GOP away from Gingrich, DeLay, Hastert, Cheney, and Bush?

Beware! They must run a very stealthy operation!...

Wednesday, January 30, 2008

Why doesn't W get credit for the economy?

This blog post from Krugman links to some great charts, especially the last one, which shows how GDP grew more under Clinton than Reagan, and Bush I and II are at the bottom of the presidential pile!

Going back to Kennedy, the GDP has grown more with Democrats in the White House. Interpret that as you will!

Why Doesn't Bush Get Economic Credit?
By Paul Krugman
January 28, 2008 | New York Times


Monday, January 28, 2008

FOX/Heritage: Neocons' post-Bush agenda

In the following op-ed, the neocons (as represented by that right-wing think tank, Heritage Foundation) are pretty frank about their post-Bush agenda:

- Even more Pentagon spending, although we now spend as much on our army than the rest of the world combined;

- More offensive, preventive U.S. strikes (here re-branded as "damage-limitation strategy"), even if America is not threatened;

- Permanent war against Islamic radicals (as the new Cold War), no matter where or how weak that Islamic minority may be; and

- The U.S. guaranteeing, by means of military force, Western access to trade routes and natural resources (read: oil & gas).

None of the above is actually necessary, as Mr. Spring falsely concludes, "to protect the American people and their families." Rather, even more massive investment in America's Military-Industrial complex would shore up America's slipping hegemonic - "hyperpower" status, and (hopefully) give the U.S. outweighed international influence as its economic power declines relative to Asia, the EU, and Mideast's.

The neocons don't know much about economics. They are not even pro-globalization in the Tom Friedman sense. Rather, they have an outdated 19th century, zero-sum view of the world where guns and guts get the gold. All they know how to do is spend money on more and bigger weapons, recklessly pull the trigger, and hope that this will guarantee America's future.

But they are nutty, they are wrong, and they will bankrupt our treasury and our moral credibility if we let them.

Heritage Foundation: Laying the Groundwork for a Military Victory
By Baker Spring
January 25, 2008 | FoxNews

George W. Bush is in the last year of his presidency. Yet the greater war against terrorism will continue long after he's out of office.

So, as he prepares to deliver his final State of the Union address, he needs to address the requirements for national defense beyond Iraq.

This isn't to say he shouldn't mention Iraq. Our progress there in the last year remains a vital issue, and the American people deserve to hear about it. What President Bush must do, though, is tie his explanation of the progress in Iraq to the broader requirements for military preparedness.

First, Bush must remind us this isn't the time for a "peace dividend." Even if the U.S. achieves a swift military and political victory in Iraq, one that would allow tens of thousands of Americans to leave Iraq, the broader war will continue.

Our country can't afford to hollow out the military when we need it to win the war against Islamic extremists.

Unfortunately, we're still rebuilding from the "procurement holiday" forced on the military in the 1990s. Because we didn't purchase enough weapons systems during that decade, we're forced to spend more today to buy the equipment the military needs. [Like armored Humvees? -- J]

This increase must allow the military to recover from the shortfall and put it on the path to sustained investments for new weapons and equipment.

That leaves less available for buying current weapons systems. For example, the Navy has been forced to reduce construction of Virginia-class submarines to one per year — even though constructing two per year could have reduced the unit cost to $2 billion per boat.

The Air Force has been forced to scale back dramatically its purchasing of F-22 Raptor tactical fighters. It's slated to obtain just 183 F-22s despite its requirement for 381.

The Army has been forced to extend the production time for its Future Combat System by five years.

This president ought to leave a very different military to his successor than Bill Clinton left for him. That, of course, will cost money.

For example, it will cost $8 billion more than is currently planned per year for the Navy to buy the new ships it needs and $3 billion per year for the Marine Corps to recruit and train thousands of necessary new warriors.

How much will the total bill be? Well, military analysts at the American Legion suggest it would take a sustained investment of 5 percent of GDP each year. Experts at The Heritage Foundation think it can be done for 4 percent — slightly more than the 3.9 percent appropriated this year.

Bush should make it clear that our military spending is low compared to what it's been other times we've been at war. And he should point out that we need to invest today to have the military we'll require in the years ahead.

The president also needs to articulate a sound national security strategy. It ought to be called a "damage limitation" program. This would explain how he intends to protect the American people (as well as friends and allies around the world) from attack.
[Take note: They're saying it's America's responsibility to protect its friends and allies from attack. Boy, these neocons talk out of both sides of their mouths! On the one side, they half-heartedly complain that Europe and Asia don't spend enough on their own defense. But on the other, they admit they want our friends to be dependent on American power, since this guarantees America's influence. - J]

Such a pro-active stance would be a welcome change from our Cold War policy of accepting vulnerability by relying on a strategy of retaliation (mutually assured destruction) in case of attack.

A damage-limitation strategy would be designed to minimize the likelihood of a successful weapons of mass destruction attack on the U.S. and its friends and allies. After all, other nations are less likely to attempt to acquire nuclear, biological and chemical weapons — or attempt to use these weapons — if their attack is likely to fail.

Meanwhile, our military needs to field the correct mix of offensive and defensive forces. We must maintain the conventional forces necessary to go after Islamic extremists anywhere in the world, which is an essential component of the damage-limitation strategy's central goal of providing protection to the American people and allies.

America's general purpose forces, however, cannot focus on the threat of Islamic extremists alone. There are two other broad requirements of the damage-limitation strategy that can be met only through modernized general purposes forces possessing broader capabilities.

The first is to prevent a major power threat to Europe, eastern Asia or the Persian Gulf. This requires enough conventional military power to counter the organized armed forces of aggressive countries.

The second requirement is to maintain access to vital resources and conduits for global trade. In this case, U.S. general purpose forces must be capable of projecting power to distant regions in order to defend access to those resources.

America's military must also be capable of protecting vital trade routes, whether at sea, in the air, in space or in cyberspace.

Our recent focus on Iraq is understandable. But it's time to broaden the nation's perspective regarding national defense. That's where the State of the Union speech comes in.

Iraq is a critical battle in a long war, just as Korea and Vietnam were important battles in the Cold War. Sustained investments in the military are urgent and necessary to achieve ultimate victory.

Most importantly, President Bush should use the speech to make a solemn pledge to the American people that the military investments he is advocating are necessary to protect them and their families.

Saturday, January 26, 2008

A Real Progressive Tax Policy?

What Does a Progressive Tax Policy Look Like?

By Ezra Klein
January 24, 2008 |


Consumption taxes, however, do not need to be sales taxes, and they do not need to be flat. Cornell economist Robert Frank has a particularly elegant proposal for a progressive sales tax that's tabulated at year's end, rather than at the point of sale. Under his system, come tax time, families would report their income, just as they do now, but also their savings (how much they've invested, kept in the bank, etc). The difference between the two would be their taxable consumption. Everyone would then get a standard deduction of $30,000, effectively exempting low-income families from taxation altogether. As the total taxable consumption rose, so too would the rates, just as is true now. A taxable consumption of $15,000 might pay 10 percent in taxes. At $8 million the top rate could be as high as we chose to make it.

This could have substantial benefits. "Consider a family that spends $10 million a year and is deciding whether to add a $2 million wing to its mansion," Frank writes. "If the top marginal tax rate on consumption were 100 percent, the project would cost $4 million. The additional tax payment would reduce the federal deficit by $2 million. Alternatively, the family could scale back, building only a $1 million addition. Then it would pay $1 million in additional tax and could deposit $2 million in savings. The federal deficit would fall by $1 million, and the additional savings would stimulate investment, promoting growth. Either way, the nation would come out ahead with no real sacrifice required of the wealthy family, because when all build larger houses, the result is merely to redefine what constitutes acceptable housing."

U.S. negotiating permanent presence in Iraq?

Don't let Bush-Cheney circumvent the Constitution again! Tell your Congressmen to do their constitutional duty and oversee the Executive branch.

Bush is trying to negotiate a treaty with the Iraqi government, without calling it a treaty, so that the Senate does not have to ratify it with a two-thirds vote.

Bush is pressuring the Iraqi government now to ratify a permanent U.S. presence in Iraq, since the UN Security Council's mandate for the U.S. occupation expires in 11 months. Bush is calling it a "status-of-forces agreement," not a treaty. But this agreement could obligate the U.S. to step in to ensure Iraq's internal and external security, i.e. it would bind America to defend Iraq. If that's not a treaty, what is?

U.S. Asking Iraq for Wide Rights on War
By Thom Shanker and Steven Lee Myers
January 25, 2008 | New York Times


Democratic critics have complained that the initial announcement about the administration's intention to negotiate an agreement, made Nov. 26, included an American pledge to support Iraq "in defending its democratic system against internal and external threats."

Representative Bill Delahunt, Democrat of Massachusetts, said that what the administration was negotiating amounted to a treaty and should be subjected to Congressional oversight and ultimately ratification.

"Where have we ever had an agreement to defend a foreign country from external attack and internal attack that was not a treaty?" he said Wednesday at a hearing of a foreign affairs subcommittee held to review the matter. "This could very well implicate our military forces in a full-blown civil war in Iraq. If a commitment of this magnitude does not rise to the level of a treaty, then it is difficult to imagine what could."

Officials: U.S. failed to manage contractors in Iraq

I've said this before: if you vote for a guy like Bush who believes that government is inherently, inevitably corrupt and incompetent, then it will be. It is a self-fulfilling prophecy. Case in point: "Heckuva Job" Brownie, Bush's former head of FEMA.

Bush is not your run-of-the-mill anti-government conservative. He's a "Big Government Conservative" who believes that money spent on defense is never money wasted. He and Rumsfeld outsourced the Iraq war to private contractors, and then failed to invest any resources to manage those contractors. The result was predictable: at least $10 billion wasted in Iraq.

The waste, fraud, and abuse perpetrated by U.S. contractors in Iraq was a failure of government oversight. But that failure was not inevitable. It was the product of a negligent anti-government ideology.

U.S. Cannot Manage Contractors in Wars, Officials Testify on Hill
Problem Is Linked to Lack of Trained Service Personnel

By Walter Pincus
January 25, 2008 | Washington Post

With even more U.S. contractors now in Iraq and Afghanistan than U.S. military personnel, government officials told Congress yesterday that the Bush administration is not prepared to manage the contractors' critical involvement in the American war effort.

At the end of last September, there were "over 196,000 contractor personnel working for the Defense Department in Iraq and Afghanistan," said Jack Bell, deputy undersecretary of defense for logistics and materiel readiness.

Contractors "have become part of our total force, a concept that DoD [the Defense Department] must manage on an integrated basis with our military forces," he also said in prepared testimony for a hearing yesterday of the Senate homeland security subcommittee. "Frankly," he continued, "we were not adequately prepared to address" what he termed "this unprecedented scale of our dependence on contractors."

Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, and William M. Solis, director of defense capabilities and management for the Government Accountability Office, testified that not enough trained service personnel are available to handle outsourcing to contractors in the wars.

Solis said a military officer with a Stryker brigade deployed in Iraq had told the GAO about a contractor that had mishandled security screenings of Iraqis and foreigners. In the end, Solis said, the officer used his own personnel to accomplish the task, diverting staff from "their primary intelligence gathering responsibilities."

Retired Army Gen. David M. Maddox, who has studied the contracting effort in Iraq as a member of an Army-appointed commission, said in his statement that it "has not fully recognized the impact of a large number of contractors" and "their potential impact to mission success."

Maddox said the Army had five general officer positions for career contracting professionals in 1990 but has none today. The two-star general who runs the Joint Contracting Command for Iraq/Afghanistan, Maddox said, is an Air Force officer.

Maddox added that 3 percent of Army contracting personnel are active-duty and that the acquisition workforce shrunk by 25 percent from 1990 to the end of fiscal 2000. [See the difference between Clinton and Bush? -- J] While the contracting workload has increased sevenfold since 2000, he said, about half of the military officers and Army civilians in the contracting field "are certified for their current positions."

[These stats are outrageous. Think about it: While the Pentagon's outsourcing has increased 700% since 2000, the Bush Administration has not invested any resources in managing those contracts. This is an abdication of government responsibility! Bush has religious faith in the private sector to always 'do the right thing.' Moron! -- J]

Sen. Thomas R. Carper (D-Del.) , the subcommittee's chairman, noted that the Defense Contract Audit Agency has reported that $10 billion of about $57 billion in contracts for services and reconstruction in Iraq "is either questionable or cannot be supported because of a lack of contractor information needed to assess costs." He added that more than 80 separate criminal investigations are underway involving contracts of more than $5 billion.

Sen. Claire McCaskill (D-Mo.), a subcommittee member who has investigated the contract issue during her trips to Iraq and Kuwait, stressed that "if people are not fired or demoted or if there is not a failure to promote in the military because of massive failure of appropriate oversight and management, things will not change."

But when she asked Bowen and Solis if they knew of anyone who had been fired or denied promotion because of contracting mistakes disclosed in more than 300 reports over five years, they said they knew of none.

Wednesday, January 23, 2008

Fascinating article on U.S. ups & downs in Iraq

If you want to know what's really happened in Iraq so far, read part 1 of this Asia Times article by Mark Perry.

This story details morally questionable, nitty-gritty stuff, (not to mention lots of catty Bush Administration infighting) but this is how counter-insurgency warfare is really lost or won.

Study: Hundreds of false statements led to Iraq invasion

Study: False statements preceded war
By Douglass K. Daniel
January 23, 2008 | Associated Press

A study by two nonprofit journalism organizations found that President Bush and top administration officials issued hundreds of false statements about the national security threat from Iraq in the two years following the 2001 terrorist attacks.

The study concluded that the statements "were part of an orchestrated campaign that effectively galvanized public opinion and, in the process, led the nation to war under decidedly false pretenses."

The study was posted Tuesday on the Web site of the Center for Public Integrity, which worked with the Fund for Independence in Journalism.

White House spokesman Scott Stanzel did not comment on the merits of the study Tuesday night but reiterated the administration's position that the world community viewed Iraq's leader, Saddam Hussein, as a threat.

"The actions taken in 2003 were based on the collective judgment of intelligence agencies around the world," Stanzel said.

The study counted 935 false statements in the two-year period
. It found that in speeches, briefings, interviews and other venues, Bush and administration officials stated unequivocally on at least 532 occasions that Iraq had weapons of mass destruction or was trying to produce or obtain them or had links to al-Qaida or both .

"It is now beyond dispute that Iraq did not possess any weapons of mass destruction or have meaningful ties to al-Qaida," according to Charles Lewis and Mark Reading-Smith of the Fund for Independence in Journalism staff members, writing an overview of the study. "In short, the Bush administration led the nation to war on the basis of erroneous information that it methodically propagated and that culminated in military action against Iraq on March 19, 2003."

Named in the study along with Bush were top officials of the administration during the period studied: Vice President Dick Cheney, national security adviser Condoleezza Rice, Defense Secretary Donald H. Rumsfeld, Secretary of State Colin Powell, Deputy Defense Secretary Paul Wolfowitz and White House press secretaries Ari Fleischer and Scott McClellan.

Bush led with 259 false statements, 231 about weapons of mass destruction in Iraq and 28 about Iraq's links to al-Qaida, the study found. That was second only to Powell's 244 false statements about weapons of mass destruction in Iraq and 10 about Iraq and al-Qaida.

The center said the study was based on a database created with public statements over the two years beginning on Sept. 11, 2001, and information from more than 25 government reports, books, articles, speeches and interviews.

"The cumulative effect of these false statements — amplified by thousands of news stories and broadcasts — was massive, with the media coverage creating an almost impenetrable din for several critical months in the run-up to war," the study concluded.

"Some journalists — indeed, even some entire news organizations — have since acknowledged that their coverage during those prewar months was far too deferential and uncritical. These mea culpas notwithstanding, much of the wall-to-wall media coverage provided additional, 'independent' validation of the Bush administration's false statements about Iraq," it said.


On the Net:

Center For Public Integrity:

Fund For Independence in Journalism:

Soros: Worst market crisis in 60 years

The worst market crisis in 60 years
By George Soros
January 22, 2008

The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.

However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.

Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.

Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.

The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.

Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks' commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever before. That made the crisis more severe than any since the second world war.

Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.

Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.

The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.

The writer is chairman of Soros Fund Management

Monday, January 21, 2008

Iraq: $2 Trillion. Peace, love & understanding? Priceless

Think the cost comparison below is silly, impractical? What's so funny about peace, love, and understanding, especially when it's affordable?

It's all a matter of priorities. What do you really value?

How the Iraq War's $2 Trillion Cost Could Have Been Spent

January 21, 2008 | The Toronto Star

In war, things are rarely what they seem.

Back in 2003, in the days leading up to the U.S. invasion of Iraq, the Pentagon adamantly insisted that the war would be a relatively cheap one. Roughly $50 billion is all it would take to rid the world of Saddam Hussein, it said.

We now know this turned out to be the first of many miscalculations. Approaching its fifth year, the war in Iraq has cost American taxpayers nearly $500 billion, according to the non-partisan U.S.-based research group National Priorities Project. That number is growing every day.

But it's still not even close to the true cost of the war. As the invasion's price tag balloons, economists and analysts are examining the entire financial burden of the Iraq campaign, including indirect expenses that Americans will be paying long after the troops come home. What they've come up with is staggering. Calculations by Harvard's Linda Bilmes and Nobel-prize-winning economist Joseph Stiglitz remain most prominent. They determined that, once you factor in things like medical costs for injured troops, higher oil prices and replenishing the military, the war will cost America upwards of $2 trillion. That doesn't include any of the costs incurred by Iraq, or America's coalition partners.

"Would the American people have had a different attitude toward going to war had they known the total cost?" Bilmes and Stiglitz ask in their report. "We might have conducted the war in a manner different from the way we did."

It's hard to comprehend just how much money $2 trillion is. Even Bill Gates, one of the richest people in the world, would marvel at this amount. But, once you begin to look at what that money could buy, the worldwide impact of fighting this largely unpopular war becomes clear.

Consider that, according to sources like Columbia's Jeffrey Sachs, the Worldwatch Institute, and the United Nations, with that same money the world could:

Eliminate extreme poverty around the world (cost $135 billion in the first year, rising to $195 billion by 2015.)

Achieve universal literacy (cost $5 billion a year.)

Immunize every child in the world against deadly diseases (cost $1.3 billion a year.)

Ensure developing countries have enough money to fight the AIDS epidemic (cost $15 billion per year.)

In other words, for a cost of $156.3 billion this year alone – less than a tenth of the total Iraq war budget – we could lift entire countries out of poverty, teach every person in the world to read and write, significantly reduce child mortality, while making huge leaps in the battle against AIDS, saving millions of lives.

Then the remaining money could be put toward the $40 billion to $60 billion annually that the World Bank says is needed to achieve the Millennium Development Goals, established by world leaders in 2000, to tackle everything from gender inequality to environmental sustainability.

The implications of this cannot be underestimated. It means that a better and more just world is far from within reach, if we are willing to shift our priorities.

If America and other nations were to spend as much on peace as they do on war, that would help root out the poverty, hopelessness and anti-Western sentiment that can fuel terrorism – exactly what the Iraq war was supposed to do.

So as candidates spend much of this year vying to be the next U.S. president, what better way to repair its image abroad, tarnished by years of war, than by becoming a leader in global development? It may be too late to turn back the clock to the past and rethink going to war, but it's not too late for the U.S. and other developed countries to invest in the future.

Craig and Marc Kielburger are children's rights activists and co-founded Free The Children, which is active in the developing world.

Friday, January 18, 2008

Alternate Mideast futures

This is long but well worth reading, even though the author has a soft spot for the Kurds. Some offhand quotes in here are worth the price of admission alone!

After Iraq
By Jeffrey Goldberg
January/February 2008 | The Atlantic Monthly

Not long ago, in a decrepit prison in Iraqi Kurdistan, a senior interrogator with the Kurdish intelligence service decided, for my entertainment and edification, to introduce me to an al-Qaeda terrorist named Omar. "This one is crazy," the interrogator said. "Don't get close, or he'll bite you."

Omar was a Sunni Arab from a village outside Mosul; he was a short and weedy man, roughly 30 years old, who radiated a pure animal anger. He was also a relentless jabberer; he did not shut up from the moment we were introduced. I met him in an unventilated interrogation room that smelled of bleach and paint. He was handcuffed, and he cursed steadily, making appalling accusations about the sexual practices of the interrogator's mother. He cursed the Kurds, in general, as pig-eaters, blasphemers, and American lackeys. As Omar ranted, the interrogator smiled. "I told you the Arabs don't like the Kurds," he said. I've known the interrogator for a while, and this is his perpetual theme: close proximity to Arabs has sabotaged Kurdish happiness.

Omar, the Kurds claim, was once an inconsequential deputy to the now-deceased terrorist chieftain Abu Musab al-Zarqawi. Omar disputed this characterization. By his own telling, he accomplished prodigies of terror against the pro-American Kurdish forces in the northern provinces of Iraq. "You are worse than the Americans," he told his Kurdish interrogator. "You are the enemy of the Muslim nation. You are enemies of God." The interrogator—I will not name him here, for reasons that will become apparent in a moment—sat sturdily opposite Omar, absorbing his invective for several minutes, absentmindedly paging through a copy of the Koran.

During a break in the tirade, the interrogator asked Omar, for my benefit, to rehearse his biography. Omar's life was undistinguished. His father was a one-donkey farmer; Omar was educated in Saddam's school system, which is to say he was hardly educated; he joined the army, and then Ansar al-Islam, the al-Qaeda–affiliated terrorist group that operates along the Iranian frontier. And then, on the blackest of days, as he described it, he fell prisoner to the Kurds.

The interrogator asked me if I had any questions for Omar. Yes, I said: Have you been tortured in this prison?

"No," he said.

"What would you do if you were to be released from prison right now?"

"I would get a knife and cut your head off," he said.

At this, the interrogator smacked Omar across the face with the Koran.

Omar yelped in shock. The interrogator said: "Don't talk that way to a guest!"

Now, Omar rounded the bend. A bolus of spit flew from his mouth as he screamed. The interrogator taunted Omar further. "This book of yours," he said, waving the Koran. "'Cut off their heads! Cut off their heads!' That's the answer for everything!" Omar cursed the interrogator's mother once again; the interrogator trumped him by cursing the Prophet Muhammad's mother.

The meeting was then adjourned.

In the hallway, I asked the interrogator, "Aren't you Muslim?"

"Of course," he said.

"But you're not a big believer in the Koran?"

"The Koran's OK," he said. "I don't have any criticism of Muhammad's mother. I just say that to get him mad."

He went on, "The Koran wasn't written by God, you know. It was written by Arabs. The Arabs were imperialists, and they forced it on us." This is a common belief among negligibly religious Kurds, of whom there are many millions.

"That's your problem, then," I said. "Arabs."

"Of course," he replied. "The Arabs are responsible for all our misfortunes."

"What about the Turks?" I asked. It is the Turks, after all, who are incessantly threatening to invade Iraqi Kurdistan, which they decline to call "Iraqi Kurdistan," in more or less the same obstreperous manner that they refuse to call the Armenian genocide a genocide.

"The Turks, too," he said. "Everyone who denies us our right to be free is responsible for our misfortunes."

We stepped out into the sun. "The Kurds never had friends. Now we have the most important friend, America. We're closer to freeing ourselves from the Arabs than ever," he said.

To the Kurds, the Arabs are bearers of great misfortune. The decades-long oppression of Iraq's Kurds culminated during the rule of Saddam Hussein, whose Sunni Arab–dominated army committed genocide against them in the late 1980s. Yet their unfaltering faith that they will one day be free may soon be rewarded: the Kurds are finally edging close to independence. Much blood may be spilled as Kurdistan unhitches itself from Iraq—Turkey is famously sour on the idea of Kurdish independence, fearing a riptide of nationalist feeling among its own unhappy Kurds—but independence for Iraq's Kurds seems, if not immediate, then in due course inevitable.

In many ways, the Kurds are functionally independent already. The Kurdish regional government has its own army, collects its own taxes, and negotiates its own oil deals. For the moment, Kurdish officials say they would be satisfied with membership in a loose-jointed federation with the Shiite and Sunni Arabs to their south. But in Erbil and Sulaymani, the two main cities of the Kurdish region, the Iraqi flag is banned from flying; Arabic is scarcely heard on the streets (and is never spoken by young people, who are happily ignorant of it), and Baghdad is referred to as a foreign capital. In October, when I was last in the region, I called the office of a high official of the peshmerga, the Kurdish guerrilla army, but was told that he had "gone to Iraq" for the week.

The Bush administration gave many reasons for the invasion of Iraq, but the satisfaction of Kurdish national desire was not one of them. Quite the opposite: the goal was, and remains, a unified, democratic Iraq. In fact, key officials of the administration have a history of indifference to, and ignorance of, the subject of Kurdish nationalism. At a conference in 2004, National Security Advisor Condoleezza Rice stated, "What has been impressive to me so far is that Iraqis—whether Kurds or Shia or Sunni or the many other ethnic groups in Iraq—have demonstrated that they really want to live as one in a unified Iraq." As Peter Galbraith, a former American diplomat and an advocate for Kurdish independence, has observed, Rice's statement was disconnected from observable reality—shortly before she spoke, 80 percent of all Iraqi Kurdish adults had signed a petition calling for a vote on independence.

Nor were neoconservative ideologues—who had the most-elaborate visions of a liberal, democratic Iraq—interested in the Kurdish cause, or even particularly knowledgeable about its history. Just before the "Mission Accomplished" phase of the war, I spoke about Kurd­istan to an audience that included Norman Podhoretz, the vicariously martial neoconservative who is now a Middle East adviser to Rudolph Giuliani. After the event, Podhoretz seemed authentically bewildered. "What's a Kurd, anyway?" he asked me.

As America approaches the fifth anniversary of the invasion of Iraq, the list of the war's unintended consequences is without end (as opposed to the list of intended consequences, which is, so far, vanishingly brief). The list includes, notably, the likelihood that the Kurds will achieve their independence and that Iraq will go the way of Gaul and be divided into three parts—but it also includes much more than that. Across the Middle East, and into south-central Asia, the intrinsically artificial qualities of several states have been brought into focus by the omnivorous American response to the attacks of 9/11; it is not just Iraq and Afghanistan that appear to be incoherent amalgamations of disparate tribes and territories. The precariousness of such states as Lebanon and Pakistan, of course, predates the invasion of Iraq. But the wars against al-Qaeda, the Taliban, and especially Saddam Hussein have made the durability of the modern Middle East state system an open question in ways that it wasn't a mere seven years ago.

It used to be that the most far-reaching and inventive question one could ask about the Middle East was this: How many states, one or two—Israel or a Palestinian state, or both—will one day exist on the slip of land between the Mediterranean Sea and the Jordan River?

Today, that question seems trivial when compared with this one: How many states will there one day be between the Mediterranean and the Euphrates River? Three? Four? Five? Six? And why stop at the western bank of the Euphrates? Why not go all the way to the Indus River? Between the Mediterranean and the Indus today lie Israel and the Palestinian territories, Lebanon, Syria and Jordan, Iraq, Iran, Afghanistan, and Pakistan. Long-term instability could lead to the breakup of many of these states.

All states are man-made. But some are more man-made than others. It was Winston Churchill (a bust of whom Bush keeps in the Oval Office) who, in the aftermath of World War I, roped together three provinces of the defeated and dissolved Ottoman Empire, adopted the name Iraq, and bequeathed it to a luckless branch of the Hashemite tribe of west Arabia. Churchill would eventually call the forced inclusion of the Kurds in Iraq one of his worst mistakes—but by then, there was nothing he could do about it.

The British, together with the French, gave the world the modern Middle East. In addition to manufacturing the country now called Iraq, the grand Middle East settlement shrank Turkey by the middle of the 1920s to the size of the Anatolian peninsula; granted what are now Syria and Lebanon to the French; and kept Egypt under British control. The British also broke Palestine in two, calling its eastern portion Trans-Jordan and installing a Hashemite prince, Abdullah, as its ruler, and at the same time promising Western Palestine to the Jews, while implying to the Arabs there that it was their land, too. As the historian David Fromkin puts it in A Peace to End All Peace, his definitive account of the machinations among the Great Powers that resulted in the modern map of the Middle East, the region became what it is today both because the European powers undertook to re-shape it and because Britain and France failed to ensure that the dynasties, the states, and the political system that they established would permanently endure.

Of course, the current turbulence in the Middle East is attributable also to factors beyond the miscalculations of both the hubristic, seat-of-the-pants Bush administration and the hubristic, seat-of-the-pants French and British empires. Among other things, there is the crisis within Islam, a religion whose doctrinal triumphalism—Muslims believe the Koran to be the final, authoritative word of God—is undermined daily by the global balance of power, with predictable and terrible consequences (see: the life of Mohammed Atta et al.); and there is the related and continuing crisis of globalization, which drives people who have not yet received the message that the world is now flat to find solace and meaning in their fundamental ethnic and religious identities.

But since 9/11, America's interventions in the region—and especially in Iraq—have exacerbated the tensions there, and have laid bare how artificial, and how tenuously constructed, the current map of the Middle East really is. By invading Iraq, the Bush administration sought not only to deprive the country of its putative weapons of mass destruction, but also to shake things up in Iraq's chaotic neighborhood; toppling Saddam and planting the seeds of democracy in Iraq would, it was hoped, make possible the transformation of the region. The region is being transformed; that transformation is just turning out to be a different, and possibly far broader, one than imagined. As Dennis Ross, who was a Middle East envoy for both Bill Clinton and George H. W. Bush, and is now with the Washington Institute for Near East Policy, puts it, the Iraq War has begun to produce "wholesale change"—but "it won't be the one envisioned by the administration." An independent Kurdistan would be just the start.

Envisioning what the Middle East might look like five or 10 or 50 years from now is by definition a speculative exercise. But precisely because of the scope of the transformation that's under way, imagining the future of the region, and figuring out a smart approach to it, should be at the top of America's post-Iraq priorities. At the moment, however, neither the Bush administration nor the candidates for the presidency seem to be thinking about the future of the Middle East (beyond the immediate situation in Iraq and the specific question of what to do about Iran's nuclear intentions) in any particularly creative way. At the State Department and on the National Security Council, there is a poverty of imagination (to borrow a phrase from the debate about the causes of chronic intelligence failure) about the shifting map of the region.

It's not just the fragility of the post-1922 borders that has been exposed by recent history; it's also the limitations of the leading foreign-policy philosophies—realism and neoconservatism. Formulating a foreign policy after Iraq will require coming to terms with a reshaped Middle East, and thinking about it in new ways.

Unintended Consequences

In an effort to understand the shape of things to come in the Middle East, I spent several weeks speaking with more than 25 experts and traveling to Iraq, Jordan, the West Bank, and Israel. Many of the conversations were colored, naturally, by the ideological predispositions of those I talked with. The realists quake at instability, which threatens (as they see it) the only real American interest in the Middle East, the uninterrupted flow of Arab oil. Iranophobes see that country's empowerment, and the threat of regional Shiite-Sunni warfare, as the greatest cause for worry. Pro-Palestinian academics blame Israel, and its friends in Washington, for trying to force the collapse of the Arab state system. The liberal interventionists lament the poor execution of the Iraq War, and wish that the Bush administration had gone about exporting democracy to the Middle East with more subtlety and less hypocrisy. The neoconservatives, who cite the American Revolution as an example of what might be called "constructive volatility," see no reason to regret instability (even as they concede that it's hard to imagine a happy end to the Iraq War anytime soon).

Some experts didn't want to play at all. When I called David Fromkin and asked him to speculate about the future of the Middle East, he said morosely, "The Middle East has no future." And when I spoke to Edward Luttwak, the iconoclastic military historian at the Center for Strategic and International Studies in Washington, he said there was no reason to engage the subject: the West is unable to shape the future of the Middle East, so why bother? "The United States could abandon Israel altogether, or embrace the general Arab cause 100 percent," he said, but "the Arabs will find a new reason to be anti-American."

Many experts I spoke to ventured that it would be foolish to predict what will happen in the Middle East next Tuesday, let alone in 2018, or in 2028—but that it would also be foolish not to be actively thinking about, and preparing for, what might come next.

So what might, in fact, come next? The most important first-order consequence of the Iraq invasion, envisioned by many of those I spoke to, is the possibility of a regional conflict between Sunnis and Shiites for theological and political supremacy in the Middle East. This is a war that could be fought by proxies of Saudi Arabia, the Sunni flag-bearer, against Iran—or perhaps by Iran and Saudi Arabia themselves—on battlefields across Iraq, in Lebanon and Syria, and in Saudi Arabia's largely Shiite Eastern Province, under which most of the kingdom's oil lies. In 2004, King Abdullah II of Jordan, a Sunni, spoke of the creation of a Shiite "crescent," running from Iran, through Iraq, and into Syria and Lebanon, that would destabilize the Arab world. Jordan, which is an indispensably important American ally, is a Sunni country, but its population is also majority-Palestinian, and many of those Palestinians support the Islamist Hamas movement, one of whose main sponsors is Shiite Iran.

There are likely second-order consequences, as well. Rampant Kurdish nationalism, unleashed by the invasion, may spill over into the Kurdish areas of Turkey and Iran. America's reliance on anti-democratic regimes, such as Egypt's, for help in its campaign against Islamist terrorism could strengthen the Islamist opposition in those countries. An American decision to confront Iran could have an enduring impact on the Israeli-Palestinian peace process—a tenuous undertaking to begin with—because the chief enemies of compromise are the Iranian-backed terror groups Hamas and Hezbollah.

Then there are third-order consequences: in the next 20 years, new states could emerge as old ones shrink, fracture, or disappear. Khuzestan, a mostly Arab province of majority-Persian Iran, could become independent. Lebanon, whose existence is perpetually inexplicable, could become partly absorbed by Syria, whose future is also uncertain. The Alawites who rule Syria are members of a Shiite splinter sect, and they are a tiny minority in their own, mostly Sunni country (the Ala­wites briefly ruled an independent state in the mountains above the Mediterranean). Syria, out of a population of 20 million, has roughly 2 million Kurds, who are mostly indifferent, and sometimes hostile, to the government in Damascus.

Kuwait is another state whose future looks unstable; after all, it has already been subsumed once, and could be again—though, under another scenario, it could gain territory and population, if Iraq's Sunnis seek an alliance with it as a way of protecting themselves from their country's newly powerful Shiites. Bahrain, a majority-Shiite country ruled by Sunnis, could well be annexed by Iran (which already claims it), and Yemen could expand its territory at Saudi Arabia's expense. And the next decades might see the birth of one or two Palestinian states—and, perhaps, the end of Israel as a Jewish state, a fervent dream of much of the Muslim world.

And let's not forget Pakistan, whose artificiality I was reminded of by Pervez Musharraf, the Pakistani dictator, during an interview in the garrison city of Rawalpindi some years ago. At one point, he took exception to the idea that the Baluch, the quasi-nomadic people who inhabit the large deserts of Pakistan's west (and Iran's southeast), might feel unattached to the government in Islamabad. In so doing, he undermined the idea of Pakistan as a naturally unitary state. "I know many residents of Baluchistan who are appreciative of Pakistan and the many programs and the like that Pakistan has for Baluchistan," he said, referring to one of his states as if it were another country. He continued: "Why [is Pakistan] thought of as artificial and not others? Didn't your country almost come to an end in a civil war? You faced larger problems than we ever have."

Musharraf also made passing reference to the Afghan-Pakistan border, the so-called Durand Line. It was named after the English official who in 1893 forced the Afghans to accept it as their border with British India, even though it sliced through the territory of a large ethnic group, the truculent Pashtuns, who dominate Afghan politics and warmaking and who have always disliked and, accordingly, disrespected the line. Musharraf warned about the hazards of even thinking about the line. "Why would there be such a desire to change existing situations?" he said. "There would be instability to come out of this situation, should this question be put on the table. It is best to leave borders alone. If you start asking about this and that border or this and that arrangement …" He didn't finish the sentence.

All of this is very confusing, of course. Many Americans (including, until not so long ago, President Bush) do not know the difference between a Shiite and a Sunni, let alone between a Sindhi and a Punjabi. Just try to imagine, say, Secretary of State Podhoretz briefing President Giuliani on his first meeting with the leaders of the Baluchi­stan Liberation Army, and it becomes obvious that we may be entering a new and hazardous era.

Mapping the New Middle East

"Nobody is thinking about whether or not the map is still viable," Ralph Peters told me. Peters is a retired Army lieutenant colonel and intelligence expert who writes frequent critiques of U.S. strategy in the Middle East. "It's not a question about how America wants the map to look; it's a question of how the map is going to look, whether we like it or not."

In the June 2006 issue of Armed Forces Journal, Peters published a map of what he thought a more logical Middle East might look like. Rather than following the European-drawn borders, he made his map by tracing the region's "blood borders," invisible lines that would separate battling ethnic and sectarian groups. He wrote of his map,

While the Middle East has far more problems than dysfunctional borders alone—from cultural stagnation through scandalous inequality to deadly religious extremism—the greatest taboo in striving to understand the region's comprehensive failure isn't Islam but the awful-but-sacrosanct international boundaries worshipped by our own diplomats.

Peters drew onto his map an independent Kurdistan and an abridged Turkey; he shrank Iran (handing over Khuzestan to an as-yet-imaginary Arab-Shiite state he carved out of what is now southern Iraq); he placed Jordan and Yemen on a steroid regimen; and he dismembered Saudi Arabia because he sees it as a primary enemy of Muslim modernization.

It was an act of knowing whimsy, he said. But it was seen by the Middle East's more fevered minds as a window onto the American imperial planning process. "The reaction was pure paranoia, just hysterics," Peters told me. "The Turks in particular got very upset." Peters explained how he made the map. "The art department gave me a blank map, and I took a crayon and drew on it. After it came out, people started arguing on the Internet that this border should, in fact, be 50 miles this way, and that border 50 miles that way, but the width of the crayon itself was 200 miles."

Given the preexisting sensitivities in the Middle East to white men wielding crayons, it's not surprising that his map would be met with such anxiety. There is a belief, prevalent in the Middle East and among pro-Palestinian American academics, that the Bush administration's actual goal—or the goal, at least, of its favored theoreticians—is to rip up the existing map of the Arab Middle East in order to help Israel.

"One of the most evil things that is happening is that a bunch of people who are fundamentally opposed to the existence of these nation-states have gotten into the control room," Rashid Khalidi, who is the Edward Said Professor of Arab Studies at Columbia University, told me. "They are irresponsible and highly ideological neoconservatives, generally, and they have been trying to smash the Arab state system. Their basic philosophy is, the smaller the Arab state, the better."

Neoconservatives inside the administration deny this. "We never had the creation of new states as a goal," Douglas Feith, the former undersecretary of defense for policy, told me, and indeed, there is no proof that the administration sought the breakup of Iraq. On the contrary: shortly after the invasion, I saw Paul Wolfowitz, then the deputy secretary of defense, at the White House Correspondents' Association dinner, and I told him I had just returned from Kurdistan. Maybe he was just feeling snappish (a few minutes earlier he had had a confrontation with Al Franken that ended with Wolfowitz saying "Fuck you" to the comedian), but Wolfowitz looked at me and, as though he were channeling the Turkish foreign minister, said, "We call it northern Iraq. Northern Iraq."

Peters said he noticed early on as well that the administration was committed to a unified Iraq, and to the preexisting, European-drawn map of the Middle East. "This is how strange things are—the greatest force for democracy in the world has signed up for the maintenance of the European model of the world," he said. "Even the neocons, who look like revolutionaries, just want to substitute Bourbons for Hapsburgs," he continued, and added, "Not just in Iraq." (Peters acknowledged that neoconservatives outside the administration were more radical than those on the inside, like Feith and Wolfowitz.)

So just what did the neoconservatives, the most influential foreign-policy school of the Bush years, have in mind? Feith, whose (inevitable) book on the invasion and its aftermath will be published in March, told me that the neoconservatives—at least those inside the administration—did not hope to create new borders, but did see a value in "instability," especially since, in his view, the Middle East was already destabilized by the presence of Saddam Hussein. "There is something I once heard attributed to Goethe," he said, "that 'Disorder is worse than injustice.' We have an interest in stability, of course, but we should not overemphasize the value of stability when there is an opportunity to make the world a better or safer place for us. For example, during the Nixon presidency, and the George H. W. Bush presidency, the emphasis was on stabilizing relations with the Soviet Union. During the Reagan administration, the goal was to put the Communists on the ash heap of history. Those Americans who argued for stability tried to preserve the Soviet Union. But it was Reagan who was right." Feith had hoped that the demise of Iraq's Baath regime would allow a new sort of governance to take hold in an Arab country. "We understood that if you did something as big as replacing Saddam, then there are going to be all kinds of consequences, many of which you can't possibly anticipate. Something good may come, something negative might come out."

[God, what reckless, arrogant sons of bitches! And to imagine those neocons had a free hand until recently! -- J]

So far, it's been mainly negative. The neoconservatives' big idea was that American-style democracy would quickly take hold in Iraq, spread through the Arab Middle East, and then be followed by the collapse of al-Qaeda, who would no longer have American-backed authoritarian Arab regimes to rally against. But democracy has turned out to be a habit not easily cultivated, and the idea that Arab political culture is capable of absorbing democratic notions of governance has fallen into disfavor.

In December of 2006, I went to the Israeli Embassy in Washington for a ceremony honoring Natan Sharansky, who had just received the Medal of Freedom from President Bush. Sharansky, the former Soviet dissident, had become the president's tutor on the importance of democratic reform in the Arab world, and during the ceremony, he praised the president for pursuing unpopular policies. As he talked, the man next to me, a senior Israeli security official, whispered, "What a child."

"What do you mean?" I asked.

"It's not smart … He wants Jordan to be more democratic. Do you know what that would mean for Israel and America? If you were me, would you rather have a stable monarch who is secular and who has a good intelligence service on your eastern border, or would you rather have a state run by Hamas? That's what he would get if there were no more monarchy in Jordan."

After the ceremony, I spoke with Sharansky about this critique. He acknowledged that he is virtually the lone neoconservative thinker in Israel, and one of the few who still believes that democracy is exportable to the Arab world, by force or otherwise.

"After I came back from Washington once," he said, "I saw [Prime Minister Ariel] Sharon in the Knesset, and he said, 'Mazel tov, Natan. You've convinced President Bush of something that doesn't exist.'"

A War about Nothing?

It is true that the neoconservatives' dream of Middle East democracy has proved to be a mirage. But it's not as though the neocons' principal foils, the foreign-policy realists, who view stability as a paramount virtue, have covered themselves in glory in the post-9/11 era. Brent Scowcroft, President George H. W. Bush's national security adviser and Washington's senior advocate of foreign-policy realism, told me not long ago of a conversation he had had with his onetime protégée Condoleezza Rice. "She says, 'We're going to democratize Iraq,' and I said, 'Condi, you're not going to democratize Iraq,' and she said, 'You know, you're just stuck in the old days,' and she comes back to this thing, that we've tolerated an autocratic Middle East for 50 years, and so on and so forth. But we've had 50 years of peace." Of course, what Scowcroft fails to note here is that al-Qaeda attacked us in part because America is the prime backer of its enemies, the autocratic rulers of Egypt and Saudi Arabia.

It is conceivable, if paradoxical, that the actual outcome of the recent turmoil in the Middle East could be a new era of stability, fostered by realists in this country and in the region itself. This might be the most unlikely potential outcome of the Iraq invasion—that it turns out to be the Seinfeld War, a war about nothing (except, of course, the loss of a great many lives and vast sums of money). Everything changes if America attacks Iranian nuclear sites, of course—but the latest National Intelligence Estimate, which came out in early December and reported that Iran had shut down its covert nuclear- weapons program in 2003, makes it unlikely that the Bush administration will pursue this option. And the next one or two U.S. presidents, who will be inheriting both the Iraq and Afghanistan portfolios, will probably be hesitant to attack any more Muslim countries. It's not impossible to imagine that, in 20 years, the map of the Middle East will look exactly like it does today.

"We tend to underestimate the power of states," Robert Satloff, the director of the Washington Institute for Near East Policy, told me. "The PC way of looking at the 21st century is that non-state actors—al-Qaeda, Hezbollah, general chaos—have replaced states as the key players in the Middle East. But states are more resilient than that." He added that a newfound fear of instability might even buttress existing states.

Jordan is an interesting example of this phenomenon. While it would seem eminently vulnerable to the chaos—Iraq is to its east, the Palestinians and Israel to its west, and Syria to the north—Jordan is, in fact, almost tranquil, in part because it is led by a savvy king (scion of a family, the Hashemites, who are quite used to living on the balls of their feet) and in part because most of its people, having viewed from orchestra seats the bedlam in Iraq, want quiet, even if that means forgoing all the features of Western democracy.

Jordan might be an exception, however. Even a passing look at a country like Saudi Arabia suggests that internally driven regime changes are real possibilities. In Egypt the aging Hosni Mubarak is trying to engineer his unproven younger son, Gamal, into the presidency. It does not seem likely, at the moment, that Gamal would succeed in the job. Egypt was once a country that could project its power into Syria; now its leaders are having trouble controlling the Sinai Peninsula, home to a couple hundred thousand Bedouin, who are Pashtun-like in their stiff-neckedness and who seem more and more unwilling to accept Cairo's rule. America, of course, continues to embrace Mubarak, seeing no alternative except the fundamentalist Muslim Brotherhood. This pattern is familiar in American diplomacy; President Bush's long embrace of Musharraf comes to mind, and there are various, bipartisan antecedents—such as, most notably, Jimmy Carter's support for the Shah of Iran.

Beyond Realism and Neoconservatism

In the years since his Iraq project fell into disrepair, President Bush has acted like a realist while speaking like a utopian neoconservative. He has touted the virtues of democracy to the very people subjugated by pro-American dictators. This is probably not a good long-term policy for managing chaos in the Middle East.

The problem is that Iraq has already proven—and Iran continues to prove—that Americans cannot make Middle Easterners do what is in America's best interest. "Whether the Middle East is unimportant or terrifically important, when it comes to doing anything about it, the actions undertaken are all ineffectual or counterproductive," Edward Luttwak told me. "In the Middle East, it doesn't help to be nice to them, or to bomb them."

A first step in restoring America's influence in the Middle East is to accept with humility the notion that America—like Britain before it—cannot organize the region according to its own interests. (Ideologues of varying positions tend to quote for their own benefit the theologian Reinhold Niebuhr on the proper use of American power—but perhaps what the debate needs is a version of Niebuhr's Serenity Prayer: "God grant me the courage to change the regimes I can, the grace to accept the regimes I can't …") What's called for is a foreign policy in which the neoconservative's belief in the liberating power of democracy is yoked to the realist's understanding of unintended consequences.

Of course, winning in Iraq—or at least not losing— would help fortify America's deterrent power, and check Iran's involvement in Lebanon, Gaza, and elsewhere. America's situation in Iraq is not quite so dire as it was a year ago; the troop surge has worked to suppress much violence, and there have been tentative steps by both Shiite and Sunni leaders to prevent all-out sectarian war. To be sure, very few experts predict with any assurance an optimistic future for Iraq. "Ten years is a reasonable time period to think that the sectarian conflict will need to play out," Martin Indyk, the director of the Saban Center for Middle East Policy at the Brookings Institution, told me. "The parties will eventually exhaust themselves. Perhaps they have already, although I fear that the surge has just provided a break for Sunnis and Shias to better position themselves for further conflict when American forces are drawn down. There's no indication yet that the Shias are prepared to share power or that the Sunnis are prepared to live as a minority under Shia majoritarian rule."

Erstwhile optimists about the prospects for democracy in the Middle East, myself included, have been chastened by recent events. But the U.S. would do well not to abandon the long-term hope that democracy, exported carefully, and slowly, can change reality. This would be not a five-year project, but a 50-year one. It would focus on aiding Middle Eastern journalists and democracy activists, on building strong universities and independent judiciaries—and on being discerning enough not to aid Muslim democracy activists when American help would undermine their credibility. If Arab moderates and democrats "begin this work now, in 10 or 15 years we will have a horse in this race," said Omran Salman, the head of an Arab reform organization called Aafaq. "We've sacrificed democracy for stability, but it's a fabricated stability. When someone's sitting on your head, it's not stable." Salman, a Shiite from Bahrain, said he opposes Western military intervention in certain cases, preferring American "moral intervention." The Americans "have to keep pressure on regimes to force them to make reforms and open their societies. Now what the regimes do is oppress liberals."

One problem is that American moral capital has been depleted, which only underscores the practical importance to national security of, among other things, banning torture, and considering carefully the impact an American strike on Iran would have on the typical Iranian. After 30 years of oppressive fundamentalist Muslim rule, many of Iran's people are pro-American; that could change, however, if American bombs begin to fall on their country.

The Next Phase

There is a way to go beyond merely managing the current instability, and to capitalize on it. I'm aware that this is not the most opportune moment in American history to disinter Wilsonian idealism, but America does now have the chance to help right some historic wrongs—for one thing, wrongs committed against the Kurds. (There are other peoples, of course, in the Middle East that the U.S. could stand up for, if it weren't quite so committed to the preservation of the existing map; the blacks in the south of Sudan—one of the most disastrous countries created by Europe—would surely like to be free from the Arab government that rules them from Khartoum.)

Iraq has been unstable since its creation because its Kurds and Shiites did not want to be ruled from Baghdad by a Sunni minority. So why not remove one source of instability—the perennially oppressed Kurds—from the formula? Kurdish independence was—literally—one of Wilson's famous Fourteen Points (No. 12, to be precise), and it is quite obviously a moral cause (and no less moral than the cause that preoccupies the West—that of Palestinian independence). There is danger here, of course: Kurdish freedom might spark secessionist impulses among other Middle Eastern ethnic groups. But these impulses already exist, and one lesson from the British and French management of the Middle East is that people cannot be suppressed forever.

[Whoa, boy! Before we right any historic wrongs, let's make sure they can stay righted. We shouldn't encourage the creation of any state which can't fend for itself. Kurdistan (Northern Iraq) doesn't meet that test: if Turkey were unhindered by the U.S., it could easily crush Northern Iraq, although it would be hard-pressed to rule it peacefully. – J]

For the moment, the Kurds of Iraq are playing the American game, officially supporting the U.S. and its flawed vision of Iraqi federalism, in part because the Turks fear Kurdish independence. Turkey has been an important American ally except for the one time when Turkey's friendship would have truly mattered—at the outset of the Iraq War, when Turkey refused to let the American 4th Infantry Division invade northern Iraq from its territory. The U.S. does not owe Turkey quite as much as its advocates think. [Care to explain that, bub? Turkey is everything we want the Middle East to be: democratic, stable, secular, Western-looking, and a NATO ally. – J] The Kurds, on the other hand, are the most stalwart U.S. allies in Iraq, and their leaders are certainly the most responsible, working for the country's unity even while hoping for something better for their own people. "If Iraq fails, no one will be able to blame the Kurds," said Barham Salih, a Kurd who is Iraq's deputy prime minister.

[Can the Kurds engineer a Sunni-Shiite reconciliation in Iraq, and bring everybody to the peace table? Hell no. All they can do is rule their ethnic enclave, under U.S. protection from Turkey. Big freaking deal, and worth diddly squat toward achieving America's goals in Iraq! – J]

The next phase of Middle East history could start 160 miles north of Baghdad, in Kirkuk, which the Kurds consider their Jerusalem. One day, in the home of Abdul Rahman Mustafa, the Kurdish-Iraqi governor there, I learned about the mature position the Kurds are adopting. Over the course of its 20 years, Saddam's regime expelled Kurds from Kirkuk and gave their homes to Arabs from the south. The government now is slowly—too slowly for many Kurds—reversing the expulsions. A group of dignitaries had come to see the governor on Eid al-Fitr, the holiday that marks the end of the holy month of Ramadan. To reach the governor's office, you must navigate an endless series of barricades manned by tense-seeming Kurdish soldiers. The house itself is surrounded by blast walls. Kirkuk has a vigorous Sunni terrorist underground, and an enormous car bomb had killed seven people the day before.

I asked the governor, who is an unexcitable lawyer of about 60, if "his people"—I phrased it this way—were seeking independence from Iraq. "My people," he said, "are all the people of Kirkuk." The men seated about his living room nodded in agreement. "My job is to help all the people of Kirkuk have better lives." More nodding. "My friends here all know that we will have justice for those who were hurt in the regime of Saddam, but we will not hurt others in order to get justice." Even more nodding, and mumblings of approval.

Four men eventually got up to leave. They kissed the governor and then left the house. The governor turned to me and said, "One of those men is Arab. Everyone is welcome here."

I told him I would like to ask my question again. "Do your people want independence from Iraq?"

"Yes, of course my people, most of them, want a new, different situation," he said. "I think—I will be careful now—I think that we will have what we need soon. Please don't ask me any more specific questions about what we need and want."

I asked, instead, for his analysis of the situation—did he think the Sunni-Shiite struggle would become worse, or would it burn out? He laughed. "I cannot predict anything about this country. I would never have predicted that I would be governor of Kirkuk. This is a city that expelled Kurds like me until the Americans came. So I couldn't predict my own future. I only know that we won't go back to the way it was before."

He went on, "I listen to television about the future, but I don't believe anything I hear."

Later that evening, as I was looking over my notes of the conversation, I recalled another comment, made by a man who thought he understood the Middle East. A little over a year ago, I ran into Paul Bremer, the ex–grand vizier of the Coalition Provisional Authority, the man who disbanded the Iraqi army, among other achievements. We were at Reagan National Airport; it was the day after the Iraq Study Group report was released, and I asked Bremer what he thought of it. He said he had not yet read it. I told him that from what I could tell, the experts were already divided on its recommendations. Bremer laughed, and said, with what I'm fairly sure was a complete lack of self-awareness, "Who really is an Iraq expert, anyway?"